8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 16, 2002

Greater Bay Bancorp

(Exact name of registrant as specified in its charter)

California	77-0387041
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification number)

Commission file number: 0-25034

2860 West Bayshore Road

Palo Alto, California 94303

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (650) 813-8200

Item 5.    Other Events.

On October 16, 2002, the Registrant issued a press release announcing its 2002 third quarter and year to date results. The title and paragraphs 1 through 10, 12, 14, 15, 17, 18, 23 and 24 of the press release, which appear as part of Exhibit 99.1, are filed and incorporated herein by reference.

Item 7.    Financial Statements and Exhibits.

Exhibits

99.1 Press Release dated October 16, 2002 re 2002 third quarter and year to date results

Item 9.    Regulation FD Disclosure

Paragraphs11, 13, 16 and 19 through 22 (including bullet points under 2002 Guidance and 2003 Guidance) of the press release appearing in Exhibit 99.1 are not filed but are furnished pursuant to Regulation FD.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GREATER BAY BANCORP (Registrant)
By:	/s/ Linda M. Iannone
	Linda M. Iannone Senior Vice President and General Counsel

Dated:    October 16, 2002

3

EXHIBIT INDEX

  99.1 Press Release dated October 16, 2002 re 2002 third quarter and year to date results

4

EX-99.1

EXHIBIT 99.1

Press Release dated October 16, 2002

For Information Contact
At Greater Bay Bancorp:	At FRB|Weber Shandwick:
David L. Kalkbrenner	James Hoyne (analyst/investor information)
President and CEO	(310) 407-6546
(650) 614-5767
Steven C. Smith
EVP, CAO and CFO
(650) 813-8222

FOR IMMEDIATE RELEASE

GREATER BAY BANCORP REPORTS 36% INCREASE

IN THIRD QUARTER 2002 NET INCOME

Net Income and Balance Sheet Overview

PALO ALTO, CA, October 16, 2002—Greater Bay Bancorp (Nasdaq:GBBK), an $8.3 billion in assets financial services holding company, today announced results for the third quarter and nine months ended September 30, 2002. Greater Bay Bancorp’s NET INCOME for the third quarter of 2002 increased 36% to $32.5 million, or $0.60 per diluted share, compared to $23.8 million, or $0.46 per diluted share, in the third quarter of 2001. The Company’s CASH NET INCOME, excluding amortization of intangibles, was $0.61 per diluted share in the third quarter of 2002, compared to $0.47 per diluted share in the third quarter of 2001.

Based on NET INCOME, for the third quarter of 2002, Greater Bay Bancorp’s return on average equity was 20.44%, return on average assets was 1.53% and efficiency ratio was 42.64%. For the third quarter of 2001, net income resulted in a return on average equity of 20.42%, return on average assets of 1.32% and an efficiency ratio of 44.99%.

Based on CASH NET INCOME, for the third quarter of 2002, Greater Bay Bancorp’s return on average equity was 28.79%, return on average assets was 1.60% and efficiency ratio was 41.52%. For the third quarter of 2001, cash net income resulted in a return on average equity of 21.74%, return on average assets of 1.34% and an efficiency ratio of 44.58%.

For the first nine months of 2002, Greater Bay Bancorp’s NET INCOME increased 30% to $93.6 million, or $1.73 per diluted share, compared to $72.3 million, or $1.41 per diluted share, for the first nine months of 2001. The Company’s CASH NET INCOME, excluding amortization of intangibles, was $1.78 per diluted share for the first nine months of 2002, compared to $1.43 per diluted share for the first nine months of 2001.

Based on NET INCOME, for the first nine months of 2002, Greater Bay Bancorp’s return on average equity was 21.10%, return on average assets was 1.51% and efficiency ratio was 44.70%. For the first nine months of 2001, net income resulted in a return on average equity of 22.14%, return on average assets of 1.49% and an efficiency ratio of 44.05%.

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Based on CASH NET INCOME, for the first nine months of 2002, Greater Bay Bancorp’s return on average equity was 28.23%, return on average assets was 1.57% and efficiency ratio was 43.72%. For the first nine months of 2001, cash net income resulted in a return on average equity of 23.65%, return on average assets of 1.51% and an efficiency ratio of 43.67%.

At September 30, 2002, Greater Bay Bancorp’s total assets were $8.3 billion, an increase of 11% or $813 million from September 30, 2001. Total loans grew to $4.7 billion, a 7% annualized growth rate, from $4.4 billion a year ago, while total deposits increased to $5.4 billion, a 12% annualized growth rate from $4.9 billion at September 30, 2001. Deposit growth for the third quarter of 2002 of $145 million or 11% annualized was driven by a money market deposit marketing program, which focused on core deposits.

