CoBiz Financial Announces Fourth Quarter 2009 Results

Reports significant improvement in quarterly operating results

Jan 28, 2010, 19:19 ET from CoBiz Financial

DENVER, Jan. 28 /PRNewswire-FirstCall/ -- CoBiz Financial Inc. (Nasdaq: COBZ), a financial services company with $2.5 billion in assets, announced a net loss of $4.5 million for the fourth quarter of 2009, as compared to a net loss of $8.6 million for the fourth quarter of 2008.  The net loss available to common shareholders was $0.15 per diluted common share versus a net loss of $0.38 per diluted common share in the prior year quarter.

For the year ended December 31, 2009, the net loss from core operations was $41.8 million, or $1.56 per diluted common share, excluding noncash charges from goodwill impairment (see the accompanying reconciliation of Non-GAAP Measures to GAAP). Including these charges, the net loss was $83.0 million, or $2.98 per diluted share. For the year ended December 31, 2008, net income was $1.3 million or $0.05 per diluted common share.

Financial Performance – Fourth Quarter 2009

  • The net loss available to common shareholders for the fourth quarter of 2009 was $0.15 per diluted common share, a 35% improvement from the net loss from core operations (excluding goodwill charges) of $0.23 per diluted common share in the third quarter of 2009 (linked-quarter). (See the accompanying reconciliation of Non-GAAP Measures to GAAP).  The current quarter results were also a 47% improvement over the net loss reported in the fourth quarter of 2008.
  • Provision for loan and credit losses (Provision) decreased for the second consecutive quarter. The Provision for the fourth quarter decreased by $3.7 million from the third quarter of 2009 to $16.5 million from $20.2 million. The fourth quarter 2009 Provision was $6.8 million less than the fourth quarter of 2008 Provision of $23.4 million.
  • During the fourth quarter, the Company charged-off, net of recoveries, $22.9 million. The resulting allowance for loan and credit losses (Allowance) was 4.23% of total loans. For the full year, net charge-offs were $73.5 million. For the year, the loan and credit loss provision was $105.7 million or 143.7% of year-to-date net charge-offs.
  • Nonperforming assets ended the quarter at $104.5 million, or 4.24% of total assets, up from $98.2 million or 3.87% of total assets at September 30, 2009.
  • The net interest margin decreased slightly to 4.36% for the fourth quarter of 2009, from 4.40% in the third quarter of 2009.  The net interest margin increased 21 basis points (0.21%) from 4.15% in the fourth quarter of 2008.
  • Loans outstanding as of December 31, 2009, decreased by $97.3 million on a linked-quarter basis to $1.78 billion. As a result, net interest income decreased by $0.6 million, from the third quarter 2009. However, for the full year, net interest income increased by $8.0 million, or 8.4% to $103.4 million over 2008 due to a strong net interest margin.
  • Deposits and customer repurchase agreements (Customer Repo's) increased by $49.5 million on a linked-quarter basis. Deposits and Customer Repo's excluding wholesale brokered sources (Customer Funding) increased by $74.6 million on a linked-quarter basis, or 14.6% annualized. Year-over-year, Customer Funding increased by $392.4 million or 23.0%.  
  • Total noninterest-bearing demand accounts represented 27.6% of total deposits as of December 31, 2009, compared to 27.1% as of the prior quarter.
  • The Company recognized a $1.6 million, pre-tax loss on securities, other assets and OREO as compared to $0.9 million in the third quarter of 2009. For the full year, the Company recognized $5.6 million of losses on securities, other assets and OREO.

"2009 was a tough year and one I wasn't sorry to see come to an end," said Chairman and CEO Steve Bangert. "However, I think it's important to take what we learned over the past year and make our Company stronger. Any company can do well in good times; it is a company's response to difficulty that differentiates it from its competitors.

"I am very proud of how our management team and employees responded to this demanding environment. During the past year, we addressed some of the larger challenges facing our company, clearing the way for positive momentum in the coming year. Within the past 18 months, we successfully raised capital on three separate occasions. We faced our credit issues head-on, provisioning $105.7 million and building our Allowance coverage to one of the highest in our peer group. We made significant investments in a newly formed Special Assets group, and have decreased our Land and Construction concentrations. More importantly, at a time when earnings were under extreme pressure, we continued to invest in the franchise by recruiting three key positions:  Director of Wealth Management, as well as Colorado and Arizona Bank Market Presidents, which will allow us to focus on growing market share.

"While 2010 will not be without challenges, I am hopeful for the promises it holds and the potential opportunities. We exit 2009 with a stronger capital base, record liquidity and a deeper management team.  As a result of our challenges, we have become more efficient, disciplined and focused, and are well prepared to continue building the franchise."

Loans

Total loans ended the period just over $1.78 billion, a decrease of $97.3 million from September 30, 2009. Although we continue to actively market new relationships, we have seen a significant decrease in quality loan demand in our markets.  Total credit extended this quarter increased from the prior quarter to $154.8 million, from $126.6 million. However, credit extensions were offset by a higher level of maturities and pay-downs, including gross charge-offs of $23.7 million during the fourth quarter.

Year-to-date, loans have decreased by $248.6 million, or 12.2%. Credit extended in 2009 totaled $624.6 million, including $237.8 million of loans to new credit relationships.  Loan advances during the year were offset by greater levels of loan maturities and pay-downs, including gross charge-offs of $76.6 million for the year.

Overall, Commercial and Industrial (C&I) loans comprised $559.6 million, or 31.4% of the total portfolio as of December 31, 2009 compared to $649.0 million, or 31.9%, a year earlier. Commercial Real Estate accounted for 52.5% of total loans, with owner/occupied properties comprising a significant portion of this category. Land acquisition and development loans (A&D) decreased to $152.7 million or 8.6% of the total portfolio at the end of fourth quarter from $221.9 million, or 10.9%, a year ago.  Construction loans, excluding A&D, accounted for $144.5 million or 8.1% of the portfolio at December 31, 2009, as compared to $192.1 million, or 9.5%, a year ago.

Investment Securities

The Company had investment securities with a carrying value totaling $529.5 million at December 31, 2009, an increase of $45.6 million from the prior quarter. The portfolio consists primarily of mortgage-backed securities, the overwhelming majority of which are backed by U.S. government agencies. These securities had a net book value of $386.4 million and a market value of $400.8 million at quarter end. The remaining MBS are non-agency, private-label securities with a net book value of $5.3 million and a market value of $2.4 million. At December 31, 2009, the Company had $56.7 million in agency debentures, of which $31.7 million were purchased during the fourth quarter.  The fair value of the agency securities was $56.5 million at year-end.  Investments also include $35.0 million of single-issuer trust preferred securities backed by 13 different financial institutions and $31.7 million of corporate debt securities issued primarily by six S&P 500 companies. All trust preferred securities in the Company's portfolio continue to pay dividends. The fair value of these securities was $67.4 million at December 31, 2009. The portfolio does not contain any collateralized debt obligations (CDOs) or securities backed by sub-prime mortgage loans.

The Company recognized a $0.1 million Other Than Temporary Impairment (OTTI) valuation loss during the fourth quarter of 2009. The valuation loss related to one private label mortgage-backed security (MBS), which was previously deemed to have an OTTI.

Deposits and Customer Repo Balances

Deposit and Customer Repo balances ended the period at $2.1 billion, an increase of $336.1 million from the same period in 2008, or 19.0%. On a linked-quarter basis, Deposit and Customer Repo balances increased by $49.5 million. Customer Funding (excluding brokered deposits from non-relationship sources) increased $74.6 million on a linked-quarter basis and $392.4 million from the prior year period. The strong growth in core deposits is the result of a consistent, focused marketing effort by our business development officers, as well as our current customers maintaining more liquidity on their balance sheets. While loan growth continues to be a challenge, the Bank is making considerable progress in building market share by attracting and building depository relationships.

Total noninterest-bearing demand accounts represented 27.6% of total deposits as of December 31, 2009, relatively level with the prior-year period.

The decrease in loan demand, coupled with strong deposit generation has contributed to a better liquidity position. As of December 31, 2009, total loans to Customer Funding decreased to 85.0% from 119.1% at the prior year end.

Allowance for Loan and Credit Losses and Credit Quality

Nonperforming assets (NPAs) increased by $6.3 million during the quarter to $104.5 million at December 31, 2009. Total nonperforming loans (NPLs) increased to $79.2 million as of December 31, 2009, from $75.7 million at September 30, 2009. NPLs to total loans increased to 4.44% at the end of the current quarter, from 4.03% as of the end of the prior linked-quarter. Other real estate owned acquired through foreclosure, and other foreclosed assets (OREO) was $25.3 million at year end 2009.

