Cobiz Financial (COBZ) 8-K CoBiz Financial Announces Fourth Quarter 2016 Results

Exhibit 99.1

CoBiz Financial Announces Fourth Quarter 2016 Results

Denver -- CoBiz Financial Inc. (Company) (NASDAQ: COBZ), a financial services company with $3.6 billion in assets, reported financial results for the fourth quarter of 2016. 

Financial Highlights – Fourth quarter 2016

•Net income available to common shareholders of $34.9 million in 2016, compared to $25.7 million in 2015.

•Net income available to common shareholders of $8.7 million for the fourth quarter of 2016, compared to $4.4 million in the fourth quarter of 2015. 

•Diluted earnings per share of $0.21 for the fourth quarter of 2016, compared to $0.11 in the fourth quarter of 2015. 

•Loans increased $234.9 million, or 8.7%, from December 31, 2015 and $107.0 million from September 30, 2016. 

•Deposits increased $288.1 million, or 10.5%, from December 31, 2015 and $92.6 million from September 30, 2016. 

•Nonperforming assets (NPAs) to total assets of 0.23%  at December 31, 2016,  compared to 0.64% at December 31, 2015 and 0.29% at September 30, 2016.    

Financial Summary

	Quarter ended (unaudited)										4Q16 change vs.
(in thousands, except per share amounts)	4Q16			3Q16			4Q15			3Q16				4Q15
Net interest income before provision	$	29,888		$	29,401		$	28,236		$	487	1.7	%	$	1,652	5.9	%
Provision for loan losses		349			(1,168)			5,390			1,517	129.9	%		(5,041)	(93.5)	%
Net interest income after provision		29,539			30,569			22,846			(1,030)	(3.4)	%		6,693	29.3	%
Total noninterest income		9,374			9,286			7,985			88	0.9	%		1,389	17.4	%
Total noninterest expense		27,088			26,043			25,717			1,045	4.0	%		1,371	5.3	%
Net income before income taxes		11,825			13,812			5,114			(1,987)	(14.4)	%		6,711	131.2	%
Provision for income taxes		3,092			3,543			714			(451)	(12.7)	%		2,378	333.1	%
Net income	$	8,733		$	10,269		$	4,400		$	(1,536)	(15.0)	%	$	4,333	98.5	%
Diluted earnings per common share	$	0.21		$	0.25		$	0.11		$	(0.04)	(16.0)	%	$	0.10	90.9	%
KEY RATIOS
Net interest margin		3.75	%		3.74	%		3.73	%
Efficiency ratio - taxable equivalent *		65.57	%		64.50	%		68.51	%
Return on average assets		0.98	%		1.18	%		0.53	%
Return on average shareholders' equity		11.56	%		14.04	%		6.37	%
Noninterest income as a percentage of taxable equivalent operating revenue *		22.66	%		22.91	%		21.07	%

* See accompanying Reconciliation of Non-GAAP Measures to GAAP

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Loans

	Quarter ended (unaudited)							4Q16 change vs.
(in thousands)	4Q16		3Q16		4Q15		3Q16				4Q15
LOANS
Commercial	$	1,217,732	$	1,196,088	$	1,175,379	$	21,644	1.8	%	$	42,353	3.6	%
Owner-occupied real estate		475,287		473,809		436,643		1,478	0.3	%		38,644	8.9	%
Investor real estate		695,836		625,174		579,625		70,662	11.3	%		116,211	20.0	%
Construction & land		174,451		170,594		201,281		3,857	2.3	%		(26,830)	(13.3)	%
Consumer		267,013		263,871		253,317		3,142	1.2	%		13,696	5.4	%
Other		103,786		97,569		52,960		6,217	6.4	%		50,826	96.0	%
Total loans	$	2,934,105	$	2,827,105	$	2,699,205	$	107,000	3.8	%	$	234,900	8.7	%

•Loans at December 31, 2016 increased $234.9 million, or 8.7%, from December 31, 2015 and $107.0 million from September 30, 2016.    

•Loans in the Arizona and Colorado markets increased $211.1 million and $23.8 million, respectively, from December 31, 2015.  Compared to the quarter ended September 30, 2016 (linked-quarter), loans in the Arizona and Colorado markets increased $106.5 million and  $0.5 million, respectively. 

	Quarter ended (unaudited)
(in thousands)	4Q16		3Q16		2Q16		1Q16		4Q15
Loans - beginning balance	$	2,827,105	$	2,813,703	$	2,716,888	$	2,699,205	$	2,621,053
New credit extended		273,195		154,319		201,018		136,126		187,750
Credit advanced		105,122		108,074		135,294		111,032		129,789
Paydowns & maturities		(270,167)		(248,760)		(239,447)		(223,102)		(239,212)
Gross loan charge-offs		(1,150)		(231)		(50)		(6,373)		(175)
Loans - ending balance	$	2,934,105	$	2,827,105	$	2,813,703	$	2,716,888	$	2,699,205
Net change - loans outstanding	$	107,000	$	13,402	$	96,815	$	17,683	$	78,152

•New credit extensions and advances were $378.3 million in the fourth quarter of 2016, compared to $317.5 million in the fourth quarter of 2015 and $262.4 million in the linked-quarter.    Paydowns and maturities were slightly higher in the fourth quarter of 2016 compared to the same periods. 

