CoBiz Financial Reports Third Quarter 2008 Results

Announces successful completion of $20.4 million capital raise

DENVER, Oct. 23 /PRNewswire-FirstCall/ -- CoBiz Financial Inc.
(Nasdaq: COBZ), a financial services company with $2.6 billion in assets,
reported third quarter 2008 diluted earnings per share (EPS) of $0.18,
consistent with the second quarter of 2008 and $0.25 diluted EPS a year ago.
Net income was $4.2 million in the second and third quarters of 2008 vs.
$6.0 million for the third quarter of 2007. For the nine months ended
September 30, 2008, net income was $9.9 million vs. $17.6 million for the
comparable period in 2007.
Financial Performance - Third Quarter 2008
-- Net income of $4.2 million, or $0.18 per diluted share, unchanged from
the second quarter of 2008 (linked-quarter).
-- Commercial banking improved $0.03 per diluted share, however, the
Investment Banking segment's contribution decreased by $0.05 per
diluted share on a linked quarter basis.
-- Stable net interest margin on a linked-quarter basis: 4.13% in third
quarter of 2008 vs. 4.11% in the second quarter.
-- Noninterest income as a percentage of operating revenues was 27.9% for
the third quarter.
-- Quarterly loan growth of $40.5 million or 8.2% annualized; year over
year loan growth of $253.4 million, or 14.5%.
-- Deposits and customer repurchase agreements (Customer Repo) increased
by $93.9 million from the second quarter and $11.5 million from
September 2007.
-- Provision for loan and credit losses of $5.4 million (pre-tax) for the
current quarter, as compared to $5.6 million for the second quarter of
2008, and $1.4 million for the third quarter of 2007.
-- Net loan charge-offs of $3.4 million for the third quarter, or 0.17% of
average loans for the quarter; net charge-offs for the nine months
ended September 30, 2008 totaled $8.7 million, or 0.45% of year-to-date
average loans.
-- Nonperforming assets to total assets at 1.19%.
-- Allowance for loan and credit losses (Allowance) increased to 1.40% of
total loans as compared to 1.32% as of June 30, 2008 and 1.10% as of
September 30, 2007.
-- Third quarter results include a $0.8 million pre-tax loss on the sale
of OREO that occurred subsequent to quarter-end, or $0.02 per diluted
share.
-- The Company recognized a $0.3 million pre-tax OTTI loss on Fannie Mae
preferred stock, or $0.01 per diluted share.
-- Issuance of $20.4 million of privately placed subordinated debentures.