Of the total, 53% of NPAs, or $55.0 million, are within the Colorado portfolio and 47%, or $49.5 million, are in Arizona. Land A&D and Construction loans continue to exhibit the greatest weakness with 22.3% and 6.7%, respectively, of total loans in their category on nonaccrual status. Nonaccruing C&I and Real Estate loans remained manageable at 2.4% and 2.3%, respectively. Of the $25.3 million of OREO, $15.2 million, or 60%, was located in Colorado and $10.1 million, or 40%, was located in Arizona.

The fourth quarter loan and credit loss provision of $16.5 million represents a decrease of 18.1% or $3.7 million from the third quarter and 29.5% or $6.9 million from the fourth quarter of 2008. The Company charged-off (net of recoveries) $22.9 million in loans during the fourth quarter of 2009 and $73.5 million for the full year of 2009. Overall, the Company provided $32.2 million more in provision for loan and credit losses than it has charged-off during the year. As a result, the Allowance increased to $75.3 million as of December 31, 2009, from $43.1 million as of December 31, 2008. The Company's Allowance to total loans held for investment increased to 4.23% as of December 31, 2009, from 2.12% as of December 31, 2008. The Allowance was over 97% of NPLs at December 31, 2009.

While the Land A&D portfolio represents only 8.6% of total loans, the Company estimates that approximately 61% of its current year Provision, and 59% of its gross charge-offs in 2009 related to Land A&D.

Shareholders' Equity and Regulatory Capital

Over the last 18 months, the Company successfully raised capital on three separate occasions:

  • In the third quarter of 2008, the Company raised $20.4 million through a private offering of subordinated debt that qualified as Tier 2 capital;
  • In the fourth quarter of 2008, the Company qualified for a $64.5 million investment from the U.S. Treasury Department as part of the Capital Purchase Program (CPP) under the Emergency Economic Stabilization Act of 2008; and
  • During the third quarter of 2009, the Company completed a successful common equity placement of $55.8 million, net of expenses.

As of December 31, 2009, total Shareholders' Equity was $230.5 million. The Company's total tangible shareholders' equity was $225.5 million. The tangible shareholders' equity to tangible assets ratio was 9.2% and the tangible common equity ratio was 6.7% at the end of the fourth quarter of 2009 as compared to 7.6% and 5.3%, respectively, at December 31, 2008 (see the accompanying Reconciliation of Non-GAAP Measures to GAAP).

As of December 31, 2009, the Company was significantly in excess of what is considered "Well-Capitalized" with an expected Tier 1 Capital ratio of 13.81%, and Total Capital ratio of 16.13%. Under the risk-based capital guidelines, the Allowance qualifies as Tier 2 equity up to 1.25% of risk-weighted assets. Consequently, due to the level of the Company's provisioning for loan losses, approximately $49.4 million of Allowance was disallowed at December 31, 2009, under the risk-based capital rules, which equated to 2.44% of risk-weighted assets.

The Company is planning to file a universal shelf registration statement on Form S−3 with the Securities and Exchange Commission to register up to $100 million in securities.  The Company anticipates that the registration statement would be filed within the next several weeks.  While the Company has no immediate plans to raise capital under the shelf registration statement, it provides the Company with the financial flexibility to do so at the appropriate time.

This announcement shall not constitute an offer to sell or a solicitation of an offer to buy any securities.  It is the Company's intention to file a shelf registration statement, however there can be no assurance that the Company will actually make such a filing or that the Securities and Exchange Commission will declare the registration statement effective.

Net Interest Income and Margin

Net interest income on a tax equivalent basis for the fourth quarter of 2009 decreased by $0.7 million, or 2.6%, to $25.2 million from the same period in 2008.  Net interest income on a tax equivalent basis for the third quarter of 2009 was $25.8 million.  The net interest margin (NIM) expanded by 21 basis points to 4.36% as compared to the fourth quarter of 2008 and remained relatively consistent with the 4.40% NIM reported in the third quarter of 2009.  Increased levels of nonaccrual loans continue to have an adverse effect on our reported NIM.

Average earning assets decreased by $32.8 million on a linked-quarter basis as a result of $92.0 million decrease in loans, net of an increase in the average allowance for loan losses of $8.4 million.  Investment securities increased $45.1 million on linked-quarter basis.  Customer funding increased $175.4 million on a linked-quarter basis and $352.4 million from the fourth quarter of 2008.  Yields on average earning assets decreased by 14 basis points on a linked quarterly basis and 49 basis points from the fourth quarter of 2008 while rates paid on average interest-bearing liabilities increased nominally by 4 basis points on a linked-quarterly basis and decreased by 60 basis points from the fourth quarter of 2008.  

Noninterest Income

Noninterest income decreased by $0.5 million on a linked-quarter basis to $6.5 million for the fourth quarter of 2009.  Noninterest income was $7.1 million in the fourth quarter of 2008. As a percentage of total operating revenue, noninterest income was 20.6% for the fourth quarter of 2009 vs. 21.6% for the prior-year quarter.

The noninterest income decline of $0.5 million in the fourth quarter is attributable to a decrease in investment banking and insurance income.  In general, all of our business segments continue to be negatively impacted by market conditions in 2009.  Although our Investment Banking segment continues to have a diversified backlog of engaged transactions, restricted credit markets and substantial uncertainty over sellers' future performance and cash-flow, had an adverse impact on the number of deals closed as well as on the number of deals actively engaged during 2009.  Our Insurance Segment's revenues were adversely affected by a continued soft premium market for property and casualty insurance.  Similarly, the decline in the broader equity market negatively impacted Investment Advisory earnings.

Operating Expenses

Noninterest expenses for the fourth quarter of 2009 were $23.8 million as compared to $36.0 million for the third quarter of 2009.  The third quarter of 2009 included a noncash goodwill impairment charge of $12.5 million.  Noninterest expenses in the fourth quarter of 2008 were $23.6 million.

Salaries and employee benefit expenses decreased by $0.3 million on a linked-quarter basis to $13.0 million. During 2009 the Company was able to attract a number of talented employees and costs have risen accordingly, increasing in fourth quarter by $1.0 million as compared to $12.0 million in the prior-year quarter. Overall, the company's full-time equivalents increased by 9.4 to 544.7 from December 31, 2008. The majority of the new hires came in the third and fourth quarters of 2009.

Other operating expenses were stable on a linked-quarter basis showing a slight decrease of $0.2 million during the fourth quarter of 2009, largely the result of lower loan workout costs relative to the third quarter costs.

Net loss on securities, other assets and OREO increased to $1.6 million as compared to third quarter losses of $0.9 million and was primarily attributed to sales and valuation activity in the OREO portfolio.

Excluding the third quarter noncash goodwill impairment charge, the Company's fourth quarter expenses increased by $0.3 million on a linked-quarter basis.  The Company's efficiency ratio for the year ended December 31, 2009 was 68.3% as compared to 65.1% for 2008, an unfavorable change relating to higher loan workout costs and significant increases in FDIC insurance premiums offset by cost-cutting initiatives and decreases in incentive compensation across all levels of the organization. (See the accompanying reconciliation of Non-GAAP Measures to GAAP).

Earnings Conference Call

In conjunction with this release, you are invited to listen to the Company's conference call on Friday, January 29, 2010, at 9:00 am MST with Steve Bangert, CoBiz chairman and CEO. The call can be accessed via the Internet at http://www.videonewswire.com/event.asp?id=65239 or by telephone at 877.493.9121, (conference ID #34736946).

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. We believe these measures provide important supplemental information to investors. However, you should not rely on non-GAAP financial measures alone as measures of our performance.

