10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-51556

 

GUARANTY BANCORP

(Exact name of registrant as specified in its charter)

DELAWARE	41-2150446
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
1331 Seventeenth St., Suite 200 Denver, CO	80202
(Address of principal executive offices)	(Zip Code)

303-675-1194

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer  ☐	Accelerated Filer   ☒
Non-accelerated Filer  ☐  (Do not check if smaller reporting company)	Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of November 7, 2016, there were 28,349,107 shares of the registrant’s common stock outstanding, consisting of 27,330,107 shares of voting common stock, of which 564,376shares were in the form of unvested stock awards, and 1,019,000 shares of the registrant’s non-voting common stock.

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Table of Contents

		Page
PART I—FINANCIAL INFORMATION		3
ITEM 1.	Unaudited Condensed Consolidated Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Income	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income	5
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity	6
	Unaudited Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	65
ITEM 4.	Controls and Procedures	67
PART II—OTHER INFORMATION		68
ITEM 1.	Legal Proceedings	68
ITEM 1A.	Risk Factors	68
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
ITEM 3.	Defaults Upon Senior Securities	68
ITEM 4.	Mine Safety Disclosure	68
ITEM 5.	Other Information	68
ITEM 6.	Exhibits	69

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PART I – FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

GUARANTY BANCORP AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

		September 30,		December 31,
		2016		2015
		(In thousands, except share and per share data)
Assets
Cash and due from banks	$	163,908	$	26,711
Time deposits with banks		504		-
Securities available for sale, at fair value		364,349		255,431
Securities held to maturity (fair value of $188,353 and $150,122 at
September 30, 2016 and December 31, 2015)		183,184		148,761
Bank stocks, at cost		14,558		20,500
Total investments		562,091		424,692
Loans, held for investment, net of deferred costs		2,412,999		1,814,536
Less allowance for loan losses		(23,300)		(23,000)
Net loans, held for investment		2,389,699		1,791,536
Premises and equipment, net		68,779		48,308
Other real estate owned and foreclosed assets		637		674
Goodwill		56,148		-
Other intangible assets, net		16,005		5,173
Bank-owned life insurance		65,030		48,909
Other assets		23,464		22,522
Total assets	$	3,346,265	$	2,368,525
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Noninterest-bearing demand	$	857,064	$	612,371
Interest-bearing demand and NOW		802,043		381,834
Money market		554,447		397,371
Savings		160,698		151,130
Time		377,860		259,139
Total deposits		2,752,112		1,801,845
Securities sold under agreement to repurchase and federal funds purchased		35,936		26,477
Federal Home Loan Bank term notes		122,521		95,000
Federal Home Loan Bank line of credit borrowing		-		185,847
Subordinated debentures		64,973		25,774
Interest payable and other liabilities		19,363		11,943
Total liabilities		2,994,905		2,146,886
Stockholders’ equity:
Common stock (1)		31		24
Additional paid-in capital - common stock		831,400		712,310
Accumulated deficit		(372,495)		(382,147)
Accumulated other comprehensive loss		(2,936)		(4,805)
Treasury stock, at cost, 2,344,909 and 2,287,744 shares, respectively		(104,640)		(103,743)
Total stockholders’ equity		351,360		221,639
Total liabilities and stockholders’ equity	$	3,346,265	$	2,368,525
____________________

⁽¹⁾ Common stock—$0.001 par value; 40,000,000 shares authorized; 30,694,016 shares issued and 28,349,107 shares outstanding at September 30, 2016 (includes 564,376 shares of unvested restricted stock); 30,000,000 shares authorized; 23,992,596 shares issued and 21,704,852 shares outstanding at December 31, 2015 (includes 590,755 shares of unvested restricted stock).

See "Notes to Unaudited Condensed Consolidated Financial Statements."

3

GUARANTY BANCORP AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Income

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2016		2015		2016		2015
		(In thousands, except share and per share data)
Interest income:
Loans, including costs and fees	$	22,295	$	17,829	$	60,206	$	51,749
Investment securities:
Taxable		1,741		2,064		5,454		6,265
Tax-exempt		971		719		2,459		2,133
Dividends		237		249		829		724
Federal funds sold and other		98		2		105		5
Total interest income		25,342		20,863		69,053		60,876
Interest expense:
Deposits		1,228		866		3,299		2,284
Securities sold under agreement to repurchase and
federal funds purchased		13		11		31		31
Borrowings		636		375		1,992		832
Subordinated debentures		715		205		1,165		606
Total interest expense		2,592		1,457		6,487		3,753
Net interest income		22,750		19,406		62,566		57,123
Provision for loan losses		27		14		53		104
Net interest income, after provision for loan losses		22,723		19,392		62,513		57,019
Noninterest income:
Deposit service and other fees		2,581		2,309		7,042		6,682
Investment management and trust		1,333		1,292		3,889		3,964
Increase in cash surrender value of life insurance		490		447		1,398		1,316
Loss on sale of securities		(66)		-		(122)		-
Gain on sale of SBA loans		208		232		472		681
Other		159		119		346		275
Total noninterest income		4,705		4,399		13,025		12,918
Noninterest expense:
Salaries and employee benefits		10,984		8,318		28,292		24,921
Occupancy expense		1,417		1,487		4,053		4,814
Furniture and equipment		750		740		2,281		2,206
Amortization of intangible assets		389		495		868		1,486
Other real estate owned, net		20		(31)		27		64
Insurance and assessments		608		604		1,818		1,795
Professional fees		962		838		2,725		2,520
Impairment of long-lived assets		-		-		-		122
Other general and administrative		3,494		2,415		9,486		7,164
Total noninterest expense		18,624		14,866		49,550		45,092
Income before income taxes		8,804		8,925		25,988		24,845
Income tax expense		3,043		2,923		9,007		8,282
Net income	$	5,761	$	6,002	$	16,981	$	16,563
Earnings per common share–basic:	$	0.25	$	0.28	$	0.78	$	0.79
Earnings per common share–diluted:		0.25		0.28		0.77		0.78
Dividends declared per common share:		0.12		0.10		0.35		0.30
Weighted average common shares outstanding-basic:		22,811,386		21,076,380		21,750,153		21,061,445
Weighted average common shares outstanding-diluted:		22,957,268		21,224,989		21,965,047		21,215,435

See "Notes to Unaudited Condensed Consolidated Financial Statements."

4

GUARANTY BANCORP AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Comprehensive Income

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2016		2015		2016		2015
		(In thousands)
Net income	$	5,761	$	6,002	$	16,981	$	16,563
Change in net unrealized gains (losses) on available for sale
securities during the period excluding the change attributable to
available for sale securities reclassified to held to maturity		645		1,706		3,434		906
Income tax effect		(245)		(648)		(1,305)		(344)
Change in unamortized loss on available for sale securities
reclassified into held to maturity securities		105		108		326		307
Income tax effect		(41)		(41)		(125)		(117)
Reclassification adjustment for net losses (gains) included
in net income during the period		66		-		122		-
Income tax effect		(25)		-		(46)		-
Change in fair value of derivatives during the period		379		(1,290)		(1,554)		(1,769)
Income tax effect		(144)		490		591		672
Reclassification adjustment of losses (gains) on derivatives
during the period		259		82		687		82
Income tax effect		(98)		(31)		(261)		(31)
Other comprehensive income (loss)		901		376		1,869		(294)
Total comprehensive income	$	6,662	$	6,378	$	18,850	$	16,269

See "Notes to Unaudited Condensed Consolidated Financial Statements”

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GUARANTY BANCORP AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In thousands, except share data)

	Common Stock Shares Outstanding		Common Stock and Additional Paid-in Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Totals
Balance, January 1, 2015	21,628,873	$	709,365	$	(103,127)	$	(396,172)	$	(3,127)	$	206,939
Net income	-		-		-		16,563		-		16,563
Other comprehensive loss	-		-		-		-		(294)		(294)
Stock compensation awards, net of forfeitures	121,759		-		-		-		-		-
Stock based compensation, net	-		2,094		-		-		-		2,094
Tax effect of restricted stock vestings			151		-		-		-		151
Repurchase of common stock	(22,430)		-		(329)		-		-		(329)
Dividends paid	-		-		-		(6,321)		-		(6,321)
Balance, September 30, 2015	21,728,202	$	711,610	$	(103,456)	$	(385,930)	$	(3,421)	$	218,803
Balance, January 1, 2016	21,704,852	$	712,334	$	(103,743)	$	(382,147)	$	(4,805)	$	221,639
Net income	-		-		-		16,981		-		16,981
Other comprehensive income	-		-		-		-		1,869		1,869
Issuance of common stock for acquisition of Home
State Bancorp net of issuance costs	6,533,756		116,468		-		-		-		116,468
Stock compensation awards, net of forfeitures	167,664		-		-		-		-		-
Stock based compensation, net	-		2,304		-		-		-		2,304
Tax effect of restricted stock vestings	-		325		-		-		-		325
Repurchase of common stock	(57,165)		-		(897)		-		-		(897)
Dividends paid	-		-		-		(7,329)		-		(7,329)
Balance, September 30, 2016	28,349,107	$	831,431	$	(104,640)	$	(372,495)	$	(2,936)	$	351,360

See "Notes to Unaudited Condensed Consolidated Financial Statements."

