CoBiz Financial : Announces First Quarter 2017 Results

Exhibit 99.1

Denver -- CoBiz Financial Inc. (Company) (NASDAQ: COBZ), a financial services company with $3.7 billion in assets, reported financial results for the first quarter of 2017.

Financial Highlights - First quarter 2017

• Net income available to common shareholders of $8.6 million for the first quarter of 2017, compared to $7.4 million in the first quarter of 2016.

• Diluted earnings per share of $0.20 for the first quarter of 2017, compared to $0.18 in the first quarter of 2016.

• Loans increased $270.2 million, or 9.9%, from March 31, 2016 and $53.0 million from December 31, 2016.

• Deposits increased $275.7 million, or 9.9%, from March 31, 2016 and $20.3 million from December 31, 2016.

• Nonperforming assets (NPAs) to total assets of 0.22% at March 31, 2017, compared to 0.40% at March 31, 2016 and 0.23% at December 31, 2016.

• See accompanying Reconciliation of Non-GAAP Measures to GAAP

  Loans

  Quarter ended (unaudited) 1Q17 change vs. (in thousands) 1Q17 4Q16 1Q16 4Q16 1Q16

  LOANS
  Commercial	$ 1,241,365	$ 1,217,732	$ 1,181,185	$ 23,633	1.9 % $	60,180	5.1 %
  Owner-occupied real estate	473,775	475,287	432,712	(1,512)	(0.3)%	41,063	9.5 %
  Investor real estate	723,476	695,836	576,970	27,640	4.0 %	146,506	25.4 %
  Construction & land	166,553	174,451	208,701	(7,898)	(4.5)%	(42,148)	(20.2)%
  Consumer	271,751	267,013	258,345	4,738	1.8 %	13,406	5.2 %
  Other	110,148	103,786	58,975	6,362	6.1 % 51,173		86.8 %
  Total loans	$ 2,987,068	$ 2,934,105	$ 2,716,888	$ 52,963	1.8 % $ 270,180		9.9 %

  • Loans at March 31, 2017 increased $270.2 million, or 9.9%, from March 31, 2016 and $53.0 million from December 31, 2016.

  • Loans in the Arizona and Colorado markets increased $169.0 million and $101.2 million, respectively, from March 31, 2016. Compared to the quarter ended December 31, 2016 (linked-quarter), loans in the Arizona market decreased $1.9 million while loans in the Colorado market increased $54.9 million.

    Quarter ended (unaudited)
    (in thousands)	1Q17	4Q16 3Q16 2Q16			1Q16
    Loans - beginning balance	$ 2,934,105	$ 2,827,105 $ 2,813,703 $ 2,716,888			$ 2,699,205
    New credit extended	151,241	273,195	154,319	201,018	136,126
    Credit advanced	113,458	105,122	108,074	135,294	111,032
    Paydowns & maturities	(211,630)	(270,167)	(248,760)	(239,447)	(223,102)
    Gross loan charge-offs	(106)	(1,150)	(231)	(50)	(6,373)
    Loans - ending balance	$ 2,987,068	$ 2,934,105	$ 2,827,105	$ 2,813,703	$ 2,716,888

    Net change - loans outstanding $ 52,963 $ 107,000 $ 13,402 $ 96,815 $ 17,683

  • New credit extensions and advances were $264.7 million in the first quarter of 2017, compared to

    $247.2 million in the first quarter of 2016 and $378.3 million in the linked-quarter. Paydowns and maturities were slightly lower in the first quarter of 2017 compared to the same periods.

  • Commercial line utilization was 32.9% at March 31, 2017, compared to 33.8% and 31.0%, respectively, at March 31, 2016 and December 31, 2016.

    DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS

    Deposits and Customer Repurchase Agreements

    Quarter ended (unaudited)	1Q17 change vs.
    (in thousands)	1Q17 4Q16 1Q16	4Q16 1Q16

    Money market	$ 910,089	$ 861,856	$ 834,152	$ 48,233	5.6 %	$ 75,937	9.1 %
    Interest-bearing demand	704,659	714,062	600,415	(9,403)	(1.3)%	104,244	17.4 %
    Savings	20,192	19,561	18,165	631	3.2 %	2,027	11.2 %
    Certificates of deposits under $100	19,045	19,899	21,078	(854)	(4.3)%	(2,033)	(9.6)%
    Certificates of deposits $100 and over	81,611	87,692	92,161	(6,081)	(6.9)%	(10,550)	(11.4)%
    Reciprocal CDARS	41,200	44,250	36,816	(3,050)	(6.9)%	4,384	11.9 %
    Total interest-bearing deposits	1,776,796	1,747,320	1,602,787	29,476	1.7 %	174,009	10.9 %
    Noninterest-bearing demand
    deposits	1,273,305	1,282,463	1,171,577	(9,158)	(0.7)%	101,728	8.7 %
    Total deposits	3,050,101	3,029,783	2,774,364	20,318	0.7 %	275,737	9.9 %
    Customer repurchase agreements	59,825	27,639	39,141	32,186	116.5 %	20,684	52.8 %
    Total deposits and customer repurchase agreements	$ 3,109,926	$ 3,057,422	$ 2,813,505	$ 52,504	1.7 %	$ 296,421	10.5 %

  • Total deposits at March 31, 2017 increased $275.7 million, or 9.9%, from March 31, 2016 and $20.3 million from December 31, 2016.

  • Noninterest-bearing demand accounts at March 31, 2017 increased $101.7 million from

    March 31, 2016, and decreased $9.2 million from December 31, 2016, and were 41.7% of total

    deposits at March 31, 2017.

    Credit Quality	Quarter ended (unaudited)
    (in thousands)	1Q17 4Q16 1Q16
    ALLOWANCE FOR LOAN AND CREDIT LOSSES
    Beginning allowance for loan losses	$ 33,293 $ 33,529 $ 40,686
    Provision for loan losses	607 349 370
    Net (charge-off) recovery	311 (585) (5,771)
    Ending allowance for loan losses	$ 34,211 $ 33,293 $ 35,285
    CREDIT QUALITY
    Nonaccrual loans	$ 3,048 $ 2,638 $ 8,244
    Loans 90 days or more past due and accruing interest	- 657 -
    Total nonperforming loans	3,048 3,295 8,244
    OREO and repossessed assets	5,079 5,079 5,079
    Total nonperforming assets	$ 8,127 $ 8,374 $ 13,323
    Performing renegotiated loans	$ 23,324 $ 23,612 $ 26,523
    Classified loans	$ 54,291 $ 57,905 $ 60,700
    ASSET QUALITY MEASURES
    Nonperforming assets to total assets	0.22 % 0.23 % 0.40 %
    Nonperforming loans to total loans	0.10 % 0.11 % 0.30 %
    Nonperforming loans and OREO to total loans and OREO	0.27 % 0.28 % 0.49 %
    Allowance for loan and credit losses to total loans	1.15 % 1.13 % 1.30 %
    Allowance for loan and credit losses to nonperforming loans	1,122.41 % 1,010.41 % 428.01 %

  • NPAs decreased $0.2 million from December 31, 2016 and $5.2 million from March 31, 2016, to $8.1 million at March 31, 2017.

  • The Company had net recoveries of $0.3 million in the first quarter of 2017.

  • A provision for loan losses of $0.6 million was recorded in the first quarter of 2017.

  • The resulting allowance for loan and credit losses was 1.15% of total loans at March 31, 2017. Shareholders' Equity

Quarter ended (unaudited)

EQUITY MEASURES

(in thousands, except per share amounts) 1Q17 4Q16 1Q16 Common shareholders' equity $ 310,209 $ 302,310 $ 277,811

Common shares outstanding at period end 41,731 41,555 41,355

Book value per common share $ 7.43 $ 7.27 $ 6.72

Tangible book value per common share * $ 7.41 $ 7.24 $ 6.67

Tangible common equity to tangible assets * 8.28 % 8.29 % 8.23 %

Tier 1 capital ratio ** 11.59 % 10.52 %

Total risk-based capital ratio ** 14.48 % 13.66 %

• See accompanying Reconciliation of Non-GAAP Measures to GAAP

  ** Ratios unavailable at the time of release

  • On April 20, 2017, the Board of Directors of the Company declared a quarterly cash dividend of $0.05 per common share. The dividend will be paid on May 8, 2017 to shareholders of record on May 1, 2017.

