CoBiz Financial Announces Fourth Quarter 2017 Results
Denver -- CoBiz Financial Inc. (Company) (NASDAQ: COBZ), a financial services company with $3.8 billion in assets, reported financial results for the fourth quarter of 2017.
Financial Highlights
· | The fourth quarter and full year 2017 financial results were impacted by a $7.1 million non-cash, tax charge from the enactment of the Tax Cuts and Jobs Act (TCJA) on December 22, 2017 1. Net income and diluted earnings per common share on a reported and as adjusted basis to exclude the TCJA charge are as follows: |
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| Quarter ended December 31, |
| Year ended December 31, | ||||||||||||||
(in thousands, except per share amounts) |
| 2017 |
| 2017 adjusted* |
| 2016 |
| 2017 |
| 2017 adjusted* |
| 2016 | ||||||
Net income |
| $ | 3,622 |
| $ | 10,772 |
| $ | 8,733 |
| $ | 32,918 |
| $ | 40,068 |
| $ | 34,899 |
Diluted earnings per common share |
| $ | 0.09 |
| $ | 0.25 |
| $ | 0.21 |
| $ | 0.78 |
| $ | 0.95 |
| $ | 0.84 |
· | Loans increased $211.5 million, or 7.2%, from December 31, 2016 and $23.9 million from September 30, 2017. Average loans increased 9.0% from December 31, 2016 to December 31, 2017. |
· | Deposits increased $195.4 million, or 6.5%, from December 31, 2016 and $47.7 million from September 30, 2017. Average deposits increased 9.0% from December 31, 2016 to December 31, 2017. |
· | Net interest margin (NIM) was 3.95% for the fourth quarter of 2017, compared to 3.75% for the fourth quarter of 2016 and 3.91% for the third quarter of 2017. |
Financial Summary
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| Quarter ended (unaudited) |
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| 4Q17 change vs. |
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(in thousands, except per share amounts) |
| 4Q17 |
| 3Q17 |
| 4Q16 |
| 3Q17 |
| 4Q16 |
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Net interest income before provision |
| $ | 34,722 |
| $ | 33,769 |
| $ | 29,888 |
| $ | 953 |
| 2.8 | % | $ | 4,834 |
| 16.2 | % |
Provision for loan losses |
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| 945 |
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| 1,060 |
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| 349 |
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| (115) |
| (10.8) | % |
| 596 |
| 170.8 | % |
Net interest income after provision |
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| 33,777 |
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| 32,709 |
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| 29,539 |
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| 1,068 |
| 3.3 | % |
| 4,238 |
| 14.3 | % |
Total noninterest income |
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| 8,367 |
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| 8,995 |
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| 9,374 |
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| (628) |
| (7.0) | % |
| (1,007) |
| (10.7) | % |
Total noninterest expense |
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| 27,733 |
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| 26,392 |
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| 27,088 |
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| 1,341 |
| 5.1 | % |
| 645 |
| 2.4 | % |
Net income before income taxes |
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| 14,411 |
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| 15,312 |
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| 11,825 |
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| (901) |
| (5.9) | % |
| 2,586 |
| 21.9 | % |
Provision for income taxes |
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| 10,789 |
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| 4,119 |
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| 3,092 |
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| 6,670 |
| 161.9 | % |
| 7,697 |
| 248.9 | % |
Net income |
| $ | 3,622 |
| $ | 11,193 |
| $ | 8,733 |
| $ | (7,571) |
| (67.6) | % | $ | (5,111) |
| (58.5) | % |
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Diluted earnings per common share |
| $ | 0.09 |
| $ | 0.27 |
| $ | 0.21 |
| $ | (0.18) |
| (66.7) | % | $ | (0.12) |
| (57.1) | % |
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KEY RATIOS |
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Net interest margin |
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| 3.95 | % |
| 3.91 | % |
| 3.75 | % |
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Efficiency ratio - taxable equivalent * |
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| 61.56 | % |
| 58.61 | % |
| 65.57 | % |
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Return on average assets |
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| 0.37 | % |
| 1.17 | % |
| 0.98 | % |
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Return on average shareholders' equity |
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| 4.30 | % |
| 13.66 | % |
| 11.56 | % |
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Noninterest income as a percentage of taxable equivalent operating revenue * |
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| 18.44 | % |
| 19.98 | % |
| 22.66 | % |
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* See accompanying Reconciliation of Non-GAAP Measures to GAAP
1 This amount is estimated based on information currently available to the Company. This amount may change, possibly materially, due to, among other things, further refinement of the Company’s calculations, changes in assumptions the Company has made and guidance that may be issued and actions the Company may take as a result of TCJA.
1 | Page
Loans
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| Quarter ended (unaudited) |
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| 4Q17 change vs. |
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(in thousands) |
| 4Q17 |
| 3Q17 |
| 4Q16 |
| 3Q17 |
| 4Q16 |
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LOANS |
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Commercial |
| $ | 1,250,571 |
| $ | 1,251,815 |
| $ | 1,217,732 |
| $ | (1,244) |
| (0.1) | % | $ | 32,839 |
| 2.7 | % |
Owner-occupied real estate |
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| 484,526 |
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| 474,360 |
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| 475,287 |
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| 10,166 |
| 2.1 | % |
| 9,239 |
| 1.9 | % |
Investor real estate |
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| 764,971 |
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| 784,546 |
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| 695,836 |
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| (19,575) |
| (2.5) | % |
| 69,135 |
| 9.9 | % |
Construction & land |
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| 264,401 |
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| 215,172 |
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| 174,451 |
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| 49,229 |
| 22.9 | % |
| 89,950 |
| 51.6 | % |
Consumer |
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| 282,149 |
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| 287,300 |
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| 267,013 |
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| (5,151) |
| (1.8) | % |
| 15,136 |
| 5.7 | % |
Other |
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| 98,945 |
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| 108,505 |
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| 103,786 |
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| (9,560) |
| (8.8) | % |
| (4,841) |
| (4.7) | % |
Total loans |
| $ | 3,145,563 |
| $ | 3,121,698 |
| $ | 2,934,105 |
| $ | 23,865 |
| 0.8 | % | $ | 211,458 |
| 7.2 | % |
•Loans at December 31, 2017 increased $211.5 million, or 7.2%, from December 31, 2016 and $23.9 million from September 30, 2017.
•Loans in the Arizona and Colorado markets increased $62.1 million and $149.4 million, respectively, from December 31, 2016. Compared to September 30, 2017, loans in the Arizona market increased $20.1 million while loans in the Colorado market increased $3.8 million.
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| Quarter ended (unaudited) |
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(in thousands) |
| 4Q17 |
| 3Q17 |
| 2Q17 |
| 1Q17 |
| 4Q16 |
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Loans - beginning balance |
| $ | 3,121,698 |
| $ | 3,060,954 |
| $ | 2,987,068 |
| $ | 2,934,105 |
| $ | 2,827,105 |
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New credit extended |
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| 171,043 |
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| 148,467 |
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| 190,431 |
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| 151,241 |
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| 273,195 |
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Credit advanced |
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| 126,103 |
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| 131,460 |
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| 129,633 |
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| 113,458 |
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| 105,122 |
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Paydowns & maturities |
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| (272,678) |
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| (219,172) |
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| (245,976) |
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| (211,630) |
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| (270,167) |
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Gross loan charge-offs |
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| (603) |
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| (11) |
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| (202) |
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| (106) |
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| (1,150) |
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Loans - ending balance |
| $ | 3,145,563 |
| $ | 3,121,698 |
| $ | 3,060,954 |
| $ | 2,987,068 |
| $ | 2,934,105 |
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Net change - loans outstanding |
| $ | 23,865 |
| $ | 60,744 |
| $ | 73,886 |
| $ | 52,963 |
| $ | 107,000 |
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•New credit extensions and advances were $297.1 million in the fourth quarter of 2017, compared to $378.3 million in the fourth quarter of 2016 and $279.9 million in the quarter ended September 30, 2017 (linked-quarter).
