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

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8-K - 8-K - COBIZ FINANCIAL INC	cobz-20131017x8k.htm

CoBiz Financial Announces Third Quarter 2013 Results

Reports 22% increase in net income available to common shareholders

Denver -- CoBiz Financial Inc. (“Company”) (NASDAQ: COBZ), a financial services company with $2.8 billion in assets, announced net income available to common shareholders of $6.9 million for the third quarter of 2013, or $0.17 per diluted common share. Net income available to common shareholders for the third quarter of 2012 was $5.6 million, or $0.14 per diluted common share.

Return on average assets for the third quarter of 2013 was 1.02% versus 1.00% for the third quarter of 2012, and return on average shareholders’ equity increased to 10.34% for the third quarter of 2013 from 10.23% for the prior-year quarter.

Financial highlights – Third quarter 2013

·	Net interest income on a tax-equivalent basis was $25.1 million for the third quarter of 2013, an increase of $1.1 million from the second quarter of 2013 (linked-quarter).

·	Loans increased 31.0 million, or 6.1% annualized, from the prior linked-quarter and $237.5 million, or 13.1%, from the prior-year quarter.

·	Strong deposit generation of $233.2 million from the prior linked-quarter. Deposits increased $220.4 million, or 10.8%, from the prior-year quarter.

·	Credit quality improved, as the ratio of nonperforming assets to total assets fell to 0.91% at September 30, 2013, the lowest quarterly level since mid-2008.

·	In August 2013, the Company redeemed in full $21.0 million of 9% Subordinated Unsecured Promissory Notes (Notes).

Financial Summary



	Quarter ended							3Q13 change vs.
(in thousands, except per share amounts)	3Q13		2Q13		3Q12		2Q13			3Q12
Net interest income before provision	$	24,375	$	23,365	$	23,247	$	1,010	4.3%	$	1,128	4.9%
Provision for loan losses		(1,554)		(1,065)		(2,506)		(489)	45.9%		952	(38.0)%
Net interest income after provision		25,929		24,430		25,753		1,499	6.1%		176	0.7%
Total noninterest income		7,759		8,425		6,400		(666)	(7.9)%		1,359	21.2%
Total noninterest expense		23,814		21,594		21,958		2,220	10.3%		1,856	8.5%
Net income before income taxes		9,874		11,261		10,195		(1,387)	(12.3)%		(321)	(3.1)%
Provision for income taxes		2,849		3,999		3,721		(1,150)	(28.8)%		(872)	(23.4)%
Income from continuing operations		7,025		7,262		6,474		(237)	(3.3)%		551	8.5%
Discontinued operations, net of tax		-		-		(125)		-	0.0%		125	(100.0)%
Net income		7,025		7,262		6,349		(237)	(3.3)%		676	10.6%
Preferred stock dividends		(144)		(143)		(717)		(1)	0.7%		573	(79.9)%
Net income available to common shareholders	$	6,881	$	7,119	$	5,632	$	(238)	(3.3)%	$	1,249	22.2%

Diluted earnings per common share	$	0.17	$	0.18	$	0.14	$	(0.01)	(5.6)%	$	0.03	21.4%

KEY RATIOS
Net interest margin		3.87%		3.85%		4.00%
Efficiency ratio		75.10%		71.20%		75.28%
Return on average assets		1.02%		1.09%		1.00%
Return on average shareholders' equity		10.34%		10.93%		10.23%
Noninterest income as a percentage of operating revenues		24.15%		26.50%		21.59%

“I was pleased to see the stabilization in our net interest margin this quarter, which expanded two basis points from the second quarter,” said Chairman and CEO Steve Bangert. “However, even more important is the

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increase in net interest income on a tax equivalent basis, which increased to $25.1 million in the third quarter, a 4.6% increase from the second quarter of this year.

“Net loan growth was lower this period, as new loan activity was offset by a higher level of payoffs. However, our marketing efforts are reflected in the success we have had building our core deposit base.”

Loans

·	Loans at September 30, 2013 were $2.0 billion, increasing $31.0 million or 6.1% annualized from the prior linked-quarter. From the prior year, loans increased $237.5 million, or 13.1%.



	Quarter ended							3Q13 change vs.
(in thousands)	3Q13		2Q13		3Q12		2Q13			3Q12
LOANS
Commercial & industrial	$	815,424	$	813,186	$	663,880	$	2,238	0.3%	$	151,544	22.8%
Owner-occupied real estate		446,976		442,132		425,217		4,844	1.1%		21,759	5.1%
Investor real estate		443,516		442,447		425,607		1,069	0.2%		17,909	4.2%
Land acquisition & development		43,359		36,795		54,220		6,564	17.8%		(10,861)	(20.0)%
Real estate - construction		61,787		58,332		56,180		3,455	5.9%		5,607	10.0%
Consumer		180,243		168,606		137,299		11,637	6.9%		42,944	31.3%
Other		57,561		56,346		49,004		1,215	2.2%		8,557	17.5%
Total loans	$	2,048,866	$	2,017,844	$	1,811,407	$	31,022	1.5%	$	237,459	13.1%

·	New loans of $136.1 million were added during the third quarter, and advances on existing lines totaled $88.7 million, an improvement over the prior-year quarter but down from a strong second quarter.

