Exhibit 99.1
CoBiz Financial Reports Third Quarter 2007 Results
Denver — CoBiz Financial Inc. (Nasdaq GS: COBZ), a financial services holding company with $2.3 billion in assets, reported third quarter 2007 diluted EPS of $0.25, compared to $0.27 diluted EPS a year ago. Diluted EPS for the first nine months of 2007 was $0.72, compared to $0.74 in the year-earlier period. Net income was $6.01 million in the third quarter 2007 versus $6.26 million one year ago and $17.55 million year-to-date 2007 versus $17.34 million for the prior-year period. Return on average equity was 12.29% for the current quarter versus 16.59% a year earlier, and 12.39% year-to-date 2007 versus 16.10% in the prior year’s period. Return on average assets was 1.06% for the current quarter versus 1.18% a year earlier, and 1.08% year-to-date versus 1.14% in the prior year’s period.
Third Quarter 2007 Highlights
(Compared with one year ago)
• Loans and deposits (including customer repos) increased 15.3% and 13.6%, respectively
• Net interest income grew 10.5%
• Net interest margin expanded by 11 basis points (0.11%)
• Credit quality remains strong at 0.09% nonperforming assets to total assets
“Overall, I am pleased with the solid underlying performance of our core business in the third quarter.” said Chairman and CEO Steve Bangert. “After posting record loan growth in the second quarter, our banks delivered another good quarter increasing loan outstanding’s by $68.6 million. However, earnings have not kept pace; while diluted earnings per share were up $0.02 from the second quarter of 2007, they were down $0.02 from the prior year quarter. Some of this is a result of lower than expected growth from our Insurance segment as well as a significant increase in the loan loss provision: $1.4 million for the third quarter of 2007, as compared to $75,000 in the third quarter of 2006.” Diluted earnings per share were also affected by the 975,000 shares issued in the secondary stock offering CoBiz completed during the first quarter of the year.
“CoBiz has always been opportunistic and that hasn’t changed, even in today’s challenging banking climate,” said Bangert. “Our 2007 results include expenses for several initiatives that weighed on our earnings, but should better position us for the next 12 to 24 months.” In the past year, the Company made significant commitments to various initiatives, including:
• Enhancing the senior management of our Trust Division
• Launching a company-wide branding project
• Accelerating our banker recruitment efforts
• The formation of a Real Estate Capital Markets Group
Management estimates that these new initiatives incrementally reduced diluted earnings per share by $0.04 to $0.06 per share in 2007, but should generate positive returns in the near future.
Loans and Deposits
Loans ended the quarter at $1.75 billion, an increase of $231.8 million, or 15.3%, over the third quarter of 2006. Loans grew at an annualized rate of 16.2% in the third quarter of 2007. After posting record loan growth of $111.0 million during the second quarter of 2007, the Company experienced loan paydowns in excess of $25 million in the early part of July. However, the banks were still successful in growing net loans by $68.6 million during the third quarter of 2007. Arizona Business Bank grew loans by $36.6 million, or 22.6% annualized, and Colorado Business Bank increased loans by $31.9 million, or 12.2% annualized.
Deposit and customer repurchase balances ended the third quarter at $1.86 billion, an increase of $223.3 million, or 13.6%, from the third quarter of 2006. In early July, the Company introduced a Euro Sweep deposit product as part of its Treasury Management services. The product has been extremely well received with balances reaching $68.5 million at the end of the third quarter, most of which were transferred from existing customer repurchase balances. As a result, we will be able to shrink our investment portfolio used to support the collateral requirements of our customer repurchase agreements, allowing us to better manage our balance sheet. On average, investment securities as a percentage of total earning assets decreased to 19.8% for the third quarter of 2007, from 24.5% for the third quarter of 2006.
Allowance for Loan Losses and Credit Quality
Credit quality continues to be very good, with nonperforming assets to total assets of nine basis points (0.09%) at September 30, 2007, flat with the end of the second quarter of 2007. Nonperforming assets to total assets were three basis points (0.03%) as of September 30, 2006. Nonperforming loans to total loans also ended the quarter at nine basis points (0.09%), compared to four basis points (0.04%) at the end of third quarter 2006.
During the quarter, the Company charged off $1.7 million in loans. The majority of the charge-offs were related to two commercial and industrial (C&I) loans, of which $1.4 million had been identified and reported as a nonperforming loan during the second quarter of 2007.
During the third quarter, the Company provisioned $1.4 million for loan and credit losses versus $75,000 for the third quarter of 2006, and $0.8 million in the second quarter of 2007. The current provision brought the Allowance for Loan and Credit Losses (“Allowance”) to Total Loans ratio to 1.10%, as compared to 1.21% at September 30, 2006 and 1.16% at June 30, 2007.
The Company actively monitors the health of its loan portfolio, paying particular attention to construction and development (C&D) credits. In its continual evaluation process, assigned loan grades are closely reviewed and updated. Management believes that the current Allowance is at a prudent level to absorb losses in the portfolio. Currently, the Allowance exceeds 1200% of non-performing loans.
Net Interest Income & Margin
Net interest income for the third quarter of 2007 increased to $22.3 million, up $2.1 million, or 10.5%, over the third quarter of 2006. Year-to-date, net interest income for 2007 was $65.0 million, up $6.4 million or 11.0% over the same period last year.