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GUARANTY BANCORP AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

		Nine Months Ended September 30,
		2016		2015
		(In thousands)
Cash flows from operating activities:
Net income	$	16,981	$	16,563
Reconciliation of net income to net cash from operating activities:
Depreciation and amortization		2,739		3,478
Net amortization and accretion		593		752
Provision for loan losses		53		104
Impairment of long-lived assets		-		122
Stock compensation, net		2,304		2,094
Dividends on bank stocks		(459)		(377)
Increase in cash surrender value of life insurance		(1,121)		(1,081)
Gain on sale of securities and SBA loans		(350)		(681)
Landlord cash allowance		-		654
Gain on the sale of other assets		(14)		-
Origination of SBA loans with intent to sell		(4,510)		(5,264)
Proceeds from the sale of SBA loans originated with intent to sell		5,613		7,093
Loss, net, and valuation adjustments on real estate owned		104		32
Net change in:
Interest receivable and other assets		817		1,267
Net deferred income tax assets		150		1,976
Interest payable and other liabilities		2,670		(855)
Net cash from operating activities		25,570		25,877
Cash flows from investing activities:
Activity in available for sale securities:
Sales, maturities, prepayments, calls and redemptions		388,820		29,120
Purchases		(99,363)		(8,561)
Activity in held to maturity securities and bank stocks:
Maturities, prepayments and calls		20,521		15,454
Purchases		(46,305)		(19,566)
Loan originations and purchases, net of principal collections		(151,834)		(185,738)
Purchase of bank-owned life insurance contracts		(15,000)		(5,000)
Proceeds from sale of other assets		2,204		1,293
Proceeds from sales of other real estate owned and foreclosed assets		-		772
Proceeds from sale of SBA loans transferred to held for sale		229		589
Additions to premises and equipment		(1,142)		(4,619)
Cash paid in acquisition, net of cash received		(23,930)		(1,457)
Net cash from investing activities		74,200		(177,713)
Cash flows from financing activities:
Net change in deposits		180,564		162,005
Net change in borrowings on Federal Home Loan Bank line of credit		(187,899)		(84,000)
Proceeds from Federal Home Loan Bank term advances		25,000		75,000
Proceeds from issuance of subordinated debt, net of issuance costs		39,199		-
Cash dividends on common stock		(7,329)		(6,321)
Tax effect of restricted stock vesting		325		147
Net change in repurchase agreements and federal funds purchased		(10,527)		(3,357)
Repurchase of common stock		(897)		(329)
Payment of stock issuance costs related to acquisition		(1,009)		-
Net cash from financing activities		37,427		143,145
Net change in cash and cash equivalents		137,197		(8,691)
Cash and cash equivalents, beginning of period		26,711		32,441
Cash and cash equivalents, end of period	$	163,908	$	23,750
Supplemental disclosure of noncash activities:
Reclassification of available for sale securities into held to maturity	$	-	$	49,084

See "Notes to Unaudited Condensed Consolidated Financial Statements."

7

GUARANTY BANCORP AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

(1) Organization, Operations and Basis of Presentation

Guaranty Bancorp is a bank holding company registered under the Bank Holding Company Act of 1956, as amended, and headquartered in Colorado.

The Company’s principal business is to serve as a holding company for its bank subsidiary, Guaranty Bank and Trust Company, referred to as the “Bank”.

References to “Company,” “us,” “we,” and “our” refer to Guaranty Bancorp on a consolidated basis. References to “Guaranty Bancorp” or to the “holding company” refer to the parent company on a stand-alone basis.

The Bank is a full-service community bank offering an array of banking products and services to the communities it serves along the Front Range of Colorado including: accepting time and demand deposits, originating commercial loans, commercial and residential real estate loans, Small Business Administration (“SBA”) guaranteed loans and consumer loans. The Bank, together with its wholly owned subsidiaries Private Capital Management, LLC (“PCM”) and Cherry Hills Investment Advisors, Inc. (“CHIA”), provides wealth management services, including private banking, investment management and trust services. Substantially all of the Bank’s loans are secured by specific items of collateral, including business assets, commercial and residential real estate, which include land or improved land and consumer assets. Commercial loans are generally expected to be repaid from cash flow from the operations of businesses that have taken out the loans. There are no significant concentrations of loans to any one industry or customer. On September 8, 2016, the Company completed the previously announced transaction with Home State Bancorp (“Home State”) in exchange for a combination of Company stock and cash.  Based in Loveland, Colorado Home State serves the banking needs of businesses and consumer customers in northern Colorado.

(a)Basis of Presentation

The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America. All material intercompany balances and transactions have been eliminated in consolidation. The Company’s financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of its financial position and results of operations for the periods presented. All such adjustments are of a normal and recurring nature. Subsequent events have been evaluated through the date of financial statement issuance.

Certain information and note disclosures normally included in consolidated financial statements, prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The interim operating results presented in these financial statements are not necessarily indicative of operating results for the full year. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2015.

(b)Business Combinations

The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair value upon the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine the fair values of assets acquired and liabilities assumed. Any excess of purchase price over amounts allocated to the acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill.

(c)Use of Estimates

The preparation of the consolidated financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of

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the dates of the consolidated balance sheets and income and expense for the periods presented. Actual results could differ significantly from those estimates.

(d)Loans and Loan Commitments

The Company’s loan portfolio includes originated and purchased loans. The Company extends commercial, real estate, agricultural and consumer loans to customers. A substantial portion of the loan portfolio consists of commercial and real estate loans made to borrowers located throughout the Front Range of Colorado. The ability of the Company’s borrowers to honor their contracts is generally dependent upon the real estate and general economic conditions prevailing in Colorado, among other factors.

Originated and purchased loans for which there was no evidence of credit deterioration upon acquisition and for which collection of all contractually required payments upon acquisition was considered probable are referred to collectively as non-purchased credit impaired loans, or “Non-PCI” loans. Purchased loans for which there was at the acquisition date evidence of credit deterioration since origination and for which collection of all contractually required payments was not probable were designated as and referred to as purchased credit impaired or “PCI” loans. In the September 8, 2016 transaction with Home State, the Company designated $2,108,000of loans as PCI.

Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding unpaid principal balances, adjusted for charge-offs, the allowance for loan losses, acquisition-related discount and any deferred fees or costs. Acquired loans are recorded upon acquisition at fair value, with no associated allowance for loan loss. However, if subsequent to acquisition the credit quality of an acquired loan deteriorates, an allowance may be required.  Accounting for loans is performed consistently across all portfolio segments and classes.

A portfolio segment is defined in accounting guidance as the level at which an entity develops and documents a systematic methodology to determine its allowance for loan losses. A class is defined in accounting guidance as a group of loans having similar initial measurement attributes, risk characteristics and methods for monitoring and assessing risk.

Interest income is accrued on the unpaid principal balance of the Company’s loans. Loan origination fees, net of direct origination costs, are deferred and recognized as an adjustment to the related loan yield using the effective interest method without anticipating prepayments. Purchase discount or premium on acquired, Non-PCI loans is recognized as an adjustment to interest income over the contractual life of such loans using the effective interest method, or taken into income when the related loans are paid off or sold. With respect to PCI loans, the “accretable yield”, calculated as the excess of undiscounted expected cash flows at acquisition over the fair value at acquisition, is accreted into income over the term of the loan assuming the amount and timing of cash flows are reasonably estimable.

