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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): JULY 8, 1998
GREATER BAY BANCORP
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
CALIFORNIA 77-0387041
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
</TABLE>
COMMISSION FILE NUMBER: 0-25034
2860 WEST BAYSHORE ROAD
PALO ALTO, CALIFORNIA 94303
(Address of principal executive offices and zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (650) 813-8200
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1
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ITEM 5. OTHER EVENTS.
See attached Press Release dated July 8, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibits
--------
99.1 Press Release dated July 8, 1998.
2
<PAGE>
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: July 16, 1998 By /s/ Steven C. Smith
_____________________________
Steven C. Smith
Executive Vice President, Chief
Operating Officer and Chief Financial
Officer
3
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EXHIBIT INDEX
-------------
99.1 Press Release dated July 8, 1998.
4
<PAGE>
EXHIBIT 99.1
Press Release dated July 8, 1998
<PAGE>
[GREATER BAY BANCORP LETTERHEAD APPEARS HERE]
For Immediate Release For Information Contact
- --------------------- -----------------------
July 8, 1998 David L. Kalkbrenner, President & CEO
(650) 614-5767
Steven C. Smith, EVP, COO & CFO
(650) 813-8222
GREATER BAY BANCORP REPORTS RECORD
1998 SECOND QUARTER AND YEAR TO DATE EARNINGS
PALO ALTO, CA - Greater Bay Bancorp (Nasdaq: "GBBK"), the $1.5 billion in
assets holding company for Cupertino National Bank, Golden Gate Bank, Mid-
Peninsula Bank, Peninsula Bank of Commerce, Venture Banking Group and Greater
Bay Trust Company, announced net earnings of $6.6 million or $0.67 per diluted
share for the six month period ended June 30, 1998. Net earnings included
approximately $1.3 million, net of tax, in merger and related non-recurring
costs. Excluding the merger and related non-recurring costs, net earnings for
the six month period ended June 30, 1998 would have been $7.9 million or $0.80
per diluted share, an increase in net earnings of 36.6% over the same period in
1997.
For the second quarter of 1998 Greater Bay Bancorp's net earnings were $2.9
million or $0.29 per diluted share. Excluding the merger and related non-
recurring costs, second quarter 1998 net earnings would have been $4.2 million
or $0.43 per share, a 14.4% increase over first quarter 1998 net earnings and a
40.7% increase over the second quarter 1997 earnings of $3.0 million or $0.32
per share.
Greater Bay Bancorp's total assets reached $1.5 billion at June 30, 1998,
an increase of 45.0% or $456.6 million from June 30, 1997, while total loans
grew to $804.6 million, an increase of $153.7 million or 23.6% compared to total
loans at June 30, 1997. Total deposits increased $376.1 million to $1.3 billion
at quarter end, a 41.4% increase since June 30, 1997. Total deposits included
approximately $70.0 million in temporary funds from clients, which were received
on June 30, 1998 and invested in short-term investment securities. The majority
of these funds were withdrawn in early July 1998.
Mr. David L. Kalkbrenner, President and Chief Executive Officer, stated,
"We continue to report record operating results in our core banking business,
while also positioning the company to be the preeminent Super Community Banking
franchise serving the dynamic market from San Francisco through the Peninsula to
San Jose." Mr. Kalkbrenner continued, "During the quarter we added Golden Gate
Bank in San Francisco to the Greater Bay Family of Banks, while also completing
a two-for-one stock split which we believe will enhance liquidity for our
shareholders."
<PAGE>
GREATER BAY BANCORP REPORTS RECORD 1998 SECOND QUARTER AND YEAR TO DATE EARNINGS
JULY 8, 1998
PAGE 2
The second quarter 1998 operating results include approximately $25,000,
excluding internal staff time, related to the correction of the year 2000
"millenium bug" which impacts all companies. The Company anticipates spending
$300,000 to $500,000 in 1998 and 1999 to ensure that its systems are ready for
processing information in the year 2000.
For the six-month period ended June 30, 1998, Greater Bay Bancorp's return
on average equity and average assets, excluding merger and related non-recurring
costs were 20.29% and 1.24% compared to 16.72% and 1.19% for the six month
period ended June 30, 1997. During the second quarter of 1998, Greater Bay
Bancorp's return on average equity and average assets, excluding the merger and
related non-recurring costs, were 21.62% and 1.25% compared to 16.63% and 1.18%
for the same period in 1997.