•Commercial line utilization was 31.0% at December 31, 2016, compared to 34.5% and 34.0%,  respectively, at December 31, 2015 and September 30, 2016.

Deposits and Customer Repurchase Agreements

	Quarter ended (unaudited)							4Q16 change vs.
(in thousands)	4Q16		3Q16		4Q15		3Q16				4Q15
DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS
Money market	$	861,856	$	854,928	$	804,777	$	6,928	0.8	%	$	57,079	7.1	%
Interest-bearing demand		714,062		681,256		585,524		32,806	4.8	%		128,538	22.0	%
Savings		19,561		20,403		18,078		(842)	(4.1)	%		1,483	8.2	%
Certificates of deposits under $100		19,899		20,151		21,515		(252)	(1.3)	%		(1,616)	(7.5)	%
Certificates of deposits $100 and over		87,692		87,593		94,260		99	0.1	%		(6,568)	(7.0)	%
Reciprocal CDARS		44,250		46,316		37,223		(2,066)	(4.5)	%		7,027	18.9	%
Total interest-bearing deposits		1,747,320		1,710,647		1,561,377		36,673	2.1	%		185,943	11.9	%
Noninterest-bearing demand deposits		1,282,463		1,226,546		1,180,335		55,917	4.6	%		102,128	8.7	%
Total deposits		3,029,783		2,937,193		2,741,712		92,590	3.2	%		288,071	10.5	%
Customer repurchase agreements		27,639		52,114		47,459		(24,475)	(47.0)	%		(19,820)	(41.8)	%
Total deposits and customer repurchase agreements	$	3,057,422	$	2,989,307	$	2,789,171	$	68,115	2.3	%	$	268,251	9.6	%

•Total deposits at December 31, 2016 increased $288.1 million, or 10.5%, from December 31, 2015 and $92.6 million from September 30, 2016.    

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•Noninterest-bearing demand accounts increased  $102.1 million from December 31, 2015 and $55.9 million from September 30, 2016 and were 42.3% of total deposits at December 31, 2016.      

Credit Quality

	Quarter ended (unaudited)
(in thousands)	4Q16			3Q16			4Q15
ALLOWANCE FOR LOAN AND CREDIT LOSSES
Beginning allowance for loan losses	$	33,529		$	34,344		$	34,899
Provision for loan losses		349			(1,168)			5,390
Net (charge-off) recovery		(585)			353			397
Ending allowance for loan losses	$	33,293		$	33,529		$	40,686
CREDIT QUALITY
Nonaccrual loans	$	2,638		$	5,046		$	15,717
Loans 90 days or more past due and accruing interest		657			-			505
Total nonperforming loans		3,295			5,046			16,222
OREO and repossessed assets		5,079			5,079			5,079
Total nonperforming assets	$	8,374		$	10,125		$	21,301
Performing renegotiated loans	$	23,612		$	25,291		$	28,196
Classified loans	$	57,905		$	58,376		$	51,078
ASSET QUALITY MEASURES
Nonperforming assets to total assets		0.23	%		0.29	%		0.64	%
Nonperforming loans to total loans		0.11	%		0.18	%		0.60	%
Nonperforming loans and OREO to total loans and OREO		0.28	%		0.36	%		0.79	%
Allowance for loan and credit losses to total loans		1.13	%		1.19	%		1.51	%
Allowance for loan and credit losses to nonperforming loans		1,010.41	%		664.47	%		250.81	%

•NPAs decreased $1.8 million from September 30, 2016 and $12.9 million from December 31, 2015,  to $8.4 million at December 31, 2016. 

•The Company had net charge-offs of $0.6 million in the fourth quarter of 2016.  

•A provision for loan losses of $0.3 million was recorded in the fourth quarter of 2016 as a result of net charge-offs and growth in the loan portfolio.

•The resulting allowance for loan and credit losses (Allowance) was 1.13% of total loans at December 31, 2016.

Shareholders’ Equity 

	Quarter ended (unaudited)
(in thousands, except per share amounts)	4Q16			3Q16			4Q15
EQUITY MEASURES
Common shareholders' equity	$	302,310		$	295,837		$	273,536
Common shares outstanding at period end		41,555			41,465			41,122
Book value per common share	$	7.27		$	7.13		$	6.65
Tangible book value per common share *	$	7.24		$	7.10		$	6.60
Tangible common equity to tangible assets *		8.29	%		8.53	%		8.11	%
Tier 1 capital ratio		**			11.52	%		10.47	%
Total risk-based capital ratio		**			14.47	%		13.73	%

* See accompanying Reconciliation of Non-GAAP Measures to GAAP

** Ratios unavailable at the time of release.

•On January 19, 2017, the Board of Directors of the Company declared a quarterly cash dividend of $0.05 per common share. The dividend will be paid on February 6, 2017 to shareholders of record on January 30, 2017.