    Net Interest Income and Margin

  • Net interest income on a tax-equivalent basis (NII) was $32.5 million for the first quarter of 2017, an increase of $2.5 million, or 8.4%, from the quarter ended March 31, 2016. From the quarter ended December 31, 2016, NII increased $0.5 million, or 1.5%.

  • The Net Interest Margin (NIM) was 3.77% for the first quarter of 2017, compared to 3.73% in the prior-year quarter and 3.75% in the fourth quarter of 2016.

  • The average yield on interest-earning assets was 4.06% for the first quarter of 2017, compared to 4.04% in the prior-year quarter and 4.02% in the fourth quarter of 2016.

  • Supporting the growth in NII was an increase in the earning asset base and deposit growth.

    • Quarterly average loans increased $227.5 million, or 8.4%, from the prior-year quarter, and

      $57.7 million from the linked-quarter.

    • Quarterly average investments increased $31.4 million, or 6.2%, from the prior-year quarter, and $63.4 million from the linked-quarter. The growth in investments in the first quarter of 2017 increased the ratio of average investments to average interest-earning assets to 15.4% at March 31, 2017 from 14.0% at December 31, 2016.

    • Quarterly average deposits increased $317.7 million, or 11.7%, from the prior-year quarter, and $4.7 million from the linked-quarter.

    • Average noninterest-bearing demand accounts increased $149.6 million, or 12.9%, from the prior-year quarter and decreased $13.1 million from the linked-quarter.

      Noninterest Income	Quarter ended (unaudited)	1Q17 change vs.
      (in thousands)	1Q17 4Q16 1Q16	4Q16 1Q16
      Noninterest income:
      Deposit service charges	$ 1,745 $ 1,551 $ 1,485	$ 194 12.5 % $ 260 17.5 %
      Investment advisory income	1,531 1,418 1,450	113 8.0 % 81 5.6 %
      Insurance income	3,122 3,286 3,050	(164) (5.0)% 72 2.4 %
      Other investments	375 215 494	160 74.4 % (119) (24.1)%
      Derivative valuation	(57) 737 (293)	(794) (107.7)% 236 80.5 %
      Other income	1,612 2,167 1,502	(555) (25.6)% 110 7.3 %
      Total noninterest income	$ 8,328 $ 9,374 $ 7,688	$ (1,046) (11.2)% $ 640 8.3 %

  • Noninterest income increased $0.6 million, or 8.3%, from the prior-year quarter and decreased $1.0 million, or 11.2%, from the linked-quarter. The linked-quarter decrease of $1.0 million was primarily driven by an $0.8 million decline in income recognized from mark-to-market adjustments on the Company's derivative portfolio.

  • Noninterest income as a percentage of taxable equivalent operating revenue was 20.4% for the first quarter of 2017, compared to 20.4% and 22.7%, respectively, for the prior-year and linked-quarters.

    Operating Expenses	Quarter ended (unaudited)	1Q17 change vs.
    (in thousands)	1Q17 4Q16 1Q16	4Q16 1Q16
    Noninterest expense:
    Salaries and employee benefits	$ 19,120 $ 18,378 $ 17,629	$ 742 4.0 % $ 1,491 8.5 %
    Occupancy expenses, premises and equipment	3,605 3,934 3,490	(329) (8.4)% 115 3.3 %
    Amortization of intangibles	150 150 150	- - % - - %
    Other operating expenses	4,584 4,659 4,560	(75) (1.6)% 24 0.5 %
    Net (gain) loss on OREO, repossessed assets and other	(345) (33) 3	(312) (945.5)% (348) nm %
    Total noninterest expense	$ 27,114 $ 27,088 $ 25,832	$ 26 0.1 % $ 1,282 5.0 %

  • Noninterest expense increased $1.3 million, or 5.0%, from the prior-year quarter and was flat with the linked-quarter. The increase in noninterest expense compared to the prior-year quarter was due to an increase in salaries and employee benefits that was partially offset by a $0.3 million net gain on the sale of other assets from the sale of a Company owned-building.

  • The efficiency ratio was 67.3% for the first quarter of 2017, compared to 68.6% and 65.6%, respectively, for the prior-year and linked-quarters.

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