Greater Bay Bancorp's ratio of non-performing assets to total assets was
0.35% at June 30, 1998 compared to 0.89% at June 30, 1997. The allowance for
loan losses represented 2.19% of total loans and 345.19% of total non performing
assets at June 30, 1998, compared to 2.09% and 150.32% at June 30, 1997.
The Company's Trust division, Greater Bay Trust Company, continues to
reflect strong growth, increasing the level of fiduciary assets under management
by 30.76% to a total of $636.4 million at June 30, 1998 compared to $486.7
million one year earlier. Trust fee income increased by 51.1% from $481,000 for
the second quarter of 1997 to $727,000 for the second quarter of 1998.
Greater Bay Bancorp's capital ratios continue to be above the well-
capitalized guidelines established by the Bank Regulatory Agencies.
Greater Bay Bancorp and its banking subsidiaries, Cupertino National Bank,
Golden Gate Bank, Mid-Peninsula Bank and Peninsula Bank of Commerce, along with
the Venture Banking Group and the Greater Bay Trust Company serve clients
throughout the Silicon Valley and the San Francisco peninsula through offices in
Cupertino, Palo Alto, Redwood City, Millbrae, San Bruno, San Francisco, San Jose
and San Mateo.
This document may contain forward-looking statements that are subject to
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risks and uncertainties that could cause actual results to differ materially
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from those projected. For a discussion of factors that could cause actual
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results to differ, please see the Company's publicly available Securities and
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Exchange Commission filings, including its annual report on Form 10-K dated
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December 31, 1997, and particularly the discussion of risk factors within that
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document.
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WE INVEST IN RELATIONSHIPS!
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GREATER BAY BANCORP
JUNE 30, 1998 - FINANCIAL SUMMARY
($ IN 000'S, EXCEPT SHARE DATA)
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<CAPTION>
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SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION DATA:
JUN 30 MAR 31 DEC 31 SEPT 30 JUN 30
1998 1998 1997 1997 1997
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Cash and Due From Banks $ 69,239 $ 70,749 $ 53,000 $ 49,436 $ 44,058
Investments 558,335 426,098 393,676 319,793 299,133
Loans:
Commercial 357,758 350,705 345,742 319,376 316,828
Construction 139,850 121,446 112,514 115,797 112,760
Real Estate 227,652 217,845 196,217 191,564 164,313
Consumer and Other 81,750 79,177 82,914 64,807 59,689
Deferred Loan Fees, Net (2,446) (2,904) (2,765) (3,007) (2,700)
----------- ----------- ----------- ----------- -----------
Total Loans 804,564 766,269 734,622 688,537 650,890
Allowance for Loan Losses (17,584) (16,205) (16,093) (14,433) (13,584)
----------- ----------- ----------- ----------- -----------
Total Loans, Net 786,980 750,064 718,529 674,104 637,306
Other Assets 56,313 57,651 35,114 34,385 33,817
----------- ----------- ----------- ----------- -----------
Total Assets $ 1,470,867 $ 1,304,562 $ 1,200,319 $ 1,077,718 $ 1,014,314
=========== =========== =========== =========== ===========
Deposits:
Demand, Non-Interest Bearing $ 263,121 $ 208,277 $ 219,495 $ 184,585 $ 169,031
NOW, MMDA and Savings 809,594 676,730 627,475 590,958 552,616