"I remain encouraged by the fundamentals of our earnings during this time
of national and international economic uncertainty," said Chairman and CEO
Steve Bangert. "We continue to see growth in our loan portfolio and maintain a
very stable and healthy net interest margin. However, because of the economic
environment, we have maintained a prudent Allowance to Total Loans coverage
that has increased to 1.40% from 1.10% to reflect our current portfolio. I
expect to exit the current credit cycle in a position of strength, and look
forward to the earnings momentum we will gain when our credit costs return to
a more normalized level."
"During the third quarter, we announced the successful completion of
$20.4 million of privately placed subordinated debentures. I believe our
ability to raise additional capital during a very difficult climate for the
industry is a testament to the franchise," said Bangert. "The capital raised
will allow us to pursue future growth opportunities and emerge through these
turbulent times a stronger institution."
Loans
Loans (for Colorado Business Bank and Arizona Business Bank, collectively,
the Bank) ended the period just over $2.0 billion, an increase of
$253.4 million, or 14.5%, over the same period in 2007. As expected, loan
growth tempered during the third quarter of 2008 with a net increase of
$40.5 million, or 8.2% annualized, as compared to a very strong second quarter
that had net growth of $85.9 million, or 18.4% annualized. Most of the growth
came from Term Commercial Mortgages. The majority of the growth in Term
Commercial Mortgages relates to owner-occupied buildings closely tied to our
C&I portfolio. Construction loans were down for the period, and continue to
be reduced as a percentage of the total portfolio, accounting for 15.5% of net
loans as of September 30, 2008 vs. 17.3% a year earlier.
Deposits and Customer Repo Balances
Deposit and Customer Repo balances ended the period at $1.9 billion, an
increase of $11.5 million from the same period in 2007. On a linked-quarter
basis, Deposit and Customer Repo balances increased by $93.9 million. The
majority of the change is attributed to an increased utilization of brokered
deposits in the Bank's funding mix, as the Bank shifted out of FHLB advances
and Fed Funds Purchased. Brokered deposits totaled $122.1 million as of
September 30, 2008, vs. $21.5 million as of June 30, 2008. Brokered funding
represented 7.03% of total deposits as of the current quarter, but was only
1.30% as of the second quarter of 2008. Brokered funding was 7.58% of total
deposits a year earlier.
This past quarter has been particularly challenging in terms of deposit
generation. As a business bank, the vast majority of our depositors maintain
balances well in excess of the FDIC insurance limits. The recent market
turmoil has created a "flight to quality" mindset whereby customers are more
concerned with perceived safety than rates earned on their investments. As a
result, the Bank has migrated a significant portion of its core deposits from
Money Market and NOW accounts into certificates of deposits (CDs) offered
through the Certificate of Deposit Account Registry Service (R) (CDARS)
program.
The CDARS program is designed to provide full FDIC insurance on deposit
amounts larger than the stated minimum by exchanging or reciprocating larger
depository relationships with other member banks. Our depositors' funds are
broken into smaller amounts and placed with other banks that are members of
the network. Each member bank issues CDs in amounts under $100,000, so the
entire deposit is eligible for FDIC insurance. CDARS are technically brokered
deposits; however, the Company considers the reciprocal deposits placed
through the CDARS program as core funding and does not report the balances as
brokered sources in its internal or external financial reports. As of
September 30, 2008, the Bank had $126.0 million of reciprocal CDARS deposits
outstanding. In exchange for the protection of principal offered by the CDARS
program, the Bank is able to pay a much lower interest rate on the depositors'
funds. Yields paid on CDs less than $100,000 have decreased by more than 80
basis points from the second quarter, helping to stabilize our net interest
margin.
Allowance for Loan and Credit Losses and Credit Quality
Total nonperforming assets (NPAs) increased to $30.9 million at September
30, 2008, from $22.8 million at June 30, 2008. NPAs to total assets remains
under peer group averages at 1.19% as of the current quarter. Nonperforming
loans (NPLs) were $23.9 million as of September 30, 2008, or 1.19% of total
loans. Included in our NPAs as of quarter end were four foreclosed properties
(OREO) totaling $7.0 million, one of which was sold for a $0.8 million loss
subsequent to quarter end, however, the loss was fully recognized in the third
quarter. The remaining three properties, all located in Phoenix, have a
carrying value of $5.2 million.
Our Arizona bank's NPLs were $12.9 million, or 1.76% of its total loans as
of September 30, 2008. The majority of Arizona's problem loans continue to be
concentrated within its Land Acquisition and Development (A&D) portfolio.
Approximately 63% of our total loans are within Colorado. Although that
portfolio has seen modest deterioration, it continues to perform well overall.
Colorado's NPLs totaled $11.0 million at the end of the current quarter or
0.87% of its total loans. Over one-third of Colorado's NPLs are attributed to
a single credit -- which was also included in our first and second quarter
NPLs.
During the third quarter of 2008, we recorded a $5.4 million loan and
credit loss provision, as compared to $5.6 million for the second quarter of
2008, and $1.4 million for the third quarter of 2007. The Company charged-off
(net of recoveries) $3.4 million in loans during the third quarter of 2008,
and $8.7 million for the nine months of 2008. For the year, the Company has
provided $7.3 million more in provision for loan and credit losses than it has
charged-off. As a result, the Allowance has increased to $28.0 million as of
September 30, 2008, from $20.6 million as of December 31, 2007. The Company's
Allowance to total loans increased to 1.40% as of September 30, 2008 from
1.32% as of June 30, 2008 and 1.12% December 31, 2007. The Allowance is at
117.0% of NPLs as of the end of the third quarter of 2008.
Shareholders' Equity and Regulatory Capital
As of the end of the third quarter, total Shareholders' Equity was
$194.5 million, or $8.33 per share. The Company's total tangible equity was
$142.9 million, and its tangible equity to tangible asset ratio was 5.59%.
Total Risk-Based Capital for the consolidated company increased by
$25.0 million during the third quarter and by 178 basis points. The majority
of the increase is attributed to the $20.4 million private offering of
subordinated debt raised in the third quarter that qualifies as Tier II
capital. In addition, the Company continues to have good internal capital
generation to support its operations and common dividend program. The
Company's Board of Directors reaffirmed its quarterly common stock dividend,
currently at $0.07 per share.
As of September 30, 2008, the Bank was well-capitalized with an expected
Tier 1 Capital ratio of 10.61%, and Total Capital ratio of 11.86%. The minimum
ratios to be considered well-capitalized under the risk-based capital
standards are 6% and 10%, respectively. At the holding company level, the
Company's Tier 1 Capital ratio as of September 30, 2008, is expected to be
9.75%, and its Total Capital ratio 12.13%.
In light of the national financial crisis and the enactment of the
Emergency Economic Stabilization Act of 2008, U.S. government agencies are
taking various actions in an attempt to enhance financial stability. These
include the U.S. Treasury Department's Troubled Asset Relief Program Capital
Purchase Program, which offers to all U.S. banking organizations the
opportunity to issue and sell preferred stock, along with warrants to purchase
common stock, to the U.S. Treasury on what may be considered attractive terms.
In addition, the FDIC has initiated the Temporary Liquidity Guarantee Program
that will provide a 100 percent guarantee for a limited period of time to
noninterest bearing transaction deposits. Coverage under the Temporary
Liquidity Guarantee Program is available for 30 days without charge and
thereafter at a cost of 10 basis points per annum for noninterest bearing
transaction deposits. Although the Company's capital ratios remain well above
the minimum levels required for well capitalized status and have not been
adversely affected in any significant respect by the national financial
crisis, we are assessing our participation in both programs but have not yet
made a definitive decision as to whether we will participate.
Net Interest Income & Margin
Net interest income on a tax equivalent basis for the third quarter of
2008 increased to $24.4 million from $23.7 million for the second quarter of
2008, a 13.2% annualized increase. Net interest income on a tax equivalent
basis was $22.4 million for the third quarter of 2007. During the third
quarter, our net interest margin remained relatively steady at 4.13% vs. 4.11%
as of the second quarter.
Average earning asset balances grew by $37.6 million on a linked-quarter
basis, mainly due to $35.4 million in average loan growth. The net increase in
earning assets was primarily funded by an increase in average other short-term
borrowings of $54.2 million. Average noninterest-bearing demand deposits were
down $6.9 million from the prior linked quarter. Yields on average earning
assets decreased 8 basis points (0.08%) from the second quarter of 2008 to the
third quarter of 2008, while rates paid on average interest-bearing
liabilities decreased 16 basis points (0.16%). Deposit generation through the
end of the third quarter remained a challenge as funds migrated to the safety
of US Treasuries and to larger, national banks perceived as "too big to fail."
As a defensive measure, the Company transferred client balances from Money
Market and NOW accounts into CDARS. The result was a reduction in the cost of
our interest-bearing deposits as the Company sets rates on its CDARS product
generally slightly above that of a risk-free instrument.
Noninterest Income
Noninterest income improved significantly for the first nine months of
2008 to $28.4 million, from $20.0 million for the same period in 2007, an
increase of 42.0%. Operating results for 2008 include noninterest income of
$4.8 million from the Company's two recent acquisitions: Wagner Investment
Management, Inc. (Wagner) and Bernard Dietrich & Associates (renamed CoBiz
Insurance-AZ). The transactions were completed on December 31, 2007 and
January 2, 2008, respectively. Accordingly, their operating results are
included in our 2008 totals, but not in any prior periods reported. As a
percentage of total operating revenue, noninterest income was 28.9% for the
nine months ended September 30, 2008 vs. 23.5% for the prior year period.
On a linked-quarter basis, noninterest income decreased by $2.2 million to
$9.4 million in the third quarter from $11.6 million in the second quarter of
2008. The majority of the decrease was related to the Investment Banking
segment.
Insurance
Insurance revenues were $3.7 million in the third quarter down from
$4.2 million in the second quarter of 2008, and $2.1 million in the third
quarter of 2007. Year-to-date, insurance revenues totaled $11.5 million vs.
$7.2 million for the prior year period. For the first half of the year, CoBiz
ranked first among bank holding companies in our asset class -- assets less
than $5 billion -- in terms of insurance revenues. The Company ranked 20th
among all U.S. financial institutions.
-- The segment was positively affected by the addition of CoBiz
Insurance-AZ, which contributed $3.3 million in revenue during 2008.
-- CoBiz Insurance-CO generated $1.7 million in year-to-date revenue thus
far, a 5.6% improvement over 2007. Revenue growth for the division
continues to be difficult as premiums in the P&C marketplace continue
to be very soft -- with average commissions decreasing by 10-15% from
the prior year.
-- The Group Employee Benefits area continues to see steady revenue
growth, and has improved revenues year-to-date by 8.6% over the same
period in 2007 to $2.8 million.
-- Revenue for the wealth transfer division increased by 26.5% in 2008
over the first nine months of 2007. Revenues from the division are
transactional in nature, as estate planning goals are primarily
achieved through the placement of life insurance. In 2007, the wealth
transfer division had a disappointing year as several large cases did
not close as a result of medical underwriting issues. However, based on
the number and quality of cases currently in underwriting, Management
expects the division's full year 2008 results to significantly improve
over its 2007 results.

