GBBK Global Blockchain Acquisition Corporation

Greater Bay Bancorp (Nasdaq:GBBK), a $7.4 billion in assets financial services holding company, today announced results for the fourth quarter and year ended December 31, 2006. For the fourth quarter of 2006, the Company�s net income was $18.8 million, or $0.33 per diluted common share, compared to $27.5 million, or $0.48 per diluted common share, for the fourth quarter of 2005, and $18.5 million, or $0.32 per diluted common share, for the third quarter of 2006. For the year ended December 31, 2006, net income was $89.6 million, or $1.60 per diluted common share, compared to $97.2 million, or $1.64 per diluted common share for the year ended December 31, 2005. Operating results for the quarter included the recognition of severance expenses totaling $2.2 million which were associated with reduction in workforce actions taken as part of the Company�s previously outlined cost control initiatives. The results also included a mark-to-market decline of $1.5 million in the value of the Company�s equity investment portfolio. For the fourth quarter of 2006, the Company�s return on average common equity, annualized, was 10.03% compared to 16.25% for the fourth quarter of 2005, and 10.15% for the third quarter of 2006. Return on average common equity for the year ended December 31, 2006 was 12.57% compared to 14.55% in 2005. Return on average assets, annualized, for the fourth quarter of 2006 was 1.00% compared to 1.53% for the fourth quarter of 2005, and 1.00% for the third quarter of 2006. Return on average assets for the year ended December 31, 2006 was 1.24% compared to 1.37% in 2005. �We are pleased with the continued progress achieved during the quarter,� stated Byron A. Scordelis, President and Chief Executive Officer of Greater Bay Bancorp. �Against a cyclical market backdrop of continued margin pressure, we achieved healthy growth in our core deposit base, and posted solid growth in both our community banking and specialty finance loan portfolios. Key credit metrics remained strong, and we made tangible progress in our sustained expense control initiatives.� Net Interest Income and Margin Net interest income for the fourth quarter of 2006 decreased to $63.9 million from $67.7 million in the fourth quarter of 2005, and increased from $63.8 million in the third quarter of 2006. Net interest income for the year ended December 31, 2006 decreased to $260.4 million from $267.2 million in 2005. The net interest margin (on a fully tax-equivalent basis) for the fourth quarter of 2006 was 3.91%, compared to 4.36% for the fourth quarter of 2005 and 3.97% for the third quarter of 2006. The net interest margin (on a fully tax-equivalent basis) for the year ended December 31, 2006 was 4.13% compared to 4.34% in 2005. �Margin contraction was principally due to a continued, though noticeably slowed, narrowing of deposit spreads,� stated James S. Westfall, Executive Vice President and Chief Financial Officer. �Movement in asset yields and other funding costs were fairly balanced during the quarter,� he added. Non-Interest Income Non-interest income for the fourth quarter of 2006 decreased to $51.6 million compared to $53.0 million in the fourth quarter of 2005. This reduction was primarily attributable to a $2.8 million decline in equity investment mark-to-market income, partially offset by a $1.7 million increase in insurance commissions and fees. Non-interest income for the fourth quarter of 2006 decreased by $3.9 million compared to the third quarter of 2006. This reduction was primarily attributable to a $3.0 million reduction in insurance commissions and fees reflecting normal fourth quarter seasonality and a $1.5 million decline in equity investment mark-to-market income. Non-interest income for the year ended December 31, 2006 increased to $222.6 million from $211.9 million in 2005. This change was primarily attributable to an increase in insurance brokerage commissions and fees of $10.9 million, including $10.2 million related to Lucini / Parish which was acquired May 1, 2005. Non-interest income as a percentage of total revenues for the fourth quarter of 2006 was 44.7%, compared to 43.9% for the fourth quarter of 2005 and 46.5% for the third quarter of 2006. Non-interest income as a percentage of total revenues for the year ended December 31, 2006 was 46.1%, compared to 44.2% for 2005. �We continue to be very encouraged by the performance of ABD,� commented Mr. Scordelis. �ABD achieved solid quarterly revenue growth compared to the same period last year in spite of on-going premium softening, and its net full-year inflow of new business remained positive. ABD also undertook explicit cost control measures aimed at expanding its future operating margin.