The accrual of interest on loans is discontinued (and the loan is put on nonaccrual status) at the time the loan is 90 days past due unless the loan is well secured and in process of collection. The time at which a loan enters past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off prior to the date on which they would otherwise enter past due status if collection of principal or interest is considered doubtful. The interest on a nonaccrual loan is accounted for using the cost-recovery or cash-basis method until the loan qualifies for a return to the accrual-basis method. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero, with payments received being applied first to the principal balance of the loan. Under the cash-basis method, interest income is recognized when the payment is received in cash. A loan is returned to accrual status after the delinquent borrower’s financial condition has improved, when all the principal and interest amounts contractually due are brought current and when the likelihood of the borrower making future timely payments is reasonably assured.

Financial instruments include off‑balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The face amount of each item represents the Company’s total exposure to loss with respect to the item before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

9

(e)Allowance for Loan Losses and Allowance for Unfunded Commitments

The allowance for loan losses, or “the allowance”, is a valuation allowance for probable incurred loan losses and is reported as a reduction of outstanding loan balances.

Management evaluates the amount of the allowance on a regular basis based upon its periodic review of the collectability of the Company’s loans. Factors affecting the collectability of the loans include the nature and volume of the loan portfolio, adverse situations that may affect borrowers’ ability to repay, estimated value of any underlying collateral, prevailing economic conditions and historical loss experience.  This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Management maintains the allowance at a level that it deems appropriate to adequately provide for probable incurred losses in the loan portfolio and other extensions of credit. The Company’s methodology for estimating the allowance is consistent across all portfolio segments and classes of loans.

Loans deemed to be uncollectible are charged off and deducted from the allowance. The Company’s loan portfolio primarily consists of non-homogeneous commercial and real estate loans where charge-offs are considered on a loan-by-loan basis based on the facts and circumstances, including management’s evaluation of collateral values in comparison to book values on collateral-dependent loans. Charge-offs on smaller balance unsecured homogenous type loans, such as overdrafts and ready reserves, are recognized by the time the loan in question is 90 days past due. The provision for loan losses and recoveries on loans previously charged-off are added to the allowance.

The allowance consists of both specific and general components. The specific component relates to loans that are individually classified as impaired. All loans are subject to individual impairment evaluation should the pertinent facts and circumstances suggest that such evaluation is necessary. Factors considered by management in determining impairment include the loan’s payment status and the probability of collecting scheduled principal and interest payments when they become due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the original underlying loan agreement.Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. If a loan is impaired, a portion, if any, of the allowance is allocated so that the loan is reported at the present value of estimated future cash flows using the loan’s original contractual rate or at the fair value of collateral, less estimated selling costs, if repayment is expected solely from collateral. Troubled debt restructurings (“TDRs”) are separately identified for impairment disclosures. If a TDR is considered to be a collateral-dependent loan, impairment of the loan is measuredusing the fair value of the collateral, less estimated selling costs. Likewise, if a TDR is not collateral-dependent, impairment is measured using the present value of estimated future cash flows discounted by the loan’s effective rate at inception. For TDRs that subsequently default, the Company determines the amount of reserve in accordance with its accounting policy for the allowance.

The general component of the allowance covers originated loans not specifically identified as impaired and is determined by calculating losses recognized by portfolio segment during the current credit cycle and adjusted based on management’s evaluation of various qualitative factors.In performing this calculation, loans are aggregated into one of three portfolio segments: Real Estate, Consumer and Commercial & Other. An assessment of risks impacting loans in each of these portfolio segments is performed and qualitative adjustment factors, which will adjust the historical loss rate, are estimated. These qualitative adjustment factors consider current conditions relative to conditions present throughout the current credit cycle in the following areas: credit quality, loan class concentration levels, economic conditions, loan growth dynamics and organizational conditions. The historical loss experience is adjusted for management’s estimate of the impact of these factors based on the risks present for each portfolio segment.

The Company recognizes a liability in relation to unfunded commitments that is intended to represent the estimated future losses on commitments. In calculating the amount of this liability, management considers the amount of the Company’s off-balance sheet commitments, estimated utilization factors and loan specific

10

risk factors. The Company’s liability for unfunded commitments is calculated quarterly and the liability is included under “other liabilities” in the consolidated balance sheet.

(f)Goodwill and Other Intangible Assets

Goodwill was recorded in the transaction with Home State on September 8, 2016 and represents the excess of the purchase price over the fair value of acquired tangible assets, identifiable intangible assets and liabilities. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified.

Intangible assets acquired in a business combination are amortized over their estimated useful lives to their estimated residual values and evaluated for impairment whenever changes in circumstances indicate that such an evaluation is necessary.

Core deposit intangible assets (“CDI assets”) are recognized at the time of their acquisition based on valuations prepared by independent third parties or other estimates of fair value. In preparing such valuations, management considers variables such as deposit servicing costs, attrition rates and market discount rates. CDI assets are amortized to expense over their useful lives, ranging from 10 years to 15 years.

Customer relationship intangible assets are recognized at the time of their acquisition based upon management’s estimate of their fair value. In preparing their valuation, management considers variables such as growth in existing customer base, attrition rates and market discount rates. The customer relationship intangible assets are amortized to expense over their estimated useful life, which has been estimated to be 10 years. As of September 30, 2016, the Company had recognized three customer relationship intangible assets as a result of the acquisitions of PCM on July 31, 2012, CHIA on July 16, 2014 and Home State Bancorp (“Home State”) on September 8, 2016.

(g)Derivative Instruments

The Company records all derivatives on its consolidated balance sheets at fair value. At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the derivative’s likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). To date, the Company has entered into cash flow hedges and stand-alone derivative agreements but has not entered into any fair value hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same periods during which the hedged transaction impacts earnings. Any portion of the cash flow hedge not deemed highly effective in hedging the changes in expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings as noninterest income.

The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions, at the inception of the derivative contract. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the hedge is highly effective in offsetting changes in cash flows of the hedged items.

(h)Stock Incentive Plan

The Company’s Amended and Restated 2005 Stock Incentive Plan (the “Incentive Plan”) provided for the grant of equity-based awards representing up to a total of 1,700,000 shares of voting common stock to key employees, nonemployee directors, consultants and prospective employees. The Incentive Plan expired by its terms on April 4, 2015. At the Company’s annual meeting of stockholders on May 5, 2015, the Company’s stockholders approved the Guaranty Bancorp 2015 Long-Term Incentive Plan (the “2015 Plan”), which had been previously approved by the Company’s Board of Directors. The 2015 Plan provides for the grant of stock options, stock awards, stock unit awards, performance stock awards, stock appreciation rights and other

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equity-based awards representing up to a total of 935,000 shares of voting common stock to key employees, nonemployee directors, consultants and prospective employees. All awards issued under the Incentive Plan will remain outstanding in accordance with their terms despite the expiration of the Incentive Plan; however, any awards granted subsequent to the expiration of the Incentive Plan have been, and will continue to be, issued under the 2015 Plan.

As of September 30, 2016, the Company had granted stock awards under both the Incentive Plan and the 2015 Plan. The Company recognizes stock compensation expense for services received in a share-based payment transaction over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The compensation cost of employee and director services received in exchange for stock awards is based on the grant date fair value of the award, as determined by quoted market prices. Stock compensation expense is recognized using an estimated forfeiture rate, adjusted as necessary to reflect actual forfeitures. The Company has issued stock awards that vest based on the passage of time over service periods of one to five years (in some cases vesting in annual installments, in other cases cliff vesting at the end of the service period) and other stock awards that vest contingent upon the satisfaction of certain performance conditions. The last date on which outstanding performance stock awards may vest is February 14, 2019. Compensation cost related to the performance stock awards is recognized based on an evaluation of financial performance in comparison to established criteria. Should expectations of future financial performance change, the amount of expense recognized in future periods could be impacted.

(i)Stock Repurchase Plan

On February 2, 2016, the Company’s Board of Directors authorized the extension of the expiration date of the Company’s share repurchase program originally announced in April 2014. The repurchase program had been scheduled to expire 12 months from the date of its announcement and, as extended, the program is scheduled to expire on April 2, 2017. Pursuant to the program, the Company may repurchase up to 1,000,000 shares of its voting common stock, par value $0.001 per share. As of the date of this filing, the Company had not repurchased any shares under the program.