Investment Banking
Investment banking revenues were $1.1 million for the third quarter, as
compared to $3.2 million in the second quarter of 2008. Year-to-date,
Investment Banking recognized $4.6 million in revenues vs. $4.4 million for
the same period in 2007. The segment contributed $0.04 per diluted share in
the second quarter of 2008, as compared to a net loss of $0.01 for the third
quarter. Year-to-date, the segment earnings per share are $0.01.
The segment continues to have a diversified backlog of engaged
transactions, however, a greater number of engaged deals are being placed on
hold. Deal activity has moderated due to global economic slowdown and
inflationary pressures that continue to strain financial performance of
cyclical middle-market businesses. This combination of events may delay exits
as business owners focus on their operations and wait for valuations to
improve. As a consequence, Management remains cautious on the segment's
outlook for the next six to nine months.
Investment Advisory & Trust
The segment's revenues were $1.5 million in the third quarter, 25.0%
greater than the third quarter of 2007, but down $0.2 million from the second
quarter of 2008. For the nine months ended September 30, 2008, the segment's
revenues were $4.9 million, as compared to $3.6 million for the nine months
ended September 30, 2007. The Company closed the acquisition of Wagner as of
December 31, 2007. The Wagner acquisition had no impact on the Company's
results of operation for 2007 but year-to-date has contributed $1.5 million in
revenues to the segment in 2008.
Discretionary Assets under Management (AUM) were $833.5 million as of
September 30, 2008. Total AUM, including custody and advisory assets, were
$1.5 billion (including a very significant advisory client base on which we
receive an hourly consulting fee, as opposed to a basis-point-fee on AUM).
In general, a decline in the broader equity market has negatively impacted
the segment's AUM levels. Existing discretionary assets have decreased due to
negative equity returns and attracting new assets is proving to be difficult
given general market conditions. Continued pressure on AUM levels continue to
adversely impact revenue growth. The segment had a net operating loss of
$0.1 million (pre-tax earnings before parent company management fees and
allocations) for 2008 vs. a positive contribution of $0.3 million for the same
period in 2007.
Deposit Service Charges
Deposit service charges are up 29.7% from the prior-year quarter, mainly
due to treasury management analysis fees. Year-to-date, deposit service
charges have increased by 32.3%. We provide customers with the option of
paying for treasury management services in cash or by maintaining additional
noninterest-bearing account balances. The earnings credit rate applied to
analysis balances has decreased as general interest rates have declined. As a
result, we are collecting more of our fees in the form of "hard-dollar" cash,
vs. "soft-dollar" compensating balances.
Other Income
Other income is comprised of increases in the cash surrender value of
BOLI, earnings on equity method investments, merchant charges, bankcard fees,
wire transfer fees, foreign exchange fees, safe deposit income and fees
collected in conjunction with our customer hedge program. Other income was
$1.8 million during the third quarter of 2008, an increase of $0.7 million
over the second quarter of 2008 and $1.1 million over the comparable period in
2007. The increase was mainly attributed to earnings on equity method
investments and the sale of interest-rate swaps to our customers.
Operating Expenses
Noninterest expenses for the first nine months of 2008 were $66.1 million,
as compared to $54.7 million for the same period in 2007. Our 2008 noninterest
expenses were affected by the acquisitions of Wagner and CoBiz Insurance-AZ.
Combined, they added $1.3 million in operating expenses for the current
quarter, and $4.3 million for the first nine months of 2008. Without Wagner
and CoBiz Insurance-AZ, year-to-date noninterest expense increased 13.1% in
2008 over 2007.
Operating expenses totaled $21.7 million for the third quarter of 2008, a
decrease of $0.8 million, or 3.4%, from the second quarter of 2008.
Contributing to the linked-quarter decrease were:
-- An net decrease in total salaries and benefits of $2.3 million:
-- Fixed compensation components were down $0.2 million;
-- Variable compensation expense was down $2.0 million due to the
weaker commissionable income recognized in the quarter and lower
accruals for discretionary management bonuses;
-- Marketing related costs, primarily charitable donations, were down
$0.2 million from the prior quarter.

