DENVER, Jan. 25 /PRNewswire-FirstCall/ -- CoBiz Inc. , a financial services holding company with $2.1 billion in assets, reported fourth quarter 2006 diluted EPS of $0.23, compared to $0.25 diluted EPS a year ago. For the full year 2006, diluted EPS was $0.98, an increase of 12.6% from 2005 diluted EPS of $0.87. The fourth quarter results included a charge from the sale of investment securities associated with the Company's previously announced investment portfolio restructuring. The impact of the restructuring reduced fourth quarter earnings by $0.05 per diluted share. Excluding the charge, fourth quarter diluted EPS was $0.28 and full year diluted EPS was $1.03, representing increases of 12.0% and 18.4%, respectively, over the prior year.
Return on average equity was 13.69% for the current quarter versus 16.96% a year earlier, and 15.45% year-to-date versus 15.42% in the prior year's period. Return on average assets was 1.03% for the current quarter versus 1.21% a year earlier, and 1.11% year-to-date versus 1.10% in the prior year's period. Excluding the fourth quarter 2006 charge, return on average equity was 16.33% for the current quarter versus 16.96% a year earlier, and 16.16% year-to-date versus 15.42% in the prior year's period. Return on average assets was 1.22% for the current quarter versus 1.21% a year earlier, and 1.16% year-to-date versus 1.10% in the prior year's period.
Fourth Quarter 2006 Highlights
(Compared with one year ago)
* Net interest income grew 11.3%
* Noninterest income increased 18.7%
* Loans and deposits (including customer repos) were up 15.9% and 10.4%,
respectively
* Credit quality remains strong with 0.06% nonperforming assets to total
assets
"CoBiz continues to deliver outstanding financial results, despite the challenges faced by the banking industry in 2006" said Chairman and CEO Steve Bangert. "We ended the year with positive momentum in our deposit base, which will help position us for a strong 2007. In addition, subsequent to the close of the fourth quarter, we successfully completed a common equity raise of $19.2 million that improves our liquidity position and strengthens our balance sheet."
Investment Portfolio Restructuring
As previously announced on December 14, 2006, the Company restructured a portion of its investment portfolio to enhance its net interest margin and improve future earnings. Investment securities were sold resulting in a pre- tax charge of $1.7 million.
Net Interest Income & Margin
Net interest income for the fourth quarter of 2006 increased to $20.8 million, up $2.1 million or 11.3% versus the fourth quarter of 2005. Year-to- date net interest income for 2006 was $79.4 million, up $8.4 million or 11.9% over the same period last year. These increases were primarily attributable to strong loan growth in both the Colorado and Arizona markets, partially offset by increased use of wholesale funding sources.
The net interest margin increased eight basis points versus the third quarter of 2006 (4.22% versus 4.14%). The margin fell eight basis points compared to the prior year's quarter (4.22% versus 4.30%) and seven basis points for the full year (4.20% versus 4.27%).
"We expect our margin to remain relatively stable during 2007," commented Bangert. "The positive impact from our investment portfolio restructuring and the additional capital we raised should offset any negative impact from continued competitive loan and deposit pricing pressures" said Bangert.
Noninterest Income
Noninterest income for the fourth quarter of 2006 increased to $9.1 million, up $1.4 million or 18.7% over the fourth quarter of 2005. For the year-to-date period, noninterest income reached $29.9 million, an increase of $4.8 million or 19.1% versus the same period in 2005. As a percentage of total operating revenue, noninterest income increased to 30.4% in the fourth quarter of this year compared to 29.1% in the fourth quarter of 2005.
The Insurance segment had a strong fourth quarter with the completion of several large wealth transfer cases. For the full year 2006, the Insurance and Investment Banking Services segments contributed 72.6% of the increase in noninterest income.
Operating Expenses
Operating expenses increased $4.1 million or 24.2% versus the fourth quarter of 2005. On a year-to-date basis, operating expenses increased $9.4 million or 15.1%. Included in the fourth quarter and full year 2006 operating expense is a $1.7 million pre-tax charge related to the aforementioned investment portfolio restructuring. Expenses were also impacted by increases in compensation from the continued expansion of our employee base, bonuses and commissions related to growth in fee-based income, and the impact of expensing stock-based compensation under SFAS 123R ($0.3 million for the fourth quarter and $1.1 million for the full year).