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Net Interest Income and Margin

•Net interest income on a tax-equivalent basis (NII) was $32.0 million for the fourth quarter of 2016,  an increase of $2.1 million, or 6.9%, from the quarter ended December 31, 2015. From the quarter ended September 30, 2016, NII increased $0.7 million, or 2.4%. 

•The Net Interest Margin (NIM) was 3.75%  for the fourth quarter of 2016,  compared to 3.73% in the prior-year quarter and 3.74% in the third quarter of 2016. 

•Supporting the growth in NII was an increase in the earning asset base and deposit growth.

o Quarterly average loans increased $219.6 million, or 8.3%, from the prior-year quarter, and $49.0 million from the linked-quarter.   

o Quarterly average deposits increased $282.6 million, or 10.3%, from the prior-year quarter, and $112.1 million from the linked-quarter. 

o Average noninterest-bearing demand accounts increased $147.7 million, or 12.6%, from the prior-year quarter and  $53.8 million from the linked-quarter.

Noninterest Income

	Quarter ended (unaudited)							4Q16 change vs.
(in thousands)	4Q16		3Q16		4Q15		3Q16				4Q15
Noninterest income:
Deposit service charges	$	1,551	$	1,553	$	1,424	$	(2)	(0.1)	%	$	127	8.9	%
Investment advisory income		1,418		1,416		1,388		2	0.1	%		30	2.2	%
Insurance income		3,286		3,120		2,937		166	5.3	%		349	11.9	%
Other investments		215		1,348		453		(1,133)	(84.1)	%		(238)	(52.5)	%
Derivative valuation		737		-		154		737	100.0	%		583	378.6	%
Other income		2,167		1,849		1,629		318	17.2	%		538	33.0	%
Total noninterest income	$	9,374	$	9,286	$	7,985	$	88	0.9	%	$	1,389	17.4	%

•Noninterest income increased $1.4 million, or 17.4%, from the prior-year quarter and $0.1 million, or 0.9%, from the linked-quarter.    On a linked-quarter basis, a decrease of $1.1 million in other investments was offset by higher income in other areas, most notably the mark-to-market adjustment on the Company’s derivative portfolio.  The increase in other income is primarily from fees recognized on the sale of interest rate swaps.

•Noninterest income as a percentage of taxable equivalent operating revenue was 22.7% for the fourth quarter of 2016, compared to 21.1% in the prior-year quarter and 22.9% in the linked-quarter. 

Operating Expenses

	Quarter ended (unaudited)							4Q16 change vs.
(in thousands)	4Q16		3Q16		4Q15		3Q16				4Q15
Noninterest expense:
Salaries and employee benefits	$	18,378	$	17,480	$	17,808	$	898	5.1	%	$	570	3.2	%
Occupancy expenses, premises and equipment		3,934		4,025		3,301		(91)	(2.3)	%		633	19.2	%
Amortization of intangibles		150		150		150		-	-	%		-	-	%
Other operating expenses		4,659		4,486		4,704		173	3.9	%		(45)	(1.0)	%
Net gain on OREO, repossessed assets and other		(33)		(98)		(246)		65	66.3	%		213	86.6	%
Total noninterest expense	$	27,088	$	26,043	$	25,717	$	1,045	4.0	%	$	1,371	5.3	%

•Noninterest expense increased $1.4 million, or 5.3%, from the prior-year quarter and $1.0 million from the linked-quarter.  The increase in noninterest expense compared to the prior-year quarter was due to increases in salaries, employee benefits and occupancy expenses.  The increase in salaries and employee benefits was due to higher incentive compensation based on improved operating results.  The increase in occupancy expense was due to the lease of the Company’s new headquarters location. 

•The efficiency ratio was 65.6% for the fourth quarter of 2016, compared to 68.5% and 64.5%, respectively, for the prior-year and linked-quarters.

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Earnings Conference Call

In conjunction with this release, you are invited to listen to the Company's conference call on Friday, January 27, 2017 at 9:00 am MDT with Steve Bangert, chairman and CEO of CoBiz Financial Inc. The call can be accessed via the Internet at https://www.webcaster4.com/Webcast/Page/989/19138 or by telephone at 877.493.9121 (conference ID # 86290694).

Explanation of the Company’s Use of Non-GAAP Financial Measures

This earnings release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding our results of operations and reflects the basis on which management internally reviews financial performance and capital adequacy. We believe these measures provide important supplemental information to investors. However, you should not rely on non-GAAP financial measures alone as measures of our performance. Please see the accompanying Reconciliation of Non-GAAP Measures to GAAP for additional information.

Contact Information

CoBiz Financial Inc.

Lyne Andrich 303.312.3458

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About CoBiz Financial

CoBiz Financial (NASDAQ:COBZ) is a $3.6 billion financial services company that serves the complete financial needs of businesses, business owners and professionals in Colorado and Arizona. The Company provides banking services through Colorado Business Bank, Arizona Business Bank and CoBiz Private Bank; wealth planning and investment management through CoBiz Wealth Management; and property and casualty insurance brokerage and employee benefits through CoBiz Insurance.