These positive variances were off set by the following increases in
noninterest expense during the period:
-- Due to a reversal of provision for off-balance sheet credit losses in
the second quarter, net off-balance sheet credit costs were up by
$0.3 million;
-- The third quarter includes an Other Than Temporary Impairment charge of
$0.3 million on FNMA preferred securities;
-- A $0.8 million loss was recognized on the disposal of an Arizona OREO
property. In addition, the Company recorded nearly $0.3 million more in
OREO and loan work-out expenses.

For the third quarter of 2008, our efficiency ratio improved to 61.3% from
64.1% from the second quarter of 2008. On a year-to-date basis, our efficiency
ratio was 66.2%, an increase from 63.8% reported for the same period in 2007.
Economic Conditions
The economic situation for the company's operations continues to be a
disparate "tale of two cities." The Denver metropolitan area posted positive
year-over-year job growth of 1.9%, placing it in the top 10 nationally. Office
and industrial vacancy rates remain stable with a positive absorption of
75,000 square feet (sq. ft.) of office space in the third quarter. Colorado is
still viewed as a safe place to invest, with a number of companies continuing
to relocate to or expand in the state.
The Phoenix metropolitan area, conversely, continues to struggle with
year-over-year negative job growth of 1.9%, which was the second-highest in
the nation. Negative job growth has been forecast for the rest of 2008 and all
of 2009. Predictably, office and industrial vacancy rates are up 4.2% and
4.5%, respectively, year over year. It is expected that this year's absorption
of office space in Phoenix will be the lowest since 2002.
Earnings Conference Call
In conjunction with this release, you are invited to listen to the
Company's conference call on Friday, October 24, 2008 at 11:00 am ET with
Steve Bangert, CoBiz chairman and CEO. The call can be accessed via the
Internet at http://www.videonewswire.com/event.asp?id=51621 or by telephone at
877.493.9121, (conference ID #65871999).
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 Financial
CoBiz Financial Inc. (http://www.cobizfinancial.com) is a $2.6 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 Trust; 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 CoBiz Trust, Alexander Capital Management
Group and Wagner Investment Management, Inc.; and employee and executive
benefits consulting and wealth transfer services through Financial Designs,
Ltd.
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 "would", "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 Financial Inc.
September 30, 2008
(unaudited)

Three months ended Nine months ended
(in thousands, except per September 30, September 30,
share amounts) 2008 2007 2008 2007

INCOME STATEMENT DATA
Interest income $36,052 $39,703 $109,088 $114,346
Interest expense 11,814 17,413 39,376 49,336
NET INTEREST INCOME BEFORE
PROVISION 24,238 22,290 69,712 65,010
Provision for loan losses 5,335 1,430 16,352 2,467
NET INTEREST INCOME AFTER
PROVISION 18,903 20,860 53,360 62,543
Noninterest income 9,385 7,024 28,378 19,981
Noninterest expense 21,703 18,273 66,085 54,663
INCOME BEFORE INCOME TAXES 6,585 9,611 15,653 27,861
Provision for income taxes 2,422 3,604 5,712 10,311
NET INCOME $4,163 $6,007 $9,941 $17,550

EARNINGS PER COMMON SHARE
BASIC $0.18 $0.25 $0.43 $0.74
DILUTED $0.18 $0.25 $0.43 $0.72
WEIGHTED AVERAGE SHARES
OUTSTANDING (in
thousands)
BASIC 23,104 23,664 23,063 23,711
DILUTED 23,232 24,150 23,240 24,286

COMMON SHARES OUTSTANDING
AT PERIOD END (in thousands) 23,361 23,398
BOOK VALUE PER COMMON SHARE $8.33 $8.21

PERIOD END BALANCES
Total Assets $2,606,107 $2,277,123
Loans (net) 1,973,982 1,729,750
Goodwill and Intangible Assets 51,658 42,064
Deposits 1,737,262 1,659,031
Subordinated Debentures 92,550 72,166
Common Shareholders' Equity 194,523 192,024
Interest-Earning Assets 2,399,121 2,117,678
Interest-Bearing Liabilities 1,951,678 1,609,631

BALANCE SHEET AVERAGES
Average Assets $2,483,357 $2,181,822
Average Loans (net) 1,893,407 1,602,710
Average Deposits 1,754,675 1,511,461
Average Subordinated
Debentures 74,742 72,166
Average Common Shareholders'
Equity 194,890 189,446
Average Interest-Earning
Assets 2,296,221 2,027,071
Average Interest-Bearing
Liabilities 1,838,793 1,538,854

