8-K

UNITED STATES

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) August 7, 2007

GREATER BAY BANCORP

(Exact name of registrant as specified in its charter)

California	0-25034	77-0387041
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1900 University Avenue, 6th Floor East Palo Alto, CA	94303
(Address of principal executive offices)	(Zip Code)

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

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operation and Financial Condition.

On August 7, 2007, Greater Bay Bancorp (the “Registrant”) issued a press release regarding its results of operations and financial condition for the second quarter and six months ended June 30, 2007. The text of the press release is included as Exhibit 99.1 to this report. The information included in the press release is considered to be “furnished” under the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

List below the financial statements, pro forma financial information and exhibits, if any, filed as a part of this report.

(a) Financial statements of businesses acquired. None

(b) Pro forma financial information. None

(c) Shell company transactions. None

(d) Exhibits.

Exhibit No.	Description of Exhibit
99.1	Press Release dated August 7, 2007, deemed “furnished” under the Securities Exchange Act of 1934

SIGNATURES

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

	Greater Bay Bancorp (Registrant)
Date: August 7, 2007	By:	/S/    LINDA M. IANNONE
		Linda M. Iannone Executive Vice President and General Counsel

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1	Press Release dated August 7, 2007, deemed “furnished” under the Securities Exchange Act of 1934

EX-99.1

Exhibit 99.1

For Information Contact At Greater Bay Bancorp: Byron A. Scordelis, President and CEO (650) 838-6101 James S. Westfall, EVP and CFO (650) 838-6108	At Silverman Heller Associates: Philip Bourdillon/Gene Heller (310) 208-2550
FOR IMMEDIATE RELEASE

GREATER BAY BANCORP REPORTS

FINANCIAL RESULTS

FOR THE SECOND QUARTER OF 2007

EAST PALO ALTO, Calif., August 7, 2007 – Greater Bay Bancorp (Nasdaq: GBBK), a $7.3 billion in assets financial services holding company, today announced results for the second quarter of 2007 and six months ended June 30, 2007.

For the second quarter of 2007, the Company’s net income was $17.5 million, or $0.35 per diluted common share, compared to $26.1 million, or $0.47 per diluted common share, for the second quarter of 2006, and $17.8 million, or $0.31 per diluted common share, for the first quarter of 2007. For the first six months of 2007, net income was $35.2 million, or $0.66 per diluted common share, compared to $52.3 million, or $0.94 per diluted common share for the first six months of 2006.

Operating results for the second quarter of 2007 included expenses of $2.1 million ($1.6 million after tax) for professional services associated with the Company’s proposed merger with Wells Fargo & Company and a write-off of $0.8 million ($0.5 million after tax) in capitalized debt issuance costs for a debt offering that was cancelled due to the proposed merger.

On June 30, 2007, the Company redeemed its outstanding convertible Series B Preferred Stock with a carrying value of $102.6 million for $100.5 million. The $2.0 million (after tax) excess of the carrying value over the redemption value did not affect reported net income for the second quarter or the first six months of 2007, but is included in net income available to common shareholders for purposes of calculating net income per share amounts for the second quarter and the first six months of 2007.

For the second quarter of 2007, the Company’s return on average common equity, annualized, was 9.29% compared to 14.85% for the second quarter of 2006, and 9.65% for the first quarter of 2007. Return on average common equity, annualized, for the first six months of 2007 was 9.47% compared to 15.79% for the same period in 2006. Return on average assets, annualized, for the second quarter of 2007 was 0.96% compared to 1.47% for the second quarter of 2006, and 0.98% for the first quarter of 2007. Return on average assets, annualized, was 0.97% for the first six months of 2007 compared to 1.49% for the same period in 2006.

Greater Bay Bancorp Reports

Financial Results for the Second Quarter of 2007

August 7, 2007

Page 2 of 12

Net Interest Income and Margin

Net interest income for the second quarter of 2007 decreased to $59.5 million from $65.8 million in the second quarter of 2006, and from $59.9 million in the first quarter of 2007.

The net interest margin (on a fully tax-equivalent basis) for the second quarter of 2007 was 3.71%, compared to 4.26% for the second quarter of 2006 and 3.78% for the first quarter of 2007. The five basis point increase in the linked-quarter interest-earning asset yield was exceeded by a 12 basis point increase in the cost of interest-bearing liabilities, reflecting a continued deposit mix shift toward higher yielding products.

Net interest income for the first half of 2007 decreased to $119.4 million from $132.7 million for the same period in 2006. The net interest margin (on a fully tax-equivalent basis) for the first six months of 2007 was 3.75% compared to 4.31% for the same period in 2006.

Non-Interest Income

Non-interest income for the second quarter of 2007 increased to $58.2 million compared to $56.8 million in the second quarter of 2006. The $1.4 million increase was due to increases of $3.3 million in insurance commissions and fees and $1.6 million in gains on deferred compensation investments, which were partially offset by a decrease of $3.8 million in mark-to-market gains on venture capital and equity securities.

Non-interest income for the second quarter of 2007 remained relatively flat compared to the first quarter of 2007.

Non-interest income in the first six months of 2007 increased to $116.7 million from $115.5 million in the first six months of 2006. The $1.2 million increase was due primarily to increases of $2.6 million in insurance commissions and fees and $1.5 million in gains on deferred compensation investments, which were partially offset by decreases of $1.7 million in mark-to-market gains on venture capital and equity securities and $1.2 million rental revenues on operating leases.

Non-interest income as a percentage of total revenues for the second quarter of 2007 was 49.5%, compared to 46.3% for the second quarter of 2006 and 49.4% for the first quarter of 2007. Non-interest income as a percentage of total revenues for the first six months of 2007 was 49.4%, compared to 46.5% for the same period one year ago.