·	During the third quarter, paydowns and maturities accelerated from recent quarters. The Company attributes part of the increase to borrowers refinancing into the long-term commercial real estate market.



	Quarter ended
(in thousands)	3Q13		2Q13		1Q13		4Q12		3Q12
Loans - beginning balance	$	2,017,844	$	1,925,806	$	1,926,432	$	1,811,407	$	1,766,688
New credit extended		136,138		149,053		78,587		205,723		134,767
Credit advanced		88,680		96,122		72,487		82,306		54,642
Paydowns & maturities		(193,396)		(151,176)		(150,878)		(172,540)		(141,705)
Gross loan charge-offs		(400)		(1,961)		(822)		(464)		(2,985)
Loans - ending balance	$	2,048,866	$	2,017,844	$	1,925,806	$	1,926,432	$	1,811,407

Net change - loans outstanding	$	31,022	$	92,038	$	(626)	$	115,025	$	44,719

·	Total line utilization was 40.2% at September 30, 2013, as compared to 40.3% and 40.4% at June 30, 2013 and September 30, 2012, respectively.

Deposits and Customer Repurchase Agreements (Customer Funding)

·	Customer Funding of $2.4 billion at September 30, 2013 increased $264.0 million on a linked-quarter basis. From September 30, 2012, Customer Funding increased $259.8 million.

·	Noninterest-bearing demand (NIB) accounts increased $124.8 million on a linked-quarter basis, increasing the percentage of NIB to total deposits to 43.6% at September 30, 2013, from 40.2% at September 30, 2012.

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	Quarter ended							3Q13 change vs.
(in thousands)	3Q13		2Q13		3Q12		2Q13			3Q12
DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS
NOW and money market	$	869,947	$	797,179	$	813,202	$	72,768	9.1%	$	56,745	7.0%
Interest-bearing demand		137,698		101,194		117,915		36,504	36.1%		19,783	16.8%
Savings		11,272		11,612		10,659		(340)	(2.9)%		613	5.8%
Certificates of deposits under $100		28,098		29,359		30,574		(1,261)	(4.3)%		(2,476)	(8.1)%
Certificates of deposits $100 and over		133,243		136,077		162,595		(2,834)	(2.1)%		(29,352)	(18.1)%
Reciprocal CDARS		98,748		95,157		90,468		3,591	3.8%		8,280	9.2%
Total interest-bearing deposits		1,279,006		1,170,578		1,225,413		108,428	9.3%		53,593	4.4%
Noninterest-bearing demand deposits		990,187		865,393		823,363		124,794	14.4%		166,824	20.3%
Customer repurchase agreements		164,188		133,402		124,836		30,786	23.1%		39,352	31.5%
Total deposits and customer repurchase agreements	$	2,433,381	$	2,169,373	$	2,173,612	$	264,008	12.2%	$	259,769	12.0%

Allowance for Loan and Credit Losses and Credit Quality

·	Nonperforming assets (NPAs) were $25.5 million at September 30, 2013, as compared to $34.3 million at September 30, 2012.

·	Classified loans decreased from the linked- and prior-year quarter ends by 24.2% and 46.4%, respectively.

·	Due to the reduction in problem loans, a negative provision for loan losses of $1.6 million was recorded during the third quarter of 2013.

·	The coverage of Allowance to nonperforming loans increased to 225.9% at September 30, 2013, from 168.7% at June 30, 2013.



	Quarter ended
(in thousands)	3Q13		2Q13		3Q12
ALLOWANCE FOR LOAN AND CREDIT LOSSES
Beginning allowance for loan losses	$	43,232	$	44,874	$	51,101
Provision for loan losses		(1,554)		(1,065)		(2,506)
Net recovery (charge-off)		132		(577)		(2,158)
Ending allowance for loan losses	$	41,810	$	43,232	$	46,437

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

Total provision for loan and credit losses	$	(1,554)	$	(1,065)	$	(2,506)

CREDIT QUALITY
Nonaccrual loans	$	18,511	$	25,634	$	19,471
Loans 90 days or more past due and accruing interest		-		-		1,183
Total nonperforming loans		18,511		25,634		20,654
OREO and repossessed assets		6,960		7,185		13,619
Total nonperforming assets	$	25,471	$	32,819	$	34,273

Performing renegotiated loans	$	28,814	$	29,623	$	34,637
Classified loans	$	48,735	$	64,300	$	90,882

ASSET QUALITY MEASURES
Nonperforming assets to total assets		0.91%		1.20%		1.34%
Nonperforming loans to total loans		0.90%		1.27%		1.14%
Nonperforming loans and OREO to total loans and OREO		1.24%		1.62%		1.88%
Allowance for loan and credit losses to total loans		2.04%		2.14%		2.57%
Allowance for loan and credit losses to nonperforming loans		225.87%		168.65%		225.00%

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Shareholders’ Equity

·	Total shareholders’ equity increased $6.3 million from June 30, 2013, to $272.9 million at September 30, 2013.

·	The tangible common equity to tangible assets ratio held relatively stable at 7.6% at September 30, 2013 compared to June 30, 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 November 4, 2013, to shareholders of record on October 28, 2013.



