CoBiz Financial Inc. Reports Operating Results (10-Q)
Cobiz Financial Inc. has a market cap of $222.8 million; its shares were traded at around $6.06 with and P/S ratio of 1.5. The dividend yield of Cobiz Financial Inc. stocks is 0.6%.
Highlight of Business Operations: · Net loss for the three and six months ended June 30, 2010, was $3.8 million and $8.5 million, respectively, compared to a net loss of $15.8 million and $62.8 million for the same periods in 2009. Included in the net loss for the first six months of 2009 was a $33.7 million goodwill impairment charge.
· Provision for loan and credit losses for the three and six months ended June 30, 2010, was $10.4 million and $24.3 million, respectively, compared to $35.1 million and $69.0 million for the comparable periods in 2009. The provision for loan losses has decreased for four consecutive quarters since it peaked in the second quarter 2009 at $35.2 million.
At June 30, 2010, the Company holds, as part of its investment portfolio, available for sale securities reported at fair value consisting of MBS, obligations of states and political subdivisions, and trust preferred securities. The fair value of the majority of MBS and obligations of states and political subdivisions are determined using widely accepted valuation techniques, including matrix pricing and broker-quote based applications, considered Level 2 inputs. The Company also holds trust preferred securities the majority of which are recorded at fair value based on quoted market prices, considered by the Company Level 1 inputs. The fair value of available for sale securities at June 30, 2010, using Level 1 and 2 inputs was $529.8 million. Certain private-label MBS valued using broker-dealer quotes based on proprietary broker models, which are considered by the Company an unobservable input (Level 3), totaled $2.2 million at June 30, 2010. Investments incorporating Level 3 inputs as part of their valuation represent 0.1% of total assets at the report date. The Company recognized losses of $0.1 million and $0.3 million on the private-label MBS for the three and six months ended June 30, 2010. Unrealized losses of $2.5 million were recorded in accumulated other comprehensive income relating to private-label MBS at June 30, 2010.
As seen in the table below, the investment portfolio is primarily classified as available for sale securities (AFS), comprised mainly of MBS, including MBS explicitly (GNMA) and implicitly (FNMA and FHLMC) backed by the U.S. Government with a net book value of $307.3 million and a market value of $321.5 million. Other MBS are private-label securities with a net book value of $4.7 million and a market value of $2.2 million. The portfolio does not hold any securities exposed to sub-prime mortgage loans. Our investment portfolio also includes $40.2 million of single-issue, public trust preferred securities and $49.2 million of corporate debt securities. None of these
Other Real Estate Owned. OREO increased $5.7 million to $30.9 million at June 30, 2010 from $25.2 million at December 31, 2009. During the first half of 2010, the Company took possession of $16.0 million in OREO, received $5.7 million in sales and recorded valuation allowances and losses on sale of $4.6 million ($3.7 million of which relates to a valuation adjustment in the second quarter of 2010 on a single property). At June 30, 2010, $14.2 million or 46% of OREO was in Colorado and $16.7 million or 54% was in Arizona. The Company held a total of 30 properties at June 30, 2010, 23 in Arizona and seven in Colorado.
Other Assets. Other Assets increased by $8.8 million to $62.9 million at June 30, 2010, from $54.1 million at December 31, 2009. The change is primarily attributable to an increase of $5.3 million in income taxes receivable and $5.0 million related to cash deposits pledged to correspondent banks as collateral for confirming letters of credit. Offsetting these increases was a decrease of $2.2 million in prepaid FDIC insurance assessments.
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