Greater Bay Bancorp’s allowance for loan losses was 2.73% of total loans at September 30, 2002 and 2.68% at June 30, 2002, while its ratio of non-performing assets to total assets was 0.58% at September 30, 2002, compared to 0.50% at June 30, 2002. The allowance for loan losses was 264.12% of total non-performing assets at September 30, 2002, compared to 294.21% at June 30, 2002.

Greater Bay Bancorp’s net interest margin for the third quarter of 2002 was 4.68% compared to 4.85% for the second quarter of 2002 and 4.98% for the first quarter of 2002. The net interest margin declined for the quarter, primarily as the result of the rapid paydowns in the investment portfolio, which were partially offset by declines in our borrowing costs. The end of period net interest margin was actually slightly higher than the average net interest margin due to the reduction in the investment portfolio and associated other borrowings.

Greater Bay Bancorp’s non-interest income rose to 37.54% of total revenue for the third quarter of 2002, compared to 11.60% for the third quarter of 2001. This was primarily attributed to the additional revenue generated from ABD Insurance and Financial Services (“ABD”) during the third quarter of 2002 and the additional income related to the gains in the investment portfolio.

“We are pleased to report that Greater Bay Bancorp had another quarter of good operating results; however, the current economic environment continues to provide substantial challenges,” said David Kalkbrenner, President and CEO of Greater Bay Bancorp.

Credit Quality Overview

Net charge-offs in the third quarter were higher than Greater Bay Bancorp’s previous expectations, but remain in line with the revised guidance provided in the Form 8K filed on September 17, 2002. Recent internal and external credit examinations have been completed without significant changes to our overall loan classifications. The increase in the net charge-offs is the result of our proactive credit risk management process, which identified loans in our real estate, shared national credit and Matsco portfolios, as discussed below:

• Two real estate loans previously identified and discussed in the second quarter of 2002, accounted for 30% or $7.5 million of the quarterly charge-offs. The losses on these two credits, which were originated in 2000, were higher than second quarter 2002 estimates primarily because these

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borrowers had less liquidity and other assets in comparison to the borrowers in our typical client relationship. The Company performed a detailed review of all real estate borrowing relationships in excess of $2 million to determine if any other loans would have similar characteristics. Based on our current assessment of our loan portfolio and current economic conditions, the Company identified 7 loans totaling $38 million that could fall into this category (2 commercial construction and 5 real estate term loans). We estimate that the total loss exposure on these loans, if they all became nonperforming, would range from $5 million to $10 million; however, currently all of these loans are performing according to their terms.

• Greater Bay Bancorp’s shared national credit portfolio now totals less than $50 million, with a target of approximately $30 million by year-end. The outstandings in this business have been declining since January 2000, when the Company made a decision to completely stop lending in this market segment. For the third quarter, losses approximated $4 million, with year to date losses exceeding 30% or $15 million of our total net charge-offs.

• Charge-offs in the Matsco division were higher than previous quarters, with approximately 25% or $5.9 million of the quarterly total. The increase in the Matsco charge-offs was the result of a more aggressive charge off policy and expanded collection process that was implemented in the third quarter. Matsco charges off credits after principal and interest payments are 120 days delinquent (180 days previously), even though in many cases there will be future recoveries. The recent collection efforts have reduced Matsco’s 30 day to 89 day delinquencies by 50% from the second quarter of 2002.

Mr. Kalkbrenner commented, “We continue to be vigilant in our credit risk management practices and focus on identifying problems quickly. Our client relationships, particularly in the real estate industry, are with individuals and companies that provide us with substantial comfort when we evaluate the credit risk in our loan portfolio. Our underwriting standards require a substantial client relationship and include liquidity and net worth as key factors in the decision to lend. This disciplined approach has proven successful in the past and is proving to be valuable today as several of our borrowers have provided cash or additional collateral to ensure their obligation is properly secured.”