The efficiency ratio was 64.4% during the fourth quarter of 2006 versus 64.0% in the prior year's quarter. For the full year, the efficiency ratio was 64.1% versus 64.8% in the same period of 2005.
Loans and Deposits
Average loan balances were $1.52 billion during the quarter, an increase of $224.4 million or 17.3% over balances of $1.30 billion one year ago. Arizona Business Bank grew loan balances by 25.6% for the full year 2006 while Colorado Business Bank grew by 11.1%. On a dollar basis, the growth was evenly split between the two markets.
Average deposit balances were $1.42 billion during the quarter, an increase of $80.1 million or 6.0% over balances of $1.34 billion one year ago. Deposits and customer repurchase balances ended the year at $1.70 billion, an increase of $160.3 million or 10.4% over balances of $1.54 billion at the end of 2005. Colorado Business Bank represented 70.4% of the total deposit and repurchase growth in 2006.
"We are extremely pleased with the growth in our loan portfolio during 2006, particularly since the interest rate environment hastened loan paydowns and created aggressive pricing terms in our markets," stated Bangert. "Although we experienced heightened competition for deposit balances during 2006, we saw acceleration in the growth of deposit and customer repurchases in the fourth quarter, with an annualized increase of 14.8%. We were particularly encouraged by the improvement in the composition, with the majority of the increase coming from demand deposits and low-cost NOW and money market accounts."
Credit Quality
Credit quality was stable throughout 2006, ending the year with nonperforming assets to total assets of six basis points (0.06%), slightly above the prior year's level of five basis points (0.05%). Nonperforming loans to total loans ended the year at nine basis points (0.09%), compared to seven basis points (0.07%) at the end of 2005. The ratio of nonperforming loans to total loans compares favorably to the average of 59 basis points (0.59%) reported for peers in the most recent data available from the FFIEC.
The allowance for loan and credit losses increased to $18.4 million at year-end, up $1.5 million from $16.9 million at the end of 2005. Contributing to the increase were net loan recoveries of $0.2 million for 2006 compared to net loan charge-offs of $0.2 million in 2005. The allowance for loan and credit losses as a percentage of total loans decreased to 1.19% at the end of the quarter, compared to 1.27% a year ago.
Earnings Conference Call
In conjunction with this earnings release, you are invited to listen to the company's conference call on Friday, January 26, 2007 at 11:00 am ET with Steve Bangert, CoBiz chairman and CEO. The call can be accessed over the Internet at http://www.videonewswire.com/event.asp?id=37076 or by telephone at (877) 715-5282 (conference ID #8248563). International callers may dial (973) 582-2850.
Explanation of the Company's Use of Non-GAAP Financial Measures
This earnings release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding our results of operations. We believe these measures provide important supplemental information to investors. However, you should not rely on non- GAAP financial measures alone as measures of our performance.
About CoBiz Inc.
CoBiz Inc. (http://www.cobizinc.com/) is a $2.1 billion financial holding company headquartered in Denver. The company operates Colorado Business Bank and Arizona Business Bank, full-service commercial banking institutions that offer a broad range of sophisticated banking services -- including credit, treasury management, investment and deposit products -- to a targeted customer base of professionals and small to mid-sized businesses. CoBiz also offers trust and fiduciary services through CoBiz Private Asset Management; property and casualty insurance brokerage and risk management consulting services through CoBiz Insurance; investment banking services through Green Manning & Bunch; the management of stock and bond portfolios for individuals and institutions through Alexander Capital Management Group; and employee and executive benefits consulting and wealth transfer services through Financial Designs.
Forward-looking Information
This release contains forward-looking statements that describe CoBiz's future plans, strategies and expectations. All forward-looking statements are based on assumptions and involve risks and uncertainties, many of which are beyond our control and which may cause our actual results, performance or achievements to differ materially from the results, performance or achievements contemplated by the forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may." Forward-looking statements speak only as of the date they are made. Such risks and uncertainties include, among other things:
* Risks and uncertainties described in our reports filed with the
Securities and Exchange Commission, including our most recent 10-K.
