Exhibit 99.1
CoBiz Financial Reports Fourth Quarter 2007 Results
Denver — CoBiz Financial Inc. (Nasdaq: COBZ), a financial services holding company with $2.4 billion in assets, reported fourth quarter 2007 diluted EPS of $0.23, compared to $0.23 diluted EPS a year ago. Diluted EPS for the full year of 2007 was $0.96, compared to $0.98 in the year-earlier period. Net income was $5.47 million in the fourth quarter 2007 versus $5.49 million one year ago and $23.02 million year-to-date 2007 versus $22.83 million for the prior-year period. Return on average equity was 11.45% for the current quarter versus 13.69% a year earlier, and 12.15% year-to-date 2007 versus 15.45% in the prior year’s period. Return on average assets was 0.93% for the current quarter versus 1.03% a year earlier, and 1.04% year-to-date versus 1.11% in the prior year’s period.
Financial Performance — Fourth Quarter 2007
· Quarterly loan growth of $98.0 million, or 22.2% annualized
· Quarterly deposit and customer repurchase agreements (“customer repo”) growth of $45.0 million, or 9.6% annualized
· Good credit quality:
· Nonperforming assets to total assets at 0.15%
· $9,000 of net charge-offs for the quarter
· Modest net interest margin contraction on a linked-quarter basis: 4.21% in Q4 2007 from 4.25% in Q3 2007
· Loss on sale of repossessed asset of $470,000
· Lower than expected seasonal insurance revenue of $2.2 million in Q4 2007 versus $4.0 million in Q4 2006
Financial Performance — Full Year 2007
· Annual loan growth of $301.9 million, or 19.5%
· Annual deposit and customer repo growth of $207.1 million, or 12.2%.
· Net loan charge-offs of $1.8 million, or 0.11% of average loans
· Net interest income growth of 10.7%
· Net interest margin expanded by 8 basis points (0.08%)
· Weak Insurance Segment results
“Given the current difficult environment for the banking industry, I am pleased with CoBiz’s overall performance in 2007,” said Chairman and CEO Steve Bangert. “The underlying fundamentals continue to be positive, with strong loan growth in the fourth quarter, a stable net interest margin and above-average asset quality. I was particularly happy to see the increased momentum in our Colorado bank, which experienced loan growth of $83.2 million during the fourth quarter, or 30.9% annualized.
“Our 2007 earnings were significantly impacted by an increase in the provision for loan losses driven in part by our growth as well as uncertain economic conditions. In addition, our Insurance Segment had a disappointing year.”
2007 Operating Results
Reported diluted earnings per share decreased from $0.98 in 2006 to $0.96 in 2007. Included in our 2006 operating results was a $1.7 million loss on sale of investment securities. The Commercial Banking segment contributed $0.08 more in 2007 versus 2006 (or $0.03 after normalizing for the 2006 loss on investment securities). However, the fee-based companies’ contribution decreased by $0.07, in aggregate, mainly due to the Insurance Segment. Diluted earnings per share were also negatively affected by an increase in the average number of shares outstanding during 2007 as a result of the secondary stock offering CoBiz completed during the first quarter of the year, offset by the share buyback program executed in the latter half of the year. A summary of the more significant year-over-year variances is summarized below:
· $2.6 million more in provision for loan loss expense, ($0.07) per share;
· Acceleration of banker recruitment initiatives, ($0.06) per share;
· Decrease in transactional life insurance revenue, ($0.05) per share;
· Increase in the number of weighted-average common shares outstanding during 2007 as a result of the secondary stock offering CoBiz completed during the first quarter of the year, offset by the share buyback program executed in the latter half of the year., ($0.03) per share;
· Incremental FDIC Insurance cost, ($0.02) per share;
· Loss on sale of repossessed assets, ($0.01) per share;
· Launch of corporate-wide branding initiative, ($0.01) per share;
· Increase in SFAS 123(R) stock-based compensation, ($0.01) per share;
· Investment in senior management of CoBiz Trust, ($0.01) per share;
· Formation of Real Estate Capital Markets group, ($0.01) per share;
· Increase in effective tax rate, ($0.01) per share.
Several of the costs mentioned above are related to previously announced initiatives that weighed on the Company’s 2007 operating results, but should generate positive returns in the future.
“From all indications, it appears that 2008 will also be a challenging year for the industry; however, I feel fortunate to operate in two of the better long-term growth markets - Colorado and Arizona - and believe we are well positioned to capitalize on opportunities that will enhance long-term shareholder value,” said Bangert.
Loans
Loans ended the year at $1.85 billion, an increase of $301.9 million or 19.5% over year-end 2006. Loans grew at an annualized rate of 22.2% in the fourth quarter of 2007.
Term Real Estate Loans saw the greatest annual growth, with $175.3 million, or 25.1%, followed by Commercial & Industrial Loans which increased $94.6 million, or 19.6%. Construction Loans were up moderately with $16.6 million of net growth, or 5.7%.
The Company continues to see good customer demand in both its markets. Of the $301.9 million in growth, Arizona Business Bank grew loans by $140.0 million, or 25.2%, and Colorado Business Bank increased loans by $161.9 million, or 16.4%. Loan production in the Colorado bank accelerated toward the end of the year, with $83.2 million in growth during the fourth quarter, or a 30.9% annualized rate.