Interest Rate Risk and Investment Portfolio Overview

Greater Bay Bancorp mitigated the impact of credit losses on overall operations by proactively managing its interest rate risk position and reducing the size of its investment portfolio. Two years ago, Greater Bay Bancorp’s balance sheet had substantial interest rate risk in a falling rate environment. At that time, the Company initiated a program to leverage the balance sheet to protect the Company’s net interest income in the event rates declined. This strategy provided significant protection to net interest income during a period of rapidly declining market interest rates. While rates may decline in the near term, over the next two to three year period, an asset sensitive balance sheet will be beneficial, as rates may rise in the future. To take advantage of this opportunity, the Company began a process to de-leverage (that is, reduce the size of the investment portfolio and wholesale borrowings) the balance sheet in the third quarter. This de-leveraging strategy seeks to capture value on securities where prepayments are accelerating and to position the balance sheet to be more asset sensitive by allowing investment cash flows to repay borrowings and not be re-invested. In the short-term, it is anticipated that the loss of net interest income will be mitigated by increased core deposits

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and loan growth. However, even if core growth does not completely cover the net interest income shortfall in the short term, we believe it will position the Company to take advantage of a rising rate environment with an asset sensitive balance sheet. The process that began in the third quarter will continue in the fourth quarter of 2002 and into 2003, with a final target of $2 billion for our investment securities portfolio (a reduction of $1.2 billion or 37% from its peak in early 2002).

Capital Overview

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. Greater Bay Bancorp’s strong earnings for the second and third quarters of 2002, when combined with our de-leveraging strategy, substantially improved the tangible equity to asset ratio from 5.01% at March 31, 2002 to 6.11% at September 30, 2002.

Mr. Kalkbrenner commented, “In assessing our tangible equity ratio, we believe it is important to consider the composition of the goodwill that is deducted from common equity to arrive at tangible equity. At September 30, 2002, the majority of the goodwill is related to the ABD acquisition. Based on ABD’s outstanding performance and current peer insurance agency valuations, ABD is worth more than the recorded goodwill value. On a pro forma basis, including the ABD goodwill in tangible equity, our tangible equity ratio would be 7.72%.”

Mr. Kalkbrenner continued, “Strong earnings coupled with the de-leveraging strategy have positioned the Company to continue to actively manage credit quality, while providing opportunities to support shareholder value. Retiring 44% of our Zero Coupon Convertible Contingent Debentures was one step we took in the third quarter to add value for our shareholders. We are actively considering other options to add value for our shareholders, as well as further reductions in our investment portfolio to position the Company to take advantage of rising interest rates.”

Forward-Looking Information

Mr. Kalkbrenner stated, “Considering our high growth, good efficiency ratio and regulatory environment, we recognize the need to increase human and systems resources, particularly in the areas of compliance and enterprise-wide risk management. These additions to staff and systems will impact salary and other expenses over the next several quarters. These increases have already been incorporated into our 2002 and 2003 earnings guidance.”

Mr. Kalkbrenner commented further, “The San Francisco Bay Area continues to be impacted by the slowing economy, as the technology recovery continues to be pushed farther and farther out. While we have few technology specific clients, the slowing economy has significant impact on our clients who provide services or real estate to this market segment. While we continue to be cautiously optimistic about the future, we realize the economy is fragile. Based on current information and assuming a second economic downturn does not occur, we are providing our guidance for the balance of 2002 and earnings per share guidance for 2003:”

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2002 Guidance

• Earnings per share growth

—Q4 2002 in the range of $0.60 to $0.63

• Net interest margin in the range of 4.65% to 4.85%

• 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%

• NPAs in the range of 0.50% to 0.65% of total assets

• Net charge-offs in the range of 110 to 120 basis points of average loans including the Shared National Credit portfolio

2003 Guidance

• 2003 earnings per share growth in the range of 10%—15%

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 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 through CompanyBoardroom at http://www.companyboardroom.com on Wednesday, October 16, 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. A replay of the conference call will be available on the CompanyBoardroom web site for 30 days and via telephone through October 23, 2002 by dialing (703) 925-2435 or (888) 266-2086, passcode 6234791.

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

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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-

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October 16, 2002

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GREATER BAY BANCORP

SEPTEMBER 30, 2002—FINANCIAL SUMMARY

($ in 000's, except share and per share data)

SELECTED CONSOLIDATED FINANCIAL CONDITION DATA:

	Sept 30			Jun 30			Mar 31			Dec 31			Sept 30
	2002			2002			2002			2001			2001
Cash and Due From Banks	$	271,774		$	265,033		$	206,487		$	189,404		$	236,989
Investments		2,966,302			3,181,788			3,215,112			2,996,630			2,662,420
Loans:
Commercial		2,007,389			1,997,960			1,901,577			1,909,056			1,888,710
Term Real Estate—Commercial		1,529,582			1,500,972			1,466,686			1,407,300			1,332,095
Total Commercial		3,536,971			3,498,932			3,368,263			3,316,356			3,220,805
Construction & Land		715,351			728,795			697,899			744,127			731,619
Real Estate—Other		282,894			292,474			251,021			246,117			237,143
Consumer and Other		174,797			178,809			196,111			204,483			205,334
Deferred Loan Fees, Net		(16,102	)		(16,354	)		(14,917	)		(15,362	)		(15,117	)
Total Loans		4,693,911			4,682,656			4,498,377			4,495,721			4,379,784
Allowance for Loan Losses		(128,429	)		(126,092	)		(125,331	)		(124,744	)		(98,178	)
Total Loans, Net		4,565,482			4,556,564			4,373,046			4,370,977			4,281,606
Goodwill and Other Intangibles		169,114			170,432			171,722			25,080			23,851
Other Assets		345,327			352,405			363,658			294,963			300,093
Total Assets	$	8,317,999		$	8,526,222		$	8,330,025		$	7,877,054		$	7,504,959
Deposits:
Demand, Non-Interest Bearing	$	984,327		$	933,486		$	934,150		$	953,989		$	956,085
NOW, MMDA and Savings		2,693,242			2,555,057			2,271,837			2,280,119			2,265,671
Time Certificates, $100,000 and over		809,519			807,033			826,178			827,756			909,175
Other Time Certificates		956,821			1,003,550			1,009,047			928,207			742,384
Total Deposits		5,443,909			5,299,126			5,041,212			4,990,071			4,873,315
Other Borrowings		1,840,423			2,209,356			2,313,428			2,095,896			1,790,383
Other Liabilities		163,310			169,311			176,688			94,403			142,748
Total Liabilities		7,447,642			7,677,793			7,531,328			7,180,370			6,806,446
Trust Preferred Securities		203,000			223,000			218,000			218,000			218,000
REIT Preferred Securities		15,650			15,650			15,650			15,000			—
Convertible Preferred Stock		72,500			72,500			72,500			—			—
Shareholders' Equity		579,207			537,279			492,547			463,684			480,513
		651,707			609,779			565,047			463,684			480,513
Total Liabilities and Shareholders' Equity	$	8,317,999		$	8,526,222		$	8,330,025		$	7,877,054		$	7,504,959
Average Quarterly Total Loans, excluding Nonaccrual	$	4,641,680		$	4,541,191		$	4,439,279		$	4,420,039		$	4,318,278
Average Quarterly Investments	$	3,183,293		$	3,202,106		$	3,098,595		$	2,794,646		$	2,434,315
Average Quarterly Interest Earning Assets	$	7,824,973		$	7,743,297		$	7,537,874		$	7,214,685		$	6,752,593
Average Quarterly Deposits	$	5,443,742		$	5,194,555		$	5,055,141		$	4,869,237		$	4,895,336
Average Quarterly Interest Bearing Liabilities	$	6,507,726		$	6,499,184		$	6,220,579		$	5,837,617		$	5,474,686
Average Quarterly Assets	$	8,474,179		$	8,413,187		$	8,028,660		$	7,613,853		$	7,154,318
Average Quarterly Equity	$	632,589		$	598,254		$	549,300		$	469,459		$	461,930
Total Regulatory Capital
Tier 1 or Leverage Capital	$	678,606		$	640,207		$	602,839		$	607,820		$	562,151
Total Capital	$	753,986		$	736,378		$	701,039		$	740,653		$	721,596
Nonperforming Assets
Nonaccrual Loans	$	47,695		$	42,349		$	27,837		$	30,970		$	22,273
OREO		930			509			972			—			—
Total Nonperforming Assets	$	48,625		$	42,858		$	28,809		$	30,970		$	22,273
Greater Bay Trust Company Assets	$	598,481		$	641,884		$	644,216		$	629,696		$	672,077

Note: Prior periods have been restated to reflect the mergers between Greater Bay Bancorp and SJNB Financial Corp. on a pooling-of-interests basis.