* Competitive pressures among depository and other financial institutions
nationally and in our market areas may increase significantly.
* Adverse changes in the economy or business conditions, either
nationally or in our market areas, could increase credit-related losses
and expenses and/or limit growth.
* Increases in defaults by borrowers and other delinquencies could result
in increases in our provision for losses on loans and leases and
related expenses.
* Our inability to manage growth effectively, including the successful
expansion of our customer support, administrative infrastructure and
internal management systems, could adversely affect our results of
operations and prospects.
* Fluctuations in interest rates and market prices could reduce our net
interest margin and asset valuations and increase our expenses.
* The consequences of continued bank acquisitions and mergers in our
market areas, resulting in fewer but much larger and financially
stronger competitors, could increase competition for financial services
to our detriment.
* Our continued growth will depend in part on our ability to enter new
markets successfully and capitalize on other growth opportunities.
* Changes in legislative or regulatory requirements applicable to us and
our subsidiaries could increase costs, limit certain operations and
adversely affect results of operations.
* Changes in tax requirements, including tax rate changes, new tax laws
and revised tax law interpretations may increase our tax expense or
adversely affect our customers' businesses.
In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements in this release. We undertake no obligation to publicly update or otherwise revise any forward- looking statements, whether as a result of new information, future events or otherwise.
CoBiz Inc.
December 31, 2006
(unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended
December 31, Year Ended
2006 2005 2006 2005
INCOME STATEMENT DATA
Interest income $36,745 $28,753 $136,444 $103,456
Interest expense 15,901 10,030 57,015 32,481
NET INTEREST INCOME BEFORE
PROVISION 20,844 18,723 79,429 70,975
Provision for loan and credit
losses 180 523 1,342 2,465
NET INTEREST INCOME AFTER
PROVISION 20,664 18,200 78,087 68,510
Noninterest income 9,123 7,689 29,965 25,153
Noninterest expense 21,021 16,924 71,927 62,480
INCOME BEFORE INCOME TAXES 8,766 8,965 36,125 31,183
Provision for income taxes 3,281 3,235 13,299 11,177
NET INCOME $5,485 $5,730 $22,826 $20,006
EARNINGS PER COMMON SHARE
BASIC $0.24 $0.26 $1.01 $0.90
DILUTED $0.23 $0.25 $0.98 $0.87
WEIGHTED AVERAGE SHARES
OUTSTANDING (in thousands)
BASIC 22,672 22,233 22,546 22,160
DILUTED 23,493 23,093 23,365 23,085
COMMON SHARES OUTSTANDING AT
PERIOD END 22,701 22,309
BOOK VALUE PER SHARE - COMMON $7.17 $6.12
PERIOD END BALANCES
Total Assets $2,112,423 $1,933,056
Loans (net) 1,526,589 1,315,762
Goodwill and Intangible Assets 42,140 41,504
Deposits 1,476,337 1,326,952
Junior Subordinated Debentures 72,166 72,166
Common Shareholders' Equity 162,675 136,544
Interest-Earning Assets 1,972,519 1,784,757
Interest-Bearing Liabilities 1,478,076 1,344,753
BALANCE SHEET AVERAGES
Average Assets $2,054,437 $1,810,971
Average Loans (net) 1,429,608 1,193,682
Average Deposits 1,383,342 1,250,365
Average Junior Subordinated
Debentures 72,166 70,057
Average Common Shareholders'
Equity 147,750 129,713
Average Interest-Earning
Assets 1,904,628 1,673,930
Average Interest-Bearing
Liabilities 1,459,756 1,263,225
CoBiz Inc.
December 31, 2006
(unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended
December 31, Year Ended
2006 2005 2006 2005
PROFITABILITY MEASURES
Net Interest Margin 4.22% 4.30% 4.20% 4.27%
Efficiency Ratio 64.44% 63.98% 64.12% 64.83%
Return on Average Assets 1.03% 1.21% 1.11% 1.10%
Return on Average Common Shareholders'
Equity 13.69% 16.96% 15.45% 15.42%
Noninterest Income as a Percentage of
Operating Revenues 30.44% 29.11% 27.39% 26.17%
CREDIT QUALITY
Nonperforming Loans
Loans 90 days or more past due and
still accruing interest $990 $--
Nonaccrual Loans 335 907
Total Nonperforming loans $1,325 $907
Charge-offs (320) (708)
Recoveries 519 475
Net Recoveries (Charge-Offs) $199 $(233)
ASSET QUALITY MEASURES
Nonperforming Assets to Total Assets 0.06% 0.05%
Nonperforming Loans to Total Loans 0.09% 0.07%
Allowance for Loan and Credit Losses
to Total Loans 1.19% 1.27%
Allowance for Loan and Credit Losses
to Nonperforming Loans 1392.30% 1863.95%
CoBiz Inc.
