The chief executive officer of Greater Bay Bancorp of Palo Alto, Calif., said Tuesday that he will retire sooner than some had expected, turning over control to its current president and chief operating officer at the end of the year.
CEO David L. Kalkbrenner said in a telephone interview that he will be leaving on an upswing. Morale is high and investors have a more positive view of the company, he said.
A succession plan was put into place in October, when Byron A. Scordelis was named president, chief operating officer, and heir apparent. At the same time, chief financial officer Steven C. Smith said he would retire at yearend.
Mr. Kalkbrenner said in an Oct. 29 interview that chief executives should not stay on past their 65th birthday — and his will come next July 1. But he also said he wanted to wait until certain issues had been resolved, among them investor concern about a tangle with regulators and Greater Bay’s sizable commercial real estate loan portfolio, which exposes the company to the uncertain San Francisco Bay Area economy.
In January the Federal Reserve Board told Greater Bay to beef up risk management procedures at some of its 11 subsidiary banks. In July the company announced that it had satisfied these requirements, and in October it said that it would consolidate the banks under one charter.
Worries about the Bay Area real estate market have also eased somewhat in recent months, and Greater Bay’s shares have gained strength lately.
On Tuesday, analysts praised Mr. Kalkbrenner, who helped found the company in 1987 and has increased its assets to $7.8 billion.
“He built a heck of a company,” said Brett D. Rabatin of First Tennessee National Corp.’s FTN Midwest Research Securities Corp.
Greater Bay’s strategy is unlikely to change after Mr. Kalkbrenner leaves, analysts said. However, Mr. Scordelis might put more emphasis on commercial and industrial lending to “diversify its risk profile,” said Michael P. McMahon of Sandler O’Neill & Partners LP.
The search for a new CFO continues. The company has interviewed three candidates, will interview three more over the next few weeks, and may announce a successor before yearend, Mr. Kalkbrenner said.
