EX-99.1 3 dex991.htm PRESS RELEASE DATED 10/16/2002 Press Release dated 10/16/2002
 
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%.

-more-

 
Greater Bay Bancorp’s Third Quarter 2002 Earnings Results
October 16, 2002
Page 2 of 12
 
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

-more-

Greater Bay Bancorp’s Third Quarter 2002 Earnings Results
October 16, 2002
Page 3 of 12
 
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

-more-

 
 
Greater Bay Bancorp’s Third Quarter 2002 Earnings Results
October 16, 2002
Page 4 of 12
 
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:”

-more-

Greater Bay Bancorp’s Third Quarter 2002 Earnings Results
October 16, 2002
Page 5 of 12
 
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

-more-

Greater Bay Bancorp’s Third Quarter 2002 Earnings Results
October 16, 2002
Page 6 of 12
 
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-

-more-

 
Greater Bay Bancorp's Third Quarter 2002 Earnings Results
October 16, 2002
Page 7 of 12
 
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.

8

Greater Bay Bancorp’s Third Quarter 2002 Earnings Results
October 16, 2002
Page 8 of 12
 
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.

Greater Bay Bancorp’s Third Quarter 2002 Earnings Results
October 16, 2002
Page 9 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 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