� Operating Expenses Operating expenses for the fourth quarter of 2006 increased to $88.0 million from $86.4 million in the fourth quarter of 2005. This increase was primarily attributable to an increase in compensation and benefits of $3.8 million, inclusive of severance expenses of $2.2 million. Partially offsetting this increase was a reduction of $1.3 million in legal and professional costs. Operating expenses for the fourth quarter of 2006 decreased to $88.0 million from $91.1 million in the third quarter of 2006. This reduction was primarily attributable to a decrease of $1.1 million in legal and professional costs and a decrease of $3.2 million in other expenses due to the write-off of the unamortized debt issuance costs related to the August redemption of a trust preferred security. These decreases were partially offset by an increase in severance expense of $1.2 million. Operating expenses for the year ended December 31, 2006 increased to $352.6 million from $336.1 million in 2005. This increase was primarily attributable to an increase of $15.6 million in compensation and benefits , including $5.6 million related to the full-year effect of ABD�s May 2005 acquisition of Lucini/Parish, $3.0 million related to the opening of three new ABD offices, $1.9 million in severance expenses related to our 2006 expense reduction initiatives and $1.5 million related to the change in accounting for option compensation beginning in 2006. These increases were partially offset by a $1.4 million reduction in legal and professional costs that primarily reflect lower Sarbanes-Oxley compliance expenses. �We completed a staffing reduction of approximately four percent during the quarter and commenced the planned consolidation of a significant portion of our administrative and service functions into a single lower cost facility that will occur in the second half of 2007,� stated Mr. Scordelis. �We also remain focused on technology enhancements and other procurement efficiencies with the dual objectives of promoting revenue growth and containing operating expenses.� Income Taxes The Company�s effective tax rate was 35.7% for 2006 compared to 37.8% in 2005. The decrease reflects an increased proportion of tax-exempt income, tax credits from investments in low income housing investments and higher California net interest deductions for enterprise zone loans. Credit Quality Overview Net loan charge-offs in the fourth quarter of 2006 were $3.2 million, or 0.26% of average loans, annualized, compared to $1.2 million, or 0.10% of average loans, annualized, for the fourth quarter of 2005 and $0.2 million, or 0.02% of average loans, for the third quarter of 2006. Net loan charge-offs for the year ended December 31, 2006 were $6.1 million, or 0.13% of average loans, compared to $11.3 million, or 0.24% of average loans in 2005. Provision for credit losses was a negative $0.4 million for the fourth quarter of 2006, compared to a negative $10.5 million for the fourth quarter of 2005, and a negative of $0.4 million for the third quarter of 2006. The provision for the year ended December 31, 2006 was a negative $8.7 million, compared to a negative $13.3 million in 2005. Non-performing assets were $30.2 million at December 31, 2006, compared to $71.7 million at December 31, 2005 and $29.7 million at September 30, 2006. The ratio of non-performing assets to total assets was 0.41% at December 31, 2006, compared to 1.01% at December 31, 2005 and 0.40% at September 30, 2006. The ratio of non-accrual loans to total loans was 0.61% at December 31, 2006, compared to 1.50% at December 31, 2005 and 0.60% at September 30, 2006. Allowance for loan and lease losses was $68.0 million, or 1.39% of total loans, at December 31, 2006, compared to $82.2 million, or 1.74% of total loans, at December 31, 2005 and $71.3 million, or 1.48% of total loans, at September 30, 2006. Balance Sheet At December 31, 2006, total assets were $7.4 billion, total net loans and leases were $4.9 billion, total securities were $1.5 billion, and total deposits were $5.3 billion. Total loans and leases, net of deferred costs and fees, were $4.9 billion at December 31, 2006, which represents an increase of $177.9 million, or 3.8%, compared to December 31, 2005. This growth reflects an increase of $193.5 million in commercial loans and leases, $85.0 million in real estate construction and land loans, and $13.4 million in residential mortgages. These increases were partially offset by a decline of $46.2 million in commercial term real estate loans, $40.5 million in consumer and other loans, and $29.4 million in real estate other loans. Total loans and leases, net of deferred costs and fees, increased by $69.6 million from September 30, 2006 to December 31, 2006, representing an annualized growth rate of 5.7% for the quarter. This growth reflects an increase of $109.3 million in commercial loans and leases, and $10.2 million in real estate other, partially offset by decreases of $23.5 million in construction and land loans, $19.5 million in commercial term real estate loans, and $10.4 million in consumer and other loans. �We are encouraged by the continued growth in our loan portfolio,� stated Mr. Scordelis. �Of most significance, and consistent with our previously stated strategic intent, commercial loans in our community banking business grew at an annualized rate of more than 30% and our specialty finance business posted another quarter of double digit growth. Looking to 2007, we expect our Matsco division to surpass $1.0 billion in outstandings during the first quarter of 2007, and we currently foresee the potential for an increasing level of commercial construction lending opportunities as 2007 progresses, which may mitigate a current market-driven slowing of residential construction activity.