CoBiz Financial Inc.
September 30, 2008
(unaudited)

Three months ended Nine months ended
September 30, September 30,
(in thousands) 2008 2007 2008 2007
PROFITABILITY MEASURES
Net Interest Margin 4.13% 4.26% 4.09% 4.32%
Efficiency Ratio 61.28% 61.77% 66.19% 63.82%
Return on Average Assets 0.65% 1.06% 0.54% 1.08%
Return on Average Common
Shareholders' Equity 8.49% 12.29% 6.81% 12.39%
Noninterest Income as a
Percentage of Operating
Revenues 27.91% 23.96% 28.93% 23.51%

CREDIT QUALITY
Nonperforming Loans
Loans 90 days or more past due
and accruing interest $1,650 $844
Nonaccrual loans 22,254 719
Total nonperforming loans $23,904 $1,563
Repossessed Assets 7,008 447
Total nonperforming assets $30,912 $2,010

Charge-offs (8,820) (1,803)
Recoveries 127 48
Net Charge-offs $(8,693) $(1,755)

ASSET QUALITY MEASURES
Nonperforming Assets to Total Assets 1.19% 0.09%
Nonperforming Loans to Total Loans 1.19% 0.09%
Nonperforming Loans and OREO to Total
Loans and OREO 1.54% 0.11%
Allowance for Loan and Credit Losses
to Total Loans 1.40% 1.10%
Allowance for Loan and Credit Losses
to Nonperforming Loans 116.98% 1225.85%

CoBiz Financial Inc.
September 30, 2008
(unaudited)

Investment Investment
(in thousands, except per share Commercial Banking Advisory
amounts) Banking Services and Trust
Net interest income
Quarter ended September 30, 2008 $25,516 $11 $-
Quarter ended June 30, 2008 24,606 12 (4)
Annualized quarterly growth 14.7% (33.2)% 397.8%

Quarter ended September 30, 2007 $23,680 $34 $-
Annual growth 7.8% (67.6)% .0%

Noninterest income
Quarter ended September 30, 2008 $3,048 $1,062 $1,517
Quarter ended June 30, 2008 2,502 3,196 1,739
Annualized quarterly growth 86.8% (265.6)% (50.8)%

Quarter ended September 30, 2007 $1,662 $2,059 $1,214
Annual growth 83.4% (48.4)% 25.0%

Net income
Quarter ended September 30, 2008 $5,292 $(235) $(140)
Quarter ended June 30, 2008 4,659 901 (79)
Annualized quarterly growth 54.1% (501.6)% (307.2)%

Quarter ended September 30, 2007 $7,272 $351 $12
Annual growth (27.2)% (167.0)% (1,266.7)%

Earnings per share (diluted)
Quarter ended September 30, 2008 $0.23 $(0.01) $(0.01)
Quarter ended June 30, 2008 0.20 0.04 (0.00)
Annualized quarterly growth 57.9% (500.3)% (770.8)%

Quarter ended September 30, 2007 $0.30 $0.01 $-
Annual growth (23.3)% (200.0)% (100.0)%

Investment Investment
Commercial Banking Advisory
(in thousands) Banking Services and Trust
Total loans
At September 30, 2008
At June 30, 2008
Annualized quarterly growth

At September 30, 2007
Annual growth

Total deposits and customer repurchase agreements
At September 30, 2008
At June 30, 2008
Annualized quarterly growth

At September 30, 2007
Annual growth

(in thousands, except per share amounts) Corporate
Support and
Insurance Other Consolidated
Net interest income
Quarter ended September 30, 2008 $(2) $(1,287) $24,238
Quarter ended June 30, 2008 (2) (1,116) 23,496
Annualized quarterly growth .0% (61.0)% 12.6%

Quarter ended September 30, 2007 $1 $(1,425) $22,290
Annual growth (300.0)% 9.7% 8.7%

Noninterest income
Quarter ended September 30, 2008 $3,743 $15 $9,385
Quarter ended June 30, 2008 4,153 (20) 11,570
Annualized quarterly growth (39.3)% 696.2% (75.1)%

Quarter ended September 30, 2007 $2,089 $- $7,024
Annual growth 79.2% 100.0% 33.6%

Net income
Quarter ended September 30, 2008 $25 $(779) $4,163
Quarter ended June 30, 2008 83 (1,381) 4,183
Annualized quarterly growth (278.0)% 173.4% (1.9)%

Quarter ended September 30, 2007 $(219) $(1,409) $6,007
Annual growth 111.4% 44.7% (30.7)%

Earnings per share (diluted)
Quarter ended September 30, 2008 $- $(0.03) $0.18
Quarter ended June 30, 2008 0.00 (0.06) 0.18
Annualized quarterly growth (397.8)% 197.3% (.6)%

Quarter ended September 30, 2007 $(0.01) $(0.05) $0.25
Annual growth 100.0% 40.0% (28.0)%

Corporate
Support and
(in thousands) Insurance Other Consolidated
Total loans
At September 30, 2008 $2,001,685
At June 30, 2008 1,961,177
Annualized quarterly growth 8.2%

At September 30, 2007 $1,748,333
Annual growth 14.5%

Total deposits and customer repurchase agreements
At September 30, 2008 $1,877,526
At June 30, 2008 1,783,650
Annualized quarterly growth 20.9%

At September 30, 2007 $1,866,004
Annual growth .6%

CoBiz Financial Inc.
September 30, 2008
(unaudited)