Forward-Looking Information

This release contains forward-looking statements that describe CoBiz's future plans, strategies and expectations. Forward-looking statements include statements about future performance and results of operations. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "would”, "could", “should” or "may." Forward-looking statements speak only as of the date they are made. All forward-looking statements are based on assumptions and involve risks and uncertainties, many of which are beyond our control and which may cause our actual results, performance or achievements to differ materially from the results, performance or achievements contemplated by the forward-looking statements. Such risks and uncertainties include, among other things:

•Risks and uncertainties described in our reports filed with the Securities and Exchange Commission, including our most recent Form 10-K.

•Competitive pressures among depository and other financial institutions nationally and in our market areas may increase significantly.

•Adverse changes in the economy or business conditions, either nationally or in our market areas, could increase credit-related losses and expenses and/or limit growth.

•Increases in defaults by borrowers and other delinquencies could result in increases in our provision for losses on loans and related expenses.

•Our ability to manage growth effectively could adversely affect our results of operations and prospects.

•Fluctuations in interest rates and market prices could reduce our net interest margin and asset valuations and increase our expenses.

•The consequences of continued bank acquisitions and mergers in our market areas, resulting in fewer but much larger and financially stronger competitors, could increase competition for financial services to our detriment.

•Changes in legislative or regulatory requirements applicable to us and our subsidiaries and implementation of current legislative or regulatory requirements could increase costs, limit certain operations and adversely affect results of operations.

•Changes in tax requirements, including tax rate changes, new tax laws and revised tax law interpretations may increase our tax expense or adversely affect our customers' businesses.

In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements in this release. We undertake no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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CoBiz Financial Inc.

December 31, 2016

(unaudited)

	Three months ended December 31,				Year ended December 31,
(in thousands, except per share amounts)	2016		2015		2016			2015
INCOME STATEMENT DATA
Interest income	$	32,779	$	31,081	$	127,782		$	121,266
Interest expense		2,891		2,845		11,731			9,590
NET INTEREST INCOME BEFORE PROVISION		29,888		28,236		116,051			111,676
Provision for loan losses		349		5,390		(2,101)			6,420
NET INTEREST INCOME AFTER PROVISION		29,539		22,846		118,152			105,256
Noninterest income		9,374		7,985		34,160			30,667
Noninterest expense		27,088		25,717		105,231			100,177
INCOME BEFORE INCOME TAXES		11,825		5,114		47,081			35,746
Provision for income taxes		3,092		714		12,182			9,606
NET INCOME FROM CONTINUING OPERATIONS		8,733		4,400		34,899			26,140
Loss from discontinued operations, net of tax		-		-		-			(71)
NET INCOME	$	8,733	$	4,400	$	34,899		$	26,069
Preferred stock dividends		-		-		-			(320)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	8,733	$	4,400	$	34,899		$	25,749
EARNINGS PER COMMON SHARE
BASIC	$	0.21	$	0.11	$	0.84		$	0.63
DILUTED	$	0.21	$	0.11	$	0.84		$	0.62
EQUITY MEASURES
Common shares outstanding at period end (in thousands)						41,555			41,122
Book value per common share					$	7.27		$	6.65
Tangible book value per common share *					$	7.24		$	6.60
Tangible common equity to tangible assets *						8.29	%		8.11	%
* See accompanying Reconciliation of Non-GAAP Measures to GAAP
PERIOD END BALANCES
Total assets					$	3,630,313		$	3,351,767
Investments						510,387			512,812
Loans						2,934,105			2,699,205
Intangible assets						1,326			1,926
Deposits						3,029,783			2,741,712
Subordinated debentures						131,277			131,197
Common shareholders' equity						302,310			273,536
Interest-earning assets						3,471,208			3,230,664
Interest-bearing liabilities						2,012,466			1,872,033
BALANCE SHEET AVERAGES
Average assets					$	3,435,703		$	3,149,310
Average investments						483,328			499,219
Average loans						2,793,516			2,517,766
Average deposits						2,860,754			2,614,410
Average subordinated debentures						131,236			102,884
Average shareholders' equity						287,327			297,180
Average interest-earning assets						3,309,281			3,041,127
Average interest-bearing liabilities						1,882,979			1,759,619

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CoBiz Financial Inc.