Deposits and Customer Repo Balances
Deposit and customer repo balances ended the year at $1.91 billion, an increase of $207.1 million or 12.2% from year-end 2006. As of December 31, 2007, $439.1 million, or 25.2%, of our deposits were noninterest-bearing deposits. Noninterest-bearing demand deposits comprised 30.5% of total deposits as of December 31, 2006. Part of the decrease in the percentage of noninterest-bearing demand is related to the Company experiencing a shift in its funding mix as funds have migrated within the deposit portfolio from lower-cost savings and transaction accounts, into higher-cost savings and time deposits. However, part of the decrease is also due to the introduction of our new EuroSweep product, which is considered a deposit account (and included in the denominator) as opposed to our traditional customer repo product, which is not a deposit.
In early July, the Company introduced its EuroSweep deposit product as part of its Treasury Management services. The product has been extremely well received and reached $77.4 million at year-end. Most of the balances were transferred from existing customer repo accounts; however, 20% was from new relationships. As a result, the Company is able to manage its balance sheet more effectively by shrinking the investment portfolio supporting the collateral requirements of our customer repo agreements. On average, investment securities as a percentage of total earning assets decreased to 17.9% for the fourth quarter of 2007, from 23.3% for the fourth quarter of 2006.
In December 2007, CoBiz established a new Director of Deposit Services position, focused solely on deposit generation. The Company was successful in recruiting a well-respected senior officer with experience in developing strategic plans for creating deposit focus and developing cross sales with existing clients.
Allowance for Loan and Credit Losses and Credit Quality
Credit quality continues to be very good, with total nonperforming assets of $3.5 million at December 31, 2007. Nonperforming assets to total assets were 15 basis points (0.15%) at December 31, 2007, up from the exceptionally low level reported at the end of 2006 (0.06%). Nonperforming loans of $3.4 million were 18 basis points (0.18%) of total loans as of December 31, 2007.
In 2007, the Company charged-off, net of recoveries, $1.8 million in loans. The majority of the charge-offs were related to two commercial and industrial (C&I) loans in Arizona. We recognized $3.9 million for loan and credit losses in 2007, $2.6 million more than the $1.3 million recorded in 2006. In 2006, the Company had net loan recoveries of
$199,000. The Allowance for Loan and Credit Losses (“Allowance”) to Total Loans was 1.12% at year-end 2007, as compared to 1.19% at the end of 2006.
The Company actively monitors the quality of its loan portfolio, and has heightened scrutiny of construction and development (C&D) credits, particularly in Arizona, which is being impacted by the continuing deterioration of real estate values. Loan grades are closely reviewed and updated, and even credits that are current in terms of principal and interest payments are continually re-evaluated based on changes in economic conditions. In the fourth quarter of 2007, the Company began seeing migration into higher risk loan classifications, particularly in the Arizona real estate portfolio.
Management believes the current Allowance is at a reasonable level to absorb losses in the portfolio. Currently, the Allowance exceeds 600% of non-performing loans.
Net Interest Income & Margin
Net interest income for the fourth quarter of 2007 increased to $22.9 million, up $2.0 million, or 9.8%, over the fourth quarter of 2006. Year-to-date, net interest income for 2007 was $87.9 million, up $8.5 million or, 10.7% over the same period last year.
Average earning asset balances grew by $81.7 million from the third quarter of 2007 which was the result of $109.7 million in average loan growth, offset by a decline of $25.2 million in the investment portfolio resulting from runoff. The net increase in earning assets was primarily funded by an increase in average jumbo CDs ($51.9 million), NOW and money market deposits ($11.7 million), and noninterest-bearing demand deposits ($10.4 million). Yields on average earning assets decreased 19 basis points (0.19%) from the third quarter to the fourth quarter of 2007; while rates paid on average interest-bearing liabilities decreased 23 basis points (0.23%).
The net interest margin decreased to 4.21% for the fourth quarter of 2007, from 4.25% in the third quarter of 2007, but decreased only 1 basis point (0.01%) from the fourth quarter of 2006. In 2007, the Federal Open Market Committee lowered its target for the federal funds rate by 100 basis points. Although the Company maintains a relatively neutral interest rate sensitivity position, future rate cuts may continue to place modest downward pressure on our net interest margin.
Noninterest Income
Noninterest income for the fourth quarter of 2007 was $8.3 million, down $0.8 million from the fourth quarter of 2006. For the full year of 2007, noninterest income was $28.3 million, a decrease of $1.7 million or 5.6% versus the same period in 2006. As a percentage of total operating revenue, noninterest income was 24.3% in 2007 versus 27.4% in 2006.
Insurance
Insurance revenues decreased from $13.1 million in 2006 to $9.4 million in 2007. A decrease in First-Year Life revenue from the wealth transfer division was the
primary cause for the decline. Revenues from the division are down $3.6 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 2007, 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. The segment has seen average premium depreciation of 15% on their book of business.
Investment Banking
Investment banking revenues were $6.7 million for 2007, as compared to $6.2 million in 2006. During the fourth quarter of 2007, the segment recognized $2.2 million in income, a slight increase over the same period in 2006. The segment enters the new year with a good, diversified backlog of engaged transactions that positions it well for 2008.