About CoBiz Financial

CoBiz Financial Inc. (www.cobizfinancial.com) is a $2.5 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 "would", "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, 2009                        
                                (unaudited)                           
                                                                      
                                                          
                            Three months ended         Year ended   
                                December 31,          December 31, 
                                ------------          ------------
    (in thousands, except                                             
     per share amounts)         2009     2008        2009        2008 
    ---------------------       ----     ----        ----        ---- 
    INCOME STATEMENT DATA                                             
    Interest income          $30,973  $35,820    $129,450    $144,908 
    Interest expense           5,981   10,181      26,066      49,557 
                               -----   ------      ------      ------ 
    NET INTEREST INCOME                                               
     BEFORE PROVISION         24,992   25,639     103,384      95,351 
    Provision for loan                                                
     losses                   16,557   23,444     105,815      39,796 
                              ------   ------     -------      ------ 
    NET INTEREST INCOME                                               
     (LOSS) AFTER PROVISION    8,435    2,195      (2,431)     55,555 
    Noninterest income         6,492    7,055      27,627      35,778 
    Noninterest expense       23,843   23,632      95,250      89,717 
    Impairment of goodwill         -        -      46,160           - 
                                 ---      ---      ------         --- 
    INCOME (LOSS) BEFORE                                              
     INCOME TAXES             (8,916) (14,382)   (116,214)      1,616 
    Benefit for income taxes  (4,272)  (5,803)    (32,859)        (91)
                              ------   ------     -------         --- 
    NET INCOME (LOSS) BEFORE                                          
     NONCONTROLLING INTEREST  (4,644)  (8,579)    (83,355)      1,707 
    Net (income) loss                                                 
     attributable to                                                  
     noncontrolling interest     106      (34)        314        (379)
                                 ---      ---         ---        ---- 
    NET INCOME (LOSS)        $(4,538) $(8,613)   $(83,041)     $1,328 
                             =======  =======    ========      ====== 
                                                                      
    Preferred stock                                                   
     dividends                  (936)    (124)     (3,733)       (124)
                                ----     ----      ------        ---- 
    NET INCOME (LOSS)                                                 
     AVAILABLE TO COMMON                                              
     SHAREHOLDERS            $(5,474) $(8,737)   $(86,774)     $1,204 
                             =======  =======    ========      ====== 
                                                                      
    EARNINGS (LOSS) PER 
     COMMON SHARE                                  
      BASIC                   $(0.15)  $(0.38)     $(2.98)      $0.05 
                              ------   ------      ------       ----- 
      DILUTED                 $(0.15)  $(0.38)     $(2.98)      $0.05 
                              ------   ------      ------       ----- 
    WEIGHTED AVERAGE SHARES 
     OUTSTANDING (in 
     thousands)                                                   
      BASIC                   36,440   23,144      29,146      23,082 
                              ------   ------      ------      ------ 
      DILUTED                 36,440   23,144      29,146      23,255 
                              ------   ------      ------      ------ 
                                                                      
    EQUITY MEASURES                                                   
      Common Shares Outstanding at Period
       End (in thousands)                          36,724      23,375 
                                                   ------      ------ 
      Book Value Per Common Share                   $4.59       $8.16 
      Tangible Book Value Per Common Share          $4.46       $5.94 
                                                                      
      Tangible Common Equity to                                       
       Tangible Assets                               6.65%       5.27%
      Tangible Equity to Tangible Assets             9.16%       7.61%
      Tier 1 Capital Ratio (1)                      13.81%      12.29%
      Total Risk Based Capital Ratio (1)            16.13%      14.50%
                                                                      
    (1) Ratios for the current period are preliminary and are subject to
     change upon completion of the Company's regulatory filings. 
                                                                      
    PERIOD END BALANCES                                               
      Total Assets                             $2,466,015  $2,684,275 
      Loans                                     1,780,866   2,031,253 
      Loans Held For Sale                           1,820           - 
      Goodwill and Intangible Assets                4,910      51,864 
      Deposits                                  1,968,833   1,639,031 
      Subordinated Debentures                      93,150      93,150 
      Common Shareholders' Equity                 168,579     190,635 
      Total Shareholders' Equity                  230,451     252,099 
      Interest-Earning Assets                   2,270,381   2,498,484 
      Interest-Bearing Liabilities              1,659,248   1,954,991 
                                                                      
    BALANCE SHEET AVERAGES                                            
      Average Assets                           $2,556,706  $2,529,901 
      Average Loans                             1,948,120   1,944,728 
      Average Deposits                          1,789,127   1,743,712 
      Average Subordinated Debentures              93,150      79,306 
      Average Shareholders' Equity                235,722     197,235 
      Average Interest-Earning Assets           2,376,128   2,354,838 
      Average Interest-Bearing Liabilities      1,814,763   1,878,852 
    
    
    
                                    CoBiz Financial Inc.                     
                                     December 31, 2009                       
                                        (unaudited)                          
                                                                             
                              Three months ended           Year ended      
                                 December 31,              December 31,    
                                 ------------              ------------    
    (in thousands)              2009       2008         2009          2008   
    --------------              ----       ----         ----          ----   
    PROFITABILITY MEASURES                                                   
    Net Interest Margin         4.36%      4.15%        4.38%         4.08%  
    Efficiency Ratio           70.34%     61.84%       68.27%        65.10%  
    Return on Average                                                        
     Assets                    (0.73)%    (1.28)%      (3.25)%        0.05%  
    Return on Average                                                        
     Shareholders' Equity      (7.67)%   (16.78)%     (35.23)%        0.67%  
    Noninterest Income                                                       
     as a Percentage of                                                      
     Operating Revenues        20.62%     21.58%       21.09%        27.28%  
                                                                             
    CREDIT QUALITY                                                           
    Nonperforming Loans                                                      
      Loans 90 Days or More
       Past Due and                                     
       Accruing Interest                                $509        $1,292   
      Nonaccrual Loans                                78,689        39,786   
                                                      ------        ------   
        Total Nonperforming                                                  
         Loans                                       $79,198       $41,078   
    OREO & Repossessed Assets                         25,318         5,941   
                                                      ------         -----   
        Total Nonperforming                                                  
         Assets                                     $104,516       $47,019   
                                                    ========       =======   
                                                                             
    Charge-offs                                     $(76,577)     $(17,144)  
    Recoveries                                         3,028           156   
                                                       -----           ---   
    Net Charge-offs                                 $(73,549)     $(16,988)  
                                                    ========      ========   
                                                                             
    ASSET QUALITY MEASURES                                                   
    Nonperforming Assets to Total Assets                4.24%         1.75%  
    Nonperforming Loans to Total Loans                  4.44%         2.02%  
    Nonperforming Loans and OREO to Total Loans                              
     and OREO                                           5.78%         2.31%  
    Allowance for Loan and Credit Losses to                                  
     Total Loans                                                             
     (excluding loans held for sale)                    4.23%         2.12%  
    Allowance for Loan and Credit Losses to                                  
     Nonperforming Loans                                                     
     (excluding loans held for sale)                   97.28%       104.95%  
                                                                             
    
                                                          Total        NPAs 
    NONPERFORMING ASSETS                                   in         as a %  
     BY MARKET             Colorado  Arizona   Total     Category    of Loans
    --------------------   --------  -------   -----     --------    --------
    Commercial             $8,658   $4,537    $13,195    $559,612      2.36%
    Term Real Estate        9,000    9,832     18,832     832,123      2.26%
    Land Acquisition &                                           
     Development           17,358   16,675     34,033     152,667     22.29%
    Construction            3,900    5,732      9,632     144,455      6.67%
    Consumer                  905      252      1,157      76,103      1.52%
    Other Loans                 -    2,349      2,349      17,726     13.25%
    OREO & Repossessed                                                      
     Assets                15,169   10,149     25,318      25,318         - 
                           ------   ------     ------      ------       --- 
    NPAs                  $54,990  $49,526   $104,516  $1,808,004      5.78%
                          =======  =======   ========  ==========      ==== 
                                                                      
    Total Loans        $1,156,522 $626,164 $1,782,686          
    Total Loans
     and OREO           1,171,691  636,313  1,808,004          
                                                                    
    Nonperforming Loans                                             
     to Loans               3.44%    6.29%      4.44%         
    Nonperforming Loans                                             
     and OREO to Total                                              
     Loans and OREO         4.69%    7.78%      5.78%       
    
    
    
    
    
                           CoBiz Financial Inc.                      
                              December 31, 2009                 
                               (unaudited)                           
                                                                     
                                                                     
                                          Investment    Investment   
    (in thousands, except     Commercial   Banking       Advisory    
    per share amounts)        Banking      Services      and Trust   
    ---------------------     -------      --------      ---------   
    Net interest income                                              
      Quarter ended                                                  
       December 31, 2009        $25,670           $1            $(7) 
      Quarter ended                                                  
       September 30, 2009        26,404            2             (6) 
      Annualized                                                     
       quarterly growth           (11.0)%     (198.4)%        (66.1)%
                                                                     
      Quarter ended                                                  
       December 31, 2008        $27,177           $8            $(3) 
      Annual growth                (5.5)%      (87.5)%       (133.3)%
                                                                     
    Noninterest income                                               
      Quarter ended                                                  
       December 31, 2009         $2,542         $175         $1,362  
      Quarter ended                                                  
       September 30, 2009         2,311          476          1,292  
      Annualized                                                     
       quarterly growth            39.7%      (250.9)%         21.5% 
                                                                     
      Quarter ended                                                  
       December 31, 2008         $1,475         $504         $1,413  
      Annual growth                72.3%       (65.3)%         (3.6)%
                                                                     
    Net income (loss)                                                
      Quarter ended                                                  
       December 31, 2009        $(1,512)       $(479)         $(200) 
      Quarter ended                                                  
       September 30, 2009        (4,587)      (2,408)        (2,780) 
      Annualized                                                     
       quarterly growth           266.0%       317.8%         368.2% 
                                                                     
      Quarter ended                                                  
       December 31, 2008        $(6,722)       $(417)           $38  
      Annual growth                77.5%       (14.9)%       (626.3)%
                                                                     
