UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): February 14, 2011

 

CoBiz Financial Inc.

(Exact name of registrant as specified in its charter)

 

Commission file number 001-15955

 

 

 

(303) 293-2265

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 2.06. Material Impairments

 

On February 11, 2011, the Company completed its analysis of the realization of its deferred tax assets at December 31, 2010 and determined that a valuation allowance should be established.  Under GAAP, a valuation allowance must be recorded if it is “more likely than not” that such deferred tax assets will not be realized. Appropriate consideration is given to all available evidence (both positive and negative) related to the realization of the deferred tax assets. In conducting our evaluation as of December 31, 2010, we concluded that a deferred tax asset valuation allowance was necessary based primarily upon the existence of a cumulative loss for the three-years ended December 31, 2010.

 

Although our current financial forecasts indicate that sufficient taxable income will be generated in the future to ultimately realize the existing deferred tax benefits, those forecasts were not considered to constitute sufficient positive evidence to overcome the observable, objective negative evidence associated with the three-year cumulative loss position determined as of December 31, 2010.

 

For the fourth quarter of 2010, we recorded a valuation allowance of $15.6 million against our net deferred tax assets of $32.0 million.  This non-cash, valuation charge adjusts the Company’s preliminary financial results reported on January 27, 2011. The valuation charge does not impact our liquidity, and is not expected to have a material impact on our regulatory capital.

 

A valuation allowance will be maintained until a change in circumstances indicates that the deferred taxes are realizable.  At such time, the valuation allowance would be reversed as a non-cash benefit in our results of operations. The Company anticipates that sufficient taxable income will be generated in the future to ultimately realize the existing deferred tax benefits and would reverse the valuation allowance once it has demonstrated a sustainable return to profitability.

 

Forward-looking Information

 

This report 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:

 

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·                  Risks and uncertainties described in our reports filed with the Securities and Exchange Commission, including our most recent Form 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 related expenses.

·                  Our ability 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.

·                  Our net interest margin may be negatively impacted if we are unable to profitably deploy excess cash into higher yielding loans or investments.

·                  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.

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

			CoBiz Financial Inc.
			(Registrant)
Date:	February 14, 2011
			/s/ Lyne Andrich
			Lyne Andrich
			EVP & CFO

 

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