Magazine article American Banker

Thumbs Up and Down for Greater Bay Bancorp

Magazine article American Banker

Thumbs Up and Down for Greater Bay Bancorp

Article excerpt

Greater Bay Bancorp of Palo Alto, Calif., got a stock upgrade and a downgrade Tuesday, nearly a week after it reported flat earnings and played up a modest improvement in its loan portfolio.

Manuel Ramirez, an analyst at Keefe, Bruyette & Woods Inc. upgraded the stock to "outperform" from "market perform." The $6.9 billion-asset company has a "number of earnings levers" that may produce better earnings this year and next than many expect, he wrote in a research note.

But Michael Diana of Citigroup Inc.'s Smith Barney downgraded Greater Bay to "sell" from "hold." He cut his per-share earnings estimates to $1.58 for this year, from $1.81, and to $1.81 for next year, from $2.

Mr. Ramirez has also lowered his expectations for earnings -- by 4 cents for this year, to $1.76, and a nickel for next year, to $2.05. But the improving economy in the San Francisco Bay Area and the company's letting securities run off to shrink the balance sheet may increase its net interest margin and produce modest growth in earning assets this year, he wrote.

The company was rumored to be for sale late last year, though that chatter appears to have died down.

Greater Bay said Feb. 1 that fourth-quarter profits dipped a scant 1% from a year earlier, to $21.1 million, or 33 cents a share. Full-year earnings ticked up 1%, to $92.9 million, or $1.50 a share.

Real estate construction and land credits rose 4%, to $479 million, from Sept. 30 to yearend, the company said. Commercial loans rose 1%, to $1. …

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