Investment Advisory & Trust
The segment’s revenues were $4.8 million in 2007, 15% greater than 2006. On average, the segment earns 56 basis points on Assets under Management (AUM).
The Company closed the acquisition of Wagner Investment Management, Inc. (Wagner) as of December 31, 2007. The Wagner acquisition had no impact on the Company’s results of operation for 2007, but had a nominal balance sheet impact.
Excluding the Wagner acquisition, discretionary AUM were $687.5 million as of December 2007. With the addition of Wagner, the segment’s discretionary assets are $963.2 million. Total AUM, including non-discretionary advisory assets, are $1.7 billion with Wagner (which has a significant amount of advisory clients).
Other Loan Fees
Included in the other loan fees total of $1.0 million in 2007 was $0.3 million of syndication income recognized by the Real Estate Capital Markets group in the fourth quarter. Depending on the structure, a portion of loan syndication fees are recognized immediately and reported as other loan fees. The remaining portion of the fee is capitalized and amortized.
Other Income
In 2007, the Company recognized $1.0 million from investments in several mezzanine partnerships, $0.3 million greater than 2006.
Operating Expenses
Operating expenses decreased $0.2 million, or 0.8%, in the fourth quarter of 2007 as compared to the fourth quarter of 2006. For the full year of 2007, operating expenses increased $3.6 million or 5.0% over the same period in 2006. Operating expenses excluding losses on the sale of other assets and securities, increased $4.3 million or 6.2% over the same period in 2006. For the year, the efficiency ratio is 64.1%, unchanged from 2006.
The increase in expenses in 2007 resulted from an increase in compensation, primarily from the continued hiring of seasoned bankers; the impact of expensing stock-based compensation under SFAS 123(R); increased FDIC insurance costs and the company-wide branding project. In addition, the Company recognized $0.4 million in 2007 on losses from the call of trust preferred securities held as investments, and $0.5 million on the loss on sale of repossessed assets.
In the latter half of 2006, the Company accelerated the recruitment of bankers to the franchise. That momentum has continued into 2007 with 24 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 $2.4 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.
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. During the fourth quarter, the Company completed the approved program. In total, the Company repurchased 1,200,207 shares at a weighted average price of $16.67 per share.
Wagner Investment Management, Inc. (Wagner)
Wagner is an SEC-registered investment advisor with approximately $900 million in assets under advisement, which provides investment management services for high-net-worth individuals and families, foundations and non-profit organizations. The firm was founded by Judith B. Wagner who will continue to serve as its president and CEO. The transaction closed on December 31, 2007, and is anticipated to be neutral to CoBiz’s earnings in 2008.
Since 1975, Wagner has designed custom portfolios for individual clients utilizing a proprietary investment approach with a growth bias. Wagner supplements the investment services currently offered by other CoBiz companies: Alexander Capital Management Group, which creates customized investment portfolios with a value bias, and CoBiz Trust, which provides trust administration and estate settlement services.
Bernard Dietrich & Associates (BDA)
In December 2007, CoBiz announced an agreement to acquire all the assets and employees of BDA through its subsidiary, CoBiz Insurance, Inc. Founded in 1993, BDA provides commercial and personal property and casualty insurance brokerage, and risk management consulting services to individuals and businesses.
The transaction closed on January 1, 2008. BDA will now operate under the name CoBiz Insurance, Arizona, under its current management team with Frank Pugh serving as president and Larry Mueller serving as senior vice president. BDA’s revenues are in
excess of $4.0 million annually, and the transaction is expected to be slightly accretive to CoBiz’s 2008 operating results.
“We are pleased to welcome BDA Insurance Services to the CoBiz Financial family of services,” said Steve Bangert, chairman and CEO. “They are one of the most well-respected agencies serving the Phoenix area, and their commitment to providing the highest caliber of service to their customers is a perfect fit with CoBiz. In addition, their success in the medical and legal markets meshes well with the customer base of our other companies.”
Earnings Conference Call
In conjunction with this earnings release, you are invited to listen to the Company’s conference call on Friday, January 25, 2008 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=44838 or by telephone at 877.493.9121, (conference ID #29921754).
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 $2.4 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 CoBiz Trust, Alexander Capital Management Group and Wagner Investment Management, Inc.; 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.