� Securities totaled $1.5 billion as of December 31, 2006, compared to $1.5 billion at December 31, 2005 and $1.6 billion at September 30, 2006. Total deposits at December 31, 2006 were $5.3 billion, which represents an increase of $198.6 million, or 3.9%, compared to December 31, 2005, and an increase of $198.1 million representing an annualized growth rate of 15.5% compared to September 30, 2006. Core deposits (excluding institutional and brokered deposits) at December 31, 2006 were $4.3 billion, which represents a decrease of $310.0 million, or 6.8%, compared to December 31, 2005, and an increase of $157.9 million representing an annualized growth rate of 15.3% compared to September 30, 2006. �Meaningful deposit balance growth during the quarter represents a marked reversal of the trend in recent periods,� commented Mr. Scordelis. �Core demand and time deposits had solid growth, while money market balances stabilized during the quarter. Acknowledging the potential for further near-term balance volatility as clients respond to the prevailing interest rate cycle, we continue to focus on account growth and optimization of overall balance levels, mix, and funding costs.� Capital Overview The capital ratios of Greater Bay Bancorp and its subsidiary bank continue to exceed minimum well-capitalized guidelines established by bank regulatory agencies. The Company�s common equity to assets ratio was 9.99% at December 31, 2006, compared to 9.45% at December 31, 2005 and 9.99% at September 30, 2006. The Company�s tangible common equity to tangible assets ratio was 6.32% at December 31, 2006, compared to 5.56% at December 31, 2005 and 6.32% at September 30, 2006. Other Matters In September 2006, the SEC staff issued Staff Accounting Bulletin (SAB) No. 108, �Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements�. The Company adopted SAB 108 as of December 31, 2006 by initially applying the provisions of SAB 108 using the cumulative effect transition method in connection with the finalization of our financial statements for the year ended December 31, 2006. As a result of adopting SAB 108, the Company�s total shareholders� equity as of January 1, 2006, was reduced by $1.9 million comprised of a decrease in retained earnings of $5.3 million and an increase in common stock of $3.4 million. Additionally, the Company increased net income reported in the first and second quarters of 2006 by $0.3 million and $1.0 million, respectively which had the effect of increasing reported net income for the year ended December 31, 2006 by $1.3 million. Outlook for 2007 Our full year guidance for 2007 is as follows: Core Loan Growth � we expect core loan portfolio growth in the high single digits. Core Deposit Growth � we expect core deposit growth in the low single digits. Credit Quality � we expect full year net charge-offs to range from 25 basis points to 35 basis points of average loans outstanding. Net Interest Margin � we expect the full year margin level to fluctuate in the 3.80% to 3.90% range. Conference Call The Company will broadcast its earnings conference call live via the Internet at 8:00 a.m. PST on Thursday, February 1. Participants may access this conference call through the company's website at http://www.gbbk.com, under the "Investor Info" link, or through http://www.earnings.com. You should go to either of these websites 15 minutes prior to the start of the call, as it may be necessary to download audio software to hear the conference call. A replay of the conference call will be available on the websites. A telephone replay will also be available beginning at 11:00 a.m. PST on February 1 through 9:00 p.m. PST on February 8, 2007, by dialing 800-642-1687 or 706-645-9291 and providing Conference ID 7182532. 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 the Company�s current expectations regarding future operating results, net interest margin, net loan charge-offs, asset quality, level of loan loss reserves, growth in loans and deposits, and the strength of the local economy. These forward looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward looking statements. These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, a decline in economic conditions at the 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; and (3) the other risks set forth in the Company�s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2005. 