Greater Bay Bancorp Reports 47% Increase in First Quarter 2001 Core Operating Earnings

- Company Announces Share Repurchase Program -



Apr 17, 2001, 01:00 ET from Greater Bay Bancorp

    PALO ALTO, Calif., April 17 /PRNewswire/ -- Greater Bay Bancorp
 (Nasdaq:   GBBK), a $5.4 billion in assets financial services holding company,
 today announced record results for the first quarter ended March 31, 2001.
 Greater Bay Bancorp's core earnings, which is its net income, excluding
 nonrecurring warrant income and merger related expenses, for the first quarter
 of 2001 increased 47% to $21.5 million, or $0.49 per diluted share, compared
 to $14.7 million, or $0.35 per diluted share, in the first quarter of 2000.
     Based on its core earnings for the first quarter of 2001, Greater Bay
 Bancorp's return on average equity was 25.64%, its return on average assets
 was 1.72% and its efficiency ratio was 46.23%, while the first quarter of 2000
 core earnings resulted in a return on average equity of 21.88%, return on
 average assets of 1.48% and an efficiency ratio of 49.66%.
     Non-interest income, excluding warrant income, continues to grow,
 reflecting Greater Bay Bancorp's efforts to further diversify and expand its
 revenue stream.  For the first quarter of 2001, the Company's trust fees,
 depositor service fees, gain on sale of SBA loans, and loan and international
 banking fees were $6.8 million, up 40% from $4.9 million in the first quarter
 of 2000.
     For the first quarter of 2001, net income increased to $21.5 million, or
 $0.49 per diluted share, compared to net income of $17.3 million, or $0.42 per
 diluted share for the first quarter of 2000, which included $8.6 million in
 pre-tax nonrecurring warrant income and only $3.9 million in merger related
 expenses compared to zero nonrecurring warrant income and merger related
 expenses for the first quarter of 2001.
     At March 31, 2001, Greater Bay Bancorp's total assets were $5.4 billion,
 an increase of 30% or $1.2 billion from March 31, 2000.  Total loans grew 40%
 to $3.7 billion, an increase of  $1.1 billion from March 31, 2000, while total
 deposits increased to $4.3 billion, an increase of 17% or $621 million from
 March 31, 2000.
     "Greater Bay Bancorp's operating performance continues to exceed our peer
 group. First quarter core EPS of $0.49 per diluted share represents the 17th
 consecutive quarter of earnings per share increases, and return on average
 equity in the first quarter in excess of 25% was the 14th consecutive quarter
 where shareholders' return on average equity exceeded 20%," said David
 Kalkbrenner, president and chief executive officer of Greater Bay Bancorp.
     Mr. Kalkbrenner added, "Greater Bay Bancorp continues to outperform its
 peers and provide exceptional returns to our shareholders.  For the first
 quarter of 2001, our core earnings increased 47% while we also continued to
 generate quality asset growth combined with strong credit quality.  These
 results reflect the continued success of our Super Community Banking Strategy
 and have been accomplished during a period of economic uncertainty in both the
 U.S. and our San Francisco Bay Area markets.  While Greater Bay is not immune
 to the impact of a slowing economy and declining interest rates, the history
 of our individual subsidiary banks and the banking industry generally supports
 the fact that community banking can be very successful during periods of
 economic uncertainty.  This is particularly true when big bank competitors
 cease lending to certain market segments, thus allowing banks like Greater Bay
 to expand and add to its client relationships."
     Greater Bay Bancorp's allowance for loan losses was 2.30% of total loans
 at March 31, 2001 and 1.98% at March 31, 2000, while its ratio of
 non-performing assets to total assets was 0.34% at March 31, 2001, compared to
 0.18% at March 31, 2000.  The allowance for loan losses was 473.80% of total
 non-performing assets at March 31, 2001.
     The capital ratios of Greater Bay Bancorp and each of its subsidiary banks
 continue to be above the well-capitalized guidelines established by the bank
 regulatory agencies.
     Mr. Kalkbrenner commented, "During the first quarter, we successfully
 integrated Matsco, headquartered in Emeryville, California and specializing in
 financial services for the dental and veterinarian markets.  We also announced
 the completion of our acquisition of CAPCO Financial Company, Inc., a
 factoring and asset-based lending company headquartered in Bellevue,
 Washington.  To date, the financial impact of these two acquisitions has been
 negligible; however, we anticipate they will enhance our financial performance
 for the remainder of 2001.  In the case of Matsco, we originally anticipated
 selling 20% to 40% of its loan production, yet in the first quarter we
 portfolioed  all of Matsco's loans.  This larger portfolio will increase our
 net interest income while also providing added flexibility to sell Matsco
 loans in future quarters. CAPCO, which just closed at the end of March, will
 have its operating results included with Greater Bay beginning in the second
 quarter and we are very confident the CAPCO acquisition will be accretive in
 2001."
 
     - Share Repurchase Program -
     Greater Bay Bancorp also announced today that its Board of Directors has
 authorized the repurchase of up to 5% of Greater Bay Bancorp's outstanding
 common stock.  The Company intends to repurchase shares from time to time in
 the open market.  We expect that such purchases would be accretive to
 earnings, while also maintaining capital ratios that exceed the regulatory
 guidelines for a well-capitalized financial institution.
     "We believe this share repurchase program represents an excellent
 investment opportunity for the company and reaffirms our commitment to
 enhancing shareholder value by utilizing all alternatives to provide superior
 returns to our shareholders," said Mr. Kalkbrenner.
 
