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.
Financial Summary | Quarter ended (unaudited) | 2Q17 change vs. | ||||
(in thousands, except per share amounts) | 2Q17 1Q17 2Q16 | 1Q17 2Q16 | ||||
Net interest income before provision | $ 32,005 $ 30,078 $ 28,533 | $ 1,927 6.4 % $ 3,472 12.2 % | ||||
Provision for loan losses | 673 607 (1,652) | 66 10.9 % 2,325 140.7 % | ||||
Net interest income after provision | 31,332 29,471 30,185 | 1,861 6.3 % 1,147 3.8 % | ||||
Total noninterest income | 8,311 8,328 7,812 | (17) (0.2)% 499 6.4 % | ||||
Total noninterest expense | 26,655 27,114 26,268 | (459) (1.7)% 387 1.5 % | ||||
Net income before income taxes | 12,988 10,685 11,729 | 2,303 21.6 % 1,259 10.7 % | ||||
Provision for income taxes | 3,499 2,071 3,197 | 1,428 69.0 % 302 9.4 % | ||||
Net income | $ 9,489 $ 8,614 $ 8,532 | $ 875 10.2 % $ 957 11.2 % | ||||
Diluted earnings per common share | $ 0.23 | $ 0.20 | $ 0.21 | $ 0.03 | 13.6 % $ 0.02 | 8.2 % |
KEY RATIOS | ||||||
Net interest margin | 3.76 % | 3.77 % | 3.72 % | |||
Efficiency ratio - taxable equivalent * | 62.83 % | 67.33 % | 68.71 % | |||
Return on average assets | 1.01 % | 0.96 % | 1.01 % | |||
Return on average shareholders' equity | 12.10 % | 11.38 % | 12.19 % | |||
Noninterest income as a percentage of taxable equivalent operating revenue * | 19.61 % | 20.42 % | 20.44 % |
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
CoBiz Financial Inc. published this content on 20 July 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 20 July 2017 21:39:20 UTC.
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