Three Months Ended September 30, 2008
Investment Investment
Commercial Banking Advisory
(in thousands) Banking Services and Trust
Income Statement
Total interest income $36,012 $11 $-
Total interest expense 10,496 - -
Net interest income 25,516 11 -
Provision for loan losses 5,335 - -
Net interest income after provision 20,181 11 -
Noninterest income 3,048 1,062 1,517
Noninterest expense 8,485 1,369 1,570
Income before income taxes 14,744 (296) (53)
Provision for income taxes 5,680 (102) 7
Net income before management
fees and overhead allocations $9,064 $(194) $(60)
Management fees and overhead
allocations, net of tax 3,772 41 80
Net income $5,292 $(235) $(140)

Corporate
Support and
(in thousands) Insurance Other Consolidated
Income Statement
Total interest income $- $29 $36,052
Total interest expense 2 1,316 11,814
Net interest income (2) (1,287) 24,238
Provision for loan losses - - 5,335
Net interest income after provision (2) (1,287) 18,903
Noninterest income 3,743 15 9,385
Noninterest expense 3,488 6,791 21,703
Income before income taxes 253 (8,063) 6,585
Provision for income taxes 127 (3,290) 2,422
Net income before management
fees and overhead allocations $126 $(4,773) $4,163
Management fees and overhead
allocations, net of tax 101 (3,994) -
Net income $25 $(779) $4,163

Three Months Ended June 30, 2008
Investment Investment
Commercial Banking Advisory
Banking Services and Trust
Income Statement
Total interest income $35,597 $12 $-
Total interest expense 10,991 - 4
Net interest income 24,606 12 (4)
Provision for loan losses 5,986 - -
Net interest income after provision 18,620 12 (4)
Noninterest income 2,502 3,196 1,739
Noninterest expense 7,546 1,679 1,703
Income before income taxes 13,576 1,529 32
Provision for income taxes 5,031 588 22
Net income before management
fees and overhead allocations $8,545 $941 $10
Management fees and overhead
allocations, net of tax 3,886 40 89
Net income $4,659 $901 $(79)

Corporate
Support and
Insurance Other Consolidated
Income Statement
Total interest income $- $30 $35,639
Total interest expense 2 1,146 12,143
Net interest income (2) (1,116) 23,496
Provision for loan losses - - 5,986
Net interest income after provision (2) (1,116) 17,510
Noninterest income 4,153 (20) 11,570
Noninterest expense 3,839 7,710 22,477
Income before income taxes 312 (8,846) 6,603
Provision for income taxes 130 (3,351) 2,420
Net income before management
fees and overhead allocations $182 $(5,495) $4,183
Management fees and overhead
allocations, net of tax 99 (4,114) -
Net income $83 $(1,381) $4,183

Three Months Ended September 30, 2007
Investment Investment
Commercial Banking Advisory
Banking Services and Trust
Income Statement
Total interest income $39,626 $34 $-
Total interest expense 15,946 - -
Net interest income 23,680 34 -
Provision for loan losses 1,430 - -
Net interest income after provision 22,250 34 -
Noninterest income 1,662 2,059 1,214
Noninterest expense 6,685 1,441 1,070
Income before income taxes 17,227 652 144
Provision for income taxes 6,481 250 69
Net income before management
fees and overhead allocations $10,746 $402 $75
Management fees and overhead
allocations, net of tax 3,474 51 63
Net income $7,272 $351 $12

Corporate
Support and
Insurance Other Consolidated
Income Statement
Total interest income $1 $42 $39,703
Total interest expense - 1,467 17,413
Net interest income 1 (1,425) 22,290
Provision for loan losses - - 1,430
Net interest income after provision 1 (1,425) 20,860
Noninterest income 2,089 - 7,024
Noninterest expense 2,246 6,831 18,273
Income before income taxes (156) (8,256) 9,611
Provision for income taxes (46) (3,150) 3,604
Net income before management
fees and overhead allocations $(110) $(5,106) $6,007
Management fees and overhead
allocations, net of tax 109 (3,697) -
Net income $(219) $(1,409) $6,007

CoBiz Financial Inc.
September 30, 2008
(unaudited)

Three months ended September 30,
Increase/(decrease)
(in thousands) 2008 2007 Amount %
NONINTEREST INCOME
Deposit service charges $1,045 $806 $239 29.7%
Other loan fees 218 194 24 12.4%
Investment advisory and trust income 1,517 1,214 303 25.0%
Insurance income 3,743 2,089 1,654 79.2%
Investment banking income 1,062 2,059 (997) (48.4%)
Other income 1,800 662 1,138 171.9%
Total noninterest income $9,385 $7,024 $2,361 33.6%

Nine months ended September 30,
Increase/(decrease)
(in thousands) 2008 2007 Amount %
NONINTEREST INCOME
Deposit service charges $2,956 $2,234 $722 32.3%
Other loan fees 752 529 223 42.2%
Investment advisory and trust income 4,929 3,558 1,371 38.5%
Insurance income 11,519 7,159 4,360 60.9%
Investment banking income 4,551 4,441 110 2.5%
Other income 3,671 2,060 1,611 78.2%
Total noninterest income $28,378 $19,981 $8,397 42.0%

Three months ended September 30,
Increase/(decrease)
(in thousands) 2008 2007 Amount %
NONINTEREST EXPENSES
Salaries and employee benefits $13,383 $11,689 $1,694 14.5%
Stock based compensation expense 393 404 (11) (2.7%)
Occupancy expenses, premises and
equipment 3,274 2,843 431 15.2%
Amortization of intangibles 166 118 48 40.7%
Other operating expenses 3,390 3,053 337 11.0%
Loss on other assets and securities 1,097 166 931 560.8%
Total noninterest expenses $21,703 $18,273 $3,430 18.8%