December 31, 2007
(unaudited)
| | Quarter Ended December 31, | | Year Ended December 31, | |
(in thousands, except per share amounts) | | 2007 | | 2006 | | 2007 | | 2006 | |
INCOME STATEMENT DATA | | | | | | | | | |
Interest income | | $ | 40,164 | | $ | 36,745 | | $ | 154,510 | | $ | 136,444 | |
Interest expense | | 17,275 | | 15,901 | | 66,611 | | 57,015 | |
NET INTEREST INCOME BEFORE PROVISION | | 22,889 | | 20,844 | | 87,899 | | 79,429 | |
Provision for loan losses | | 1,469 | | 180 | | 3,936 | | 1,342 | |
NET INTEREST INCOME AFTER PROVISION | | 21,420 | | 20,664 | | 83,963 | | 78,087 | |
Noninterest income | | 8,308 | | 9,123 | | 28,289 | | 29,965 | |
Noninterest expense | | 20,852 | | 21,021 | | 75,515 | | 71,927 | |
INCOME BEFORE INCOME TAXES | | 8,876 | | 8,766 | | 36,737 | | 36,125 | |
Provision for income taxes | | 3,402 | | 3,281 | | 13,713 | | 13,299 | |
NET INCOME | | $ | 5,474 | | $ | 5,485 | | $ | 23,024 | | $ | 22,826 | |
| | | | | | | | | |
EARNINGS PER COMMON SHARE | | | | | | | | | |
BASIC | | $ | 0.24 | | $ | 0.24 | | $ | 0.98 | | $ | 1.01 | |
DILUTED | | $ | 0.23 | | $ | 0.23 | | $ | 0.96 | | $ | 0.98 | |
WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands) | | | | | | | | | |
BASIC | | 23,079 | | 22,672 | | 23,552 | | 22,546 | |
DILUTED | | 23,508 | | 23,493 | | 24,090 | | 23,365 | |
| | | | | | | | | |
COMMON SHARES OUTSTANDING AT PERIOD END | | | | | | 22,993 | | 22,701 | |
BOOK VALUE PER SHARE - COMMON | | | | | | $ | 8.23 | | $ | 7.17 | |
| | | | | | | | | |
PERIOD END BALANCES | | | | | | | | | |
Total Assets | | | | | | $ | 2,391,012 | | $ | 2,112,423 | |
Loans (net) | | | | | | 1,826,283 | | 1,526,589 | |
Deposits | | | | | | 1,742,689 | | 1,476,337 | |
Junior Subordinated Debentures | | | | | | 72,166 | | 72,166 | |
Common Shareholders’ Equity | | | | | | 189,270 | | 162,675 | |
Interest-Earning Assets | | | | | | 2,225,621 | | 1,971,306 | |
Interest-Bearing Liabilities | | | | | | 1,741,559 | | 1,478,077 | |
| | | | | | | | | |
BALANCE SHEET AVERAGES | | | | | | | | | |
Average Assets | | | | | | $ | 2,218,625 | | $ | 2,054,437 | |
Average Loans (net) | | | | | | 1,646,820 | | 1,429,608 | |
Average Deposits | | | | | | 1,564,650 | | 1,383,342 | |
Average Junior Subordinated Debentures | | | | | | 72,166 | | 72,166 | |
Average Common Shareholders’ Equity | | | | | | 189,502 | | 147,750 | |
Average Interest-Earning Assets | | | | | | 2,065,738 | | 1,904,628 | |
Average Interest-Bearing Liabilities | | | | | | 1,571,789 | | 1,459,756 | |
CoBiz Financial Inc.
December 31, 2007
(unaudited)
| | Quarter Ended December 31, | | Year Ended December 31, | |
(in thousands, except per share amounts) | | 2007 | | 2006 | | 2007 | | 2006 | |
PROFITABILITY MEASURES | | | | | | | | | |
Net Interest Margin | | 4.21 | % | 4.22 | % | 4.28 | % | 4.20 | % |
Efficiency Ratio | | 64.87 | % | 64.44 | % | 64.10 | % | 64.12 | % |
Return on Average Assets | | 0.93 | % | 1.03 | % | 1.04 | % | 1.11 | % |
Return on Average Common Shareholders’ Equity | | 11.45 | % | 13.69 | % | 12.15 | % | 15.45 | % |
Noninterest Income as a Percentage of Operating Revenues | | 26.63 | % | 30.44 | % | 24.35 | % | 27.39 | % |
| | | | | | | | | |
CREDIT QUALITY | | | | | | | | | |
Nonperforming Loans | | | | | | | | | |
Loans 90 days or more past due and still accruing interest | | | | | | $ | 2,208 | | $ | 990 | |
Nonaccrual Loans | | | | | | 1,202 | | 335 | |
Total Nonperforming loans | | | | | | $ | 3,410 | | $ | 1,325 | |
Repossessed Assets | | | | | | 90 | | — | |
Total Nonperforming assets | | | | | | $ | 3,500 | | $ | 1,325 | |
| | | | | | | | | |
Charge-offs | | | | | | (1,838 | ) | (320 | ) |
Recoveries | | | | | | 74 | | 519 | |
Net Charge-Offs | | | | | | $ | (1,764 | ) | $ | 199 | |
| | | | | | | | | |
ASSET QUALITY MEASURES | | | | | | | | | |
Nonperforming Assets to Total Assets | | | | | | 0.15 | % | 0.06 | % |
Nonperforming Loans to Total Loans | | | | | | 0.18 | % | 0.09 | % |
Allowance for Loan and Credit Losses to Total Loans | | | | | | 1.12 | % | 1.19 | % |
Allowance for Loan and Credit Losses to Nonperforming Loans | | | | | | 604.69 | % | 1392.30 | % |
CoBiz Financial Inc.