•Commercial line utilization was 32.5% at December 31, 2017, compared to 31.0% and 32.6%, respectively, at December 31, 2016 and September 30, 2017.
Deposits
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| Quarter ended (unaudited) |
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| 4Q17 change vs. |
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(in thousands) |
| 4Q17 |
| 3Q17 |
| 4Q16 |
| 3Q17 |
| 4Q16 |
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DEPOSITS |
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Money market |
| $ | 875,936 |
| $ | 925,589 |
| $ | 861,856 |
| $ | (49,653) |
| (5.4) | % | $ | 14,080 |
| 1.6 | % |
Interest-bearing demand |
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| 737,934 |
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| 721,600 |
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| 714,062 |
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| 16,334 |
| 2.3 | % |
| 23,872 |
| 3.3 | % |
Savings |
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| 21,453 |
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| 21,210 |
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| 19,561 |
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| 243 |
| 1.1 | % |
| 1,892 |
| 9.7 | % |
Certificates of deposits under $100 |
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| 17,715 |
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| 18,445 |
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| 19,899 |
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| (730) |
| (4.0) | % |
| (2,184) |
| (11.0) | % |
Certificates of deposits $100 and over |
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| 69,736 |
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| 76,266 |
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| 87,692 |
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| (6,530) |
| (8.6) | % |
| (17,956) |
| (20.5) | % |
Reciprocal CDARS |
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| 28,796 |
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| 40,630 |
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| 44,250 |
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| (11,834) |
| (29.1) | % |
| (15,454) |
| (34.9) | % |
Total interest-bearing deposits |
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| 1,751,570 |
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| 1,803,740 |
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| 1,747,320 |
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| (52,170) |
| (2.9) | % |
| 4,250 |
| 0.2 | % |
Noninterest-bearing demand deposits |
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| 1,473,650 |
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| 1,373,792 |
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| 1,282,463 |
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| 99,858 |
| 7.3 | % |
| 191,187 |
| 14.9 | % |
Total deposits |
| $ | 3,225,220 |
| $ | 3,177,532 |
| $ | 3,029,783 |
| $ | 47,688 |
| 1.5 | % | $ | 195,437 |
| 6.5 | % |
•Total deposits at December 31, 2017 increased $195.4 million, or 6.5%, from December 31, 2016 and $47.7 million from September 30, 2017.
•Noninterest-bearing demand deposits at December 31, 2017 increased $191.2 million from December 31, 2016 and $99.9 million from September 30, 2017 and were 45.7% of total deposits at December 31, 2017.
2 | Page
Credit Quality
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| Quarter ended (unaudited) |
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(in thousands) |
| 4Q17 |
| 3Q17 |
| 4Q16 |
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ALLOWANCE FOR LOAN LOSSES |
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Beginning allowance for loan losses |
| $ | 36,850 |
| $ | 35,625 |
| $ | 33,529 |
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Provision for loan losses |
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| 945 |
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| 1,060 |
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| 349 |
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Net recoveries (charge-offs) |
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| 146 |
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| 165 |
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| (585) |
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Ending allowance for loan losses |
| $ | 37,941 |
| $ | 36,850 |
| $ | 33,293 |
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CREDIT QUALITY |
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Nonaccrual loans |
| $ | 7,517 |
| $ | 4,863 |
| $ | 2,638 |
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Loans 90 days or more past due and accruing interest |
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| 348 |
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| 20 |
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| 657 |
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Total nonperforming loans |
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| 7,865 |
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| 4,883 |
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| 3,295 |
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OREO and repossessed assets |
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| 5,079 |
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| 5,079 |
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| 5,079 |
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Total nonperforming assets |
| $ | 12,944 |
| $ | 9,962 |
| $ | 8,374 |
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Performing renegotiated loans |
| $ | 52,817 |
| $ | 33,205 |
| $ | 23,612 |
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Classified loans |
| $ | 74,674 |
| $ | 54,355 |
| $ | 57,905 |
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ASSET QUALITY MEASURES |
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Nonperforming assets to total assets |
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| 0.34 | % |
| 0.26 | % |
| 0.23 | % |
Nonperforming loans to total loans |
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| 0.25 | % |
| 0.16 | % |
| 0.11 | % |
Nonperforming loans and OREO to total loans and OREO |
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| 0.41 | % |
| 0.32 | % |
| 0.28 | % |
Allowance for loan losses to total loans |
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| 1.21 | % |
| 1.18 | % |
| 1.13 | % |
Allowance for loan losses to nonperforming loans |
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| 482.40 | % |
| 754.66 | % |
| 1,010.41 | % |
•Nonperforming assets (NPAs) of $12.9 million at December 31, 2017 increased $4.6 million from December 31, 2016 and increased $3.0 million from September 30, 2017
•The Company had net recoveries of $0.1 million in the fourth quarter of 2017.
•A provision for loan losses of $0.9 million was recorded in the fourth quarter of 2017.
•The resulting allowance for loan losses was 1.21% of total loans at December 31, 2017.
Shareholders’ Equity
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| Quarter ended (unaudited) |
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(in thousands, except per share amounts) |
| 4Q17 |
| 3Q17 |
| 4Q16 |
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EQUITY MEASURES |
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Common shareholders' equity |
| $ | 329,284 |
| $ | 329,090 |
| $ | 302,310 |
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Common shares outstanding at period end |
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| 42,217 |
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| 41,800 |
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| 41,555 |
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Book value per common share |
| $ | 7.80 |
| $ | 7.87 |
| $ | 7.27 |
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Tangible book value per common share * |
| $ | 7.78 |
| $ | 7.85 |
| $ | 7.24 |
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Tangible common equity to tangible assets * |
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| 8.54 | % |
| 8.56 | % |
| 8.29 | % |
Tier 1 capital ratio |
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| 11.65 | % |
| 11.59 | % |
Total risk-based capital ratio |
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| ** |
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| 14.49 | % |
| 14.48 | % |
* See accompanying Reconciliation of Non-GAAP Measures to GAAP
** Ratios unavailable at the time of release
•On January 18, 2018, the Board of Directors of the Company declared a quarterly cash dividend of $0.055 per common share. The dividend will be paid on February 5, 2018 to shareholders of record on January 29, 2018.
3 | Page
Net Interest Income and Margin
•Net interest income on a taxable-equivalent basis (NII) was $37.0 million for the fourth quarter of 2017, an increase of $5.0 million, or 15.7%, from the quarter ended December 31, 2016. Compared to the quarter ended September 30, 2017, NII increased $1.0 million, or 2.7%.
•Net interest margin (NIM) was 3.95% for the fourth quarter of 2017, compared to 3.75% in the prior-year quarter and 3.91% in the linked-quarter.
•The average yield on interest-earning assets was 4.22% for the fourth quarter of 2017, compared to 4.02% in the prior-year quarter and 4.20% in the linked-quarter.
•Items impacting NII and the NIM in the fourth quarter of 2017 were:
o | Quarterly average loans increased $272.3 million, or 9.5%, from the prior-year quarter and $71.2 million from the linked-quarter. |
o | Quarterly average investments increased $75.1 million, or 15.8%, from the prior-year quarter and decreased $13.8 million from the linked-quarter. The growth in investments in 2017 increased the ratio of average investments to average interest-earning assets to 15.4% at December 31, 2017 from 14.6% at December 31, 2016. |
o | Quarterly average deposits increased $251.5 million, or 8.3%, from the prior-year quarter and $118.6 million from the linked-quarter. |
o | Including noninterest-bearing deposits, the Company’s deposit interest cost remained stable at 0.13% for the current, prior-year and linked quarters. |
o | Quarterly average noninterest-bearing demand accounts increased $204.3 million, or 15.5%, from the prior-year quarter and $111.1 million from the linked-quarter. |
o | Quarterly average other short-term borrowings increased $23.2 million from the prior-year quarter and decreased $57.4 million from the linked-quarter. The shift in funding mix into core deposits from more expensive short-term borrowings contributed to the NIM expansion in the fourth quarter of 2017 compared to the linked-quarter. |
•The Company presents NII and NIM on a tax-equivalent basis to recognize the income tax savings when comparing taxable and tax-exempt assets. While the Company expects the TCJA to benefit net income prospectively, assuming no other changes, NII and the NIM on a tax-equivalent basis will be reduced due to the decrease in the federal income tax rate. The reduction to NII and NIM will have no impact on net income as it only effects income statement geography.