     -Looking Forward -- 2001 Performance Goals Reaffirmed -
     Mr. Kalkbrenner continued, "We believe that the performance goals stated
 for Greater Bay in our year end 2000 press release dated January 17, 2001 and
 reaffirmed in our Form 8K filing with the SEC on March 6, 2001, still reflect
 our current outlook for 2001 based on our assessment of the current economic
 environment and its potential impact on our business."
     Mr. Kalkbrenner continued, "Our current view is that we will see, at a
 minimum, an additional 75 basis point decline in interest rates which will
 reduce our net interest margin but should not impact our ability to meet our
 performance goals.  If the economic outlook deteriorates further than most
 economists anticipate, it could impact the ability of Greater Bay to attain
 its performance goals.  However, if the economy would decline significantly,
 this impact would not only impact Greater Bay's operating results, it would
 also impact most financial services companies operating in the United States.
 We intend to manage through this declining net interest rate and uncertain
 economic environment by monitoring our expense growth, aggressively managing
 our credit quality and focusing our relationship officers on generating new
 quality client relationships while improving the overall profitability of our
 existing client relationships."
     The following are the performance guidance disclosed in the fourth quarter
 and year-end press release dated January 17, 2001, reaffirmed in the Form 8K
 filed with the SEC on March 6, 2001 and once again reaffirmed with this
 release:
 
     -- Loan growth in the 20%-25% range
     -- Deposit growth 15%
     -- Revenue growth of 22%-27%
     -- Return on equity greater than 20%
     -- Return on average assets greater than 1.4%
     -- Efficiency ratio less than 48%
     -- Earnings per share growth of 17%-25%
 
     Greater Bay Bancorp through its ten subsidiary banks, Bank of Petaluma,
 Bank of Santa Clara, Bay Area Bank, Bay Bank of Commerce, Coast Commercial
 Bank, Cupertino National Bank, Golden Gate Bank, Mid-Peninsula Bank, Mt.
 Diablo National Bank and Peninsula Bank of Commerce, along with its operating
 divisions, serves clients throughout Silicon Valley, San Francisco, the San
 Francisco Peninsula, the East Bay Region, the North Bay Region and the Central
 Coastal Region.
     Greater Bay Bancorp's first quarter 2001 earnings conference call is
 scheduled for April 17, 2001 at 8:00 am PDT. Investors have the opportunity to
 listen to the conference call live on the Internet through Street Events at
 http://www.streetevents.com.  Investors should go to the Street Events Web
 site 15 minutes prior to the start of the call, as it may be necessary to
 download audio software to hear the conference call.   To do so, investors
 should click on the Real Player icon and follow directions from there. A
 replay of the conference call will be available on the Street Events Web site
 for 30 days and via telephone through April 23, 2001 by dialing 703-925-2435,
 passcode 511840.
     Greater Bay Bancorp's corporate press releases are available on the
 Company's Web site at http://www.gbbk.com.
 
     Safe Harbor
     Certain matters discussed in this press release constitute forward looking
 statements within the meaning of the Private Securities Litigation Reform Act
 of 1995.  These forward looking statements relate to the Company's current
 expectations regarding future operating results, growth in loans, deposits and
 assets, continued success of its Super Community Banking strategy and the
 strength of the local economy.  These forward looking statements are subject
 to certain risks and uncertainties that could cause the actual results,
 performance or achievements to differ materially from those expressed,
 suggested or implied by the forward looking statements.
     These risks and uncertainties include, but are not limited to: (1) the
 impact of changes in interest rates, a decline in economic conditions at the
 international, national and local levels and increased competition among
 financial service providers on the Company's results of operations, the
 Company's ability to continue its internal growth at historical rates, the
 Company's ability to maintain its net interest spread, and the quality of the
 Company's earning assets; (2) government regulations; (3) the ability to
 successfully integrate recently completed mergers and acquisitions; (4)  the
 risks relating to the Company's warrant positions; and (5) the other risks set
 forth in the Company's reports filed with the Securities and Exchange
 Commission, including its Annual Report on Form 10-K for the year ended
 December 31, 2000.
     For investor information on Greater Bay Bancorp at no charge, call our
 automated shareholder information line at 800-PRO-INFO (800-776-4636) and
 enter code GBBK.  For international access, dial 201-432-6555.
 
 
                              GREATER BAY BANCORP
                       MARCH 31, 2001 - FINANCIAL SUMMARY
                 ($ in 000's, except share and per share data)
 
     SELECTED CONSOLIDATED FINANCIAL CONDITION DATA:
 
                         Mar 31     Dec 31     Sept 30     Jun 30     Mar 31
                          2001       2000       2000        2000       2000
     Cash and Due
      From Banks        $206,156   $270,774   $243,207   $232,371    $182,642
     Investments       1,301,970  1,100,333  1,085,257  1,110,239   1,187,241
     Loans:
       Commercial      1,595,293  1,562,712  1,250,056  1,130,322   1,042,686
       Term Real Estate
        - Commercial     992,777    967,428    890,127    869,226     834,146
       Total
        Commercial     2,588,070  2,530,140  2,140,183  1,999,548   1,876,832
       Construction      701,414    691,912    581,956    516,998     494,099
       Real Estate
        - Other          233,538    176,568    174,997    127,571     126,363
       Consumer
        and Other        216,064    216,459    206,632    209,019     172,571
       Deferred Loan
        Fees, Net        (13,461)   (13,657)   (13,440)   (13,829)    (13,066)
         Total Loans   3,725,625  3,601,422  3,090,328  2,839,307   2,656,799
         Allowance for
          Loan Losses    (85,914)   (84,014)   (67,637)   (58,578)    (52,852)
       Total Loans,
        Net            3,639,711  3,517,408  3,022,691  2,780,729   2,603,947
     Other Assets        258,409    241,863    196,914    195,746     194,001
     Total Assets     $5,406,246 $5,130,378 $4,548,069 $4,319,085  $4,167,831
 