	Quarter ended
(in thousands, except per share amounts)	3Q13		2Q13		3Q12
EQUITY MEASURES
Common shareholders' equity	$	215,599	$	209,341	$	193,692
Total shareholders' equity		272,937		266,679		251,030

Common shares outstanding at period end		40,300		40,282		39,729

Book value per common share	$	5.35	$	5.20	$	4.88
Tangible book value per common share *	$	5.28	$	5.12	$	4.80

Tangible common equity to tangible assets *		7.58%		7.54%		7.45%
Tangible equity to tangible assets *		9.62%		9.63%		9.69%
Tier 1 capital ratio		**		14.52%		15.08%
Total-risk based capital ratio		**		16.70%		17.35%

* 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 $25.1 million for the third quarter of 2013, an increase of $1.1 million from the prior linked-quarter.

·	The net interest margin expanded by two basis points on a linked-quarter basis to 3.87% mainly due to the redemption of the Notes in August 2013.

·	Average earning assets of $2.6 billion increased $76.3 million on a linked-quarter basis.

o	From the second quarter of 2013, average net loans increased $64.8 million, average federal funds sold and interest-earning deposits decreased $3.4 million, and average investments increased $14.9 million.

·	The yield on average earning assets decreased two basis points to 4.14% on a linked-quarter basis.

·	The rate paid on average interest-bearing liabilities decreased six basis points on a linked-quarter basis to 0.66%.

Noninterest Income

·	As a percentage of total operating revenue, noninterest income was 24.1% for the third quarter of 2013 as compared to 26.5% for the second quarter of 2013 and 21.6% for the prior-year quarter.

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



	Quarter ended							3Q13 change vs.
(in thousands)	3Q13		2Q13		3Q12		2Q13			3Q12
Noninterest income:
Deposit service charges	$	1,359	$	1,352	$	1,218	$	7	0.5%	$	141	11.6%
Investment advisory income		1,306		1,295		1,176		11	0.8%		130	11.1%
Insurance income		2,862		3,210		2,412		(348)	(10.8)%		450	18.7%
Investment banking income		689		576		253		113	19.6%		436	172.3%
Other income		1,543		1,992		1,341		(449)	(22.5)%		202	15.1%
Total noninterest income	$	7,759	$	8,425	$	6,400	$	(666)	(7.9)%	$	1,359	21.2%

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Operating Expenses

·	The increase in compensation-related expenses over the linked- and prior-year quarters is attributed to an increase in bonus accruals, the recruitment of business development personnel, an increase in 401(k) matching expense and higher medical claims.

·	The reduction in other operating expenses from the linked- and prior-year quarters is primarily due to a reduction in loan workout and Other Real Estate Owned (“OREO”) expenses.

·	In the third quarter of 2013, the Company recognized a net gain on OREO, investments and other assets.



	Quarter ended							3Q13 change vs.
(in thousands)	3Q13		2Q13		3Q12		2Q13			3Q12
Noninterest expense:
Salaries and employee benefits	$	16,373	$	14,720	$	14,004	$	1,653	11.2%	$	2,369	16.9%
Stock-based compensation expense		694		746		499		(52)	(7.0)%		195	39.1%
Occupancy expenses, premises and equipment		3,289		3,155		3,307		134	4.2%		(18)	(0.5)%
Amortization of intangibles		152		159		265		(7)	(4.4)%		(113)	(42.6)%
Other operating expenses		3,625		3,853		3,818		(228)	(5.9)%		(193)	(5.1)%
(Gain) loss on OREO, repossessed assets and other		(347)		(561)		(102)		214	(38.1)%		(245)	240.2%
(Gain) loss on investment securities		28		(478)		167		506	(105.9)%		(139)	(83.2)%
Total noninterest expense	$	23,814	$	21,594	$	21,958	$	2,220	10.3%	$	1,856	8.5%

Earnings Conference Call

In conjunction with this release, you are invited to listen to the Company's conference call on Friday, October 18, 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=96229 or by telephone at 877.493.9121, (conference ID # 73923180). 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

About CoBiz Financial

CoBiz Financial (NASDAQ:COBZ) is a $2.8 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.

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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.
September 30, 2013
(unaudited)

	Three months ended September 30,				Nine months ended September 30,
(in thousands, except per share amounts)	2013		2012		2013		2012
INCOME STATEMENT DATA
Interest income	$	26,961	$	26,449	$	79,173	$	79,885
Interest expense		2,586		3,202		8,248		9,711
NET INTEREST INCOME BEFORE PROVISION		24,375		23,247		70,925		70,174
Provision for loan losses		(1,554)		(2,506)		(4,209)		(4,396)
NET INTEREST INCOME AFTER PROVISION		25,929		25,753		75,134		74,570
Noninterest income		7,759		6,400		22,660		19,887
Noninterest expense		23,814		21,958		67,989		67,958
INCOME BEFORE INCOME TAXES		9,874		10,195		29,805		26,499
Provision for income taxes		2,849		3,721		9,642		9,331
NET INCOME FROM CONTINUING OPERATIONS		7,025		6,474		20,163		17,168
Income (loss) from discontinued operations, net of tax		-		(125)		173		(129)
NET INCOME	$	7,025	$	6,349	$	20,336	$	17,039