Noninterest Income
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| Quarter ended (unaudited) |
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| 4Q17 change vs. |
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(in thousands) |
| 4Q17 |
| 3Q17 |
| 4Q16 |
| 3Q17 |
| 4Q16 |
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Noninterest income: |
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Deposit service charges |
| $ | 1,505 |
| $ | 1,660 |
| $ | 1,551 |
| $ | (155) |
| (9.3) | % | $ | (46) |
| (3.0) | % |
Investment advisory income |
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| 1,639 |
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| 1,550 |
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| 1,418 |
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| 89 |
| 5.7 | % |
| 221 |
| 15.6 | % |
Insurance income |
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| 3,294 |
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| 3,338 |
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| 3,286 |
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| (44) |
| (1.3) | % |
| 8 |
| 0.2 | % |
Other investments |
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| 132 |
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| 355 |
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| 215 |
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| (223) |
| (62.8) | % |
| (83) |
| (38.6) | % |
Derivative valuation |
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| (3) |
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| (35) |
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| 737 |
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| 32 |
| 91.4 | % |
| (740) |
| (100.4) | % |
Other income |
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| 1,800 |
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| 2,127 |
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| 2,167 |
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| (327) |
| (15.4) | % |
| (367) |
| (16.9) | % |
Total noninterest income |
| $ | 8,367 |
| $ | 8,995 |
| $ | 9,374 |
| $ | (628) |
| (7.0) | % | $ | (1,007) |
| (10.7) | % |
•Noninterest income decreased $1.0 million, or 10.7%, from the prior-year quarter and $0.6 million, or 7.0%, from the linked-quarter. The prior-year quarter benefited from increased revenue from fees recognized on the sale of interest rate swaps in other income. The decrease from the linked-quarter was primarily a result of lower income on loan fees.
•Noninterest income as a percentage of taxable equivalent operating revenue* was 18.4% for the fourth quarter of 2017, compared to 22.7% in the prior-year quarter and 20.0% in the third quarter of 2017.
* See accompanying Reconciliation of Non-GAAP Measures to GAAP
4 | Page
Operating Expenses
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| Quarter ended (unaudited) |
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| 4Q17 change vs. |
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(in thousands) |
| 4Q17 |
| 3Q17 |
| 4Q16 |
| 3Q17 |
| 4Q16 |
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Noninterest expense: |
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Salaries and employee benefits |
| $ | 19,212 |
| $ | 18,421 |
| $ | 18,378 |
| $ | 791 |
| 4.3 | % | $ | 834 |
| 4.5 | % |
Occupancy expenses, premises and equipment |
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| 3,709 |
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| 3,666 |
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| 3,934 |
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| 43 |
| 1.2 | % |
| (225) |
| (5.7) | % |
Amortization of intangibles |
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| 150 |
|
| 150 |
|
| 150 |
|
| - |
| - | % |
| - |
| - | % |
Other operating expenses |
|
| 4,862 |
|
| 4,149 |
|
| 4,659 |
|
| 713 |
| 17.2 | % |
| 203 |
| 4.4 | % |
Net (gain) loss on securities, other assets and OREO |
|
| (200) |
|
| 6 |
|
| (33) |
|
| (206) |
| nm |
|
| (167) |
| (506.1) | % |
Total noninterest expense |
| $ | 27,733 |
| $ | 26,392 |
| $ | 27,088 |
| $ | 1,341 |
| 5.1 | % | $ | 645 |
| 2.4 | % |
•Noninterest expense increased $0.6 million, or 2.4%, from the prior-year quarter and $1.3 million from the linked-quarter. The increases compared to the prior-year and linked-quarters were due to an increase in bonus accruals for 2017, partially offset by a gain recognized on investment securities called during the fourth quarter of 2017. Other operating expenses for the fourth quarter of 2017 increased compared to the linked-quarter due to a customer fraud loss and higher loan workout costs and legal expenses.
•The taxable equivalent efficiency ratio* was 61.6% for the fourth quarter of 2017, compared to 65.6% and 58.6%, respectively, for the prior-year and linked-quarters.
•While the TCJA is expected to benefit the Company and increase net income in future periods, the decrease in the federal income tax rate will reduce NII on a tax-equivalent basis and increase the efficiency ratio.
Provision for Income Taxes
· | The Company’s effective tax rate for the fourth quarter of 2017 was 74.9%. Excluding the $7.1 million charge from the enactment of the TCJA the effective tax rate was 25.3%, compared to 26.1% in the prior-year quarter and 26.9% in the linked-quarter. |
· | The Company expects its 2018 effective income tax rate to be less than 20%. |
Earnings Conference Call
In conjunction with this release, you are invited to listen to the Company's conference call on Friday, January 26, 2018 at 9:00 am MST 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/989/23977 or by telephone at 877.493.9121 (conference ID # 4299025).
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. The Company believes these non-GAAP measures are useful supplementary financial measures that enable investors to assess the performance of the Company’s operations and for comparison to the Company’s peers. 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
* See accompanying Reconciliation of Non-GAAP Measures to GAAP
5 | Page
About CoBiz Financial
CoBiz Financial (NASDAQ:COBZ) is a $3.8 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; 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.
•Our ability to grow deposits while the number of physical branches have decreased in recent years.
•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.
•Increased cybersecurity risk, including potential network breaches, business disruptions, or financial losses.
•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 change 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.
6 | Page
CoBiz Financial Inc.
December 31, 2017
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended December 31, |
| Year ended December 31, |
| ||||||||
(in thousands, except per share amounts) |
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||
INCOME STATEMENT DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
| $ | 37,753 |
| $ | 32,779 |
| $ | 143,187 |
| $ | 127,782 |
|
Interest expense |
|
| 3,031 |
|
| 2,891 |
|
| 12,613 |
|
| 11,731 |
|
NET INTEREST INCOME BEFORE PROVISION |
|
| 34,722 |
|
| 29,888 |
|
| 130,574 |
|
| 116,051 |
|
Provision for loan losses |
|
| 945 |
|
| 349 |
|
| 3,285 |
|
| (2,101) |
|
NET INTEREST INCOME AFTER PROVISION |
|
| 33,777 |
|
| 29,539 |
|
| 127,289 |
|
| 118,152 |
|
Noninterest income |
|
| 8,367 |
|
| 9,374 |
|
| 34,001 |
|
| 34,160 |
|
Noninterest expense |
|
| 27,733 |
|
| 27,088 |
|
| 107,894 |
|
| 105,231 |
|
INCOME BEFORE INCOME TAXES |
|
| 14,411 |
|
| 11,825 |
|
| 53,396 |
|
| 47,081 |
|
Provision for income taxes |
|
| 10,789 |
|
| 3,092 |
|
| 20,478 |
|
| 12,182 |
|
NET INCOME |
| $ | 3,622 |
| $ | 8,733 |
| $ | 32,918 |
| $ | 34,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
| $ | 0.09 |
| $ | 0.21 |
| $ | 0.79 |
| $ | 0.84 |
|
DILUTED |
| $ | 0.09 |
| $ | 0.21 |
| $ | 0.78 |
| $ | 0.84 |
|
DILUTED - excluding discrete tax adjustment * |
| $ | 0.25 |
| $ | 0.21 |
| $ | 0.95 |
| $ | 0.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY MEASURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding at period end (in thousands) |
|
|
|
|
|
|
|
| 42,217 |
|
| 41,555 |
|
Book value per common share |
|
|
|
|
|
|
| $ | 7.80 |
| $ | 7.27 |
|
Tangible book value per common share * |
|
|
|
|
|
|
| $ | 7.78 |
| $ | 7.24 |
|
Tangible book value per common share - excluding discrete tax adjustment * |
|
|
|
|
|
|
| $ | 7.95 |
| $ | 7.24 |
|
Tangible common equity to tangible assets * |
|
|
|
|
|
|
|
| 8.54 | % |
| 8.29 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See accompanying Reconciliation of Non-GAAP Measures to GAAP |
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERIOD END BALANCES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
| $ | 3,846,272 |
| $ | 3,630,313 |
|
Investments |
|
|
|
|
|
|
|
| 539,416 |
|
| 510,387 |
|
Loans |
|
|
|
|
|
|
|
| 3,145,563 |
|
| 2,934,105 |
|
Intangible assets |
|
|
|
|
|
|
|
| 726 |
|
| 1,326 |
|
Deposits |
|
|
|
|
|
|
|
| 3,225,220 |
|
| 3,029,783 |
|
Long-term debt |
|
|
|
|
|
|
|
| 131,361 |
|
| 131,277 |
|
Common shareholders' equity |
|
|
|
|
|
|
|
| 329,284 |
|
| 302,310 |
|
Interest-earning assets |
|
|
|
|
|
|
|
| 3,686,424 |
|
| 3,471,208 |
|
Interest-bearing liabilities |
|
|
|
|
|
|
|
| 2,013,530 |
|
| 2,012,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET AVERAGES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
|
|
|
|
|
| $ | 3,766,839 |
| $ | 3,435,703 |
|
Average investments |
|
|
|
|
|
|
|
| 557,576 |
|
| 483,328 |
|
Average loans |
|
|
|
|
|
|
|
| 3,046,133 |
|
| 2,793,516 |
|
Average deposits |
|
|
|
|
|
|
|
| 3,117,307 |
|
| 2,860,754 |
|
Average long-term debt |
|
|
|
|
|
|
|
| 131,318 |
|
| 131,236 |
|
Average shareholders' equity |
|
|
|
|
|
|
|
| 320,378 |
|
| 287,327 |
|
Average interest-earning assets |
|
|
|
|
|
|
|
| 3,625,709 |
|
| 3,309,281 |
|
Average interest-bearing liabilities |
|
|
|
|
|
|
|
| 2,026,719 |
|
| 1,882,979 |
|
7 | Page
CoBiz Financial Inc.
