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CoBiz Financial's (COBZ) CEO Steven Bangert on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Conference Call

April 22, 2016 11:00 AM ET


Steven Bangert - Chairman and CEO

Lyne Andrich - EVP and CFO

Scott Page - CEO, Colorado Business Bank/Arizona Business Bank


Joseph Morford - RBC Capital Markets

John Rodis - FIG Partners LLC

Alex Morris - Sandler O'Neill & Partners LP

Frederick Cannon - Keefe Bruyette & Woods Inc.

John Moran - Macquarie Capital


Good morning. My name is Holly, and I will be your conference operator today. At this time, I would like to welcome everyone to the CoBiz Financial First Quarter 2016 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

I’ll now turn today’s conference over to Lyne Andrich, Chief Financial Officer for CoBiz Financial.

Lyne Andrich

All right. Thank you, Holly, and good morning, everyone. Before we commence with Management comments today, though I do need to remind everyone of our Safe Harbor disclosures.

Certain of the matters discussed in this presentation may constitute forward-looking statements for the purposes of the Federal Securities Laws, and as such, may involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of CoBiz to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

Additional information concerning factors that could cause our actual results to be materially different than those in the forward-looking statements can be found on the Company’s filings with the SEC, including Forms 10-Q, 10-K, and other reports and statements we’ve filed with the SEC. All forward-looking statements are expressly qualified in their entirety by these cautionary statements.

Also on today's call, our speakers may reference certain non-GAAP financial measures, which we believe provide useful information for our investors. Reconciliation of these non-GAAP numbers to GAAP results are included in our earnings release, which is available on the Investor Relations page of our Web site.

I’d like to now introduce Mr. Steve Bangert, Chairman and CEO of CoBiz.

Steven Bangert

Thanks, Lyne. Welcome to the CoBiz Financial first quarter conference call. I will have some short comments before I turn it over to Lyne Andrich, our CFO, to go over the financial results. Scott Page, the CEO of our Banks will follow with a brief overview of the activities we’re seeing on both markets.

I characterize the first quarter as relatively quiet, which is typical CoBiz. During 9 of the last 10 years, the slowest quarter for new loan activity occurred in the first quarter. Deposit activity often mirrors the activity we’re seeing in the loan portfolio.

You will notice that new credit extended as shown in the loan activity table in our press release showed a similar pattern in 2015. In fact loan activity were slow, but it’s picked up -- it picked up as the year progress. We are expecting similar activity this year, but Scott will discuss that later in his comments.

We are still managing to and expecting 10% deposit and loan growth in 2016. We’ve been very clear that we’re targeting continued growth in our core earnings, which is our pre-tax, pre-provision earnings. Last year these earnings were up almost 19%. We are primarily focused on three primary financial metrics and I talked about them repeatedly, but I will mention them again. We are looking for 10% deposit on loan growth and when I say 10% that’s anywhere from 8% to 12% we will be satisfied with.

We are looking for 8% fee income growth out of CoBiz, and we’re -- we want to hold our expense growth of 4% or less. And if we continue to hit these goals, we should continue to benefit from improved operating margins, continued improvement in our efficiency ratio and you ought to expect a 15% plus increase in our core operating earnings on a going forward basis.