(j)Income Taxes

Income tax expense is the total of the current year’s income tax payable or refundable and the increase or decrease in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of the enactment date.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that the Company will not realize some portion of or the entire deferred tax asset. In assessing the Company’s likelihood of realizing deferred tax assets, management evaluates both positive and negative evidence, including the existence of any cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry-back years, forecasts of future income, taking into account applicable tax planning strategies and assessments of current and future economic and business conditions. Management performs this analysis quarterly and adjusts as necessary. At September 30, 2016 and December 31, 2015, the Company had a net deferred tax asset of $3,451,000 and$7,912,000, respectively, which includes the deferred tax asset (liability) associated with the net unrealized loss (gain) on securities and interest rate swaps. After analyzing the composition of, and changes in, the deferred tax assets and liabilities and considering the Company’s forecasted future taxable income and various tax planning strategies, including the intent to hold the securities available for sale that were in a loss position until maturity, management determined that as of September 30, 2016, it was “more likely than not” that the net deferred tax asset would be fully realized. As a result, there was no valuation allowance with respect to the Company’s deferred tax asset as of September 30, 2016 or December 31, 2015.  

The Company and the Bank are subject to U.S. federal income tax and state of Colorado income tax. Generally, the Company is no longer subject to examination by Federal taxing authorities for years before 2012 and is no longer subject to examination by the State for years before 2011. The Company recognizes

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interest related to income tax matters as interest expense and penalties related to income tax matters as other noninterest expense. At September 30, 2016 and December 31, 2015, the Company did not have any amounts accrued for interest or penalties.

(k)Earnings per Common Share

Basic earnings per common share represents the earnings allocable to common stockholders divided by the weighted average number of common shares outstanding during the period. Dilutive common shares that may be issued by the Company represent unvested stock awards subject to a service or performance condition.

Earnings per common share have been computed based on the following calculation of weighted average shares outstanding:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Average common shares outstanding	22,811,386	21,076,380	21,750,153	21,061,445
Effect of dilutive unvested stock grants (1)	145,882	148,609	214,894	153,990
Average shares outstanding for calculated
diluted earnings per common share	22,957,268	21,224,989	21,965,047	21,215,435
_____________

(1) Unvested stock grants representing 564,376 shares at September 30, 2016 had a dilutive impact of 145,882 and 214,894 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2016, respectively. Unvested stock grants representing 651,275 shares at September 30, 2015 had a dilutive impact of 148,609 and 153,990 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2015, respectively.

(l)Recently Issued Accounting Standards

Adoption of New Accounting Standards:

In April 2015, the FASB issued accounting standards update 2015-03 modifying the presentation of debt issuance costs. The update requires that debt issuance costs be presented as a direct reduction of debt balances on the balance sheet. For public business entities, the amendments of this update are effective for interim and annual periods beginning after December 15, 2015.  As a result of this update the Company has presented debt issuance costs as a reduction of the related debt balance on the Company’s Balance Sheet.

In September 2015, the FASB issued accounting standards update 2015-16 Simplifying the Accounting for Measurement-Period Adjustments. The update requires acquirers to adjust provisional amounts identified during the measurement period in the reporting period in which the adjustments are determined, rather than retrospectively adjusting previously reported information. Additional disclosure of the impact of measurement period adjustments on current year earnings will also be required. For public business entities, the amendments of this update are effective for interim and annual periods beginning after December 15, 2015. This update does not have a material impact on the Company’s financial position, results of operations or cash flows.

Recently Issued but not yet Effective Accounting Standards:

In May 2014, the FASB issued accounting standards update 2014-09 Revenue from Contracts with Customers. The main provisions of the update require the identification of performance obligations within a contract and require the recognition of revenue based on a stand-alone allocation of contract revenue to each performance obligation. Performance obligations may be satisfied and revenue recognized over a period of time if: (i) the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs, or (ii) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (iii) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. The amendments of the update are to be effective for public entities beginning with interim and annual reporting periods beginning after December 15, 2017. Management does not expect the

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requirements of this update to have a material impact on the Company’s financial position, results of operations or cash flows.

In January 2016, the FASB released accounting standards update 2016-01 Recognition and Measurement of Financial Assets and Liabilities. The main provisions of the update are to eliminate the available for sale classification of accounting for equity securities and to adjust the fair value disclosures for financial instruments carried at amortized costs such that the disclosed fair values represent an exit price as opposed to an entry price. The provisions of this update will require that equity securities be carried at fair market value on the balance sheet and any periodic changes in value will be adjustments to the income statement. A practical expedient is provided for equity securities without a readily determinable fair value, such that these securities can be carried at cost less any impairment. The provisions of this update become effective for interim and annual periods beginning after December 15, 2017. Management does not expect the requirements of this update to have a material impact on the Company’s financial position, results of operations or cash flows.

In February 2016, the FASB issued accounting standards update 2016-02 Leases. The update requires all leases, with the exception of short-term leases that have contractual terms no greater than one year, to be recorded on the balance sheet. Under the provisions of the update, leases classified as operating will be reflected on the balance sheet with the recognition of both a right-of-use asset and a lease liability. Under the update, a distinction will exist between finance and operating type leases and the rules for determining which classification a lease will fall into are similar to existing rules. For public business entities, the amendments of this update are effective for interim and annual periods beginning after December 15, 2018. The update requires a modified retrospective transition under which comparative balance sheets from the earliest historical period presented will be revised to reflect what the financials would have looked like were the provisions of the update applied consistently in all prior periods. Management is in the process of evaluating the impacts of the update on the Company’s financial position and does not expect the requirements of the update to have a material impact on the Company’s results of operations or cash flows.

In March 2016, the FASB issued accounting standards update 2016-09 Compensation-Stock Compensation. The purpose of the update was to simplify the accounting for share-based payment transactions, including the income tax consequences of such transactions. Under the provisions of the update the income tax consequences of excess tax benefits and deficiencies should be recognized in income tax expense in the reporting period in which the awards vest. Currently, excess tax benefits or deficiencies impact stockholder’s equity directly to the extent there is a cumulative excess tax benefit. In the event that a tax deficiency has occurred during the reporting period and a cumulative excess tax benefit does not exist, the tax deficiency is recognized in income tax expense under current GAAP. The update also provides that entities may continue to estimate forfeitures in accounting for stock based compensation or recognize them as they occur. The provisions of this update become effective for interim and annual periods beginning after December 15, 2016. The update requires a modified retrospective transition under which a cumulative effect to equity will be recognized in the period of adoption. Management is in the process of evaluating the impact of the update on the Company’s financial position, results of operations and cash flows.

In June 2016, the FASB issued accounting standards update 2016-13 Financial Instruments - Credit Losses, commonly referred to as “CECL”. The provisions of the update eliminate the probable initial recognition threshold under current GAAP which requires reserves to be based on an incurred loss methodology. Under CECL reserves required for financial assets measured at amortized cost will reflect an organization’s estimate of all expected credit losses over the contractual term of the financial asset and thereby require the use of reasonable and supportable forecasts to estimate future credit losses. Because CECL encompasses all financial assets carried at amortized cost, the requirement that reserves be established based on an organization’s reasonable and supportable estimate of expected credit losses extends to held to maturity (“HTM”) debt securities. Under the provisions of the update credit losses recognized on available for sale (“AFS”) debt securities will be presented as an allowance as opposed to a write-down. In addition, CECL will modify the accounting for purchased loans, with credit deterioration since origination, so that reserves are established at the date of acquisition for purchased loans. Under current GAAP a purchased loan’s contractual balance is adjusted to fair value through a credit discount and no reserve is recorded on the purchased loan upon acquisition. Since under CECL reserves will be established for purchased loans at the time of acquisition the accounting for purchased loans is made more comparable to the accounting for originated loans. Finally, increased disclosure requirements under CECL require organizations to present the currently required credit quality disclosures disaggregated by the year of origination or vintage. The FASB expects that the evaluation

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of underwriting standards and credit quality trends by financial statement users will be enhanced with the additional vintage disclosures. For public business entities that are SEC filers the amendments of the update will become effective beginning January 1, 2020. Management is in the process of evaluating the impact of CECL on the Company’s financial position, results of operations and cash flows as well as its required disclosures.

In August 2016, the FASB issued accounting standards update 2016-15, Statement of Cash Flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this update are effective for fiscal years and interim periods beginning after December 15, 2017; however early adoption is permitted. Management is currently in the process of evaluating the impact of the update on the Company’s statement of cash flows.