December 31, 2016

(unaudited)

	Three months ended December 31,						Year ended December 31,
(in thousands)	2016			2015			2016			2015
PROFITABILITY MEASURES
Net interest margin		3.75	%		3.73	%		3.73	%		3.86	%
Efficiency ratio - taxable equivalent *		65.57	%		68.51	%		66.79	%		67.91	%
Return on average assets		0.98	%		0.53	%		1.02	%		0.83	%
Return on average shareholders' equity		11.56	%		6.37	%		12.15	%		8.77	%
Noninterest income as a percentage of taxable equivalent operating revenue *		22.66	%		21.07	%		21.66	%		20.71	%
CREDIT QUALITY
Nonperforming loans
Nonaccrual loans							$	2,638		$	15,717
Loans 90 days or more past due and accruing interest								657			505
Total nonperforming loans								3,295			16,222
OREO & repossessed assets								5,079			5,079
Total nonperforming assets							$	8,374		$	21,301
Performing renegotiated loans							$	23,612		$	28,196
Classified loans							$	57,905		$	51,078
Charge-offs							$	(7,804)		$	(1,296)
Recoveries								2,512			2,797
Net (charge-offs) recoveries							$	(5,292)		$	1,501
Nonperforming assets to total assets								0.23	%		0.64	%
Nonperforming loans to total loans								0.11	%		0.60	%
Nonperforming loans and OREO to total loans and OREO								0.28	%		0.79	%
Allowance for loan and credit losses to total loans								1.13	%		1.51	%
Allowance for loan and credit losses to nonperforming loans								1,010.41	%		250.81	%

										Total		NPAs as a
NONPERFORMING ASSETS BY MARKET	Colorado			Arizona			Total			in Category		%
Commercial	$	1,966		$	236		$	2,202		$	1,217,732	0.18	%
Real estate - mortgage		-			269			269			1,171,123	0.02	%
Construction & land		657			-			657			174,451	0.38	%
Consumer		167			-			167			267,013	0.06	%
Other loans		-			-			-			103,786	-	%
OREO & repossessed assets		4,903			176			5,079			5,079	-
NPAs	$	7,693		$	681		$	8,374		$	2,939,184	0.28	%
Total loans	$	1,869,086		$	1,065,019		$	2,934,105
Total loans and OREO		1,873,989			1,065,195			2,939,184
Nonperforming loans to loans		0.15	%		0.05	%		0.11	%
Nonperforming loans and OREO to total loans and OREO		0.41	%		0.06	%		0.28	%

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CoBiz Financial Inc.

December 31, 2016

(unaudited)

	Three months ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(in thousands, except per share amounts)	2016			2016			2016			2016			2015
Interest income	$	32,779		$	32,308		$	31,500		$	31,195		$	31,081
Interest expense		2,891			2,907			2,967			2,966			2,845
Net interest income before provision		29,888			29,401			28,533			28,229			28,236
Provision for loan losses		349			(1,168)			(1,652)			370			5,390
Net interest income after provision		29,539			30,569			30,185			27,859			22,846
Noninterest income:
Deposit service charges	$	1,551		$	1,553		$	1,470		$	1,485		$	1,424
Investment advisory income		1,418			1,416			1,430			1,450			1,388
Insurance income		3,286			3,120			3,112			3,050			2,937
Other investments		215			1,348			420			494			453
Derivative valuation		737			-			(163)			(293)			154
Other income		2,167			1,849			1,543			1,502			1,629
Total noninterest income		9,374			9,286			7,812			7,688			7,985
Noninterest expense:
Salaries and employee benefits	$	18,378		$	17,480		$	17,984		$	17,629		$	17,808
Occupancy expenses, premises and equipment		3,934			4,025			3,517			3,490			3,301
Amortization of intangibles		150			150			150			150			150
Other operating expenses		4,659			4,486			4,610			4,560			4,704
Net (gain) loss on securities, other assets and OREO		(33)			(98)			7			3			(246)
Total noninterest expense		27,088			26,043			26,268			25,832			25,717
Net income before income taxes		11,825			13,812			11,729			9,715			5,114
Provision for income taxes		3,092			3,543			3,197			2,350			714
Net income	$	8,733		$	10,269		$	8,532		$	7,365		$	4,400
Earnings per common share
Basic	$	0.21		$	0.25		$	0.21		$	0.18		$	0.11
Diluted	$	0.21		$	0.25		$	0.21		$	0.18		$	0.11
PROFITABILITY MEASURES
Net interest margin		3.75	%		3.74	%		3.72	%		3.73	%		3.73	%
Efficiency ratio - taxable equivalent *		65.57	%		64.50	%		68.71	%		68.63	%		68.51	%
Return on average assets		0.98	%		1.18	%		1.01	%		0.88	%		0.53	%
Return on average shareholders' equity		11.56	%		14.04	%		12.19	%		10.74	%		6.37	%
Noninterest income as a percentage of taxable equivalent operating revenue *		22.66	%		22.91	%		20.44	%		20.43	%		21.07	%
EQUITY MEASURES
Common shares outstanding at period end (in thousands)		41,555			41,465			41,433			41,355			41,122
Diluted weighted average common shares outstanding (in thousands)		41,371			41,192			41,105			40,829			40,874
Book value per common share	$	7.27		$	7.13		$	6.90		$	6.72		$	6.65
Tangible book value per common share *	$	7.24		$	7.10		$	6.86		$	6.67		$	6.60
Tangible common equity to tangible assets *		8.29	%		8.53	%		8.23	%		8.23	%		8.11	%
Tier 1 capital ratio		**	%		11.52	%		10.75	%		10.52	%		10.47	%
Total risk based capital ratio		**	%		14.47	%		13.77	%		13.66	%		13.73	%

* See accompanying Reconciliation of Non-GAAP Measures to GAAP

** Ratios unavailable at the time of release.

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CoBiz Financial Inc.