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. For additional information and press releases about Greater Bay Bancorp, visit the Company�s website at http://www.gbbk.com. GREATER BAY BANCORP December 31, 2006 - FINANCIAL SUMMARY (UNAUDITED) (Dollars and shares in 000's, except per share data) � � � � � � � � � � � SELECTED QUARTERLY CONSOLIDATED OPERATING DATA: � � Restated(7) Fourth Third Second First Fourth Quarter Quarter Quarter Quarter Quarter 2006� 2006� � 2006� 2006� � 2005� Interest income $ 116,308� $ 113,916� $ 108,321� $ 104,015� $ 102,225� Interest expense 52,419� 50,142� � 42,487� 37,134� � 34,478� Net interest income before reversal of provision for credit losses 63,889� 63,774� 65,834� 66,881� 67,747� Reversal of provision for credit losses (384) (443) � (1,886) (6,004) � (10,491) Net interest income after reversal of provision for credit losses 64,273� 64,217� 67,720� 72,885� 78,238� � Non-interest income: Insurance commissions and fees 38,730� 41,757� 40,235� 44,600� 37,071� Rental revenue on operating leases 4,490� 4,632� 4,790� 4,950� 4,906� Service charges and other fees 2,324� 2,363� 2,368� 2,540� 2,533� Loan and international banking fees 1,980� 1,960� 1,718� 1,795� 1,919� Income on bank owned life insurance 2,003� 2,038� 1,922� 1,911� 1,869� Trust fees 1,138� 1,059� 1,127� 1,055� 1,101� Gains/(losses) on sale of loans -� (14) -� -� 172� Security gains, net -� 40� 5� 168� -� Other income 908� 1,617� � 4,605� 1,747� � 3,438� Total non-interest income 51,573� 55,452� 56,770� 58,766� 53,009� � Operating expenses: Compensation and benefits 55,279� 52,548� 50,906� 57,556� 51,455� Occupancy and equipment 11,457� 11,896� 11,192� 11,322� 11,285� Legal costs and other professional fees 3,950� 5,074� 3,884� 3,753� 5,295� Depreciation - operating leases 3,503� 3,665� 3,917� 4,003� 4,013� Amortization of intangibles 1,507� 1,678� 1,689� 1,640� 1,835� Other expenses 12,281� 16,220� � 11,387� 12,271� � 12,476� Total operating expenses 87,977� 91,081� 82,975� 90,545� 86,359� � Income before provision for income taxes and cumulative effect of accounting change 27,869� 28,588� 41,515� 41,106� 44,888� Provision for income taxes 9,091� 10,076� � 15,423� 15,006� � 17,433� Income before cumulative effect of accounting change 18,778� 18,512� 26,092� 26,100� 27,455� Cumulative effect of accounting change, net of tax (1) -� -� � -� 130� � -� Net income $ 18,778� $ 18,512� � $ 26,092� $ 26,230� � $ 27,455� � � � � � � � � � � � � � EARNINGS PER SHARE DATA: Net Income per common share before cumulative effect of accounting change (2) Basic $ 0.34� $ 0.33� $ 0.48� $ 0.49� $ 0.51� Diluted $ 0.33� $ 0.32� $ 0.47� $ 0.46� $ 0.48� � Net Income per common share after cumulative effect of accounting change (2) Basic $ 0.34� $ 0.33� $ 0.48� $ 0.49� $ 0.51� Diluted $ 0.33� $ 0.32� $ 0.47� $ 0.46� $ 0.48� � Weighted average common shares outstanding 50,478� 50,423� 50,188� 49,802� 50,251� Weighted average common & potential common shares outstanding 51,180� 51,366� 51,173� 52,727� 53,370� � GAAP ratios Return on quarterly average assets, annualized 1.00% 1.00% 1.47% 1.49% 1.53% Return on quarterly average common shareholders' equity, annualized 10.03% 10.15% 14.85% 15.62% 16.25% Return on quarterly average total equity, annualized 8.81% 8.89% 12.95% 13.56% 14.09% Net interest margin, annualized (3) 3.91% 3.97% 4.26% 4.37% 4.36% Operating expense ratio, annualized (4) 4.71% 4.92% 4.66% 5.15% 4.81% Efficiency ratio (5) 76.20% 76.39% 67.68% 72.06% 71.52% � NON-GAAP ratios Efficiency ratio (excluding ABD & other ABD expenses paid by holding company) (6) 67.08% 69.63% 58.27% 66.35% 62.31% � � � � � (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 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. Additionally, the Company's outstanding convertible preferred stock was antidilutive for all periods presented. � � Income before cumulative effect of accounting change as reported $ 18,778� $ 18,512� $ 26,092� $ 26,100� $ 27,455� Less: dividends on convertible preferred stock (1,832) (1,832) � (1,822) (1,832) � (1,825) Income available to common shareholders before cumulative effect of accounting change 16,946� 16,680� 24,270� 24,268� 25,630� Add: CODES interest and other related income/(loss), net of taxes -� -� � -� 59� � (99) Income available to common shareholders before cumulative effect of accounting change 16,946� 16,680� 24,270� 24,327� 25,531� Cumulative effect of accounting change, net of tax -� -� � -� 130� � -� Income available to common shareholders after cumulative effect of accounting change $ 16,946� $ 16,680� � $ 24,270� $ 24,457� � $ 25,531� � Weighted average common shares outstanding 50,478� 50,423� 50,188� 49,802� 50,251� Weighted average potential common shares: Stock options 702� 943� 985� 946� 939� CODES due 2024 -� -� � -� 1,979� � 2,180� Total weighted average common & potential common shares outstanding 51,180� 51,366� � 51,173� 52,727� � 53,370� � (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) $ 75,911� $ 77,083� $ 82,180� $ 80,546� $ 83,614� Operating expenses (excluding ABD & other ABD expenses paid by holding company) $ 50,924� $ 53,670� $ 47,888� $ 53,441� $ 52,102� (7) Restated to reflect adoption of SEC Staff Accounting Bulletin No. 108 effective January 1, 2006, and reflects the reversal of expenses recorded during Q1 and Q2 to correct for immaterial errors related to periods prior to 2006. The pre tax amounts reversed were $0.6 million and $1.5 million for Q1 and Q2 respectively. � � GREATER BAY BANCORP December 31, 2006 - FINANCIAL SUMMARY (UNAUDITED) (Dollars and shares in 000's, except per share data) � � � � � � � SELECTED QUARTERLY CONSOLIDATED OPERATING DATA: � Twelve Months EndedDecember 31, 2006� 2005� Interest income $ 442,560� $ 390,783� Interest expense 182,182� 123,573� Net interest income before reversal of provision for credit losses 260,378� 267,210� Reversal of provision for credit losses (8,717) (13,269) Net interest income after reversal of provision for credit losses 269,095� 280,479� � Non-interest income: Insurance commissions and fees 165,322� 154,390� Rental revenue on operating leases 18,862� 18,302� Service charges and other fees 9,595� 10,448� Loan and international banking fees 7,453� 7,708� Income on bank owned life insurance 7,874� 7,547� Trust fees 4,379� 4,301� Gains/(losses) on sale of loans (14) 478� Security gains, net 213� 342� Other income 8,877� 8,416� Total non-interest income 222,561� 211,932� � Operating expenses: Compensation and benefits 216,289� 200,657� Occupancy and equipment 45,867� 44,123� Legal costs and other professional fees 16,661� 18,015� Depreciation - operating leases 15,088� 15,226� Amortization of intangibles 6,514� 7,876� Other expenses 52,159� 50,164� Total operating expenses 352,578� 336,061� � Income before provision for income taxes and cumulative effect of accounting change 139,078� 156,350� Provision for income taxes 49,596� 59,123� Income before cumulative effect of accounting change 89,482� 97,227� Cumulative effect of accounting change, net of tax (1) 130� -� Net income $ 89,612� $ 97,227� � � � � � � � � EARNINGS PER SHARE DATA: Net Income per common share before cumulative effect of accounting change (2) Basic $ 1.64� $ 1.77� Diluted $ 1.60� $ 1.64� � Net Income per common share after cumulative effect of accounting change (2) Basic $ 1.64� $ 1.77� Diluted $ 1.60� $ 1.64� � Weighted average common shares outstanding 50,221� 50,730� Weighted average common & potential common shares outstanding 51,530� 55,058� � GAAP ratios Return on YTD average assets, annualized 1.24% 1.37% Return on YTD common shareholders' equity, annualized 12.57% 14.55% Return on YTD average total equity, annualized 10.98% 12.59% Net interest margin, annualized (3) 4.13% 4.34% Operating expense ratio, annualized (4) 4.86% 4.74% Efficiency ratio (5) 73.01% 70.14% � NON-GAAP ratios Efficiency Ratio (excluding ABD & other ABD expenses paid by holding company) (6) 65.22% 62.47% � � � � � (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. � � Income before cumulative effect of accounting change as reported $ 89,482� $ 97,227� Less: dividends on convertible preferred stock (7,318) (7,340) Net Income available to common shareholders before cumulative effect of accounting change 82,164� 89,887� Add: CODES interest and other related income/(loss), net of taxes 59� 267� Income available to common shareholders before cumulative effect of accounting change 82,223� 90,154� Cumulative effect of accounting change, net of tax 130� -� Income available to common shareholders after cumulative effect of accounting change $ 82,353� $ 90,154� � � Weighted average common shares outstanding 50,221� 50,730� Weighted average potential common shares: Stock options 821� 1,017� CODES due 2024 488� 3,302� CODES due 2022 -� 9� Total weighted average common & potential common shares outstanding 51,530� 55,058� � (3) Net interest income (on a tax equivalent basis) for the period divided by YTD average interest earning assets for the period. (4) Total operating expenses for the period divided by YTD average 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) $ 315,720� $ 323,344� Operating Expenses (Excluding ABD & other ABD expenses paid by holding company) $ 205,923� $ 202,006� GREATER BAY BANCORP December 31, 2006 - FINANCIAL SUMMARY (UNAUDITED) (Dollars in 000's) � � � � � � � � � � � � SELECTED CONSOLIDATED FINANCIAL CONDITION DATA AND RATIOS: � � Restated(5) Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 2006� � 2006� 2006� 2006� � 2005� Cash and cash equivalents $ 170,365� $ 160,572� $ 198,716� $ 167,203� $ 152,153� Fed funds sold -� -� 36,000� -� -� Securities 1,543,097� 1,572,109� 1,565,732� 1,468,123� 1,493,584� Loans and leases: Commercial (1) 2,245,549� 2,136,235� 2,072,334� 2,046,402� 