CoBiz Financial Announces Fourth Quarter 2009 Results

DENVER, Jan. 28 /PRNewswire-FirstCall/ -- CoBiz Financial Inc. (Nasdaq: COBZ), a financial services company with $2.5 billion in assets, announced a net loss of $4.5 million for the fourth quarter of 2009, as compared to a net loss of $8.6 million for the fourth quarter of 2008.  The net loss available to common shareholders was $0.15 per diluted common share versus a net loss of $0.38 per diluted common share in the prior year quarter.

For the year ended December 31, 2009, the net loss from core operations was $41.8 million, or $1.56 per diluted common share, excluding noncash charges from goodwill impairment (see the accompanying reconciliation of Non-GAAP Measures to GAAP). Including these charges, the net loss was $83.0 million, or $2.98 per diluted share. For the year ended December 31, 2008, net income was $1.3 million or $0.05 per diluted common share.

Financial Performance – Fourth Quarter 2009

• The net loss available to common shareholders for the fourth quarter of 2009 was $0.15 per diluted common share, a 35% improvement from the net loss from core operations (excluding goodwill charges) of $0.23 per diluted common share in the third quarter of 2009 (linked-quarter). (See the accompanying reconciliation of Non-GAAP Measures to GAAP).  The current quarter results were also a 47% improvement over the net loss reported in the fourth quarter of 2008.
• Provision for loan and credit losses (Provision) decreased for the second consecutive quarter. The Provision for the fourth quarter decreased by $3.7 million from the third quarter of 2009 to $16.5 million from $20.2 million. The fourth quarter 2009 Provision was $6.8 million less than the fourth quarter of 2008 Provision of $23.4 million.
• During the fourth quarter, the Company charged-off, net of recoveries, $22.9 million. The resulting allowance for loan and credit losses (Allowance) was 4.23% of total loans. For the full year, net charge-offs were $73.5 million. For the year, the loan and credit loss provision was $105.7 million or 143.7% of year-to-date net charge-offs.
• Nonperforming assets ended the quarter at $104.5 million, or 4.24% of total assets, up from $98.2 million or 3.87% of total assets at September 30, 2009.
• The net interest margin decreased slightly to 4.36% for the fourth quarter of 2009, from 4.40% in the third quarter of 2009.  The net interest margin increased 21 basis points (0.21%) from 4.15% in the fourth quarter of 2008.
• Loans outstanding as of December 31, 2009, decreased by $97.3 million on a linked-quarter basis to $1.78 billion. As a result, net interest income decreased by $0.6 million, from the third quarter 2009. However, for the full year, net interest income increased by $8.0 million, or 8.4% to $103.4 million over 2008 due to a strong net interest margin.
• Deposits and customer repurchase agreements (Customer Repo's) increased by $49.5 million on a linked-quarter basis. Deposits and Customer Repo's excluding wholesale brokered sources (Customer Funding) increased by $74.6 million on a linked-quarter basis, or 14.6% annualized. Year-over-year, Customer Funding increased by $392.4 million or 23.0%.  
• Total noninterest-bearing demand accounts represented 27.6% of total deposits as of December 31, 2009, compared to 27.1% as of the prior quarter.
• The Company recognized a $1.6 million, pre-tax loss on securities, other assets and OREO as compared to $0.9 million in the third quarter of 2009. For the full year, the Company recognized $5.6 million of losses on securities, other assets and OREO.

"2009 was a tough year and one I wasn't sorry to see come to an end," said Chairman and CEO Steve Bangert. "However, I think it's important to take what we learned over the past year and make our Company stronger. Any company can do well in good times; it is a company's response to difficulty that differentiates it from its competitors.

"I am very proud of how our management team and employees responded to this demanding environment. During the past year, we addressed some of the larger challenges facing our company, clearing the way for positive momentum in the coming year. Within the past 18 months, we successfully raised capital on three separate occasions. We faced our credit issues head-on, provisioning $105.7 million and building our Allowance coverage to one of the highest in our peer group. We made significant investments in a newly formed Special Assets group, and have decreased our Land and Construction concentrations. More importantly, at a time when earnings were under extreme pressure, we continued to invest in the franchise by recruiting three key positions:  Director of Wealth Management, as well as Colorado and Arizona Bank Market Presidents, which will allow us to focus on growing market share.

"While 2010 will not be without challenges, I am hopeful for the promises it holds and the potential opportunities. We exit 2009 with a stronger capital base, record liquidity and a deeper management team.  As a result of our challenges, we have become more efficient, disciplined and focused, and are well prepared to continue building the franchise."