COBIZ FINANCIAL INC - FORM 8-K - EX-99.1

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8-K - 8-K - COBIZ FINANCIAL INC	cobz-20130718x8k.htm

CoBiz Financial Announces Second Quarter 2013 Results

Reports 31% increase in net income available to common shareholders

Denver -- CoBiz Financial Inc. (NASDAQ: COBZ), a financial services company with $2.7 billion in assets, announced net income available to common shareholders of $7.1 million for the second quarter of 2013, or $0.18 per diluted common share. Net income available to common shareholders for the second quarter of 2012 was $5.4 million, or $0.14 per diluted common share.

Return on average assets for the second quarter of 2013 increased to 1.09% from 1.00% in the second quarter of 2012, and return on average shareholders’ equity increased to 10.93% for the second quarter of 2013 from 10.22% for the prior-year quarter.

Financial Highlights – Second quarter 2013

·	Loans increased by $92.0 million, or 19% annualized, from the first quarter of 2013 (linked-quarter).

·	Continued credit improvement led to a negative provision for loan losses of $1.1 million for the current quarter.

·	An increase in fee income coupled with a reduction in noninterest expenses led to an improvement in the efficiency ratio to 71.2% for the second quarter of 2013 versus 75.8% for the first quarter of 2013 and 74.3% for the second quarter of 2012.

·	The net interest margin (NIM) decreased nine basis points from the first quarter of 2013.

Financial Summary



		Quarter ended						2Q13 change vs.
(in thousands, except per share amounts)		2Q13		1Q13		2Q12		1Q13			2Q12
Net interest income before provision	$	23,365	$	23,185	$	23,624	$	180	0.8%	$	(259)	(1.1)%
Provision for loan losses		(1,065)		(1,590)		(1,820)		525	(33.0)%		755	(41.5)%
Net interest income after provision		24,430		24,775		25,444		(345)	(1.4)%		(1,014)	(4.0)%
Total noninterest income		8,425		6,476		6,570		1,949	30.1%		1,855	28.2%
Total noninterest expense		21,594		22,581		22,589		(987)	(4.4)%		(995)	(4.4)%
Net income before income taxes		11,261		8,670		9,425		2,591	29.9%		1,836	19.5%
Provision for income taxes		3,999		2,794		3,230		1,205	43.1%		769	23.8%
Income from continuing operations		7,262		5,876		6,195		1,386	23.6%		1,067	17.2%
Discontinued operations, net of tax		-		173		(45)		(173)	(100.0)%		45	(100.0)%
Net income		7,262		6,049		6,150		1,213	20.1%		1,112	18.1%
Preferred stock dividends		(143)		(514)		(717)		371	(72.2)%		574	(80.1)%
Net income available to common shareholders	$	7,119	$	5,535	$	5,433	$	1,584	28.6%	$	1,686	31.0%

Diluted earnings per common share	$	0.18	$	0.14	$	0.14	$	0.04	28.6%	$	0.04	28.6%

KEY RATIOS
Net interest margin		3.85%		3.94%		4.19%
Efficiency ratio		71.20%		75.80%		74.32%
Return on average assets		1.09%		0.94%		1.00%
Return on average shareholders' equity		10.93%		9.43%		10.22%
Noninterest income as a percentage of operating revenues		26.50%		21.83%		21.76%

“It was gratifying to see the level of loan activity pick up this quarter, with the bank reporting 19% annualized loan growth. In such a challenging rate environment, quality loan generation is critical to maintaining our net interest income,” said Chairman and CEO Steve Bangert. “However, the momentum wasn’t isolated to the bank, with progress recognized across all our business units. The growth in fee income combined with disciplined expense management allowed our efficiency ratio to improve to 71%.

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“I look forward to building on the success we have seen. We recently announced expansion plans into two new markets within Colorado as well as the formation of a dedicated private banking division. I believe our high-touch business banking model will be well received and continue to build on the results we’ve seen in Colorado.”

Loans

·	Loans at June 30, 2013 were $2.0 billion, an increase of $251.2 million, or 14.2%, from the prior-year quarter. On a linked-quarter basis, loans increased by $92.0 million, or 19% annualized.

·	Growth was driven by the Commercial & Industrial (C&I) portfolio, which increased by $70.9 million during the current quarter, and $184.9 million from June 30, 2012.



		Quarter ended						2Q13 change vs.
(in thousands)		2Q13		1Q13		2Q12		1Q13			2Q12
LOANS
Commercial & industrial	$	813,186	$	742,239	$	628,327	$	70,947	9.6%	$	184,859	29.4%
Owner-occupied real estate		442,132		438,118		431,968		4,014	0.9%		10,164	2.4%
Investor real estate		442,447		451,053		400,673		(8,606)	(1.9)%		41,774	10.4%
Land acquisition & development		36,795		38,054		56,455		(1,259)	(3.3)%		(19,660)	(34.8)%
Real estate - construction		58,332		46,346		65,761		11,986	25.9%		(7,429)	(11.3)%
Consumer		168,606		157,973		132,510		10,633	6.7%		36,096	27.2%
Other		56,346		52,023		50,994		4,323	8.3%		5,352	10.5%
Total loans	$	2,017,844	$	1,925,806	$	1,766,688	$	92,038	4.8%	$	251,156	14.2%

·	Loan activity accelerated during the second quarter of 2013 after a relatively slow first quarter. New loans of $149.1 million were added during the second quarter, and advances on existing lines totaled $96.1 million.

·	New and advanced loans were offset by paydowns and maturities of $151.2 million during the second quarter of 2013.



