Bay Area Bancshares Announces Record Annual Earnings.

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Jan. 26, 1999--Bay Area Bancshares (Bulletin Board:BYAR) today reported record 1998 earnings of $2,366,000 or $2.33 per diluted share, an increase of $561,000 or 31% over 1997 profits.

This represents the 11th consecutive year the company has set a new record for profitability.

On Jan. 5, 1999, the company paid an $0.11 per share dividend to holders of common stock at Dec. 28, 1998. This is the 29th consecutive quarterly cash dividend paid by the company and represents an increase of 10% over the previous quarterly dividend.

Bay Area Bank, the company's sole subsidiary, continued its record growth with annual earnings of $2,395,000, an increase of $533,000 or 29% over 1997. Bank earnings in 1998 resulted in a return on average equity of 20.0% and a 1.74% return on average assets.

The company also announced today the signing of a Definitive Agreement for a merger with Greater Bay Bancorp. Following the transaction, Bay Area Bank will operate as a wholly owned subsidiary of Greater Bay Bancorp. Mr. Haight, the chairman of Bay Area Bancshares, commented, "By combining with Greater Bay Bancorp, Bay Area Bank will enhance its ability to offer a wide range of financial services to its clients and to increase its lending capacity and market presence." -0-

Highlights

                      Bay Area Bancshares         Bay Area Bank
Full Year              1998        1997          1998          1997
Net Income       $2,366,000    $1,805,000     $2,395,000    $1,862,000
Diluted Earnings
  per Share           $2.33         $1.84         n/a           n/a
Total Assets   $155,330,000  $122,043,000   $154,706,000  $121,290,000

                      Bay Area Bancshares         Bay Area Bank
Fourth Quarter         1998        1997          1998          1997
Net Income          $647,000      $490,000      $645,000      $498,000
Diluted Earnings
  per Share           $0.64         $0.49           n/a         n/a