Operating Expenses

Operating expenses for the second quarter of 2007 increased $7.5 million to $90.5 million from $83.0 million in the second quarter of 2006. Second quarter 2007 operating expenses compared to second quarter 2006 included:

• Increase of $4.8 million in compensation expenses due mainly to increases in average salaries, bonus levels and share based compensation expense

• Increase of $1.2 million in legal costs and other professional fees primarily due to $2.1 million in professional services expense associated with the Company’s pending merger with Wells Fargo & Company, and

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Greater Bay Bancorp Reports

Financial Results for the Second Quarter of 2007

August 7, 2007

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• Increase of $1.8 million in other expenses due principally to a $0.8 million write-off of debt issuance costs related to a cancelled debt offering.

Operating expenses for the second quarter of 2007 decreased to $90.5 million from $90.7 million in the first quarter of 2007. Second quarter 2007 operating expenses compared to first quarter 2007 included:

• Decrease of $3.1 million in compensation and benefits due mainly to lower share based compensation expense of $1.2 million, lower payroll taxes of $1.2 million and lower 401(k) contribution expense of $0.9 million.

• Increase of $1.0 million in legal costs and other professional fees primarily due to merger related expenses

• Increase in other expenses related to the write-off of debt issuance costs

Operating expenses in the first six months of 2007 increased to $181.1 million from $173.5 million in the first half of 2006. The first six months of 2007 operating expenses compared to the same period in 2006 included:

• Increase of $6.0 million in compensation expenses due mainly to increases in salaries of $1.1 million, bonus expense of $1.5 million and share based compensation expense of $2.6 million

• Increase of $1.6 million in legal costs and other professional fees due primarily to merger related costs and professional services associated with the Company’s previously announced strategic planning project

• Increase of $1.7 million in other expenses due mainly to the write-off of debt issuance costs related to a cancelled debt offering and $0.9 million in outsourced data processing fees.

Income Taxes

The Company’s effective tax rate was 36.6% for the second quarter of 2007 compared to 37.2% for the second quarter of 2006. The effective tax rate was 37.5% for the first six months of 2007 compared to 36.8% for the same period in 2006.

Credit Quality Overview

Net loan charge-offs in the second quarter of 2007 were $1.8 million, or 0.14% of average loans, annualized, compared to $2.7 million or 0.23% of average loans, annualized, for the second quarter of 2006 and $1.1 million, or 0.09% of average loans, annualized, for the first quarter of 2007. Net loan charge-offs in the first six months of 2007 were $2.9 million, or 0.12% of average loans, annualized, compared to $2.7 million or 0.12% for the same period in 2006.

Provision for credit losses was a negative $0.4 million for the second quarter of 2007, compared to a negative $1.9 million for the second quarter of 2006, and a negative $1.1 million for the first quarter of 2007. The provision for credit losses for the first six months of 2007 was a negative $1.5 million, compared to a negative $7.9 million for the first six months of 2006.

Non-performing assets were $24.4 million at June 30, 2007, compared to $32.6 million at June 30, 2006 and $32.1 million at March 31, 2007. The ratio of non-performing assets to total assets was 0.33% at June 30, 2007, compared to 0.44% at June 30, 2006 and 0.43% at March 31,

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Greater Bay Bancorp Reports

Financial Results for the Second Quarter of 2007

August 7, 2007

Page 4 of 12

2007. The ratio of non-accrual loans to total loans was 0.48% at June 30, 2007, compared to 0.68% at June 30, 2006 and 0.64% at March 31, 2007.

Allowance for loan and lease losses was $64.1 million, or 1.27% of total loans, at June 30, 2007, compared to $71.7 million, or 1.50% of total loans, at June 30, 2006 and $66.0 million, or 1.35% of total loans, at March 31, 2007.

Balance Sheet

At June 30, 2007, total assets were $7.3 billion, total net loans and leases were $5.1 billion, total securities were $1.4 billion, and total deposits were $5.3 billion.

Total loans and leases, net of deferred costs and fees, were $5.1 billion at June 30, 2007, which represents an increase of $277.6 million, or 5.8%, compared to June 30, 2006. This growth reflects an increase of $354.4 million, or 17.1%, in commercial loans and leases plus $97.7 million in commercial term real estate loans. These increases were partially offset by a decline of $106.0 million, or 13.9%, in construction and land loans plus $35.7 million in consumer and other loans, $19.7 million in real estate other loans and $16.9 million in residential mortgages.

Total loans and leases, net of deferred costs and fees, were $5.1 billion at June 30, 2007, which represents an increase of $146.4 million, or 12.0% annualized, compared to March 31, 2007. This growth was most notable in commercial loans and leases, which increased by $127.4 million or an annualized rate of 22.2%. Additional increases in commercial term real estate loans of $24.1 million and in construction and land loans of $7.4 million were partially offset by a decline of $15.9 million in residential mortgage lending.

Securities totaled $1.4 billion as of June 30, 2007, compared to $1.6 billion at June 30, 2006 and $1.4 billion at March 31, 2007.

Total deposits at June 30, 2007 were $5.3 billion, which represents an increase of $277.2 million, or 5.5%, compared to June 30, 2006, and a decrease of $9.5 million compared to March 31, 2007.

Core deposits (excluding institutional and brokered deposits) at June 30, 2007 were $3.9 billion, which represents a decrease of $321.4 million, or 7.6%, compared to June 30, 2006, and a decrease of $336.4 million compared to March 31, 2007. The majority of this core deposit outflow occurred in April, and is viewed in part as being a seasonal event, with other outflow occurring in the area of large specialty deposits which continued a trend noted in prior quarters.

