Rule 425
Filer: Greater Bay Bancorp
Commission File Number: 0-25034
Subject Company: SJNB Financial Corp.
Commission File Number: 0-11771
Northern California's
Premier Business Bank
SJNB
August 2001
With 2nd Quarter Financials
THE MARKET STREET
JOURNAL
SAN JOSE NATIONAL BANK
We Value Your
Referrals!
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SJNB wishes to thank the following
individuals for referring new business.
Dave Buchanan
Crawford, Pimentel,& Co., CPAs
Michael Callahan
ABC Properties
Hank Chanchez
Acme Building Maintenance
Art Harriz
Pizza Chicago
Mike Hubert
Inner City Express
Amir Kanji
Roman Sausage Company
Nick Kouretas
Kouretas & Company
Reggie Lee
R & L Management
Ronald Mancuso, D.D.S.
SJNB Director
Bill Matusich, CPA
Steve Olson
Olson & Company
Andy Pavicich,Jr.
A. P. Stumps
Mary Lou Perez
Funding Express
Kurt Schienifel
Compass Management
If a company, group, or individual
you know would benefit from SJNB's unique
brand of Relationship Banking,
contact us today.
SJNB Joins
Greater Bay Family
Customer Corner
PW Supermarkets and SJNB
Define Relationship Banking
San Jose National Bank has prided itself on its unique brand of "Relationship
Banking." Our Relationship Banking is grounded in the principle of serving the
best interests of our customers, in a highly personal manner, today and in the
future. Personal understanding and mutual respect are the foundations of the
relationship. In effect, the bank and its customers grow together.
This has been the case with PW Supermarkets and SJNB. Loyalty is an important
principle to the Joey Franco family, the owners of PW Supermarkets, one of San
Jose National Bank's original clients dating back to 1983. From literally a "Mom
and Pop" grocery store in 1943, PW has grown to a market leader while still
maintaining a neighborhood feel. Customer loyalty and employee loyalty have
helped PW Supermarkets grow through the years. Customers have come to rely on PW
Supermarkets week-in and week-out for all of their grocery and household needs.
Many employees have spent their entire careers at PW.
It was no surprise that when Merlin Stigge joined PW Markets as Chief Financial
Officer in January, he was able to bring his many years of experience to
streamline and improve the cost effectiveness
continued on next page
[LOGO OF PW SUPERMARKETS]
One North Market Street o San Jose, California 95113 o
(408) 947-7562 o www.sjnb.com
ECHO Annual Seminar
a Great Success
[PHOTO]
Marlene Henry (center) of Brookvale Terrace, Capitola, was
the winner of a $1,000 Travel Gift Certificate from Cedar
Tree Travel courtesy of SJNB. Marlene is shown here with
SJNB's Traci Cecil (left), manager of the HOA Department and
Teresa Powell, Senior Vice President.
For the 29th consecutive year, members of ECHO (Executive Council of Homeowners)
held their annual trade show to learn about common interest developments and to
compare notes. Homeowners, Board Members, Management Companies and a variety of
vendor organizations attended the trade show.
SJNB spread the exciting news of joining the Greater Bay Family to all the
attendees. Joining Greater Bay gives SJNB the opportunity to place Homeowner
Association reserve funds into separate FDIC insured banks within our banking
family, up to $1 Million! This greatly reduces the amount of time management
companies and Homeowner Associations spend looking for CD Placement programs.
SJNB continues to be committed to serving the HOA industry!
Guest speakers and breakout sessions featured topics ranging from Basics for
Directors to finances, legal and legislative issues. From 9 a.m. until late
afternoon, the information flowed to all of the attendees. The day was topped
off with an ice cream social.
SJNB, a longtime supporter of ECHO and exhibitor at the trade show, was well
represented by Teresa Powell, Traci Cecil, Carla Brandt-Fenner, Diana Madera and
Kimberly Payne.
Customer Corner continued from page 1...
of PW's banking structure. Today, PW uses many of SJNB's technology-based
products to manage their cash flow and to make smarter banking decisions. Since
Merlin's arrival, PW has embraced SJNB Online with Cash Management. With the use
of ACH, available through SJNB Online, PW is able to offer its employees direct
deposit of their payroll checks.
[PHOTO]
Merlin Stigge and Carla Brandt-Fenner
Carla Brandt-Fenner, SJNB Assistant Vice President, and Merlin Stigge have set
up other Cash Management services as well. When SJNB recently rolled out CD ROM
Statement capability, PW jumped right in to participate in the program.
Merlin Stigge states, "When I started at PW at the beginning of this year, I
wasn't sure that SJNB would be able to provide us with the services I was
seeking. I was pleasantly surprised to see that SJNB has the technology of the
big banks and the customer service of a small bank. I appreciate that."
PW Supermarkets and SJNB have provided a blueprint of how Relationship Banking
is good for bank and customer alike. Both have grown, both have prospered and
both look forward to a bright future and a continuing relationship.
If you are interested in learning more about any of our cash management
products, contact your account officer today at 408-947-7562.
================================================================================
Is There a CD ROM
Statement in Your Future?