(m)Reclassifications

Certain reclassifications of prior year balances have been made to conform to the current year presentation. These reclassifications had no impact on the Company’s consolidated financial position, results of operations or cash flows.

(2)Business Combination

On March 16, 2016, the Company entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) with Home State, a Colorado state chartered bank headquartered in Loveland, Colorado whereby Home State would merge into the Company. The transaction closed on September 8, 2016 with an aggregate transaction value of $152,478,000.  The Merger Agreement provided that, subject to certain conditions, Home State shareholders would receive 6,533,756 shares of Company voting common stock valued at $117,477,000 based on the Company’s closing stock price on September 8, 2016 of $17.98, in addition to $35,001,000 in cash.

The Company believes that the transaction will enhance its liquidity and its market share in northern Colorado.

Home State’s results of operations have been included in the Company’s results of operations beginning September 9, 2016, however, it is impracticable to provide separate information on Home State’s revenues and income subsequent to September 8, 2016 due to changes in the consolidated balance sheet.Pre-tax merger expenses of $2,205,000 and $3,227,000were included in the Company’s results of operations for the three and nine months ended September 30, 2016. Of the $2,205,000 in pre-tax merger expenses incurred in the three months ended September 30, 2016, $1,389,000was included in salaries and employee benefits expense, while $816,000was included in other general and administrative expense.  Of the $3,227,000 in pre-tax merger expenses incurred in the nine months ended September 30, 2016, $1,389,000was included in salaries and employee benefits expense, while $1,838,000was included in other general and administrative expense.  In addition to merger-related costs recognized as expense, the Company incurred debt-issuance and stock-issuance costs of $801,000 and $1,009,000, respectively, as of September 30, 2016.  Debt-issuance costs wererecorded as a reduction to subordinated debentures and stock-issuance costs were recorded as a reduction to additional paid in capital on the Company’s balance sheet.

Goodwill of $56,148,000 was recognized in the transaction and represents expected synergies and cost savings resulting from combining the operations of Home State with the Company. Due to the tax-free structure of the transaction, goodwill is not deductible for tax purposes. The fair values of assets acquired and liabilities assumed at acquisition is preliminary and pending receipt of final valuations. Additionally, preliminary valuations of Home State’s deferred tax assets are subject to adjustment, pending completion of the “stub” period return, covering Home State’s operations from January 1, 2016 through September 8, 2016.

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The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the September 8, 2016 transaction with Home State:

Assets acquired:
		(In thousands)
Cash and cash equivalents	$	11,849
Time deposits with banks		504
Securities available-for-sale		396,450
Securities held-to-maturity		850
Bank stocks		1,355
Net Loans		445,529
Premises and equipment, net		23,460
Other real estate owned		67
Goodwill		56,148
Other intangible assets, net		11,701
Other assets		8,244
Total assets acquired		956,157
Liabilities assumed:
Deposits		769,709
Securities sold under agreement to repurchase and federal funds purchased		19,985
Federal Home Loan Bank term notes		2,525
Federal Home Loan Bank line of credit borrowing		2,052
Other liabilities		9,408
Total liabilities assumed		803,679
Net assets acquired	$	152,478

The fair value of net assets acquired includes fair value adjustments to certain loans that were considered impaired as of the acquisition date. The fair value adjustments were determined using discounted expected cash flows. Acquired loans that evidence credit deterioration since origination, for which the acquirer does not expect to collect all contractual cash flows are designated as PCI upon acquisition. The gross contractual amount of loans identified as PCI as of the acquisition date totaled $2,834,000, however, contractual cash flows not expected to be collected as of acquisition date on these PCI loans totaled $531,000, representing 18.7% of their contractual balance.  Additionally, PCI loans had an interest rate fair value adjustment as of September 8, 2016 of $195,000 bringing the net fair value to $2,108,000 as of September 8, 2016. Cash flows on PCI loans cannot be reliably estimated and as a result these loans have been designated as nonaccrual. Loans that were not designated PCI at acquisition had a fair value of $443,423,000 and a contractual balance of $458,014,000 as of September 8, 2016. The credit component of the fair value adjustment on non-PCI loans as of acquisition totaled$8,358,000, representing 1.8% of their contractual balances. No allowance for loan losses related to acquired loans was brought over as a result of the Home State transaction. The composition of Home State’s portfolio as of September 8, 2016 is detailed in the table below:

		September 30,
		2016
		(In thousands)
Commercial and residential real estate	$	294,069
Construction		39,947
Commercial		45,996
Agricultural		7,906
Consumer		16,460
SBA		25,227
Other		15,924
Total gross loans		445,529

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The following tables present pro-forma financial information as if the transaction occurred as of January 1, 2015. The pro-forma information includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction and the related tax effects. The unaudited pro forma financial information has been adjusted to exclude one-time expenses related to the transaction. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on January 1, 2015.  

		Three Months Ended September 30,
		2016		2015
UNAUDITED		(Dollars in thousands, except per share data)
Net interest income	$	28,832	$	27,134
Noninterest income		6,124		6,309
Net income		8,419		8,940
Earnings per common share-basic:	$	0.30	$	0.32
Earnings per common share-diluted:	$	0.30	$	0.32

		Nine Months Ended September 30,
		2016		2015
UNAUDITED		(Dollars in thousands, except per share data)
Net interest income	$	84,004	$	80,182
Noninterest income		19,326		18,190
Net income		25,503		23,265
Earnings per common share-basic:	$	0.92	$	0.84
Earnings per common share-diluted:	$	0.91	$	0.84

(3)Securities

The fair value of available for sale debt securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) (“AOCI”) were as follows at the dates presented:

	September 30, 2016
		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
		(In thousands)
Securities available for sale:
U.S. government agencies	$	5,018	$	-	$	-	$	5,018
State and municipal		142,457		257		(376)		142,576
Mortgage-backed - agency / residential		130,544		887		(256)		129,913
Mortgage-backed - private / residential		270		-		(5)		275
Asset-backed		2,151		-		(1)		2,152
Corporate		63,422		648		(456)		63,230
Collateralized loan obligations		20,487		11		(62)		20,538
Total securities available for sale	$	364,349	$	1,803	$	(1,156)	$	363,702

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	December 31, 2015
		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
		(In thousands)
Securities available for sale:
State and municipal	$	34,713	$	20	$	-	$	34,693
Mortgage-backed - agency / residential		129,017		1,081		(1,929)		129,865
Mortgage-backed - private / residential		274		-		(10)		284
Trust preferred		17,806		100		(2,294)		20,000
Corporate		65,291		660		(389)		65,020
Collateralized loan obligations		8,330		-		(148)		8,478
Total securities available for sale	$	255,431	$	1,861	$	(4,770)	$	258,340

During the first quarter of 2015, the Company reclassified, at fair value, approximately $49,084,000 in available for sale mortgage-backed, asset-backed and municipal securities to the held to maturity category, including related unrealized pre-tax losses of approximately $750,000. As of September 30, 2016, unrealized pre-tax losses of approximately $575,000 remained in accumulated other comprehensive income (loss) and will continue to be accreted over the remaining life of the securities.  No gains or losses were recognized at the time of reclassification.  

The carrying amount, unrecognized gains/losses and fair value of securities held to maturity were as follows at the dates presented:

		Fair Value		Gross Unrecognized Gains		Gross Unrecognized Losses		Amortized Cost
		(In thousands)
September 30, 2016:
State and municipal	$	64,285	$	2,289	$	(252)	$	62,248
Mortgage-backed - agency / residential		104,453		2,566		(28)		101,915
Asset-backed		18,415		594		-		17,821
Other		1,200		-		-		1,200
	$	188,353	$	5,449	$	(280)	$	183,184
December 31, 2015:
State and municipal	$	55,812	$	1,349	$	(390)	$	54,853
Mortgage-backed - agency / residential		74,692		767		(611)		74,536
Asset-backed		19,618		273		(27)		19,372
	$	150,122	$	2,389	$	(1,028)	$	148,761

The proceeds from sales and calls of securities and the associated gains are listed below:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2016		2015		2016		2015
		(In thousands)
Proceeds	$	317,630	$	-	$	370,111	$	2,868
Gross gains		1,434		-		2,486		16
Gross losses		(1,500)		-		(2,608)		(16)
Net tax (benefit) expense related to
gains (losses) on sale		(25)		-		(46)		-

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The amortized cost and estimated fair value of available for sale and held to maturity debt securities by contractual maturity at September30, 2016 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties. Securities not due at a single maturity date are presented separately.