Nine months ended September 30,
Increase/(decrease)
(in thousands) 2008 2007 Amount %
NONINTEREST EXPENSES
Salaries and employee benefits $43,548 $35,443 $8,105 22.9%
Stock based compensation expense 1,279 1,111 168 15.1%
Occupancy expenses, premises and
equipment 9,658 8,517 1,141 13.4%
Amortization of intangibles 555 355 200 56.3%
Other operating expenses 9,887 8,815 1,072 12.2%
Loss on other assets and securities 1,158 422 736 174.4%
Total noninterest expenses $66,085 $54,663 $11,422 20.9%

September 30, 2008 December 31, 2007
% of % of
(in thousands) Amount Portfolio Amount Portfolio
LOANS
Commercial $621,128 31.4% $576,959 31.6%
Real Estate - mortgage 982,084 49.8% 874,226 47.9%
Real Estate - construction 305,819 15.5% 309,568 17.0%
Consumer 80,336 4.1% 71,422 3.9%
Other 12,318 0.6% 14,151 0.8%
Gross loans 2,001,685 101.4% 1,846,326 101.1%
Less allowance for loan losses (27,703) (1.4%) (20,043) (1.1%)
Net loans $1,973,982 100.0% $1,826,283 100.0%

September 30, 2007
% of
(in thousands) Amount Portfolio
LOANS
Commercial $537,447 31.1%
Real Estate - mortgage 834,416 48.2%
Real Estate - construction 299,069 17.3%
Consumer 62,414 3.6%
Other 14,987 0.9%
Gross loans 1,748,333 101.1%
Less allowance for loan losses (18,583) (1.1%)
Net loans $1,729,750 100.0%

September 30, 2008 December 31, 2007
% of % of
(in thousands) Amount Portfolio Amount Portfolio
DEPOSITS AND CUSTOMER REPURCHASE
AGREEMENTS
NOW and money market $528,272 28.1% $631,391 33.0%
Savings 10,617 0.6% 11,546 0.6%
Eurodollar 101,723 5.4% 77,444 4.1%
Certificates of deposits under
$100,000 97,017 5.2% 112,125 5.9%
Certificates of deposits $100,000
and over 312,053 16.6% 308,867 16.2%
Reciprocal CDARS 125,951 6.7% 14,159 0.7%
Brokered deposits 122,093 6.5% 148,081 7.7%
Total interest-bearing
deposits 1,297,726 69.1% 1,303,613 68.2%
Noninterest-bearing demand
deposits 439,536 23.4% 439,076 23.0%
Customer repurchase agreements 140,264 7.5% 168,336 8.8%
Total deposits and customer
repurchase agreements $1,877,526 100.0% $1,911,025 100.0%

September 30, 2007
% of
(in thousands) Amount Portfolio
DEPOSITS AND CUSTOMER REPURCHASE
AGREEMENTS
NOW and money market $584,890 31.3%
Savings 11,028 0.6%
Eurodollar 68,544 3.7%
Certificates of deposits under
$100,000 112,930 6.1%
Certificates of deposits $100,000
and over 281,004 15.1%
Reciprocal CDARS 16,091 0.9%
Brokered deposits 125,792 6.7%
Total interest-bearing
deposits 1,200,279 64.3%
Noninterest-bearing demand
deposits 458,752 24.6%
Customer repurchase agreements 206,973 11.1%
Total deposits and customer
repurchase agreements $1,866,004 100.0%

CoBiz Financial Inc.
September 30, 2008
(unaudited)

For the three months ended
September 30, 2008
Interest Average
Average earned yield
(in thousands) balance or paid or cost
Assets
Federal funds sold and other $7,435 $55 2.89%
Investment securities 425,965 5,571 5.23%
Loans 1,946,465 30,632 6.16%
Allowance for loan losses (26,940)
Total interest-earning assets $2,352,925 $36,258 5.98%
Noninterest-earning assets
Cash and due from banks 43,038
Other 152,848
Total assets $2,548,811

Liabilities and Shareholders' Equity
Deposits
NOW and money market $610,777 $2,771 1.80%
Savings 10,358 29 1.11%
Eurodollar 120,725 572 1.85%
Certificates of deposit
Brokered under $100,000 102,624 780 3.02%
Under $100,000 139,170 1,048 3.00%
$100,000 and over 321,325 2,646 3.28%
Total interest-bearing deposits $1,304,979 $7,846 2.39%
Other borrowings
Securities sold under agreements
to repurchase 151,276 608 1.57%
Other short-term borrowings 364,440 2,217 2.38%
Long term-debt 79,837 1,143 5.60%
Total interest-bearing
liabilities $1,900,532 $11,814 2.46%
Noninterest-bearing demand accounts 433,135
Total deposits and interest-
bearing liabilities 2,333,667
Other noninterest-bearing liabilities 20,020
Total liabilities 2,353,687
Shareholders' equity 195,124
Total liabilities and
shareholders' equity $2,548,811
Net interest income $24,444
Net interest spread 3.52%
Net interest margin 4.13%
Ratio of average interest-earning
assets to average interest-
bearing liabilities 123.80%

For the three months ended
September 30, 2007
Interest Average
Average earned yield
(in thousands) balance or paid or cost
Assets
Federal funds sold and other $9,681 $122 4.93%
Investment securities 413,797 5,362 5.18%
Loans 1,685,184 34,359 7.98%
Allowance for loan losses (18,914)
Total interest-earning assets $2,089,748 $39,843 7.41%
Noninterest-earning assets
Cash and due from banks 45,173
Other 108,961
Total assets $2,243,882