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GREATER BAY BANCORP

SEPTEMBER 30, 2002—FINANCIAL SUMMARY

($ in 000’s, except share and per share data)

SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:

	Third Quarter 2002			Second Quarter 2002			First Quarter 2002			Fourth Quarter 2001			Third Quarter 2001
Interest Income	$	128,259		$	130,792		$	129,425		$	129,946		$	131,856
Interest Expense		35,957			37,120			36,891			42,054			50,879
Net Interest Income Before Provision for Loan Losses		92,302			93,672			92,534			87,892			80,977
Provision for Loan Losses		27,776			9,000			16,000			28,950			8,400
Net Interest Income After Provision for Loan Losses		64,526			84,672			76,534			58,942			72,577
Non-interest Income:
Insurance Agency Commissions & Fees(1)		26,359			27,601			10,891			—			—
Depositor Service Fees		2,771			2,762			2,828			3,223			2,564
Loan and International Banking Fees		2,124			2,273			2,527			2,243			1,987
Trust Fees		844			894			906			881			865
ATM Fees		629			628			583			656			803
Gain on Sale of Loans		2,049			210			496			347			1,684
Gain/(loss) on Investments		9,299			2,707			200			(46	)		819
Gain on early retirement of Zero Coupon Convertible Contingent Securities (CODES)		5,770			—			—			—			—
Other Income		5,641			2,435			4,161			2,380			1,900
		55,486			39,510			22,592			9,684			10,622
Nonrecurring—Warrant Income(2)		(89	)		—			—			—			77
Total Non-interest Income		55,397			39,510			22,592			9,684			10,699
Operating Expenses:
Salaries		37,296			36,054			26,046			23,675			21,366
Deferred Loan Origination Costs		(3,479	)		(3,745	)		(2,986	)		(3,117	)		(3,067	)
Benefits		5,950			6,338			5,515			4,138			4,019
Total Compensation and Benefits		39,767			38,647			28,575			24,696			22,318
Occupancy and Equipment		10,035			10,267			8,838			7,817			7,036
Professional Services & Legal		2,462			1,915			1,689			2,342			2,418
Telephone, postage and supplies		1,827			1,918			1,633			1,615			1,366
Marketing and promotion		1,605			1,617			1,452			1,470			1,413
Data Processing		1,145			1,196			1,129			1,021			1,166
Client Services		433			557			647			645			712
FDIC Insurance and Assessments		409			417			463			627			406
Other Real Estate, Net		119			—			—			—			—
Amortization of Intangibles		1,650			1,650			562			376			374
Other Expenses		3,565			6,170			4,682			3,331			4,000
		63,017			64,354			49,670			43,940			41,209
Costs related to the Early Retirement of Trust Preferred Securities (TPS)		—			975			—			—			—
TPS & REIT Preferred Securities expense		4,826			5,185			5,323			5,088			3,724
Nonrecurring Expenses(2)		479			—			—			—			—
Total Operating Expenses(1)(3)		68,322			70,514			54,993			49,028			44,933
Income Before Income Taxes, Merger and Other Related Nonrecurring Costs		51,601			53,668			44,133			19,598			38,343
Income Taxes:
Income Tax Expense		19,572			20,132			16,531			6,369			14,485
Capital Loss Carryback Tax (Benefit)(4)		—			—			—			(11,897	)		—
Nonrecurring Income Tax Expense(2)		(441	)		—			—			—			32
Total Income Tax Expense		19,131			20,132			16,531			(5,528	)		14,517
Income Before Merger and Other Related Nonrecurring Costs		32,470			33,536			27,602			25,126			23,826
Merger and Other Related Nonrecurring Costs, net of tax(2)		—			—			—			17,611			—
Net Income	$	32,470		$	33,536		$	27,602		$	7,515		$	23,826

(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 $32,597 for Q3 2002, $25,126 for Q4 2001and $23,781 for Q3 2001.

(3) Total Operating Expenses were $46.0 million in Q3 2002, $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.

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GREATER BAY BANCORP

SEPTEMBER 30, 2002—FINANCIAL SUMMARY

($ in 000’s, except share and per share data)

SELECTED YEAR TO DATE CONSOLIDATED OPERATING DATA:

	YTD 30-Sep 2002			YTD 30-Sep 2001
Interest Income	$	388,476		$	377,295
Interest Expense		109,968			144,178
Net Interest Income Before Provision for Loan Losses		278,508			233,117
Provision for Loan Losses		52,776			25,777
Net Interest Income After Provision for Loan Losses		225,732			207,340
Non-interest Income:
Insurance Agency Commissions & Fees(1)		64,851			—
Depositor Service Fees		8,361			7,379
Loan and International Banking Fees		6,924			6,613
Trust Fees		2,644			2,729
ATM Fees		1,840			2,231
Gain on Sale of Loans		2,755			2,894
Gain/(loss) on Investments		12,206			6,350
Gain on early retirement of Zero Coupon Convertible Contingent Securities (CODES)		5,770			—
Other Income		12,237			6,381
		117,588			34,577
Nonrecurring—Warrant Income(2)		(89	)		581
Total Non-interest Income		117,499			35,158
Operating Expenses:
Salaries		99,396			60,883
Deferred Loan Origination Costs		(10,210	)		(8,297	)
Benefits		17,803			12,417
Total Compensation and Benefits		106,989			65,003
Occupancy and Equipment		29,140			19,939
Professional Services & Legal		6,066			5,497
Telephone, postage and supplies		5,378			4,412
Marketing and promotion		4,674			4,178
Data Processing		3,470			3,427
Client Services		1,637			2,320
FDIC Insurance and Assessments		1,289			1,135
Other Real Estate, Net		119			—
Amortization of Intangibles		3,862			1,032
Other Expenses		14,417			10,984
		177,041			117,927
Costs related to the Early Retirement of Trust Preferred Securities (TPS)		975			—
TPS & REIT Preferred Securities expense		15,334			8,636
Nonrecurring Expenses(2)		479			—
Total Operating Expenses(1)(3)		193,829			126,563
Income Before Income Taxes, Merger and Other Related Nonrecurring Costs		149,402			115,935
Income Taxes:
Income Tax Expense		56,235			43,390
Nonrecurring Income Tax Expense(2)		(441	)		244
Total Income Tax Expense		55,794			43,634
Income Before Merger and Other Related Nonrecurring Costs		93,608			72,301
Merger and Other Related Nonrecurring Costs, net of tax(2)		—			—
Net Income	$	93,608		$	72,301

(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 $93,735 for YTD September 2002 and $71,964 for YTD September 2001.

(3) Total Operating Expenses were $142.5 million in YTD September 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.

10

Greater Bay Bancorp’s Third Quarter Earnings Results

October 16, 2002

Page 10 of 12

GREATER BAY BANCORP

SEPTEMBER 30, 2002—FINANCIAL SUMMARY

($ in 000’s, except share and per share data)

SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:

	Sept 30 2002			Jun 30 2002			Mar 31 2002			Dec 31 2001			Sept 30 2001
Loan to Deposit Ratio		86.22	%		88.37	%		89.23	%		90.09	%		89.87	%
Core Bank Loan to Deposit Ratio(1)		70.53	%		71.49	%		72.26	%		75.41	%		75.60	%
Ratio of Allowance for Loan Losses to:
Average Loans		2.74	%		2.75	%		2.81	%		2.80	%		2.26	%
End of Period Loans		2.73	%		2.68	%		2.78	%		2.77	%		2.23	%
Total Nonperforming Assets		264.12	%		294.21	%		435.04	%		402.79	%		440.79	%
Ratio of Provision for Loan Losses to Average Loans, annualized		2.35	%		0.79	%		1.45	%		2.58	%		0.77	%
Total Nonperforming Loans to Total Loans		1.02	%		0.90	%		0.62	%		0.69	%		0.51	%
Total Nonperforming Assets to Total Assets		0.58	%		0.50	%		0.35	%		0.39	%		0.30	%
Ratio of Quarterly Net Charge-offs to Average Loans, annualized		2.15	%		0.72	%		1.40	%		0.52	%		0.58	%
Ratio of YTD Net Charge-offs to YTD Average Loans, annualized		1.43	%		1.05	%		1.40	%		0.59	%		0.61	%
Loan Growth, current quarter to prior year quarter		7.17	%		9.01	%		7.08	%		10.60	%		24.28	%
Loan Growth, current quarter to prior quarter, annualized		0.95	%		16.43	%		0.24	%		10.50	%		7.78	%
Loan Growth, YTD annualized		5.89	%		8.39	%		0.24	%		10.60	%		10.36	%
Deposits Growth, current quarter to prior year quarter		11.71	%		8.60	%		4.74	%		5.05	%		8.93	%
Deposits Growth, current quarter to prior quarter, annualized		10.84	%		20.52	%		4.16	%		9.51	%		-0.51	%
Deposits Growth, YTD annualized		12.16	%		12.49	%		4.16	%		5.05	%		3.46	%
Recurring Revenue Growth, current quarter to prior year quarter		61.34	%		48.74	%		33.01	%		17.96	%		18.97	%
Recurring Revenue Growth, current quarter to prior quarter, annualized		43.51	%		62.91	%		72.94	%		25.89	%		9.12	%
Net Interest Income Growth, current quarter to prior year quarter		13.99	%		21.59	%		23.22	%		18.47	%		18.50	%
Net Interest Income Growth, current quarter to prior quarter, annualized		-5.80	%		4.93	%		21.42	%		33.88	%		20.27	%
Average Earning Assets to Average Total Assets		92.34	%		92.04	%		93.89	%		94.76	%		94.38	%
Average Earning Assets to Average Interest-Bearing Liabilities		120.24	%		119.14	%		121.18	%		123.59	%		123.34	%
Capital Ratios:
Tangible Equity and REIT Preferred Securities to Tangible Assets		6.11	%		5.45	%		5.01	%		5.78	%		6.10	%
Tangible Equity and REIT Preferred Securities to Tangible Assets (including ABD value)		7.72	%		7.05	%		6.68	%		5.78	%		6.10	%
Leverage		8.17	%		7.77	%		7.67	%		8.01	%		7.86	%
Tier 1 Risk Based Capital		11.35	%		10.66	%		10.31	%		10.49	%		10.05	%
Total Risk Based Capital		12.61	%		12.26	%		11.99	%		12.79	%		12.90	%
Risk Weighted Assets	$	5,979,732		$	6,005,431		$	5,845,147		$	5,792,917		$	5,593,341
Book Value Per Share	$	11.26		$	10.50		$	9.75		$	9.31		$	9.66
Total Shares Outstanding		51,442,027			51,192,359			50,501,861			49,831,682			49,717,960