    Earnings per share (diluted)                                     
      Quarter ended                                                  
       December 31, 2009         $(0.04)      $(0.01)        $(0.01) 
      Quarter ended                                                  
       September 30, 2009         (0.14)       (0.07)         (0.08) 
      Annualized                                                     
       quarterly growth           283.4%       340.1%         347.1% 
                                                                     
      Quarter ended                                                  
       December 31, 2008         $(0.29)      $(0.02)            $-  
      Annual growth                86.2%        50.0%        (100.0)%
                                                                     
    Total loans                                                      
      At December 31, 2009                                           
      At September                                                   
       30, 2009                                                      
      Annualized                                                     
       quarterly growth                                              
                                                                     
      At December 31, 2008                                           
      Annual growth                                                  
                                                                     
    Total deposits and customer                                      
     repurchase agreements                                           
      At December 31, 2009                                           
      At September                                                   
       30, 2009                                                      
      Annualized                                                     
       quarterly growth                                              
                                                                     
      At December 31, 2008                                           
      Annual growth                                                  
                                                                     
                                                                     
                                                                     
                                            Corporate                
                                            Support                  
     (in thousands, except                    and                    
    per share amounts)       Insurance       Other     Consolidated  
    ---------------------    ---------       -----     ------------  
    Net interest income                                              
      Quarter ended                                                  
       December 31, 2009            $(3)       $(669)       $24,992  
      Quarter ended                                                  
       September 30, 2009            (4)        (809)        25,587  
      Annualized                                                     
       quarterly growth            99.2%        68.7%          (9.2)%
                                                                     
      Quarter ended                                                  
       December 31, 2008            $(4)     $(1,539)       $25,639  
      Annual growth                25.0%        56.5%          (2.5)%
                                                                     
    Noninterest income                                               
      Quarter ended                                                  
       December 31, 2009         $2,580        $(167)        $6,492  
      Quarter ended                                                  
       September 30, 2009         3,019         (119)         6,979  
      Annualized                                                     
       quarterly growth           (57.7)%     (160.0)%        (27.7)%
                                                                     
      Quarter ended                                                  
       December 31, 2008         $3,594          $69         $7,055  
      Annual growth               (28.2)%     (342.0)%         (8.0)%
                                                                     
    Net income (loss)                                                
      Quarter ended                                                  
       December 31, 2009          $(213)     $(2,134)       $(4,538) 
      Quarter ended                                                  
       September 30, 2009        (4,465)      (1,503)       (15,743) 
      Annualized                                                     
       quarterly growth           377.8%      (166.6)%        282.4% 
                                                                     
      Quarter ended                                                  
       December 31, 2008            $69      $(1,581)       $(8,613) 
      Annual growth              (408.7)%      (35.0)%         47.3% 
                                                                     
    Earnings per share (diluted)                                     
      Quarter ended                                                  
       December 31, 2009         $(0.01)      $(0.08)        $(0.15) 
      Quarter ended                                                  
       September 30, 2009         (0.13)       (0.08)         (0.50) 
      Annualized                                                     
       quarterly growth           366.2%          .0%         277.7% 
                                                                     
      Quarter ended                                                  
       December 31, 2008             $-       $(0.07)        $(0.38) 
      Annual growth              (100.0)%      (14.3)%         60.5% 
                                                                     
    Total loans                                                      
      At December 31, 2009                               $1,782,686  
      At September                                                   
       30, 2009                                           1,879,969  
      Annualized                                                     
       quarterly growth                                       (20.5)%
                                                                     
      At December 31, 2008                               $2,031,253  
      Annual growth                                           (12.2)%
                                                                     
    Total deposits and customer                                      
     repurchase agreements                                           
      At December 31, 2009                               $2,108,627  
      At September                                                   
       30, 2009                                           2,059,080  
      Annualized                                                     
       quarterly growth                                         9.5% 
                                                                     
      At December 31, 2008                               $1,772,509  
      Annual growth                                            19.0% 
    
    
    
    
                               CoBiz Financial Inc.                  
                                 December 31, 2009                   
                                    (unaudited)                      
                                                                     
                                         Three months ended
                                         ------------------
                          December  September   June      March      December 
                             31,       30,       30,       31,          31, 
    (in thousands)          2009      2009      2009      2009         2008 
    --------------          ----      ----      ----      ----         ---- 
                                                                              
    COMMERCIAL BANKING                                                        
    ------------------                                                        
    Income Statement                                                          
    Total interest                                                            
     income              $30,685   $31,901   $32,820     $33,508      $35,780 
    Total interest                                                            
     expense               5,015     5,497     5,490       5,699        8,603 
                           -----     -----     -----       -----        ----- 
    Net interest income   25,670    26,404    27,330      27,809       27,177 
    Provision for loan                                                        
     losses               14,593    19,838    35,249      33,747       23,444 
                          ------    ------    ------      ------       ------ 
    Net interest                                                              
     income (loss)                                                            
     after provision      11,077     6,566    (7,919)     (5,938)       3,733 
    Noninterest income     2,542     2,311     2,773       1,929        1,475 
    Noninterest expense    7,837     8,231    10,323       8,142        9,184 
    Impairment of                                                             
     goodwill                  -         -         -      15,348            - 
                             ---       ---       ---      ------          --- 
    Income (loss) before                                                      
     income taxes          5,782       646   (15,469)    (27,499)     (3,976)
    Provision (benefit)                                                       
     for income taxes      1,513        14    (4,768)     (4,813)      (1,994)
                           -----       ---    ------      ------       ------ 
    Net income (loss) before                                                  
     management fees and   
     overhead allocations $4,269      $632  $(10,701)   $(22,686)     $(1,982)
                          ------      ----  --------    --------      ------- 
    Management fees and                                                       
     overhead allocations, 
     net of tax            5,781     5,219     3,107       5,105        4,740 
                           -----     -----     -----       -----        ----- 
    Net income (loss)    $(1,512)  $(4,587) $(13,808)   $(27,791)     $(6,722)
                         =======   =======  ========    ========      ======= 
                                                                              
    INVESTMENT BANKING                                                        
    ------------------                                                        
    Income Statement                                                          
    Total interest                                                            
     income                   $1        $2        $1          $3           $8 
    Total interest                                                            
     expense                   -         -         -           -            - 
                             ---       ---       ---         ---          --- 
    Net interest income        1         2         1           3            8 
    Provision for loan                                                        
     losses                    -         -         -           -            - 
                             ---       ---       ---         ---          --- 
    Net interest                                                              
     income (loss)                                                            
     after provision           1         2         1           3            8 
    Noninterest income       175       476       399         104          504 
    Noninterest expense      999     1,154       955         916        1,142 
    Impairment of                                                             
     goodwill                  -     3,049         -       2,230            - 
                             ---     -----       ---       -----          --- 
    Income (loss) before                                                      
     income taxes           (823)   (3,725)     (555)     (3,039)        (630)
    Provision (benefit)                                                       
     for income taxes       (377)   (1,347)     (209)     (1,755)        (247)
                            ----    ------      ----      ------         ---- 
    Net income (loss) before                                                  
     management fees and 
     overhead allocations  $(446)  $(2,378)    $(346)    $(1,284)       $(383)
                           -----   -------     -----     -------        ----- 
    Management fees and                                                       
     overhead allocations, 
     net of tax               33        30        30          38           34 
                             ---       ---       ---         ---          --- 
    Net income (loss)      $(479)  $(2,408)    $(376)    $(1,322)       $(417)
                           =====   =======     =====     =======        ===== 
                                                                              
    INVESTMENT ADVISORY                                                       
     AND TRUST                                                                
    -------------------                                                       
    Income Statement                                                          
    Total interest                                                            
     income                   $-        $-        $-          $-           $- 
    Total interest                                                            
     expense                   7         6         3           -            3 
                             ---       ---       ---         ---          --- 
    Net interest income       (7)       (6)       (3)          -           (3)
    Provision for loan                                                        
     losses                    -         -         -           -            - 
                             ---       ---       ---         ---          --- 
    Net interest                                                              
     income (loss)                                                            
     after provision          (7)       (6)       (3)          -           (3)
    Noninterest income     1,362     1,292     1,308       1,224         1,413
    Noninterest expense    1,563     1,336     1,698       1,655         1,255
    Impairment of                                                             
     goodwill                  -     3,437         -       3,081            - 
                             ---     -----       ---       -----          --- 
    Income (loss) before                                                      
     income taxes           (208)   (3,487)     (393)     (3,512)         155 
    Provision (benefit)                                                       
     for income taxes       (107)     (794)     (152)       (153)          51 
                            ----      ----      ----        ----          --- 
    Net income (loss) before                                                  
     management fees and   
     overhead allocations  $(101)  $(2,693)    $(241)    $(3,359)        $104 
                           -----   -------     -----     -------         ---- 
    Management fees and                                                       
     overhead allocations, 
     net of tax               99        87        84         111           66 
                             ---       ---       ---         ---          --- 
    Net income (loss)      $(200)  $(2,780)    $(325)    $(3,470)         $38 
                           =====   =======     =====     =======          === 
                                                                              
