·

Loans at December 31, 2014 increased $48.5 million from September 30, 2014, and $321.2 million, or 15.4%, from December 31, 2013.

·

Deposits at December 31, 2014 increased $125.9 million from September 30, 2014, and $213.3 million, or 9.4%, from December 31, 2013.

·

Net interest income on a tax-equivalent basis (NII) increased $0.4 million from the third quarter of 2014 (linked-quarter), and $3.0 million, or 11.8%, from the prior-year quarter.

·

The net interest margin expanded four basis points (0.04%) to 3.94% from the linked-quarter, and 15 basis points (0.15%) from the prior-year quarter.

Quarter ended (unaudited)

4Q14 change vs.

(in thousands, except per share amounts)

4Q14

3Q14

4Q13

3Q14

4Q13

Net interest income before provision

$

$

$

$

% 

$

%

Provision for loan losses

% 

%

Net interest income after provision

% 

%

Total noninterest income

% 

%

Total noninterest expense

% 

%

Net income before income taxes

% 

%

Provision for income taxes

% 

%

Net income

% 

%

Preferred stock dividends

 -

 -

% 

%

Net income available to common shareholders

$

$

$

$

% 

$

%

Diluted earnings per common share

$

$

$

$

% 

$

%

KEY RATIOS

Net interest margin

%

%

%

Efficiency ratio(1)

%

%

%

Return on average assets

%

%

%

Return on average shareholders' equity

%

%

%

Noninterest income as a percentage of operating revenues

%

%

%

1

The efficiency ratio equals noninterest expenses adjusted to exclude gains and losses on OREO, other assets and investments, divided by the sum of tax equivalent net interest income and noninterest income. To calculate tax equivalent net interest income, the interest earned on tax exempt loans and investment securities has been adjusted to reflect the amount that would have been earned had these investments been subject to normal income taxation.

·

Loans at December 31, 2014 were $2.4 billion, increasing $48.5 million from September 30, 2014.   From December 31, 2013, loans increased $321.2 million, or 15.4%.

·

Loans increased $33.8 million and $14.7 million, respectively, for Arizona and Colorado from September 30, 2014. From December 31, 2013, loans increased $109.8 million, or 19.5%, for Arizona and $211.4 million, or 13.9%, for Colorado.

Quarter ended (unaudited)

4Q14 change vs.

(in thousands)

4Q14

3Q14

4Q13

3Q14

4Q13

LOANS

Commercial

$

$

$

$

% 

$

% 

Owner-occupied real estate

% 

% 

Investor real estate

% 

% 

Construction & land

% 

% 

Consumer

% 

% 

Other

% 

% 

Total loans

$

$

$

$

% 

$

% 

·

New credit advanced of $177.2 million improved over the linked- and prior-year quarters. However, the level of loan paydowns and maturities in the fourth quarter, primarily in the Colorado portfolio, exceeded the linked- and prior-year quarters. 

·

In the fourth quarter of 2014, gross credit commitments increased by $84.0 million, or 24.5% annualized, from the linked-quarter. However, advances on lines declined, which reduced the total line utilization rate to 39.1% at December 31, 2014 compared to 42.9% at September 30, 2014.

·

Commercial line utilization was 36.2% at December 31, 2014, compared to 39.7% and 37.2%, respectively, at the linked- and prior-year quarter ends.

Quarter ended (unaudited)

(in thousands)

4Q14

3Q14

2Q14

1Q14

4Q13

Loans - beginning balance

$

$

$

$

$

New credit extended

Credit advanced

Paydowns & maturities

Gross loan charge-offs

Loans - ending balance

$

$

$

$

$

Net change - loans outstanding

$

$

$

$

$

·

Customer Funding at December 31, 2014 increased $99.9 million from the linked-quarter end and $124.7 million from the prior-year quarter end. 

·

The decrease in customer repurchase agreements of $88.5 million from the prior-year quarter end is the result of a concerted effort to transition clients out of our collateralized sweep product.