Time Certificates, $100,000 and over 180,891 175,381 183,147 147,255 123,707
Other Time Certificates 31,009 46,043 41,031 47,635 63,179
----------- ----------- ----------- ----------- -----------
Total Deposits 1,284,615 1,106,431 1,071,148 970,433 908,533
----------- ----------- ----------- ----------- -----------
Other Borrowings 70,000 71,900 19,480 - 2,969
Other Liabilities 10,919 22,967 10,433 7,869 7,128
----------- ----------- ----------- ----------- -----------
Total Liabilities 1,365,534 1,201,298 1,101,061 978,302 918,630
----------- ----------- ----------- ----------- -----------
Long-term Subordinated Debt 3,000 3,000 3,000 3,000 3,000
Trust Preferred Securities 20,000 20,000 20,000 20,000 20,000
Stockholders' Equity 82,333 80,264 76,258 76,416 72,684
----------- ----------- ----------- ----------- -----------
Regulatory Capital 105,333 103,264 99,258 99,416 95,684
----------- ----------- ----------- ----------- -----------
Total Liabilities and Shareholders' Equity $ 1,470,867 $ 1,304,562 $ 1,200,319 $ 1,077,718 $ 1,014,314
=========== =========== =========== =========== ===========
Average Quarterly Loans, excluding Nonaccrual $ 753,510 $ 738,009 $ 716,971 $ 665,564 $ 623,557
Average Quarterly Investments $ 471,513 $ 410,650 $ 351,928 $ 327,222 $ 320,733
Average Quarterly Interest Bearing Liabilities $ 986,297 $ 955,914 $ 863,686 $ 809,927 $ 771,942
Average Quarterly Assets $ 1,359,402 $ 1,222,582 $ 1,132,476 $ 1,060,029 $ 1,014,633
Average Quarterly Equity $ 79,480 $ 77,252 $ 77,043 $ 74,912 $ 71,834
Regulatory Capital
Tier I or Leverage Capital $ 101,935 $ 99,724 $ 96,035 $ 96,418 $ 92,540
Total Capital $ 117,545 $ 114,336 $ 110,096 $ 109,591 $ 105,057
Nonperforming Assets
Nonaccrual Loans $ 3,758 $ 3,152 $ 2,971 $ 4,565 $ 5,783
Loans 90 Days Past Due & Accruing 75 108 158 575 147
Restructured Loans 531 903 1,062 1,453 1,705
OREO 730 1,001 1,303 1,069 1,402
----------- ----------- ----------- ----------- -----------
Total Nonperforming Assets $ 5,094 $ 5,164 $ 5,494 $ 7,662 $ 9,037
=========== =========== =========== =========== ===========
Greater Bay Trust Company Assets $ 636,362 $ 576,290 $ 577,746 $ 539,800 $ 486,679
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</TABLE>
<TABLE>
<CAPTION>
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SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:
JUN 30 MAR 31 DEC 31 SEPT 30 JUN 30
1998 1998 1997 1997 1997
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<S> <C> <C> <C> <C> <C>
Loan to Deposit Ratio 62.63% 69.26% 68.58% 70.95% 71.64%
Ratio of Allowance for Loan Losses to:
Total Loans 2.19% 2.11% 2.19% 2.10% 2.09%
Total Nonperforming Assets 345.19% 313.81% 292.92% 188.37% 150.32%
Total Nonperforming Assets to Total Assets 0.35% 0.40% 0.46% 0.71% 0.89%
Ratio of Net Charge-offs to Average Loans, annualized 0.01% 0.62% 0.27% 0.20% 0.20%
Earning Assets to Total Assets 92.57% 91.38% 93.98% 93.42% 93.36%
Earning Assets to Interest-Bearing Liabilities 133.29% 132.73% 132.46% 128.11% 128.05%
Capital Ratios:
Leverage 7.50% 8.16% 8.48% 9.10% 9.12%
Tier 1 Risk Based Capital 10.22% 10.76% 10.90% 11.84% 12.14%
Total Risk Based Capital 11.79% 12.34% 12.49% 13.46% 13.79%
Risk Weighted Assets $ 997,119 $ 926,374 $ 881,337 $ 814,260 $ 762,053
Book Value Per Share $ 8.96 $ 8.82 $ 8.47 $ 8.56 $ 8.16
Total Shares Outstanding 9,192,134 9,098,764 9,006,930 8,927,152 8,908,538
</TABLE>
Note: Prior periods have been restated to reflect the mergers between Greater
Bay Bancorp and Peninsula Bank of Commerce and Pacific Rim Bancorporation (the
parent of Golden Gate Bank), on a pooling-of-interests basis.
