<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (date of Earliest Event Reported): December 23, 1997
GREATER BAY BANCORP
(Exact name of registrant as specified in its charter)
CALIFORNIA 0-25034 77-0387041
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification
of incorporation Number)
or organization)
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
================================================================================
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 23, 1997, the Registrant completed the acquisition of
Peninsula Bank of Commerce, a California state chartered bank ("PBC"), through
the merger (the "Merger") of GBB Acquisition Corp., a California corporation and
wholly owned subsidiary of the Registrant ("Newco"), with and into PBC.
Pursuant to an Agreement and Plan of Reorganization, dated as of September 5,
1997, by and among the Registrant, Newco and PBC (the "Reorganization
Agreement"), the former shareholders of PBC will receive approximately 0.9655
shares of the Registrant's common stock for each share of PBC common stock owned
immediately prior to the Merger. The Merger was accounted for as a pooling of
interests.
For a more detailed discussion of the of the terms and conditions of
the Reorganization Agreement and the Merger, reference is made to the
Registrant's Registration Statement on Form S-4 (Registration No. 333-37169)
filed with the Securities and Exchange Commission on October 3, 1997, as amended
by Amendment No. 1 thereto filed with the Securities and Exchange Commission on
October 22, 1997 (the "Registration Statement"), incorporated herein by this
reference.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
Not applicable.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
2
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Pro Forma Financial Statements.
(1) Unaudited Pro Forma Combined Financial Statements for Greater
Bay Bancorp and Peninsula Bank of Commerce as of December 31,
1996 and for each of the years in the three-year period ended
December 31, 1996, incorporated by reference from Registrant's
Registration Statement on Form S-4 (Registration No. 333-
37169).
(2) Unaudited Pro Forma Condensed Combined Balance Sheet for
Greater Bay Bancorp and Peninsula Bank of Commerce as of
September 30, 1997.
(3) Unaudited Pro Forma Condensed Combined Statement of Operations
for Greater Bay Bancorp and Peninsula Bank of Commerce for the
nine months ended September 30, 1997.
(b) Financial Statements of Peninsula Bank of Commerce.
(1) Audited Financial Statements for Peninsula Bank of Commerce and
Subsidiary as of December 31, 1996 and 1995 and for each of the
three years in the three-year period ended December 31, 1996,
incorporated by reference from the Registrant's Registration
Statement on Form S-4 (Registration No. 333-37169).
(2) Unaudited Consolidated Statement of Condition for Peninsula
Bank of Commerce and Subsidiary as of September 30, 1997.
(3) Unaudited Consolidated Statements of Operations for Peninsula
Bank of Commerce and Subsidiary for the nine months ended
September 30, 1997 and 1996.
(4) Unaudited Consolidated Statements of Cash Flows for Peninsula
Bank of Commerce and Subsidiary for the nine months ended
September 30, 1997 and 1996.
3
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial information
gives effect to the Merger as if it had occurred as of January 1, 1997 with
respect to the Unaudited Pro Forma Condensed Combined Statement of Operations,
and as of September 30, 1997 with respect to the Unaudited Pro Forma Condensed
Combined Balance Sheet data using the pooling of interests method of accounting.
The Unaudited Pro Forma Condensed Combined Financial Statements do not
purport to present the actual financial position or results of operations of
Greater Bay Bancorp had the events assumed therein in fact occurred on the dates
specified, nor are they necessarily indicative of the results of operations that
may be achieved in the future. The Unaudited Pro Forma Condensed Combined
Financial Statements are based on certain assumptions and adjustments described
in the notes to the Unaudited Pro Forma Condensed Combined Financial Statements
and should be read in conjunction therewith and with the Consolidated Financial
Statements of Greater Bay Bancorp and PBC and the related notes thereto
incorporated herein by reference from the Registrant's Registration Statement on
Form S-4 (Registration No. 333-37169).
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(In thousands)
<TABLE>
<CAPTION>
PENINSULA
GREATER BAY BANK OF
BANCORP COMMERCE ADJUSTMENT COMBINED
----------- --------- ---------- -----------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 39,803 $ 5,722 $ -- $ 45,525
Federal funds sold 37,300 5,500 -- 42,800
Short-term agency securities 0 89,951 -- 89,951
Securities held-to-maturity 42,965 7,161 -- 50,126
Securities available-for-sale 87,465 14,940 -- 102,405
Other securities 2,130 0 -- 2,130
Loans, net 541,234 78,244 -- 619,478
Premises and Equipment 4,652 1,913 -- 6,565
Accued interest receivable and other assets 22,048 2,734 -- 24,782
-------- -------- --------- --------
TOTAL ASSETS $777,597 $206,165 $ -- $983,762
======== ======== ========= ========
LIABILITIES
Deposits $698,132 $188,286 $ -- $886,418
Subordinated debt 3,000 0 -- 3,000
Accrued interest payable and other liabilities 5,449 1,934 1,436 8,819
Company obligated mandatorily redeemable
preferred securities of subsidiary trust
holding solely junior subordinated debentures 20,000 0 20,000
-------- -------- --------- --------
TOTAL LIABILITIES 726,581 190,220 1,436 918,237
SHAREHOLDERS' EQUITY 51,016 15,945 (1,436) 65,525
-------- -------- --------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $777,597 $206,165 $ -- $983,762
======== ======== ========= ========
</TABLE>
(1) The following table reflects all nonrecurring Greater Bay and Peninsula
estimated merger and restructuring related costs as of September 30, 1997.