·

Noninterest-bearing demand (NIB) accounts increased $71.2 million, or 28.2% annualized, on a linked-quarter basis. The percentage of NIB to total deposits was 43.1% at December 31, 2014.

Quarter ended (unaudited)

4Q14 change vs.

(in thousands)

4Q14

3Q14

4Q13

3Q14

4Q13

DEPOSITS AND CUSTOMER REPURCHASE AGREEMENTS

Money market

$

$

$

$

% 

$

%

Interest-bearing demand

% 

%

Savings

% 

%

Certificates of deposits under $100

% 

%

Certificates of deposits $100 and over

% 

%

Reciprocal CDARS

% 

%

Total interest-bearing deposits

% 

%

Noninterest-bearing demand deposits

% 

%

Customer repurchase agreements

% 

%

Total deposits and customer repurchase agreements

$

$

$

$

% 

$

%

·

Nonperforming assets were $15.0 million at December 31, 2014, compared to $12.0 million at September 30, 2014, and $19.0 million at December 31, 2013. 

·

Net charge-offs were negligible for the fourth quarter of 2014 and $0.1 million for the full year 2014. Negative provisions for loan losses of $0.9 million and $4.1 million were recorded during the fourth quarter and full year 2014, respectively.

·

The resulting Allowance equated to 1.36% of total loans, and the coverage of Allowance to nonperforming loans was 357.9% at December 31, 2014.

Quarter ended (unaudited)

(in thousands)

4Q14

3Q14

4Q13

ALLOWANCE FOR LOAN AND CREDIT LOSSES

Beginning allowance for loan losses

$

$

$

Provision for loan losses

Net recovery (charge-off)

Ending allowance for loan losses

$

$

$

CREDIT QUALITY

Nonaccrual loans

$

$

$

Loans 90 days or more past due and accruing interest

 -

Total nonperforming loans

OREO and repossessed assets

Total nonperforming assets

$

$

$

Performing renegotiated loans

$

$

$

Classified loans

$

$

$

ASSET QUALITY MEASURES

Nonperforming assets to total assets

% 

% 

% 

Nonperforming loans to total loans

% 

% 

% 

Nonperforming loans and OREO to total loans and OREO

% 

% 

% 

Allowance for loan and credit losses to total loans

% 

% 

% 

Allowance for loan and credit losses to nonperforming loans

% 

% 

% 

·

On January 22, 2015, the Board of Directors of the Company declared a quarterly cash dividend of $0.04 per common share. The dividend will be paid on February 9, 2015 to shareholders of record on February 2, 2015.

Quarter ended (unaudited)

(in thousands, except per share amounts)

4Q14

3Q14

4Q13

EQUITY MEASURES

Common shareholders' equity

$

$

$

Total shareholders' equity

Common shares outstanding at period end

Book value per common share

$

$

$

Tangible book value per common share *

$

$

$

Tangible common equity to tangible assets *

% 

% 

% 

Tangible equity to tangible assets *

% 

% 

% 

Tier 1 capital ratio

**

% 

% 

Total-risk based capital ratio

**

% 

% 

·

Net interest income on a tax-equivalent basis was $28.5 million for the fourth quarter of 2014, an increase of $0.4 million from the linked-quarter.

·

The net interest margin expanded four basis points on a linked-quarter basis to 3.94%.

·

From the third quarter of 2014, average loans increased $32.7 million while average federal funds sold, interest-earning deposits and investments decreased $15.7 million.

o

As a percentage of average earning assets, the Company’s investment portfolio declined to 17.1% from 17.9% at the linked-quarter end.

·

Average deposits increased $99.4 million from the linked-quarter, with average non-interest bearing deposits increasing $70.3 million from the linked-quarter.

·

Total noninterest income decreased $2.1 million to $7.6 million from the linked- quarter, primarily due to a decline in investment banking income.

·

Noninterest income as a percentage of operating income was 21.7% for the fourth quarter of 2014.

Quarter ended (unaudited)

4Q14 change vs.