December 31, 2006
(unaudited)
(Dollars in thousands)
Colorado Arizona Investment Investment
Business Business Banking Advisory
Bank Bank Services and Trust
Net interest income
Quarter ended December 31, 2006 $14,614 $7,568 $46 $7
Quarter ended September 30, 2006 $13,986 $7,487 $34 $5
Annualized quarterly growth 17.8% 4.3% 140.0% 158.7%
Quarter ended December 31, 2005 $13,541 $6,314 $9 $4
Annual growth 7.9% 19.9% 411.1% 75.0%
Noninterest income
Quarter ended December 31, 2006 $1,329 $382 $2,096 $1,087
Quarter ended September 30, 2006 1,251 418 1,063 1,030
Annualized quarterly growth 24.7% (34.2)% 385.5% 22.0%
Quarter ended December 31, 2005 $1,008 $316 $2,462 $956
Annual growth 31.8% 20.9% (14.9)% 13.7%
Net income
Quarter ended December 31, 2006 $4,306 $1,830 $155 $34
Quarter ended September 30, 2006 5,019 2,219 (68) 49
Annualized quarterly growth (56.4)% (69.6)% 1,301.1% (121.5)%
Quarter ended December 31, 2005 $4,308 $1,762 $427 $66
Annual growth (.0)% 3.9% (63.7)% (48.5)%
Earnings per share (diluted)
Quarter ended December 31, 2006 $0.18 $0.08 $0.01 $--
Quarter ended September 30, 2006 0.21 0.10 -- --
Annualized quarterly growth (56.7)% (79.3)% -- --
Quarter ended December 31, 2005 $0.19 $0.08 $0.02 $--
Annual growth (5.3)% .0% (50.0)% .0%
Corporate
Support and
Insurance Other Consolidated
Net interest income
Quarter ended December 31, 2006 $3 $(1,394) $20,844
Quarter ended September 30, 2006 $(2) $(1,346) $20,164
Annualized quarterly growth 991.8% (14.1)% 13.4%
Quarter ended December 31, 2005 $-- $(1,145) $18,723
Annual growth 100.0% (21.7)% 11.3%
Noninterest income
Quarter ended December 31, 2006 $4,006 $223 $9,123
Quarter ended September 30, 2006 3,525 $(4) 7,283
Annualized quarterly growth 54.1% 22,514.9% 100.2%
Quarter ended December 31, 2005 $2,934 $13 $7,689
Annual growth 36.5% 1,615.4% 18.7%
Net income
Quarter ended December 31, 2006 $350 $(1,190) $5,485
Quarter ended September 30, 2006 229 (1,192) 6,256
Annualized quarterly growth 209.6% .7% (48.9)%
Quarter ended December 31, 2005 $257 $(1,090) $5,730
Annual growth 36.2% (9.2)% (4.3)%
Earnings per share (diluted)
Quarter ended December 31, 2006 $0.01 $(0.05) $0.23
Quarter ended September 30, 2006 0.01 (0.05) 0.27
Annualized quarterly growth .0% .0% (58.8)%
Quarter ended December 31, 2005 $0.01 $(0.05) $0.25
Annual growth .0% .0% (8.0)%
Colorado Arizona Investment Investment
Business Business Banking Advisory
Bank Bank Services and Trust
Total loans
At December 31, 2006 $989,627 $554,803 $-- $--
At September 30, 2006 980,140 536,309 -- --
Annualized quarterly
growth 3.8% 13.7% -- --
At December 31, 2005 $890,909 $441,711 $-- $--
Annual growth 11.1% 25.6% -- --
Total deposits and customer
repurchase agreements
At December 31, 2006 $1,347,673 $354,675 $-- $1,606
At September 30, 2006 1,318,720 323,130 -- 833
Annualized quarterly
growth 8.7% 38.7% -- 368.2%
At December 31, 2005 $1,234,770 $307,894 $-- $1,014
Annual growth 9.1% 15.2% -- 58.4%
Corporate
Support and
Insurance Other Consolidated
Total loans
At December 31, 2006 $-- $30 $1,544,460
At September 30, 2006 -- 45 1,516,494
Annualized quarterly growth -- (132.2)% 7.3%
At December 31, 2005 $-- $48 $1,332,668
Annual growth -- (37.5)% 15.9%
Total deposits and customer
repurchase agreements
At December 31, 2006 $-- $-- $1,703,954
At September 30, 2006 -- -- 1,642,683
Annualized quarterly growth -- -- 14.8%
At December 31, 2005 $-- $-- $1,543,678
Annual growth -- -- 10.4%
CoBiz Inc.