     Deposits:
       Demand,
        Non-Interest
        Bearing         $897,229 $1,003,828   $899,496   $851,590    $847,815
       NOW, MMDA
        and Savings    2,108,098  2,082,708  2,132,184  2,032,360   2,070,090
       Time
        Certificates,
        $100,000
        and over         777,901    784,118    737,533    675,031     589,072
       Other Time
        Certificates     490,402    294,407    156,125    157,554     145,221
         Total
          Deposits     4,273,630  4,165,061  3,925,338  3,716,535   3,652,198
     Other Borrowings    572,828    431,228    135,313    156,037     116,092
     Other Liabilities   105,922    112,224     87,702     60,368      61,598
         Total
          Liabilities  4,952,380  4,708,513  4,148,353  3,932,940   3,829,888
     Trust Preferred
      Securities          99,500     99,500     99,500     99,500      58,500
     Shareholders'
      Equity             354,366    322,365    300,216    286,645     279,443
     Total Liabilities
      and Shareholders'
      Equity          $5,406,246 $5,130,378 $4,548,069 $4,319,085  $4,167,831
 
     Average Quarterly
      Total Loans,
      excluding
      Nonaccrual      $3,638,946 $3,326,505 $2,962,402 $2,826,612  $2,553,083
     Average
      Quarterly
      Investments     $1,048,617 $1,095,752 $1,225,598 $1,154,824  $1,138,163
 
     Average
      Quarterly
      Interest
      Earning Assets  $4,687,563 $4,422,257 $4,188,000 $3,981,436  $3,691,246
     Average
      Quarterly
      Interest Bearing
      Liabilities     $3,643,025 $3,334,513 $3,044,342 $2,972,538  $2,819,566
 
     Average
      Quarterly
      Assets          $5,088,379 $4,783,445 $4,532,392 $4,213,203  $3,979,375
     Average
      Quarterly
      Equity            $340,582   $316,331   $301,644   $284,653    $269,530
 
     Total Regulatory Capital
       Tier I
        or Leverage
        Capital         $431,427   $417,847   $412,724   $385,854    $346,472
       Total Capital    $491,675   $475,891   $462,807   $447,301    $390,554
 
     Nonperforming Assets
       Nonaccrual Loans  $17,874    $12,593    $14,884     $8,779     $ 6,327
       Restructured Loans     --         --        420        420         743
       OREO                  259         --        395        229         271
     Total
      Nonperforming
      Assets             $18,133    $12,593    $15,699     $9,428     $ 7,341
 
     Greater Bay Trust
      Company Assets    $734,910   $773,791   $838,659   $795,042    $751,677
 
 
     SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:
 
                         Mar 31      Dec 31     Sept 30    Jun 30      Mar 31
                          2001        2000       2000       2000        2000
     Loan to
      Deposit Ratio       87.18%     86.47%     78.73%      76.40%     72.75%
     Core Bank
      Loan to
      Deposit Ratio (A)   72.39%     72.44%     71.89%      69.39%     66.40%
     Ratio of Allowance
      for Loan Losses to:
       Average Loans       2.35%      2.52%      2.27%       2.07%      2.07%
       End of Period Loans 2.30%      2.32%      2.18%       2.05%      1.98%
       Total
        Nonperforming
        Assets           473.80%    667.15%    430.84%     621.32%    719.96%
 
     Total
      Nonperforming
      Assets to
      Total Assets         0.34%      0.25%      0.35%       0.22%      0.18%
 
     Ratio of Quarterly
      Net Charge-offs
      to Average
      Loans, annualized    0.59%      0.31%      0.37%       0.58%      0.26%
     Ratio of YTD Net
      Charge-offs to
      YTD Average
      Loans, annualized    0.59%      0.38%      0.41%       0.44%      0.26%
 
     Loan Growth,
      current quarter
      to prior
      year quarter        40.23%     46.13%     37.05%      36.76%     41.57%
     Loan Growth,
      current quarter
      to prior quarter,
      annualized          13.99%     65.79%     35.17%      27.63%     31.39%
     Recurring Revenue
      Growth, current
      quarter to prior
      year quarter        30.94%     30.59%     34.71%      44.15%     40.84%
     Recurring Revenue
      Growth, current
      quarter to prior
      quarter,
      annualized          20.12%     31.93%     21.05%      38.92%     18.82%
 
     Average Earning
      Assets to Average
      Total Assets        92.12%     92.45%     92.40%      94.50%     92.76%
     Average Earning
      Assets to Average
      Interest-Bearing
      Liabilities        128.67%    132.62%    137.57%     133.94%    130.92%
 
     Capital Ratios:
       Leverage            8.52%      8.77%      9.11%       9.16%      8.71%
       Tier 1 Risk
        Based Capital      9.14%      9.40%     10.83%      10.87%     10.30%
       Total Risk
        Based Capital     10.42%     10.70%     12.14%      12.61%     11.62%
 
     Risk Weighted
      Assets          $4,720,719 $4,446,088 $3,812,504  $3,548,503 $3,362,293
 
     Book Value
      Per Share (B)        $8.33      $7.69      $7.21       $6.94      $6.80
     Total Shares
      Outstanding (B) 42,546,142 41,929,173 41,648,016  41,284,372 41,121,745
 
     (A) Includes the ten core banking divisions and excludes Matsco, Capco,
         Pacific Business Funding and Corporate Finance.
     (B) Prior periods have been restated for the 2 for 1 stock split effective
         October 4, 2000.
 
     Note:  Prior periods have been restated to reflect the mergers between
 Greater Bay Bancorp, Coast Bancorp, Bank of Santa Clara and Bank of Petaluma
 on a pooling-of-interests basis.
 