December 31, 2017
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended December 31, |
| Year ended December 31, |
| ||||||||
(in thousands) |
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||
PROFITABILITY MEASURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin |
|
| 3.95 | % |
| 3.75 | % |
| 3.85 | % |
| 3.73 | % |
Efficiency ratio - taxable equivalent * |
|
| 61.56 | % |
| 65.57 | % |
| 62.46 | % |
| 66.79 | % |
Return on average assets |
|
| 0.37 | % |
| 0.98 | % |
| 0.87 | % |
| 1.02 | % |
Return on average assets - excluding discrete tax adjustment |
|
| 1.11 | % |
| 0.98 | % |
| 1.06 | % |
| 1.02 | % |
Return on average shareholders' equity |
|
| 4.30 | % |
| 11.56 | % |
| 10.27 | % |
| 12.15 | % |
Return on average shareholders' equity - excluding discrete tax adjustment |
|
| 12.78 | % |
| 11.56 | % |
| 12.51 | % |
| 12.15 | % |
Noninterest income as a percentage of taxable equivalent operating revenue * |
|
| 18.44 | % |
| 22.66 | % |
| 19.59 | % |
| 21.66 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
|
|
|
|
|
|
| $ | 7,517 |
| $ | 2,638 |
|
Loans 90 days or more past due and accruing interest |
|
|
|
|
|
|
|
| 348 |
|
| 657 |
|
Total nonperforming loans |
|
|
|
|
|
|
|
| 7,865 |
|
| 3,295 |
|
OREO & repossessed assets |
|
|
|
|
|
|
|
| 5,079 |
|
| 5,079 |
|
Total nonperforming assets |
|
|
|
|
|
|
| $ | 12,944 |
| $ | 8,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performing renegotiated loans |
|
|
|
|
|
|
| $ | 52,817 |
| $ | 23,612 |
|
Classified loans |
|
|
|
|
|
|
| $ | 74,674 |
| $ | 57,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge-offs |
|
|
|
|
|
|
| $ | (922) |
| $ | (7,804) |
|
Recoveries |
|
|
|
|
|
|
|
| 2,285 |
|
| 2,512 |
|
Net recoveries (charge-offs) |
|
|
|
|
|
|
| $ | 1,363 |
| $ | (5,292) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to total assets |
|
|
|
|
|
|
|
| 0.34 | % |
| 0.23 | % |
Nonperforming loans to total loans |
|
|
|
|
|
|
|
| 0.25 | % |
| 0.11 | % |
Nonperforming loans and OREO to total loans and OREO |
|
|
|
|
|
|
|
| 0.41 | % |
| 0.28 | % |
Allowance for loan losses to total loans |
|
|
|
|
|
|
|
| 1.21 | % |
| 1.13 | % |
Allowance for loan losses to nonperforming loans |
|
|
|
|
|
|
|
| 482.40 | % |
| 1,010.41 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| NPAs as a |
| |||||||
NONPERFORMING ASSETS BY MARKET |
| Colorado |
| Arizona |
| Total |
| in Category |
| % |
| ||||
Commercial |
| $ | 5,619 |
| $ | 914 |
| $ | 6,533 |
| $ | 1,250,571 |
| 0.52 | % |
Real estate - mortgage |
|
| - |
|
| 57 |
|
| 57 |
|
| 1,249,497 |
| 0.00 | % |
Construction & land |
|
| - |
|
| - |
|
| - |
|
| 264,401 |
| - | % |
Consumer |
|
| 1,275 |
|
| - |
|
| 1,275 |
|
| 282,149 |
| 0.45 | % |
Other loans |
|
| - |
|
| - |
|
| - |
|
| 98,945 |
| - | % |
OREO & repossessed assets |
|
| 4,903 |
|
| 176 |
|
| 5,079 |
|
| 5,079 |
| - |
|
NPAs |
| $ | 11,797 |
| $ | 1,147 |
| $ | 12,944 |
| $ | 3,150,642 |
| 0.41 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
| $ | 2,018,415 |
| $ | 1,127,148 |
| $ | 3,145,563 |
|
|
|
|
|
|
Total loans and OREO |
|
| 2,023,318 |
|
| 1,127,324 |
|
| 3,150,642 |
|
|
|
|
|
|
Nonperforming loans to loans |
|
| 0.34 | % |
| 0.09 | % |
| 0.25 | % |
|
|
|
|
|
Nonperforming loans and OREO to total loans and OREO |
|
| 0.58 | % |
| 0.10 | % |
| 0.41 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See accompanying Reconciliation of Non-GAAP Measures to GAAP |
|
|
|
|
|
|
|
| |||||||
8 | Page
CoBiz Financial Inc.
