CoBiz Financial, Inc. :COBZ-US: Earnings Analysis: Q1, 2016 By the Numbers

CoBiz Financial, Inc. reports financial results for the quarter ended March 31, 2016.

We analyze the earnings along side the following peers of CoBiz Financial, Inc. – Western Alliance Bancorporation, Guaranty Bancorp, Glacier Bancorp, Inc., Zions Bancorporation, National Bank Holdings Corporation Class A, Pinnacle Financial Partners, Inc. and KeyCorp (WAL-US, GBNK-US, GBCI-US, ZION-US, NBHC-US, PNFP-US and KEY-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 35.72 million, Net Earnings of USD 7.37 million.
  • Net interest income margins narrowed from 81.51% to 79.04% compared to the same period last year.
  • Net loan assets changed 10.95% compared to same period last year and 0.87% from previous period, total deposits changed 8.92% compared to same period last year and 1.19% from previous period.
  • Earnings grew despite decline in operating margins and pre-tax margins compared to same period last year.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2015-03-31 2015-06-30 2015-09-30 2015-12-31 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 35.15 35.55 34.79 35.9 35.72
Revenue Growth (%YOY) 9.94 -3.65 -5.57 2.78 1.62
Earnings (mil) 7.3 7.29 6.87 4.35 7.37
Earnings Growth (%YOY) 34.53 -14.01 -11.56 -36.98 0.92
Net Margin (%) 20.77 20.51 19.75 12.11 20.62
EPS 0.18 0.18 0.17 0.11 0.18
Return on Equity (%) 9.17 8.96 9.23 6.4 10.69
Return on Assets (%) 0.95 0.93 0.85 0.52 0.88

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Market Share Versus Profits

Revenues History
Earnings History

COBZ-US‘s change in revenue this period compared to the same period last year of 1.62% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that COBZ-US is holding onto its market share. Also, for comparison purposes, revenues changed by -0.51% and earnings by 69.39% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Earnings Growth Analysis

COBZ-US‘s earnings rose year-on-year. But this growth has not come as a result of improvement in net interest income margins or any loan loss improvement activities in its operations. Net interest income margins were 79.04% compared to 71.97% in the immediate last period. Net interest income after provisions margins were 78.00% this period compared to 56.96% in the previous period. In addition, loan loss provisions as a percentage of net interest income were 1.31% this period and -2.75% a year ago.

Net Interest Income Margin Versus Loan Loss Provisions Margin
Net Interest Income Margin History
Loan Loss Provisions Margin History

Net Loans and Total Deposits

A financial institution’s core operations represented by Net Interest Income and Net Interest Income after Provisions are dependent on both the growth and quality of its deposits as well as the growth and quality of its loans. A firm could boost its interest income in the short-term by just increasing its loan assets with less concern about their quality – but this would eventually lead to greater loan loss provisions. Similarly a drive to increase deposits could result in higher interest expenses and eventually effect the firm’s equity. It is thus important to understand net interest income performance in context to loan loss provisions, loan assets and deposits.

Loan Assets Growth Rate History (Qtr YOY)
Total Deposits Growth Rate History (Qtr YOY)

The firm’s decline in net interest income margins came despite the relative increase in the levels of net loan assets. In addition, total deposits as a percentage of equity went from 8.07% to 9.99%. On an absolute basis, net loan assets changed 10.95% compared to the same period last year and 0.87% from the previous period. Total deposits changed 8.92% compared to the same period last year and 1.19% from the previous period.


Despite a decline in operating’s margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin History
PreTax Margin History
EBIT Margin Versus PreTax Margin

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Company Profile

CoBiz Financial, Inc. operates as a diversified financial services company. The company operates through three business segments: Commercial Banking, Fee-Based Lines and Corporate Support & Other. The Commercial Banking segment consists of the operations of Colorado Business Bank and Arizona Business Bank, which offers real estate banking, private banking, interest-rate hedging, depository products and treasury management. The Fee-Based Lines segment divided into three segments those are Investment, Wealth Management and Insurance. The Investment Banking segment consists of the operations of Green Manning & Bunch, which provides middle-market companies with merger and acquisition advisory services, institutional private placements of debt and equity, and other strategic financial advisory services. The Wealth Management segment consists of the operations of CoBiz Investment Management, LLC. and CoBiz Trust and Financial Designs Ltd., which offers customized client investment policy, proprietary bond and equity offerings, tailored asset allocation strategies, trust administration, estate and business succession planning, carefully vetted investment options utilizing external managers, investment management, estate settlements, financial planning and family office services. The Insurance segment consists of the operations of CoBiz Insurance, Inc. and Financial Designs Ltd., which offers employee benefits and retirement planning, executive compensation and benefits planning, individual benefits, commercial lines, professional lines, private client and risk management services. The Corporate Support & Other segment is composed of activities of the parent company; non-production, back-office support operations; and eliminating transactions in consolidation. The non-production, back-office operations include human resources, accounting and finance, information technology, and loan and deposit operations. CoBiz Financial was founded on February 19, 1980 and is headquartered in Denver, CO.

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