2,052,049� Term real estate - commer-cial 1,403,631� � 1,423,090� 1,394,518� 1,439,416� � 1,449,818� Total commer-cial (1) 3,649,180� 3,559,325� 3,466,852� 3,485,818� 3,501,867� Real estate construc-tion and land 729,871� 753,416� 762,409� 688,086� 644,883� Residen-tial mortgage 279,615� 277,038� 275,332� 271,658� 266,263� Real estate other 173,271� 163,077� 164,133� 180,409� 202,675� Consumer and other (1) 68,698� 79,131� 101,821� 100,468� 109,168� Deferred costs and fees, net (1) 5,206� � 4,278� 4,066� 3,285� � 3,113� Total loans and leases, net of deferred costs and fees (1) 4,905,841� 4,836,265� 4,774,613� 4,729,724� 4,727,969� Allowance for loan and lease losses (68,025) � (71,323) (71,689) (74,568) � (82,159) Total loans and leases, net 4,837,816� 4,764,942� 4,702,924� 4,655,156� 4,645,810� Goodwill 246,016� 242,687� 243,343� 242,728� 243,289� Other intangible assets 42,978� 44,515� 46,227� 48,005� 49,741� Other assets 530,862� � 554,985� 583,167� 533,366� � 536,392� Total assets $ 7,371,134� � $ 7,339,810� $ 7,376,109� $ 7,114,581� � $ 7,120,969� � Deposits: Demand, non-interest-bearing $ 1,028,245� $ 980,050� $ 1,015,734� $ 1,004,575� $ 1,093,157� MMDA, NOW and savings 2,614,349� 2,613,387� 2,734,656� 2,957,354� 3,000,647� Time deposits, $100,000 and over 892,048� 784,557� 776,712� 782,891� 741,682� Other time deposits 722,541� � 681,104� 495,131� 363,941� � 223,053� Total deposits 5,257,183� � 5,059,098� 5,022,233� 5,108,761� � 5,058,539� Other borrowings 825,837� 994,044� 970,390� 750,248� 797,802� Subordinated debt 180,929� 180,929� 287,631� 210,311� 210,311� Other liabilities 254,812� � 256,545� 268,899� 240,008� � 265,607� Total lia-bilities 6,518,761� � 6,490,616� 6,549,153� 6,309,328� � 6,332,259� � Minority interest: Preferred stock of real estate investment trust subsidiaries 12,861� 12,821� 12,780� 12,739� 12,699� � Convertible preferred stock 103,094� 103,094� 103,096� 103,097� 103,387� Common share-holders' equity 736,418� � 733,279� 711,080� 689,417� � 672,624� Total equity 839,512� 836,373� 814,176� 792,514� 776,011� � � � � � � � Total liabilities and total equity $ 7,371,134� � $ 7,339,810� $ 7,376,109� $ 7,114,581� � $ 7,120,969� � � � � � � � � � � � RATIOS: � Loan growth, current quarter to prior year quarter 3.76% 3.19% 0.72% 4.93% 5.34% Loan growth, current quarter to prior quarter, annualized 5.71% 5.12% 3.81% 0.15% 3.49% Loan growth, YTD 3.76% 3.06% 1.99% 0.15% 5.34% � Core loan growth, current quarter to prior year quarter (2) 4.45% 3.90% 1.32% 1.39% 0.57% Core loan growth, current quarter to prior quarter, annualized (2) 6.41% 5.91% 4.47% 0.66% 4.30% Core loan growth, YTD (2) 4.45% 3.73% 2.58% 0.66% 0.57% � Deposit growth, current quarter to prior year quarter 3.93% 0.87% 2.93% 2.26% -0.87% Deposit growth, current quarter to prior quarter, annualized 15.53% 2.91% -6.79% 4.03% 3.41% Deposit growth, YTD 3.93% 0.01% -1.45% 4.03% -0.87% � Core deposit growth, current quarter to prior year quarter (3) -6.79% -10.48% -6.63% -5.78% -5.03% Core deposit growth, current quarter to prior quarter, annualized (3) 15.29% -14.43% -19.72% -8.31% -1.02% Core deposit growth, YTD (3) -6.79% -13.71% -13.84% -8.31% -5.03% � Revenue growth, current quarter to prior year quarter (4) -4.38% -2.66% 2.46% 8.10% 7.03% Revenue growth, current quarter to prior quarter, annualized (4) -12.53% -10.93% -9.71% 16.43% -5.60% � Net interest income growth, current quarter to prior year quarter -5.69% -6.21% 0.63% 1.27% -0.52% Net interest income growth, current quarter to prior quarter, annualized 0.72% -12.41% -6.28% -5.18% -1.45% � � � � � (1) In Q3 2006, $15.4 million of deferred costs and fees on leases were reclassified from commercial loans and consumer and other loans into net deferred costs and fees. Prior period presentation has been changed to conform to current period presentation. � (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 to reflect adoption of SEC Staff Accounting Bulletin No. 108 effective January 1, 2006, including an adjustment to common shareholders' equity of $1.9 million as of January 1, 2006. GREATER BAY BANCORP December 31, 2006 - FINANCIAL SUMMARY (UNAUDITED) (Dollars in 000's) � � � � � � � � � � � � SELECTED AVERAGE BALANCE SHEET AND YIELD DATA: � Three months ended December 31, 2006 September 30, 2006 Average Average Average Yield / Average Yield / Tax-Equivalent Basis (1) Balance (2) � Interest � Rate Balance (2) � Interest � Rate � INTEREST-EARNING ASSETS: Fed funds sold $ 83,034� $ 1,098� 5.24% $ 33,141� $ 432� 5.18% Securities: Taxable 1,493,073� 17,358� 4.61% 1,509,123� 17,537� 4.61% Tax-exempt (1) 92,347� 1,595� 6.85% 91,142� 1,590� 6.92% Other short-term (3) 9,643� 90� 3.69% 9,993� 83� 3.29% Loans & leases (4) 4,850,605� 96,673� 7.91% 4,785,791� 94,781� 7.86% Total interest-earning assets 6,528,702� 116,814� 7.10% 6,429,190� 114,423� 7.06% Noninterest-earning assets 885,204� -� 911,348� -� Total assets $7,413,906� 116,814� $ 7,340,538� 