These costs are not included in the Unaudited Pro Forma Combined Income
Statement but are included in the Unaudited Pro Forma Combined Balance Sheet
as a reduction to equity capital. These costs will be charged to expense
immediately following the consummation of the Merger. Such estimated merger
and restructuring related costs are summarized below (in thousands):
<TABLE>
<CAPTION>
Peninsula
Greater Bay Bank of
Bancorp Commerce Combined
----------- --------- --------
<S> <C> <C> <C>
Financial Advisory $ 38 $440 $ 478
Professional fees and printing 289 176 465
Loan Loss Reserve 750 60 810
Other 301 192 493
------ ---- ------
Total $1,378 $868 $2,246
====== ==== ======
</TABLE>
4
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(In thousands)
<TABLE>
<CAPTION>
PENINSULA
GREATER BAY BANK OF
BANCORP COMMERCE ADJUSTMENTS COMBINED
----------- --------- ----------- -------------
<S> <C> <C> <C> <C>
Interest and fees on loans and
leases $38,453 $6,138 $ -- $44,591
Interest on investment securities 4,712 4,774 -- 9,486
Other interest income 2,027 261 -- 2,288
------- ------ -------
TOTAL INTEREST INCOME 45,192 11,173 -- 56,365
Interest expense 17,270 4,322 -- 21,592
------- ------ -------
Net interest Income 27,922 6,851 -- 34,773
Provision for loan loss 5,287 105 -- 5,392
------- ------ ------ -------
Net interest income after
provision for loan loss 22,635 6,746 -- 29,381
Total other income 4,517 325 -- 4,842
Total operating expense 17,189 2,916 -- 20,105
------- ------ -------
Income before taxes 9,963 4,155 -- 14,118
Income tax expense 3,866 1,582 -- 5,448
------- ------ ------ -------
NET INCOME $6,097 $2,573 $ -- $ 8,670
======= ======= ======= =======
Earnings per share $1.68 $3.65 $2.01
Weighted average shares
outstanding 3,629 705 4,309
</TABLE>
5
<PAGE>
PENINSULA BANK OF COMMERCE
AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENT OF CONDITION
<TABLE>
<CAPTION>
SEPT 30,
1997
------------
<S> <C>
ASSETS
Cash and due from banks $ 5,722,410
Federal funds sold 5,500,000
Agency securities 89,951,160
------------
Cash and cash equivalents 101,173,570
Investment securities:
Held to maturity 7,160,523
Available-for-sale 14,939,956
------------
Total investment securities 22,100,479
Loans, net 78,244,413
Premises and equipment, net 1,912,814
Interest receivable and other assets 2,734,014
------------
Total assets $206,165,290
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand $ 23,620,400
Interest-bearing demand 126,456,590
Savings 5,623,573
Time 32,585,427
------------
Total deposits 188,285,990
------------
Interest payable and other liabilities 1,934,007
------------
Total liabilities 190,219,997
------------
Common stock, no par value; 2,000,000 shares
authorized; 673,862 shares issued and
outstanding in 1997 7,408,092
Net unrealized gain (loss) on available-for-sale
securities (31,184)
Retained earnings 8,568,385
------------
Total shareholders' equity 15,945,293
------------
Total liabilities and shareholders' equity $206,165,290
============
</TABLE>
6
<PAGE>
PENINSULA BANK OF COMMERCE
AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1997 1996
<S> <C> <C>
Interest income:
Interest and fees on loans $ 6,137,531 $4,952,894
Interest on federal funds sold 261,001 388,595
Interest on investment securities:
U.S. Treasury securities 137,947 104,183
Securities of U.S. government agencies 4,400,916 618,848
Obligations of states and political subdivisions 235,483 227,116
----------- ----------
Total interest income 11,172,878 6,291,636
----------- ----------
Interest expense:
Interest on interest-bearing transaction accounts 2,973,117 692,803
Interest on savings deposits 82,990 85,469
Interest on time deposits 1,266,354 1,138,809
----------- ----------
Total interest expenses 4,322,461 1,917,081
----------- ----------
Net interest income 6,850,417 4,374,555
Provision for loan losses 105,000 135,000
----------- ----------
Net interest income after
provision for loan losses 6,745,417 4,239,555
----------- ----------
Noninterest Income:
Service charges on deposit accounts 175,385 190,421
Rental income and other 150,101 124,432
----------- ----------
Total noninterest income 325,486 314,853
----------- ----------