 
                              GREATER BAY BANCORP
                       MARCH 31, 2001 - FINANCIAL SUMMARY
                 ($ in 000's, except share and per share data)
 
     SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:
                          First     Fourth       Third      Second      First
                         Quarter    Quarter     Quarter    Quarter     Quarter
                          2001       2000        2000        2000       2000
 
     Interest Income    $106,694   $104,376    $96,612    $87,538     $79,837
     Interest Expense     40,448     38,957     36,797     30,976      29,674
       Net Interest
        Income Before
        Provision for
        Loan Losses       66,246     65,419     59,815     56,562      50,163
     Provision for
      Loan Losses          6,928      6,316      7,844      8,312       5,624
       Net Interest
        Income After
        Provision for
        Loan Losses       59,318     59,103     51,971     48,250      44,539
 
     Other Income:
     Trust Fees              886        954        822        827         847
     Depositor
      Service Fees         2,013      2,034      2,219      2,194       2,147
     ATM Fees                662        748        817        676         650
     Loan and
      International
      Banking Fees         3,101      2,562      2,497      1,927       1,176
     Gain on Sale
      of SBA Loans           835        312        429        753         696
     Gain/(loss)
      on Investments       1,578         21          3         58         (1)
     Other Income (A)      1,656      1,289      1,288      1,482       3,112
                          10,731      7,920      8,075      7,917       8,627
     Nonrecurring
      - Warrant
      Income (C)              --        870      2,767        740       8,609
     Total Other Income   10,731      8,790     10,842      8,657      17,236
 
     Operating Expenses:
     Compensation
      and Benefits (E)    18,405     17,449     15,792     15,258      15,825
     Occupancy
      and Equipment        5,863      5,711      5,575      5,117       5,285
     Professional
      Services & Legal     1,387      1,083      1,312      1,199       1,110
     Client Services         644        563        477        496         545
     FDIC Insurance
      and Assessments        273        356        379        251         250
     Other Real
      Estate, Net             --          5         --         41          10
     Other Expenses        9,018      8,182      7,035      7,133       6,169
     Total
      Operating
      Expenses            35,590     33,349     30,570     29,495      29,194
 
     Income Before
      Income Taxes,
      Merger and Other
      Related
      Nonrecurring Costs  34,459     34,544     32,243     27,412      32,581
     Income Taxes:
     Income Tax Expense   12,928     12,695     11,173      9,953       9,306
     Nonrecurring
      Income Tax
      Expense (C)             --        366      1,164        290       3,590
     Total Income
      Tax Expense         12,928     13,061     12,337     10,243      12,896
     Income Before
      Merger and
      Other Related
      Nonrecurring Costs  21,531     21,483     19,906     17,169      19,685
     Merger and Other
      Related
      Nonrecurring
      Costs, net
      of tax (C)              --      3,533      7,037      6,744       2,389
     Net Income          $21,531    $17,950    $12,869    $10,425     $17,296
 
 
     SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:
                          First       Fourth     Third      Second      First
                         Quarter     Quarter    Quarter     Quarter    Quarter
                           2001        2000      2000        2000       2000
 
     Income Per Share (Before Nonrecurring and Merger Items) (C), (D)
       Basic               $0.51      $0.50     $ 0.44       $0.41      $0.37
       Diluted             $0.49      $0.47     $ 0.42       $0.39      $0.35
     Income Per Share (Before Merger Items) (D)
       Basic               $0.51      $0.51     $ 0.48       $0.42      $0.49
       Diluted             $0.49      $0.48     $ 0.46       $0.40      $0.47
     Net Income Per Share (D)
       Basic               $0.51      $0.43     $ 0.31       $0.25      $0.43
       Diluted             $0.49      $0.41     $ 0.29       $0.24      $0.42
     Weighted Average
      Common Shares
      Outstanding (D) 42,323,000 41,817,000 41,448,000  41,207,000 39,784,000
     Weighted Average
      Common & Common
      Equivalent
     Shares
      Outstanding (D) 44,175,000 44,319,000 43,676,000  42,913,000 41,632,000
 
     Return on
      Period Average
      Assets,
      annualized (B)       1.72%      1.74%      1.61%       1.60%      1.48%
     Return on
      Period Average
      Equity,
      annualized (B)      25.64%     26.38%     24.14%      23.62%     21.88%
     Net Interest
      Margin
      - Average
      Earning Assets       5.73%      5.89%      5.68%       5.71%      5.47%
     Operating Expense
      Ratio (Before
      Nonrecurring
      and Merger Items)    2.84%      2.77%      2.68%       2.82%      2.95%
     Operating Expense
      Ratio (Before
      Nonrecurring
      and Merger
      Items and
      excluding Matsco)    2.69%      2.85%      2.68%       2.82%      2.95%
     Efficiency Ratio
      (Before
      Nonrecurring
      and Merger Items)   46.23%     45.47%     45.03%      45.74%     49.66%
     Efficiency Ratio
      (Before
      Nonrecurring
      and Merger
      Items and
      excluding Matsco)   44.67%     44.84%     45.03%      45.74%     49.66%
 
 
     (A) Q1 2000  included a $2.1 million gain on an equity investment.
     (B) Before Nonrecurring and Merger Items of $3.0 million, net of tax, in
         Q4 2000; $5.4 million, net of tax, in Q3 2000; $6.3 million, net of
         tax, in Q2 2000 and $2.6 million, net of tax, in Q1 2000.
     (C) These items are the components of Nonrecurring and Merger Items.  Net
         Income excluding these items is $20,979 for Q4 2000, $18,303 for
         Q3 2000, $16,719 for Q2 2000 and $14,666 for Q1 2000.
     (D) Prior periods have been restated for the 2 for 1 stock split effective
         October 4, 2000.
     (E) Includes Matsco compensation and benefits of $2.4 million in Q1 2001
         and $904,000 in Q4 2000 as this was a purchase transaction that closed
         in November 2000.
 
     Note:  Prior periods have been restated to reflect the mergers between
 Greater Bay Bancorp, Coast Bancorp, Bank of Santa Clara and Bank of Petaluma
 on a pooling-of-interests basis.
 