Preferred stock dividends		(144)		(717)		(801)		(2,151)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	6,881	$	5,632	$	19,535	$	14,888

EARNINGS PER COMMON SHARE
BASIC	$	0.17	$	0.14	$	0.49	$	0.38
DILUTED	$	0.17	$	0.14	$	0.49	$	0.38

EQUITY MEASURES
Common shares outstanding at period end (in thousands)						40,300		39,729
Book value per common share					$	5.35	$	4.88
Tangible book value per common share *					$	5.28	$	4.80
Tangible common equity to tangible assets *						7.58%		7.45%
Tangible equity to tangible assets *						9.62%		9.69%

* See accompanying Reconciliation of Non-GAAP Measures to GAAP

PERIOD END BALANCES
Total assets					$	2,807,955	$	2,559,954
Investments						582,889		601,230
Loans						2,048,866		1,811,407
Intangible assets						2,960		3,148
Deposits						2,269,193		2,048,776
Subordinated debentures						72,166		93,150
Common shareholders' equity						215,599		193,692
Total shareholders' equity						272,937		251,030
Interest-earning assets						2,625,334		2,382,653
Interest-bearing liabilities						1,515,360		1,443,399

BALANCE SHEET AVERAGES
Average assets					$	2,671,670	$	2,477,379
Average investments						565,136		623,865
Average loans						1,971,927		1,713,940
Average deposits						2,073,450		1,919,983
Average subordinated debentures						89,614		93,150
Average shareholders' equity						265,385		237,957
Average interest-earning assets						2,509,610		2,308,421
Average interest-bearing liabilities						1,522,328		1,464,960

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CoBiz Financial Inc.
September 30, 2013
(unaudited)

	Three months ended September 30,			Nine months ended September 30,
(in thousands)		2013	2012		2013		2012
PROFITABILITY MEASURES
Net interest margin		3.87%	4.00%		3.89%		4.14%
Efficiency ratio		75.10%	75.28%		74.00%		75.46%
Return on average assets		1.02%	1.00%		1.02%		0.92%
Return on average shareholders' equity		10.34%	10.23%		10.25%		9.56%
Noninterest income as a percentage of operating revenues		24.15%	21.59%		24.21%		22.08%

CREDIT QUALITY
Nonperforming loans
Nonaccrual loans				$	18,511	$	19,471
Loans 90 days or more past due and accruing interest					-		1,183
Total nonperforming loans					18,511		20,654
OREO & repossessed assets					6,960		13,619
Total nonperforming assets				$	25,471	$	34,273

Performing renegotiated loans				$	28,814	$	34,637
Classified loans				$	48,735	$	90,882

Charge-offs				$	(3,183)	$	(8,136)
Recoveries					2,336		3,340
Net charge-offs				$	(847)	$	(4,796)

Nonperforming assets to total assets					0.91%		1.34%
Nonperforming loans to total loans					0.90%		1.14%
Nonperforming loans and OREO to total loans and OREO					1.24%		1.88%
Allowance for loan and credit losses to total loans					2.04%		2.57%
Allowance for loan and credit losses to nonperforming loans					225.87%		225.00%



							Total		NPAs as a
NONPERFORMING ASSETS BY MARKET	Colorado		Arizona		Total		in Category		%
Commercial	$	2,598	$	705	$	3,303	$	815,424	0.41%
Real estate - mortgage		1,336		11,194		12,530		890,492	1.41%
Land acquisition & development		1,232		924		2,156		43,359	4.97%
Real estate - construction		-		-		-		61,787	0.00%
Consumer		522		-		522		180,243	0.29%
Other loans		-		-		-		57,561	0.00%
OREO & repossessed assets		5,869		1,091		6,960		6,960	-
NPAs	$	11,557	$	13,914	$	25,471	$	2,055,826	1.24%

Total loans	$	1,493,469	$	555,397	$	2,048,866
Total loans and OREO		1,499,338		556,488		2,055,826
Nonperforming loans to loans		0.38%		2.31%		0.90%
Nonperforming loans and OREO to total loans and OREO		0.77%		2.50%		1.24%

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CoBiz Financial Inc.
September 30, 2013
(unaudited)

	Three months ended
	September 30,		June 30,		March 31,		December 31,		September 30,
(in thousands)	2013		2013		2013		2012		2012
COMMERCIAL BANKING
Income Statement
Total interest income	$	26,854	$	26,068	$	25,958	$	26,158	$	26,364
Total interest expense		1,281		1,330		1,424		1,577		1,730
Net interest income		25,573		24,738		24,534		24,581		24,634
Provision for loan losses		(1,449)		(822)		(1,031)		(18)		(2,324)
Net interest income (loss) after provision		27,022		25,560		25,565		24,599		26,958
Noninterest income		2,795		3,236		2,681		3,756		2,495
Noninterest expense		8,612		8,917		8,215		8,631		7,261
Operating income		21,205		19,879		20,031		19,724		22,192
Amortization of intangibles		-		-		-		-		-
Provision (benefit) for income taxes		7,402		7,139		7,149		7,226		8,374
Net income (loss) before management
fees and overhead allocations	$	13,803	$	12,740	$	12,882	$	12,498	$	13,818
Management fees and overhead
allocations, net of tax		5,592		5,042		5,477		4,806		5,704
Net income	$	8,211	$	7,698	$	7,405	$	7,692	$	8,114

