CoBiz Financial : Announces Third Quarter 2017 Results

Exhibit 99.1

Denver -- CoBiz Financial Inc. (Company) (NASDAQ: COBZ), a financial services company with $3.8 billion in assets, reported financial results for the third quarter of 2017.

Financial Highlights -Third quarter 2017

• Net income of $11.2 million for the third quarter of 2017, compared to $10.3 million for the third quarter of 2016.

• Diluted earnings per share of $0.27 for the third quarter of 2017, compared to $0.25 for the third quarter of 2016.

• Loans increased $294.6 million, or 10.4%, from September 30, 2016 and $60.7 million from June 30, 2017.

• Deposits increased $240.3 million, or 8.2%, from September 30, 2016 and $104.9 million from June 30, 2017.

• Net interest margin (NIM) was 3.91% for the third quarter of 2017, compared to 3.74% for the third quarter of 2016 and 3.76% for the second quarter of 2017.

• See accompanying Reconciliation of Non-GAAP Measures to GAAP

  Loans

  (in thousands)	Quarter ended (unaudited) 3Q17 2Q17 3Q16	3Q17 change vs. 2Q17 3Q16
  LOANS
  Commercial	$ 1,251,815 $ 1,272,304 $ 1,196,088	$ (20,489) (1.6)% $ 55,727 4.7 %
  Owner-occupied real estate	474,360 481,180 473,809	(6,820) (1.4)% 551 0.1 %
  Investor real estate	784,546 747,765 625,174	36,781 4.9 % 159,372 25.5 %
  Construction & land	215,172 162,318 170,594	52,854 32.6 % 44,578 26.1 %
  Consumer	287,300 287,790 263,871	(490) (0.2)% 23,429 8.9 %
  Other	108,505 109,597 97,569	(1,092) (1.0)% 10,936 11.2 %
  Total loans	$ 3,121,698 $ 3,060,954 $ 2,827,105	$ 60,744 2.0 % $ 294,593 10.4 %

  • Loans at September 30, 2017 increased $294.6 million, or 10.4%, from September 30, 2016 and

    $60.7 million from June 30, 2017.

  • Loans in the Arizona and Colorado markets increased $148.5 million and $146.1 million, respectively, from September 30, 2016. Compared to June 30, 2017, loans in the Arizona market increased $9.2 million while loans in the Colorado market increased $51.5 million.

    Quarter ended (unaudited)
    (in thousands)	3Q17	2Q17 1Q17 4Q16			3Q16
    Loans - beginning balance	$ 3,060,954	$ 2,987,068 $ 2,934,105 $ 2,827,105			$ 2,813,703
    New credit extended	148,467	190,431	151,241	273,195	154,319
    Credit advanced	131,460	129,633	113,458	105,122	108,074
    Paydowns & maturities	(219,172)	(245,976)	(211,630)	(270,167)	(248,760)
    Gross loan charge-offs	(11)	(202)	(106)	(1,150)	(231)
    Loans - ending balance	$ 3,121,698	$ 3,060,954	$ 2,987,068	$ 2,934,105	$ 2,827,105

    Net change - loans outstanding $ 60,744 $ 73,886 $ 52,963 $ 107,000 $ 13,402

  • New credit extensions and advances were $279.9 million in the third quarter of 2017, compared to

    $262.4 million in the third quarter of 2016 and $320.1 million in the quarter ended June 30, 2017 (linked-quarter).

  • Commercial line utilization was 32.6% at September 30, 2017, compared to 34.0% and 32.6%, respectively, at September 30, 2016 and June 30, 2017.

    Deposits

    (in thousands)	Quarter ended (unaudited) 3Q17 2Q17 3Q16			3Q17 change vs. 2Q17 3Q16
    DEPOSITS
    Money market	$ 925,589	$ 898,615	$ 854,928	$ 26,974	3.0 % $	70,661	8.3 %
    Interest-bearing demand	721,600	696,971	681,256	24,629	3.5 %	40,344	5.9 %
    Savings	21,210	22,748	20,403	(1,538)	(6.8)%	807	4.0 %
    Certificates of deposits under $100	18,445	18,748	20,151	(303)	(1.6)%	(1,706)	(8.5)%
    Certificates of deposits $100 and over	76,266	79,103	87,593	(2,837)	(3.6)%	(11,327)	(12.9)%
    Reciprocal CDARS	40,630	42,046	46,316	(1,416)	(3.4)% (5,686)		(12.3)%
    Total interest-bearing deposits	1,803,740	1,758,231	1,710,647	45,509	2.6 % 93,093		5.4 %
    Noninterest-bearing demand
    deposits	1,373,792	1,314,408	1,226,546	59,384	4.5 % 147,246		12.0 %
    Total deposits	$ 3,177,532	$ 3,072,639	$ 2,937,193	$ 104,893	3.4 % $ 240,339		8.2 %

  • Total deposits at September 30, 2017 increased $240.3 million, or 8.2%, from September 30, 2016 and $104.9 million from June 30, 2017.

  • Noninterest-bearing demand deposits at September 30, 2017 increased $147.2 million from September 30, 2016 and $59.4 million from June 30, 2017 and were 43.2% of total deposits at September 30, 2017.