 

SOURCE Greater Bay Bancorp
    PALO ALTO, Calif., April 17 /PRNewswire/ -- Greater Bay Bancorp
 (Nasdaq:   GBBK), a $5.4 billion in assets financial services holding company,
 today announced record results for the first quarter ended March 31, 2001.
 Greater Bay Bancorp's core earnings, which is its net income, excluding
 nonrecurring warrant income and merger related expenses, for the first quarter
 of 2001 increased 47% to $21.5 million, or $0.49 per diluted share, compared
 to $14.7 million, or $0.35 per diluted share, in the first quarter of 2000.
     Based on its core earnings for the first quarter of 2001, Greater Bay
 Bancorp's return on average equity was 25.64%, its return on average assets
 was 1.72% and its efficiency ratio was 46.23%, while the first quarter of 2000
 core earnings resulted in a return on average equity of 21.88%, return on
 average assets of 1.48% and an efficiency ratio of 49.66%.
     Non-interest income, excluding warrant income, continues to grow,
 reflecting Greater Bay Bancorp's efforts to further diversify and expand its
 revenue stream.  For the first quarter of 2001, the Company's trust fees,
 depositor service fees, gain on sale of SBA loans, and loan and international
 banking fees were $6.8 million, up 40% from $4.9 million in the first quarter
 of 2000.
     For the first quarter of 2001, net income increased to $21.5 million, or
 $0.49 per diluted share, compared to net income of $17.3 million, or $0.42 per
 diluted share for the first quarter of 2000, which included $8.6 million in
 pre-tax nonrecurring warrant income and only $3.9 million in merger related
 expenses compared to zero nonrecurring warrant income and merger related
 expenses for the first quarter of 2001.
     At March 31, 2001, Greater Bay Bancorp's total assets were $5.4 billion,
 an increase of 30% or $1.2 billion from March 31, 2000.  Total loans grew 40%
 to $3.7 billion, an increase of  $1.1 billion from March 31, 2000, while total
 deposits increased to $4.3 billion, an increase of 17% or $621 million from
 March 31, 2000.
     "Greater Bay Bancorp's operating performance continues to exceed our peer
 group. First quarter core EPS of $0.49 per diluted share represents the 17th
 consecutive quarter of earnings per share increases, and return on average
 equity in the first quarter in excess of 25% was the 14th consecutive quarter
 where shareholders' return on average equity exceeded 20%," said David
 Kalkbrenner, president and chief executive officer of Greater Bay Bancorp.
     Mr. Kalkbrenner added, "Greater Bay Bancorp continues to outperform its
 peers and provide exceptional returns to our shareholders.  For the first
 quarter of 2001, our core earnings increased 47% while we also continued to
 generate quality asset growth combined with strong credit quality.  These
 results reflect the continued success of our Super Community Banking Strategy
 and have been accomplished during a period of economic uncertainty in both the
 U.S. and our San Francisco Bay Area markets.  While Greater Bay is not immune
 to the impact of a slowing economy and declining interest rates, the history
 of our individual subsidiary banks and the banking industry generally supports
 the fact that community banking can be very successful during periods of
 economic uncertainty.  This is particularly true when big bank competitors
 cease lending to certain market segments, thus allowing banks like Greater Bay
 to expand and add to its client relationships."
     Greater Bay Bancorp's allowance for loan losses was 2.30% of total loans
 at March 31, 2001 and 1.98% at March 31, 2000, while its ratio of
 non-performing assets to total assets was 0.34% at March 31, 2001, compared to
 0.18% at March 31, 2000.  The allowance for loan losses was 473.80% of total
 non-performing assets at March 31, 2001.
     The capital ratios of Greater Bay Bancorp and each of its subsidiary banks
 continue to be above the well-capitalized guidelines established by the bank
 regulatory agencies.
     Mr. Kalkbrenner commented, "During the first quarter, we successfully
 integrated Matsco, headquartered in Emeryville, California and specializing in
 financial services for the dental and veterinarian markets.  We also announced
 the completion of our acquisition of CAPCO Financial Company, Inc., a
 factoring and asset-based lending company headquartered in Bellevue,
 Washington.  To date, the financial impact of these two acquisitions has been
 negligible; however, we anticipate they will enhance our financial performance
 for the remainder of 2001.  In the case of Matsco, we originally anticipated
 selling 20% to 40% of its loan production, yet in the first quarter we
 portfolioed  all of Matsco's loans.  This larger portfolio will increase our
 net interest income while also providing added flexibility to sell Matsco
 loans in future quarters. CAPCO, which just closed at the end of March, will
 have its operating results included with Greater Bay beginning in the second
 quarter and we are very confident the CAPCO acquisition will be accretive in
 2001."
 
     - Share Repurchase Program -
     Greater Bay Bancorp also announced today that its Board of Directors has
 authorized the repurchase of up to 5% of Greater Bay Bancorp's outstanding
 common stock.  The Company intends to repurchase shares from time to time in
 the open market.  We expect that such purchases would be accretive to
 earnings, while also maintaining capital ratios that exceed the regulatory
 guidelines for a well-capitalized financial institution.
     "We believe this share repurchase program represents an excellent
 investment opportunity for the company and reaffirms our commitment to
 enhancing shareholder value by utilizing all alternatives to provide superior
 returns to our shareholders," said Mr. Kalkbrenner.
 