December 31, 2016

(unaudited)

	At
	December 31,			September 30,			June 30,			March 31,			December 31,
(in thousands)	2016			2016			2016			2016			2015
PERIOD END BALANCES
Total assets	$	3,630,313		$	3,452,498		$	3,457,516		$	3,357,000		$	3,351,767
Investments		510,387			455,082			477,617			495,012			512,812
Loans		2,934,105			2,827,105			2,813,703			2,716,888			2,699,205
Intangible assets		1,326			1,476			1,626			1,776			1,926
Deposits		3,029,783			2,937,193			2,806,344			2,774,364			2,741,712
Subordinated debentures		131,277			131,256			131,236			131,216			131,197
Common shareholders' equity		302,310			295,837			286,052			277,811			273,536
Interest-earning assets		3,471,208			3,309,804			3,325,368			3,229,226			3,230,664
Interest-bearing liabilities		2,012,466			1,896,216			1,956,402			1,879,671			1,872,033
LOANS
Commercial	$	1,217,732		$	1,196,088		$	1,218,723		$	1,181,185		$	1,175,379
Real estate - mortgage		1,171,123			1,098,983			1,053,867			1,009,682			1,016,268
Construction & land		174,451			170,594			184,620			208,701			201,281
Consumer		267,013			263,871			258,773			258,345			253,317
Other		103,786			97,569			97,720			58,975			52,960
Gross loans		2,934,105			2,827,105			2,813,703			2,716,888			2,699,205
Less allowance for loan losses		(33,293)			(33,529)			(34,344)			(35,285)			(40,686)
Total net loans	$	2,900,812		$	2,793,576		$	2,779,359		$	2,681,603		$	2,658,519
Gross loans - Colorado	$	1,869,086		$	1,868,582		$	1,867,772		$	1,822,739		$	1,845,292
Gross loans - Arizona	$	1,065,019		$	958,523		$	945,931		$	894,149		$	853,913
DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS
Money market	$	861,856		$	854,928		$	853,815		$	834,152		$	804,777
Interest-bearing demand		714,062			681,256			591,355			600,415			585,524
Savings		19,561			20,403			19,097			18,165			18,078
Certificates of deposits under $100		19,899			20,151			19,836			21,078			21,515
Certificates of deposits $100 and over		87,692			87,593			89,008			92,161			94,260
Reciprocal CDARS		44,250			46,316			49,210			36,816			37,223
Total interest-bearing deposits		1,747,320			1,710,647			1,622,321			1,602,787			1,561,377
Noninterest-bearing demand deposits		1,282,463			1,226,546			1,184,023			1,171,577			1,180,335
Total deposits		3,029,783			2,937,193			2,806,344			2,774,364			2,741,712
Customer repurchase agreements		27,639			52,114			37,908			39,141			47,459
Total deposits and customer repurchase agreements	$	3,057,422		$	2,989,307		$	2,844,252		$	2,813,505		$	2,789,171
BALANCE SHEET AVERAGES
Average assets	$	3,538,428		$	3,456,974		$	3,394,960		$	3,351,087		$	3,298,242
Average investments		475,750			462,766			487,309			507,797			512,638
Average loans		2,871,288			2,822,334			2,777,790			2,701,483			2,651,689
Average deposits		3,021,429			2,909,307			2,801,499			2,708,483			2,738,796
Average subordinated debentures		131,266			131,245			131,225			131,206			131,187
Average shareholders' equity		300,665			290,973			281,617			275,863			274,196
Average interest-earning assets		3,397,679			3,322,596			3,286,863			3,228,872			3,183,463
Average interest-bearing liabilities		1,887,410			1,869,875			1,883,198			1,891,527			1,835,549
ALLOWANCE FOR LOAN AND CREDIT LOSSES
Beginning allowance for loan losses	$	33,529		$	34,344		$	35,285		$	40,686		$	34,899
Provision for loan losses		349			(1,168)			(1,652)			370			5,390
Net (charge-off) recovery		(585)			353			711			(5,771)			397
Ending allowance for loan losses	$	33,293		$	33,529		$	34,344		$	35,285		$	40,686
CREDIT QUALITY
Nonperforming loans
Nonaccrual loans	$	2,638		$	5,046		$	5,994		$	8,244		$	15,717
Loans 90 days or more past due and accruing interest		657			-			-			-			505
Total nonperforming loans		3,295			5,046			5,994			8,244			16,222
OREO and repossessed assets		5,079			5,079			5,079			5,079			5,079
Total nonperforming assets	$	8,374		$	10,125		$	11,073		$	13,323		$	21,301
Performing renegotiated loans	$	23,612		$	25,291		$	27,240		$	26,523		$	28,196
Classified loans	$	57,905		$	58,376		$	58,163		$	60,700		$	51,078
ASSET QUALITY MEASURES
Nonperforming assets to total assets		0.23	%		0.29	%		0.32	%		0.40	%		0.64	%
Nonperforming loans to total loans		0.11	%		0.18	%		0.21	%		0.30	%		0.60	%
Nonperforming loans and OREO to total loans and OREO		0.28	%		0.36	%		0.39	%		0.49	%		0.79	%
Allowance for loan and credit losses to total loans		1.13	%		1.19	%		1.22	%		1.30	%		1.51	%
Allowance for loan and credit losses to nonperforming loans		1010.41	%		664.47	%		572.97	%		428.01	%		250.81	%

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CoBiz Financial Inc.