Average earning asset balances grew by $61.8 million from the second quarter which was the result of $70.0 million in average loan growth, offset by a decline of $11.3 million in the investment portfolio resulting from runoff. The net increase in earning assets was primarily funded by an increase in average noninterest-bearing demand ($8.2 million) and NOW and money market deposits ($43.2 million). Yields on average earning assets decreased 4 basis points (0.04%) from the second quarter to the third quarter of 2007; while rates paid on average deposits (including demand) increased 13 basis points (0.13%).
The net interest margin increased to 4.25% for the third quarter of 2007, from 4.14% in the third quarter of 2006, but decreased 7 basis points (0.07%) from the second quarter of 2007. On September 18, 2007, the Federal Open Market Committee lowered its target for the federal funds rate 50 basis points. Over the next year, management expects the impact of the rate cut to be insignificant, as the Company has maintained a relatively neutral interest rate sensitivity position. However, the Fed’s move may put modest downward pressure (5 to 10 basis points) on the net interest margin over the next two quarters.
Noninterest Income
Noninterest income for the third quarter of 2007 was $7.0 million, down $0.3 million from the third quarter of 2006. For the first nine months of 2007, noninterest income was $20.0 million, a decrease of $0.9 million or 4.1% versus the same period in 2006. As a percentage of total operating revenue, noninterest income was 24.0% in the third quarter of 2007 versus 26.5% in the third quarter of 2006. A decrease in insurance revenue from the wealth transfer division was the primary cause for the decline. Revenues from the division are down $1.8 million from the prior-year period. Wealth transfer income is transactional in nature, as estate planning goals are primarily achieved through the placement of life insurance. During the past quarter, several large cases did not close as a result of medical underwriting issues. In addition, growth in the Company’s property & casualty division has been negatively impacted by a soft premium market.
Partially offsetting the decline in insurance revenue was an increase in investment banking revenues. During the third quarter of 2007, the segment recognized $2.1 million in income, an increase of $1.0 million over the same period in 2006. Year-to-date
revenues were $4.4 million, up from $4.1 million for the nine months ended September 2006. The segment continues to have a very strong pipeline of engaged transactions, although predicting the timing of deal closings continues to be difficult. To date, the challenging global credit market conditions have not had an adverse impact on investment banking activities in our middle-market niche.
Operating Expenses
Operating expenses increased $0.8 million, or 4.5%, in the third quarter of 2007 over the third quarter of 2006. For the first nine months of 2007, operating expenses increased $3.8 million or 7.4% over the same period in 2006. The increase in expenses during the third quarter and first nine months of 2007 resulted from an increase in compensation, primarily from the continued hiring of seasoned bankers, the cumulative impact of expensing stock-based compensation under SFAS 123(R) and the recently launched company-wide branding project. In addition, the Company has recognized $422,000 in 2007 on losses from the call of trust preferred securities held as investments.
In the latter half of 2006, the Company accelerated the recruitment of bankers to the franchise. That momentum has continued into 2007 with 19 new bankers being hired in 2007, versus 15 for all of 2006 (10 of whom started in the last two quarters of 2006). The current-year hires, coupled with the cumulative impact of the late 2006 hires has added approximately $2.0 million in incremental salary and benefit costs in 2007, as compared to 2006. Management expects the pace of recruitment to return to more normalized levels in the next several quarters.
The efficiency ratio improved to 61.8% during the third quarter of 2007 versus 63.5% in the prior year’s quarter. For the year, the efficiency ratio is 63.8% versus 64.0% in the same period of 2006. Management continues to be committed to containing costs and believes we have an opportunity to reduce overhead without compromising our high level of customer service or employee morale.
Real Estate Capital Markets Group
The Company recently announced the formation of a Real Estate Capital Markets group led by two seasoned bankers previously with LaSalle Bank’s regional Colorado office. “I am extremely encouraged by the team’s early success.” said Bangert. “The Group is currently working on four large senior-debt deals, two of which are expected to close in the fourth quarter of this year. Their transition from LaSalle has gone very smoothly, with full acceptance from the marketplace.”
Share Repurchase Program
On July 19, 2007, the Company’s Board of Directors approved a share repurchase program, authorizing the repurchase of up to 5% of its outstanding stock, or 1,200,207 shares. The Company has actively taken advantage of the program, and as of September 30, 2007 has repurchased 639,854 shares at a weighted average price of $16.38 per share.
Share repurchases under this program are made through open market purchases, block trades or in privately negotiated transactions from time to time and in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The future timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The share repurchase program may be suspended or terminated at any time without prior notice, and will expire on July 18, 2008.
Earnings Conference Call
In conjunction with this earnings release, you are invited to listen to the company’s conference call on Friday, October 19, 2007 at 11:00 am ET with Steve Bangert, CoBiz chairman and CEO. The call can be accessed via the Internet at http://www.videonewswire.com/event.asp?id=42606 or by telephone at 877.493.9121, (conference ID #9287736).
Contact Information
CoBiz Financial Inc.