Capital Overview

The capital ratios of Greater Bay Bancorp and its subsidiary bank continue to comfortably exceed minimum well-capitalized guidelines established by bank regulatory agencies.

The Company’s common equity to assets ratio was 10.32% at June 30, 2007, compared to 9.64% at June 30, 2006 and 10.13% at March 31, 2007. The Company’s tangible common equity to tangible assets ratio was 6.66% at June 30, 2007, compared to 5.95% at June 30, 2006 and 6.47% at March 31, 2007.

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Greater Bay Bancorp Reports

Financial Results for the Second Quarter of 2007

August 7, 2007

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About Greater Bay Bancorp

Greater Bay Bancorp, a diversified financial services holding company, provides community banking services in the Greater San Francisco Bay Area through Greater Bay Bank, N.A.’s community banking organization, including Bank of Petaluma, Coast Commercial Bank, Golden Gate Bank, Mid-Peninsula Bank, Mt. Diablo National Bank, Peninsula Bank of Commerce and Santa Clara Valley National Bank. Nationally, Greater Bay Bancorp provides specialized leasing and loan services through its specialty finance group, which includes Matsco, Greater Bay Business Funding and Greater Bay Capital. ABD Insurance and Financial Services, the Company’s insurance brokerage subsidiary, provides commercial insurance brokerage, employee benefits consulting and risk management solutions to business clients throughout the United States.

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, among other things, our pending merger with Wells Fargo & Company, the Company’s current expectations regarding future operating results, net interest margin, net loan charge-offs, asset quality, level of loan loss provisions, growth in loans and deposits, ABD revenue growth and level of operating expenses. 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 local, national and international 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 subpoenas from state attorneys general related to the ongoing insurance industry-wide investigations into contingent commissions and override payments; (3) failure to consummate our merger with Wells Fargo & Company as a result of the inability to satisfy a condition to close, including the inability to obtain requisite shareholder or governmental approval; and (4) 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, 2006. Greater Bay does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements, except as required by law.

For additional information and press releases about Greater Bay Bancorp, visit the Company’s website at http://www.gbbk.com.

-Financial Tables Follow-

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Greater Bay Bancorp Reports Financial Results for the Second Quarter of 2007

August 7, 2007

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GREATER BAY BANCORP

JUNE 30, 2007 - FINANCIAL SUMMARY (UNAUDITED)

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

SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:

	Second Quarter 2007			First Quarter 2007			Fourth Quarter 2006			Third Quarter 2006			Restated(6) Second Quarter 2006
Interest income	$	115,255		$	113,479		$	116,308		$	113,916		$	108,321
Interest expense		55,799			53,572			52,419			50,142			42,487
Net interest income before (reversal of) / provision for credit losses		59,456			59,907			63,889			63,774			65,834
(Reversal of) / provision for credit losses		(418	)		(1,073	)		(384	)		(443	)		(1,886	)
Net interest income after (reversal of) / provision for credit losses		59,874			60,980			64,273			64,217			67,720
Non-interest income:
Insurance commissions and fees		43,541			43,898			38,730			41,757			40,235
Rental revenue on operating leases		4,215			4,322			4,490			4,632			4,790
Service charges and other fees		2,239			2,196			2,324			2,363			2,368
Loan and international banking fees		2,359			2,047			1,980			1,960			1,718
Income on bank owned life insurance		2,107			1,726			2,003			2,038			1,922
Trust fees		1,097			1,054			1,138			1,059			1,127
Other income		2,633			3,221			908			1,643			4,610
Total non-interest income		58,191			58,464			51,573			55,452			56,770
Operating expenses:
Compensation and benefits		55,709			58,762			55,279			52,548			50,906
Occupancy and equipment		11,319			10,751			11,457			11,896			11,192
Legal costs and other professional fees		5,076			4,123			3,950			5,074			3,884
Depreciation - operating leases		3,270			3,393			3,503			3,665			3,917
Amortization of intangibles		1,896			1,462			1,507			1,678			1,689
Other expenses		13,202			12,167			12,281			16,220			11,387
Total operating expenses		90,472			90,658			87,977			91,081			82,975
Income before provision for income taxes and cumulative effect of accounting change		27,593			28,786			27,869			28,588			41,515
Provision for income taxes		10,105			11,027			9,091			10,076			15,423
Net income	$	17,488		$	17,759		$	18,778		$	18,512		$	26,092
EARNINGS PER SHARE DATA:
Net Income per common share (1)
Basic	$	0.36		$	0.32		$	0.34		$	0.33		$	0.48
Diluted	$	0.35		$	0.31		$	0.33		$	0.32		$	0.47
Weighted average common shares outstanding		50,639			50,488			50,478			50,423			50,188
Weighted average common & potential common shares outstanding		51,440			51,294			51,180			51,366			51,173
GAAP ratios
Return on quarterly average assets, annualized		0.96	%		0.98	%		1.00	%		1.00	%		1.47	%
Return on quarterly average common shareholders’ equity, annualized		9.29	%		9.65	%		10.03	%		10.15	%		14.85	%
Return on quarterly average total equity, annualized		8.45	%		8.48	%		8.81	%		8.89	%		12.95	%
Net interest margin, annualized (2)		3.71	%		3.78	%		3.91	%		3.97	%		4.26	%
Operating expense ratio, annualized (3)		4.96	%		5.01	%		4.71	%		4.92	%		4.66	%
Efficiency ratio (4)		76.90	%		76.59	%		76.20	%		76.39	%		67.68	%
NON-GAAP ratios
Efficiency ratio (excluding ABD & other ABD expenses paid by holding company) (5)		72.40	%		72.92	%		67.08	%		69.63	%		58.27	%
(1)    The following table provides a reconciliation of income available to common shareholders. Additionally, the Company’s outstanding convertible preferred stock was antidilutive for all periods presented.
Net income	$	17,488		$	17,759		$	18,778		$	18,512		$	26,092
Less: dividends on convertible preferred stock		(1,348	)		(1,831	)		(1,832	)		(1,832	)		(1,822	)
Plus: excess of carrying value over the consideration paid on redemption of preferred stock (7)		2,030			—			—			—			—
Net Income available to common shareholders	$	18,170		$	15,928		$	16,946		$	16,680		$	24,270
Weighted average common shares outstanding		50,639			50,488			50,478			50,423			50,188
Weighted average potential common shares:
Stock options		801			806			702			943			985
Total weighted average common & potential common shares outstanding		51,440			51,294			51,180			51,366			51,173
(2)    Net interest income (on a tax equivalent basis) for the period, annualized and divided by average quarterly interest earning assets for the period.
(3)    Total operating expenses for the period, annualized and divided by average quarterly assets.
(4)    Total operating expenses divided by total revenue (the sum of net interest income and non-interest income, excluding provision for credit losses).
(5)    Total operating expenses less ABD operating expenses divided by total revenue less ABD revenue. The following table provides the information for calculating the efficiency ratio excluding ABD:
Revenue (excluding ABD)	$	73,335		$	74,032		$	75,911		$	77,083		$	82,180
Operating expenses (excluding ABD & other ABD-related expenses)	$	53,091		$	53,990		$	50,924		$	53,670		$	47,888
(6)    Restated Q2 2006 to reflect adoption of SEC Staff Accounting Bulletin No.108 effective January 1, 2006.
(7)    On June 30, 2007, the Company redeemed its outstanding convertible Series B Preferred Stock which had a carrying value of $102.6 million at its stated value of $50.00 per share for total consideration of $100.5 million. The $2.0 million excess of the carrying value of the redeemed shares over the consideration paid was recorded as an adjustment to paid-in-capital, which is included in Common Stock. This $2.0 million adjustment to paid-in-capital is also included in income available to common shareholders for purposes of determining the net income per common share.