We are pleased to announce the availability of your checking and savings account
statements on CD ROM. This service is ideal if you have many accounts or very
high volume accounts. The software makes viewing statements easier and faster
with up to 12 months of statements and checks for viewing on one CD ROM. The
cost for this service is $25 per month and $150 for a yearly statement.
Sign-up today for this program to get your August through December 2001 CD ROM
statement. For more information or to view a demo of our CD ROM statements,
contact Carla Brandt-Fenner at 408-938-1147 or by e-mail at
carla.fenner@sjnb.com.
SJNB to Become Part of the
"Super-Community Banking" Family
The community banks that make up the Greater Bay Bancorp family
have retained their individual names and identities and
operate with autonomy in their respective markets.
On June 25, 2001, Greater Bay Bancorp and SJNB Financial Corp. announced the
signing of a definitive merger agreement. Upon completion of the merger, San
Jose National Bank will operate as a wholly owned subsidiary of Greater Bay
Bancorp.
To compete more effectively in the financial industry, Greater Bay Bancorp
incorporates a strategy referred to as "Super-Community Banking." Through
high-touch relationship banking with local decision-making, Greater Bay Bancorp
is positioned as an attractive alternative to larger institutions. By pooling
the resources of selected community banks through mergers, Greater Bay Bancorp
offers a wide range of products and services enabling it to compete against
bigger banks, and yet remains small enough to work closely with clients in
meeting their needs.
How will this merger benefit SJNB customers?
SJNB customers will have access to more products and more services while
still enjoying the local, personal decision-making they have always received at
SJNB.
o SJNB customers will have access to 38 banking offices instead of 4... more
locations.
o The strength of the merged bank will provide our customers with access to
higher lending limits, assuring that SJNB can continue to assist its
customers to grow their businesses in the future.
o SJNB will offer our customers access to an international banking group, a
venture banking group and trust services.
o The development of technology-based products that give our customers more
control over their finances will remain a priority.
It is anticipated that the closing of the merger, which is subject to regulatory
and shareholder approvals and the satisfaction of other closing conditions, will
be in late 2001.
================================================================================
Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, including
statements concerning the proposed merger between SJNB Financial Corp. and
Greater Bay Bancorp. These forward-looking statements are based on management's
current expectations and beliefs and are subject to certain risks and
uncertainties that could cause the actual results to differ materially from
those described in the forward-looking statements, including when and if the
proposed merger is consummated, the success of Greater Bay in integrating the
new bank into its organization and other risks detailed in the reports filed by
SJNB and Greater Bay with the SEC, including their 2000 Annual Reports on Form
10-K.
Material set forth herein may be deemed to be solicitation material in respect
of the proposed merger of SJNB with Greater Bay. SJNB and its directors and
executive officers may be deemed to be participants in the solicitation of
proxies from SJNB shareholders in respect of the merger. Information about the
directors and executive officers of SJNB and their ownership of SJNB common
stock is set forth in SJNB's proxy statement on Schedule 14A filed with the SEC
on April 18, 2001. Additional information regarding the interests of those
participants may be obtained by reading the definitive joint proxy
statement/prospectus regarding the proposed transaction when it becomes
available. Shareholders of SJNB and other investors are urged to read the joint
proxy statement/prospectus which will be included in the registration statement
on Form S-4 to be filed by Greater Bay with the SEC in connection with the
proposed merger, and which will be sent to shareholders of SJNB and Greater Bay
seeking their approval of the proposed merger, because it will contain important
information. When filed, the registration statement can be obtained, without
charge, at the SEC's Internet site (http://www.sec.gov) or by directing a
request to SJNB's executive offices at One North Market Street, San Jose,
California, 95113, telephone (408) 947-7562.
P R E S I D E N T ' S
M E S S A G E
[PHOTO]
James R.
Kenny
. . . . .
President
and CEO
SJNB Financial Corp and San Jose National Bank are pleased to report that the
net income for the second quarter of 2001 was $2.795 million ($.70 per diluted
share). This represents an increase of 8.5% from the $2.577 million ($.67 per
diluted share) for the second quarter of 2000. This represented a decrease of
6.9% from the $3.001 million ($.75 per diluted share) for the first quarter of
2001. Net income for the six months ended June 30, 2001 was $5.796 million and
represented an increase of 15% from the $5.040 million, before the Saratoga
Bancorp merger related costs, net of tax, for the same period in 2000.
The increase in net income for the six months ended June 30, 2001 over the prior
year was achieved in spite of the economic slow-down and was achieved primarily
by an increase in net interest income resulting from our continued growth. The
decrease in net income for the second quarter of 2001 as compared to the first
quarter of 2001 was mainly due to the decline in net interest income resulting
primarily from the decrease in interest rates since January 2001.
Although we are disappointed with the decline in earnings from the first quarter
of 2001 to the second quarter of 2001, we believe our performance continues to
reflect excellent operating statistics as shown by our six months ended June 30,
2001 return on average tangible equity of 18.4% and return on average tangible
assets of 1.83%. We continue to be proud of our credit quality ratio of .20% of
non-performing loans and leases to total loans and leases.