Lyne Andrich 303.312.3458
Sue Hermann 303.312.3488
About CoBiz Financial
CoBiz Financial Inc. (www.cobizfinancial.com) is a $2.3 billion financial holding company headquartered in Denver. The company operates Colorado Business Bank and Arizona Business Bank, full-service commercial banking institutions that offer a broad range of sophisticated banking services — including credit, treasury management, investment and deposit products — to a targeted customer base of professionals and small to mid-sized businesses. CoBiz also offers trust and fiduciary services through CoBiz Trust; property and casualty insurance brokerage and risk management consulting services through CoBiz Insurance; investment banking services through Green Manning & Bunch; the management of stock and bond portfolios for individuals and institutions through Alexander Capital Management Group; and employee and executive benefits consulting and wealth transfer services through Financial Designs, Ltd.
Forward-looking Information
This release contains forward-looking statements that describe CoBiz’s future plans, strategies and expectations. 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. 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 “will,” “would,” “should,” “could” or “may.” Forward-looking
statements speak only as of the date they are made. 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 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 leases and related expenses.
• Our inability to manage growth effectively, including the successful expansion of our customer support, administrative infrastructure and internal management systems, 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.
• Our continued growth will depend in part on our ability to enter new markets successfully and capitalize on other growth opportunities.
• Changes in legislative or regulatory requirements applicable to us and our subsidiaries 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.
CoBiz Financial Inc.
September 30, 2007
(unaudited)
(Dollars in thousands, except per share amounts)
| | Quarter Ended September 30, | | Nine Months Ended September 30, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
INCOME STATEMENT DATA | | | | | | | | | |
Interest income | | $ | 39,703 | | $ | 35,759 | | $ | 114,346 | | $ | 99,699 | |
Interest expense | | 17,413 | | 15,595 | | 49,336 | | 41,114 | |
NET INTEREST INCOME BEFORE PROVISION | | 22,290 | | 20,164 | | 65,010 | | 58,585 | |
Provision for loan losses | | 1,430 | | 75 | | 2,467 | | 1,162 | |
NET INTEREST INCOME AFTER PROVISION | | 20,860 | | 20,089 | | 62,543 | | 57,423 | |
Noninterest income | | 7,024 | | 7,283 | | 19,981 | | 20,842 | |
Noninterest expense | | 18,273 | | 17,487 | | 54,663 | | 50,906 | |
INCOME BEFORE INCOME TAXES | | 9,611 | | 9,885 | | 27,861 | | 27,359 | |
Provision for income taxes | | 3,604 | | 3,629 | | 10,311 | | 10,018 | |
NET INCOME | | $ | 6,007 | | $ | 6,256 | | $ | 17,550 | | $ | 17,341 | |
| | | | | | | | | |
EARNINGS PER COMMON SHARE | | | | | | | | | |
BASIC | | $ | 0.25 | | $ | 0.28 | | $ | 0.74 | | $ | 0.77 | |
DILUTED | | $ | 0.25 | | $ | 0.27 | | $ | 0.72 | | $ | 0.74 | |
WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands) | | | | | | | | | |
BASIC | | 23,664 | | 22,612 | | 23,711 | | 22,504 | |
DILUTED | | 24,150 | | 23,437 | | 24,286 | | 23,322 | |
| | | | | | | | | |
COMMON SHARES OUTSTANDING AT PERIOD END | | | | | | 23,398 | | 22,650 | |
BOOK VALUE PER SHARE - COMMON | | | | | | $ | 8.21 | | $ | 6.87 | |
| | | | | | | | | |
PERIOD END BALANCES | | | | | | | | | |
Total Assets | | | | | | $ | 2,277,123 | | $ | 2,130,468 | |
Loans (net) | | | | | | 1,729,750 | | 1,498,779 | |
Goodwill and Intangible Assets | | | | | | 42,066 | | 41,662 | |
Deposits | | | | | | 1,659,031 | | 1,396,337 | |
Junior Subordinated Debentures | | | | | | 72,166 | | 72,166 | |
Common Shareholders’ Equity | | | | | | 192,024 | | 155,628 | |
Interest-Earning Assets | | | | | | 2,118,065 | | 1,974,052 | |
Interest-Bearing Liabilities | | | | | | 1,609,631 | | 1,518,651 | |
| | | | | | | | | |
BALANCE SHEET AVERAGES | | | | | | | | | |
Average Assets | | | | | | $ | 2,181,822 | | $ | 2,031,782 | |
Average Loans (net) | | | | | | 1,602,710 | | 1,403,588 | |
Average Deposits | | | | | | 1,511,461 | | 1,371,748 | |
Average Junior Subordinated Debentures | | | | | | 72,166 | | 72,166 | |
Average Common Shareholders’ Equity | | | | | | 189,446 | | 143,965 | |
Average Interest-Earning Assets | | | | | | 2,029,492 | | 1,881,317 | |
Average Interest-Bearing Liabilities | | | | | | 1,538,854 | | 1,444,620 | |
| | | | | | | | | | | | | | | |
CoBiz Financial Inc.