December 31, 2007
(unaudited)
| | | | Investment | | Investment | | | | Corporate | | | |
| | Commercial | | Banking | | Advisory | | | | Support and | | | |
(in thousands, except per share amounts) | | Banking | | Services | | and Trust | | Insurance | | Other | | Consolidated | |
Net interest income | | | | | | | | | | | | | |
Quarter ended December 31, 2007 | | $ | 24,403 | | $ | 29 | | $ | 1 | | $ | 1 | | $ | (1,545 | ) | $ | 22,889 | |
Quarter ended September 30, 2007 | | 23,680 | | 34 | | — | | 1 | | (1,425 | ) | 22,290 | |
Annualized quarterly growth | | 12.1 | % | (58.3 | )% | — | | .0 | % | (33.4 | )% | 10.7 | % |
| | | | | | | | | | | | | |
Quarter ended December 31, 2006 | | $ | 22,182 | | $ | 46 | | $ | 7 | | $ | 3 | | $ | (1,394 | ) | $ | 20,844 | |
Annual growth | | 10.0 | % | (37.0 | )% | (85.7 | )% | (66.7 | )% | (10.8 | )% | 9.8 | % |
| | | | | | | | | | | | | |
Noninterest income | | | | | | | | | | | | | |
Quarter ended December 31, 2007 | | $ | 2,587 | | $ | 2,240 | | $ | 1,205 | | $ | 2,238 | | $ | 38 | | $ | 8,308 | |
Quarter ended September 30, 2007 | | 1,662 | | 2,059 | | 1,214 | | 2,089 | | — | | 7,024 | |
Annualized quarterly growth | | 220.8 | % | 34.9 | % | (2.9 | )% | 28.3 | % | — | | 72.5 | % |
| | | | | | | | | | | | | |
Quarter ended December 31, 2006 | | $ | 1,711 | | $ | 2,096 | | $ | 1,087 | | $ | 4,006 | | $ | 223 | | $ | 9,123 | |
Annual growth | | 51.2 | % | 6.9 | % | 10.9 | % | (44.1 | )% | (83.0 | )% | (8.9 | )% |
| | | | | | | | | | | | | |
Net income | | | | | | | | | | | | | |
Quarter ended December 31, 2007 | | $ | 7,051 | | $ | 116 | | $ | (90 | ) | $ | (177 | ) | $ | (1,426 | ) | $ | 5,474 | |
Quarter ended September 30, 2007 | | 7,272 | | 351 | | 12 | | (219 | ) | (1,409 | ) | 6,007 | |
Annualized quarterly growth | | (12.1 | )% | (265.6 | )% | (3,372.3 | )% | 76.1 | % | (4.8 | )% | (35.2 | )% |
| | | | | | | | | | | | | |
Quarter ended December 31, 2006 | | $ | 6,136 | | $ | 155 | | $ | 34 | | $ | 350 | | $ | (1,190 | ) | $ | 5,485 | |
Annual growth | | 14.9 | % | (25.2 | )% | (364.7 | )% | (150.6 | )% | (19.8 | )% | (.2 | )% |
| | | | | | | | | | | | | |
Earnings per share (diluted) | | | | | | | | | | | | | |
Quarter ended December 31, 2007 | | $ | 0.30 | | $ | — | | $ | — | | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.23 | |
Quarter ended September 30, 2007 | | 0.30 | | 0.01 | | — | | (0.01 | ) | (0.05 | ) | 0.25 | |
Annualized quarterly growth | | .0 | % | (396.7 | )% | — | | .0 | % | (79.3 | )% | (31.7 | )% |
| | | | | | | | | | | | | |
Quarter ended December 31, 2006 | | $ | 0.26 | | $ | 0.01 | | $ | — | | $ | 0.01 | | $ | (0.05 | ) | $ | 0.23 | |
Annual growth | | 15.4 | % | (100.0 | )% | .0 | % | (200.0 | )% | (20.0 | )% | (.0 | )% |
| | | | | | | | | | | | | |
Total loans | | | | | | | | | | | | | |
At December 31, 2007 | | | | | | | | | | | | $ | 1,846,326 | |
At September 30, 2007 | | | | | | | | | | | | 1,748,333 | |
Annualized quarterly growth | | | | | | | | | | | | 22.2 | % |
| | | | | | | | | | | | | |
At December 31, 2006 | | | | | | | | | | | | $ | 1,544,460 | |
Annual growth | | | | | | | | | | | | 19.5 | % |
| | | | | | | | | | | | | |
Total deposits and customer repurchase agreements | | | | | | | | | | | |
At December 31, 2007 | | | | | | | | | | | | $ | 1,911,025 | |
At September 30, 2007 | | | | | | | | | | | | 1,866,004 | |
Annualized quarterly growth | | | | | | | | | | | | 9.6 | % |
| | | | | | | | | | | | | |
At December 31, 2006 | | | | | | | | | | | | $ | 1,703,954 | |
Annual growth | | | | | | | | | | | | 12.2 | % |
CoBiz Financial Inc.