		Available for Sale
		Fair Value		Amortized Cost
		(In thousands)
Securities available for sale:
Due in one year or less	$	16,092	$	16,068
Due after one year through five years		19,915		19,516
Due after five years through ten years		106,052		106,014
Due after ten years		68,838		69,226
Total AFS, excluding mortgage-backed (MBS), asset-backed
and collateralized loan obligations		210,897		210,824
Mortgage-backed, asset-backed and collateralized
loan obligations		153,452		152,878
Total securities available for sale	$	364,349	$	363,702

		Held to Maturity
		Fair Value		Amortized Cost
		(In thousands)
Securities held to maturity:
Due in one year or less	$	592	$	592
Due after one year through five years		3,513		3,426
Due after five years through ten years		29,307		28,515
Due after ten years		32,073		30,915
Total HTM, excluding MBS and asset-backed		65,485		63,448
Mortgage-backed and asset-backed		122,868		119,736
Total securities held to maturity	$	188,353	$	183,184

The following tables present the fair value and the unrealized loss on securities that were temporarily impaired as of September 30, 2016 and December 31, 2015, aggregated by major security type and length of time in a continuous unrealized loss position:

September 30, 2016		Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(In thousands)
Description of securities:
Available for sale:
State and municipal	$	91,119	$	(376)	$	-	$	-	$	91,119	$	(376)
Mortgage-backed - agency /
residential		33,061		(148)		10,160		(108)		43,221		(256)
Mortgage-backed - private /
residential		-		-		270		(5)		270		(5)
Asset-backed		2,151		(1)		-		-		2,151		(1)
Corporate		14,042		(456)		-		-		14,042		(456)
Collateralized loan obligations		2,988		-		5,475		(62)		8,463		(62)
Held to maturity:
State and municipal		2,630		(17)		610		(246)		3,240		(263)
Mortgage-backed - agency /
residential		12,965		(402)		-		-		12,965		(402)
Asset-backed		7,562		(119)		3,315		(5)		10,877		(124)
Total temporarily impaired	$	166,518	$	(1,519)	$	19,830	$	(426)	$	186,348	$	(1,945)

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December 31, 2015		Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(In thousands)
Description of securities:
Available for sale:
Mortgage-backed - agency /
residential	$	56,204	$	(800)	$	31,755	$	(1,129)	$	87,959	$	(1,929)
Mortgage-backed - private /
residential		274		(10)		-		-		274		(10)
Trust preferred		-		-		7,706		(2,294)		7,706		(2,294)
Corporate		27,176		(389)		-		-		27,176		(389)
Collateralized loan obligations		8,330		(148)		-		-		8,330		(148)
Held to maturity:
State and municipal		6,726		(351)		10,056		(102)		16,782		(453)
Mortgage-backed - agency /
residential		39,280		(781)		25,838		(820)		65,118		(1,601)
Asset-backed		-		-		19,618		(438)		19,618		(438)
Total temporarily impaired	$	137,990	$	(2,479)	$	94,973	$	(4,783)	$	232,963	$	(7,262)

The table above presents unrealized losses on held to maturity securities since the date of the securities purchase, independent of the impact associated with changes in cost basis upon transfer from available for sale to held to maturity.

In determining whether or not there is an other-than-temporary-impairment (“OTTI”) for a security, management considers many factors, including: (i) the length of time for which and the extent to which the security’s fair value has been less than cost, (ii) the financial condition and near-term prospects of the security’s issuer, (iii) whether the decline in the security’s value was affected by macroeconomic conditions, and (iv)whether the Company intends to sell the security and whether it is more likely than not that the Company will be required to sell the security before a recovery in its fair value. The assessment of whether an OTTI exists involves a high degree of subjectivity and judgment and is based on the information available to management at a particular point in time. There were no accumulated credit losses on any of the Company’s securities as of September30, 2016 or December 31, 2015.

At September30, 2016,  there were 152 individual securities in an unrealized loss position, including 10 individual securities that had been in a continuous unrealized loss position for 12 months or longer. Management has evaluated these securities, in addition to the remaining 142 securities in an unrealized loss position, and has determined that the decline in value since their purchase dates was primarily attributable to fluctuations in market interest rates and does not reflect a decline in the underlying issuers’ ability to repay. The decrease in the number of securities in an unrealized loss position in excess of 12 months from 43 securities at December 31, 2015 to 10 securities at September 30, 2016 was primarily attributable to the timing of interest rate fluctuations in addition to a restructuring of the investment portfolio immediately following the transaction with Home State. The total number of securities in an unrealized loss position increasedfrom 88 individual securities at December 31, 2015 to 152 securities at September 30, 2016primarily as a result of the increase in the number of securities as a result of the September 8, 2016 transaction with Home State. At September 30, 2016, the Company did not intend to sell, and did not consider it likely that it would be required to sell, any of these securities prior to recovery in their fair value.

The Company’s unrated and rated municipal bond securities, along with the Company’s other rated investment securities, are subject to an annual internal review process that management has historically performed in the fourth quarter. The review process includes a review of the securities’ issuers’ most recent financial statements, including an evaluation of the expected sufficiency of the issuers’ cash flows relative to their debt service requirements. In addition, management considers any interim information made available to it that would prompt the need for more frequent review. At September 30, 2016 and December 31, 2015, the Company’s unrated municipal bonds comprised approximately 5.3% and13.8%, respectively, of the carrying value of the Company’s entire municipal bond portfolio.

Certain mortgage backed securities with an aggregate market value of approximately $36,105,000 as of September 30, 2016 were pledged to secure overnight repurchase agreement borrowings. Fluctuations in the fair

20

value of these securities, and or the fluctuation in customer repurchase agreement balances, may result in the need to pledge additional securities against these borrowings. Management monitors the Bank’s collateral position with respect to repurchase agreement borrowings on a daily basis. The Company also pledges certain securities to public deposits under the Colorado Public Deposit Protection Act and pledges securities as collateral for funding lines. At September 30,2016, the Company’s total pledged securities were $229,337,000.

(4)Loans

A summary of net loans held for investment by loan type at the dates indicated is as follows:

		September 30,		December 31,
		2016		2015
		(In thousands)
Commercial and residential real estate	$	1,752,113	$	1,281,701
Construction		75,603		107,170
Commercial		400,281		323,552
Agricultural		18,245		9,294
Consumer		81,766		66,288
SBA		51,480		25,645
Other		33,162		631
Total gross loans		2,412,650		1,814,281
Deferred costs, net		349		255
Loans, held for investment, net		2,412,999		1,814,536
Less allowance for loan losses		(23,300)		(23,000)
Net loans, held for investment	$	2,389,699	$	1,791,536

In the second and third quarters of 2016, the Company purchased $22.7 million and $29.3 million, respectively, in performing loans included in our Real Estate portfolio segment. In the third quarter of 2015, the Company purchased $20.1 million in performing loans included in our Real Estate portfolio segment.

Activity in the allowance for loan losses for the period indicated is as follows:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2016		2015		2016		2015
		(In thousands)
Balance, beginning of period	$	23,050	$	22,850	$	23,000	$	22,490
Provision for loan losses		27		14		53		104
Loans charged-off		(72)		(75)		(431)		(172)
Recoveries on loans previously
charged-off		295		101		678		468
Balance, end of period	$	23,300	$	22,890	$	23,300	$	22,890

The Company’s additional disclosures relating to loans and the allowance for loan losses are broken out into two subsets, portfolio segment and class. The portfolio segment level is defined as the level where financing receivables are aggregated in developing the Company’s systematic method for calculating its allowance for loan losses. The class level is the second level at which credit information is presented and represents the categorization of financing related receivables at a slightly less aggregated level than the portfolio segment level. Because data presented according to class is dependent upon the underlying purpose of the loan, whereas loan data organized by portfolio segment is determined by the loan’s underlying collateral, disclosures broken out by portfolio segment versus class may not be in agreement. The disclosures in this footnote include both Non-PCI and PCI loans. As of September 30, 2016 PCI loans acquired in the Home State transaction are not considered material and as a result separate PCI disclosures are not included. 