Noninterest expense:
Salaries and related benefits 1,871,742 1,667,008
Occupancy and equipment 336,600 353,559
Other 708,010 632,424
----------- ----------
Total noninterest expense 2,916,352 2,652,991
----------- ----------
Income before income taxes 4,154,551 1,901,417
Provision for income taxes 1,581,630 675,550
----------- ----------
Net income $ 2,572,921 $1,225,867
=========== ==========
Earnings per share $3.65 $1.85
=========== ==========
Weighted-average shares outstanding 704,557 664,074
=========== ==========
</TABLE>
7
<PAGE>
PENINSULA BANK OF COMMERCE
AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1997 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,572,921 $ 1,225,867
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 143,237 127,554
Provision for loan losses 105,000 135,000
Amortization of discount on investments (4,013,348) (10,368)
Change in assets and liabilities:
Net change in interest payable and other liabilities (578,912) (1,458,448)
Net change in interest receivable and other assets (896,634) (187,059)
Net change in deferred loan fees (32,769) 120,102
------------ -----------
Net cash used in operating activities (2,700,505) (47,352)
------------ -----------
Cash flows from investing activities:
Net change in loans (14,131,446) (2,850,249)
Purchase of investment securities---available-for-sale (2,116,204) (8,844,975)
Proceeds from maturities of investment
securities---available-for-sale 2,500,000 5,464,545
Purchase of investment securities---held-to-maturity (1,188,626) (349,239)
Proceeds from maturities of investment
securities---held-to-maturity 4,062,366 524,382
Proceeds from sale of OREO 0 1,000,000
Purchase of premises and equipment (255,047) (68,173)
Retirement of premises and equipment 0 35,742
------------ -----------
Net cash used in investing activities (11,128,957) (5,087,967)
------------ -----------
Cash flows from financing activities:
Net change in deposits (248,553) 5,509,359
Exercise of stock options 266,944 89,345
------------ -----------
Net cash provided by financing activities 18,391 5,598,704
------------ -----------
Net change in cash and cash equivalents (13,811,071) 463,385
Cash and cash equivalents at beginning of period 114,984,641 15,571,860
------------ -----------
Cash and cash equivalents at end of period $101,173,570 $16,035,245
============ ===========
Supplemental cash flow information:
Interest paid $ 4,320,462 $ 1,941,705
============ ===========
Income taxes paid, net of refunds $ 1,256,626 $ 2,117,711
============ ===========
</TABLE>
8
<PAGE>
(c) Exhibits.
2.0 Agreement and Plan of Reorganization by and among Greater Bay
Bancorp, GBB Acquisition Corp. and Peninsula Bank of Commerce,
incorporated by reference from Exhibit 2.0 to Greater Bay
Bancorp's current report on Form 8-K (File No. 000-25034) dated
September 12, 1997.
23.1 Consent of Coopers & Lybrand LLP
23.2 Consent of Coopers & Lybrand LLP
27 Peninsula Bank of Commerce Financial Data Schedule
99.0 Press Release
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
Not applicable.
9
<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
Dated: January 5, 1998 /s/ Steven C. Smith
------------------------------------------
Steven C. Smith, Executive Vice President,
Chief Operating Officer and Chief
Financial Officer
10
<PAGE>
EXHIBIT INDEX
-------------
2.0 Agreement and Plan of Reorganization by and among Greater Bay Bancorp, GBB
Acquisition Corp. and Peninsula Bank of Commerce, incorporated by
reference from Exhibit 2.0 to Greater Bay Bancorp's current report on Form
8-K (File No. 000-25034) dated September 12, 1997.
23.1 Consent of Coopers & Lybrand LLP
23.2 Consent of Coopers & Lybrand LLP
27 Peninsula Bank of Commerce Financial Data Schedule
99.0 Press Release
11
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form 8-K of our report
dated October 2, 1997, on our audits of the consolidated financial statements of
Peninsula Bank of Commerce and Subsidiary as of December 31, 1996 and 1995, and
for the three years in the period ended December 31, 1996, appearing in the
registration statement on Form S-4 (SEC File No. 333-37169) of Greater Bay
Bancorp and Subsidiaries.