December 31, 2007
(unaudited)
| | For the Quarter ended December 31, 2007 | |
| | | | Investment | | Investment | | | | Corporate | | | |
| | Commercial | | Banking | | Advisory | | | | Support and | | | |
(in thousands) | | Banking | | Services | | and Trust | | Insurance | | Other | | Consolidated | |
Income Statement | | | | | | | | | | | | | |
Total interest income | | $ | 40,091 | | $ | 29 | | $ | 1 | | $ | 2 | | $ | 41 | | $ | 40,164 | |
Total interest expense | | 15,688 | | — | | — | | 1 | | 1,586 | | 17,275 | |
Net interest income | | 24,403 | | 29 | | 1 | | 1 | | (1,545 | ) | 22,889 | |
Provision for loan losses | | 1,469 | | — | | — | | — | | — | | 1,469 | |
Net interest income after provision for credit losses | | 22,934 | | 29 | | 1 | | 1 | | (1,545 | ) | 21,420 | |
Noninterest income | | 2,587 | | 2,240 | | 1,205 | | 2,238 | | 38 | | 8,308 | |
Noninterest expense | | 9,199 | | 1,990 | | 1,239 | | 2,325 | | 6,099 | | 20,852 | |
Income before income taxes | | 16,322 | | 279 | | (33 | ) | (86 | ) | (7,606 | ) | 8,876 | |
Provision for income taxes | | 6,090 | | 111 | | (8 | ) | (21 | ) | (2,770 | ) | 3,402 | |
Net income before management fees and overhead allocations | | $ | 10,232 | | $ | 168 | | $ | (25 | ) | $ | (65 | ) | $ | (4,836 | ) | $ | 5,474 | |
Management fees and overhead allocations, net of tax | | 3,181 | | 52 | | 65 | | 112 | | (3,410 | ) | — | |
Net income | | $ | 7,051 | | $ | 116 | | $ | (90 | ) | $ | (177 | ) | $ | (1,426 | ) | $ | 5,474 | |
| | | | | | | | | | | | | |
| | 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 December 31, 2006 | |
| | | | Investment | | Investment | | | | Corporate | | | |
| | Commercial | | Banking | | Advisory | | | | Support and | | | |
| | Banking | | Services | | and Trust | | Insurance | | Other | | Consolidated | |
Income Statement | | | | | | | | | | | | | |
Total interest income | | $ | 36,655 | | $ | 46 | | $ | 7 | | $ | 3 | | $ | 34 | | $ | 36,745 | |
Total interest expense | | 14,473 | | — | | — | | — | | 1,428 | | 15,901 | |
Net interest income | | 22,182 | | 46 | | 7 | | 3 | | (1,394 | ) | 20,844 | |
Provision for loan losses | | 181 | | — | | — | | — | | (1 | ) | 180 | |
Net interest income after provision for credit losses | | 22,001 | | 46 | | 7 | | 3 | | (1,393 | ) | 20,664 | |
Noninterest income | | 1,711 | | 2,096 | | 1,087 | | 4,006 | | 223 | | 9,123 | |
Noninterest expense | | 5,363 | | 1,807 | | 939 | | 3,265 | | 9,647 | | 21,021 | |
Income before income taxes | | 18,349 | | 335 | | 155 | | 744 | | (10,817 | ) | 8,766 | |
Provision for income taxes | | 6,897 | | 131 | | 65 | | 298 | | (4,110 | ) | 3,281 | |
Net income before management fees and overhead allocations | | $ | 11,452 | | $ | 204 | | $ | 90 | | $ | 446 | | $ | (6,707 | ) | $ | 5,485 | |
Management fees and overhead allocations, net of tax | | 5,316 | | 49 | | 56 | | 96 | | (5,517 | ) | — | |
Net income | | $ | 6,136 | | $ | 155 | | $ | 34 | | $ | 350 | | $ | (1,190 | ) | $ | 5,485 | |
CoBiz Financial Inc.
December 31, 2007
(unaudited)
| | Quarter ended December 31, | | Year ended December 31, |
| | | | | | Increase/(decrease) | | | | | | Increase/(decrease) | |
(in thousands) | | 2007 | | 2006 | | Amount | | % | | 2007 | | 2006 | | Amount | | % | |
NONINTEREST INCOME | | | | | | | | | | | | | | | | | |
Deposit service charges | | $ | 920 | | $ | 674 | | $ | 246 | | 36 | % | $ | 3,154 | | $ | 2,778 | | $ | 376 | | 14 | % |
Other loan fees | | 494 | | 202 | | 292 | | 145 | % | 1,023 | | 758 | | 265 | | 35 | % |
Investment advisory and trust income | | 1,205 | | 1,087 | | 118 | | 11 | % | 4,763 | | 4,141 | | 622 | | 15 | % |
Insurance income | | 2,238 | | 4,006 | | (1,768 | ) | (44 | )% | 9,397 | | 13,094 | | (3,697 | ) | (28 | )% |
Investment banking income | | 2,240 | | 2,096 | | 144 | | 7 | % | 6,681 | | 6,214 | | 467 | | 8 | % |
Other income | | 1,211 | | 1,058 | | 153 | | 14 | % | 3,271 | | 2,980 | | 291 | | 10 | % |
Total noninterest income | | $ | 8,308 | | $ | 9,123 | | $ | (815 | ) | (9 | )% | $ | 28,289 | | $ | 29,965 | | $ | (1,676 | ) | (6 | )% |
| | Quarter ended December 31, | | Year ended December 31, |