(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 San Jose National Bank on a pooling-of-interests basis.

11

Greater Bay Bancorp’s Third Quarter 2002 Earnings Results

October 16, 2002

Page 11 of 12

GREATER BAY BANCORP

SEPTEMBER 30, 2002—FINANCIAL SUMMARY

($ in 000’s, except share and per share data)

SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:

	Third Quarter 2002			Second Quarter 2002			First Quarter 2002			Fourth Quarter 2001			Third Quarter 2001
GAAP EPS (including Amortization of Intangibles)
Income Per Share (Before Nonrecurring and Merger Items)(1)(2)(3)
Basic(4)	$	0.61		$	0.64		$	0.54		$	0.51		$	0.48
Diluted	$	0.60		$	0.62		$	0.52		$	0.49		$	0.46
Income Per Share (Before Merger Items)(3)
Basic(4)	$	0.61		$	0.64		$	0.54		$	0.51		$	0.48
Diluted	$	0.60		$	0.62		$	0.52		$	0.49		$	0.46
Net Income Per Share
Basic(4)	$	0.61		$	0.64		$	0.54		$	0.15		$	0.48
Diluted	$	0.60		$	0.62		$	0.52		$	0.15		$	0.46
Cash EPS (excluding Amortization of Intangibles)
Income Per Share (Before Nonrecurring and Merger Items)(1)(2)(3)
Basic(4)	$	0.63		$	0.66		$	0.55		$	0.51		$	0.48
Diluted	$	0.62		$	0.63		$	0.53		$	0.49		$	0.47
Income Per Share (Before Merger Items)(3)
Basic(4)	$	0.63		$	0.66		$	0.55		$	0.51		$	0.48
Diluted	$	0.61		$	0.63		$	0.53		$	0.49		$	0.47
Net Income Per Share(3)
Basic(4)	$	0.63		$	0.66		$	0.55		$	0.16		$	0.48
Diluted	$	0.61		$	0.63		$	0.53		$	0.15		$	0.47
Weighted Average Common Shares Outstanding		51,339,000			50,685,000			50,204,000			49,689,000			49,588,000
Weighted Average Common & Common Equivalent Shares Outstanding		54,504,000			54,500,000			53,026,000			51,221,000			51,352,000
GAAP Ratios (including Amortization of Intangibles)
Return on Period Average Assets, annualized(1)		1.53	%		1.60	%		1.39	%		1.31	%		1.32	%
Return on Period Average Equity, annualized(1)		20.44	%		22.48	%		20.38	%		21.23	%		20.42	%
Net Interest Margin—Average Earning Assets		4.68	%		4.85	%		4.98	%		4.83	%		4.76	%
Operating Expense Ratio (Before Nonrecurring and Merger Items)		3.18	%		3.36	%		2.78	%		2.55	%		2.49	%
Operating Expense Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)		2.95	%		3.07	%		2.51	%		2.29	%		2.29	%
Efficiency Ratio (Before Nonrecurring and Merger Items)		45.91	%		52.95	%		47.77	%		50.25	%		49.05	%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)		42.64	%		48.32	%		43.14	%		45.03	%		44.99	%
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)		33.60	%		40.75	%		40.53	%		45.03	%		44.99	%
Cash Ratios (excluding Amortization of Intangibles)
Return on Period Average Assets, annualized(1)		1.60	%		1.68	%		1.42	%		1.33	%		1.34	%
Return on Period Average Equity, annualized(1)		28.79	%		32.37	%		23.89	%		22.63	%		21.74	%
Net Interest Margin—Average Earning Assets		4.68	%		4.85	%		4.98	%		4.83	%		4.76	%
Operating Expense Ratio (Before Nonrecurring and Merger Items)		3.10	%		3.28	%		2.75	%		2.54	%		2.47	%
Operating Expense Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)		2.87	%		2.99	%		2.48	%		2.27	%		2.26	%
Efficiency Ratio (Before Nonrecurring and Merger Items)		44.79	%		51.71	%		47.28	%		49.86	%		48.65	%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)		41.52	%		47.08	%		42.66	%		44.65	%		44.58	%
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)		33.58	%		40.74	%		40.51	%		44.65	%		44.58	%

