Slide Presentation of Greater Bay Bancorp

EX-99.2 3 dex992.htm SLIDE PRESENTATION OF GREATER BAY BANCORP Slide Presentation of Greater Bay Bancorp

Exhibit 99.2

LOGO

Greater Bay Bancorp Investor Presentation October 2005 1

Greater Bay Bancorp

Certain

matters

discussed

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

interest

margin,

net

loan

charge-offs,

asset

quality,

level

loan

loss

reserves,

growth

loans and deposits 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 and the quality of the Company’s

earning assets; (2) government regulation, including ABD’ s receipt of requests for

information from state insurance commissioners and a subpoena from the New York

Attorney

General

the

ongoing

insurance

industry-wide

investigations

into

contingent commissions and override payments; and (3) 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, 2004. Greater Bay does not

undertake,

and

specifically

disclaims,

any

obligation

update

any

forward-looking

statements to reflect occurrences or unanticipated events or circumstances after the date of

such statements.

Company Profile

As of September 30, 2005

1.42% / 15.13%

Q3 ROA / ROE

$1.22 billion

Market Capitalization (2)

$667 million

Common Equity

50.4 million

Common Shares Outstanding

$0.44

Q3 Diluted EPS

$25.6 million

Q3 Net Income

$4.6 billion

Core Deposits (1)

$7.1 billion

Total Assets

(1)

Excludes brokered and wholesale institutional deposits

(2)

As of October 24, 2005

Investment Rationale

Largest independent banking franchise in Northern

California operating in lucrative San Francisco Bay Area

regional market.

–

Established track record as acquirer of choice.

–

Proven record of organic growth and in-market

expansion.

Diversified provider of financial services in four distinct

business areas.

–

Mitigates geographic concentration of banking

business and sector-specific earnings volatility.

–

Reduces spread income dependence.

Investment Rationale

Strong financial fundamentals and sound credit metrics.

Experienced and proven executive management team.

Leading to long-term record of superior shareholder

return.

An Exceptional Regional Market

Greater San Francisco Bay Area

Greater San Francisco Bay Area Profile

Recognized global leadership in technological innovation,

advancement, and growth.

–

Unmatched concentration of venture capital funding

and investment.

–

Entrepreneurial spirit and results-oriented ethic.

Highest levels of worker productivity and per capita

income in the nation.

Highest level of workforce education in the nation.

Exceptionally strong international trade position.

“The Bay Area has proven fairly resilient in the economic

downturn. Several fundamental strengths remain in tact

such as its highly skilled work force, global presence, and

multi-faceted economy…(and) the Bay Area retains its

core dynamism, and still has marked advantages over

other comparable regions in the country.”

McKinsey & Company/Bay Area Council

“Downturn and Recovery in Restoring Prosperity”

Economic Profile

January 2004

A Regional Strategic Perspective

Diversified Financial Services

Provider

Diversified Financial Services Provider

Loans of $3.1 billion

Core deposit of $4.6 billion

12 distinct community

bank branches

40 offices

Relationship based

Centralized operations,

international and cash

management support

Regional in scope

Regional

Community Banking

Assets of $1.4 billion

Commercial finance to

health care businesses

Small ticket leasing

Factoring and asset

based lending

SBA lending

National in scope

Specialty Finance

Annual premiums

approaching $2 billion

2004 annual revenues

of $130 million*

Offering P&C, D&O,

employee benefits, risk

management services

No underwriting risk

Western U.S. in scope

Insurance Brokerage

Trust and private

banking

AUM in excess of $600

million

Regional in scope

Wealth Management

Greater Bay Bancorp

* Excludes Lucini/Parish which was acquired May, 2005.

Regional Community Banking

Regional Community Banking Business

Operating 12 separate business dbas under single consolidated

charter –

40 office locations throughout the Greater Bay Area.

Common data processing platform, credit policies and operating

procedures –

served and supported by single administrative staff.

Relationship focused:

–

Loans: Commercial ($500m-5mm), CRE ($1-10mm), and

construction ($1-10mm) credit opportunities.

–

Deposits: Full suite of business and personal products.

–

Local people in local markets making local decisions based

upon local knowledge.