     -Looking Forward -- 2001 Performance Goals Reaffirmed -
     Mr. Kalkbrenner continued, "We believe that the performance goals stated
 for Greater Bay in our year end 2000 press release dated January 17, 2001 and
 reaffirmed in our Form 8K filing with the SEC on March 6, 2001, still reflect
 our current outlook for 2001 based on our assessment of the current economic
 environment and its potential impact on our business."
     Mr. Kalkbrenner continued, "Our current view is that we will see, at a
 minimum, an additional 75 basis point decline in interest rates which will
 reduce our net interest margin but should not impact our ability to meet our
 performance goals.  If the economic outlook deteriorates further than most
 economists anticipate, it could impact the ability of Greater Bay to attain
 its performance goals.  However, if the economy would decline significantly,
 this impact would not only impact Greater Bay's operating results, it would
 also impact most financial services companies operating in the United States.
 We intend to manage through this declining net interest rate and uncertain
 economic environment by monitoring our expense growth, aggressively managing
 our credit quality and focusing our relationship officers on generating new
 quality client relationships while improving the overall profitability of our
 existing client relationships."
     The following are the performance guidance disclosed in the fourth quarter
 and year-end press release dated January 17, 2001, reaffirmed in the Form 8K
 filed with the SEC on March 6, 2001 and once again reaffirmed with this
 release:
 
     -- Loan growth in the 20%-25% range
     -- Deposit growth 15%
     -- Revenue growth of 22%-27%
     -- Return on equity greater than 20%
     -- Return on average assets greater than 1.4%
     -- Efficiency ratio less than 48%
     -- Earnings per share growth of 17%-25%
 
     Greater Bay Bancorp through its ten subsidiary banks, Bank of Petaluma,
 Bank of Santa Clara, Bay Area Bank, Bay Bank of Commerce, Coast Commercial
 Bank, Cupertino National Bank, Golden Gate Bank, Mid-Peninsula Bank, Mt.
 Diablo National Bank and Peninsula Bank of Commerce, along with its operating
 divisions, serves clients throughout Silicon Valley, San Francisco, the San
 Francisco Peninsula, the East Bay Region, the North Bay Region and the Central
 Coastal Region.
     Greater Bay Bancorp's first quarter 2001 earnings conference call is
 scheduled for April 17, 2001 at 8:00 am PDT. Investors have the opportunity to
 listen to the conference call live on the Internet through Street Events at
 http://www.streetevents.com.  Investors should go to the Street Events Web
 site 15 minutes prior to the start of the call, as it may be necessary to
 download audio software to hear the conference call.   To do so, investors
 should click on the Real Player icon and follow directions from there. A
 replay of the conference call will be available on the Street Events Web site
 for 30 days and via telephone through April 23, 2001 by dialing 703-925-2435,
 passcode 511840.
     Greater Bay Bancorp's corporate press releases are available on the
 Company's Web site at http://www.gbbk.com.
 
     Safe Harbor
     Certain matters discussed in this press release constitute forward looking
 statements within the meaning of the Private Securities Litigation Reform Act
 of 1995.  These forward looking statements relate to the Company's current
 expectations regarding future operating results, growth in loans, deposits and
 assets, continued success of its Super Community Banking strategy and the
 strength of the local economy.  These forward looking statements are subject
 to certain risks and uncertainties that could cause the actual results,
 performance or achievements to differ materially from those expressed,
 suggested or implied by the forward looking statements.
     These risks and uncertainties include, but are not limited to: (1) the
 impact of changes in interest rates, a decline in economic conditions at the
 international, national and local levels and increased competition among
 financial service providers on the Company's results of operations, the
 Company's ability to continue its internal growth at historical rates, the
 Company's ability to maintain its net interest spread, and the quality of the
 Company's earning assets; (2) government regulations; (3) the ability to
 successfully integrate recently completed mergers and acquisitions; (4)  the
 risks relating to the Company's warrant positions; and (5) the other risks set
 forth in the Company's reports filed with the Securities and Exchange
 Commission, including its Annual Report on Form 10-K for the year ended
 December 31, 2000.
     For investor information on Greater Bay Bancorp at no charge, call our
 automated shareholder information line at 800-PRO-INFO (800-776-4636) and
 enter code GBBK.  For international access, dial 201-432-6555.
 
 
                              GREATER BAY BANCORP
                       MARCH 31, 2001 - FINANCIAL SUMMARY
                 ($ in 000's, except share and per share data)
 
     SELECTED CONSOLIDATED FINANCIAL CONDITION DATA:
 
                         Mar 31     Dec 31     Sept 30     Jun 30     Mar 31
                          2001       2000       2000        2000       2000
     Cash and Due
      From Banks        $206,156   $270,774   $243,207   $232,371    $182,642
     Investments       1,301,970  1,100,333  1,085,257  1,110,239   1,187,241
     Loans:
       Commercial      1,595,293  1,562,712  1,250,056  1,130,322   1,042,686
       Term Real Estate
        - Commercial     992,777    967,428    890,127    869,226     834,146
       Total
        Commercial     2,588,070  2,530,140  2,140,183  1,999,548   1,876,832
       Construction      701,414    691,912    581,956    516,998     494,099
       Real Estate
        - Other          233,538    176,568    174,997    127,571     126,363
       Consumer
        and Other        216,064    216,459    206,632    209,019     172,571
       Deferred Loan
        Fees, Net        (13,461)   (13,657)   (13,440)   (13,829)    (13,066)
         Total Loans   3,725,625  3,601,422  3,090,328  2,839,307   2,656,799
         Allowance for
          Loan Losses    (85,914)   (84,014)   (67,637)   (58,578)    (52,852)
       Total Loans,
        Net            3,639,711  3,517,408  3,022,691  2,780,729   2,603,947
     Other Assets        258,409    241,863    196,914    195,746     194,001
     Total Assets     $5,406,246 $5,130,378 $4,548,069 $4,319,085  $4,167,831
 