    INSURANCE                                                                 
    ---------                                                                 
    Income Statement                                                          
    Total interest                                                            
     income                   $-        $-        $-          $-           $- 
    Total interest                                                            
     expense                   3         4         4           2            4 
                             ---       ---       ---         ---          --- 
    Net interest income       (3)       (4)       (4)         (2)          (4)
    Provision for loan                                                        
     losses                    -         -         -           -            - 
                             ---       ---       ---         ---          --- 
    Net interest                                                              
     income (loss)                                                            
     after provision          (3)       (4)       (4)         (2)          (4)
    Noninterest income     2,580     3,019     2,795       3,384        3,594 
    Noninterest expense    2,748     2,961     2,966       3,474        3,353 
    Impairment of                                                             
     goodwill                  -     5,977         -      13,038            - 
                             ---     -----       ---      ------          --- 
    Income (loss) before                                                      
     income taxes           (171)   (5,923)     (175)    (13,130)         237 
    Provision (benefit)                                                       
     for income taxes        (58)   (1,548)      (63)        (24)          85 
                             ---    ------       ---         ---          --- 
    Net income (loss) before                                                  
     management fees and   
     overhead allocations  $(113)  $(4,375)    $(112)   $(13,106)        $152 
                           -----   -------     -----    --------         ---- 
    Management fees and                                                       
     overhead allocations, 
     net of tax              100        90        90         114           83 
                             ---       ---       ---         ---          --- 
    Net income (loss)      $(213)  $(4,465)    $(202)   $(13,220)         $69 
                           =====   =======     =====    ========          === 
                                                                             
    CORPORATE SUPPORT                                                         
     AND OTHER                                                                
    -----------------                                                         
    Income Statement                                                         
    Total interest                                                            
     income                 $287      $199       $20         $23          $32 
    Total interest                                                            
     expense                 956     1,008     1,118       1,254        1,571 
                             ---     -----     -----       -----        ----- 
    Net interest income     (669)     (809)   (1,098)     (1,231)      (1,539)
    Provision for loan                                                        
     losses                1,964       424         -           -            - 
                           -----       ---       ---         ---          --- 
    Net interest                                                              
     income (loss)                                                            
     after provision      (2,633)   (1,233)   (1,098)     (1,231)      (1,539)
    Noninterest income      (167)     (119)      760        (520)          69 
    Noninterest expense   10,696     9,821     8,331       9,444        8,698 
                          ------     -----     -----       -----        ----- 
    Income (loss) before                                                      
     income taxes        (13,496)  (11,173)   (8,669)    (11,195)     (10,168)
    Provision (benefit)                                                       
     for income taxes     (5,243)   (4,244)   (4,548)     (4,183)      (3,698)
                          ------    ------    ------      ------       ------ 
    Net income (loss) before                                                  
     management fees and 
     overhead 
     allocations         $(8,253)  $(6,929)  $(4,121)    $(7,012)     $(6,470)
                         -------   -------   -------     -------      ------- 
    Management fees and                                                       
     overhead allocations, 
     net of tax           (6,013)   (5,426)   (3,311)     (5,368)      (4,923)
                          ------    ------    ------      ------       ------ 
    Net income (loss)    $(2,240)  $(1,503)    $(810)    $(1,644)     $(1,547)
    Net (income) loss                                                         
     attributable to                                                          
     noncontrolling                                                           
     interest                106         -      (290)        498          (34)
                             ---       ---      ----         ---          --- 
    Net income (loss)                                                         
     attributable to                                                          
     CoBiz Financial     $(2,134)  $(1,503)  $(1,100)    $(1,146)     $(1,581)
                         =======   =======   =======     =======      ======= 
                                                                              
    CONSOLIDATED                                                              
    ------------                                                              
    Income Statement                                                          
    Total interest                                                           
     income              $30,973   $32,102   $32,841     $33,534      $35,820 
    Total interest                                                            
     expense               5,981     6,515     6,615       6,955       10,181 
                           -----     -----     -----       -----       ------ 
    Net interest income   24,992    25,587    26,226      26,579       25,639 
    Provision for loan                                                        
     losses               16,557    20,262    35,249      33,747       23,444 
                          ------    ------    ------      ------       ------ 
    Net interest                                                              
     income (loss)                                                            
     after provision       8,435     5,325    (9,023)     (7,168)       2,195 
    Noninterest income     6,492     6,979     8,035       6,121        7,055 
    Noninterest expense   23,843    23,503    24,273      23,631       23,632 
    Impairment of                                                             
     goodwill                  -    12,463         -      33,697            - 
                             ---    ------       ---      ------          --- 
    Income (loss) before                                                      
     income taxes         (8,916)  (23,662)  (25,261)    (58,375)     (14,382)
    Provision (benefit)                                                      
     for income taxes     (4,272)   (7,919)   (9,740)    (10,928)      (5,803)
                          ------    ------    ------     -------       ------
    Net income (loss) before                                                 
     management fees and  
     overhead                                                            
     allocations         $(4,644) $(15,743) $(15,521)   $(47,447)     $(8,579)
                         -------  --------  --------    --------      -------
    Management fees and                                                      
     overhead allocations, 
     net of tax                -         -         -           -            -
                             ---       ---       ---         ---          ---
    Net income (loss)    $(4,644) $(15,743) $(15,521)   $(47,447)     $(8,579)
    Net (income) loss                                                        
     attributable to                                                         
     noncontrolling                                                          
     interest                106         -      (290)        498          (34)
                             ---       ---      ----         ---          ---
    Net income (loss)                                                        
     attributable to                                                         
     CoBiz Financial     $(4,538) $(15,743) $(15,811)   $(46,949)     $(8,613)
                         =======  ========  ========    ========      =======
    
    
    
                         CoBiz Financial Inc.                        
                           December 31, 2009                         
                              (unaudited)                            
                                                                     
    
                                         Three months ended
     (in thousands,                      ------------------
     except per           December   September   June     March    December  
     share                  31,        30,        30,       31,        31,   
     amounts)              2009       2009       2009      2009       2008  
    -----------            ----       ----       ----      ----       ----  
    Interest income      $30,973    $32,102   $32,841    $33,534    $35,820  
    Interest expense       5,981      6,515     6,615      6,955     10,181  
                           -----      -----     -----      -----     ------  
        Net interest                                                  
         income before                                                    
         provision        24,992     25,587    26,226     26,579     25,639  
    Provision                                                               
     for loan                                                               
     losses               16,557     20,262    35,249     33,747     23,444  
                          ------     ------    ------     ------     ------  
        Net interest                                                        
         income (loss)                                                      
         after provision   8,435      5,325    (9,023)    (7,168)     2,195  
                           -----      -----    ------     ------      -----  
    Noninterest income:                                                     
      Deposit service                                                       
       charges            $1,212     $1,282    $1,248     $1,177     $1,111  
      Investment                                                            
       advisory and                                                         
       trust income        1,362      1,292     1,308      1,224      1,413  
      Insurance income     2,580      3,019     2,795      3,384      3,594  
      Investment                                                            
       banking income        175        476       399        104        504  
      Other income         1,163        910     2,285        232        433  
                           -----        ---     -----        ---        ---  
        Total                                                    
         noninterest                                             
         income            6,492      6,979     8,035      6,121      7,055  
                           -----      -----     -----      -----      -----  
    Noninterest expense:                                                    
      Salaries and                                                          
       employee benefits $13,049    $13,350   $13,081    $13,836    $12,052  
      Stock-based                                                           
       compensation 
      expense                410        313       411        409        489  
      Occupancy                                                           
       expenses,                                                          
       premises and                                                       
       equipment            3,333     3,320     3,288      3,274      3,417  
      Amortization of                                                     
       intangibles            167       169       169        169        169  
      Other operating                                                     
       expenses             5,261     5,426     5,632      4,584      4,070  
      Impairment of                                                        
       goodwill                 -    12,463         -     33,697          -  
      Net loss on                                                         
       securities, other                                                  
       assets and OREO      1,623       925     1,692      1,359      3,435  
                            -----       ---     -----      -----      -----  
        Total                                                   
         noninterest                                            
         expense           23,843    35,966    24,273     57,328     23,632  
                           ------    ------    ------     ------     ------  
        Net Loss before                                                     
         income taxes      (8,916)  (23,662)  (25,261)   (58,375)   (14,382) 
    Benefit for                                                             
     income taxes          (4,272)   (7,919)   (9,740)   (10,928)    (5,803) 
                           ------    ------    ------    -------     ------  
        Net loss before                                           
         noncontrolling                                           
         interest          (4,644)  (15,743)  (15,521)   (47,447)    (8,579) 
    Net (income) loss                                                       
     attributable to                                               
     noncontrolling                                                  
     interest                 106         -      (290)       498        (34) 
                              ---       ---      ----        ---        ---  
        Net loss          $(4,538) $(15,743) $(15,811)  $(46,949)   $(8,613) 
                          =======  ========  ========    ========   =======  
                                                                