Greater Bay Community Banking –

1996

Greater Bay Community Banking -

Today

Community Banking Group Profile

Mid-Peninsula Bank

Peninsula Bank of

Commerce

Bay Area Bank

Peninsula/

San Mateo County

Cupertino National

Bank

San Jose National

Bank

Bank of Santa Clara

Santa Clara

County

Golden Gate Bank

Greater Bay Bank-

Marin

San Francisco/

Marin Counties

Bay Bank of

Commerce

Greater Bay Bank-

Fremont

Alameda

County

Mt. Diablo National

Bank

Greater Bay Bank-

Walnut Creek

Contra Costa

County

Coast Commercial

Bank

Greater Bay Bank-

Carmel

Santa Cruz/

Monterey Counties

Bank of Petaluma

Sonoma

County

Community

Banking

Group

Note: Figures shown as of 09/30/05.

Total Loans: $3.1 billion

Core Deposits: $4.6 billion

Client-Centric Banking Model

Install

Sell

Service

Craft

Locate and

Diagnose

Client

Link and

Build

Relationship

Management

Business

Development

Core Deposit Balance

(1)

$4.43

$4.56

$4.81

$4.75

$4.55

$4.58

2002

2003

2004

Q1 '05

Q2 '05

Q3 '05

($ in Billions)

(1) Core deposits exclude brokered and wholesale institutional deposits.

Core Deposit Composition

(1)

–

9/30/05

($ in Billions)

(1) Core deposits exclude brokered and wholesale institutional deposits.

By Region

By Type

Demand

23%

Savings &

NOW

28%

MMDAs

38%

Time

Deposits

>$100

Other Time

Deposits

San Mateo

26%

Santa Clara

41%

San

Francisco

Marin

Contra Costa

11%

Santa Cruz &

Monterey

Sonoma

Core Deposits $4.58 Billion

Specialty Finance

Specialty Finance Business

Collection of discrete businesses focused on acquisition and

servicing/sale of value-based assets where execution,

efficiency, standardization, and productivity are essential to

optimizing profitability.

Transaction rather than relationship-based.

–

Relationships essentially limited to intermediaries who

source the business (dealers, distributors, etc.).

Mandate to compete at high end of credit quality spectrum.

–

No deviation from target borrower –

very disciplined.

Intense focus on perpetual growth of credit risk knowledge and

on automation-based underwriting as core strategic elements.

Specialty Finance Group Profile

Professional dental

and veterinary term

commercial financing

National in scope

Matsco

Small-ticket leasing

National in scope

Greater Bay

Capital

Factoring and asset-

based lending

West Coast in scope

Greater Bay

Funding

504 and 7(A) business

sourced direct and via

community banks

Regional in scope

SBA

Lending

Start-up venture aimed

at brokering or retaining

high quality SFD REL

Regional in scope

Residential

Mortgage Lending

Specialty

Finance

Group

Note: Figures as of 09/30/05.

Total Assets: $1.4 billion

2001

2002

2003

2004

Q1 2005

Q2 2005

Q3 2005

CRE

Construction and Land

Commercial/Matsco/GBC

All Others/SNC

Residential Mortgage

Loan Portfolio Composition

Combined Community Banking and Specialty Finance

($ in Billions)

* Gross of Deferred Fees & Discounts

$4.51 $4.81 $4.55 $4.49

$4.50 $4.73 $4.68

14%

39%

16%

31%

11%

41%

15%

33%

10%

42%

12%

36%

44%

11%

36%

45%

11%

34%

46%

11%

29%

6 %

46%

13%

27%

Commercial Real Estate Portfolio

Composition –

9/30/05

Office

34%

Retail

18%

Industrial

13%

Other

10%

Hotel/Motel

R&D

1-4SFR

Warehouse

Self Storage

Multifamily

Santa Clara

34%

San Mateo

13%

Alameda

12%

San

Francisco

Santa Cruz

Sonoma

Other

Monterey

Marin

Contra Costa

Sacramento

Solano

By Type

By County

Total -

$1.5 Billion

Construction Loan Portfolio

Composition –

9/30/05

By Type

By County

1-4 SFR

49%

Multifamily

40%

Office

Industrial

Self Storage

Retail

Other

Santa Clara

26%

San Mateo

16%

San

Francisco

13%

Contra Costa

13%

Alameda

Santa Cruz

10%

Sonoma

San

Bernadino

Placer

Other

Sacramento

Marin

Total -

$472 Million

CRE Loan Outstandings by Vintage –

Through 9/30/05

$238

$202

$153

$214

$340

$243

$195

$157

$100

$200

$300

$400

$500

Pre

1999

2000

2001

2002

2003

2004

2005

($ in Millions)