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The following tables provide detail for the ending balances in the Company’s allowance for loan losses and loans held for investment, broken down by portfolio segment as of the dates indicated. In addition, the tables also provide a roll-forward by portfolio segment of the allowance for loan losses for the three and nine months ended September 30, 2016 and September 30, 2015. The detail provided for the amount of the allowance for loan losses and loans individually versus collectively evaluated for impairment (i.e., the specific component versus the general component of the allowance for loan losses) corresponds to the Company’s systematic methodology for estimating its allowance for loan losses.

		Real Estate		Consumer and Installment		Commercial and Other		Total
		(In thousands)
Allowance for Loan Losses
Balance as of December 31, 2015	$	20,306	$	71	$	2,623	$	23,000
Charge-offs		(213)		(12)		(206)		(431)
Recoveries		235		13		430		678
Provision (credit)		(143)		(15)		211		53
Balance as of September 30, 2016	$	20,185	$	57	$	3,058	$	23,300
Balance as of June 30, 2016	$	20,171	$	75	$	2,804	$	23,050
Charge-offs		(9)		(5)		(58)		(72)
Recoveries		150		2		143		295
Provision (credit)		(127)		(15)		169		27
Balance as of September 30, 2016	$	20,185	$	57	$	3,058	$	23,300

Balances at September 30, 2016:
Allowance for Loan Losses
Individually evaluated	$	301	$	-	$	274	$	575
Collectively evaluated		19,884		57		2,784		22,725
Total	$	20,185	$	57	$	3,058	$	23,300
Loans
Individually evaluated	$	24,783	$	-	$	5,412	$	30,195
Collectively evaluated		1,990,126		5,995		386,683		2,382,804
Total	$	2,014,909	$	5,995	$	392,095	$	2,412,999

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		Real Estate		Consumer and Installment		Commercial and Other		Total
		(In thousands)
Allowance for Loan Losses
Balance as of December 31, 2014	$	19,607	$	39	$	2,844	$	22,490
Charge-offs		(21)		(9)		(142)		(172)
Recoveries		138		21		309		468
Provision (credit)		368		10		(274)		104
Balance as of September 30, 2015	$	20,092	$	61	$	2,737	$	22,890
Allowance for Loan Losses
Balance as of June 30, 2015	$	20,006	$	54	$	2,790	$	22,850
Charge-offs		(14)		(5)		(56)		(75)
Recoveries		66		9		26		101
Provision (credit)		34		3		(23)		14
Balance as of September 30, 2015	$	20,092	$	61	$	2,737	$	22,890

Balances at December 31, 2015:
Allowance for Loan Losses
Individually evaluated	$	282	$	-	$	11	$	293
Collectively evaluated		20,024		71		2,612		22,707
Total	$	20,306	$	71	$	2,623	$	23,000
Loans
Individually evaluated	$	23,846	$	2	$	2,305	$	26,153
Collectively evaluated		1,489,211		5,716		293,456		1,788,383
Total	$	1,513,057	$	5,718	$	295,761	$	1,814,536

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The following tables provide additional detail with respect to impaired loans broken out according to class as of the dates indicated. The recorded investment included in the following table represents customer balances net of any partial charge-offs recognized on the loans, net of any deferred fees and costs. The unpaid balance represents the recorded balance prior to any partial charge-offs. Interest income recognized year-to-date may exclude an immaterial amount of interest income on matured loans that are 90 days or more past due, but that are in the process of being renewed and thus are still accruing.

September 30, 2016		Recorded Investment		Unpaid Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized YTD
		(In thousands)
Impaired loans with no related allowance:
Commercial and residential real estate	$	12,832	$	12,862	$	-	$	12,225	$	1,248
Construction		-		-		-		740		-
Commercial		591		591		-		248		13
Consumer		19		19		-		142		1
Other		754		1,124		-		412		-
Total	$	14,196	$	14,596	$	-	$	13,767	$	1,262
Impaired loans with a related allowance:
Commercial and residential real estate	$	11,450	$	11,561	$	293	$	10,296	$	317
Construction		-		-		-		-		-
Commercial		3,500		3,542		28		2,079		110
Consumer		379		467		8		410		7
Other		670		723		246		336		-
Total	$	15,999	$	16,293	$	575	$	13,121	$	434
Total impaired loans:
Commercial and residential real estate	$	24,282	$	24,423	$	293	$	22,521	$	1,565
Construction		-		-		-		740		-
Commercial		4,091		4,133		28		2,327		123
Consumer		398		486		8		552		8
Other		1,424		1,847		246		748		-
Total impaired loans	$	30,195	$	30,889	$	575	$	26,888	$	1,696

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December 31, 2015		Recorded Investment		Unpaid Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized YTD
		(In thousands)
Impaired loans with no related allowance:
Commercial and residential real estate	$	12,756	$	14,472	$	-	$	14,194	$	242
Construction		986		986		-		789		-
Commercial		-		-		-		19		-
Consumer		271		310		-		307		5
Other		250		588		-		171		-
Total	$	14,263	$	16,356	$	-	$	15,480	$	247
Impaired loans with a related allowance:
Commercial and residential real estate	$	10,232	$	10,472	$	268	$	9,989	$	388
Construction		-		-		-		-		-
Commercial		1,204		1,220		11		492		18
Consumer		454		529		14		493		13
Other		-		-		-		-		-
Total	$	11,890	$	12,221	$	293	$	10,974	$	419
Total impaired loans:
Commercial and residential real estate	$	22,988	$	24,944	$	268	$	24,183	$	630
Construction		986		986		-		789		-
Commercial		1,204		1,220		11		511		18
Consumer		725		839		14		800		18
Other		250		588		-		171		-
Total impaired loans	$	26,153	$	28,577	$	293	$	26,454	$	666

The interest income recognized on impaired loans in the third quarter was $1,180,000; of this $969,000 was recognized on impaired loans with no related allowance and $211,000 was recognized on loans with a related allowance. The majority of the $969,000 was comprised of a $775,000 interest recovery on a commercial real estate nonaccrual loan in the third quarter 2016.  The gross year-to-date interest income that would have been recorded had the nonaccrual loans been current in accordance with their original terms was $209,000 for the nine months ended September 30, 2016 and $510,000 for the nine months ended September 30, 2015. For the three months ended September 30, 2016 and September30, 2015, gross interest income that would have been recorded on nonaccrual loans, had the loans been current in accordance with their original terms, was approximately $77,000 and $171,000 respectively. During the three and nine months ended September 30, 2016, approximately $83,000 and $332,000, respectively, in cash-basis interest income was recognized on the Company’s largest nonaccrual loan. This loan was moved into accruing status in September 2016. No cash-basis interest income was recognized in the first nine months of 2015.

The following tables summarize, by class, loans classified as past due in excess of 30 days or more, in addition to those loans classified as nonaccrual:

September 30, 2016		30-89 Days Past Due		90 Days + Past Due and Still Accruing		Nonaccrual		Total Nonaccrual and Past Due		Total Loans, Held for Investment
		(In thousands)
Commercial and residential
real estate	$	803	$	-	$	3,008	$	3,811	$	1,752,366
Construction		-		-		-		-		75,614
Commercial		1,090		335		828		2,253		400,339
Consumer		57		-		248		305		81,778
Other		207		-		1,423		1,630		102,902
Total	$	2,157	$	335	$	5,507	$	7,999	$	2,412,999

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December 31, 2015		30-89 Days Past Due		90 Days + Past Due and Still Accruing		Nonaccrual		Total Nonaccrual and Past Due		Total Loans, Held for Investment
		(In thousands)
Commercial and residential
real estate	$	653	$	-	$	11,905	$	12,558	$	1,281,881
Construction		-		-		986		986		107,185
Commercial		1,147		-		874		2,021		323,598
Consumer		291		-		459		750		66,297
Other		-		-		250		250		35,575
Total	$	2,091	$	-	$	14,474	$	16,565	$	1,814,536

The Company categorizes loans into risk categories based on relevant information about the ability of a particular borrower to service its debt, such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company uses the following definitions for risk ratings, which are consistent with the definitions used in supervisory guidance:

Substandard.  Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral, if any, pledged to secure the loan. Loans so classified have a well-defined weakness or weaknesses that jeopardize the collection of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful.  Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Loans not meeting the criteria above are considered to be non-classified loans.