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		690		576		66		3,358		253
Noninterest expense		992		916		845		1,630		833
Operating income		(301)		(339)		(778)		1,729		(579)
Amortization of intangibles		-		-		-		-		-
Provision (benefit) for income taxes		(118)		(122)		(314)		679		(266)
Net income (loss) before management
fees and overhead allocations	$	(183)	$	(217)	$	(464)	$	1,050	$	(313)
Management fees and overhead
allocations, net of tax		38		42		40		36		33
Net income (loss)	$	(221)	$	(259)	$	(504)	$	1,014	$	(346)

WEALTH MANAGEMENT
Income Statement
Total interest income	$	-	$	-	$	1	$	-	$	-
Total interest expense		14		13		10		8		10
Net interest income		(14)		(13)		(9)		(8)		(10)
Provision for loan losses		-		-		-		-		-
Net interest income (loss) after provision		(14)		(13)		(9)		(8)		(10)
Noninterest income		1,306		1,299		1,112		1,109		1,176
Noninterest expense		1,041		1,074		1,059		1,372		1,050
Operating income		251		212		44		(271)		116
Amortization of intangibles		22		21		22		22		22
Provision (benefit) for income taxes		94		74		15		(112)		32
Net income (loss) from continuing operations		135		117		7		(181)		62
Income (loss) from discontinued operations, net of tax		-		-		173		453		(125)
Net income (loss) before management
fees and overhead allocations	$	135	$	117	$	180	$	272	$	(63)
Management fees and overhead
allocations, net of tax		82		97		105		165		150
Net income (loss)	$	53	$	20	$	75	$	107	$	(213)

9 | Page




CoBiz Financial Inc.
September 30, 2013
(unaudited)

	Three months ended
	September 30,		June 30,		March 31,		December 31,		September 30,
(in thousands)	2013		2013		2013		2012		2012
INSURANCE
Income Statement
Total interest income	$	2	$	2	$	1	$	1	$	2
Total interest expense		1		5		5		2		-
Net interest income		1		(3)		(4)		(1)		2
Provision for loan losses		-		-		-		-		-
Net interest income (loss) after provision		1		(3)		(4)		(1)		2
Noninterest income		2,862		3,210		2,510		2,341		2,412
Noninterest expense		2,311		2,573		2,315		2,276		2,201
Operating income		552		634		191		64		213
Amortization of intangibles		130		138		178		172		243
Provision (benefit) for income taxes		165		197		79		(40)		(9)
Net income (loss) before management
fees and overhead allocations	$	257	$	299	$	(66)	$	(68)	$	(21)
Management fees and overhead
allocations, net of tax		109		123		116		92		86
Net income (loss)	$	148	$	176	$	(182)	$	(160)	$	(107)

CORPORATE SUPPORT AND OTHER
Income Statement
Total interest income	$	104	$	89	$	91	$	83	$	82
Total interest expense		1,290		1,447		1,428		1,452		1,462
Net interest income		(1,186)		(1,358)		(1,337)		(1,369)		(1,380)
Provision for loan losses		(105)		(243)		(559)		(319)		(182)
Net interest income (loss) after provision		(1,081)		(1,115)		(778)		(1,050)		(1,198)
Noninterest income		106		104		107		108		64
Noninterest expense		10,706		7,955		9,947		9,105		10,348
Operating income		(11,681)		(8,966)		(10,618)		(10,047)		(11,482)
Amortization of intangibles		-		-		-		-		-
Provision (benefit) for income taxes		(4,694)		(3,289)		(4,135)		(3,826)		(4,410)
Net income (loss) before management
fees and overhead allocations	$	(6,987)	$	(5,677)	$	(6,483)	$	(6,221)	$	(7,072)
Management fees and overhead
allocations, net of tax		(5,821)		(5,304)		(5,738)		(5,099)		(5,973)
Net loss	$	(1,166)	$	(373)	$	(745)	$	(1,122)	$	(1,099)

CONSOLIDATED
Income Statement
Total interest income	$	26,961	$	26,160	$	26,052	$	26,243	$	26,449
Total interest expense		2,586		2,795		2,867		3,039		3,202
Net interest income		24,375		23,365		23,185		23,204		23,247
Provision for loan losses		(1,554)		(1,065)		(1,590)		(337)		(2,506)
Net interest income (loss) after provision		25,929		24,430		24,775		23,541		25,753
Noninterest income		7,759		8,425		6,476		10,672		6,400
Noninterest expense		23,662		21,435		22,381		23,014		21,693
Operating income		10,026		11,420		8,870		11,199		10,460
Amortization of intangibles		152		159		200		194		265
Provision (benefit) for income taxes		2,849		3,999		2,794		3,927		3,721
Net income (loss) from continuing operations		7,025		7,262		5,876		7,078		6,474
Income (loss) from discontinued operations, net of tax		-		-		173		453		(125)
Net income (loss) before management
fees and overhead allocations	$	7,025	$	7,262	$	6,049	$	7,531	$	6,349
Management fees and overhead
allocations, net of tax		-		-		-		-		-
Net income	$	7,025	$	7,262	$	6,049	$	7,531	$	6,349