December 31, 2017
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended |
| |||||||||||||
|
| December 31, |
| September 30, |
| June 30, |
| March 31, |
| December 31, |
| |||||
(in thousands, except per share amounts) |
| 2017 |
| 2017 |
| 2017 |
| 2017 |
| 2016 |
| |||||
Interest income |
| $ | 37,753 |
| $ | 36,947 |
| $ | 35,406 |
| $ | 33,081 |
| $ | 32,779 |
|
Interest expense |
|
| 3,031 |
|
| 3,178 |
|
| 3,401 |
|
| 3,003 |
|
| 2,891 |
|
Net interest income before provision |
|
| 34,722 |
|
| 33,769 |
|
| 32,005 |
|
| 30,078 |
|
| 29,888 |
|
Provision for loan losses |
|
| 945 |
|
| 1,060 |
|
| 673 |
|
| 607 |
|
| 349 |
|
Net interest income after provision |
|
| 33,777 |
|
| 32,709 |
|
| 31,332 |
|
| 29,471 |
|
| 29,539 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit service charges |
| $ | 1,505 |
| $ | 1,660 |
| $ | 1,714 |
| $ | 1,745 |
| $ | 1,551 |
|
Investment advisory income |
|
| 1,639 |
|
| 1,550 |
|
| 1,500 |
|
| 1,531 |
|
| 1,418 |
|
Insurance income |
|
| 3,294 |
|
| 3,338 |
|
| 3,427 |
|
| 3,122 |
|
| 3,286 |
|
Other investments |
|
| 132 |
|
| 355 |
|
| 372 |
|
| 375 |
|
| 215 |
|
Derivative valuation |
|
| (3) |
|
| (35) |
|
| (80) |
|
| (57) |
|
| 737 |
|
Other income |
|
| 1,800 |
|
| 2,127 |
|
| 1,378 |
|
| 1,612 |
|
| 2,167 |
|
Total noninterest income |
|
| 8,367 |
|
| 8,995 |
|
| 8,311 |
|
| 8,328 |
|
| 9,374 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
| $ | 19,212 |
| $ | 18,421 |
| $ | 18,335 |
| $ | 19,120 |
| $ | 18,378 |
|
Occupancy expenses, premises and equipment |
|
| 3,709 |
|
| 3,666 |
|
| 3,685 |
|
| 3,605 |
|
| 3,934 |
|
Amortization of intangibles |
|
| 150 |
|
| 150 |
|
| 150 |
|
| 150 |
|
| 150 |
|
Other operating expenses |
|
| 4,862 |
|
| 4,149 |
|
| 4,453 |
|
| 4,584 |
|
| 4,659 |
|
Net (gain) loss on securities, other assets and OREO |
|
| (200) |
|
| 6 |
|
| 32 |
|
| (345) |
|
| (33) |
|
Total noninterest expense |
|
| 27,733 |
|
| 26,392 |
|
| 26,655 |
|
| 27,114 |
|
| 27,088 |
|
Net income before income taxes |
|
| 14,411 |
|
| 15,312 |
|
| 12,988 |
|
| 10,685 |
|
| 11,825 |
|
Provision for income taxes |
|
| 10,789 |
|
| 4,119 |
|
| 3,499 |
|
| 2,071 |
|
| 3,092 |
|
Net income |
| $ | 3,622 |
| $ | 11,193 |
| $ | 9,489 |
| $ | 8,614 |
| $ | 8,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 0.09 |
| $ | 0.27 |
| $ | 0.23 |
| $ | 0.21 |
| $ | 0.21 |
|
Diluted |
| $ | 0.09 |
| $ | 0.27 |
| $ | 0.23 |
| $ | 0.20 |
| $ | 0.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFITABILITY MEASURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin |
|
| 3.95 | % |
| 3.91 | % |
| 3.76 | % |
| 3.77 | % |
| 3.75 | % |
Efficiency ratio - taxable equivalent * |
|
| 61.56 | % |
| 58.61 | % |
| 62.83 | % |
| 67.33 | % |
| 65.57 | % |
Return on average assets |
|
| 0.37 | % |
| 1.17 | % |
| 1.01 | % |
| 0.96 | % |
| 0.98 | % |
Return on average shareholders' equity |
|
| 4.30 | % |
| 13.66 | % |
| 12.10 | % |
| 11.38 | % |
| 11.56 | % |
Noninterest income as a percentage of taxable equivalent operating revenue * |
|
| 18.44 | % |
| 19.98 | % |
| 19.61 | % |
| 20.42 | % |
| 22.66 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY MEASURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding at period end (in thousands) |
|
| 42,217 |
|
| 41,800 |
|
| 41,771 |
|
| 41,731 |
|
| 41,555 |
|
Diluted weighted average common shares outstanding (in thousands) |
|
| 41,908 |
|
| 41,781 |
|
| 41,713 |
|
| 41,584 |
|
| 41,371 |
|
Book value per common share |
| $ | 7.80 |
| $ | 7.87 |
| $ | 7.65 |
| $ | 7.43 |
| $ | 7.27 |
|
Tangible book value per common share * |
| $ | 7.78 |
| $ | 7.85 |
| $ | 7.62 |
| $ | 7.41 |
| $ | 7.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets * |
|
| 8.54 | % |
| 8.56 | % |
| 8.37 | % |
| 8.28 | % |
| 8.29 | % |
Tier 1 capital ratio |
|
| ** | % |
| 11.65 | % |
| 11.52 | % |
| 11.46 | % |
| 11.59 | % |
Total risk-based capital ratio |
|
| ** | % |
| 14.49 | % |
| 14.36 | % |
| 14.30 | % |
| 14.48 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See accompanying Reconciliation of Non-GAAP Measures to GAAP
** Ratios unavailable at the time of release
9 | Page
CoBiz Financial Inc.
December 31, 2017
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| At |
| |||||||||||||
|
| December 31, |
| September 30, |
| June 30, |
| March 31, |
| December 31, |
| |||||
(in thousands) |
| 2017 |
| 2017 |
| 2017 |
| 2017 |
| 2016 |
| |||||
PERIOD END BALANCES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
| $ | 3,846,272 |
| $ | 3,836,843 |
| $ | 3,803,490 |
| $ | 3,731,342 |
| $ | 3,630,313 |
|
Investments |
|
| 539,416 |
|
| 549,748 |
|
| 568,181 |
|
| 572,106 |
|
| 510,387 |
|
Loans |
|
| 3,145,563 |
|
| 3,121,698 |
|
| 3,060,954 |
|
| 2,987,068 |
|
| 2,934,105 |
|
Deposits |
|
| 3,225,220 |
|
| 3,177,532 |
|
| 3,072,639 |
|
| 3,050,101 |
|
| 3,029,783 |
|
Common shareholders' equity |
|
| 329,284 |
|
| 329,090 |
|
| 319,470 |
|
| 310,209 |
|
| 302,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE SHEET AVERAGES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
| $ | 3,862,902 |
| $ | 3,795,822 |
| $ | 3,772,484 |
| $ | 3,633,308 |
| $ | 3,538,428 |
|
Average investments |
|
| 550,853 |
|
| 564,690 |
|
| 575,363 |
|
| 539,195 |
|
| 475,750 |
|
Average loans |
|
| 3,143,543 |
|
| 3,072,370 |
|
| 3,036,949 |
|
| 2,929,024 |
|
| 2,871,288 |
|
Average deposits |
|
| 3,272,895 |
|
| 3,154,343 |
|
| 3,012,706 |
|
| 3,026,167 |
|
| 3,021,429 |
|
Average shareholders' equity |
|
| 334,404 |
|
| 325,136 |
|
| 314,669 |
|
| 306,951 |
|
| 300,665 |
|
Average interest-earning assets |
|
| 3,716,903 |
|
| 3,656,949 |
|
| 3,633,412 |
|
| 3,492,768 |
|
| 3,397,679 |
|