December 31, 2006
(unaudited)
(Dollars in thousands)
For the Quarter ended December 31, 2006
Colorado Arizona Investment Investment
Business Business Banking Advisory
Bank Bank Services and Trust
Income Statement
Total interest income $26,496 $10,159 $46 $7
Total interest expense 11,882 2,591 -- --
Net interest income 14,614 7,568 46 7
Provision for credit losses 123 58 -- --
Net interest income after
provision for credit losses 14,491 7,510 46 7
Noninterest income 1,329 382 2,096 1,087
Noninterest expense and
minority interest 2,770 2,593 1,807 939
Income before income taxes 13,050 5,299 335 155
Provision for income taxes 4,892 2,005 131 65
Net income before management
fees and overhead allocations $8,158 $3,294 $204 $90
Management fees and overhead
allocations, net of tax 3,852 1,464 49 56
Net income $4,306 $1,830 $155 $34
For the Quarter ended December 31, 2006
Corporate
Support and
Insurance Other Consolidated
Income Statement
Total interest income $3 $34 $36,745
Total interest expense -- 1,428 15,901
Net interest income 3 (1,394) 20,844
Provision for credit losses -- (1) 180
Net interest income after provision
for credit losses 3 (1,393) 20,664
Noninterest income 4,006 223 9,123
Noninterest expense and minority
interest 3,265 9,647 21,021
Income before income taxes 744 (10,817) 8,766
Provision for income taxes 298 (4,110) 3,281
Net income before management fees
and overhead allocations $446 $(6,707) $5,485
Management fees and overhead
allocations, net of tax 96 (5,517) --
Net income $350 $(1,190) $5,485
For the Quarter ended September 30, 2006
Colorado Arizona Investment Investment
Business Business Banking Advisory
Bank Bank Services and Trust
Income Statement
Total interest income $25,817 $9,816 $34 $5
Total interest expense 11,831 2,329 -- --
Net interest income 13,986 7,487 34 5
Provision for credit losses (60) 150 -- --
Net interest income after
provision for credit losses 14,046 7,337 34 5
Noninterest income 1,251 418 1,063 1,030
Noninterest expense and
minority interest 2,788 2,462 1,135 885
Income before income taxes 12,509 5,293 (38) 150
Provision for income taxes 4,556 2,002 (8) 58
Net income before management
fees and overhead allocations $7,953 $3,291 $(30) $92
Management fees and overhead
allocations, net of tax 2,934 1,072 38 43
Net income $5,019 $2,219 $(68) $49
For the Quarter ended September 30, 2006
Corporate
Support and
Insurance Other Consolidated
Income Statement
Total interest income $2 $85 $35,759
Total interest expense 4 1,431 15,595
Net interest income (2) (1,346) 20,164
Provision for credit losses -- (15) 75
Net interest income after
provision for credit losses (2) (1,331) 20,089
Noninterest income 3,525 (4) 7,283
Noninterest expense and minority
interest 3,005 7,212 17,487
Income before income taxes 518 (8,547) 9,885
Provision for income taxes 210 (3,189) 3,629
Net income before management fees
and overhead allocations $308 $(5,358) $6,256
Management fees and overhead
allocations, net of tax 79 (4,166) --
Net income $229 $(1,192) $6,256
For the Quarter ended December 31, 2005
Colorado Arizona Investment Investment
Business Business Banking Advisory
Bank Bank Services and Trust
Income Statement
Total interest income $20,987 $7,720 $9 $4
Total interest expense 7,446 1,406 -- --
Net interest income 13,541 6,314 9 4
Provision for credit losses 291 231 -- --
Net interest income after
provision for credit losses 13,250 6,083 9 4
Noninterest income 1,008 316 2,462 956
Noninterest expense and
minority interest 2,869 2,321 1,726 790
Income before income taxes 11,389 4,078 745 170
Provision for income taxes 4,211 1,462 287 67
Net income before management
fees and overhead allocations $7,178 $2,616 $458 $103
