UPDATE: D.A. Davidson Upgrades CoBiz Financial on Solid 3Q, Improved Outlook

In a report published Monday, D.A. Davidson & Co. analyst Gary P. Tenner upgraded the rating on CoBiz Financial (NASDAQ: COBZ) from Neutral to Buy, and raised the price target from $10.00 to $13.00.

In the report, D.A. Davidson & Co. noted, “CoBiz reported 3Q13 EPS of $0.17, three cents above our estimate and two cents above the Street. Relative to our model, the beat can be attributed to stronger margins and subsequent spread income upside, as well as a larger than expected negative provision and a lower tax rate. Loan growth solid with positive outlook from new markets and SBA. Period-end loan growth was 6.1% annualized while average loans grew 13.5%. Growth was especially strong in Arizona, growing $35 million mainly through real estate and tax exempt loans and taking some high quality credits from competitors. Colorado loan balances were sequentially flat but included $30 million in late quarter prepayments (4 credits), offsetting solid new loan production. With a strong pipeline and potential tailwinds developing in 2014 from lenders in its new markets of Ft. Collins and Colorado Springs, we anticipate a pick-up in loan growth. COBZ views SBA as a portfolio product over the intermediate term (through 2014) but would consider secondary market sales depending on overall growth rates, balance sheet capacity, and secondary market premiums.”

CoBiz Financial closed on Friday at $10.78.