		Quarter ended
(in thousands)		2Q13		1Q13		4Q12		3Q12		2Q12
Loans - beginning balance	$	1,925,806	$	1,926,432	$	1,811,407	$	1,766,688	$	1,678,447
New credit extended		149,053		78,587		205,723		134,767		164,414
Credit advanced		96,122		72,487		82,306		54,642		77,683
Paydowns & maturities		(151,176)		(150,878)		(172,540)		(141,705)		(152,017)
Gross loan charge-offs		(1,961)		(822)		(464)		(2,985)		(1,839)
Loans - ending balance	$	2,017,844	$	1,925,806	$	1,926,432	$	1,811,407	$	1,766,688

Net change - loans outstanding	$	92,038	$	(626)	$	115,025	$	44,719	$	88,241

·	Gross credit commitments increased by $45.0 million, or 17.0% annualized, on a linked-quarter basis and by $135.8 million, or 13.9%, from June 30, 2012.

·	Total line utilization was 40.3% at June 30, 2013, as compared to 37.9% and 42.0% at March 31, 2013 and June 30, 2012, respectively.

Investment Securities

·	The Company had investment securities available for sale (AFS) with a carrying value of $552.9 million at June 30, 2013, a $7.0 million increase from March 31, 2013.

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o	Due to the shift in the yield curve, the unrealized gain on the AFS investment portfolio decreased $8.8 million from March 31, 2013 to $8.4 million at June 30, 2013.

·	Investment securities classified as held to maturity increased $6.9 million from March 31, 2013 to $12.4 million at June 30, 2013.

·	Other investments totaled $10.8 million at June 30, 2013, an increase of $2.5 million from March 31, 2013.

Deposits and Customer Repurchase Agreements (Repo)

·	Customer Funding at June 30, 2013 was $2.2 billion, an increase of $95.2 million from June 30, 2012. On a linked-quarter basis, Customer Funding declined $20.6 million.

·	Noninterest-bearing demand (NIB) accounts increased $31.1 million on a linked-quarter basis, increasing the percentage of NIB to total deposits to 42.5% at June 30, 2013 from 40.4% at March 31, 2013.



		Quarter ended						2Q13 change vs.
(in thousands)		2Q13		1Q13		2Q12		1Q13			2Q12
DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS
NOW and money market	$	797,179	$	846,204	$	767,102	$	(49,025)	(5.8)%	$	30,077	3.9%
Interest-bearing demand		101,194		118,085		115,684		(16,891)	(14.3)%		(14,490)	(12.5)%
Savings		11,612		11,429		10,278		183	1.6%		1,334	13.0%
Certificates of deposits under $100		29,359		29,889		31,399		(530)	(1.8)%		(2,040)	(6.5)%
Certificates of deposits $100 and over		136,077		143,529		166,938		(7,452)	(5.2)%		(30,861)	(18.5)%
Reciprocal CDARS		95,157		81,631		94,336		13,526	16.6%		821	0.9%
Total interest-bearing deposits		1,170,578		1,230,767		1,185,737		(60,189)	(4.9)%		(15,159)	(1.3)%
Noninterest-bearing demand deposits		865,393		834,337		761,252		31,056	3.7%		104,141	13.7%
Customer repurchase agreements		133,402		124,882		127,144		8,520	6.8%		6,258	4.9%
Total deposits and customer repurchase agreements	$	2,169,373	$	2,189,986	$	2,074,133	$	(20,613)	(0.9)%	$	95,240	4.6%

Allowance for Loan and Credit Losses and Credit Quality

·	Nonperforming assets (NPAs) were $32.8 million at June 30, 2013, as compared to $38.6 million at June 30, 2012.

·	Classified loans decreased from the linked- and prior-year quarter ends by 5.0% and 34.5%, respectively.

·	Due to the reduction in problem loans, a negative provision for loan losses of $1.1 million was recorded during the second quarter of 2013.

·	The Company recognized net loan charge-offs of $0.6 million in the second quarter of 2013, compared to net charge-offs of $0.4 million in the first quarter of 2013 and net recoveries of $0.1 million in the second quarter of 2012.

·	As a result of the improvement in credit quality measures, the Allowance for Loan and Credit Losses (Allowance) to loan ratio decreased to 2.14% at June 30, 2013 from 2.33% at March 31, 2013.

·	The coverage of Allowance to nonperforming loans increased to 168.7% at June 30, 2013 from 145.6% at March 31, 2013.

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		Quarter ended
(in thousands)		2Q13		1Q13		2Q12
ALLOWANCE FOR LOAN AND CREDIT LOSSES
Beginning allowance for loan losses	$	44,874	$	46,866	$	52,778
Provision for loan losses		(1,065)		(1,590)		(1,820)
Net recovery (charge-off)		(577)		(402)		143
Ending allowance for loan losses	$	43,232	$	44,874	$	51,101

Beginning allowance for credit losses	$	-	$	-	$	35
Provision for credit losses		-		-		-
Ending allowance for credit losses	$	-	$	-	$	35

Total provision for loan and credit losses	$	(1,065)	$	(1,590)	$	(1,820)

CREDIT QUALITY
Nonaccrual loans	$	25,634	$	30,420	$	24,950
Loans 90 days or more past due and accruing interest		-		407		-
Total nonperforming loans		25,634		30,827		24,950
OREO and repossessed assets		7,185		8,420		13,651
Total nonperforming assets	$	32,819	$	39,247	$	38,601

Performing renegotiated loans	$	29,623	$	31,619	$	36,010
Classified loans	$	64,300	$	67,677	$	98,136

ASSET QUALITY MEASURES
Nonperforming assets to total assets		1.20%		1.50%		1.53%
Nonperforming loans to total loans		1.27%		1.60%		1.41%
Nonperforming loans and OREO to total loans and OREO		1.62%		2.03%		2.17%
Allowance for loan and credit losses to total loans		2.14%		2.33%		2.89%
Allowance for loan and credit losses to nonperforming loans		168.65%		145.57%		204.95%

Shareholders’ Equity

·	Total shareholders’ equity increased $3.2 million from March 31, 2013 to $266.7 million at June 30, 2013.

