CoBiz Financial : Announces Second 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 second quarter of 2017.

Financial Highlights - Second quarter 2017

• Net income of $9.5 million for the second quarter of 2017, compared to $8.5 million in the second quarter of 2016.

• Diluted earnings per share of $0.23 for the second quarter of 2017, compared to $0.21 in the second quarter of 2016.

• Loans increased $247.3 million, or 8.8%, from June 30, 2016 and $73.9 million from March 31, 2017.

• Deposits increased $266.3 million, or 9.5%, from June 30, 2016 and $22.5 million from March 31, 2017.

• Nonperforming assets (NPAs) to total assets of 0.25% at June 30, 2017, compared to 0.32% at June 30, 2016 and 0.22% at March 31, 2017.

• See accompanying Reconciliation of Non-GAAP Measures to GAAP

  Loans

  Quarter ended (unaudited) 2Q17 change vs. (in thousands) 2Q17 1Q17 2Q16 1Q17 2Q16

  LOANS
  Commercial	$ 1,272,304	$ 1,241,365	$ 1,218,723	$ 30,939	2.5 % $	53,581	4.4 %
  Owner-occupied real estate	481,180	473,775	446,699	7,405	1.6 %	34,481	7.7 %
  Investor real estate	747,765	723,476	607,168	24,289	3.4 %	140,597	23.2 %
  Construction & land	162,318	166,553	184,620	(4,235)	(2.5)%	(22,302)	(12.1)%
  Consumer	287,790	271,751	258,773	16,039	5.9 %	29,017	11.2 %
  Other	109,597	110,148	97,720	(551)	(0.5)% 11,877		12.2 %
  Total loans	$ 3,060,954	$ 2,987,068	$ 2,813,703	$ 73,886	2.5 % $ 247,251		8.8 %

  • Loans at June 30, 2017 increased $247.3 million, or 8.8%, from June 30, 2016 and $73.9 million from March 31, 2017.

  • Loans in the Arizona and Colorado markets increased $151.9 million and $95.4 million, respectively, from June 30, 2016. Compared to March 31, 2017, loans in the Arizona market increased $34.6 million while loans in the Colorado market increased $39.3 million.

    Quarter ended (unaudited)
    (in thousands)	2Q17	1Q17 4Q16 3Q16			2Q16
    Loans - beginning balance	$ 2,987,068	$ 2,934,105 $ 2,827,105 $ 2,813,703			$ 2,716,888
    New credit extended	190,431	151,241	273,195	154,319	201,018
    Credit advanced	129,633	113,458	105,122	108,074	135,294
    Paydowns & maturities	(245,976)	(211,630)	(270,167)	(248,760)	(239,447)
    Gross loan charge-offs	(202)	(106)	(1,150)	(231)	(50)
    Loans - ending balance	$ 3,060,954	$ 2,987,068	$ 2,934,105	$ 2,827,105	$ 2,813,703

    Net change - loans outstanding $ 73,886 $ 52,963 $ 107,000 $ 13,402 $ 96,815

  • New credit extensions and advances were $320.1 million in the second quarter of 2017, compared to

    $336.3 million in the second quarter of 2016 and $264.7 million in the quarter-ended March 31, 2017 (linked-quarter).

  • Commercial line utilization was 32.6% at June 30, 2017, compared to 36.3% and 32.9%, respectively, at June 30, 2016 and March 31, 2017.

    DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS

    Deposits and Customer Repurchase Agreements

    Quarter ended (unaudited)	2Q17 change vs.
    (in thousands)	2Q17 1Q17 2Q16	1Q17 2Q16

    Money market	$ 898,615	$ 910,089	$ 853,815	$ (11,474)	(1.3)%	$ 44,800	5.2 %
    Interest-bearing demand	696,971	704,659	591,355	(7,688)	(1.1)%	105,616	17.9 %
    Savings	22,748	20,192	19,097	2,556	12.7 %	3,651	19.1 %
    Certificates of deposits under $100	18,748	19,045	19,836	(297)	(1.6)%	(1,088)	(5.5)%
    Certificates of deposits $100 and
    over	79,103	81,611	89,008	(2,508)	(3.1)%	(9,905)	(11.1)%
    Reciprocal CDARS	42,046	41,200	49,210	846	2.1 %	(7,164)	(14.6)%
    Total interest-bearing deposits	1,758,231	1,776,796	1,622,321	(18,565)	(1.0)%	135,910	8.4 %
    Noninterest-bearing demand deposits	1,314,408	1,273,305	1,184,023	41,103	3.2 %	130,385	11.0 %
    Total deposits	3,072,639	3,050,101	2,806,344	22,538	0.7 %	266,295	9.5 %
    Customer repurchase agreements	69,203	59,825	37,908	9,378	15.7 %	31,295	82.6 %
    Total deposits and customer repurchase agreements	$ 3,141,842	$ 3,109,926	$ 2,844,252	$ 31,916	1.0 %	$ 297,590	10.5 %

  • Total deposits at June 30, 2017 increased $266.3 million, or 9.5%, from June 30, 2016 and $22.5 million from March 31, 2017.

  • Noninterest-bearing demand accounts at June 30, 2017 increased $130.4 million from June 30, 2016, and increased $41.1 million from March 31, 2017 and were 42.8% of total deposits at June 30, 2017.