September 30, 2007
(unaudited)
(Dollars in thousands, except per share amounts)
| | Quarter Ended September 30, | | Nine Months Ended September 30, | |
| | 2007 | | 2006 | | 2007 | | 2006 | |
PROFITABILITY MEASURES | | | | | | | | | |
Net Interest Margin | | 4.25 | % | 4.14 | % | 4.31 | % | 4.19 | % |
Efficiency Ratio | | 61.77 | % | 63.54 | % | 63.82 | % | 64.00 | % |
Return on Average Assets | | 1.06 | % | 1.18 | % | 1.08 | % | 1.14 | % |
Return on Average Common Shareholders’ Equity | | 12.29 | % | 16.59 | % | 12.39 | % | 16.10 | % |
Noninterest Income as a Percentage of Operating Revenues | | 23.96 | % | 26.53 | % | 23.51 | % | 26.24 | % |
| | | | | | | | | |
CREDIT QUALITY | | | | | | | | | |
Nonperforming Loans | | | | | | | | | |
Loans 90 days or more past due and still accruing interest | | | | | | $ | 844 | | $ | 196 | |
Nonaccrual Loans | | | | | | 719 | | 448 | |
Total Nonperforming loans | | | | | | $ | 1,563 | | $ | 644 | |
Repossessed Assets | | | | | | 447 | | — | |
Total Nonperforming assets | | | | | | $ | 2,010 | | $ | 644 | |
| | | | | | | | | |
Charge-offs | | | | | | (1,800 | ) | (288 | ) |
Recoveries | | | | | | 45 | | 512 | |
Net Charge-Offs | | | | | | $ | (1,755 | ) | $ | 224 | |
| | | | | | | | | |
ASSET QUALITY MEASURES | | | | | | | | | |
Nonperforming Assets to Total Assets | | | | | | 0.09 | % | 0.03 | % |
Nonperforming Loans to Total Loans | | | | | | 0.09 | % | 0.04 | % |
Allowance for Loan and Credit Losses to Total Loans | | | | | | 1.10 | % | 1.21 | % |
Allowance for Loan and Credit Losses to Nonperforming Loans | | | | | | 1225.85 | % | 2840.37 | % |
| | | | | | | | | | | | |
CoBiz Financial Inc.
September 30, 2007
(unaudited)
(Dollars in thousands)
| | | | Investment | | Investment | | | | Corporate | | | |
| | Commercial | | Banking | | Advisory | | | | Support and | | | |
| | Banking | | Services | | and Trust | | Insurance | | Other | | Consolidated | |
Net interest income | | | | | | | | | | | | | |
Quarter ended September 30, 2007 | | $ | 23,680 | | $ | 34 | | $ | — | | $ | 1 | | $ | (1,425 | ) | $ | 22,290 | |
Quarter ended June 30, 2007 | | 23,043 | | 27 | | 1 | | — | | (1,366 | ) | 21,705 | |
Annualized quarterly growth | | 11.0 | % | 102.9 | % | (396.7 | )% | — | | (17.1 | )% | 10.7 | % |
| | | | | | | | | | | | | |
Quarter ended September 30, 2006 | | $ | 21,473 | | $ | 34 | | $ | 5 | | $ | (2 | ) | $ | (1,346 | ) | $ | 20,164 | |
Annual growth | | 10.3 | % | .0 | % | (100.0 | )% | 150.0 | % | (5.9 | )% | 10.5 | % |
| | | | | | | | | | | | | |
Noninterest income | | | | | | | | | | | | | |
Quarter ended September 30, 2007 | | $ | 1,662 | | $ | 2,059 | | $ | 1,214 | | $ | 2,089 | | $ | — | | $ | 7,024 | |
Quarter ended June 30, 2007 | | 1,723 | | 959 | | 1,192 | | 2,440 | | 11 | | 6,325 | |
Annualized quarterly growth | | (14.0 | )% | 455.1 | % | 7.3 | % | (57.1 | )% | (396.7 | )% | 43.8 | % |
| | | | | | | | | | | | | |
Quarter ended September 30, 2006 | | $ | 1,669 | | $ | 1,063 | | $ | 1,030 | | $ | 3,525 | | $ | (4 | ) | $ | 7,283 | |
Annual growth | | (.4 | )% | 93.7 | % | 17.9 | % | (40.7 | )% | 100.0 | % | (3.6 | )% |
| | | | | | | | | | | | | |
Net income | | | | | | | | | | | | | |
Quarter ended September 30, 2007 | | $ | 7,272 | | $ | 351 | | $ | 12 | | $ | (219 | ) | $ | (1,409 | ) | $ | 6,007 | |
Quarter ended June 30, 2007 | | 7,182 | | (62 | ) | 17 | | (134 | ) | (1,343 | ) | 5,660 | |
Annualized quarterly growth | | 5.0 | % | 2,642.8 | % | (116.7 | )% | (251.7 | )% | (19.5 | )% | 24.3 | % |
| | | | | | | | | | | | | |
Quarter ended September 30, 2006 | | $ | 7,238 | | $ | (68 | ) | $ | 49 | | $ | 229 | | $ | (1,192 | ) | $ | 6,256 | |
Annual growth | | .5 | % | 616.2 | % | (75.5 | )% | (195.6 | )% | (18.2 | )% | (4.0 | )% |
| | | | | | | | | | | | | |
Earnings per share (diluted) | | | | | | | | | | | | | |
Quarter ended September 30, 2007 | | $ | 0.30 | | $ | 0.01 | | $ | — | | $ | (0.01 | ) | $ | (0.05 | ) | $ | 0.25 | |
Quarter ended June 30, 2007 | | 0.29 | | — | | — | | (0.01 | ) | (0.05 | ) | 0.23 | |
Annualized quarterly growth | | 13.7 | % | — | | — | | .0 | % | .0 | % | 34.5 | % |
| | | | | | | | | | | | | |
Quarter ended September 30, 2006 | | $ | 0.31 | | $ | — | | $ | — | | $ | 0.01 | | $ | (0.05 | ) | $ | 0.27 | |
Annual growth | | (3.2 | )% | 100.0 | % | .0 | % | (200.0 | )% | .0 | % | (7.4 | )% |
| | | | | | | | | | | | | |
| | | | | | | | | | | | Consolidated | |
Total loans | | | | | | | | | | | | | |
At September 30, 2007 | | | | | | | | | | | | $ | 1,748,333 | |
At June 30, 2007 | | | | | | | | | | | | 1,679,765 | |
Annualized quarterly growth | | | | | | | | | | | | 16.2 | % |
| | | | | | | | | | | | | |
At September 30, 2006 | | | | | | | | | | | | $ | 1,516,494 | |
Annual growth | | | | | | | | | | | | 15.3 | % |
| | | | | | | | | | | | | |
Total deposits and customer repurchase agreements | | | | | | | | | | | | | |
At September 30, 2007 | | | | | | | | | | | | $ | 1,866,004 | |
At June 30, 2007 | | | | | | | | | | | | 1,817,941 | |
Annualized quarterly growth | | | | | | | | | | | | 10.5 | % |
| | | | | | | | | | | | | |
At September 30, 2006 | | | | | | | | | | | | $ | 1,642,683 | |
Annual growth | | | | | | | | | | | | 13.6 | % |
| | | | | | | | | | | | | | | | | | | | | | |
CoBiz Financial Inc.