    Credit Quality	Quarter ended (unaudited)
    (in thousands)	3Q17 2Q17 3Q16
    ALLOWANCE FOR LOAN LOSSES
    Beginning allowance for loan losses	$ 35,625 $ 34,211 $ 34,344
    Provision for loan losses	1,060 673 (1,168)
    Net recoveries (charge-offs)	165 741 353
    Ending allowance for loan losses	$ 36,850 $ 35,625 $ 33,529
    CREDIT QUALITY
    Nonaccrual loans	$ 4,863 $ 3,830 $ 5,046
    Loans 90 days or more past due and accruing interest	20 664 -
    Total nonperforming loans	4,883 4,494 5,046
    OREO and repossessed assets	5,079 5,079 5,079
    Total nonperforming assets	$ 9,962 $ 9,573 $ 10,125
    Performing renegotiated loans	$ 33,205 $ 31,482 $ 25,291
    Classified loans	$ 54,355 $ 50,587 $ 58,376
    ASSET QUALITY MEASURES
    Nonperforming assets to total assets	0.26 % 0.25 % 0.29 %
    Nonperforming loans to total loans	0.16 % 0.15 % 0.18 %
    Nonperforming loans and OREO to total loans and OREO	0.32 % 0.31 % 0.36 %
    Allowance for loan losses to total loans	1.18 % 1.16 % 1.19 %
    Allowance for loan losses to nonperforming loans	754.66 % 792.72 % 664.47 %

  • Nonperforming assets (NPAs) of $10.0 million at September 30, 2017 decreased $0.2 million from September 30, 2016 and increased $0.4 million from June 30, 2017

  • The Company had net recoveries of $0.2 million in the third quarter of 2017.

  • A provision for loan losses of $1.1 million was recorded in the third quarter of 2017.

  • The resulting allowance for loan losses was 1.18% of total loans at September 30, 2017. Shareholders' Equity

Quarter ended (unaudited)

EQUITY MEASURES

(in thousands, except per share amounts) 3Q17 2Q17 3Q16 Common shareholders' equity $ 329,090 $ 319,470 $ 295,837

Common shares outstanding at period end 41,800 41,771 41,465

Book value per common share $ 7.87 $ 7.65 $ 7.13

Tangible book value per common share * $ 7.85 $ 7.62 $ 7.10

Tangible common equity to tangible assets * 8.56 % 8.37 % 8.53 %

Tier 1 capital ratio ** 11.52 % 11.52 %

Total risk-based capital ratio ** 14.36 % 14.47 %

• See accompanying Reconciliation of Non-GAAP Measures to GAAP

  ** Ratios unavailable at the time of release

  • On October 18, 2017, the Board of Directors of the Company declared a quarterly cash dividend of

    $0.055 per common share. The dividend will be paid on November 6, 2017 to shareholders of record on October 30, 2017.

    Net Interest Income and Margin

  • Net interest income on a taxable-equivalent basis (NII) was $36.0 million for the third quarter of 2017, an increase of $4.8 million, or 15.3%, from the quarter ended September 30, 2016. From the quarter ended June 30, 2017, NII increased $2.0 million, or 5.8%.

  • Net interest margin (NIM) was 3.91% for the third quarter of 2017, compared to 3.74% in the prior- year quarter and 3.76% in the linked-quarter.

  • The average yield on interest-earning assets was 4.20% for the third quarter of 2017, compared to 4.03% in the prior-year quarter and 4.08% in the linked-quarter.

  • Items impacting NII and the NIM in the third quarter of 2017 were:

    • Quarterly average loans increased $250.0 million, or 8.9%, from the prior-year quarter and

      $35.4 million from the linked-quarter.

    • Quarterly average investments increased $101.9 million, or 22.0%, from the prior-year quarter and decreased $10.7 million from the linked-quarter. The growth in investments in 2017 increased the ratio of average investments to average interest-earning assets to 15.4% at September 30, 2017 from 13.9% at September 30, 2016.

    • Quarterly average deposits increased $245.0 million, or 8.4%, from the prior-year quarter and

      $141.6 million from the linked-quarter.

    • Including noninterest-bearing deposits, the Company's deposit interest cost remained stable at 0.13% for the current and linked-quarters and 0.14% for the prior-year quarter.

    • Quarterly average noninterest-bearing demand accounts increased $147.0 million, or 11.6%, from the prior-year quarter and $94.9 million from the linked-quarter.

    • Quarterly average other short-term borrowings increased $52.2 million from the prior-year quarter and decreased $135.4 million from the linked-quarter. The shift in funding mix into core deposits from more expensive short-term borrowings contributed to the NIM expansion in the third quarter of 2017 compared to the linked-quarter.

      Noninterest Income	Quarter ended (unaudited)			3Q17 change vs.
      (in thousands)	3Q17 2Q17 3Q16			2Q17 3Q16
      Noninterest income:
      Deposit service charges	$ 1,660	$ 1,714	$ 1,553	$ (54)	(3.2)% $	107	6.9 %
      Investment advisory income	1,550	1,500	1,416	50	3.3 %	134	9.5 %
      Insurance income	3,338	3,427	3,120	(89)	(2.6)%	218	7.0 %
      Other investments	355	372	1,348	(17)	(4.6)%	(993)	(73.7)%
      Derivative valuation	(35)	(80)	-	45	56.3 %	(35)	nm
      Other income	2,127	1,378	1,849	749	54.4 % 278		15.0 %
      Total noninterest income	$ 8,995	$ 8,311	$ 9,286	$ 684	8.2 % $ (291)		(3.1)%

  • Noninterest income decreased $0.3 million, or 3.1%, from the prior-year quarter and increased $0.7 million, or 8.2%, from the linked-quarter. The prior-year quarter benefited from a record quarter in revenue from other investments. The increase from the linked-quarter was primarily due to higher income on the customer swap portfolio and other loan fees.

  • Noninterest income as a percentage of taxable equivalent operating revenue* was 20.0% for the third quarter of 2017, compared to 22.9% in the prior-year quarter and 19.6% in the second quarter of 2017.

* See accompanying Reconciliation of Non-GAAP Measures to GAAP nm - not meaningful