Greater Bay Bancorp, which has been buying San Francisco-area community banks at a steady pace the last three years, is now setting its sights on nonbank businesses.
The Palo Alto, Calif., company has agreed to buy Matsco Cos. Inc., a $170 million-asset equipment lease finance outfit in Emeryville, Calif., that focuses on the dental and veterinarian industries.
That deal was announced last week, and Greater Bay president and chief executive officer David L. Kalkbrenner says he has been talking with investment banking consultants about the possibility of other nonbank acquisitions.
"We're considering how we might enter the insurance business in the property and casualty area," he said. "There may be opportunities for buying agencies or forming joint ventures."
Greater Bay, which has $4.1 billion of assets, expects to complete its $12.5 million acquisition of Matsco in the fourth quarter.
It plans to market conventional banking, private banking, and trust services to Matsco's customers. It also wants to offer Matsco's services to the dentists and veterinarians who are customers of its community banks as well as to many other professionals who bank at its subsidiaries .
"Say we have a law firm that does business with us and they are thinking about getting new computer equipment and software," Mr. Kalkbrenner said. "A lot of professional firms would prefer to lease, but up until now, we couldn't provide that service. Now we could through Matsco."
Greater Bay is still on the lookout for banks to buy.
Over the last several years it has acquired eight banks, and it has a deal pending for $195 million-asset Bank of Petaluma. Mr. Kalkbrenner said Greater Bay will continue to shop for banks in the San Francisco area and that it may expand its banking business into Southern California.
Greater Bay is to pay Matsco shareholders $6.5 million in cash up front and up to an additional $6 million in an earn-out arrangement over a five-year period.