Management fees and overhead
allocations, net of tax 2,870 854 31 37
Net income $4,308 $1,762 $427 $66
For the Quarter ended December 31, 2005
Corporate
Support and
Insurance Other Consolidated
Income Statement
Total interest income $-- $33 $28,753
Total interest expense -- 1,178 10,030
Net interest income -- (1,145) 18,723
Provision for credit losses -- 1 523
Net interest income after
provision for credit losses -- (1,146) 18,200
Noninterest income 2,934 13 7,689
Noninterest expense and minority
interest 2,377 6,841 16,924
Income before income taxes 557 (7,974) 8,965
Provision for income taxes 219 (3,011) 3,235
Net income before management fees
and overhead allocations $338 $(4,963) $5,730
Management fees and overhead
allocations, net of tax 81 (3,873) --
Net income $257 $(1,090) $5,730
CoBiz Inc.
December 31, 2006
(unaudited)
(Dollars in thousands)
Quarter ended December 31,
Increase/(decrease)
2006 2005 Amount %
NONINTEREST INCOME
Deposit service charges $674 $662 $12 2%
Other loan fees 202 230 (28) (12%)
Investment advisory and
trust income 1,087 956 131 14%
Insurance income 4,006 2,934 1,072 37%
Investment banking income 2,096 2,462 (366) (15%)
Other income 1,058 445 613 138%
Total noninterest income $9,123 $7,689 $1,434 19%
Year ended December 31,
Increase/(decrease)
2006 2005 Amount %
NONINTEREST INCOME
Deposit service charges $2,778 $2,812 $(34) (1%)
Other loan fees 758 772 (14) (2%)
Investment advisory and
trust income 4,141 3,903 238 6%
Insurance income 13,094 10,655 2,439 23%
Investment banking income 6,214 5,158 1,056 20%
Other income 2,980 1,853 1,127 61%
Total noninterest income $29,965 $25,153 $4,812 19%
Quarter ended December 31,
Increase/(decrease)
2006 2005 Amount %
NONINTEREST EXPENSES
Salaries and
employee benefits $13,122 $11,281 $1,841 16%
Stock-based compensation 285 -- 285 100%
Occupancy expenses,
premises and equipment 2,842 2,794 48 2%
Amortization of intangibles 118 124 (6) (5%)
Other operating expenses 2,945 2,701 244 9%
Loss on sale of other assets
and securities 1,709 24 1,685 7021%
Total noninterest expenses $21,021 $16,924 $4,097 24%
Year ended December 31,
Increase/(decrease)
2006 2005 Amount %
NONINTEREST EXPENSES
Salaries and
employee benefits $46,487 $40,422 $6,065 15%
Stock-based compensation 1,140 -- 1,140 100%
Occupancy expenses,
premises and equipment 11,360 10,975 385 4%
Amortization of intangibles 475 540 (65) (12%)
Other operating expenses 10,683 10,380 303 3%
Loss on sale of other assets
and securities 1,782 163 1,619 993%
Total noninterest expenses $71,927 $62,480 $9,447 15.1%
December 31, 2006 December 31, 2005
% of % of
Amount Portfolio Amount Portfolio
LOANS
Commercial $482,309 31.6% $421,497 32.0%
Real Estate - mortgage 698,951 45.8% 682,503 51.9%
Real Estate - construction 292,952 19.2% 150,680 11.5%
Consumer 57,990 3.8% 65,932 5.0%
Other 12,258 0.8% 12,056 0.9%
Gross loans 1,544,460 101.2% 1,332,668 101.3%
Less allowance for
loan losses (17,871) (1.2%) (16,906) (1.3%)
Net loans $1,526,589 100.0% $1,315,762 100.0%
December 31, 2006 December 31, 2005
% of % of
Amount Portfolio Amount Portfolio
DEPOSITS AND CUSTOMER
REPURCHASE AGREEMENTS
NOW and money market
accounts $566,849 33.3% $502,283 32.5%
Savings 10,740 0.6% 8,461 0.5%
Certificates of deposits
under $100,000 77,367 4.5% 81,436 5.3%
Certificates of deposits
$100,000 and over 371,137 21.8% 298,681 19.3%
Total interest-bearing
deposits 1,026,093 60.2% 890,861 57.7%
Noninterest-bearing demand
deposits 450,244 26.4% 436,091 28.3%
Customer repurchase
agreements 227,617 13.4% 216,726 14.0%
Total deposits and customer
repurchase agreements $1,703,954 100.0% $1,543,678 100.0%
CoBiz Inc.