September 30, 2007
(unaudited)
(Dollars in thousands)
For the Quarter ended September 30, 2007
| | | | Investment | | Investment | | | | Corporate | | | |
| | Commercial | | Banking | | Advisory | | | | Support and | | | |
| | Banking | | Services | | and Trust | | Insurance | | Other | | Consolidated | |
Income Statement | | | | | | | | | | | | | |
Total interest income | | $ | 39,626 | | $ | 34 | | $ | — | | $ | 1 | | $ | 42 | | $ | 39,703 | |
Total interest expense | | 15,946 | | — | | — | | — | | 1,467 | | 17,413 | |
Net interest income | | 23,680 | | 34 | | — | | 1 | | (1,425 | ) | 22,290 | |
Provision for loan losses | | 1,430 | | — | | — | | — | | — | | 1,430 | |
Net interest income after provision for credit losses | | 22,250 | | 34 | | — | | 1 | | (1,425 | ) | 20,860 | |
Noninterest income | | 1,662 | | 2,059 | | 1,214 | | 2,089 | | — | | 7,024 | |
Noninterest expense | | 6,685 | | 1,441 | | 1,070 | | 2,246 | | 6,831 | | 18,273 | |
Income before income taxes | | 17,227 | | 652 | | 144 | | (156 | ) | (8,256 | ) | 9,611 | |
Provision for income taxes | | 6,481 | | 250 | | 69 | | (46 | ) | (3,150 | ) | 3,604 | |
Net income before management fees and overhead allocations | | $ | 10,746 | | $ | 402 | | $ | 75 | | $ | (110 | ) | $ | (5,106 | ) | $ | 6,007 | |
Management fees and overhead allocations, net of tax | | 3,474 | | 51 | | 63 | | 109 | | (3,697 | ) | — | |
Net income | | $ | 7,272 | | $ | 351 | | $ | 12 | | $ | (219 | ) | $ | (1,409 | ) | $ | 6,007 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
For the Quarter ended June 30, 2007
| | | | Investment | | Investment | | | | Corporate | | | |
| | Commercial | | Banking | | Advisory | | | | Support and | | | |
| | Banking | | Services | | and Trust | | Insurance | | Other | | Consolidated | |
Income Statement | | | | | | | | | | | | | |
Total interest income | | $ | 38,217 | | $ | 27 | | $ | 1 | | $ | 1 | | $ | 40 | | $ | 38,286 | |
Total interest expense | | 15,174 | | — | | — | | 1 | | 1,406 | | 16,581 | |
Net interest income | | 23,043 | | 27 | | 1 | | — | | (1,366 | ) | 21,705 | |
Provision for loan losses | | 1,037 | | — | | — | | — | | — | | 1,037 | |
Net interest income after provision for credit losses | | 22,006 | | 27 | | 1 | | — | | (1,366 | ) | 20,668 | |
Noninterest income | | 1,723 | | 959 | | 1,192 | | 2,440 | | 11 | | 6,325 | |
Noninterest expense | | 6,090 | | 998 | | 1,026 | | 2,468 | | 7,423 | | 18,005 | |
Income before income taxes | | 17,639 | | (12 | ) | 167 | | (28 | ) | (8,778 | ) | 8,988 | |
Provision for income taxes | | 6,567 | | (2 | ) | 86 | | (4 | ) | (3,319 | ) | 3,328 | |
Net income before management fees and overhead allocations | | $ | 11,072 | | $ | (10 | ) | $ | 81 | | $ | (24 | ) | $ | (5,459 | ) | $ | 5,660 | |
Management fees and overhead allocations, net of tax | | 3,890 | | 52 | | 64 | | 110 | | (4,116 | ) | — | |
Net income | | $ | 7,182 | | $ | (62 | ) | $ | 17 | | $ | (134 | ) | $ | (1,343 | ) | $ | 5,660 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
For the Quarter ended September 30, 2006
| | | | Investment | | Investment | | | | Corporate | | | |
| | Commercial | | Banking | | Advisory | | | | Support and | | | |
| | Banking | | Services | | and Trust | | Insurance | | Other | | Consolidated | |
Income Statement | | | | | | | | | | | | | |
Total interest income | | $ | 35,633 | | $ | 34 | | $ | 5 | | $ | 2 | | $ | 85 | | $ | 35,759 | |
Total interest expense | | 14,160 | | — | | — | | 4 | | 1,431 | | 15,595 | |
Net interest income | | 21,473 | | 34 | | 5 | | (2 | ) | (1,346 | ) | 20,164 | |
Provision for loan losses | | 90 | | — | | — | | — | | (15 | ) | 75 | |
Net interest income after provision for credit losses | | 21,383 | | 34 | | 5 | | (2 | ) | (1,331 | ) | 20,089 | |
Noninterest income | | 1,669 | | 1,063 | | 1,030 | | 3,525 | | (4 | ) | 7,283 | |
Noninterest expense | | 5,250 | | 1,135 | | 885 | | 3,005 | | 7,212 | | 17,487 | |
Income before income taxes | | 17,802 | | (38 | ) | 150 | | 518 | | (8,547 | ) | 9,885 | |
Provision for income taxes | | 6,558 | | (8 | ) | 58 | | 210 | | (3,189 | ) | 3,629 | |