Total accumulated other comprehensive income included within total shareholders’ equity declined by $3.6 million. The recent rise in interest rates reduced the unrealized net gain on the Company’s AFS investments and had a corresponding decrease on the unrealized net loss on the derivative portfolio.

·	Tangible common equity decreased to 7.5% of tangible assets at June 30, 2013 from 7.8% at March 31, 2013.

·	The Board of Directors of the Company declared a quarterly cash dividend of $0.03 per common share. The dividend will be paid on August 5, 2013 to shareholders of record on July 29, 2013.

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		Quarter ended
(in thousands, except per share amounts)		2Q13		1Q13		2Q12
EQUITY MEASURES
Common shareholders' equity	$	209,341	$	206,179	$	186,097
Total shareholders' equity		266,679		263,517		243,435

Common shares outstanding at period end		40,282		40,197		39,708

Book value per common share	$	5.20	$	5.13	$	4.69
Tangible book value per common share *	$	5.12	$	5.05	$	4.60

Tangible common equity to tangible assets *		7.54%		7.75%		7.23%
Tangible equity to tangible assets *		9.63%		9.94%		9.50%
Tier 1 capital ratio		**		14.72%		15.01%
Total-risk based capital ratio		**		16.93%		17.32%

* See accompanying Reconciliation of Non-GAAP measures to GAAP
** Ratios unavailable at the time of release

Net Interest Income and Margin

·	Net interest income on a tax-equivalent basis was $24.0 million for the second quarter of 2013, an increase of $0.2 million from the prior linked-quarter.

·	The NIM contracted by nine basis points on a linked-quarter basis to 3.85% mainly due to decreases in earning asset yields, primarily loan yields.

·	Average earning assets of $2.5 billion increased $53.8 million on a linked-quarter basis.

o	From the first quarter of 2013, average net loans increased $55.6 million, average federal funds sold and interest earning deposits increased $3.2 million, and average investments decreased $5.0 million.

·	The yield on average earning assets decreased 11 basis points to 4.16% from 4.27% on a linked-quarter basis.

·	The rate paid on average interest-bearing liabilities decreased five basis points on a linked-quarter basis from 0.77% to 0.72%.

Noninterest Income

·	As a percentage of total operating revenue, noninterest income increased to 26.5% for the second quarter of 2013 from 21.8% for both the linked- and prior-year quarters.

·	The Company observed increases across all noninterest income categories and operating units compared to the linked- and prior-year quarters.

·	The linked-quarter increase in other income is primarily attributable to a change in the fair value of the Company’s interest rate swap portfolio.

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		Quarter ended						2Q13 change vs.
(in thousands)		2Q13		1Q13		2Q12		1Q13			2Q12
Noninterest income:
Deposit service charges	$	1,352	$	1,328	$	1,221	$	24	1.8%	$	131	10.7%
Investment advisory income		1,295		1,112		951		183	16.5%		344	36.2%
Insurance income		3,210		2,510		2,517		700	27.9%		693	27.5%
Investment banking income		576		66		148		510	772.7%		428	289.2%
Other income		1,992		1,460		1,733		532	36.4%		259	14.9%
Total noninterest income	$	8,425	$	6,476	$	6,570	$	1,949	30.1%	$	1,855	28.2%

Operating Expenses

·	The Company’s efficiency ratio for the second quarter of 2013 was 71.2% compared to 74.3% for the second quarter of 2012 and 75.8% for the first quarter of 2013.

·	The increase in compensation-related expenses over the linked-quarter is attributed to the impact of annual cost of living and merit increases effective in the second quarter 2013.

·	The reduction in other operating expenses from the linked- and prior-year quarters is primarily due to a reduction in loan workout and OREO expenses.

·	In the second quarter of 2013, the Company recorded net gains on OREO, investments and other assets.



		Quarter ended						2Q13 change vs.
(in thousands)		2Q13		1Q13		2Q12		1Q13			2Q12
Noninterest expense:
Salaries and employee benefits	$	14,720	$	14,484	$	13,790	$	236	1.6%	$	930	6.7%
Stock-based compensation expense		746		748		511		(2)	(0.3)%		235	46.0%
Occupancy expenses, premises and equipment		3,155		3,304		3,335		(149)	(4.5)%		(180)	(5.4)%
Amortization of intangibles		159		200		133		(41)	(20.5)%		26	19.5%
Other operating expenses		3,853		3,926		4,291		(73)	(1.9)%		(438)	(10.2)%
(Gain) loss on OREO, repossessed assets and other		(561)		(70)		1,070		(491)	701.4%		(1,631)	(152.4)%
(Gain) loss on investment securities		(478)		(11)		(541)		(467)	4,245.5%		63	(11.6)%
Total noninterest expense	$	21,594	$	22,581	$	22,589	$	(987)	(4.4)%	$	(995)	(4.4)%

Earnings Conference Call

In conjunction with this release, you are invited to listen to the Company's conference call on Friday, July 19, 2013, at 9:00 am MDT with Steve Bangert, CoBiz chairman and CEO. The call can be accessed via the Internet at http://www.videonewswire.com/event.asp?id=94876 or by telephone at 877.493.9121, (conference ID # 15554382). International callers may dial: 973.582.2750.

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

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

Contact Information

CoBiz Financial Inc.

Lyne Andrich 303.312.3458

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About CoBiz Financial

CoBiz Financial (NASDAQ:COBZ) is a $2.7 billion financial services company that serves the complete financial needs of businesses, business owners and professionals in Colorado and Arizona. The Company provides commercial banking services through Colorado Business Bank and Arizona Business Bank; wealth planning and investment management through CoBiz Wealth Management; property and casualty insurance brokerage and employee benefits through CoBiz Insurance; and investment banking services through Green Manning & Bunch.