December  31, 2016

(unaudited)

	For the three months ended,
	December 31, 2016							September 30, 2016							December 31, 2015
				Interest		Average					Interest		Average					Interest		Average
	Average			earned		yield		Average			earned		yield		Average			earned		yield
(in thousands)	balance			or paid		or cost		balance			or paid		or cost		balance			or paid		or cost
Assets
Federal funds sold and other	$	50,641		$	64	0.49	%	$	37,496		$	50	0.52	%	$	19,136		$	14	0.29	%
Investment securities		475,750			3,234	2.72	%		462,766			3,224	2.79	%		512,638			3,518	2.75	%
Loans		2,871,288			31,578	4.30	%		2,822,334			30,877	4.28	%		2,651,689			29,221	4.31	%
Total interest-earning assets	$	3,397,679		$	34,876	4.02	%	$	3,322,596		$	34,151	4.03	%	$	3,183,463		$	32,753	4.04	%
Noninterest-earning assets		140,749							134,378							114,779
Total assets	$	3,538,428						$	3,456,974						$	3,298,242
Liabilities and Shareholders' Equity
Deposits
Money market	$	857,720		$	588	0.27	%	$	862,607		$	600	0.28	%	$	812,953		$	553	0.27	%
Interest-bearing demand		671,858			271	0.16	%		606,481			241	0.16	%		581,622			202	0.14	%
Savings		20,059			3	0.06	%		19,621			2	0.04	%		18,749			3	0.06	%
Certificates of deposit
Reciprocal		44,636			21	0.19	%		48,257			24	0.20	%		34,796			15	0.17	%
Under $100		19,986			18	0.36	%		20,559			19	0.37	%		21,626			21	0.39	%
$100 and over		88,214			113	0.51	%		86,621			110	0.51	%		97,759			124	0.50	%
Total interest-bearing deposits	$	1,702,473		$	1,014	0.24	%	$	1,644,146		$	996	0.24	%	$	1,567,505		$	918	0.23	%
Other borrowings
Securities sold under agreements to repurchase		44,985			7	0.06	%		57,400			9	0.06	%		52,090			8	0.06	%
Other short-term borrowings		8,686			17	0.77	%		37,084			51	0.54	%		84,767			71	0.33	%
Long-term debt		131,266			1,853	5.52	%		131,245			1,851	5.52	%		131,187			1,849	5.52	%
Total interest-bearing liabilities	$	1,887,410		$	2,891	0.60	%	$	1,869,875		$	2,907	0.61	%	$	1,835,549		$	2,846	0.61	%
Noninterest-bearing demand accounts		1,318,956							1,265,161							1,171,291
Total deposits and interest-bearing liabilities		3,206,366							3,135,036							3,006,840
Other noninterest-bearing liabilities		31,397							30,965							17,206
Total liabilities		3,237,763							3,166,001							3,024,046
Total equity		300,665							290,973							274,196
Total liabilities and equity	$	3,538,428						$	3,456,974						$	3,298,242
Net interest income - taxable equivalent				$	31,985						$	31,244						$	29,907
Net interest spread						3.42	%						3.42	%						3.43	%
Net interest margin						3.75	%						3.74	%						3.73	%
Ratio of average interest-earning assets to average interest-bearing liabilities		180.02	%						177.69	%						173.43	%

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CoBiz Financial Inc.

December 31, 2016

(unaudited)