Net income before management fees and overhead allocations | | $ | 11,244 | | $ | (30 | ) | $ | 92 | | $ | 308 | | $ | (5,358 | ) | $ | 6,256 | |
Management fees and overhead allocations, net of tax | | 4,006 | | 38 | | 43 | | 79 | | (4,166 | ) | — | |
Net income | | $ | 7,238 | | $ | (68 | ) | $ | 49 | | $ | 229 | | $ | (1,192 | ) | $ | 6,256 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
CoBiz Financial Inc.
September 30, 2007
(unaudited)
(Dollars in thousands)
| | Quarter ended September 30, | | Nine Months ended September 30, | |
| | | | | | Increase/(decrease) | | | | | | Increase/(decrease) | |
| | 2007 | | 2006 | | Amount | | % | | 2007 | | 2006 | | Amount | | % | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | | |
Deposit service charges | | $ | 806 | | $ | 679 | | $ | 127 | | 19 | % | $ | 2,234 | | $ | 2,104 | | $ | 130 | | 6 | % |
Other loan fees | | 194 | | 186 | | 8 | | 4 | % | 529 | | 555 | | (26 | ) | (5 | )% |
Investment advisory and trust income | | 1,214 | | 1,030 | �� | 184 | | 18 | % | 3,558 | | 3,054 | | 504 | | 17 | % |
Insurance income | | 2,089 | | 3,525 | | (1,436 | ) | (41 | )% | 7,159 | | 9,088 | | (1,929 | ) | (21 | )% |
Investment banking income | | 2,059 | | 1,063 | | 996 | | 94 | % | 4,441 | | 4,118 | | 323 | | 8 | % |
Other income | | 662 | | 800 | | (138 | ) | (17 | )% | 2,060 | | 1,923 | | 137 | | 7 | % |
Total noninterest income | | $ | 7,024 | | $ | 7,283 | | $ | (259 | ) | (4 | )% | $ | 19,981 | | $ | 20,842 | | $ | (861 | ) | (4 | )% |
| | | | | | | | | | | | | | | | | |
| | Quarter ended September 30, | | Nine Months ended September 30, | |
| | | | | | Increase/(decrease) | | | | | | Increase/(decrease) | |
| | 2007 | | 2006 | | Amount | | % | | 2007 | | 2006 | | Amount | | % | |
NONINTEREST EXPENSES | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | $ | 11,689 | | $ | 11,544 | | $ | 145 | | 1 | % | $ | 35,443 | | $ | 33,364 | | $ | 2,079 | | 6 | % |
Stock based compensation expense | | 404 | | 311 | | 93 | | 30 | % | 1,111 | | 855 | | 256 | | 30 | % |
Occupancy expenses, premises and equipment | | 2,843 | | 2,961 | | (118 | ) | (4 | )% | 8,517 | | 8,517 | | — | | 0 | % |
Amortization of intangibles | | 118 | | 118 | | — | | 0 | % | 355 | | 355 | | — | | 0 | % |
Other operating expenses | | 3,053 | | 2,506 | | 547 | | 22 | % | 8,815 | | 7,742 | | 1,073 | | 14 | % |
Loss on sale of other assets and securities | | 166 | | 47 | | 119 | | 253 | % | 422 | | 73 | | 349 | | 478 | % |
Total noninterest expenses | | $ | 18,273 | | $ | 17,487 | | $ | 786 | | 4 | % | $ | 54,663 | | $ | 50,906 | | $ | 3,757 | | 7 | % |
| | | | | | | | | | | | | | | | | |
| | September 30, 2007 | | December 31, 2006 | | September 30, 2006 | | | | | |
| | Amount | | % of
Portfolio | | Amount | | % of
Portfolio | | Amount | | % of
Portfolio | | | | | |
LOANS | | | | | | | | | | | | | | | | | |
Commercial | | $ | 537,447 | | 31.1 | % | $ | 482,309 | | 31.6 | % | $ | 451,593 | | 30.1 | % | | | | |
Real Estate - mortgage | | 834,416 | | 48.2 | % | 698,951 | | 45.8 | % | 706,749 | | 47.2 | % | | | | |
Real Estate - construction | | 299,069 | | 17.3 | % | 292,952 | | 19.2 | % | 280,437 | | 18.7 | % | | | | |
Consumer | | 62,414 | | 3.6 | % | 57,990 | | 3.8 | % | 64,269 | | 4.3 | % | | | | |
Other | | 14,987 | | 0.9 | % | 12,258 | | 0.8 | % | 13,446 | | 0.9 | % | | | | |
Gross loans | | 1,748,333 | | 101.1 | % | 1,544,460 | | 101.2 | % | 1,516,494 | | 101.2 | % | | | | |
Less allowance for loan losses | | (18,583 | ) | (1.1 | )% | (17,871 | ) | (1.2 | )% | (17,715 | ) | (1.2 | )% | | | | |
Net loans | | $ | 1,729,750 | | 100.0 | % | $ | 1,526,589 | | 100.0 | % | $ | 1,498,779 | | 100.0 | % | | | | |
| | | | | | | | | | | | | | | | | |
| | September 30, 2007 | | December 31, 2006 | | September 30, 2006 | | | | | |
| | Amount | | % of
Portfolio | | Amount | | % of
Portfolio | | Amount | | % of
Portfolio | | | | | |
DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS | | | | | | | | | | | | | | | | | |
NOW and money market accounts | | $ | 584,890 | | 31.3 | % | $ | 566,849 | | 33.3 | % | $ | 500,262 | | 30.5 | % | | | | |