    Preferred stock                                                      
     dividends               (936)     (935)     (932)      (930)      (124) 
                             ----      ----      ----       ----       ----  
        Net income (loss)                                           
         available to 
         common                                                         
         shareholders     $(5,474) $(16,678) $(16,743)  $(47,879)   $(8,737) 
                          =======  ========  ========   ========    ======= 
                                                                        
    Earnings (loss)                                                     
     per common share                                                   
      Basic                $(0.15)   $(0.50)   $(0.72)    $(2.07)    $(0.38) 
                           ------    ------    ------     ------     ------  
      Diluted              $(0.15)   $(0.50)   $(0.72)    $(2.07)    $(0.38) 
                           ------    ------    ------     ------     ------  
                                                                    
    Weighted average                                                        
     shares outstanding                                                    
     (in thousands)                                                     
      Basic                36,440    33,581    23,194     23,174     23,144  
                           ------    ------    ------     ------     ------  
      Diluted              36,440    33,581    23,194     23,174     23,144  
                           ------    ------    ------     ------     ------  
                                                                
    PROFITABILITY MEASURES                                      
    Net Interest                                                   
     Margin                  4.36%     4.40%     4.38%      4.38%      4.15% 
    Efficiency Ratio        70.34%    69.33%    66.47%     67.09%     61.84% 
    Return on                                                          
     Average Assets         (0.73)%   (2.48)%   (2.46)%    (7.08)%    (1.28)%
    Return on Average                                                    
     Shareholders' Equity   (7.67)%  (25.11)%  (30.77)%   (74.24)%   (16.78)%
    Noninterest Income as                                             
     a Percentage of                                                   
     Operating Revenues     20.62%    21.43%    23.45%     18.72%     21.58% 
                                                         
                    
                         CoBiz Financial Inc.                        
                           December 31, 2009                         
                              (unaudited)                            
                                                                     
                                                 At               
                      ------------------------------------------------------
                      December    September    June        March    December
                         31,         30,        30,         31,       31,   
    (in thousands)      2009        2009       2009        2009      2008  
    --------------      ----        ----       ----        ----      ----  
    PERIOD END BALANCES                                                   
    Total Assets   $2,466,015  $2,537,665  $2,540,833  $2,623,923  $2,684,275
    Loans           1,780,866   1,878,125   1,949,590   2,016,350   2,031,253
    Loans Held                                                            
     for Sale           1,820       1,844       2,185       3,100           -
    Goodwill and                                                    
     Intangible                                                     
     Assets             4,910       5,078      17,708      17,878      51,864
    Deposits        1,968,833   1,933,418   1,758,635   1,676,482   1,639,031 
    Subordinated 
     Debentures        93,150      93,150      93,150      93,150      93,150 
    Common                                                           
     Shareholders'                                                   
     Equity           168,579     172,338     131,518     141,555     190,635 
    Total 
     Shareholders' 
     Equity           230,451     234,080     193,132     203,049     252,099 
    Interest-                                                     
     Earning                                                      
     Assets         2,270,381   2,355,281   2,344,099   2,441,130   2,498,484 
    Interest-                                                       
     Bearing                                                        
     Liabilities    1,659,248   1,728,059   1,848,425   1,945,511   1,954,991 
                                                                     
    LOANS                                                            
    Commercial       $559,612    $579,524    $603,278    $630,567    $648,968 
    Real estate                                                    
     - mortgage       935,510     980,345   1,009,960   1,039,957   1,017,444 
    Real estate -                                                     
     construction     193,735     223,856     237,663     250,767     266,928 
    Consumer           76,103      82,021      85,385      83,405      86,701 
    Other              15,906      12,379      13,304      11,654      11,212 
                       ------      ------      ------      ------      ------ 
      Gross                                                  
       loans        1,780,866   1,878,125   1,949,590   2,016,350   2,031,253 
    Less allowance                                             
     for loan
     losses           (75,116)    (81,499)    (75,256)    (63,361)    (42,851)
                      -------     -------     -------     -------     ------- 
      Net loans held
       for                                                     
      investment    1,705,750   1,796,626   1,874,334   1,952,989   1,988,402 
    Loans held                                                               
     for sale           1,820       1,844       2,185       3,100          - 
                        -----       -----       -----       -----        --- 
      Total net                                                        
       loans       $1,707,570  $1,798,470  $1,876,519  $1,956,089  $1,988,402 
                   ==========  ==========  ==========  ==========  ========== 
                                                       
    DEPOSITS AND 
     CUSTOMER 
     REPURCHASE 
     AGREEMENTS                       
    NOW and money                                             
     market          $708,445    $583,877    $524,622    $520,605    $565,948 
    Savings            10,552       9,952       9,432       9,560       9,274 
    Eurodollar        107,500     113,936     103,303     100,249      88,025 
    Certificates 
     of deposits                                                  
     under $100,000    52,430      53,942      56,657      59,835      76,559 
    Certificates
     of deposits                                                   
     $100,000
     and over         358,424     420,962     405,888     311,348     287,039 
    Reciprocal CDARS  178,382     191,211     117,408     108,961      91,844 
    Brokered deposits  10,332      35,367      65,972     113,800      66,611 
                       ------      ------      ------     -------      ------ 
      Total interest-                                                 
       bearing 
       deposits     1,426,065   1,409,247   1,283,282   1,224,358   1,185,300 
    Noninterest-
     bearing                                                             
     demand deposits  542,768     524,171     475,353     452,124     453,731 
    Customer                                                             
     repurchase                                                          
     agreements       139,794     125,662     118,958     129,195     133,478 
                      -------     -------     -------     -------     ------- 
      Total deposits
       and                                   
       customer                                            
       repurchase                                                  
       agreements  $2,108,627  $2,059,080  $1,877,593  $1,805,677  $1,772,509 
                   ==========  ==========  ==========  ==========  ========== 
                                                       
    BALANCE SHEET 
     AVERAGES                                  
    Average 
     Assets        $2,472,318  $2,518,393  $2,580,448  $2,658,588  $2,668,533 
    Average Loans   1,836,782   1,920,384   2,012,342   2,025,349   2,025,859 
    Average
     Deposits       1,966,157   1,835,662   1,719,953   1,630,537   1,711,063 
    Average                                                        
     Subordinated                                                
     Debentures        93,150      93,150      93,150      93,150      92,902 
    Average                                                
     Shareholders'                                         
     Equity           234,844     248,781     206,127     253,652     204,222 
    Average Interest-                                           
     Earning
     Assets         2,289,621   2,322,410   2,419,408   2,475,708   2,479,183 
    Average Interest-                                                 
     Bearing
     Liabilities    1,679,788   1,741,117   1,894,779   1,947,119   1,998,161 
                                                    
    CREDIT QUALITY                                  
    Nonperforming Loans                             
      Loans 90 days or                                      
       more past due 
       and accruing                                     
       interest          $509      $3,949         $35        $522      $1,292 
      Nonaccrual
       loans           78,689      71,785      67,394      43,121      39,786 
                       ------      ------      ------      ------      ------ 
        Total                                              
         nonperforming                                     
         loans        $79,198     $75,734     $67,429     $43,643     $41,078 
    OREO and                                                      
     Repossessed                                                  
     Assets            25,318      22,452      26,461       8,879       5,941 
                       ------      ------      ------       -----       ----- 
        Total                                                  
         nonperforming                                         
         assets      $104,516     $98,186     $93,890     $52,522     $47,019 
                     ========     =======     =======     =======     ======= 
                                              
    ASSET QUALITY MEASURES                                 
    Nonperforming
     Assets to                                                                
     Total Assets       4.24%       3.87%       3.70%       2.00%       1.75%
    Nonperforming
     Loans to                                                                 
     Total Loans        4.44%       4.03%       3.45%       2.16%       2.02%
    Nonperforming                                
     Loans and OREO                              
     to Total Loans                              
     and OREO           5.78%       5.16%       4.75%       2.59%       2.31%
    Allowance for                                    
     Loan and Credit                                 
     Losses to Total                                 
     Loans (excluding                                      
     loans held for                                  
     sale)              4.23%       4.35%       3.87%       3.16%       2.12%
    Allowance for
     Loan and Credit 
     Losses to                                                     
     Nonperforming
     Loans             97.28%     107.86%     111.99%     146.12%     104.95%
                                                             
    EQUITY MEASURES                                          
    Common shares                                            
     outstanding 
     at period end
     (in thousands)    36,724      36,694      23,460      23,421      23,375
                       ------      ------      ------      ------      ------
    Book Value Per                                                     
     Common Share       $4.59       $4.70       $5.61       $6.04       $8.16
    Tangible                                            
     Book Value                                         
     Per Common                                         
     Share              $4.46       $4.56       $4.85       $5.28       $5.94
                                                               
    Tangible Common                                                    
     Equity to                                                 
     Tangible Assets     6.65%       6.60%       4.51%       4.75%       5.27%
    Tangible Equity                                                   
     to Tangible                                                 
     Assets              9.16%       9.04%       6.95%       7.11%       7.61%
    Tier 1 Capital                                           
     Ratio (1)          13.81%      13.95%      10.78%      11.55%      12.29%
    Total Risk                                                  
     Based Capital                                               
     Ratio (1)          16.13%      16.25%      13.44%      13.89%      14.50%
                                                                              
    (1) Ratios for the current period are preliminary and are subject
        to change upon completion of the Company's regulatory filings. 
    