(1) Excludes nonrecurring and Merger items of $127 thousand, net of tax, in Q3 2002. 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.

(2) Components of Nonrecurring and Merger Items. Net Income excluding these items is $32,597 for Q3 2002, $25,126 for Q4 2001 and $23,781 for Q3 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 for both Q3 and Q2 2002 and $263 thousand for 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.

12

Greater Bay Bancorp’s Third Quarter 2002 Earnings Results

October 16, 2002

Page 12 of 12

GREATER BAY BANCORP

SEPTEMBER 30, 2002—FINANCIAL SUMMARY

($ in 000’s, except share and per share data)

SELECTED YEAR TO DATE CONSOLIDATED OPERATING RATIOS:

	YTD 30-Sep 2002			YTD 30-Sep 2001
GAAP EPS (including Amortization of Intangibles)
Income Per Share (Before Nonrecurring and Merger Items)(1)(2)(3)
Basic(4)	$	1.79		$	1.46
Diluted	$	1.73		$	1.41
Income Per Share (Before Merger Items)(3)
Basic(4)	$	1.78		$	1.46
Diluted	$	1.73		$	1.41
Net Income Per Share
Basic(4)	$	1.78		$	1.46
Diluted	$	1.73		$	1.41
Cash EPS (excluding Amortization of Intangibles)
Income Per Share (Before Nonrecurring and Merger Items)(1)(2)(3)
Basic(4)	$	1.83		$	1.47
Diluted	$	1.78		$	1.42
Income Per Share (Before Merger Items)(3)
Basic(4)	$	1.83		$	1.48
Diluted	$	1.78		$	1.43
Net Income Per Share(3)
Basic(4)	$	1.83		$	1.48
Diluted	$	1.78		$	1.43
Weighted Average Common Shares Outstanding		50,891,000			49,426,000
Weighted Average Common & Common Equivalent Shares Outstanding		54,039,000			51,154,000
GAAP Ratios (including Amortization of Intangibles)
Return on Period Average Assets, annualized(1)		1.51	%		1.49	%
Return on Period Average Equity, annualized(1)		21.10	%		22.14	%
Net Interest Margin—Average Earning Assets		4.83	%		5.17	%
Operating Expense Ratio (Before Nonrecurring and Merger Items)		3.11	%		2.62	%
Operating Expense Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)		2.85	%		2.44	%
Efficiency Ratio (Before Nonrecurring and Merger Items)		48.81	%		47.28	%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)		44.70	%		44.05	%
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)		38.06	%		44.05	%
Cash Ratios (excluding Amortization of Intangibles)
Return on Period Average Assets, annualized(1)		1.57	%		1.51	%
Return on Period Average Equity, annualized(1)		28.23	%		23.65	%
Net Interest Margin—Average Earning Assets		4.83	%		5.17	%
Operating Expense Ratio (Before Nonrecurring and Merger Items)		3.05	%		2.60	%
Operating Expense Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)		2.79	%		2.42	%
Efficiency Ratio (Before Nonrecurring and Merger Items)		47.84	%		46.89	%
Efficiency Ratio (Before Nonrecurring and Merger Items, costs related to early retirement of TPS and TPS & REIT preferred securities expense)		43.72	%		43.67	%
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)		38.04	%		43.67	%

(1) Excludes Nonrecurring and Merger Items of $127 thousand, net of tax, in YTD September 2002 and $337 thousand, net of tax, in YTD September 2001.

(2) Components of Nonrecurring and Merger Items. Net Income excluding these items is $93,735 for YTD September 2002 and $71,964 for YTD September 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 $2.9 million in YTD September 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.

13