114,423� INTEREST-BEARING LIABILITIES: Deposits: MMDA, NOW and Savings $2,611,369� 17,545� 2.67% $ 2,719,915� 17,036� 2.48% Time deposits over $100,000 827,608� 10,312� 4.94% 787,289� 9,506� 4.79% Other time deposits 727,388� 8,895� 4.85% 595,200� 6,973� 4.65% Total interest-bearing deposits 4,166,365� 36,752� 3.50% 4,102,404� 33,515� 3.24% Short-term borrowings 393,702� 4,873� 4.91% 299,675� 3,674� 4.86% CODES -� -� 0.00% -� -� 0.00% Subordinated debt 180,929� 3,768� 8.26% 251,677� 5,355� 8.44% Other long-term borrowings 526,025� 7,026� 5.30% 579,694� 7,598� 5.20% Total interest-bearing liabilities 5,267,021� 52,419� 3.95% 5,233,450� 50,142� 3.80% Noninterest-bearing deposits 1,021,175� 993,457� Other noninterest-bearing liabilities 267,007� 274,367� Minority Interest: Preferred stock of real estate investment trust subsidiaries 12,837� 12,796� Shareholders' equity 845,866� � 826,468� � Total share-holders' equity and liabilities $7,413,906� 52,419� $ 7,340,538� 50,142� � Net interest income, on a tax-equivalent basis (1) 64,395� 64,281� � Net interest margin (5) 3.91% 3.97% � Reconciliation to reported net interest income: � Adjustment for tax-equivalent basis (506) (507) � Net interest income, as reported $ 63,889� $ 63,774� � � (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 $674,000 and $364,000, for the three months ended December 31, 2006 and September 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 December 31, 2006 - FINANCIAL SUMMARY (UNAUDITED) (Dollars in 000's) � SELECTED AVERAGE BALANCE SHEET AND YIELD DATA: � Three months ended December 31, 2006 December 31, 2005 Average Average Average Yield / Average Yield / Tax-Equivalent Basis (1) Balance (2) � Interest � Rate Balance (2) � Interest � Rate � INTEREST-EARNING ASSETS: Fed funds sold $ 83,034� $ 1,098� 5.24% $ 74,740� $ 716� 3.80% Securities: Taxable 1,493,073� 17,358� 4.61% 1,374,102� 14,862� 4.29% Tax-exempt (1) 92,347� 1,595� 6.85% 80,793� 1,476� 7.25% Other short-term (3) 9,643� 90� 3.69% 11,245� 45� 1.58% Loans and leases (4) 4,850,605� 96,673� 7.91% 4,673,852� 85,611� 7.27% Total interest-earning assets 6,528,702� 116,814� 7.10% 6,214,732� 102,710� 6.56% Noninterest-earning assets 885,204� -� 905,369� -� Total assets $ 7,413,906� 116,814� $ 7,120,101� 102,710� INTEREST-BEARING LIABILITIES: Deposits: MMDA, NOW and Savings $ 2,611,369� 17,545� 2.67% $ 3,111,275� 14,841� 1.89% Time deposits over $100,000 827,608� 10,312� 4.94% 741,859� 6,466� 3.46% Other time deposits 727,388� 8,895� 4.85% 194,054� 1,375� 2.81% Total interest-bearing deposits 4,166,365� 36,752� 3.50% 4,047,188� 22,682� 2.22% Short-term borrowings 393,702� 4,873� 4.91% 171,801� 1,870� 4.32% CODES -� -� 0.00% 87,500� 117� 0.53% Subordinated debt 180,929� 3,768� 8.26% 210,311� 4,504� 8.50% Other long-term borrowings 526,025� 7,026� 5.30% 456,962� 5,305� 4.61% Total interest-bearing liabilities 5,267,021� 52,419� 3.95% 4,973,762� 34,478� 2.75% Noninterest-bearing deposits 1,021,175� 1,086,424� Other noninterest-bearing liabilities 267,007� 274,391� Minority Interest: Preferred stock of real estate investment trust subsidiaries 12,837� 12,674� Shareholders' equity 845,866� � 772,848� � Total share-holders' equity and liabilities $ 7,413,906� 52,419� $ 7,120,101� 34,478� � Net interest income, on a tax-equivalent basis (1) 64,395� 68,232� � Net interest margin (5) 3.91% 4.36% � Reconciliation to reported net interest income: � Adjustment for tax-equivalent basis (506) (485) � Net interest income, as reported $ 63,889� $ 67,747� � � (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 $674,000 and $580,000 for the three months ended December 31, 2006 and December 31, 2005, 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 December 31, 2006 - FINANCIAL SUMMARY (UNAUDITED) (Dollars in 000's) � � SELECTED AVERAGE BALANCE SHEET AND YIELD DATA: � Twelve months ended December 31, 2006 December 31, 2005 Average Average Average Yield / Average Yield / Tax-Equivalent Basis (1) Balance (2) � Interest � Rate Balance (2) Interest � Rate � INTEREST-EARNING ASSETS: Fed funds sold $ 34,991� $ 1,790� 5.12% $ 47,555� $ 1,505� 3.16% Securities: Taxable 1,465,664� 66,549� 4.54% 1,453,524� 62,042� 4.27% Tax-exempt (1) 88,137� 6,220� 7.06% 83,201� 5,949� 7.15% Other short-term (3) 9,687� 254� 2.62% 8,906� 155� 1.74% Loans and leases (4) 4,758,571� 369,747� 7.77% 4,604,690� 323,098� 7.02% Total interest-earning assets 6,357,050� 444,560� 6.99% 6,197,876� 392,749� 6.34% Noninterest-earning assets 898,487� -� 891,721� -� Total assets $ 7,255,537� 444,560� $ 7,089,597� 392,749� INTEREST-BEARING LIA-BILITIES: Deposits: MMDA, NOW and Savings $ 2,771,143� 63,747� 2.30% $ 3,125,467� 54,437� 1.74% Time deposits over $100,000 788,086� 35,606� 4.52% 682,213� 19,640� 2.88% Other time deposits 501,082� 22,616� 4.51% 162,352� 4,001� 2.46% Total interest-bearing deposits 4,060,311� 121,969� 3.00% 3,970,032� 78,078� 1.97% Short-term borrowings 311,321� 14,477� 4.65% 297,561� 10,741� 