     Deposits:
       Demand,
        Non-Interest
        Bearing         $897,229 $1,003,828   $899,496   $851,590    $847,815
       NOW, MMDA
        and Savings    2,108,098  2,082,708  2,132,184  2,032,360   2,070,090
       Time
        Certificates,
        $100,000
        and over         777,901    784,118    737,533    675,031     589,072
       Other Time
        Certificates     490,402    294,407    156,125    157,554     145,221
         Total
          Deposits     4,273,630  4,165,061  3,925,338  3,716,535   3,652,198
     Other Borrowings    572,828    431,228    135,313    156,037     116,092
     Other Liabilities   105,922    112,224     87,702     60,368      61,598
         Total
          Liabilities  4,952,380  4,708,513  4,148,353  3,932,940   3,829,888
     Trust Preferred
      Securities          99,500     99,500     99,500     99,500      58,500
     Shareholders'
      Equity             354,366    322,365    300,216    286,645     279,443
     Total Liabilities
      and Shareholders'
      Equity          $5,406,246 $5,130,378 $4,548,069 $4,319,085  $4,167,831
 
     Average Quarterly
      Total Loans,
      excluding
      Nonaccrual      $3,638,946 $3,326,505 $2,962,402 $2,826,612  $2,553,083
     Average
      Quarterly
      Investments     $1,048,617 $1,095,752 $1,225,598 $1,154,824  $1,138,163
 
     Average
      Quarterly
      Interest
      Earning Assets  $4,687,563 $4,422,257 $4,188,000 $3,981,436  $3,691,246
     Average
      Quarterly
      Interest Bearing
      Liabilities     $3,643,025 $3,334,513 $3,044,342 $2,972,538  $2,819,566
 
     Average
      Quarterly
      Assets          $5,088,379 $4,783,445 $4,532,392 $4,213,203  $3,979,375
     Average
      Quarterly
      Equity            $340,582   $316,331   $301,644   $284,653    $269,530
 
     Total Regulatory Capital
       Tier I
        or Leverage
        Capital         $431,427   $417,847   $412,724   $385,854    $346,472
       Total Capital    $491,675   $475,891   $462,807   $447,301    $390,554
 
     Nonperforming Assets
       Nonaccrual Loans  $17,874    $12,593    $14,884     $8,779     $ 6,327
       Restructured Loans     --         --        420        420         743
       OREO                  259         --        395        229         271
     Total
      Nonperforming
      Assets             $18,133    $12,593    $15,699     $9,428     $ 7,341
 
     Greater Bay Trust
      Company Assets    $734,910   $773,791   $838,659   $795,042    $751,677
 
 
     SELECTED QUARTERLY CONSOLIDATED FINANCIAL CONDITION RATIOS:
 
                         Mar 31      Dec 31     Sept 30    Jun 30      Mar 31
                          2001        2000       2000       2000        2000
     Loan to
      Deposit Ratio       87.18%     86.47%     78.73%      76.40%     72.75%
     Core Bank
      Loan to
      Deposit Ratio (A)   72.39%     72.44%     71.89%      69.39%     66.40%
     Ratio of Allowance
      for Loan Losses to:
       Average Loans       2.35%      2.52%      2.27%       2.07%      2.07%
       End of Period Loans 2.30%      2.32%      2.18%       2.05%      1.98%
       Total
        Nonperforming
        Assets           473.80%    667.15%    430.84%     621.32%    719.96%
 
     Total
      Nonperforming
      Assets to
      Total Assets         0.34%      0.25%      0.35%       0.22%      0.18%
 
     Ratio of Quarterly
      Net Charge-offs
      to Average
      Loans, annualized    0.59%      0.31%      0.37%       0.58%      0.26%
     Ratio of YTD Net
      Charge-offs to
      YTD Average
      Loans, annualized    0.59%      0.38%      0.41%       0.44%      0.26%
 
     Loan Growth,
      current quarter
      to prior
      year quarter        40.23%     46.13%     37.05%      36.76%     41.57%
     Loan Growth,
      current quarter
      to prior quarter,
      annualized          13.99%     65.79%     35.17%      27.63%     31.39%
     Recurring Revenue
      Growth, current
      quarter to prior
      year quarter        30.94%     30.59%     34.71%      44.15%     40.84%
     Recurring Revenue
      Growth, current
      quarter to prior
      quarter,
      annualized          20.12%     31.93%     21.05%      38.92%     18.82%
 
     Average Earning
      Assets to Average
      Total Assets        92.12%     92.45%     92.40%      94.50%     92.76%
     Average Earning
      Assets to Average
      Interest-Bearing
      Liabilities        128.67%    132.62%    137.57%     133.94%    130.92%
 
     Capital Ratios:
       Leverage            8.52%      8.77%      9.11%       9.16%      8.71%
       Tier 1 Risk
        Based Capital      9.14%      9.40%     10.83%      10.87%     10.30%
       Total Risk
        Based Capital     10.42%     10.70%     12.14%      12.61%     11.62%
 
     Risk Weighted
      Assets          $4,720,719 $4,446,088 $3,812,504  $3,548,503 $3,362,293
 
     Book Value
      Per Share (B)        $8.33      $7.69      $7.21       $6.94      $6.80
     Total Shares
      Outstanding (B) 42,546,142 41,929,173 41,648,016  41,284,372 41,121,745
 
     (A) Includes the ten core banking divisions and excludes Matsco, Capco,
         Pacific Business Funding and Corporate Finance.
     (B) Prior periods have been restated for the 2 for 1 stock split effective
         October 4, 2000.
 
     Note:  Prior periods have been restated to reflect the mergers between
 Greater Bay Bancorp, Coast Bancorp, Bank of Santa Clara and Bank of Petaluma
 on a pooling-of-interests basis.
 