Greater Bay Bancorp Reports Financial Results for the Second Quarter of 2007

August 7, 2007

Page 7 of 12

GREATER BAY BANCORP

JUNE 30, 2007 - FINANCIAL SUMMARY (UNAUDITED)

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

SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:

	Six Months Ended June 30,
	2007			Restated(7) 2006
Interest income	$	228,734		$	212,336
Interest expense		109,371			79,621
Net interest income before (reversal of) / provision for credit losses		119,363			132,715
Reversal of provision for credit losses		(1,491	)		(7,890	)
Net interest income after reversal of provision for credit losses		120,854			140,605
Non-interest income:
Insurance commissions and fees		87,439			84,835
Rental revenue on operating leases		8,537			9,740
Service charges and other fees		4,435			4,908
Loan and international banking fees		4,406			3,513
Income on bank owned life insurance		3,833			3,833
Trust fees		2,151			2,182
Other income		5,854			6,525
Total non-interest income		116,655			115,536
Operating expenses:
Compensation and benefits		114,471			108,462
Occupancy and equipment		22,070			22,514
Legal costs and other professional fees		9,199			7,637
Depreciation - operating leases		6,663			7,920
Amortization of intangibles		3,358			3,329
Other expenses		25,369			23,658
Total operating expenses		181,130			173,520
Income before provision for income taxes and cumulative effect of accounting change		56,379			82,621
Provision for income taxes		21,132			30,429
Income before cumulative effect of accounting change		35,247			52,192
Cumulative effect of accounting change, net of tax (1)		—			130
Net income	$	35,247		$	52,322
EARNINGS PER SHARE DATA:
Net Income per common share before cumulative effect of accounting change (2)
Basic	$	0.67		$	0.97
Diluted	$	0.66		$	0.94
Net Income per common share after cumulative effect of accounting change (2)
Basic	$	0.67		$	0.97
Diluted	$	0.66		$	0.94
Weighted average common shares outstanding		50,568			49,997
Weighted average common & potential common shares outstanding		51,378			51,860
GAAP ratios
Return on YTD average assets, annualized		0.97	%		1.49	%
Return on YTD common shareholders’ equity, annualized		9.47	%		15.79	%
Return on YTD average total equity, annualized		8.46	%		13.67	%
Net interest margin, annualized (3)		3.75	%		4.31	%
Operating expense ratio, annualized (4)		4.99	%		4.94	%
Efficiency ratio (5)		76.74	%		69.90	%
NON-GAAP ratios
Efficiency Ratio (excluding ABD & other ABD expenses paid by holding company) (6)		72.66	%		62.27	%
(1)    Effective January 1, 2006, the Company adopted SFAS No.123 (revised 2004), Share-Based Payment (“SFAS 123R”), as a result of which the Company recognized a one-time which the Company recognized a one-time cumulative adjustment, to record an estimate of future forfeitures on outstanding equity based awards for which compensation expense had been recognized prior to adoption.
(2)    The following table provides a reconciliation of income available to common shareholders before and after cumulative effect of accounting change. Additionally, the Company’s outstanding convertible preferred stock was antidilutive for all periods presented.
Net income before cumulative effect of accounting change as reported	$	35,247		$	52,192
Less: dividends on convertible preferred stock		(3,179	)		(3,654	)
Plus: excess of carrying value over the consideration paid on redemption of preferred stock (8)		2,030			—
Net Income available to common shareholders before cumulative effect of accounting change		34,098			48,538
Add: CODES interest and other related income/(loss), net of taxes		—			59
Net income available to common shareholders before cumulative effect of accounting change		34,098			48,597
Cumulative effect of accounting change, net of tax		—			130
Net income available to common shareholders after cumulative effect of accounting change	$	34,098		$	48,727
Weighted average common shares outstanding		50,568			49,997
Weighted average potential common shares:
Stock options		810			879
CODES		—			984
Total weighted average common & potential common shares outstanding		51,378			51,860
(3)    Net interest income (on a tax equivalent basis) for the period, annualized and divided by average quarterly interest earning assets for the period.
(4)    Total operating expenses for the period, annualized and divided by average quarterly assets.
(5)    Total operating expenses divided by total revenue (the sum of net interest income and non-interest income, excluding provision for credit losses).
(6)    Total operating expenses less ABD operating expenses divided by total revenue less ABD revenue. The following table provides the information for calculating the efficiency ratio excluding ABD:
Revenue (Excluding ABD)	$	147,367		$	162,726
Operating Expenses (Excluding ABD & other ABD expenses paid by holding company)	$	107,081		$	101,329
(7)    Restated YTD 2006 to reflect adoption of SEC Staff Accounting Bulletin No.108 effective January 1, 2006.
(8)    On June 30, 2007, the Company redeemed its outstanding convertible Series B Preferred Stock which had a carrying value of $102.6 million at its stated value of $50.00 per share for total consideration of $100.5 million. The $2.0 million excess of the carrying value of the redeemed shares over the consideration paid was recorded as an adjustment to paid-in-capital, which is included in Common Stock. This $2.0 million adjustment to paid-in-capital is also included in income available to common shareholders for purposes of determining the net income per common share.