10 | Page



CoBiz Financial Inc.
September 30, 2013
(unaudited)

	Three months ended
	September 30,		June 30,		March 31,		December 31,		September 30,
(in thousands, except per share amounts)	2013		2013		2013		2012		2012
Interest income	$	26,961	$	26,160	$	26,052	$	26,243	$	26,449
Interest expense		2,586		2,795		2,867		3,039		3,202
Net interest income before provision		24,375		23,365		23,185		23,204		23,247
Provision for loan losses		(1,554)		(1,065)		(1,590)		(337)		(2,506)
Net interest income after provision		25,929		24,430		24,775		23,541		25,753
Noninterest income:
Deposit service charges	$	1,359	$	1,352	$	1,328	$	1,220	$	1,218
Investment advisory income		1,306		1,295		1,112		1,109		1,176
Insurance income		2,862		3,210		2,510		2,341		2,412
Investment banking income		689		576		66		3,358		253
Other income		1,543		1,992		1,460		2,644		1,341
Total noninterest income		7,759		8,425		6,476		10,672		6,400
Noninterest expense:
Salaries and employee benefits	$	16,373	$	14,720	$	14,484	$	15,526	$	14,004
Stock-based compensation expense		694		746		748		450		499
Occupancy expenses, premises and equipment		3,289		3,155		3,304		3,393		3,307
Amortization of intangibles		152		159		200		193		265
Other operating expenses		3,625		3,853		3,926		4,331		3,818
Net (gain) loss on securities, other assets and OREO		(319)		(1,039)		(81)		(685)		65
Total noninterest expense		23,814		21,594		22,581		23,208		21,958
Net income before income taxes		9,874		11,261		8,670		11,005		10,195
Provision for income taxes		2,849		3,999		2,794		3,927		3,721
Net income from continuing operations		7,025		7,262		5,876		7,078		6,474
Income (loss) from discontinued operations, net of tax		-		-		173		453		(125)
Net income	$	7,025	$	7,262	$	6,049	$	7,531	$	6,349

Preferred stock dividends		(144)		(143)		(514)		(664)		(717)
Net income available to common shareholders	$	6,881	$	7,119	$	5,535	$	6,867	$	5,632

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

PROFITABILITY MEASURES
Net interest margin		3.87%		3.85%		3.94%		3.89%		4.00%
Efficiency ratio		75.10%		71.20%		75.80%		70.30%		75.28%
Return on average assets		1.02%		1.09%		0.94%		1.15%		1.00%
Return on average shareholders' equity		10.34%		10.93%		9.43%		11.77%		10.23%
Noninterest income as a percentage of operating revenues		24.15%		26.50%		21.83%		31.50%		21.59%

EQUITY MEASURES
Common shares outstanding at period end (in thousands)		40,300		40,282		40,197		39,790		39,729
Diluted weighted average common shares outstanding (in thousands)		39,738		39,580		39,362		39,164		39,122
Book value per common share	$	5.35	$	5.20	$	5.13	$	5.02	$	4.88
Tangible book value per common share *	$	5.28	$	5.12	$	5.05	$	4.93	$	4.80

Tangible common equity to tangible assets *		7.58%		7.54%		7.75%		7.40%		7.45%
Tangible equity to tangible assets *		9.62%		9.63%		9.94%		9.56%		9.69%
Tier 1 capital ratio		**		14.52%		14.72%		14.29%		15.08%
Total risk based capital ratio		**		16.70%		16.93%		16.51%		17.35%

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

11 | Page




CoBiz Financial Inc.
September 30, 2013
(unaudited)

	At
	September 30,		June 30,		March 31,		December 31,		September 30,
(in thousands)	2013		2013		2013		2012		2012
PERIOD END BALANCES
Total assets	$	2,807,955	$	2,738,749	$	2,620,512	$	2,653,641	$	2,559,954
Investments		582,889		576,045		559,607		571,665		601,230
Loans		2,048,866		2,017,844		1,925,806		1,926,432		1,811,407
Intangible assets		2,960		3,112		3,373		3,573		3,148
Deposits		2,269,193		2,035,971		2,065,104		2,129,260		2,048,776
Subordinated debentures		72,166		93,150		93,150		93,150		93,150
Common shareholders' equity		215,599		209,341		206,179		199,713		193,692
Total shareholders' equity		272,937		266,679		263,517		257,051		251,030
Interest-earning assets		2,625,334		2,564,833		2,449,800		2,473,847		2,382,653
Interest-bearing liabilities		1,515,360		1,552,129		1,487,799		1,490,901		1,443,399

LOANS
Commercial	$	815,424	$	813,186	$	742,239	$	729,442	$	663,880
Real estate - mortgage		890,492		884,579		889,171		880,377		850,824
Land acquisition & development		43,359		36,795		38,054		53,562		54,220
Real estate - construction		61,787		58,332		46,346		67,022		56,180
Consumer		180,243		168,606		157,973		149,638		137,299
Other		57,561		56,346		52,023		46,391		49,004
Gross loans		2,048,866		2,017,844		1,925,806		1,926,432		1,811,407
Less allowance for loan losses		(41,810)		(43,232)		(44,874)		(46,866)		(46,437)
Total net loans	$	2,007,056	$	1,974,612	$	1,880,932	$	1,879,566	$	1,764,970

DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS
NOW and money market	$	869,947	$	797,179	$	846,204	$	866,250	$	813,202
Interest-bearing demand		137,698		101,194		118,085		118,433		117,915
Savings		11,272		11,612		11,429		24,813		10,659
Certificates of deposits under $100		28,098		29,359		29,889		30,058		30,574
Certificates of deposits $100 and over		133,243		136,077		143,529		148,184		162,595
Reciprocal CDARS		98,748		95,157		81,631		82,127		90,468
Total interest-bearing deposits		1,279,006		1,170,578		1,230,767		1,269,865		1,225,413
Noninterest-bearing demand deposits		990,187		865,393		834,337		859,395		823,363
Customer repurchase agreements		164,188		133,402		124,882		127,887		124,836
Total deposits and customer repurchase agreements	$	2,433,381	$	2,169,373	$	2,189,986	$	2,257,147	$	2,173,612

BALANCE SHEET AVERAGES
Average assets	$	2,734,624	$	2,662,914	$	2,616,170	$	2,600,083	$	2,529,999
Average investments		573,375		558,464		563,461		586,482		607,696
Average loans		2,031,282		1,968,674		1,914,542		1,831,430		1,780,352
Average deposits		2,129,108		2,030,209		2,060,274		2,062,306		1,979,267
Average subordinated debentures		82,658		93,150		93,150		93,150		93,150
Average shareholders' equity		269,494		266,526		260,030		254,455		246,783
Average interest-earning assets		2,577,907		2,501,630		2,447,867		2,430,196		2,365,965
Average interest-bearing liabilities		1,536,699		1,535,232		1,494,590		1,477,566		1,468,194

ALLOWANCE FOR LOAN AND CREDIT LOSSES
Beginning allowance for loan losses	$	43,232	$	44,874	$	46,866	$	46,437	$	51,101
Provision for loan losses		(1,554)		(1,065)		(1,590)		(337)		(2,506)
Net recovery (charge-off)		132		(577)		(402)		766		(2,158)
Ending allowance for loan losses	$	41,810	$	43,232	$	44,874	$	46,866	$	46,437

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

Total provision for loan and credit losses	$	(1,554)	$	(1,065)	$	(1,590)	$	(372)	$	(2,506)

CREDIT QUALITY
Nonperforming loans
Nonaccrual loans	$	18,511	$	25,634	$	30,420	$	19,677	$	19,471
Loans 90 days or more past due and accruing interest		-		-		407		35		1,183
Total nonperforming loans		18,511		25,634		30,827		19,712		20,654
OREO and repossessed assets		6,960		7,185		8,420		10,577		13,619
Total nonperforming assets	$	25,471	$	32,819	$	39,247	$	30,289	$	34,273

Performing renegotiated loans	$	28,814	$	29,623	$	31,619	$	43,321	$	34,637
Classified loans	$	48,735	$	64,300	$	67,677	$	81,205	$	90,882

ASSET QUALITY MEASURES
Nonperforming assets to total assets		0.91%		1.20%		1.50%		1.14%		1.34%
Nonperforming loans to total loans		0.90%		1.27%		1.60%		1.02%		1.14%
Nonperforming loans and OREO to total loans and OREO		1.24%		1.62%		2.03%		1.56%		1.88%
Allowance for loan and credit losses to total loans		2.04%		2.14%		2.33%		2.43%		2.57%
Allowance for loan and credit losses to nonperforming loans		225.87%		168.65%		145.57%		237.75%		225.00%

12 | Page



CoBiz Financial Inc.
September 30, 2013
(unaudited)

	For the three months ended,
	September 30, 2013					June 30, 2013					September 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	$	16,478	$	23	0.55%	$	19,918	$	23	0.46%	$	28,933	$	26	0.35%
Investment securities		573,375		4,116	2.87%		558,464		4,175	2.99%		607,696		4,535	2.99%
Loans		2,031,282		23,564	4.54%		1,968,674		22,611	4.54%		1,780,352		22,411	4.93%
Allowance for loan losses		(43,228)					(45,426)					(51,016)
Total interest-earning assets	$	2,577,907	$	27,703	4.14%	$	2,501,630	$	26,809	4.16%	$	2,365,965	$	26,972	4.37%

Noninterest-earning assets		156,717					161,284					164,034
Total assets	$	2,734,624				$	2,662,914				$	2,529,999