Average interest-bearing liabilities |
|
| 1,971,962 |
|
| 2,027,857 |
|
| 2,115,642 |
|
| 1,991,616 |
|
| 1,887,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
| $ | 1,250,571 |
| $ | 1,251,815 |
| $ | 1,272,304 |
| $ | 1,241,365 |
| $ | 1,217,732 |
|
Real estate - mortgage |
|
| 1,249,497 |
|
| 1,258,906 |
|
| 1,228,945 |
|
| 1,197,251 |
|
| 1,171,123 |
|
Construction & land |
|
| 264,401 |
|
| 215,172 |
|
| 162,318 |
|
| 166,553 |
|
| 174,451 |
|
Consumer |
|
| 282,149 |
|
| 287,300 |
|
| 287,790 |
|
| 271,751 |
|
| 267,013 |
|
Other |
|
| 98,945 |
|
| 108,505 |
|
| 109,597 |
|
| 110,148 |
|
| 103,786 |
|
Total gross loans |
|
| 3,145,563 |
|
| 3,121,698 |
|
| 3,060,954 |
|
| 2,987,068 |
|
| 2,934,105 |
|
Less allowance for loan losses |
|
| (37,941) |
|
| (36,850) |
|
| (35,625) |
|
| (34,211) |
|
| (33,293) |
|
Total net loans |
| $ | 3,107,622 |
| $ | 3,084,848 |
| $ | 3,025,329 |
| $ | 2,952,857 |
| $ | 2,900,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans - Colorado |
| $ | 2,018,415 |
| $ | 2,014,676 |
| $ | 1,963,177 |
| $ | 1,923,932 |
| $ | 1,869,086 |
|
Gross loans - Arizona |
| $ | 1,127,148 |
| $ | 1,107,022 |
| $ | 1,097,777 |
| $ | 1,063,136 |
| $ | 1,065,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEPOSITS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market |
| $ | 875,936 |
| $ | 925,589 |
| $ | 898,615 |
| $ | 910,089 |
| $ | 861,856 |
|
Interest-bearing demand |
|
| 737,934 |
|
| 721,600 |
|
| 696,971 |
|
| 704,659 |
|
| 714,062 |
|
Savings |
|
| 21,453 |
|
| 21,210 |
|
| 22,748 |
|
| 20,192 |
|
| 19,561 |
|
Certificates of deposits under $100 |
|
| 17,715 |
|
| 18,445 |
|
| 18,748 |
|
| 19,045 |
|
| 19,899 |
|
Certificates of deposits $100 and over |
|
| 69,736 |
|
| 76,266 |
|
| 79,103 |
|
| 81,611 |
|
| 87,692 |
|
Reciprocal CDARS |
|
| 28,796 |
|
| 40,630 |
|
| 42,046 |
|
| 41,200 |
|
| 44,250 |
|
Total interest-bearing deposits |
|
| 1,751,570 |
|
| 1,803,740 |
|
| 1,758,231 |
|
| 1,776,796 |
|
| 1,747,320 |
|
Noninterest-bearing demand deposits |
|
| 1,473,650 |
|
| 1,373,792 |
|
| 1,314,408 |
|
| 1,273,305 |
|
| 1,282,463 |
|
Total deposits |
| $ | 3,225,220 |
| $ | 3,177,532 |
| $ | 3,072,639 |
| $ | 3,050,101 |
| $ | 3,029,783 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLOWANCE FOR LOAN LOSSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning allowance for loan losses |
| $ | 36,850 |
| $ | 35,625 |
| $ | 34,211 |
| $ | 33,293 |
| $ | 33,529 |
|
Provision for loan losses |
|
| 945 |
|
| 1,060 |
|
| 673 |
|
| 607 |
|
| 349 |
|
Net recovery (charge-off) |
|
| 146 |
|
| 165 |
|
| 741 |
|
| 311 |
|
| (585) |
|
Ending allowance for loan losses |
| $ | 37,941 |
| $ | 36,850 |
| $ | 35,625 |
| $ | 34,211 |
| $ | 33,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans |
| $ | 7,517 |
| $ | 4,863 |
| $ | 3,830 |
| $ | 3,048 |
| $ | 2,638 |
|
Loans 90 days or more past due and accruing interest |
|
| 348 |
|
| 20 |
|
| 664 |
|
| - |
|
| 657 |
|
Total nonperforming loans |
|
| 7,865 |
|
| 4,883 |
|
| 4,494 |
|
| 3,048 |
|
| 3,295 |
|
OREO and repossessed assets |
|
| 5,079 |
|
| 5,079 |
|
| 5,079 |
|
| 5,079 |
|
| 5,079 |
|
Total nonperforming assets |
| $ | 12,944 |
| $ | 9,962 |
| $ | 9,573 |
| $ | 8,127 |
| $ | 8,374 |
|
Performing renegotiated loans |
| $ | 52,817 |
| $ | 33,205 |
| $ | 31,482 |
| $ | 23,324 |
| $ | 23,612 |
|
Classified loans |
| $ | 74,674 |
| $ | 54,355 |
| $ | 50,587 |
| $ | 54,291 |
| $ | 57,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY MEASURES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets to total assets |
|
| 0.34 | % |
| 0.26 | % |
| 0.25 | % |
| 0.22 | % |
| 0.23 | % |
Nonperforming loans to total loans |
|
| 0.25 | % |
| 0.16 | % |
| 0.15 | % |
| 0.10 | % |
| 0.11 | % |
Nonperforming loans and OREO to total loans and OREO |
|
| 0.41 | % |
| 0.32 | % |
| 0.31 | % |
| 0.27 | % |
| 0.28 | % |
Allowance for loan losses to total loans |
|
| 1.21 | % |
| 1.18 | % |
| 1.16 | % |
| 1.15 | % |
| 1.13 | % |
Allowance for loan losses to nonperforming loans |
|
| 482.40 | % |
| 754.66 | % |
| 792.72 | % |
| 1,122.41 | % |
| 1,010.41 | % |
10 | Page
CoBiz Financial Inc.
December 31, 2017
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the three months ended, |
| ||||||||||||||||||||||
|
| December 31, 2017 |
| September 30, 2017 |
| December 31, 2016 |
| ||||||||||||||||||
|
|
|
|
| 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 |
| $ | 22,507 |
| $ | 69 |
| 1.20 | % | $ | 19,889 |
| $ | 69 |
| 1.36 | % | $ | 50,641 |
| $ | 64 |
| 0.49 | % |
Investment securities |
|
| 550,853 |
|
| 3,769 |
| 2.74 | % |
| 564,690 |
|
| 3,812 |
| 2.70 | % |
| 475,750 |
|
| 3,234 |
| 2.72 | % |
Loans |
|
| 3,143,543 |
|
| 36,201 |
| 4.51 | % |
| 3,072,370 |
|
| 35,324 |
| 4.50 | % |
| 2,871,288 |
|
| 31,578 |
| 4.30 | % |
Total interest-earning assets |
| $ | 3,716,903 |
| $ | 40,039 |
| 4.22 | % | $ | 3,656,949 |
| $ | 39,205 |
| 4.20 | % | $ | 3,397,679 |
| $ | 34,876 |
| 4.02 | % |
Noninterest-earning assets |
|
| 145,999 |
|
|
|
|
|
|
| 138,873 |
|
|
|
|
|
|
| 140,749 |
|
|
|
|
|
|
Total assets |
| $ | 3,862,902 |
|
|
|
|
|
| $ | 3,795,822 |
|
|
|
|
|
| $ | 3,538,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market |
| $ | 925,412 |
| $ | 639 |
| 0.27 | % | $ | 914,533 |
| $ | 613 |
| 0.27 | % | $ | 857,720 |
| $ | 588 |
| 0.27 | % |
Interest-bearing demand |
|
| 678,982 |
|
| 286 |
| 0.17 | % |
| 667,916 |
|
| 273 |
| 0.16 | % |
| 671,858 |
|
| 271 |
| 0.16 | % |
Savings |
|
| 21,396 |
|
| 3 |
| 0.06 | % |
| 21,715 |
|
| 3 |
| 0.05 | % |
| 20,059 |
|
| 3 |
| 0.06 | % |
Certificates of deposit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reciprocal |
|
| 32,226 |
|
| 16 |
| 0.20 | % |