Greater Bay Bancorp Reports Financial Results for the Second Quarter of 2007

August 7, 2007

Page 8 of 12

GREATER BAY BANCORP

JUNE 30, 2007 - FINANCIAL SUMMARY (UNAUDITED)

(Dollars in 000’s)

SELECTED CONSOLIDATED FINANCIAL CONDITION DATA AND RATIOS:

	Jun 30 2007			Mar 31 2007			Dec 31 2006			Restated(5) Sep 30 2006			Restated(5) Jun 30 2006
Cash and cash equivalents	$	134,464		$	139,083		$	170,365		$	160,572		$	198,716
Fed funds sold		20,000			161,000			—			—			36,000
Securities		1,369,589			1,435,692			1,543,097			1,572,109			1,565,732
Loans and leases:
Commercial		2,426,776			2,299,362			2,245,549			2,136,235			2,072,334
Term real estate - commercial		1,492,253			1,468,160			1,403,631			1,423,090			1,394,518
Total commercial		3,919,029			3,767,522			3,649,180			3,559,325			3,466,852
Real estate construction and land		656,405			649,009			729,871			753,416			762,409
Residential mortgage		258,479			274,329			279,615			277,038			275,332
Real estate other		144,463			146,697			173,271			163,077			164,133
Consumer and other		66,119			62,026			68,698			79,131			101,821
Deferred costs and fees, net		7,709			6,254			5,206			4,278			4,066
Total loans and leases, net of deferred costs and fees		5,052,204			4,905,837			4,905,841			4,836,265			4,774,613
Allowance for loan and lease losses		(64,110	)		(65,950	)		(68,025	)		(71,323	)		(71,689	)
Total loans and leases, net		4,988,094			4,839,887			4,837,816			4,764,942			4,702,924
Goodwill		246,016			246,016			246,016			242,687			243,343
Other intangible assets		41,150			43,069			42,978			44,515			46,227
Other assets		529,756			517,581			530,862			554,985			583,167
Total assets	$	7,329,069		$	7,382,328		$	7,371,134		$	7,339,810		$	7,376,109
Deposits:
Demand, noninterest-bearing	$	879,756		$	953,808		$	1,028,245		$	980,050		$	1,015,734
MMDA, NOW and savings		2,527,705			2,679,239			2,614,349			2,613,387			2,734,656
Time deposits, $100,000 and over		805,311			911,915			892,048			784,557			776,712
Other time deposits		1,086,650			763,975			722,541			681,104			495,131
Total deposits		5,299,422			5,308,937			5,257,183			5,059,098			5,022,233
Other borrowings		826,240			791,670			825,837			994,044			970,390
Subordinated debt		175,774			180,929			180,929			180,929			287,631
Other liabilities		258,201			237,061			254,812			256,545			268,899
Total liabilities		6,559,637			6,518,597			6,518,761			6,490,616			6,549,153
Minority interest:
Preferred stock of real estate investment trust subsidiaries		12,943			12,902			12,861			12,821			12,780
Convertible preferred stock		—			103,069			103,094			103,094			103,096
Common shareholders’ equity (1)		756,489			747,760			736,418			733,279			711,080
Total shareholders’ equity (1)		756,489			850,829			839,512			836,373			814,176
Total liabilities and total equity	$	7,329,069		$	7,382,328		$	7,371,134		$	7,339,810		$	7,376,109
RATIOS:
Loan growth, current quarter to prior year quarter		5.81	%		3.72	%		3.76	%		3.19	%		0.72	%
Loan growth, current quarter to prior quarter, annualized		11.97	%		0.00	%		5.71	%		5.12	%		3.81	%
Loan growth, YTD		6.02	%		0.00	%		3.76	%		3.06	%		1.99	%
Core loan growth, current quarter to prior year quarter (2)		6.59	%		4.37	%		4.45	%		3.90	%		1.32	%
Core loan growth, current quarter to prior quarter, annualized (2)		13.09	%		0.34	%		6.41	%		5.91	%		4.47	%
Core loan growth, YTD (2)		6.76	%		0.34	%		4.45	%		3.73	%		2.58	%
Deposit growth, current quarter to prior year quarter		5.52	%		3.92	%		3.93	%		0.87	%		2.93	%
Deposit growth, current quarter to prior quarter, annualized		-0.72	%		3.99	%		15.53	%		2.91	%		-6.79	%
Deposit growth, YTD		1.62	%		3.99	%		3.93	%		0.01	%		-1.45	%
Core deposit growth, current quarter to prior year quarter (3)		-7.56	%		-4.58	%		-6.79	%		-10.48	%		-6.63	%
Core deposit growth, current quarter to prior quarter, annualized (3)		-31.62	%		1.11	%		15.29	%		-14.43	%		-19.72	%
Core deposit growth, YTD (3)		-15.39	%		1.11	%		-6.79	%		-13.71	%		-13.84	%
Revenue growth, current quarter to prior year quarter (4)		-4.04	%		-5.79	%		-4.38	%		-2.66	%		2.46	%
Revenue growth, current quarter to prior quarter, annualized (4)		-2.45	%		10.22	%		-12.53	%		-10.93	%		-9.71	%
Net interest income growth, current quarter to prior year quarter		-9.69	%		-10.43	%		-5.69	%		-6.21	%		0.63	%
Net interest income growth, current quarter to prior quarter, annualized		-3.02	%		-25.28	%		0.72	%		-12.41	%		-6.28	%