San Francisco, California
January 6, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form 8-K of our report
dated February 27, 1997, on our audits of the consolidated financial statements
of Greater Bay Bancorp and Subsidiaries as of December 31, 1996 and 1995, and
for the three years in the period ended December 31, 1996, appearing in the
registration statement on Form S-4 (SEC File No. 333-37169) of Greater Bay
Bancorp and Subsidiaries.
San Francisco, California
January 6, 1998
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PENINSULA BANK OF COMMERCE FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO THOSE FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> SEP-30-1997 SEP-30-1996
<CASH> 95,673,570 106,884,641
<INT-BEARING-DEPOSITS> 0 0
<FED-FUNDS-SOLD> 5,500,000 13,100,000
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 14,939,956 15,301,858
<INVESTMENTS-CARRYING> 7,160,523 6,210,549
<INVESTMENTS-MARKET> 0 0
<LOANS> 79,636,036 65,563,066
<ALLOWANCE> 1,391,623 1,377,868
<TOTAL-ASSETS> 206,165,290 204,320,630
<DEPOSITS> 188,285,990 188,534,543
<SHORT-TERM> 0 2,512,919
<LIABILITIES-OTHER> 1,934,007 0
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 7,408,092 7,141,148
<OTHER-SE> 8,537,201 6,132,020
<TOTAL-LIABILITIES-AND-EQUITY> 206,165,290 204,320,630
<INTEREST-LOAN> 6,137,531 4,952,894
<INTEREST-INVEST> 5,035,347 1,338,742
<INTEREST-OTHER> 0 0
<INTEREST-TOTAL> 11,172,878 6,291,636
<INTEREST-DEPOSIT> 4,322,461 1,917,081
<INTEREST-EXPENSE> 4,322,461 1,917,081
<INTEREST-INCOME-NET> 6,850,417 4,374,555
<LOAN-LOSSES> 105,000 135,000
<SECURITIES-GAINS> 0 0
<EXPENSE-OTHER> 2,916,352 2,652,991
<INCOME-PRETAX> 4,154,551 1,901,417
<INCOME-PRE-EXTRAORDINARY> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,572,921 1,225,867
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 3.65 1.85
<YIELD-ACTUAL> 0 0
<LOANS-NON> 0 0
<LOANS-PAST> 0 0
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 0 0
<CHARGE-OFFS> 0 0
<RECOVERIES> 0 0
<ALLOWANCE-CLOSE> 0 0
<ALLOWANCE-DOMESTIC> 0 0
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
<PAGE>
EXHIBIT 99
Greater Bay Bancorp and Peninsula Bank of Commerce
Announce Completion of Merger
December 24, 1997 6:00 AM EST
PALO ALTO, Calif.--(BUSINESS WIRE)--Dec. 24, 1997--David L. Kalkbrenner,
President and Chief Executive Officer of Greater Bay Bancorp (NASDAQ:GBBK),
announced that the merger with Peninsula Bank of Commerce (NASDAQ:PEBC) was
completed on December 23, 1997.
With the completion of the merger, PEBC has joined Mid-Peninsula Bank and
Cupertino National Bank & Trust as wholly owned subsidiaries of GBBK. The
subsidiaries will focus on serving the greater Bay Area through their nine
combined office locations. The transaction furthers the strategic emphasis of
GBBK in becoming the pre-eminent financial services company based in the San
Francisco Peninsula markets. The combined company will have total assets in
excess of $1.0 billion and equity of over $87 million.
Mr. Kalkbrenner stated that, "We are delighted to welcome PEBC to the GBBK
family with the completion of this merger. This business combination will allow
GBBK to continue its record of growth by enabling the Banks to further take
advantage of the rapidly growing market in the San Francisco Peninsula area."
Mark F. Doiron, President and Chief Executive Officer of PEBC commented, "We
have been impressed with the significant benefits that the clients of Mid-
Peninsula Bank and Cupertino National Bank & Trust have received from their
affiliation with GBBK. We look forward to providing our current and future
clients with the same expanded services through our new relationship with GBBK,
while maintaining our individual community bank focus."
The terms of the agreement provide for PEBC shareholders to receive .9655 shares
of GBBK stock for each share of PEBC in a tax-free exchange. The total value of
the GBBK shares exchanged at the current price of $49 per share is $37.4 million
or approximately 2.3 times PEBC's fully diluted book value per share. The merger
will be accounted for as a "pooling-of-interests."
This news release contains statements which constitute forward-looking
statements (within the meaning of the Private Securities Litigation Reform Act
of 1995), that involve risks and uncertainties. Actual results may differ
materially from the results discussed in these forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
expected cost savings from the merger not being fully realized, revenues
following the merger being lower than expected and costs or difficulties related
to the integration of the business of Greater Bay Bancorp and Peninsula Bank of
Commerce being greater than expected.