Liabilities and Shareholders' Equity
Deposits
NOW and money market $604,560 $5,128 3.37%
Savings 11,076 50 1.79%
Eurodollar 32,687 345 4.13%
Certificates of deposit
Brokered under $100,000 117,014 1,580 5.36%
Under $100,000 125,538 1,564 4.94%
$100,000 and over 274,535 3,450 4.99%
Total interest-bearing deposits $1,165,410 $12,117 4.12%
Other borrowings
Securities sold under agreements
to repurchase 232,880 2,211 3.72%
Other short-term borrowings 121,951 1,657 5.32%
Long term-debt 72,166 1,428 7.74%
Total interest-bearing
liabilities $1,592,407 $17,413 4.32%
Noninterest-bearing demand accounts 439,811
Total deposits and interest-
bearing liabilities 2,032,218
Other noninterest-bearing
liabilities 17,799
Total liabilities 2,050,017
Shareholders' equity 193,865
Total liabilities and
shareholders' equity $2,243,882
Net interest income $22,430
Net interest spread 3.09%
Net interest margin 4.26%
Ratio of average interest-earning
assets to average interest-
bearing liabilities 131.23%

For the nine months ended
September 30, 2008
Interest Average
Average earned yield
(in thousands) balance or paid or cost
Assets
Federal funds sold and other $8,500 $221 3.42%
Investment securities 411,181 16,044 5.20%
Loans 1,900,620 93,340 6.45%
Allowance for loan losses (24,080)
Total interest-earning assets $2,296,221 $109,605 6.22%
Noninterest-earning assets
Cash and due from banks 42,450
Other 144,686
Total assets $2,483,357

Liabilities and Shareholders' Equity
Deposits
NOW and money market $654,270 $10,368 2.12%
Savings 10,854 112 1.38%
Eurodollar 107,295 1,737 2.13%
Certificates of deposits
Brokered under $100,000 101,964 3,124 4.08%
Under $100,000 122,429 3,440 3.75%
$100,000 and over 326,481 9,217 3.77%
Total interest-bearing deposits $1,323,293 $27,998 2.82%
Other borrowings
Securities sold under agreements
to repurchase 152,096 2,230 1.93%
Other short-term borrowings 288,662 5,789 2.63%
Long-term debt 74,742 3,359 5.90%
Total interest-bearing
liabilities $1,838,793 $39,376 2.84%
Noninterest-bearing demand accounts 431,382
Total deposits and interest-
bearing liabilities 2,270,175
Other noninterest-bearing liabilities 18,292
Total liabilities and preferred
securities 2,288,467
Shareholders' equity 194,890
Total liabilities and
shareholders' equity $2,483,357
Net interest income $70,229
Net interest spread 3.37%
Net interest margin 4.09%
Ratio of average interest-earning
assets to average interest-
bearing liabilities 124.88%

For the nine months ended
September 30, 2007
Interest Average
Average earned yield
(in thousands) balance or paid or cost
Assets
Federal funds sold and other $9,078 $359 5.21%
Investment securities 417,704 16,108 5.14%
Loans 1,618,674 98,310 8.01%
Allowance for loan losses (18,385)
Total interest-earning assets $2,027,071 $114,777 7.41%
Noninterest-earning assets
Cash and due from banks 44,841
Other 109,910
Total assets $2,181,822

Liabilities and Shareholders' Equity
Deposits
NOW and money market $574,047 $13,893 3.24%
Savings 11,165 143 1.71%
Eurodollar 11,016 345 4.13%
Certificates of deposits
Brokered under $100,000 100,847 4,014 5.32%
Under $100,000 113,188 4,087 4.83%
$100,000 and over 265,606 9,740 4.90%
Total interest-bearing deposits $1,075,869 $32,222 4.00%
Other borrowings
Securities sold under agreements
to repurchase 240,169 6,791 3.73%
Other short-term borrowings 150,650 6,090 5.33%
Long-term debt 72,166 4,233 7.73%
Total interest-bearing
liabilities $1,538,854 $49,336 4.27%
Noninterest-bearing demand accounts 435,592
Total deposits and interest-
bearing liabilities 1,974,446
Other noninterest-bearing
liabilities 17,930
Total liabilities and preferred
securities 1,992,376
Shareholders' equity 189,446
Total liabilities and
shareholders' equity $2,181,822
Net interest income $65,441
Net interest spread 3.14%
Net interest margin 4.32%
Ratio of average interest-earning
assets to average interest-
bearing liabilities 131.73%

CoBiz Financial Inc.
September 30, 2008
(unaudited)

Reconciliation of Non-GAAP Measure to GAAP

The following table includes Non-GAAP financial measurements related to
tangible equity and tangible assets. These items have been adjusted to
exclude goodwill and intangible assets.

September 30, 2008

Shareholders' equity as reported - GAAP $194,523

Goodwill and intangible assets (51,658)

Tangible equity - Non-GAAP $142,865

Total assets as reported - GAAP $2,606,107

Goodwill and intangible assets (51,658)

Total tangible assets - Non-GAAP $2,554,449

Shareholders' equity to total assets as reported - GAAP 7.46%

Tangible equity to total tangible
assets as reported - Non-GAAP 5.59%

SOURCE CoBiz Financial Inc.

Lyne Andrich, +1-303-312-3458, or Sue Hermann, +1-303-312-3488, both of CoBiz
Financial Inc.