(1)    The Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” or FIN 48 effective January 1, 2007 and as a result recognized a $4.5 million reserve for uncertain tax positions which was recorded as a reduction to the beginning balance of retained earnings as of January 1, 2007.

(2)    Core loans calculated as total loans less purchased residential mortgage loans.

(3)    Core deposits calculated as total deposits less institutional and brokered time deposits.

(4)    Revenue is the sum of net interest income before (reversal of) / provision for credit losses and total non-interest income.

(5)    Restated Q2 and Q3 2006 to reflect adoption of SEC Staff Accounting Bulletin No. 108 effective January 1, 2006.

Greater Bay Bancorp Reports Financial Results for the Second Quarter of 2007

August 7, 2007

Page 9 of 12

GREATER BAY BANCORP

JUNE 30, 2007 - FINANCIAL SUMMARY (UNAUDITED)

(Dollars in 000’s)

SELECTED AVERAGE BALANCE SHEET AND YIELD DATA:

	Three months ended
	June 30, 2007							March 31, 2007
Tax-Equivalent Basis (1)	Average balance (2)		Interest			Average yield / rate		Average balance (2)		Interest			Average yield / rate
INTEREST-EARNING ASSETS:
Fed funds sold	$	58,077	$	763		5.27	%	$	63,223	$	815		5.23	%
Securities:
Taxable		1,347,838		15,365		4.57	%		1,441,326		16,588		4.67	%
Tax-exempt (1)		90,848		1,554		6.86	%		92,071		1,582		6.97	%
Other short-term (3)		9,363		86		3.70	%		8,424		84		4.03	%
Loans and leases (4)		4,948,695		97,976		7.94	%		4,869,674		94,910		7.90	%
Total interest-earning assets		6,454,821		115,744		7.19	%		6,474,718		113,979		7.14	%
Noninterest-earning assets		858,236		—					866,562		—
Total assets	$	7,313,057		115,744				$	7,341,280		113,979
INTEREST-BEARING LIABILITIES:
Deposits:
MMDA, NOW and Savings	$	2,609,041		20,195		3.10	%	$	2,603,938		18,810		2.93	%
Time deposits over $100,000		858,287		10,856		5.07	%		877,491		10,881		5.03	%
Other time deposits		814,071		9,991		4.92	%		747,657		9,072		4.92	%
Total interest-bearing deposits		4,281,399		41,042		3.84	%		4,229,086		38,763		3.72	%
Short-term borrowings		347,514		4,624		5.34	%		369,591		4,489		4.93	%
Subordinated debt		176,850		3,645		8.27	%		180,929		3,711		8.32	%
Other long-term borrowings		499,732		6,724		5.40	%		494,409		6,609		5.42	%
Total interest-bearing liabilities		5,305,495		56,035		4.24	%		5,274,016		53,572		4.12	%
Noninterest-bearing deposits		901,588							948,232
Other noninterest-bearing liabilities		263,096							256,393
Minority Interest: Preferred stock of real estate investment trust subsidiaries		12,917							12,876
Shareholders’ equity		829,961							849,763
Total shareholders’ equity and liabilities	$	7,313,057		56,035				$	7,341,280		53,572
Net interest income, on a tax-equivalent basis (1)				59,709							60,407
Net interest margin (5)						3.71	%						3.78	%
Reconciliation to reported net interest income:
Adjustment for tax-equivalent basis				(253	)						(500	)
Net interest income, as reported			$	59,456						$	59,907

(1) Income from tax-exempt securities issued by state and local governments or authorities, is adjusted by an increment that equates tax-exempt income to tax equivalent basis (assuming a 35% federal income tax rate).

(2) Nonaccrual loans are included in the average balance.

(3) Includes average interest-earning deposits in other financial institutions.

(4) Amortization of deferred costs and fees, net, resulted in an increase of interest income on loans by $771,000 and $592,000, for the three months ended June 30, 2007 and March 31, 2007, respectively.

(5) Net interest margin during the period equals (a) the difference between tax-equivalent interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (b) average interest-earning assets for the period, annualized.