Forward-Looking Information

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

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

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

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

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

·	Our ability to manage growth effectively, 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.

·	Our net interest margin may be negatively impacted if we are unable to profitably deploy excess cash into higher yielding loans or investments.

·	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 and implementation of current legislative or regulatory requirements could increase costs, limit certain operations and adversely affect results of operations.

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

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

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CoBiz Financial Inc.
June 30, 2013
(unaudited)

	Three months ended June 30,				Six months ended June 30,
(in thousands, except per share amounts)	2013		2012		2013		2012
INCOME STATEMENT DATA
Interest income	$	26,160	$	26,842	$	52,212	$	53,436
Interest expense		2,795		3,218		5,662		6,509
NET INTEREST INCOME BEFORE PROVISION		23,365		23,624		46,550		46,927
Provision for loan losses		(1,065)		(1,820)		(2,655)		(1,890)
NET INTEREST INCOME AFTER PROVISION		24,430		25,444		49,205		48,817
Noninterest income		8,425		6,570		14,901		13,487
Noninterest expense		21,594		22,589		44,175		46,000
INCOME BEFORE INCOME TAXES		11,261		9,425		19,931		16,304
Provision for income taxes		3,999		3,230		6,793		5,610
NET INCOME FROM CONTINUING OPERATIONS		7,262		6,195		13,138		10,694
Income (loss) from discontinued operations, net of tax		-		(45)		173		(4)
NET INCOME	$	7,262	$	6,150	$	13,311	$	10,690

Preferred stock dividends		(143)		(717)		(657)		(1,434)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	7,119	$	5,433	$	12,654	$	9,256

EARNINGS PER COMMON SHARE
BASIC	$	0.18	$	0.14	$	0.32	$	0.24
DILUTED	$	0.18	$	0.14	$	0.32	$	0.24

EQUITY MEASURES
Common shares outstanding at period end (in thousands)						40,282		39,708
Book value per common share					$	5.20	$	4.69
Tangible book value per common share *					$	5.12	$	4.60
Tangible common equity to tangible assets *						7.54%		7.23%
Tangible equity to tangible assets *						9.63%		9.50%

* See accompanying Reconciliation of Non-GAAP Measures to GAAP

PERIOD END BALANCES
Total assets					$	2,738,749	$	2,530,133
Investments						576,045		623,879
Loans						2,017,844		1,766,688
Intangible assets						3,112		3,439
Deposits						2,035,971		1,946,989
Subordinated debentures						93,150		93,150
Common shareholders' equity						209,341		186,097
Total shareholders' equity						266,679		243,435
Interest-earning assets						2,564,833		2,355,707
Interest-bearing liabilities						1,552,129		1,480,256

BALANCE SHEET AVERAGES
Average assets					$	2,639,671	$	2,450,965
Average investments						560,949		632,007
Average loans						1,941,758		1,680,561
Average deposits						2,045,158		1,890,100
Average subordinated debentures						93,150		93,150
Average shareholders' equity						263,296		233,546
Average interest-earning assets						2,474,898		2,279,515
Average interest-bearing liabilities						1,515,022		1,463,434

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CoBiz Financial Inc.
June 30, 2013
(unaudited)

	Three months ended June 30,			Six months ended June 30,
(in thousands)	2013	2012		2013		2012
PROFITABILITY MEASURES
Net interest margin	3.85%	4.19%		3.90%		4.21%
Efficiency ratio	71.20%	74.32%		73.43%		75.55%
Return on average assets	1.09%	1.00%		1.02%		0.88%
Return on average shareholders' equity	10.93%	10.22%		10.19%		9.20%
Noninterest income as a percentage of operating revenues	26.50%	21.76%		24.25%		22.32%

CREDIT QUALITY
Nonperforming loans
Nonaccrual loans			$	25,634	$	24,950
Loans 90 days or more past due and accruing interest				-		-
Total nonperforming loans				25,634		24,950
OREO & repossessed assets				7,185		13,651
Total nonperforming assets			$	32,819	$	38,601

Performing renegotiated loans			$	29,623	$	36,010
Classified loans			$	64,300	$	98,136

Charge-offs			$	(2,783)	$	(5,151)
Recoveries				1,804		2,513
Net charge-offs			$	(979)	$	(2,638)

Nonperforming assets to total assets				1.20%		1.53%
Nonperforming loans to total loans				1.27%		1.41%
Nonperforming loans and OREO to total loans and OREO				1.62%		2.17%
Allowance for loan and credit losses to total loans				2.14%		2.89%
Allowance for loan and credit losses to nonperforming loans				168.65%		204.95%



								Total	NPAs as a
NONPERFORMING ASSETS BY MARKET		Colorado		Arizona		Total		in Category	%
Commercial	$	1,791	$	1,108	$	2,899	$	813,186	0.36%
Real estate - mortgage		2,414		17,679		20,093		884,579	2.27%
Land acquisition & development		1,262		936		2,198		36,795	5.97%
Real estate - construction		261		-		261		58,332	0.45%
Consumer		183		-		183		168,606	0.11%
Other loans		-		-		-		56,346	0.00%
OREO & repossessed assets		5,994		1,191		7,185		7,185	-
NPAs	$	11,905	$	20,914	$	32,819	$	2,025,029	1.62%

Total loans	$	1,497,577	$	520,267	$	2,017,844
Total loans and OREO		1,503,571		521,458		2,025,029
Nonperforming loans to loans		0.39%		3.79%		1.27%
Nonperforming loans and OREO to total loans and OREO		0.79%		4.01%		1.62%

9 | Page



CoBiz Financial Inc.
June 30, 2013
(unaudited)