Savings | | 11,028 | | 0.6 | % | 10,740 | | 0.6 | % | 11,304 | | 0.7 | % | | | | |
Eurodollar | | 68,544 | | 3.7 | % | — | | 0.0 | % | — | | 0.0 | % | | | | |
Certificates of deposits under $100,000 | | 129,021 | | 6.9 | % | 87,366 | | 5.1 | % | 70,850 | | 4.3 | % | | | | |
Certificates of deposits $100,000 and over | | 406,796 | | 21.8 | % | 361,138 | | 21.2 | % | 376,350 | | 22.9 | % | | | | |
Total interest-bearing deposits | | 1,200,279 | | 64.3 | % | 1,026,093 | | 60.2 | % | 958,766 | | 58.4 | % | | | | |
Noninterest-bearing demand deposits | | 458,752 | | 24.6 | % | 450,244 | | 26.4 | % | 437,571 | | 26.6 | % | | | | |
Customer repurchase agreements | | 206,973 | | 11.1 | % | 227,617 | | 13.4 | % | 246,346 | | 15.0 | % | | | | |
Total deposits and customer repurchase agreements | | $ | 1,866,004 | | 100.0 | % | $ | 1,703,954 | | 100.0 | % | $ | 1,642,683 | | 100.0 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
CoBiz Financial Inc.
September 30, 2007
(unaudited)
(Dollars in thousands)
| | For the quarter ended September 30, | |
| | | | 2007 | | | | | | 2006 | | | |
| | | | Interest | | Average | | | | Interest | | Average | |
| | Average | | earned | | yield | | Average | | earned | | yield | |
| | Balance | | or paid | | or cost | | Balance | | or paid | | or cost | |
| | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | |
Federal funds sold and other | | $ | 9,681 | | $ | 122 | | 4.93 | % | $ | 7,068 | | $ | 120 | | 6.64 | % |
Investment securities | | 413,797 | | 5,362 | | 5.07 | % | 476,049 | | 5,595 | | 4.60 | % |
Loans | | 1,687,055 | | 34,359 | | 7.97 | % | 1,480,819 | | 30,172 | | 7.97 | % |
Allowance for loan losses | | (18,914 | ) | | | | | (17,524 | ) | | | | |
Total interest earning assets | | $ | 2,091,619 | | $ | 39,843 | | 7.45 | % | $ | 1,946,412 | | $ | 35,887 | | 7.21 | % |
Noninterest-earning assets | | | | | | | | | | | | | |
Cash and due from banks | | 45,173 | | | | | | 46,342 | | | | | |
Other | | 107,090 | | | | | | 106,671 | | | | | |
Total assets | | $ | 2,243,882 | | | | | | $ | 2,099,425 | | | | | |
| | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | |
NOW and money market deposits | | $ | 604,560 | | $ | 5,128 | | 3.37 | % | $ | 508,351 | | $ | 3,611 | | 2.82 | % |
Savings deposits | | 11,076 | | 50 | | 1.79 | % | 10,319 | | 32 | | 1.23 | % |
Eurodollar deposits | | 32,687 | | 345 | | 4.19 | % | — | | — | | 0.00 | % |
Certificates of deposits | | | | | | | | | | | | | |
Under $100,000 | | 125,538 | | 1,564 | | 4.94 | % | 75,258 | | 796 | | 4.20 | % |
$100,000 and over | | 391,549 | | 5,030 | | 5.10 | % | 384,684 | | 4,584 | | 4.73 | % |
Total Interest-bearing deposits | | $ | 1,165,410 | | $ | 12,117 | | 4.12 | % | $ | 978,612 | | $ | 9,023 | | 3.66 | % |
Other borrowings | | | | | | | | | | | | | |
Securities sold under agreements to repurchase and other short-term borrowings | | 354,831 | | 3,868 | | 4.27 | % | 454,215 | | 5,134 | | 4.42 | % |
Junior subordinated debentures | | 72,166 | | 1,428 | | 7.74 | % | 72,166 | | 1,438 | | 7.80 | % |
Total interest-bearing liabilities | | $ | 1,592,407 | | $ | 17,413 | | 4.32 | % | $ | 1,504,993 | | $ | 15,595 | | 4.09 | % |
Noninterest-bearing demand accounts | | 439,811 | | | | | | 425,798 | | | | | |
Total deposits and interest-bearing liabilities | | 2,032,218 | | | | | | 1,930,791 | | | | | |
Other noninterest-bearing liabilities | | 17,799 | | | | | | 19,033 | | | | | |
Total liabilities and preferred securities | | 2,050,017 | | | | | | 1,949,824 | | | | | |
Shareholders’ equity | | 193,865 | | | | | | 149,601 | | | | | |
Total liabilities and shareholders’ equity | | $ | 2,243,882 | | | | | | $ | 2,099,425 | | | | | |
Net interest income | | | | $ | 22,430 | | | | | | $ | 20,292 | | | |
Net interest spread | | | | | | 3.13 | % | | | | | 3.13 | % |
Net interest margin | | | | | | 4.25 | % | | | | | 4.14 | % |
Ratio of average interest-earning assets to average interest-bearing liabilities | | 131.35 | % | | | | | 129.33 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
CoBiz Financial Inc.