3.61% CODES 18,518� 101� 0.55% 137,585� 749� 0.54% Subordinated debt 216,933� 18,547� 8.55% 210,311� 17,639� 8.39% Other long-term borrowings 532,155� 27,088� 5.09% 333,454� 16,366� 4.91% Total interest-bearing lia-bilities 5,139,238� 182,182� 3.54% 4,948,943� 123,573� 2.50% Noninterest-bearing deposits 1,017,381� 1,088,927� Other noninterest-bearing liabilities 269,846� 267,019� Minority Interest: Preferred stock of real estate investment trust subsidiaries 12,776� 12,618� Shareholders' equity 816,296� � 772,090� � Total share-holders' equity and lia-bilities $ 7,255,537� 182,182� $ 7,089,597� 123,573� � Net interest income, on a tax-equivalent basis (1) 262,378� 269,176� � Net interest margin (5) 4.13% 4.34% � Reconcilia-tion to reported net interest income: � Adjustment for tax-equivalent basis (2,000) (1,966) � Net interest income, as reported $ 260,378� $ 267,210� � � (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 $1,885,000 and $1,418,000 for the twelve months ended December 31, 2006 and December 31, 2005, 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 December 31, 2006 - FINANCIAL SUMMARY (UNAUDITED) (Dollars and shares in 000's, except per share data) � SELECTED CONSOLIDATED CREDIT QUALITY DATA: � Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 � � � � 2006� 2006� 2006� 2006� 2005� � Nonperforming assets (1) Commercial: Matsco/GBC $ 7,583� $ 8,323� $ 7,257� $ 8,011� $ 8,883� SBA 5,576� 2,881� 4,536� 3,627� 6,497� Other 8,486� 6,458� 4,775� 9,184� 9,142� Total commercial 21,645� 17,662� 16,568� 20,822� 24,522� Real estate: Commercial 7,173� 10,939� 14,763� 8,203� 8,434� Construction and land 930� 323� 323� 3,242� 323� Other -� -� 3� 7� 33,312� Total real estate 8,103� 11,262� 15,089� 11,452� 42,069� Consumer and other 117� 139� 611� 718� 4,503� Total nonaccrual loans 29,865� 29,063� 32,268� 32,992� 71,094� OREO -� -� -� -� -� Other nonperforming assets 382� 603� 361� 438� 631� Total non-performing assets (1) $ 30,247� $ 29,666� $ 32,629� $ 33,430� $ 71,725� � Net loan charge-offs (recoveries) (2) $ 3,192� $ 223� $ 2,662� $ 43� $ 1,207� � Ratio of allowance for loan and lease losses to: End of period loans 1.39% 1.48% 1.50% 1.58% 1.74% Total nonaccrual loans 227.77% 245.41% 222.17% 226.02% 115.56% � Ratio of reversal of provision for credit losses to average loans, annualized -0.03% -0.04% -0.16% -0.52% -0.89% � Total nonaccrual loans to total loans 0.61% 0.60% 0.68% 0.70% 1.50% Total nonperforming assets to total assets 0.41% 0.40% 0.44% 0.47% 1.01% � Ratio of quarterly net loan charge-offs to average loans, annualized 0.26% 0.02% 0.23% 0.00% 0.10% Ratio of YTD net loan charge-offs to YTD average loans 0.13% 0.08% 0.12% 0.00% 0.24% � � � � � (1) Nonperforming assets include nonaccrual loans and leases, other real estate owned and other nonperforming assets. (2) Net loan charge-offs are loan charge-offs net of recoveries. Q3 2006 includes an insurance recovery of $1.6 million related to previously charged off loans and leases. � � � � � � � � � � � � � � � � � � � � � SELECTED QUARTERLY CAPITAL RATIOS AND DATA: � Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 � � � � 2006� 2006� 2006� 2006� 2005� � Tier 1 leverage ratio 10.63% 10.63% 12.07% 10.77% 10.41% Tier 1 risk-based capital ratio 12.26% 12.15% 13.49% 12.48% 12.01% Total risk-based capital ratio 13.47% 13.40% 14.93% 13.73% 13.26% Total equity to assets ratio 11.39% 11.40% 11.04% 11.14% 10.90% Common equity to assets ratio 9.99% 9.99% 9.64% 9.69% 9.45% � Tier I capital $ 755,860� $ 748,071� $ 824,154� $ 734,692� $ 708,563� Total risk-based capital $ 830,461� $ 825,036� $ 911,802� $ 808,436� $ 782,525� Risk weighted assets $ 6,166,011� $ 6,155,489� $ 6,108,101� $ 5,889,032� $ 5,900,425� � NON-GAAP RATIOS (1): � Tangible common equity to tangible assets - end of period (2) 6.32% 6.32% 5.95% 5.84% 5.56% Tangible common book value per common share - end of period (3) $ 8.78� $ 8.74� $ 8.28� $ 7.93� $ 7.61� � Common book value per common share - end of period (4) $ 14.46� $ 14.36� $ 13.97� $ 13.71� $ 13.48� Total common shares outstanding - end of period 50,938� 51,047� 50,917� 50,288� 49,906� � � � � � (1) The following table provides a reconciliation of common equity to tangible common equity and total assets to tangible assets: � Common shareholders' equity $ 736,418� $ 733,279� $ 711,080� $ 689,417� $ 672,624� Less: goodwill and other Intangible assets (288,994) (287,202) (289,570) (290,733) (293,030) Tangible common equity $ 447,424� $ 446,077� $ 421,510� $ 398,684� $ 379,594� � Total assets $ 7,371,134� $ 7,339,810� $ 7,376,109� $ 7,114,581� $ 7,120,969� Less: goodwill and other intangible assets (288,994) (287,202) (289,570) (290,733) (293,030) Tangible assets $ 7,082,140� $ 7,052,608� $ 7,086,539� $ 6,823,848� $ 6,827,939� � (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 - end of period. (4)Computed as common shareholders' equity divided by common shares outstanding - end of period.