		Three months ended
		June 30,		March 31,		December 31,		September 30,		June 30,
(in thousands)		2013		2013		2012		2012		2012
COMMERCIAL BANKING
Income Statement
Total interest income	$	26,068	$	25,958	$	26,158	$	26,364	$	26,759
Total interest expense		1,330		1,424		1,577		1,730		1,766
Net interest income		24,738		24,534		24,581		24,634		24,993
Provision for loan losses		(822)		(1,031)		(18)		(2,324)		(1,841)
Net interest income (loss) after provision		25,560		25,565		24,599		26,958		26,834
Noninterest income		3,236		2,681		3,756		2,495		2,965
Noninterest expense		8,917		8,215		8,631		7,261		7,424
Operating income		19,879		20,031		19,724		22,192		22,375
Amortization of intangibles		-		-		-		-		-
Provision (benefit) for income taxes		7,139		7,149		7,226		8,374		8,161
Net income (loss) before management
fees and overhead allocations	$	12,740	$	12,882	$	12,498	$	13,818	$	14,214
Management fees and overhead
allocations, net of tax		5,042		5,477		4,806		5,704		5,377
Net income	$	7,698	$	7,405	$	7,692	$	8,114	$	8,837

INVESTMENT BANKING
Income Statement
Total interest income	$	1	$	1	$	1	$	1	$	1
Total interest expense		-		-		-		-		-
Net interest income		1		1		1		1		1
Provision for loan losses		-		-		-		-		-
Net interest income (loss) after provision		1		1		1		1		1
Noninterest income		576		66		3,358		253		148
Noninterest expense		916		845		1,630		833		823
Operating income		(339)		(778)		1,729		(579)		(674)
Amortization of intangibles		-		-		-		-		-
Provision (benefit) for income taxes		(122)		(314)		679		(266)		(260)
Net income (loss) before management
fees and overhead allocations	$	(217)	$	(464)	$	1,050	$	(313)	$	(414)
Management fees and overhead
allocations, net of tax		42		40		36		33		41
Net income (loss)	$	(259)	$	(504)	$	1,014	$	(346)	$	(455)

WEALTH MANAGEMENT
Income Statement
Total interest income	$	-	$	1	$	-	$	-	$	-
Total interest expense		13		10		8		10		13
Net interest income		(13)		(9)		(8)		(10)		(13)
Provision for loan losses		-		-		-		-		-
Net interest income (loss) after provision		(13)		(9)		(8)		(10)		(13)
Noninterest income		1,299		1,112		1,109		1,176		951
Noninterest expense		1,074		1,059		1,372		1,050		1,176
Operating income		212		44		(271)		116		(238)
Amortization of intangibles		21		22		22		22		22
Provision (benefit) for income taxes		74		15		(112)		32		(107)
Net income (loss) from continuing operations		117		7		(181)		62		(153)
Income (loss) from discontinued operations, net of tax		-		173		453		(125)		(45)
Net income (loss) before management
fees and overhead allocations	$	117	$	180	$	272	$	(63)	$	(198)
Management fees and overhead
allocations, net of tax		97		105		165		150		161
Net income (loss)	$	20	$	75	$	107	$	(213)	$	(359)

10 | Page



CoBiz Financial Inc.
June 30, 2013
(unaudited)

		Three months ended
		June 30,		March 31,		December 31,		September 30,		June 30,
(in thousands)		2013		2013		2012		2012		2012
INSURANCE
Income Statement
Total interest income	$	2	$	1	$	1	$	2	$	1
Total interest expense		5		5		2		-		-
Net interest income		(3)		(4)		(1)		2		1
Provision for loan losses		-		-		-		-		-
Net interest income (loss) after provision		(3)		(4)		(1)		2		1
Noninterest income		3,210		2,510		2,341		2,412		2,517
Noninterest expense		2,573		2,315		2,276		2,201		2,208
Operating income		634		191		64		213		310
Amortization of intangibles		138		178		172		243		110
Provision (benefit) for income taxes		197		79		(40)		(9)		81
Net income (loss) before management
fees and overhead allocations	$	299	$	(66)	$	(68)	$	(21)	$	119
Management fees and overhead
allocations, net of tax		123		116		92		86		107
Net income (loss)	$	176	$	(182)	$	(160)	$	(107)	$	12

CORPORATE SUPPORT AND OTHER
Income Statement
Total interest income	$	89	$	91	$	83	$	82	$	81
Total interest expense		1,447		1,428		1,452		1,462		1,439
Net interest income		(1,358)		(1,337)		(1,369)		(1,380)		(1,358)
Provision for loan losses		(243)		(559)		(319)		(182)		21
Net interest income (loss) after provision		(1,115)		(778)		(1,050)		(1,198)		(1,379)
Noninterest income		104		107		108		64		(11)
Noninterest expense		7,955		9,947		9,105		10,348		10,826
Operating income		(8,966)		(10,618)		(10,047)		(11,482)		(12,216)
Amortization of intangibles		-		-		-		-		-
Provision (benefit) for income taxes		(3,289)		(4,135)		(3,826)		(4,410)		(4,645)
Net income (loss) before management
fees and overhead allocations	$	(5,677)	$	(6,483)	$	(6,221)	$	(7,072)	$	(7,571)
Management fees and overhead
allocations, net of tax		(5,304)		(5,738)		(5,099)		(5,973)		(5,686)
Net loss	$	(373)	$	(745)	$	(1,122)	$	(1,099)	$	(1,885)