| | | | | | Increase/(decrease) | | | | | | Increase/(decrease) | |
(in thousands) | | 2007 | | 2006 | | Amount | | % | | 2007 | | 2006 | | Amount | | % | |
NONINTEREST EXPENSES | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | $ | 13,206 | | $ | 13,122 | | $ | 84 | | 1 | % | $ | 48,649 | | $ | 46,487 | | $ | 2,162 | | 5 | % |
Stock based compensation expense | | 412 | | 285 | | 127 | | 45 | % | 1,523 | | 1,140 | | 383 | | 34 | % |
Occupancy expenses, premises and equipment | | 3,024 | | 2,842 | | 182 | | 6 | % | 11,541 | | 11,360 | | 181 | | 2 | % |
Amortization of intangibles | | 118 | | 118 | | 0 | | 0 | % | 473 | | 475 | | (2 | ) | (0 | )% |
Other operating expenses | | 3,477 | | 2,945 | | 532 | | 18 | % | 12,292 | | 10,683 | | 1,609 | | 15 | % |
Loss on sale of other assets and securities | | 615 | | 1,709 | | (1,094 | ) | (64 | )% | 1,037 | | 1,782 | | (745 | ) | (42 | )% |
Total noninterest expenses | | $ | 20,852 | | $ | 21,021 | | $ | (169 | ) | (1 | )% | $ | 75,515 | | $ | 71,927 | | $ | 3,588 | | 5 | % |
| | December 31, 2007 | | December 31, 2006 | |
| | | | % of | | | | % of | |
(in thousands) | | Amount | | Portfolio | | Amount | | Portfolio | |
LOANS | | | | | | | | | |
Commercial | | $ | 576,959 | | 31.6 | % | $ | 482,309 | | 31.6 | % |
Real Estate - mortgage | | 874,226 | | 47.9 | % | 698,951 | | 45.8 | % |
Real Estate - construction | | 309,568 | | 17.0 | % | 292,952 | | 19.2 | % |
Consumer | | 71,422 | | 3.9 | % | 57,990 | | 3.8 | % |
Other | | 14,151 | | 0.8 | % | 12,258 | | 0.8 | % |
Gross loans | | 1,846,326 | | 101.1 | % | 1,544,460 | | 101.2 | % |
Less allowance for loan losses | | (20,043 | ) | (1.1 | %) | (17,871 | ) | (1.2 | )% |
Net loans | | $ | 1,826,283 | | 100.0 | % | $ | 1,526,589 | | 100.0 | % |
| | December 31, 2007 | | December 31, 2006 | |
| | | | % of | | | | % of | |
(in thousands) | | Amount | | Portfolio | | Amount | | Portfolio | |
DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS | | | | | | | | | |
NOW and money market accounts | | $ | 631,391 | | 33.0 | % | $ | 566,849 | | 33.3 | % |
Savings | | 11,546 | | 0.6 | % | 10,740 | | 0.6 | % |
Euro Sweep | | 77,444 | | 4.1 | % | 0 | | 0.0 | % |
Certificates of deposits under $100,000 | | 126,478 | | 6.6 | % | 87,366 | | 5.1 | % |
Certificates of deposits $100,000 and over | | 456,754 | | 23.9 | % | 361,138 | | 21.2 | % |
Total interest-bearing deposits | | 1,303,613 | | 68.2 | % | 1,026,093 | | 60.2 | % |
Noninterest-bearing demand deposits | | 439,076 | | 23.0 | % | 450,244 | | 26.4 | % |
Customer repurchase agreements | | 168,336 | | 8.8 | % | 227,617 | | 13.4 | % |
Total deposits and customer repurchase agreements | | $ | 1,911,025 | | 100.0 | % | $ | 1,703,954 | | 100.0 | % |
CoBiz Financial Inc.
December 31, 2007
(unaudited)
| | For the quarter ended December 31, |
| | 2007 | | 2006 | |
| | | | 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 | | $ | 7,010 | | $ | 97 | | 5.41 | % | $ | 7,869 | | $ | 126 | | 6.27 | % |
Investment securities | | 388,573 | | 5,100 | | 5.14 | % | 459,111 | | 5,598 | | 4.77 | % |
Loans | | 1,796,787 | | 35,136 | | 7.65 | % | 1,524,567 | | 31,149 | | 7.99 | % |
Allowance for loan losses | | (19,073 | ) | | | | | (17,748 | ) | | | | |
Total interest earning assets | | $ | 2,173,297 | | $ | 40,333 | | 7.26 | % | $ | 1,973,799 | | $ | 36,873 | | 7.31 | % |
Noninterest-earning assets | | | | | | | | | | | | | |
Cash and due from banks | | 45,857 | | | | | | 43,374 | | | | | |
Other | | 108,681 | | | | | | 104,488 | | | | | |
Total assets | | $ | 2,327,835 | | | | | | $ | 2,121,661 | | | | | |
| | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | |
NOW and money market deposits | | $ | 616,220 | | $ | 4,779 | | 3.08 | % | $ | 516,791 | | $ | 3,823 | | 2.93 | % |
Savings deposits | | 11,238 | | 52 | | 1.84 | % | 10,903 | | 42 | | 1.53 | % |
Eurodollar deposits | | 71,760 | | 640 | | 3.54 | % | — | | — | | 0.00 | % |
Certificates of deposits | | | | | | | | | | | | | |
Under $100,000 | | 129,624 | | 1,605 | | 4.91 | % | 73,583 | | 825 | | 4.45 | % |
$100,000 and over | | 443,401 | | 5,566 | | 4.98 | % | 377,408 | | 4,646 | | 4.88 | % |