	For the year ended December 31,
	2016							2015
				Interest		Average					Interest		Average
	Average			earned		yield		Average			earned		yield
(in thousands)	balance			or paid		or cost		balance			or paid		or cost
Assets
Federal funds sold and other	$	32,437		$	166	0.51	%	$	24,142		$	58	0.24	%
Investment securities		483,328			13,412	2.77	%		499,219			13,935	2.79	%
Loans		2,793,516			121,735	4.36	%		2,517,766			112,994	4.49	%
Total interest-earning assets	$	3,309,281		$	135,313	4.09	%	$	3,041,127		$	126,987	4.18	%
Noninterest-earning assets		126,422							108,183
Total assets	$	3,435,703						$	3,149,310
Liabilities and Shareholders' Equity
Deposits
Money market	$	842,870		$	2,298	0.27	%	$	758,389		$	2,102	0.28	%
Interest-bearing demand		604,799			934	0.15	%		585,241			789	0.13	%
Savings		18,904			10	0.05	%		18,015			10	0.06	%
Certificates of deposit
Reciprocal		43,728			81	0.19	%		45,187			99	0.22	%
Under $100		20,684			77	0.37	%		22,687			90	0.40	%
$100 and over		89,950			454	0.50	%		107,608			550	0.51	%
Total interest-bearing deposits	$	1,620,935		$	3,854	0.24	%	$	1,537,127		$	3,640	0.24	%
Other borrowings
Securities sold under agreements to repurchase		45,967			28	0.06	%		57,280			36	0.06	%
Other short-term borrowings		84,841			466	0.55	%		62,328			178	0.29	%
Long term-debt		131,236			7,383	5.63	%		102,884			5,736	5.58	%
Total interest-bearing liabilities	$	1,882,979		$	11,731	0.62	%	$	1,759,619		$	9,590	0.55	%
Noninterest-bearing demand accounts		1,239,819							1,077,283
Total deposits and interest-bearing liabilities		3,122,798							2,836,902
Other noninterest-bearing liabilities		25,578							15,228
Total liabilities		3,148,376							2,852,130
Total equity		287,327							297,180
Total liabilities and equity	$	3,435,703						$	3,149,310
Net interest income - taxable equivalent				$	123,582						$	117,397
Net interest spread						3.47	%						3.63	%
Net interest margin						3.73	%						3.86	%
Ratio of average interest-earning assets to average interest-bearing liabilities		175.75	%						172.83	%

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CoBiz Financial Inc.

December 31, 2016

(unaudited)

Reconciliation of Non-GAAP Measures to GAAP

(in thousands, except per share amounts)

The Company believes these non-GAAP measures are useful to obtain an understanding of the operating results of the Company’s core business and reflect the basis on which management internally reviews financial performance and capital adequacy. These non-GAAP measures are not a substitute for operating results determined in accordance with GAAP nor do they necessarily conform to non-GAAP performance measures that may be presented by other companies.

The following table includes non-GAAP financial measures related to tangible common equity,  tangible assets and tangible book value per common share.  Shareholders’ equity and total assets have been adjusted to exclude intangible assets. 

		At
		December 31,			September 30,			June 30,			March 31,			December 31,
		2016			2016			2016			2016			2015
	Shareholders' equity as reported - GAAP	$	302,310		$	295,837		$	286,052		$	277,811		$	273,536
	Intangible assets		(1,326)			(1,476)			(1,626)			(1,776)			(1,926)
A	Tangible common equity - non-GAAP	$	300,984		$	294,361		$	284,426		$	276,035		$	271,610
	Total assets as reported - GAAP	$	3,630,313		$	3,452,498		$	3,457,516		$	3,357,000		$	3,351,767
	Intangible assets		(1,326)			(1,476)			(1,626)			(1,776)			(1,926)
B	Total tangible assets - non-GAAP	$	3,628,987		$	3,451,022		$	3,455,890		$	3,355,224		$	3,349,841
C	Common shares outstanding	$	41,555		$	41,465		$	41,433		$	41,355		$	41,122
A / B	Tangible common equity to tangible assets - non-GAAP		8.29	%		8.53	%		8.23	%		8.23	%		8.11	%
A / C	Tangible book value per common share - non-GAAP	$	7.24		$	7.10		$	6.86		$	6.67		$	6.60

The following table includes non-GAAP financial measures used in the computation of the efficiency ratio and the ratio of noninterest income to taxable equivalent operating revenue.  The efficiency ratio equals noninterest expense adjusted to exclude gains and losses on other real estate owned (OREO), other assets and investments, divided by the sum of tax equivalent net interest income and noninterest income.  To calculate tax equivalent net interest income, the interest earned on tax exempt loans and investment securities has been adjusted to reflect the amount that would have been earned had these investments been subject to normal income taxation. 

		Three months ended
		December 31,			September 30,			June 30,			March 31,			December 31,
	(in thousands)	2016			2016			2016			2016			2015
	Noninterest expense - GAAP	$	27,088		$	26,043		$	26,268		$	25,832		$	25,717
	Adjusted for:
	Net gain (loss) on securities, other assets and OREO		33			98			(7)			(3)			246
D	Adjusted noninterest expense - non-GAAP	$	27,121		$	26,141		$	26,261		$	25,829		$	25,963
	Net interest income - GAAP	$	29,888		$	29,401		$	28,533		$	28,229		$	28,236
E	Noninterest income - GAAP		9,374			9,286			7,812			7,688			7,985
	Operating revenue		39,262			38,687			36,345			35,917			36,221
	Taxable equivalent adjustment		2,097			1,843			1,874			1,717			1,673
F	Operating revenue - taxable equivalent - non-GAAP	$	41,359		$	40,530		$	38,219		$	37,634		$	37,894
D / F	Efficiency ratio - taxable equivalent - non-GAAP		65.57	%		64.50	%		68.71	%		68.63	%		68.51	%
E / F	Noninterest income as a percentage of taxable equivalent operating revenue - non-GAAP		22.66	%		22.91	%		20.44	%		20.43	%		21.07	%

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