CONSOLIDATED
Income Statement
Total interest income	$	26,160	$	26,052	$	26,243	$	26,449	$	26,842
Total interest expense		2,795		2,867		3,039		3,202		3,218
Net interest income		23,365		23,185		23,204		23,247		23,624
Provision for loan losses		(1,065)		(1,590)		(337)		(2,506)		(1,820)
Net interest income (loss) after provision		24,430		24,775		23,541		25,753		25,444
Noninterest income		8,425		6,476		10,672		6,400		6,570
Noninterest expense		21,435		22,381		23,014		21,693		22,456
Operating income		11,420		8,870		11,199		10,460		9,558
Amortization of intangibles		159		200		194		265		133
Provision (benefit) for income taxes		3,999		2,794		3,927		3,721		3,230
Net income (loss) from continuing operations		7,262		5,876		7,078		6,474		6,195
Income (loss) from discontinued operations, net of tax		-		173		453		(125)		(45)
Net income (loss) before management
fees and overhead allocations	$	7,262	$	6,049	$	7,531	$	6,349	$	6,150
Management fees and overhead
allocations, net of tax		-		-		-		-		-
Net income	$	7,262	$	6,049	$	7,531	$	6,349	$	6,150

11 | Page



CoBiz Financial Inc.
June 30, 2013
(unaudited)

	Three months ended
	June 30,		March 31,		December 31,		September 30,		June 30,
(in thousands, except per share amounts)	2013		2013		2012		2012		2012
Interest income	$	26,160	$	26,052	$	26,243	$	26,449	$	26,842
Interest expense		2,795		2,867		3,039		3,202		3,218
Net interest income before provision		23,365		23,185		23,204		23,247		23,624
Provision for loan losses		(1,065)		(1,590)		(337)		(2,506)		(1,820)
Net interest income after provision		24,430		24,775		23,541		25,753		25,444
Noninterest income:
Deposit service charges	$	1,352	$	1,328	$	1,220	$	1,218	$	1,221
Investment advisory income		1,295		1,112		1,109		1,176		951
Insurance income		3,210		2,510		2,341		2,412		2,517
Investment banking income		576		66		3,358		253		148
Other income		1,992		1,460		2,644		1,341		1,733
Total noninterest income		8,425		6,476		10,672		6,400		6,570
Noninterest expense:
Salaries and employee benefits	$	14,720	$	14,484	$	15,526	$	14,004	$	13,790
Stock-based compensation expense		746		748		450		499		511
Occupancy expenses, premises and equipment		3,155		3,304		3,393		3,307		3,335
Amortization of intangibles		159		200		193		265		133
Other operating expenses		3,853		3,926		4,331		3,818		4,291
Net loss on securities, other assets and OREO		(1,039)		(81)		(685)		65		529
Total noninterest expense		21,594		22,581		23,208		21,958		22,589
Net income before income taxes		11,261		8,670		11,005		10,195		9,425
Provision for income taxes		3,999		2,794		3,927		3,721		3,230
Net income from continuing operations		7,262		5,876		7,078		6,474		6,195
Income (loss) from discontinued operations, net of tax		-		173		453		(125)		(45)
Net income	$	7,262	$	6,049	$	7,531	$	6,349	$	6,150

Preferred stock dividends		(143)		(514)		(664)		(717)		(717)
Net income available to common shareholders	$	7,119	$	5,535	$	6,867	$	5,632	$	5,433

Earnings per common share
Basic	$	0.18	$	0.14	$	0.17	$	0.14	$	0.14
Diluted	$	0.18	$	0.14	$	0.17	$	0.14	$	0.14

PROFITABILITY MEASURES
Net interest margin		3.85%		3.94%		3.89%		4.00%		4.19%
Efficiency ratio		71.20%		75.80%		70.30%		75.28%		74.32%
Return on average assets		1.09%		0.94%		1.15%		1.00%		1.00%
Return on average shareholders' equity		10.93%		9.43%		11.77%		10.23%		10.22%
Noninterest income as a percentage of operating revenues		26.50%		21.83%		31.50%		21.59%		21.76%

EQUITY MEASURES
Common shares outstanding at period end (in thousands)		40,282		40,197		39,790		39,729		39,708
Diluted weighted average common shares outstanding (in thousands)		39,580		39,362		39,164		39,122		39,029
Book value per common share	$	5.20	$	5.13	$	5.02	$	4.88	$	4.69
Tangible book value per common share *	$	5.12	$	5.05	$	4.93	$	4.80	$	4.60

Tangible common equity to tangible assets *		7.54%		7.75%		7.40%		7.45%		7.23%
Tangible equity to tangible assets *		9.63%		9.94%		9.56%		9.69%		9.50%
Tier 1 capital ratio		**		14.72%		14.29%		15.08%		15.01%
Total risk based capital ratio		**		16.93%		16.51%		17.35%		17.32%

* See accompanying Reconciliation of Non-GAAP Measures to GAAP
** Ratios unavailable at the time of release

12 | Page



CoBiz Financial Inc.
June 30, 2013
(unaudited)
	At
	June 30,		March 31,		December 31,		September 30,		June 30,
(in thousands)	2013		2013		2012		2012		2012
PERIOD END BALANCES
Total assets	$	2,738,749	$	2,620,512	$	2,653,641	$	2,559,954	$	2,530,133
Investments		576,045		559,607		571,665		601,230		623,879
Loans		2,017,844		1,925,806		1,926,432		1,811,407		1,766,688
Intangible assets		3,112		3,373		3,573		3,148		3,439
Deposits		2,035,971		2,065,104		2,129,260		2,048,776		1,946,989
Subordinated debentures		93,150		93,150		93,150		93,150		93,150
Common shareholders' equity		209,341		206,179		199,713		193,692		186,097
Total shareholders' equity		266,679		263,517		257,051		251,030		243,435
Interest-earning assets		2,564,833		2,449,800		2,473,847		2,382,653		2,355,707
Interest-bearing liabilities		1,552,129		1,487,799		1,490,901		1,443,399		1,480,256