(in thousands)

4Q14

3Q14

4Q13

3Q14

4Q13

Noninterest income:

Deposit service charges

$

$

$

$

% 

$

% 

Investment advisory income

% 

% 

Insurance income

% 

% 

Investment banking income

% 

% 

Other income

% 

% 

Total noninterest income

$

$

$

$

% 

$

% 

·

Total noninterest expense increased $0.5 million to $25.5 million from the linked- quarter. Excluding net gains on OREO and investment securities, noninterest expenses were relatively flat as compared to the linked-quarter.

·

The increase in noninterest expense (excluding net gains and losses) over the prior-year quarter is primarily related to investments in new personnel and annual merit increases effective in April 2014.

o

Total full-time equivalent employees at December 31, 2014 were 534, compared to 535 at September 30, 2014 and 513 at December 31, 2013.

Quarter ended (unaudited)

4Q14 change vs.

(in thousands)

4Q14

3Q14

4Q13

3Q14

4Q13

Noninterest expense:

Salaries and employee benefits

$

$

$

$

% 

$

% 

Stock-based compensation expense

% 

% 

Occupancy expenses, premises and equipment

% 

% 

Amortization of intangibles

% 

% 

Other operating expenses

% 

% 

Net (gain) loss on OREO, repossessed assets and other

% 

% 

Loss on investment securities

% 

% 

Total noninterest expense

$

$

$

$

% 

$

% 

·

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  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 and implementation of current legislative or regulatory requirements 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.

Three months ended December 31, 

Year ended December 31, 

(in thousands, except per share amounts)

2014

2013

2014

2013

INCOME STATEMENT DATA

Interest income

$

$

$

$

Interest expense

NET INTEREST INCOME BEFORE PROVISION

Provision for loan losses

NET INTEREST INCOME AFTER PROVISION

Noninterest income

Noninterest expense

INCOME BEFORE INCOME TAXES

Provision for income taxes

NET INCOME FROM CONTINUING OPERATIONS

Income from discontinued operations, net of tax

 -

 -

 -

NET INCOME

$

$

$

$

Preferred stock dividends

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

$

$

$

$

EARNINGS PER COMMON SHARE

BASIC

$

$

$

$

DILUTED

$

$

$

$

EQUITY MEASURES

Common shares outstanding at period end (in thousands)

Book value per common share

$

$

Tangible book value per common share *

$

$

Tangible common equity to tangible assets *

% 

% 

Tangible equity to tangible assets *

% 

% 

* See accompanying Reconciliation of Non-GAAP Measures to GAAP

PERIOD END BALANCES

Total assets

$

$

Investments

Loans

Intangible assets

Deposits

Subordinated debentures

Common shareholders' equity

Total shareholders' equity

Interest-earning assets

Interest-bearing liabilities

BALANCE SHEET AVERAGES

Average assets

$

$

Average investments

Average loans

Average deposits

Average subordinated debentures

Average shareholders' equity

Average interest-earning assets

Average interest-bearing liabilities

Three months ended December 31, 

Year ended December 31, 

(in thousands)

2014

2013

2014

2013

PROFITABILITY MEASURES

Net interest margin

% 

% 

% 

% 

Efficiency ratio - tax equivalent

% 

% 

% 

% 

Return on average assets

% 

% 

% 

% 

Return on average shareholders' equity

% 

% 

% 

% 

Noninterest income as a percentage of operating revenues

% 

% 

% 

% 

CREDIT QUALITY

Nonperforming loans

Nonaccrual loans

$

$

Loans 90 days or more past due and accruing interest

Total nonperforming loans

OREO & repossessed assets

Total nonperforming assets

$

$

Performing renegotiated loans

$

$

Classified loans

$

$

Charge-offs

$

$

Recoveries

Net charge-offs

$

$

Nonperforming assets to total assets

% 

% 

Nonperforming loans to total loans

% 

% 

Nonperforming loans and OREO to total loans and OREO

% 

% 

Allowance for loan and credit losses to total loans

% 

% 

Allowance for loan and credit losses to nonperforming loans

% 

% 

Total

NPAs as a

NONPERFORMING ASSETS BY MARKET

Colorado

Arizona

Total