| 41,645 |
|
| 20 |
| 0.19 | % |
| 44,636 |
|
| 21 |
| 0.19 | % |
Under $100 |
|
| 18,078 |
|
| 17 |
| 0.37 | % |
| 18,623 |
|
| 17 |
| 0.36 | % |
| 19,986 |
|
| 18 |
| 0.36 | % |
$100 and over |
|
| 73,562 |
|
| 92 |
| 0.50 | % |
| 77,783 |
|
| 98 |
| 0.50 | % |
| 88,214 |
|
| 113 |
| 0.51 | % |
Total interest-bearing deposits |
| $ | 1,749,656 |
| $ | 1,053 |
| 0.24 | % | $ | 1,742,215 |
| $ | 1,024 |
| 0.23 | % | $ | 1,702,473 |
| $ | 1,014 |
| 0.24 | % |
Other borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under agreements to repurchase |
|
| 59,035 |
|
| 9 |
| 0.06 | % |
| 65,032 |
|
| 10 |
| 0.06 | % |
| 44,985 |
|
| 7 |
| 0.06 | % |
Other short-term borrowings |
|
| 31,922 |
|
| 112 |
| 1.37 | % |
| 89,282 |
|
| 288 |
| 1.26 | % |
| 8,686 |
|
| 17 |
| 0.77 | % |
Long-term debt |
|
| 131,349 |
|
| 1,857 |
| 5.53 | % |
| 131,328 |
|
| 1,856 |
| 5.53 | % |
| 131,266 |
|
| 1,853 |
| 5.52 | % |
Total interest-bearing liabilities |
| $ | 1,971,962 |
| $ | 3,031 |
| 0.60 | % | $ | 2,027,857 |
| $ | 3,178 |
| 0.62 | % | $ | 1,887,410 |
| $ | 2,891 |
| 0.60 | % |
Noninterest-bearing demand accounts |
|
| 1,523,239 |
|
|
|
|
|
|
| 1,412,128 |
|
|
|
|
|
|
| 1,318,956 |
|
|
|
|
|
|
Total deposits and interest-bearing liabilities |
|
| 3,495,201 |
|
|
|
|
|
|
| 3,439,985 |
|
|
|
|
|
|
| 3,206,366 |
|
|
|
|
|
|
Other noninterest-bearing liabilities |
|
| 33,297 |
|
|
|
|
|
|
| 30,701 |
|
|
|
|
|
|
| 31,397 |
|
|
|
|
|
|
Total liabilities |
|
| 3,528,498 |
|
|
|
|
|
|
| 3,470,686 |
|
|
|
|
|
|
| 3,237,763 |
|
|
|
|
|
|
Total shareholders' equity |
|
| 334,404 |
|
|
|
|
|
|
| 325,136 |
|
|
|
|
|
|
| 300,665 |
|
|
|
|
|
|
Total liabilities and shareholders' equity |
| $ | 3,862,902 |
|
|
|
|
|
| $ | 3,795,822 |
|
|
|
|
|
| $ | 3,538,428 |
|
|
|
|
|
|
Net interest income - taxable equivalent |
|
|
|
| $ | 37,008 |
|
|
|
|
|
| $ | 36,027 |
|
|
|
|
|
| $ | 31,985 |
|
|
|
Net interest spread |
|
|
|
|
|
|
| 3.62 | % |
|
|
|
|
|
| 3.58 | % |
|
|
|
|
|
| 3.42 | % |
Net interest margin |
|
|
|
|
|
|
| 3.95 | % |
|
|
|
|
|
| 3.91 | % |
|
|
|
|
|
| 3.75 | % |
Ratio of average interest-earning assets to average interest-bearing liabilities |
|
| 188.49 | % |
|
|
|
|
|
| 180.34 | % |
|
|
|
|
|
| 180.02 | % |
|
|
|
|
|
11 | Page
CoBiz Financial Inc.
December 31, 2017
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the year ended December 31, |
| ||||||||||||||
|
| 2017 |
| 2016 |
| ||||||||||||
|
|
|
|
| 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 |
| $ | 22,000 |
| $ | 248 |
| 1.13 | % | $ | 32,437 |
| $ | 166 |
| 0.51 | % |
Investment securities |
|
| 557,576 |
|
| 15,376 |
| 2.76 | % |
| 483,328 |
|
| 13,412 |
| 2.77 | % |
Loans |
|
| 3,046,133 |
|
| 136,542 |
| 4.48 | % |
| 2,793,516 |
|
| 121,735 |
| 4.36 | % |
Total interest-earning assets |
| $ | 3,625,709 |
| $ | 152,166 |
| 4.20 | % | $ | 3,309,281 |
| $ | 135,313 |
| 4.09 | % |
Noninterest-earning assets |
|
| 141,130 |
|
|
|
|
|
|
| 126,422 |
|
|
|
|
|
|
Total assets |
| $ | 3,766,839 |
|
|
|
|
|
| $ | 3,435,703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market |
| $ | 907,280 |
| $ | 2,430 |
| 0.27 | % | $ | 842,870 |
| $ | 2,298 |
| 0.27 | % |
Interest-bearing demand |
|
| 661,043 |
|
| 1,038 |
| 0.16 | % |
| 604,799 |
|
| 934 |
| 0.15 | % |
Savings |
|
| 20,632 |
|
| 11 |
| 0.05 | % |
| 18,904 |
|
| 10 |
| 0.05 | % |
Certificates of deposit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reciprocal |
|
| 40,013 |
|
| 75 |
| 0.19 | % |
| 43,728 |
|
| 81 |
| 0.19 | % |
Under $100 |
|
| 18,773 |
|
| 68 |
| 0.36 | % |
| 20,684 |
|
| 77 |
| 0.37 | % |
$100 and over |
|
| 79,292 |
|
| 397 |
| 0.50 | % |
| 89,950 |
|
| 454 |
| 0.50 | % |
Total interest-bearing deposits |
| $ | 1,727,033 |
| $ | 4,019 |
| 0.23 | % | $ | 1,620,935 |
| $ | 3,854 |
| 0.24 | % |
Other borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities sold under agreements to repurchase |
|
| 59,625 |
|
| 36 |
| 0.06 | % |
| 45,967 |
|
| 28 |
| 0.06 | % |
Other short-term borrowings |
|
| 108,743 |
|
| 1,169 |
| 1.08 | % |
| 84,841 |
|
| 466 |
| 0.55 | % |
Long term-debt |
|
| 131,318 |
|
| 7,389 |
| 5.63 | % |
| 131,236 |
|
| 7,383 |
| 5.63 | % |
Total interest-bearing liabilities |
| $ | 2,026,719 |
| $ | 12,613 |
| 0.62 | % | $ | 1,882,979 |
| $ | 11,731 |
| 0.62 | % |
Noninterest-bearing demand accounts |
|
| 1,390,274 |
|
|
|
|
|
|
| 1,239,819 |
|
|
|
|
|
|
Total deposits and interest-bearing liabilities |
|
| 3,416,993 |
|
|
|
|
|
|
| 3,122,798 |
|
|
|
|
|
|
Other noninterest-bearing liabilities |
|
| 29,468 |
|
|
|
|
|
|
| 25,578 |
|
|
|
|
|
|
Total liabilities |
|
| 3,446,461 |
|
|
|
|
|
|
| 3,148,376 |
|
|
|
|
|
|
Total shareholders' equity |
|
| 320,378 |
|
|
|
|
|
|
| 287,327 |
|
|
|
|
|
|
Total liabilities and shareholders' equity |
| $ | 3,766,839 |
|
|
|
|
|
| $ | 3,435,703 |
|
|
|
|
|
|
Net interest income - taxable equivalent |
|
|
|
| $ | 139,553 |
|
|
|
|
|
| $ | 123,582 |
|
|
|
Net interest spread |
|
|
|
|
|
|
| 3.58 | % |
|
|
|
|
|
| 3.47 | % |
Net interest margin |
|
|
|
|
|
|
| 3.85 | % |
|
|
|
|
|
| 3.73 | % |
Ratio of average interest-earning assets to average interest-bearing liabilities |
|
| 178.90 | % |
|
|
|
|
|
| 175.75 | % |
|
|
|
|
|
12 | Page
CoBiz Financial Inc.
December 31, 2017
(unaudited)
Reconciliation of Non-GAAP Measures to GAAP
(in thousands, except per share amounts)
The Company believes these non-GAAP financial measures enable investors 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 financial measures are not a substitute for operating results determined in accordance with GAAP nor do they necessarily conform to non-GAAP financial measures that may be presented by other companies.