Greater Bay Bancorp Reports Financial Results for the Second Quarter of 2007

August 7, 2007

Page 10 of 12

GREATER BAY BANCORP

JUNE 30, 2007 - FINANCIAL SUMMARY (UNAUDITED)

(Dollars in 000’s)

SELECTED AVERAGE BALANCE SHEET AND YIELD DATA:

	Three months ended
	June 30, 2007							June 30, 2006
Tax-Equivalent Basis (1)	Average balance (2)		Interest			Average yield / rate		Average balance (2)		Interest			Average yield / rate
INTEREST-EARNING ASSETS:
Fed funds sold	$	58,077	$	763		5.27	%	$	10,791	$	128		4.77	%
Securities:
Taxable		1,347,838		15,365		4.57	%		1,433,756		16,030		4.48	%
Tax-exempt (1)		90,848		1,554		6.86	%		86,323		1,543		7.16	%
Other short-term (3)		9,363		86		3.70	%		9,348		46		1.99	%
Loans and leases (4)		4,948,695		97,976		7.94	%		4,705,859		91,074		7.76	%
Total interest-earning assets		6,454,821		115,744		7.19	%		6,246,077		108,821		6.99	%
Noninterest-earning assets		858,236		—					894,432		—
Total assets	$	7,313,057		115,744				$	7,140,509		108,821
INTEREST-BEARING LIABILITIES:
Deposits:
MMDA, NOW and Savings	$	2,609,041		20,195		3.10	%	$	2,807,337		15,094		2.16	%
Time deposits over $100,000		858,287		10,856		5.07	%		780,415		8,466		4.35	%
Other time deposits		814,071		9,991		4.92	%		414,765		4,381		4.24	%
Total interest-bearing deposits		4,281,399		41,042		3.84	%		4,002,517		27,941		2.80	%
Short-term borrowings		347,514		4,624		5.34	%		262,439		2,947		4.50	%
Subordinated debt		176,850		3,645		8.27	%		224,755		4,867		8.68	%
Other long-term borrowings		499,732		6,724		5.40	%		547,494		6,732		4.93	%
Total interest-bearing liabilities		5,305,495		56,035		4.24	%		5,037,205		42,487		3.38	%
Noninterest-bearing deposits		901,588							1,013,577
Other noninterest-bearing liabilities		263,096							270,030
Minority Interest: Preferred stock of real estate investment trust subsidiaries		12,917							12,756
Shareholders’ equity		829,961							806,941
Total shareholders’ equity and liabilities	$	7,313,057		56,035				$	7,140,509		42,487
Net interest income, on a tax-equivalent basis (1)				59,709							66,334
Net interest margin (5)						3.71	%						4.26	%
Reconciliation to reported net interest income:
Adjustment for tax-equivalent basis				(253	)						(500	)
Net interest income, as reported			$	59,456						$	65,834

(1) Income from tax-exempt securities issued by state and local governments or authorities, is adjusted by an increment that equates tax-exempt income to tax equivalent basis (assuming a 35% federal income tax rate).

(2) Nonaccrual loans are included in the average balance.

(3) Includes average interest-earning deposits in other financial institutions.

(4) Amortization of deferred costs and fees, net, resulted in an increase of interest income on loans by $771,000 and $602,000 for the three months ended June 30, 2007 and June 30, 2006, respectively.

(5) Net interest margin during the period equals (a) the difference between tax-equivalent interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (b) average interest-earning assets for the period, annualized.

Greater Bay Bancorp Reports Financial Results for the Second Quarter of 2007

August 7, 2007

Page 11 of 12

GREATER BAY BANCORP

JUNE 30, 2007 - FINANCIAL SUMMARY (UNAUDITED)

(Dollars in 000’s)

SELECTED AVERAGE BALANCE SHEET AND YIELD DATA:

	Six months ended
	June 30, 2007							June 30, 2006
Tax-Equivalent Basis (1)	Average balance (2)		Interest			Average yield / rate		Average balance (2)		Interest			Average yield / rate
INTEREST-EARNING ASSETS:
Fed funds sold	$	60,635	$	1,578		5.25	%	$	11,533	$	260		4.55	%
Securities:
Taxable		1,394,324		31,953		4.62	%		1,429,572		31,653		4.47	%
Tax-exempt (1)		91,456		3,137		6.92	%		84,470		3,035		7.24	%
Other short-term (3)		8,896		170		3.86	%		9,554		81		1.72	%
Loans and leases (4)		4,909,402		192,885		7.92	%		4,713,403		178,294		7.63	%
Total interest-earning assets		6,464,713		229,724		7.17	%		6,248,532		213,323		6.88	%
Noninterest-earning assets		862,377		—					889,779		—
Total assets	$	7,327,090		229,724				$	7,138,311		213,323
INTEREST-BEARING LIABILITIES:
Deposits:
MMDA, NOW and Savings	$	2,606,503		39,005		3.02	%	$	2,878,394		29,165		2.04	%
Time deposits over $100,000		867,836		21,793		5.06	%		768,401		15,789		4.14	%
Other time deposits		781,048		19,007		4.91	%		338,214		6,748		4.02	%
Total interest-bearing deposits		4,255,387		79,805		3.78	%		3,985,009		51,702		2.62	%
Short-term borrowings		358,491		9,112		5.13	%		275,389		5,930		4.34	%
CODES		—		—		0.00	%		37,343		101		0.55	%
Subordinated debt		178,878		7,356		8.29	%		217,573		9,424		8.73	%
Other long-term borrowings		497,086		13,334		5.41	%		511,107		12,464		4.92	%
Total interest-bearing liabilities		5,289,842		109,607		4.18	%		5,026,421		79,621		3.19	%
Noninterest-bearing deposits		924,781							1,027,613
Other noninterest-bearing liabilities		259,763							275,984
Minority Interest: Preferred stock of real estate investment trust subsidiaries		12,897							12,735
Shareholders’ equity		839,807							795,558
Total shareholders’ equity and liabilities	$	7,327,090		109,607				$	7,138,311		79,621
Net interest income, on a tax-equivalent basis (1)				120,117							133,702
Net interest margin (5)						3.75	%						4.31	%
Reconciliation to reported net interest income:
Adjustment for tax-equivalent basis				(754	)						(987	)
Net interest income, as reported			$	119,363						$	132,715

(1) Income from tax-exempt securities issued by state and local governments or authorities, is adjusted by an increment that equates tax-exempt income to tax equivalent basis (assuming a 35% federal income tax rate).