Total Interest-bearing deposits | | $ | 1,272,243 | | $ | 12,642 | | 3.94 | % | $ | 978,685 | | $ | 9,336 | | 3.78 | % |
Other borrowings | | | | | | | | | | | | | |
Securities sold under agreements to repurchase and other short-term borrowings | | 325,118 | | 3,215 | | 3.87 | % | 453,814 | | 5,133 | | 4.43 | % |
Junior subordinated debentures | | 72,166 | | 1,418 | | 7.69 | % | 72,166 | | 1,432 | | 7.76 | % |
Total interest-bearing liabilities | | $ | 1,669,527 | | $ | 17,275 | | 4.09 | % | $ | 1,504,665 | | $ | 15,901 | | 4.17 | % |
Noninterest-bearing demand accounts | | 450,243 | | | | | | 439,062 | | | | | |
Total deposits and interest-bearing liabilities | | 2,119,770 | | | | | | 1,943,727 | | | | | |
Other noninterest-bearing liabilities | | 18,396 | | | | | | 18,950 | | | | | |
Total liabilities and preferred securities | | 2,138,166 | | | | | | 1,962,677 | | | | | |
Shareholders’ equity | | 189,669 | | | | | | 158,984 | | | | | |
Total liabilities and shareholders’ equity | | $ | 2,327,835 | | | | | | $ | 2,121,661 | | | | | |
Net interest income | | | | $ | 23,058 | | | | | | $ | 20,972 | | | |
Net interest spread | | | | | | 3.17 | % | | | | | 3.14 | % |
Net interest margin | | | | | | 4.21 | % | | | | | 4.22 | % |
Ratio of average interest-earning assets to average interest-bearing liabilities | | 130.17 | % | | | | 131.18 | % | | | | |
CoBiz Financial Inc.
December 31, 2007
(unaudited)
| | For the year ended December 31, | |
| | 2007 | | 2006 | |
| | | | 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 | | $ | 8,557 | | $ | 456 | | 5.33 | % | $ | 6,677 | | $ | 423 | | 6.34 | % |
Investment securities | | 410,361 | | 21,207 | | 5.17 | % | 468,343 | | 21,590 | | 4.61 | % |
Loans | | 1,665,379 | | 133,446 | | 8.01 | % | 1,446,964 | | 114,942 | | 7.94 | % |
Allowance for loan losses | | (18,559 | ) | | | | | (17,356 | ) | — | | | |
Total interest earning assets | | $ | 2,065,738 | | $ | 155,109 | | 7.51 | % | $ | 1,904,628 | | $ | 136,955 | | 7.19 | % |
Noninterest-earning assets | | | | | | | | | | | | | |
Cash and due from banks | | 45,097 | | | | | | 46,187 | | | | | |
Other | | 107,790 | | | | | | 103,622 | | | | | |
Total assets | | $ | 2,218,625 | | | | | | $ | 2,054,437 | | | | | |
| | | | | | | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | |
NOW and money market deposits | | $ | 584,677 | | $ | 18,673 | | 3.19 | % | $ | 512,007 | | $ | 13,857 | | 2.71 | % |
Savings deposits | | 11,184 | | 194 | | 1.73 | % | 9,475 | | 103 | | 1.09 | % |
Eurodollar deposits | | 26,326 | | 985 | | 3.74 | % | — | | — | | 0.00 | % |
Certificates of deposits | | | | | | | | | | | | | |
Under $100,000 | | 117,331 | | 5,693 | | 4.85 | % | 78,432 | | 3,177 | | 4.05 | % |
$100,000 and over | | 385,847 | | 19,319 | | 5.01 | % | 353,345 | | 15,839 | | 4.48 | % |
Total Interest-bearing deposits | | $ | 1,125,365 | | $ | 44,864 | | 3.99 | % | $ | 953,259 | | $ | 32,976 | | 3.46 | % |
Other borrowings | | | | | | | | | | | | | |
Securities sold under agreements to repurchase and other short-term borrowings | | 374,258 | | 16,096 | | 4.30 | % | 434,331 | | 18,585 | | 4.28 | % |
Junior subordinated debentures | | 72,166 | | 5,651 | | 7.83 | % | 72,166 | | 5,454 | | 7.56 | % |
Total interest-bearing liabilities | | $ | 1,571,789 | | $ | 66,611 | | 4.24 | % | $ | 1,459,756 | | $ | 57,015 | | 3.91 | % |
Noninterest-bearing demand accounts | | 439,285 | | | | | | 430,083 | | | | | |
Total deposits and interest-bearing liabilities | | 2,011,074 | | | | | | 1,889,839 | | | | | |
Other noninterest-bearing liabilities | | 18,049 | | | | | | 16,848 | | | | | |
Total liabilities and preferred securities | | 2,029,123 | | | | | | 1,906,687 | | | | | |
Shareholders’ equity | | 189,502 | | | | | | 147,750 | | | | | |
Total liabilities and shareholders’ equity | | $ | 2,218,625 | | | | | | $ | 2,054,437 | | | | | |
Net interest income | | | | $ | 88,498 | | | | | | $ | 79,940 | | | |
Net interest spread | | | | | | 3.27 | % | | | | | 3.28 | % |
Net interest margin | | | | | | 4.28 | % | | | | | 4.20 | % |
Ratio of average interest-earning assets to average interest-bearing liabilities | | 131.43 | % | | | | | 130.48 | % | | | | |