LOANS
Commercial	$	813,186	$	742,239	$	729,442	$	663,880	$	628,327
Real estate - mortgage		884,579		889,171		880,377		850,824		832,641
Land acquisition & development		36,795		38,054		53,562		54,220		56,455
Real estate - construction		58,332		46,346		67,022		56,180		65,761
Consumer		168,606		157,973		149,638		137,299		132,510
Other		56,346		52,023		46,391		49,004		50,994
Gross loans		2,017,844		1,925,806		1,926,432		1,811,407		1,766,688
Less allowance for loan losses		(43,232)		(44,874)		(46,866)		(46,437)		(51,101)
Total net loans	$	1,974,612	$	1,880,932	$	1,879,566	$	1,764,970	$	1,715,587

DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS
NOW and money market	$	797,179	$	846,204	$	866,250	$	813,202	$	767,102
Interest-bearing demand		101,194		118,085		118,433		117,915		115,684
Savings		11,612		11,429		24,813		10,659		10,278
Certificates of deposits under $100		29,359		29,889		30,058		30,574		31,399
Certificates of deposits $100 and over		136,077		143,529		148,184		162,595		166,938
Reciprocal CDARS		95,157		81,631		82,127		90,468		94,336
Total interest-bearing deposits		1,170,578		1,230,767		1,269,865		1,225,413		1,185,737
Noninterest-bearing demand deposits		865,393		834,337		859,395		823,363		761,252
Customer repurchase agreements		133,402		124,882		127,887		124,836		127,144
Total deposits and customer repurchase agreements	$	2,169,373	$	2,189,986	$	2,257,147	$	2,173,612	$	2,074,133

BALANCE SHEET AVERAGES
Average assets	$	2,662,914	$	2,616,170	$	2,600,083	$	2,529,999	$	2,476,936
Average investments		558,464		563,461		586,482		607,696		629,087
Average loans		1,968,674		1,914,542		1,831,430		1,780,352		1,712,917
Average deposits		2,030,209		2,060,274		2,062,306		1,979,267		1,893,456
Average subordinated debentures		93,150		93,150		93,150		93,150		93,150
Average shareholders' equity		266,526		260,030		254,455		246,783		242,098
Average interest-earning assets		2,501,630		2,447,867		2,430,196		2,365,965		2,310,064
Average interest-bearing liabilities		1,535,232		1,494,590		1,477,566		1,468,194		1,481,794

ALLOWANCE FOR LOAN AND CREDIT LOSSES
Beginning allowance for loan losses	$	44,874	$	46,866	$	46,437	$	51,101	$	52,778
Provision for loan losses		(1,065)		(1,590)		(337)		(2,506)		(1,820)
Net recovery (charge-off)		(577)		(402)		766		(2,158)		143
Ending allowance for loan losses	$	43,232	$	44,874	$	46,866	$	46,437	$	51,101

Beginning allowance for credit losses	$	-	$	-	$	35	$	35	$	35
Provision for credit losses		-		-		(35)		-		-
Ending allowance for credit losses	$	-	$	-	$	-	$	35	$	35

Total provision for loan and credit losses	$	(1,065)	$	(1,590)	$	(372)	$	(2,506)	$	(1,820)

CREDIT QUALITY
Nonperforming loans
Nonaccrual loans	$	25,634	$	30,420	$	19,677	$	19,471	$	24,950
Loans 90 days or more past due and accruing interest		-		407		35		1,183		-
Total nonperforming loans		25,634		30,827		19,712		20,654		24,950
OREO and repossessed assets		7,185		8,420		10,577		13,619		13,651
Total nonperforming assets	$	32,819	$	39,247	$	30,289	$	34,273	$	38,601

Performing renegotiated loans	$	29,623	$	31,619	$	43,321	$	34,637	$	36,010
Classified loans	$	64,300	$	67,677	$	81,205	$	90,882	$	98,136

ASSET QUALITY MEASURES
Nonperforming assets to total assets		1.20%		1.50%		1.14%		1.34%		1.53%
Nonperforming loans to total loans		1.27%		1.60%		1.02%		1.14%		1.41%
Nonperforming loans and OREO to total loans and OREO		1.62%		2.03%		1.56%		1.88%		2.17%
Allowance for loan and credit losses to total loans		2.14%		2.33%		2.43%		2.57%		2.89%
Allowance for loan and credit losses to nonperforming loans		168.65%		145.57%		237.75%		225.00%		204.95%

13 | Page



CoBiz Financial Inc.
June 30, 2013
(unaudited)

	For the three months ended,
	June 30, 2013					March 31, 2013					June 30, 2012
				Interest	Average				Interest	Average				Interest	Average
		Average		earned	yield		Average		earned	yield		Average		earned	yield
(in thousands)		balance		or paid	or cost		balance		or paid	or cost		balance		or paid	or cost
Assets
Federal funds sold and other	$	19,918	$	23	0.46%	$	16,738	$	27	0.65%	$	21,379	$	24	0.44%
Investment securities		558,464		4,175	2.99%		563,461		4,297	3.05%		629,087		5,331	3.39%
Loans		1,968,674		22,611	4.54%		1,914,542		22,340	4.67%		1,712,917		21,937	5.07%
Allowance for loan losses		(45,426)					(46,874)					(53,319)
Total interest-earning assets	$	2,501,630	$	26,809	4.16%	$	2,447,867	$	26,664	4.27%	$	2,310,064	$	27,292	4.57%

Noninterest-earning assets		161,284					168,303					166,872
Total assets	$	2,662,914				$	2,616,170				$	2,476,936