    
    
                            CoBiz Financial Inc.              
                            December 31, 2009
                               (unaudited)                    
                                                              
                                                              
                                   For the three months ended December 31,
                                   --------------------------------------
                                                      2009
                                                    Interest  Average 
                                          Average    earned    yield  
    (in thousands)                        balance    or paid  or cost 
    --------------                        -------    -------  ------- 
    Assets                                                           
    Federal funds sold and other           $28,390       $31    0.43%
    Investment securities                  507,858     5,947    4.68%
    Loans                                1,836,782    25,178    5.36%
    Allowance for loan losses              (83,409)                  
                                           -------   -------         
      Total interest-earning assets     $2,289,621   $31,156    5.15%
    Noninterest-earning assets                                       
      Cash and due from banks               35,684                   
      Other                                147,013                   
                                           -------                   
        Total assets                    $2,472,318                   
                                        ==========                   
                                                                     
    Liabilities and Shareholders' Equity                             
    Deposits                                                         
      NOW and money market                $667,682    $1,498    0.89%
      Savings                                9,916        12    0.48%
      Eurodollar                           113,745       312    1.07%
      Certificates of deposit                                        
        Brokered                            17,265        87    2.00%
        Reciprocal CDARS                   182,016       637    1.39%
        Under $100,000                      53,715       258    1.91%
        $100,000 and over                  386,874     1,852    1.90%
                                           -------     -----         
      Total interest-bearing deposits   $1,431,213    $4,656    1.29%
    Other borrowings                                                 
      Securities sold under agreements                               
       to repurchase                       135,529       330    0.95%
      Other short-term borrowings           19,896        19    0.37%
      Long term-debt                        93,150       976    4.10%
                                            ------       ---         
        Total interest-bearing                                       
         liabilities                    $1,679,788    $5,981    1.41%
    Noninterest-bearing demand accounts    534,944                   
                                           -------                   
        Total deposits and interest-                                 
         bearing liabilities             2,214,732                   
    Other noninterest-bearing                                        
     liabilities                            21,509                   
                                            ------                   
        Total liabilities                2,236,241                   
    Total equity                           236,077                   
                                           -------                   
        Total liabilities and equity    $2,472,318                   
                                        ==========                   
    Net interest income - taxable equivalent         $25,175         
                                                     =======         
    Net interest spread                                         3.74%
    Net interest margin                                         4.36%
    Ratio of average interest-earning 
     assets to average interest-bearing                              
     liabilities                            136.30%                  
                                                                     
                                                                     
                                                                     
                                                                     
                                   For the three months ended December 31,
                                   --------------------------------------
                                                      2008         
                                                    Interest  Average 
                                          Average    earned    yield  
    (in thousands)                        balance    or paid  or cost 
    --------------                        -------    -------  ------- 
    Assets                                                           
    Federal funds sold and other            $6,348       $53    3.27%
    Investment securities                  477,700     6,254    5.24%
    Loans                                2,025,859    29,715    5.74%
    Allowance for loan losses              (30,724)                  
                                           -------   -------         
      Total interest-earning assets     $2,479,183   $36,022    5.64%
    Noninterest-earning assets                                       
      Cash and due from banks               51,984                   
      Other                                137,366                   
                                           -------                   
        Total assets                    $2,668,533                   
                                        ==========                   
                                                                     
    Liabilities and Shareholders' Equity                             
    Deposits                                                         
      NOW and money market                $527,066    $1,912    1.44%
      Savings                                8,319        10    0.48%
      Eurodollar                           110,712       443    1.57%
      Certificates of deposit                                        
        Brokered                           111,739       794    2.82%
        Reciprocal CDARS                   132,558       601    1.80%
        Under $100,000                      88,870       715    3.19%
        $100,000 and over                  286,318     2,197    3.04%
                                           -------     -----         
      Total interest-bearing deposits   $1,265,582    $6,672    2.09%
    Other borrowings                                                 
      Securities sold under agreements                               
       to repurchase                       132,738       439    1.29%
      Other short-term borrowings          506,939     1,539    1.19%
      Long term-debt                        92,902     1,531    6.45%
                                            ------     -----         
        Total interest-bearing                                       
         liabilities                    $1,998,161   $10,181    2.01%
    Noninterest-bearing demand accounts    445,481                   
                                           -------                   
        Total deposits and interest-                                 
         bearing liabilities             2,443,642                   
    Other noninterest-bearing                                        
     liabilities                            18,716                   
                                            ------                   
        Total liabilities                2,462,358                   
    Total equity                           206,175                   
                                           -------                   
        Total liabilities and equity    $2,668,533                   
                                        ==========                   
    Net interest income - taxable equivalent         $25,841         
                                                     =======         
    Net interest spread                                         3.63%
    Net interest margin                                         4.15%
    Ratio of average interest-earning 
     assets to average interest-bearing    
     liabilities                            124.07%                  
    
    
    
                                                             
                                          For the year ended December 31,
                                          -------------------------------
                                                      2009              
                                                    Interest   Average     
                                          Average    earned     yield      
    (in thousands)                        balance    or paid   or cost      
    --------------                        -------    -------   --------     
    Assets                                                                
    Federal funds sold and other           $13,011      $105     0.81%    
    Investment securities                  482,859    24,107     4.99%    
    Loans                                1,948,120   105,965     5.44%    
    Allowance for loan losses              (67,862)                       
                                           -------  --------              
      Total interest-earning assets     $2,376,128  $130,177     5.32%    
    Noninterest-earning assets                                            
      Cash and due from banks               37,473                        
      Other                                143,105                        
                                           -------                        
        Total assets                    $2,556,706                        
                                        ==========                        
                                                                          
    Liabilities and Shareholders' Equity                                  
    Deposits                                                              
      NOW and money market                $567,363    $6,011     1.06%    
      Savings                                9,711        47     0.48%    
      Eurodollar                           105,946     1,305     1.23%    
      Certificates of deposit                                             
        Brokered                            33,115       468     1.41%    
        Reciprocal CDARS                   132,994     1,888     1.42%    
        Under $100,000                      61,254     1,503     2.45%    
        $100,000 and over                  392,409     8,458     2.16%    
                                           -------     -----              
      Total interest-bearing deposits   $1,302,792   $19,680     1.51%    
    Other borrowings                                                      
      Securities sold under agreements                                    
       to repurchase                       125,053     1,137     0.91%    
      Other short-term borrowings          293,768       885     0.30%    
      Long-term debt                        93,150     4,365     4.69%    
                                            ------     -----              
        Total interest-bearing                                            
         liabilities                    $1,814,763   $26,067     1.44%    
    Noninterest-bearing demand accounts    486,335                        
                                           -------                        
        Total deposits and interest-                                      
         bearing liabilities             2,301,098                        
    Other noninterest-bearing                                             
     liabilities                            18,841                        
                                            ------                        
        Total liabilities                2,319,939                        
    Total equity                           236,767                        
                                           -------                        
        Total liabilities and equity    $2,556,706                        
                                        ==========                        
    Net interest income - taxable equivalent        $104,110              
                                                    ========              
    Net interest spread                                          3.88%    
    Net interest margin                                          4.38%    
    Ratio of average interest-earning 
     assets to average interest-bearing    
     liabilities                            130.93%                       
                                                                          
                                                                          
                                                                          