The following tables include 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 (1) and the TCJA charge (2).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| At |
| |||||||||||||
|
|
| December 31, |
| September 30, |
| June 30, |
| March 31, |
| December 31, |
| |||||
| (in thousands, except per share amounts) |
| 2017 |
| 2017 |
| 2017 |
| 2017 |
| 2016 |
| |||||
| Shareholders' equity as reported - GAAP |
| $ | 329,284 |
| $ | 329,090 |
| $ | 319,470 |
| $ | 310,209 |
| $ | 302,310 |
|
| Intangible assets |
|
| (726) |
|
| (876) |
|
| (1,026) |
|
| (1,176) |
|
| (1,326) |
|
A | Tangible common equity (1) - non-GAAP |
| $ | 328,558 |
| $ | 328,214 |
| $ | 318,444 |
| $ | 309,033 |
| $ | 300,984 |
|
| TCJA charge |
|
| 7,150 |
|
| - |
|
| - |
|
| - |
|
| - |
|
B | Tangible common equity (2) - non-GAAP |
| $ | 335,708 |
| $ | 328,214 |
| $ | 318,444 |
| $ | 309,033 |
| $ | 300,984 |
|
| Total assets as reported - GAAP |
| $ | 3,846,272 |
| $ | 3,836,843 |
| $ | 3,803,490 |
| $ | 3,731,342 |
| $ | 3,630,313 |
|
| Intangible assets |
|
| (726) |
|
| (876) |
|
| (1,026) |
|
| (1,176) |
|
| (1,326) |
|
C | Total tangible assets - non-GAAP |
| $ | 3,845,546 |
| $ | 3,835,967 |
| $ | 3,802,464 |
| $ | 3,730,166 |
| $ | 3,628,987 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D | Common shares outstanding |
|
| 42,217 |
|
| 41,800 |
|
| 41,771 |
|
| 41,731 |
|
| 41,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A / C | Tangible common equity (1) to tangible assets - non-GAAP |
|
| 8.54 | % |
| 8.56 | % |
| 8.37 | % |
| 8.28 | % |
| 8.29 | % |
A / D | Tangible book value per common share (1) - non-GAAP |
| $ | 7.78 |
| $ | 7.85 |
| $ | 7.62 |
| $ | 7.41 |
| $ | 7.24 |
|
B / D | Tangible book value per common share (2) - non-GAAP |
| $ | 7.95 |
| $ | 7.85 |
| $ | 7.62 |
| $ | 7.41 |
| $ | 7.24 |
|
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 securities, other assets and other real estate owned (OREO), divided by taxable equivalent operating revenue, which equals 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) |
| 2017 |
| 2017 |
| 2017 |
| 2017 |
| 2016 |
| |||||
| Noninterest expense - GAAP, adjusted for: |
| $ | 27,733 |
| $ | 26,392 |
| $ | 26,655 |
| $ | 27,114 |
| $ | 27,088 |
|
| Net (gain) loss on securities, other assets and OREO |
|
| (200) |
|
| 6 |
|
| 32 |
|
| (345) |
|
| (33) |
|
E | Adjusted noninterest expense - non-GAAP |
| $ | 27,933 |
| $ | 26,386 |
| $ | 26,623 |
| $ | 27,459 |
| $ | 27,121 |
|
| Net interest income - GAAP |
| $ | 34,722 |
| $ | 33,769 |
| $ | 32,005 |
| $ | 30,078 |
| $ | 29,888 |
|
F | Noninterest income - GAAP |
|
| 8,367 |
|
| 8,995 |
|
| 8,311 |
|
| 8,328 |
|
| 9,374 |
|
| Operating revenue |
|
| 43,089 |
|
| 42,764 |
|
| 40,316 |
|
| 38,406 |
|
| 39,262 |
|
| Taxable equivalent adjustment |
|
| 2,286 |
|
| 2,258 |
|
| 2,056 |
|
| 2,379 |
|
| 2,097 |
|
G | Operating revenue - taxable equivalent - non-GAAP |
| $ | 45,375 |
| $ | 45,022 |
| $ | 42,372 |
| $ | 40,785 |
| $ | 41,359 |
|
E / G | Efficiency ratio - taxable equivalent - non-GAAP |
|
| 61.56 | % |
| 58.61 | % |
| 62.83 | % |
| 67.33 | % |
| 65.57 | % |
F / G | Noninterest income as a percentage of taxable equivalent operating revenue - non-GAAP |
|
| 18.44 | % |
| 19.98 | % |
| 19.61 | % |
| 20.42 | % |
| 22.66 | % |
Pre-tax, Adjusted Earnings (PTAE) is a non-GAAP measure and is calculated as net income adjusted on a taxable equivalent basis excluding provisions for income taxes and loan losses and further adjusted to exclude gains and losses on securities, other assets and OREO. To calculate taxable equivalent net 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. The Company believes that PTAE is a useful financial measure that enables investors and others to assess the Company's ability to generate
13 | Page
capital to cover credit losses and is a reflection of earnings generated by the core business. The following table is a reconciliation of PTAE to its most comparable GAAP measure.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended December 31, |
| Change |
| ||||||||
| (in thousands) |
| 2017 |
| 2016 |
| Amount |
| % |
| ||||
| Net income - GAAP, adjusted for: |
| $ | 3,622 |
| $ | 8,733 |
| $ | (5,111) |
|
| 58.5 | % |
| Taxable equivalent adjustment |
|
| 2,286 |
|
| 2,097 |
|
| 189 |
|
| 9.0 | % |
| Provision for income taxes |
|
| 10,789 |
|
| 3,092 |
|
| 7,697 |
|
| 248.9 | % |
| Provision for loan losses |
|
| 945 |
|
| 349 |
|
| 596 |
|
| 170.8 | % |
| Net (gain) loss on securities, other assets and other real estate owned |
|
| (200) |
|
| (33) |
|
| (167) |
|
| 506.1 | % |
| Pre-tax, Adjusted Earnings (PTAE) - non-GAAP |
| $ | 17,442 |
| $ | 14,238 |
| $ | 3,204 |
|
| 22.5 | % |
Diluted earnings per common share (EPS), adjusted to exclude the TCJA charge, is a non-GAAP measure. The Company believes presenting net income and EPS excluding the effect of the TCJA charge is meaningful to increase comparability of period-to-period results. The following table is a reconciliation of diluted earnings per share to adjusted diluted earnings per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended | |||||||||||||
|
|
| December 31, |
| September 30, |
| June 30, |
| March 31, |
| December 31, | |||||
| (in thousands, except per share amounts) |
| 2017 |
| 2017 |
| 2017 |
| 2017 |
| 2016 | |||||
| Net income - GAAP, adjusted for: |
| $ | 3,622 |
| $ | 11,193 |
| $ | 9,489 |
| $ | 8,614 |
| $ | 8,733 |
| TCJA charge |
|
| 7,150 |
|
| - |
|
| - |
|
| - |
|
| - |
| Adjusted net income - non-GAAP |
| $ | 10,772 |
| $ | 11,193 |
| $ | 9,489 |
| $ | 8,614 |
| $ | 8,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average common shares outstanding - diluted |
|
| 41,908 |
|
| 41,781 |
|
| 41,713 |
|
| 41,584 |
|
| 41,371 |
| Diluted EPS - GAAP 1 |
| $ | 0.09 |
| $ | 0.27 |
| $ | 0.23 |
| $ | 0.20 |
| $ | 0.21 |
| Adjusted diluted EPS - non-GAAP 1 |
| $ | 0.25 |
| $ | 0.27 |
| $ | 0.23 |
| $ | 0.20 |
| $ | 0.21 |
|
|
|
|
|
|
|
|
|
|
| Year ended December 31, | ||||
| (in thousands, except share amounts) |
| 2017 |
| 2016 | ||
| Net income - GAAP, adjusted for: |
| $ | 32,918 |
| $ | 34,899 |
| TCJA charge |
|
| 7,150 |
|
| - |
| Adjusted net income - non-GAAP |
| $ | 40,068 |
| $ | 34,899 |
|
|
|
|
|
|
|
|
| Weighted average common shares outstanding - diluted |
|
| 41,726 |
|
| 41,125 |
| Diluted EPS - GAAP 1 |
| $ | 0.78 |
| $ | 0.84 |
| Adjusted diluted EPS - non-GAAP 1 |
| $ | 0.95 |
| $ | 0.84 |
|
|
|
|
|
|
|
|
| 1 The calculation of EPS excludes earnings allocated to participating securities. |
|
|
|
|
|
|
14 | Page