Liabilities and Shareholders' Equity
Deposits
NOW and money market	$	816,593	$	695	0.34%	$	846,187	$	790	0.38%	$	764,077	$	938	0.49%
Interest-bearing demand		109,991		109	0.40%		118,934		123	0.42%		110,928		137	0.50%
Savings		11,498		2	0.07%		18,488		3	0.07%		10,386		3	0.12%
Certificates of deposit
Reciprocal		88,897		92	0.42%		81,957		94	0.47%		94,652		115	0.49%
Under $100		29,585		38	0.52%		29,764		40	0.55%		31,758		50	0.63%
$100 and over		139,585		207	0.59%		144,534		239	0.67%		165,506		308	0.75%
Total interest-bearing deposits	$	1,196,149	$	1,143	0.38%	$	1,239,864	$	1,289	0.42%	$	1,177,307	$	1,551	0.53%
Other borrowings
Securities sold under agreements to repurchase		149,203		82	0.22%		144,737		84	0.23%		125,525		97	0.31%
Other short-term borrowings		96,730		69	0.28%		16,839		10	0.24%		85,812		68	0.31%
Long term-debt		93,150		1,501	6.37%		93,150		1,484	6.37%		93,150		1,502	6.38%
Total interest-bearing liabilities	$	1,535,232	$	2,795	0.72%	$	1,494,590	$	2,867	0.77%	$	1,481,794	$	3,218	0.87%
Noninterest-bearing demand accounts		834,060					820,410					716,149
Total deposits and interest-bearing liabilities		2,369,292					2,315,000					2,197,943
Other noninterest-bearing liabilities		27,096					41,140					36,895
Total liabilities		2,396,388					2,356,140					2,234,838
Total equity		266,526					260,030					242,098
Total liabilities and equity	$	2,662,914				$	2,616,170				$	2,476,936
Net interest income - taxable equivalent			$	24,014				$	23,797				$	24,074
Net interest spread					3.44%					3.50%					3.70%
Net interest margin					3.85%					3.94%					4.19%
Ratio of average interest-earning assets to
average interest-bearing liabilities		162.95%					163.78%					155.90%

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CoBiz Financial Inc.
June 30, 2013
(unaudited)

	For the six months ended June 30,
	2013					2012
				Interest	Average				Interest	Average
		Average		earned	yield		Average		earned	yield
(in thousands)		balance		or paid	or cost		balance		or paid	or cost
Assets
Federal funds sold and other	$	18,337	$	50	0.54%	$	21,327	$	50	0.46%
Investment securities		560,949		8,472	3.02%		632,007		10,730	3.40%
Loans		1,941,758		44,951	4.60%		1,680,561		43,473	5.12%
Allowance for loan losses		(46,146)					(54,380)
Total interest-earning assets	$	2,474,898	$	53,473	4.22%	$	2,279,515	$	54,253	4.60%

Noninterest-earning assets		164,773					171,450
Total assets	$	2,639,671				$	2,450,965

Liabilities and Shareholders' Equity
Deposits
NOW and money market	$	831,308	$	1,485	0.36%	$	765,466	$	1,926	0.51%
Interest-bearing demand		114,438		232	0.41%		107,044		293	0.55%
Savings		14,973		5	0.07%		10,632		6	0.11%
Certificates of deposit
Reciprocal		85,446		186	0.44%		92,080		228	0.50%
Under $100		29,674		78	0.53%		32,554		109	0.67%
$100 and over		142,046		446	0.63%		166,480		635	0.77%
Total interest-bearing deposits	$	1,217,885	$	2,432	0.40%	$	1,174,256	$	3,197	0.55%
Other borrowings
Securities sold under agreements to repurchase		146,982		166	0.22%		128,283		204	0.31%
Other short-term borrowings		57,005		79	0.28%		67,745		104	0.30%
Long term-debt		93,150		2,985	6.37%		93,150		3,004	6.38%
Total interest-bearing liabilities	$	1,515,022	$	5,662	0.75%	$	1,463,434	$	6,509	0.89%
Noninterest-bearing demand accounts		827,273					715,844
Total deposits and interest-bearing liabilities		2,342,295					2,179,278
Other noninterest-bearing liabilities		34,080					38,141
Total liabilities		2,376,375					2,217,419
Total equity		263,296					233,546
Total liabilities and equity	$	2,639,671				$	2,450,965
Net interest income - taxable equivalent			$	47,811				$	47,744
Net interest spread					3.47%					3.71%
Net interest margin					3.90%					4.21%
Ratio of average interest-earning assets to
average interest-bearing liabilities		163.36%					155.76%

15 | Page



CoBiz Financial Inc.
June 30, 2013
(unaudited)

Reconciliation of Non-GAAP Measures to GAAP
(in thousands, except per share amounts)

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

The following table includes non-GAAP financial measures related to tangible equity, tangible common equity, and tangible assets. These items have been adjusted to exclude intangible assets and preferred stock.

			At
			June 30,		March 31,	December 31,		September 30,			June 30,
			2013		2013	2012		2012			2012

	Shareholders' equity as reported - GAAP	$	266,679	$	263,517	$	257,051	$	251,030	$	243,435
	Intangible assets		(3,112)		(3,373)		(3,573)		(3,148)		(3,439)

A	Tangible equity - non-GAAP		263,567		260,144		253,478		247,882		239,996
	Preferred stock		(57,338)		(57,338)		(57,338)		(57,338)		(57,338)

B	Tangible common equity - non-GAAP	$	206,229	$	202,806	$	196,140	$	190,544	$	182,658

	Total assets as reported - GAAP	$	2,738,749	$	2,620,512	$	2,653,641	$	2,559,954	$	2,530,133
	Intangible assets		(3,112)		(3,373)		(3,573)		(3,148)		(3,439)

C	Total tangible assets - non-GAAP	$	2,735,637	$	2,617,139	$	2,650,068	$	2,556,806	$	2,526,694

D	Common shares outstanding		40,282		40,197		39,790		39,729		39,708

B / C	Tangible common equity to tangible assets - non-GAAP		7.54%		7.75%		7.40%		7.45%		7.23%
A / C	Tangible equity to tangible assets - non-GAAP		9.63%		9.94%		9.56%		9.69%		9.50%
B / D	Tangible book value per common share - non-GAAP	$	5.12	$	5.05	$	4.93	$	4.80	$	4.60

16 | Page

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