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<PAGE>
GREATER BAY BANCORP
JUNE 30, 1998 - FINANCIAL SUMMARY
($ IN 000'S, EXCEPT SHARE DATA)
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<CAPTION>
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SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:
SECOND FIRST FOURTH THIRD SECOND
QUARTER QUARTER QUARTER QUARTER QUARTER
1998 1998 1997 1997 1997
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<S> <C> <C> <C> <C> <C>
Interest Income $ 26,655 $ 24,732 $ 23,966 $ 22,304 $ 20,910
Interest Expense 11,228 10,082 9,254 8,524 8,281
-------- -------- -------- -------- --------
Net Interest Income before Provision for Loan Losses 15,427 14,650 14,712 13,780 12,629
Provision for Loan Losses 1,307 936 1,000 1,224 2,275
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Net Interest Income after Provision for Loan Losses 14,120 13,714 13,712 12,556 10,354
Other Income:
Trust Fees 727 550 603 550 481
Depositor Service Fees 349 420 394 433 400
Gain on Sale of SBA Loans 221 244 269 216 181
Loan Fees 110 63 53 74 39
Gain on Investments (8) 8 25 5 8
Other Income (1) 199 (341) 114 166 257
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1,598 944 1,458 1,444 1,366
Nonrecurring - Warrant Income - 497 14 34 1,114
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Other Income 1,598 1,441 1,472 1,478 2,480
Operating Expenses:
Compensation and Benefits 5,548 5,251 5,268 4,951 4,727
Occupancy and Equipment 1,514 1,371 1,342 1,376 1,295
Professional Services & Legal 485 382 392 506 500
FDIC Insurance and Assessments 77 89 73 70 83
Client Services (20) 151 80 83 79
Other Real Estate, Net (8) 24 25 (10) 71
Other Expenses 1,554 1,587 2,127 1,269 1,354
------- -------- -------- -------- --------
9,150 8,855 9,307 8,245 8,109
Nonrecurring Expenses (2) - 701 - - -
------- -------- -------- -------- --------
Other Expenses 9,150 9,556 9,307 8,245 8,109
------- -------- -------- -------- --------
Income before Income Taxes & Merger and Other Related
Nonrecurring Costs 6,568 5,599 5,877 5,789 4,725
Income Tax Expense 2,331 1,894 2,037 2,146 1,714
------- -------- -------- -------- --------
Net Income before Merger and Other Related Nonrecurring Costs 4,237 3,705 3,840 3,643 3,011
Merger and Other Related Nonrecurring Costs, net of tax 1,314 - 2,282 - -
------- -------- -------- -------- --------
Net Income $ 2,923 $ 3,705 $ 1,558 $ 3,643 $ 3,011
======= ======== ======== ======== ========
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</TABLE>
<TABLE>
<CAPTION>
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SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:
SECOND FIRST FOURTH THIRD SECOND
QUARTER QUARTER QUARTER QUARTER QUARTER
1998 1998 1997 1997 1997
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income Per Share (3) (before merger and other related
nonrecurring costs)
Basic $ 0.46 $ 0.41 $ 0.43 $ 0.41 $ 0.34
Diluted $ 0.43 $ 0.37 $ 0.39 $ 0.38 $ 0.32
Net Income Per Share (3)
Basic $ 0.32 $ 0.41 $ 0.17 $ 0.41 $ 0.34
Diluted $ 0.29 $ 0.37 $ 0.16 $ 0.38 $ 0.32
Weighted Average Common Shares Outstanding (4) 9,163,034 9,059,152 8,968,984 8,922,882 8,895,548
Weighted Average Common & Common Equivalent
Shares Outstanding (4) 9,956,808 9,957,456 9,781,420 9,645,818 9,484,672
Return on Quarterly Average Assets, annualized (5) 1.25% 1.23% 1.35% 1.36% 1.18%
Return on Quarterly Average Equity, annualized (5) 21.62% 19.45% 19.78% 22.05% 16.63%
Net Interest Margin - Average Earning Assets 5.05% 5.12% 5.52% 5.57% 5.36%
Operating Expense Ratio (before Merger and Other Related
Nonrecurring Costs) 2.70% 3.17% 3.26% 3.09% 3.21%
Efficiency Ratio (before Merger and Other Related
Nonrecurring Costs) 53.75% 59.39% 57.51% 54.04% 53.67%
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</TABLE>
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(1) Q1 of 1998 includes a $700,000 write-down of an equity investment in
accordance with APB 18.