Sincerely,
/s/ James R. Kenny
James R. Kenny
President
& Chief Executive Officer
SJNB One North Market Street
San Jose, California 95113
Northern California's Premier Business Bank
[LOGO] Member FDIC
SECOND QUARTER 2001 FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)
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June 30, Dec. 31,
2001 2000
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Assets:
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Cash and due from banks $ 27,008 $ 20,831
Interest-bearing deposits in other banks 674 599
Federal funds sold 5,000 7,240
Money market investments -- 38,475
Investment securities:
Available for sale (includes securities subject
to repurchase agreements as of December 31, 2000:
Fair value: $10,024 at December 31, 2000) 118,019 110,160
Held to maturity (Fair value: $18,646 at December 31, 2000) -- 18,627
-------------------------------------------------------------------------------------------------------------------
Total investment securities 118,019 128,787
-------------------------------------------------------------------------------------------------------------------
Loans and leases 482,029 463,314
Allowance for loan and lease losses (7,929) (7,393)
-------------------------------------------------------------------------------------------------------------------
Loans and leases, net 474,100 455,921
-------------------------------------------------------------------------------------------------------------------
Premises and equipment, net 5,133 5,444
Accrued interest receivable 3,330 3,968
Intangibles (Net of accumulated amortization of $3,246 at June 30, 2001
and $3,059 at December 31, 2000) 2,765 2,952
Other assets 24,492 23,560
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Total assets $660,521 $687,777
===================================================================================================================
Liabilities and Shareholders' Equity:
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Deposits:
Non interest-bearing $112,560 $130,130
Interest-bearing 450,261 455,213
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Total deposits 562,821 585,343
-------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank advances 18,236 20,326
Other borrowings 2,303 11,713
Accrued interest payable 2,188 2,412
Other liabilities 4,447 4,400
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Total liabilities 589,995 624,194
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Shareholders' equity:
Preferred stock, no par value, 5,000 shares authorized; None issued or
outstanding in 2001 or 2000.
Common stock, no par value; 20,000 shares authorized; Issued and outstanding,
3,808 shares at June 30, 2001 and 3,747 shares at December 31, 2000. 24,109 22,845
Retained earnings 44,504 40,221
Accumulated other comprehensive income 1,913 517
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Total shareholders' equity 70,526 63,583
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Commitments and contingencies -- --
-------------------------------------------------------------------------------------------------------------------
Total $660,521 $687,777
===================================================================================================================
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, except per share amounts) Quarter ended Six months ended
(Unaudited) June 30, June 30,
-----------------------------------------------
2001 2000 2001 2000
-------------------------------------------------------------------------------------------------------------------------
Interest income:
Interest and fees on loans and leases $10,814 $11,269 $22,621 $21,603
Interest on money market investments 217 668 489 1,073
Interest on time deposits 7 22 14 47
Interest and dividends on investment securities available for sale 1,824 1,632 3,814 3,090
Interest on investment securities held to maturity -- 283 -- 583
Other interest and investment income 114 3 163 5
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Total interest income 12,976 13,877 27,101 26,401
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Interest Expense:
Deposits:
Interest-bearing demand 354 562 840 1,121
Money market and savings 1,207 1,592 2,808 3,003
Certificates of deposits less than $100 922 851 1,700 1,563
Certificates of deposit over $100 1,715 1,775 3,586 3,291
Federal Home Loan Bank advances 279 332 595 664
Other borrowings 199 222 419 420
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Total interest expense 4,676 5,334 9,948 10,062
-------------------------------------------------------------------------------------------------------------------------
Net interest income 8,300 8,543 17,153 16,339
-------------------------------------------------------------------------------------------------------------------------
Provision for loan and lease losses 200 125 600 375
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Net interest income after provision for
loan and lease losses 8,100 8,418 16,553 15,964
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Other Income:
Service charges on deposits 390 291 711 565
Other operating income 111 125 268 296
Increase in cash surrender value of life insurance 181 81 419 143
Net loss on securities available for sale (10) (587) (1) (587)
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Total other income (loss) 672 (90) 1,397 417
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Other Expenses:
Salaries and benefits 2,579 2,345 5,220 4,643
Occupancy 356 341 754 694
Merger related costs, nonrecurring -- -- -- 3,424
Other 1,362 1,430 2,694 2,805
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Total other expenses 4,297 4,116 8,668 11,566
-------------------------------------------------------------------------------------------------------------------------
Income before income taxes 4,475 4,212 9,282 4,815
Income taxes 1,680 1,635 3,486 1,923
-------------------------------------------------------------------------------------------------------------------------
Net income $ 2,795 $ 2,577 $ 5,796 $ 2,892
=========================================================================================================================
Net income per share - basic $0.73 $0.70 $1.53 $0.80
=========================================================================================================================
Net income per share - diluted $0.70 $0.67 $1.45 $0.76
=========================================================================================================================
Dividends declared per share $0.20 $0.16 $0.40 $0.32
=========================================================================================================================
Average common shares outstanding 3,805 3,676 3,789 3,635
=========================================================================================================================
Average common shares and share equivalents outstanding 4,006 3,823 3,993 3,806
=========================================================================================================================