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.
Financial Summary | Quarter ended (unaudited) | 1Q17 change vs. | |||||
(in thousands, except per share amounts) | 1Q17 4Q16 1Q16 | 4Q16 1Q16 | |||||
Net interest income before provision | $ 30,078 $ 29,888 $ 28,229 | $ 190 0.6 % $ 1,849 6.6 % | |||||
Provision for loan losses | 607 349 370 | 258 73.9 % 237 64.1 % | |||||
Net interest income after provision | 29,471 29,539 27,859 | (68) (0.2)% 1,612 5.8 % | |||||
Total noninterest income | 8,328 9,374 7,688 | (1,046) (11.2)% 640 8.3 % | |||||
Total noninterest expense | 27,114 27,088 25,832 | 26 0.1 % 1,282 5.0 % | |||||
Net income before income taxes | 10,685 11,825 9,715 | (1,140) (9.6)% 970 10.0 % | |||||
Provision for income taxes | 2,071 3,092 2,350 | (1,021) (33.0)% (279) (11.9)% | |||||
Net income | $ 8,614 $ 8,733 $ 7,365 | $ (119) (1.4)% $ 1,249 17.0 % | |||||
Diluted earnings per common share | $ 0.20 | $ 0.21 | $ 0.18 | $ (0.01) | (4.8)% $ | 0.02 | 11.1 % |
KEY RATIOS | |||||||
Net interest margin | 3.77 % | 3.75 % | 3.73 % | ||||
Efficiency ratio - taxable equivalent * | 67.33 % | 65.57 % | 68.63 % | ||||
Return on average assets | 0.96 % | 0.98 % | 0.88 % | ||||
Return on average shareholders' equity | 11.38 % | 11.56 % | 10.74 % | ||||
Noninterest income as a percentage of taxable equivalent operating revenue * | 20.42 % | 22.66 % | 20.43 % |
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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CoBiz Financial Inc. published this content on 27 April 2017 and is solely responsible for the information contained herein.
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