(2) Q1 of 1998 nonrecurring expenses is comprised of a $701,000 donation to the
GBB Foundation.
(3) Earnings per share for prior periods have been restated as required by the
adoption of SFAS No. 128. In accordance with the newly adopted accounting
standard, Earnings Per Share is now presented on a Basic and Diluted basis.
(4) Restated to reflect the 2-for-1 stock split declared for shareholders of
record as of April 30, 1998.
(5) Before Merger and Other Related Nonrecurring Costs of $1.31 million, net of
tax, in Q2 of 1998 and $2.28 million, net of tax, in Q4 of 1997.
Note: Prior periods have been restated to reflect the mergers between Greater
Bay Bancorp and Peninsula Bank of Commerce and Pacific Rim Bancorporation (the
parent of Golden Gate Bank), on a pooling-of-interests basis.
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<PAGE>
GREATER BAY BANCORP
JUNE 30, 1998 - FINANCIAL SUMMARY
($ IN 000'S, EXCEPT SHARE DATA)
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SELECTED YEAR TO DATE CONSOLIDATED OPERATING DATA:
JUNE 30, JUNE 30,
1998 1997
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Interest Income $ 51,387 $ 39,191
Interest Expense 21,310 15,136
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Net Interest Income Before
Provision for Loan Losses 30,077 24,055
Provision for Loan Losses 2,243 4,268
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Net Interest Income After Provision
for Loan Losses 27,834 19,787
Other Income (1) 2,542 2,481
Other Income - nonrecurring 497 1,114
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Total Other Income 3,039 3,595
Other Expenses 18,005 15,551
Other Expenses - nonrecurring (2) 701 (1,287)
---------- ----------
Total Other Expenses 18,706 14,264
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Income before Income Taxes & Merger and
Other Related Nonrecurring Costs 12,167 9,118
Income Tax Expense 4,225 3,303
---------- ----------
Net Income before Merger and Other
Related Nonrecurring Costs 7,942 5,815
Merger and Other Related Nonrecurring
Costs, net of tax 1,314 -
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Net Income $ 6,628 $ 5,815
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SELECTED YEAR TO DATE CONSOLIDATED OPERATING RATIOS:
JUNE 30, JUNE 30,
1998 1997
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Income Per Share (3) (before merger and
other related nonrecurring costs)
Basic $ 0.87 $ 0.65
Diluted $ 0.80 $ 0.61
Net Income Per Share (3)
Basic $ 0.73 $ 0.65
Diluted $ 0.67 $ 0.61
Weighted Average Common Shares Outstanding (4) 9,106,015 8,923,764
Weighted Average Common & Common Equivalent
Shares Outstanding (4) 9,924,158 9,594,479
Return on Average Assets, annualized (5) 1.24% 1.19%
Return on Average Equity, annualized (5) 20.29% 16.72%
Net Interest Margin - Average Earning Assets 5.00% 5.33%
Operating Expense Ratio (before Merger and
Other Related Nonrecurring Costs) 2.92% 2.91%
Efficiency Ratio (before Non-recurring Items
and Merger and Other Related Non-recurring Costs) 55.20% 58.60%
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(1) Q1 of 1998 includes a $700,000 write-down of an equity investment in
accordance with APB 18.
(2) Q1 of 1998 nonrecurring expenses is comprised of a $701,000 donation to the
GBB Foundation. Q1 of 1997 nonrecurring expenses inc ludes $413,000 in
nonrecurring charges as well as a $1.70 million recovery from GBB's
insurance coverage related to the $1.70 million legal settlement charge that
occurred in the second quarter of 1995.
(3) Earnings per share for prior periods have been restated as required by the
adoption of SFAS No. 128. In accordance with the newly adopted accounting
standard, Earnings Per Share is now presented on a Basic and Diluted basis.
(4) Restated to reflect the 2-for-1 stock split declared for shareholders of
record as of April 30, 1998.
(5) Before Merger and Other Related Non-recurring Costs of $1.31 million, net of
tax, in Q2 of 1998.
Note: Prior periods have been restated to reflect the mergers between Greater
Bay Bancorp and Peninsula Bank of Commerce and Pacific Rim Bancorporation (the
parent of Golden Gate Bank), on a pooling-of-interests basis.
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