    Credit Quality	Quarter ended (unaudited)
    (in thousands)	2Q17 1Q17 2Q16
    ALLOWANCE FOR LOAN LOSSES
    Beginning allowance for loan losses	$ 34,211 $ 33,293 $ 35,285
    Provision for loan losses	673 607 (1,652)
    Net recovery (charge-off)	741 311 711
    Ending allowance for loan losses	$ 35,625 $ 34,211 $ 34,344
    CREDIT QUALITY
    Nonaccrual loans	$ 3,830 $ 3,048 $ 5,994
    Loans 90 days or more past due and accruing interest	664 - -
    Total nonperforming loans	4,494 3,048 5,994
    OREO and repossessed assets	5,079 5,079 5,079
    Total nonperforming assets	$ 9,573 $ 8,127 $ 11,073
    Performing renegotiated loans	$ 31,482 $ 23,324 $ 27,240
    Classified loans	$ 50,587 $ 54,291 $ 58,163
    ASSET QUALITY MEASURES
    Nonperforming assets to total assets	0.25 % 0.22 % 0.32 %
    Nonperforming loans to total loans	0.15 % 0.10 % 0.21 %
    Nonperforming loans and OREO to total loans and OREO	0.31 % 0.27 % 0.39 %
    Allowance for loan losses to total loans	1.16 % 1.15 % 1.22 %
    Allowance for loan losses to nonperforming loans	792.72 % 1,122.41 % 572.97 %

  • NPAs increased $1.4 million from March 31, 2017 and decreased $1.5 million from June 30, 2016, and were $9.6 million at June 30, 2017.

  • The Company had net recoveries of $0.7 million in the second quarter of 2017.

  • A provision for loan losses of $0.7 million was recorded in the second quarter of 2017.

  • The resulting allowance for loan losses was 1.16% of total loans at June 30, 2017. Shareholders' Equity

Quarter ended (unaudited)

EQUITY MEASURES

(in thousands, except per share amounts) 2Q17 1Q17 2Q16 Common shareholders' equity $ 319,470 $ 310,209 $ 286,052

Common shares outstanding at period end 41,771 41,731 41,433

Book value per common share $ 7.65 $ 7.43 $ 6.90

Tangible book value per common share * $ 7.62 $ 7.41 $ 6.86

Tangible common equity to tangible assets * 8.37 % 8.28 % 8.23 %

Tier 1 capital ratio ** 11.46 % 10.75 %

Total risk-based capital ratio ** 14.30 % 13.77 %

• See accompanying Reconciliation of Non-GAAP Measures to GAAP

  ** Ratios unavailable at the time of release

  • On July 20, 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 August 7, 2017 to shareholders of record on July 31, 2017.

    Net Interest Income and Margin

  • Net interest income on a taxable-equivalent basis (NII) was $34.1 million for the second quarter of 2017, an increase of $3.7 million, or 12.0%, from the quarter ended June 30, 2016. From the quarter ended March 31, 2017, NII increased $1.6 million, or 4.9%.

  • Net interest margin (NIM) was 3.76% for the second quarter of 2017, compared to 3.72% in the prior- year quarter and 3.77% in the first quarter of 2017.

  • The average yield on interest-earning assets was 4.08% for the second quarter of 2017, compared to 4.02% in the prior-year quarter and 4.06% in the first quarter of 2017.

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

    • A tax-exempt loan prepaid during the quarter that resulted in the accelerated amortization of a $0.2 million loan premium which, on a taxable-equivalent basis, reduced NIM four basis points in the second quarter of 2017.

    • Quarterly average loans increased $259.2 million, or 9.3%, from the prior-year quarter, and

      $107.9 million from the linked-quarter.

    • Quarterly average investments increased $88.1 million, or 18.1%, from the prior-year quarter, and $36.2 million from the linked-quarter. The growth in investments in the first half of 2017 increased the ratio of average investments to average interest-earning assets to 15.8% at June 30, 2017 from 14.0% at December 31, 2016.

    • Quarterly average deposits increased $211.2 million, or 7.5%, from the prior-year quarter, and decreased $13.5 million from the linked-quarter. The decline in average deposits during the second quarter of 2017 is a result of typical outflows by our commercial clients as they make distributions and tax payments during the quarter.

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

    • Average noninterest-bearing demand accounts increased $99.5 million, or 8.2%, from the prior-year quarter and $11.4 million from the linked-quarter.

    • Average other short-term borrowings increased $91.2 million, or 68.3%, from the prior-year quarter, and increased $134.7 million from the linked-quarter. The shift in funding mix from core deposits into more expensive short-term borrowings reduces the NIM.

      Noninterest Income	Quarter ended (unaudited)	2Q17 change vs.
      (in thousands)	2Q17 1Q17 2Q16	1Q17 2Q16
      Noninterest income:
      Deposit service charges	$ 1,714 $ 1,745 $ 1,470	$ (31) (1.8)% $ 244 16.6 %
      Investment advisory income	1,500 1,531 1,430	(31) (2.0)% 70 4.9 %
      Insurance income	3,427 3,122 3,112	305 9.8 % 315 10.1 %
      Other investments	372 375 420	(3) (0.8)% (48) (11.4)%
      Derivative valuation	(80) (57) (163)	(23) (40.4)% 83 50.9 %
      Other income	1,378 1,612 1,543	(234) (14.5)% (165) (10.7)%
      Total noninterest income	$ 8,311 $ 8,328 $ 7,812	$ (17) (0.2)% $ 499 6.4 %

  • Noninterest income increased $0.5 million, or 6.4%, from the prior-year quarter and was flat with the linked-quarter.

  • Noninterest income as a percentage of taxable equivalent operating revenue* was 19.6% for the second quarter of 2017, compared to 20.4% for both the prior-year and linked-quarters.

* See accompanying reconciliation of Non-GAAP Measures to GAAP