Liabilities and Shareholders' Equity
Deposits
NOW and money market	$	848,295	$	710	0.33%	$	816,593	$	695	0.34%	$	782,546	$	924	0.47%
Interest-bearing demand		118,384		110	0.37%		109,991		109	0.40%		121,979		164	0.53%
Savings		11,789		1	0.03%		11,498		2	0.07%		10,601		3	0.11%
Certificates of deposit
Reciprocal		95,401		86	0.36%		88,897		92	0.42%		91,515		114	0.49%
Under $100		28,457		34	0.47%		29,585		38	0.52%		30,838		46	0.59%
$100 and over		130,956		189	0.57%		139,585		207	0.59%		165,152		296	0.71%
Total interest-bearing deposits	$	1,233,282	$	1,130	0.36%	$	1,196,149	$	1,143	0.38%	$	1,202,631	$	1,547	0.51%
Other borrowings
Securities sold under agreements to repurchase		160,514		86	0.21%		149,203		82	0.22%		151,222		120	0.31%
Other short-term borrowings		60,245		34	0.22%		96,730		69	0.28%		21,191		17	0.31%
Long term-debt		82,658		1,336	6.32%		93,150		1,501	6.37%		93,150		1,518	6.38%
Total interest-bearing liabilities	$	1,536,699	$	2,586	0.66%	$	1,535,232	$	2,795	0.72%	$	1,468,194	$	3,202	0.86%
Noninterest-bearing demand accounts		895,826					834,060					776,636
Total deposits and interest-bearing liabilities		2,432,525					2,369,292					2,244,830
Other noninterest-bearing liabilities		32,605					27,096					38,386
Total liabilities		2,465,130					2,396,388					2,283,216
Total equity		269,494					266,526					246,783
Total liabilities and equity	$	2,734,624				$	2,662,914				$	2,529,999
Net interest income - taxable equivalent			$	25,117				$	24,014				$	23,770
Net interest spread					3.48%					3.44%					3.51%
Net interest margin					3.87%					3.85%					4.00%
Ratio of average interest-earning assets to
average interest-bearing liabilities		167.76%					162.95%					161.15%

13 | Page




CoBiz Financial Inc.
September 30, 2013
(unaudited)

	For the nine months ended September 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	$	17,710	$	73	0.54%	$	23,872	$	76	0.42%
Investment securities		565,136		12,588	2.97%		623,865		15,265	3.26%
Loans		1,971,927		68,515	4.58%		1,713,940		65,884	5.05%
Allowance for loan losses		(45,163)					(53,256)
Total interest-earning assets	$	2,509,610	$	81,176	4.19%	$	2,308,421	$	81,225	4.52%

Noninterest-earning assets		162,060					168,958
Total assets	$	2,671,670				$	2,477,379

Liabilities and Shareholders' Equity
Deposits
NOW and money market	$	837,033	$	2,195	0.35%	$	771,182	$	2,850	0.49%
Interest-bearing demand		115,768		342	0.39%		112,068		457	0.54%
Savings		13,900		6	0.06%		10,623		9	0.11%
Certificates of deposit
Reciprocal		88,801		272	0.41%		91,884		342	0.50%
Under $100		29,264		112	0.51%		31,980		155	0.65%
$100 and over		138,309		635	0.61%		166,020		931	0.75%
Total interest-bearing deposits	$	1,223,075	$	3,562	0.39%	$	1,183,757	$	4,744	0.54%
Other borrowings
Securities sold under agreements to repurchase		151,542		252	0.22%		135,985		324	0.31%
Other short-term borrowings		58,097		113	0.26%		52,068		121	0.31%
Long term-debt		89,614		4,321	6.36%		93,150		4,522	6.38%
Total interest-bearing liabilities	$	1,522,328	$	8,248	0.72%	$	1,464,960	$	9,711	0.88%
Noninterest-bearing demand accounts		850,375					736,226
Total deposits and interest-bearing liabilities		2,372,703					2,201,186
Other noninterest-bearing liabilities		33,582					38,236
Total liabilities		2,406,285					2,239,422
Total equity		265,385					237,957
Total liabilities and equity	$	2,671,670				$	2,477,379
Net interest income - taxable equivalent			$	72,928				$	71,514
Net interest spread					3.47%					3.64%
Net interest margin					3.89%					4.14%
Ratio of average interest-earning assets to
average interest-bearing liabilities		164.85%					157.58%

14 | Page



CoBiz Financial Inc.
September 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
		September 30,		June 30,		March 31,		December 31,		September 30,
		2013		2013		2013		2012		2012

	Shareholders' equity as reported - GAAP	$	272,937	$	266,679	$	263,517	$	257,051	$	251,030
	Intangible assets		(2,960)		(3,112)		(3,373)		(3,573)		(3,148)

A	Tangible equity - non-GAAP		269,977		263,567		260,144		253,478		247,882
	Preferred stock		(57,338)		(57,338)		(57,338)		(57,338)		(57,338)

B	Tangible common equity - non-GAAP	$	212,639	$	206,229	$	202,806	$	196,140	$	190,544

	Total assets as reported - GAAP	$	2,807,955	$	2,738,749	$	2,620,512	$	2,653,641	$	2,559,954
	Intangible assets		(2,960)		(3,112)		(3,373)		(3,573)		(3,148)

C	Total tangible assets - non-GAAP	$	2,804,995	$	2,735,637	$	2,617,139	$	2,650,068	$	2,556,806

D	Common shares outstanding		40,300		40,282		40,197		39,790		39,729

B / C	Tangible common equity to tangible assets - non-GAAP		7.58%		7.54%		7.75%		7.40%		7.45%
A / C	Tangible equity to tangible assets - non-GAAP		9.62%		9.63%		9.94%		9.56%		9.69%
B / D	Tangible book value per common share - non-GAAP	$	5.28	$	5.12	$	5.05	$	4.93	$	4.80

15 | Page

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