September 30, 2007
(unaudited)
(Dollars in thousands)
| | For the nine months ended September 30, | |
| | | | 2007 | | | | | | 2006 | | | |
| | | | Interest | | Average | | | | Interest | | Average | |
| | Average | | earned | | yield | | Average | | earned | | yield | |
| | Balance | | or paid | | or cost | | Balance | | or paid | | or cost | |
| | | | | | | | | | | | | |
Assets | | | | | | | | | | | | | |
Federal funds sold and other | | $ | 9,078 | | $ | 359 | | 5.29 | % | $ | 6,275 | | $ | 297 | | 6.33 | % |
Investment securities | | 417,704 | | 16,108 | | 5.16 | % | 471,454 | | 15,992 | | 4.54 | % |
Loans | | 1,621,095 | | 98,310 | | 8.11 | % | 1,420,812 | | 83,792 | | 7.88 | % |
Allowance for loan losses | | (18,385 | ) | | | | | (17,224 | ) | | | | |
Total interest earning assets | | $ | 2,029,492 | | $ | 114,777 | | 7.56 | % | $ | 1,881,317 | | $ | 100,081 | | 7.11 | % |
Noninterest-earning assets | | | | | | | | | | | | | |
Cash and due from banks | | 44,842 | | | | | | 47,135 | | | | | |
Other | | 107,488 | | | | | | 103,330 | | | | | |
Total assets | | $ | 2,181,822 | | | | | | $ | 2,031,782 | | | | | |
| | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | |
NOW and money market deposits | | $ | 574,047 | | $ | 13,893 | | 3.24 | % | $ | 510,395 | | $ | 10,034 | | 2.63 | % |
Savings deposits | | 11,165 | | 143 | | 1.71 | % | 8,994 | | 61 | | 0.91 | % |
Euro Sweep deposits | | 11,016 | | 345 | | 4.19 | % | — | | — | | 0.00 | % |
Certificates of deposits | | | | | | | | | | | | | |
Under $100,000 | | 113,189 | | 4,088 | | 4.83 | % | 79,151 | | 2,317 | | 3.91 | % |
$ 100,000 and over | | 366,452 | | 13,753 | | 5.02 | % | 346,150 | | 11,227 | | 4.34 | % |
Total Interest-bearing deposits | | $ | 1,075,869 | | $ | 32,222 | | 4.00 | % | $ | 944,690 | | $ | 23,639 | | 3.35 | % |
Other borrowings | | | | | | | | | | | | | |
Securities sold under agreements to repurchase and other short-term borrowings | | 390,819 | | 12,881 | | 4.41 | % | 427,764 | | 13,453 | | 4.20 | % |
Junior subordinated debentures | | 72,166 | | 4,233 | | 7.84 | % | 72,166 | | 4,022 | | 7.45 | % |
Total interest-bearing liabilities | | $ | 1,538,854 | | $ | 49,336 | | 4.29 | % | $ | 1,444,620 | | $ | 41,114 | | 3.81 | % |
Noninterest-bearing demand accounts | | 435,592 | | | | | | 427,058 | | | | | |
Total deposits and interest-bearing liabilities | | 1,974,446 | | | | | | 1,871,678 | | | | | |
Other noninterest-bearing liabilities | | 17,930 | | | | | | 16,139 | | | | | |
Total liabilities and preferred securities | | 1,992,376 | | | | | | 1,887,817 | | | | | |
Shareholders’ equity | | 189,446 | | | | | | 143,965 | | | | | |
Total liabilities and shareholders’ equity | | $ | 2,181,822 | | | | | | $ | 2,031,782 | | | | | |
Net interest income | | | | $ | 65,441 | | | | | | $ | 58,967 | | | |
Net interest spread | | | | | | 3.27 | % | | | | | 3.31 | % |
Net interest margin | | | | | | 4.31 | % | | | | | 4.19 | % |
Ratio of average interest-earning assets to average interest-bearing liabilities | | 131.88 | % | | | | | 130.23 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