Total Outstandings = $1.5 billion

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

1999

2000

2001

2002

2003

2004

Q1'05

Q2'05

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Avg Rent

Vacancy

Bay Area Office Market

Rental and Vacancy Trends

Source: BT Commercial

Commercial Insurance Brokerage

Commercial Insurance Services Business

Acquired ABD Insurance and Financial Services in March

2002 –

a highly-respected provider of commercial

insurance brokerage and risk management services.

Largest brokerage firm headquartered on the West Coast

and 15

largest in the nation. (1)

–

And 4

largest bank-owned firm in the country.

Diversified property and casualty (65%) and employee

benefit (35%) revenue streams.

Key strengths in technology, biotech, wine, construction,

and agribusiness industry sectors.

(1) Source: Business Insurance Magazine –

July

18, 2005

Commercial Insurance Services Business

Strategic focus on disciplined expansion (via organic

growth and acquisition) into key western regional markets.

–

To leverage existing lines of business expertise –

and

to develop enhanced “provider-of-choice”

branding and

pricing positions.

–

Highly successful expansion into Seattle is indicative of

both capabilities and expectations.

–

Completed acquisition of highly regarded Lucini/Parish

firm in Nevada –

May 1, 2005

Commercial Insurance Services Group

Bay Area

Sacramento

Additional Major

Western Regional

Markets

Los Angeles/

Southern CA

Seattle

Reno

ABD Insurance and

Financial Services

2004 Premium Volume: $1.9 billion

2004 Commission / Fee Revenue: $130 million

Increased Non-Interest Revenue

Contribution*

* As a result of the ABD acquisition in March 2002, the Company’ s 2002 results included 10 months of insurance commissions

and fees totaling $88.5 million.

17.7%

13.3%

25.0%

11.4%

27.6%

11.7%

32.8%

10.4%

32.8%

12.6%

32.6%

11.9%

2002

2003

2004

Q1 '05

Q2 '05

Q3 '05

ABD

43.2%

45.3%

36.6%

31.2%

39.6%

44.5%

Sound Credit Metrics

Net Charge-Offs by Loan Type

$10

$20

$30

$40

$50

$60

2002

$54.8

$17.5

$13.8

$13.5

$9.5

$0.5

2003

$31.6

$9.6

$10.3

$5.6

$5.2

$0.9

2004

$17.7

$6.6

$3.0

$4.6

$0.5

Sept YTD 2005

$10.1

$3.2

$0.0

$1.7

$3.0

$2.2

Total

Matsco

SNC

Other C&I

CRE &

Construction

Consumer

($ in millions)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

'3/01

'6/01

'9/01

'12/01

'3/02

'6/02

'9/02

'12/02

'3/03

'6/03

'9/03

'12/03

'3/04

'6/04

'9/04

'12/04

'3/05

'6/05

'9/05

GBBK Annualized Net Charge-Off Rate

GBBK Allowance as % of Loans

Peer Allowance as % of Loans

Allowance and Charge-Off Levels

Non-Performing Assets by Loan Type

($5)

$15

$25

$35

$45

$55

$65

$75

$85

$95

3/31/04

6/30/04

9/30/04

12/31/04

3/31/05

6/30/05

9/30/05

CRE

Const./Land

Commercial

Corp. Finance

Matsco/GBC

All Other

$49.2

$42.2

$59.3

$44.3

($ in millions)

$53.4

$88.6

$73.1

Strong Financial Indicators

Capital Strength

13.5%

12.3%

10.2%

7.1%

Q3 2005

14.3%

14.1%

10.0%

Total Risk-Based Capital

13.0%

12.9%

6.0%

Tier 1 Risk-Based Capital

10.7%

10.0%

5.0%

Leverage Ratio

7.7%

7.1%

n/a

Tang.Equity/Tang. Assets (1)

2004

2003

Regulatory Well-

Capitalized Standard

_____ Capital Ratios___ _ __

(1) Common equity plus preferred stock less intangible assets divided by tangible assets.