December 31, 2006
(unaudited)
(Dollars in thousands)
For the quarter ended December 31,
2006
Interest Average
Average earned yield
Balance or paid or cost
Assets
Federal funds sold and other $7,869 $126 6.27%
Investment securities 459,111 5,598 4.77%
Loans 1,524,567 31,149 7.99%
Allowance for loan losses (17,748) --
Total interest earning assets $1,973,799 $36,873 7.31%
Noninterest-earning assets
Cash and due from banks 43,374
Other 104,488
Total assets $2,121,661
Liabilities and Shareholders' Equity
Deposits
NOW and money market deposits $516,791 $3,823 2.93%
Savings deposits 10,903 42 1.53%
Certificates of deposits
Under $100,000 73,583 825 4.45%
$100,000 and over 377,408 4,646 4.88%
Total Interest-bearing deposits $978,685 $9,336 3.78%
Other borrowings
Securities sold under agreements
to repurchase and other short-term
borrowings 453,814 5,133 4.43%
Junior subordinated debentures 72,166 1,432 7.76%
Total interest-bearing
liabilities $1,504,665 $15,901 4.17%
Noninterest-bearing demand accounts 439,062
Total deposits and interest-
bearing liabilities 1,943,727
Other noninterest-bearing liabilities 18,950
Total liabilities and preferred
securities 1,962,677
Shareholders' equity 158,984
Total liabilities and
shareholders' equity $2,121,661
Net interest income $20,972
Net interest spread 3.14%
Net interest margin 4.22%
Ratio of average interest-earning
assets to average interest-bearing
liabilities 131.18%
For the quarter ended December 31,
2005
Interest Average
Average earned yield
Balance or paid or cost
Assets
Federal funds sold and other $3,935 $57 5.67%
Investment securities 449,791 4,506 3.92%
Loans 1,300,171 24,305 7.31%
Allowance for loan losses (16,631) --
Total interest earning assets $1,737,266 $28,868 6.50%
Noninterest-earning assets
Cash and due from banks 46,502
Other 97,614
Total assets $1,881,382
Liabilities and Shareholders' Equity
Deposits
NOW and money market deposits $490,387 $2,632 2.13%
Savings deposits 8,812 12 0.54%
Certificates of deposits
Under $100,000 85,989 713 3.29%
$100,000 and over 316,622 2,727 3.42%
Total Interest-bearing deposits $901,810 $6,084 2.68%
Other borrowings
Securities sold under agreements
to repurchase and other short-term
borrowings 322,483 2,767 3.36%
Junior subordinated debentures 72,166 1,179 6.39%
Total interest-bearing
liabilities $1,296,459 $10,030 3.05%
Noninterest-bearing demand accounts 435,853
Total deposits and interest-
bearing liabilities 1,732,312
Other noninterest-bearing liabilities 15,031
Total liabilities and preferred
securities 1,747,343
Shareholders' equity 134,039
Total liabilities and
shareholders' equity $1,881,382
Net interest income $18,838
Net interest spread 3.45%
Net interest margin 4.30%
Ratio of average interest-earning
assets to average interest-bearing
liabilities 134.00%
For the year ended December 31,
2006
Interest Average
Average earned yield
Balance or paid or cost
Assets
Federal funds sold and other $6,677 $423 6.34%
Investment securities 468,343 21,590 4.61%
Loans 1,446,964 114,942 7.94%
Allowance for loan losses (17,356) --
Total interest earning assets $1,904,628 $136,955 7.19%
Noninterest-earning assets
Cash and due from banks 46,187
Other 103,622
Total assets $2,054,437
Liabilities and Shareholders' Equity
Deposits
NOW and money market deposits $512,007 $13,857 2.71%