(2) Nonaccrual loans are included in the average balance.

(3) Includes average interest-earning deposits in other financial institutions.

(4) Amortization of deferred costs and fees, net, resulted in an increase of interest income on loans by $1,363,000 and $847,000 for the six months ended June 30, 2007 and June 30, 2006, respectively.

(5) Net interest margin during the period equals (a) the difference between tax-equivalent interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (b) average interest-earning assets for the period, annualized.

Greater Bay Bancorp Reports Financial Results for the Second Quarter of 2007

August 7, 2007

Page 12 of 12

GREATER BAY BANCORP

JUNE 30, 2007 - FINANCIAL SUMMARY (UNAUDITED)

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

SELECTED CONSOLIDATED CREDIT QUALITY DATA:

	Jun 30 2007			Mar 31 2007			Dec 31 2006			Sep 30 2006			Jun 30 2006
Nonperforming assets
Commercial:
Matsco/GBC	$	8,169		$	9,160		$	7,583		$	8,323		$	7,257
SBA		6,252			6,456			5,576			2,881			4,536
Other		5,280			7,769			8,486			6,458			4,775
Total commercial		19,701			23,385			21,645			17,662			16,568
Real estate:
Commercial		2,306			6,180			7,173			10,939			14,763
Construction and land		1,980			1,980			930			323			323
Other		—			—			—			—			3
Total real estate		4,286			8,160			8,103			11,262			15,089
Consumer and other		189			74			117			139			611
Total nonaccrual loans		24,176			31,619			29,865			29,063			32,268
OREO		—			—			—			—			—
Other nonperforming assets		215			435			382			603			361
Total nonperforming assets	$	24,391		$	32,054		$	30,247		$	29,666		$	32,629
Net loan charge-offs (recoveries) (1)	$	1,755		$	1,122		$	3,192		$	223		$	2,662
Ratio of allowance for loan and lease losses to:
End of period loans		1.27	%		1.35	%		1.39	%		1.48	%		1.50	%
Total nonaccrual loans		265.2	%		208.6	%		227.8	%		245.4	%		222.2	%
Ratio of quarter (reversal of) / provision for credit losses to quarter average loans, annualized		-0.03	%		-0.09	%		-0.03	%		-0.04	%		-0.16	%
Total nonaccrual loans to total loans		0.48	%		0.64	%		0.61	%		0.60	%		0.68	%
Total nonperforming assets to total assets		0.33	%		0.43	%		0.41	%		0.40	%		0.44	%
Ratio of quarterly net loan charge-offs to average loans, annualized		0.14	%		0.09	%		0.26	%		0.02	%		0.23	%
Ratio of YTD net loan charge-offs to YTD average loans		0.12	%		0.09	%		0.13	%		0.08	%		0.12	%
(1)    Net loan charge-offs are loan charge-offs net of recoveries. Q3 2006 includes an insurance recovery of $1.6 million related to a previously charged-off loan.
SELECTED QUARTERLY CAPITAL RATIOS AND DATA:
	Jun 30 2007			Mar 31 2007			Dec 31 2006			Sep 30 2006			Jun 30 2006
Tier 1 leverage ratio		9.64	%		10.92	%		10.63	%		10.63	%		12.07	%
Tier 1 risk-based capital ratio		10.90	%		12.61	%		12.26	%		12.15	%		13.49	%
Total risk-based capital ratio		12.04	%		13.79	%		13.47	%		13.40	%		14.93	%
Total equity to assets ratio		10.32	%		11.53	%		11.39	%		11.40	%		11.04	%
Common equity to assets ratio		10.32	%		10.13	%		9.99	%		9.99	%		9.64	%
Tier I capital	$	676,078		$	769,415		$	755,860		$	748,071		$	824,154
Total risk-based capital	$	746,311		$	841,821		$	830,461		$	825,036		$	911,802
Risk weighted assets	$	6,201,016		$	6,103,632		$	6,166,011		$	6,155,489		$	6,108,101
NON-GAAP RATIOS (1):
Tangible common equity to tangible assets (2)		6.66	%		6.47	%		6.32	%		6.32	%		5.95	%
Tangible common book value per common share (3)	$	9.17		$	8.99		$	8.78		$	8.74		$	8.28
Common book value per common share (4)	$	14.79		$	14.65		$	14.46		$	14.36		$	13.97
Total common shares outstanding		51,159			51,044			50,938			51,047			50,917
(1)    The following table provides a reconciliation of common equity to tangible common equity and total assets to tangible assets:
Common shareholders’ equity	$	756,489		$	747,760		$	736,418		$	733,279		$	711,080
Less: goodwill and other Intangible assets		(287,166	)		(289,085	)		(288,994	)		(287,202	)		(289,570	)
Tangible common equity	$	469,323		$	458,675		$	447,424		$	446,077		$	421,510
Total assets	$	7,329,069		$	7,382,328		$	7,371,134		$	7,339,810		$	7,376,109
Less: goodwill and other intangible assets		(287,166	)		(289,085	)		(288,994	)		(287,202	)		(289,570	)
Tangible assets	$	7,041,903		$	7,093,242		$	7,082,140		$	7,052,608		$	7,086,539

(2) Computed as common shareholders’ equity, less goodwill and other intangible assets divided by tangible assets.

(3) Computed as common shareholders’ equity, less goodwill and other intangible assets divided by total common shares outstanding.

(4) Computed as common shareholders’ equity divided by common shares outstanding.