4.36%

4.20%

4.52%

4.86%

5.56%

5.29%

4.45%

4.29%

6.75%

5.25%

4.00%

4.25%

5.00%

9.50%

8.50%

5.75%

6.00%

10%

12/99

12/00

12/01

12/02

12/03

12/04

03/05

06/05

09/05

GBBK's Avg. Margin

Prime Rate

Net Interest Margin Levels

Interest Rate Risk Profile

Greater Bay is fundamentally neutral with current slight bias to

net asset-sensitive position.

Balance sheet actively managed to sustain slightly net asset

sensitive position

–

$1.9 billion of indexed loans that adjust with market rate

movements.

–

Restrained upward deposit pricing.

–

Wholesale financing duration extensions.

Investment portfolio continues to be managed for minimal

credit and controlled extension risk.

Recent Developments

Insurance Brokerage Contingent Commissions

–

Greater Bay engaged outside counsel in late 2004 to review

ABD’s overall business practices in specific areas of

concern.

•

No evidence found of improper marketing activities.

•

No systemic compliance related issues identified.

–

ABD has received and is fully cooperating with requests from

various state insurance commissioners as well as a

subpoena from the N.Y. Attorney General’s Office requesting

information about contingent commissions and marketing

practices.

•

We believe this to be a part of an industry wide review of

such practices.

Recent Developments

Charter consolidation process.

–

Completed on target in Q3 2005.

–

Minimal client impact

–

seamless transition to date.

–

Adoption of common deposit product set underway to reduce

funding costs and strengthen controls .

IRS Notice of Proposed Adjustment (NOPA).

–

Received in November 2004

–

challenged deductibility of

merger-related expenses of $34 million taken in 2000 and

2001.

–

NOPA resolved with IRS during Q3 2005; disallowed

deductions reduced to $1.5 million.

–

No tax expense related to this matter required.

Quality Management

Experienced and Committed

Management Team

Stanford University, Bank of

America, EurekaBank

Peggy Hiraoka

Human Resources

Co-Founder –

ABD Insurance

Frederick J. de Grosz

Insurance Brokerage

Wells Fargo, ATT Capital

Keith Wilton

Specialty Finance

Wells Fargo

Colleen M. Anderson

Community Banking

Cal Fed, OTS

Kenneth Shannon

Chief Risk Officer

Bank of America

James S. Westfall

Chief Financial Officer

Wells Fargo, Bank of America,

EurekaBank

Byron A. Scordelis

Chief Executive Officer

Experience

Name

Officer

Focus on the Future

Key Objectives

Restore and drive top-line revenue growth.

–

Quality loan and deposit growth in target product types

and client profiles.

–

Acceleration of insurance and other fee revenue

sources.

–

Redoubled focus on pricing disciplines.

Achieve and sustain increased cost efficiency.

–

Rationalize responsibilities and structures.

–

Realize growth without added recurring cost.

Key Objectives

Pursue expansion of all

existing business lines.

Be regarded as “best of breed”

in all control endeavors.

–

Regulatory, compliance, accounting, SOX, and

enterprise-wide risk management.

–

Portfolio concentration and credit quality.

–

Interest-rate risk management.

Be an active force for positive change in the communities

that we serve.

Outlook for 2005

Our full year guidance for 2005 is as follows:

Core Loan Growth

–

based on the current forecast of moderate economic

growth in our primary market area, we anticipate core loan portfolio growth to be

flat or in the low single digits.

Core Deposit Growth

–

we anticipate core deposit growth to be flat or in the low

single digits, and intend to adjust our use of institutional time deposits and other

non-relationship funding sources to meet funding needs not satisfied

by core

deposit and capital funding sources.

Credit Quality

–

based on our continued aggressive credit risk management and

the current economic outlook, we anticipate net

charge-offs

from

30 basis points

to 40 basis points of average loans outstanding.

Net Interest Margin

–

based on the Company ’s anticipated core loan and

deposit growth and its slightly asset sensitive interest rate risk position, we

expect the margin to fluctuate in the 4.30% to 4.40% range.

Focus on Shareholder Value

GBBK Share Price Performance

100%

200%

300%

400%

500%

600%

700%

800%

900%

11/27/1996

1997

1998

1999

2000

2001

2002

2003

2004

Q1 2005

Q2 2005

Q3 2006

GBBK

S&P Bank Index

S&P 500

Nasdaq Bank Index