Savings deposits 9,475 103 1.09%
Certificates of deposits
Under $100,000 77,748 3,143 4.04%
$100,000 and over 354,029 15,873 4.48%
Total Interest-bearing deposits $953,259 $32,976 3.46%
Other borrowings
Securities sold under agreements
to repurchase and other short-term
borrowings 434,331 18,585 4.28%
Junior subordinated debentures 72,166 5,454 7.56%
Total interest-bearing
liabilities $1,459,756 $57,015 3.91%
Noninterest-bearing demand accounts 430,083
Total deposits and interest-
bearing liabilities 1,889,839
Other noninterest-bearing liabilities 16,848
Total liabilities and preferred
securities 1,906,687
Shareholders' equity 147,750
Total liabilities and
shareholders' equity $2,054,437
Net interest income $79,940
Net interest spread 3.28%
Net interest margin 4.20%
Ratio of average interest-earning
assets to average interest-bearing
liabilities 130.48%
For the year ended December 31,
2005
Interest Average
Average earned yield
Balance or paid or cost
Assets
Federal funds sold and other $3,706 $223 6.02%
Investment securities 476,542 18,139 3.81%
Loans 1,209,377 85,531 7.07%
Allowance for loan losses (15,695) --
Total interest earning assets $1,673,930 $103,893 6.21%
Noninterest-earning assets
Cash and due from banks 42,370
Other 94,671
Total assets $1,810,971
Liabilities and Shareholders' Equity
Deposits
NOW and money market deposits $461,544 $7,469 1.62%
Savings deposits 10,357 42 0.41%
Certificates of deposits
Under $100,000 83,587 2,404 2.88%
$100,000 and over 289,607 8,561 2.96%
Total Interest-bearing deposits $845,095 $18,476 2.19%
Other borrowings
Securities sold under agreements
to repurchase and other short-term
borrowings 348,073 9,607 2.76%
Junior subordinated debentures 70,057 4,398 6.28%
Total interest-bearing
liabilities $1,263,225 $32,481 2.57%
Noninterest-bearing demand accounts 405,270
Total deposits and interest-
bearing liabilities 1,668,495
Other noninterest-bearing liabilities 12,763
Total liabilities and preferred
securities 1,681,258
Shareholders' equity 129,713
Total liabilities and
shareholders' equity $1,810,971
Net interest income $71,412
Net interest spread 3.64%
Net interest margin 4.27%
Ratio of average interest-earning
assets to average interest-bearing
liabilities 132.51%
Reconciliation of Non-GAAP Measure to GAAP
Management is presenting in the following table, adjustments to net income, diluted earnings per share, return on average equity and return on average assets as reported in accordance with generally accepted accounting principles for the impact of an investment portfolio restructuring.
Quarter Ended Year Ended
December 31, 2006 December 31, 2006
Net income as reported - GAAP $5,485 $22,826
Effect of excluding the investment
portfolio restructuring - net of
tax 1,057 1,057
Adjusted net income (Non-GAAP) $6,542 $23,883
Diluted EPS as reported - GAAP $0.23 $0.98
Effect of excluding the investment
portfolio restructuring 0.05 0.05
Adjusted diluted EPS (Non-GAAP) $0.28 $1.03
Return on average equity as
reported - GAAP 13.69% 15.45%
Effect of excluding the investment
portfolio restructuring 2.64% 0.71%
Adjusted return on average equity
(Non-GAAP) 16.33% 16.16%
Return on average assets as
reported - GAAP 1.03% 1.11%
Effect of excluding the investment
portfolio restructuring 0.20% 0.05%
Adjusted return on average assets
(Non-GAAP) 1.22% 1.16%