 
                              GREATER BAY BANCORP
                       MARCH 31, 2001 - FINANCIAL SUMMARY
                 ($ in 000's, except share and per share data)
 
     SELECTED QUARTERLY CONSOLIDATED OPERATING DATA:
                          First     Fourth       Third      Second      First
                         Quarter    Quarter     Quarter    Quarter     Quarter
                          2001       2000        2000        2000       2000
 
     Interest Income    $106,694   $104,376    $96,612    $87,538     $79,837
     Interest Expense     40,448     38,957     36,797     30,976      29,674
       Net Interest
        Income Before
        Provision for
        Loan Losses       66,246     65,419     59,815     56,562      50,163
     Provision for
      Loan Losses          6,928      6,316      7,844      8,312       5,624
       Net Interest
        Income After
        Provision for
        Loan Losses       59,318     59,103     51,971     48,250      44,539
 
     Other Income:
     Trust Fees              886        954        822        827         847
     Depositor
      Service Fees         2,013      2,034      2,219      2,194       2,147
     ATM Fees                662        748        817        676         650
     Loan and
      International
      Banking Fees         3,101      2,562      2,497      1,927       1,176
     Gain on Sale
      of SBA Loans           835        312        429        753         696
     Gain/(loss)
      on Investments       1,578         21          3         58         (1)
     Other Income (A)      1,656      1,289      1,288      1,482       3,112
                          10,731      7,920      8,075      7,917       8,627
     Nonrecurring
      - Warrant
      Income (C)              --        870      2,767        740       8,609
     Total Other Income   10,731      8,790     10,842      8,657      17,236
 
     Operating Expenses:
     Compensation
      and Benefits (E)    18,405     17,449     15,792     15,258      15,825
     Occupancy
      and Equipment        5,863      5,711      5,575      5,117       5,285
     Professional
      Services & Legal     1,387      1,083      1,312      1,199       1,110
     Client Services         644        563        477        496         545
     FDIC Insurance
      and Assessments        273        356        379        251         250
     Other Real
      Estate, Net             --          5         --         41          10
     Other Expenses        9,018      8,182      7,035      7,133       6,169
     Total
      Operating
      Expenses            35,590     33,349     30,570     29,495      29,194
 
     Income Before
      Income Taxes,
      Merger and Other
      Related
      Nonrecurring Costs  34,459     34,544     32,243     27,412      32,581
     Income Taxes:
     Income Tax Expense   12,928     12,695     11,173      9,953       9,306
     Nonrecurring
      Income Tax
      Expense (C)             --        366      1,164        290       3,590
     Total Income
      Tax Expense         12,928     13,061     12,337     10,243      12,896
     Income Before
      Merger and
      Other Related
      Nonrecurring Costs  21,531     21,483     19,906     17,169      19,685
     Merger and Other
      Related
      Nonrecurring
      Costs, net
      of tax (C)              --      3,533      7,037      6,744       2,389
     Net Income          $21,531    $17,950    $12,869    $10,425     $17,296
 
 
     SELECTED QUARTERLY CONSOLIDATED OPERATING RATIOS:
                          First       Fourth     Third      Second      First
                         Quarter     Quarter    Quarter     Quarter    Quarter
                           2001        2000      2000        2000       2000
 
     Income Per Share (Before Nonrecurring and Merger Items) (C), (D)
       Basic               $0.51      $0.50     $ 0.44       $0.41      $0.37
       Diluted             $0.49      $0.47     $ 0.42       $0.39      $0.35
     Income Per Share (Before Merger Items) (D)
       Basic               $0.51      $0.51     $ 0.48       $0.42      $0.49
       Diluted             $0.49      $0.48     $ 0.46       $0.40      $0.47
     Net Income Per Share (D)
       Basic               $0.51      $0.43     $ 0.31       $0.25      $0.43
       Diluted             $0.49      $0.41     $ 0.29       $0.24      $0.42
     Weighted Average
      Common Shares
      Outstanding (D) 42,323,000 41,817,000 41,448,000  41,207,000 39,784,000
     Weighted Average
      Common & Common
      Equivalent
     Shares
      Outstanding (D) 44,175,000 44,319,000 43,676,000  42,913,000 41,632,000
 
     Return on
      Period Average
      Assets,
      annualized (B)       1.72%      1.74%      1.61%       1.60%      1.48%
     Return on
      Period Average
      Equity,
      annualized (B)      25.64%     26.38%     24.14%      23.62%     21.88%
     Net Interest
      Margin
      - Average
      Earning Assets       5.73%      5.89%      5.68%       5.71%      5.47%
     Operating Expense
      Ratio (Before
      Nonrecurring
      and Merger Items)    2.84%      2.77%      2.68%       2.82%      2.95%
     Operating Expense
      Ratio (Before
      Nonrecurring
      and Merger
      Items and
      excluding Matsco)    2.69%      2.85%      2.68%       2.82%      2.95%
     Efficiency Ratio
      (Before
      Nonrecurring
      and Merger Items)   46.23%     45.47%     45.03%      45.74%     49.66%
     Efficiency Ratio
      (Before
      Nonrecurring
      and Merger
      Items and
      excluding Matsco)   44.67%     44.84%     45.03%      45.74%     49.66%
 
 
     (A) Q1 2000  included a $2.1 million gain on an equity investment.
     (B) Before Nonrecurring and Merger Items of $3.0 million, net of tax, in
         Q4 2000; $5.4 million, net of tax, in Q3 2000; $6.3 million, net of
         tax, in Q2 2000 and $2.6 million, net of tax, in Q1 2000.
     (C) These items are the components of Nonrecurring and Merger Items.  Net
         Income excluding these items is $20,979 for Q4 2000, $18,303 for
         Q3 2000, $16,719 for Q2 2000 and $14,666 for Q1 2000.
     (D) Prior periods have been restated for the 2 for 1 stock split effective
         October 4, 2000.
     (E) Includes Matsco compensation and benefits of $2.4 million in Q1 2001
         and $904,000 in Q4 2000 as this was a purchase transaction that closed
         in November 2000.
 
     Note:  Prior periods have been restated to reflect the mergers between
 Greater Bay Bancorp, Coast Bancorp, Bank of Santa Clara and Bank of Petaluma
 on a pooling-of-interests basis.
 
 SOURCE  Greater Bay Bancorp