                                                                          
                                          For the year ended December 31,
                                          -------------------------------
                                                      2008              
                                                    Interest   Average     
                                          Average    earned     yield      
    (in thousands)                        balance    or paid   or cost     
    --------------                        -------    -------   --------    
    Assets                                                                
    Federal funds sold and other             7,958      $274     3.44%    
    Investment securities                  427,902    22,298     5.21%    
    Loans                                1,944,728   123,055     6.33%    
    Allowance for loan losses              (25,750)                       
                                           -------  --------              
      Total interest-earning assets     $2,354,838  $145,627     6.11%    
    Noninterest-earning assets                                            
      Cash and due from banks               44,846                        
      Other                                130,217                        
                                           -------                        
        Total assets                    $2,529,901                        
                                        ==========                        
                                                                          
    Liabilities and Shareholders' Equity                                  
    Deposits                                                              
      NOW and money market                $622,295   $12,280     1.97%    
      Savings                               10,217       122     1.19%    
      Eurodollar                           108,154     2,180     2.02%    
      Certificates of deposit                                             
        Brokered                           104,421     3,919     3.75%    
        Reciprocal CDARS                    52,858     1,134     2.15%    
        Under $100,000                      94,455     3,621     3.83%    
        $100,000 and over                  316,386    11,415     3.61%    
                                           -------    ------              
      Total interest-bearing deposits   $1,308,786   $34,671     2.65%    
    Other borrowings                                                      
      Securities sold under agreements                                    
       to repurchase                       147,230     2,669     1.81%    
      Other short-term borrowings          343,530     7,327     2.13%    
      Long-term debt                        79,306     4,890     6.17%    
                                            ------     -----              
        Total interest-bearing                                            
         liabilities                    $1,878,852   $49,557     2.64%    
    Noninterest-bearing demand accounts    434,926                        
                                           -------                        
        Total deposits and interest-                                      
         bearing liabilities             2,313,778                        
    Other noninterest-bearing                                             
     liabilities                            17,040                        
                                            ------                        
        Total liabilities                2,330,818                        
    Total equity                           199,083                        
                                           -------                        
        Total liabilities and equity    $2,529,901                        
                                        ==========                        
    Net interest income - taxable equivalent         $96,070              
                                                     =======              
    Net interest spread                                          3.47%    
    Net interest margin                                          4.08%    
    Ratio of average interest-earning 
     assets to average interest-bearing                  
     liabilities                            125.33%                       
    
    
    
    
                        CoBiz Financial Inc.                                  
                        December 31, 2009                                     
                           (unaudited)                                        
                                                                              
           Reconciliation of Non-GAAP Measures to GAAP                        
           -------------------------------------------                        
                                                                              
    --------------------------------------------------------------------------
       The Company believes these Non-GAAP measurements are useful to obtain  
       an understanding of the operating results of the Company’s core        
       business and reflects the basis on which management internally reviews 
       financial performance and capital adequacy. These Non-GAAP measurements
       are not a substitute for operating results determined in accordance    
       with GAAP nor do they necessarily conform to Non-GAAP performance      
       measures that may be presented by other companies.                     
    --------------------------------------------------------------------------
    
    --------------------------------------------------------------------------
       The following table reflects adjustments to net income and earnings per
       share, as reported, to exclude the effects of goodwill impairment.     
    --------------------------------------------------------------------------
                                                                              
                                           Year ended      Three months ended 
                                        -----------------  ------------------ 
      (in thousands)                    December 31, 2009  September 31, 2009 
      --------------                    -----------------  ------------------ 
                                                                              
      Net (loss) as reported - GAAP         $(83,041)           $(15,743)
      Effect of excluding:                                               
        Goodwill impairment                   46,160              12,463 
        Benefit for income taxes              (4,907)             (3,457)
                                                                         
       --------------------------------     --------             ------- 
      Net loss, excluding goodwill -                                     
       Non-GAAP                             $(41,788)            $(6,737)
      ===============================       ========             ======= 
                                                                         
      Earnings (loss) per diluted                                        
       common share - GAAP                    $(2.98)              (0.50)
      Effect of excluding goodwill                                       
       impairment charge                        1.42                0.27 
      ----------------------------              ----                ---- 
      Earnings (loss) per diluted                                        
       common share, excluding goodwill                                  
       - Non-GAAP                             $(1.56)             $(0.23)
      =================================       ======              ====== 
                                                                         
                                                                         
    
    --------------------------------------------------------------------------
       The following table includes Non-GAAP financial measurements related to
       tangible equity, tangible common equity and tangible assets.  These    
       items have been adjusted to exclude goodwill, intangible assets and    
       preferred stock.                                                       
    --------------------------------------------------------------------------
    
    
                         Year ended     Three months ended  Three months ended
                      ----------------  ------------------  ------------------
    (in thousands)    December 31, 2009  September 30, 2009    June 30, 2009  
    -------------     -----------------  ------------------ ------------------
                                                                     
      Total                                                          
       shareholders'                                           
       equity as                                               
       reported - GAAP      $230,451         $234,080            $193,132 
      Goodwill and                                                
       intangible                                                 
       assets                 (4,910)          (5,078)            (17,708)
       ----------------     --------         --------            -------- 
      Tangible equity -                                           
        Non-GAAP            $225,541         $229,002            $175,424 
      Preferred stock        (61,872)         (61,742)            (61,614)
       ----------------     --------         --------            -------- 
      Tangible common                                             
       equity -                                                   
       Non-GAAP             $163,669         $167,260            $113,810 
      ===============       ========         ========            ======== 
                                                                  
      Total assets as                                             
       reported - GAAP    $2,466,015       $2,537,665          $2,540,833 
      Goodwill and                                                
       intangible                                                 
       assets                 (4,910)          (5,078)            (17,708)
       ----------------   ----------       ----------          ---------- 
      Total tangible                                              
       assets -                                                   
       Non-GAAP           $2,461,105       $2,532,587          $2,523,125 
      ==============      ==========       ==========          ========== 
                                                                  
      Common Shares                                               
       Outstanding at                                             
       Period End (in                                             
       thousands)             36,724           36,694              23,460 
      Tangible Book                                               
       Value Per                                                  
       Common Share            $4.46            $4.56               $4.85 
                                                                  
      Tangible common                                             
       equity to                                                  
       tangible assets -                                           
       Non-GAAP                 6.65%            6.60%               4.51%
      Tangible equity                                             
       to tangible assets -                                       
       Non-GAAP                 9.16%            9.04%               6.95%
      Shareholders'                                               
       equity to                                                  
       assets as                                                  
       reported -                                                 
       GAAP                     9.35%            9.22%               7.60%
    
    
                                  Three months ended      Year ended      
                                  ------------------   -----------------  
      (in thousands)                March 31, 2009     December 31, 2008  
      --------------              ------------------   -----------------  
                                                                          
      Total shareholders' equity                                          
       as reported - GAAP               $203,049            $252,099  
      Goodwill and intangible                                         
       assets                            (17,878)            (51,864) 
                                                                      
       --------------------------       --------            --------  
      Tangible equity - Non-GAAP        $185,171            $200,235  
      Preferred stock                    (61,494)            (61,464) 
                                                                      
       --------------------------       --------            --------  
      Tangible common equity -                                        
       Non-GAAP                         $123,677            $138,771  
      =========================         ========            ========  
                                                                      
      Total assets as reported -                                      
       GAAP                           $2,623,923          $2,684,275  
      Goodwill and intangible                                         
       assets                            (17,878)            (51,864) 
                                                                      
       --------------------------     ----------          ----------  
      Total tangible assets -                                         
       Non-GAAP                       $2,606,045          $2,632,411  
      ========================        ==========          ==========  
                                                                      
      Common Shares Outstanding                                       
       at Period End (in                                              
       thousands)                         23,421              23,375  
      Tangible Book Value Per                                         
       Common Share                        $5.28               $5.94  
                                                                      
      Tangible common equity to                                       
       tangible assets -                                              
        Non-GAAP                            4.75%               5.27% 
      Tangible equity to                                              
       tangible assets -                                              
       Non-GAAP                             7.11%               7.61% 
      Shareholders' equity to                                         
       assets as                                                      
       reported - GAAP                      7.74%               9.39% 
    
    
    
    --------------------------------------------------------------------------
       The following table reflects noninterest expenses for the              
       three months ended December 31, 2009 and September 30, 2009            
       adjusted to exclude goodwill impairment charges.                       
    --------------------------------------------------------------------------
                                                                              
                             Three months ended Three months ended  Quarterly 
                             ------------------ ------------------  --------- 
      (in thousands)          December 31, 2009 September 30, 2009    Change  
      --------------          ----------------- ------------------  --------- 
      Noninterest expense -                                                   
       GAAP                        $23,843            $35,966       $(12,123)
      Goodwill impairment                -            (12,463)        12,463 
      -------------------              ---            -------         ------ 
      Noninterest expense -                                                  
       Non-GAAP                    $23,843            $23,503           $340 
      =====================        =======            =======           ====
    
    

SOURCE CoBiz Financial



RELATED LINKS

http://www.cobizfinancial.com