The following tables provide detail for the risk categories of loans, by class of loans, based on the most recent credit analysis performed as of the dates indicated:

September 30, 2016		Commercial & Residential Real Estate		Construction		Commercial		Consumer		Other		Total
		(In thousands)
Non-classified	$	1,725,406	$	75,603	$	395,917	$	81,351	$	100,335	$	2,378,612
Substandard		26,707		-		4,364		415		2,552		34,038
Doubtful		-		-		-		-		-		-
Subtotal		1,752,113		75,603		400,281		81,766		102,887		2,412,650
Deferred costs, net		253		11		58		12		15		349
Loans, held for investment, net	$	1,752,366	$	75,614	$	400,339	$	81,778	$	102,902	$	2,412,999

December 31, 2015		Commercial & Residential Real Estate		Construction		Commercial		Consumer		Other		Total
		(In thousands)
Non-classified	$	1,260,134	$	106,184	$	322,650	$	65,365	$	34,194	$	1,788,527
Substandard		21,567		986		902		923		1,376		25,754
Doubtful		-		-		-		-		-		-
Subtotal		1,281,701		107,170		323,552		66,288		35,570		1,814,281
Deferred costs, net		180		15		46		9		5		255
Loans, held for investment, net	$	1,281,881	$	107,185	$	323,598	$	66,297	$	35,575	$	1,814,536

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The book balance of TDRs at September 30, 2016 and December 31, 2015 was $24,431,000 and $22,391,000, respectively. Management established approximately $310,000 and $276,000 in specific reserves with respect to these loans as of September 30, 2016 and December31,2015, respectively. The Company had an additional $1,864,000and $953,000 committed on loans classified as TDRs at September 30, 2016 and December 31, 2015,  respectively.

During the nine months ended September 30, 2016, the terms of three loans totaling $4,765,000, were modified in troubled debt restructurings. The modification of the terms of such loans included two restructurings of payment terms and one renewal of a loan with a stated interest rate below market. During the three months ended September 30, 2016 the repayment terms of a single loan with a balance of $2,900,000 were modified in a troubled debt restructuring. During the three and nine months ended September 30, 2015 there were nomaterial modifications of loans designated as TDRs.

For reporting purposes, a loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no defaults on TDRs during the three and nine months ended September 30, 2016 orSeptember 30, 2015.

(5)Goodwill and Other Intangible Assets

The Company recognized $56,148,000 in goodwill as a result of the Home State transaction on September 8, 2016. Current estimates of the fair value of acquired assets and liabilities assumed are preliminary and subject to change in the twelve months after the transaction if subsequently additional information becomes available impacting acquisition date fair values. Subsequent changes to estimates of acquisition date fair value will impact the amount recognized as goodwill.

Other intangible assets with finite lives are amortized over their respective estimated useful lives to their estimated residual values. As of September 30, 2016, the Company had intangible assets comprised of its core deposit intangible assets and customer relationship intangible assets.

The following table presents the gross amounts of core deposit intangible assets and customer relationship intangible assets and the related accumulated amortization at the dates indicated:

			September 30,		December 31,
	Useful Life		2016		2015
			(In thousands)
Core deposit intangible assets	10 - 15 years	$	73,655	$	62,975
Core deposit intangible assets accumulated amortization			(62,561)		(62,124)
Core deposit intangible assets, net		$	11,094	$	851
Customer relationship intangible assets	10 years		6,674		5,654
Customer relationship intangible assets accumulated amortization			(1,763)		(1,332)
Customer relationship intangible assets, net		$	4,911	$	4,322
Total other intangible assets, net		$	16,005	$	5,173

(6)Borrowings

At September 30, 2016, the Company’s outstanding borrowings were $122,521,000 as compared to $280,847,000 at December 31, 2015. These borrowings at September 30, 2016 consisted of $122,521,000 in term notes with the Federal Home Loan Bank (the “FHLB”). The Company also maintains a line of credit at the FHLB, however, it had no outstanding borrowings on the line of credit as of September 30, 2016. At December 31, 2015, outstanding borrowings consisted of $95,000,000 of term notes and $185,847,000 in advances on our line of credit, both with the FHLB.

The interest rate on the FHLB line of credit varies with the federal funds rate and was 0.53% atSeptember 30, 2016. The Company has six term notes with the FHLB. Four of the term notes have fixed interest rates, the first a $20,000,000 term note at 2.52% that is payable at its maturity date of January 23, 2018, with a prepayment penalty if paid prior to maturity and is convertible to floating rate on predetermined conversion dates at

27

the discretion of the FHLB. If the note is converted by the FHLB, the Bank has the option to prepay the note without penalty. If the note is not converted by the FHLB, the note continues to be convertible quarterly thereafter, with the option to convert to floating rate at the discretion of the FHLB. The second fixed rate term note of $50,000,000 carried an interest rate of 0.63% and matured October 24, 2016 and was not renewed. The remaining two fixed rate term notes of $695,000 and $1,740,000 have maturity dates of April 10, 2017 and August 30, 2017, respectively. The notes were assumedin the transaction with Home State and have an unamortized fair value premium of approximately $86,000 as of September 30, 2016.The Company also has two variable rate term notes of $25,000,000 each that mature on March 7, 2017and August 4, 2017 and have interest rates that reset quarterly, currently set as 1.03% and 0.87%, respectively. The next rate reset dates on the variable rate term notes are December 7, 2016 and November 5, 2016.

The Company has an advance, pledge and security agreement with the FHLB and had pledged qualifying loans and securities in the amount of $831,636,000 atSeptember 30, 2016 and $454,748,000 at December 31, 2015. The maximum credit allowance for future borrowings, including term notes and advances on the line of credit, was $709,201,000 at September 30, 2016 and $173,901,000 at December 31, 2015.

In April 2016, the holding company entered into a credit agreement for a $10,000,000 secured line of credit with Wells Fargo Bank, National Association. The holding company’s stock in the Bank is pledged as collateral to the line of credit. The line of credit matures on March 17, 2017. Under the credit agreement, we elect a fixed or floating interest rate on each advance. As of September 30, 2016 no amounts had been borrowed on the Wells Fargo line of credit.

(7)Subordinated Debentures and Trust Preferred Securities

At September 30, 2016 the balance of the Company’s outstanding subordinated debentures (the “Debentures”) was $64,973,000, comprised of $65,774,000 in debt, partially offset by $801,000 in debt issuance costs. At December 31, 2015 the balance of the Company’s Debentures was $25,774,000. As of September 30, 2016, the Company's Debentures bore a weighted average cost of funds of 4.87%.  

The Company’s Debentures were issued in three separate series. The first two issuances have maturities of 30 years from the date of issuance. These two issuances of Debentures were issued to trusts established by the Company, which in turn issued $25,000,000 of trust preferred securities (“TruPS”). Generally, and with certain limitations, the Company is permitted to call the Debentures subsequent to the first five or ten years, as applicable, after issuance, if certain conditions are met, or at any time upon the occurrence and continuation of certain changes in either the tax treatment or the capital treatment of the trusts, the Debentures or the preferred securities. The Guaranty Capital Trust III TruPS became callable at each quarterly interest payment date starting on July 7, 2008. The CenBank Trust III TruPS became callable at each quarterly interest payment date starting on April 15, 2009.

The third issuance was executed on July 18, 2016 in anticipation of the transaction with Home State, in order to fund the cash consideration to be paid to Home State shareholders in conjunction with the transaction. The issuance was comprised of $40,000,000 of 5.75% Fixed-to-Floating Rate Subordinated Notes (the “Notes”) due July 20, 2026. The Notes will initially bear a fixed interest rate of 5.75% per annum, payable semi-annually in arrears. On July 20, 2021, and, thereafter, the interest on the Notes will be payable quarterly in arrears, at an annual floating rate equal to three-month LIBOR as determined by the applicable quarterly period, plus 4.73%.

As of September 30, 2016, the Company was in compliance with all financial covenants of the Debentures.

The Company had accrued, unpaid interest on its Debentures of approximately $698,000 at September 30, 2016 and approximately $208,000 at December 31, 2015. Interest payable on Debentures is included in interest payable and other liabilities on the consolidated balance sheets.

The Company is not considered the primary beneficiary of the trusts that issued the TruPS (variable interest entities); therefore, the trusts are not consolidated in the Company’s financial statements and the Debentures are shown as liabilities. The Company’s investment in the common stock of each trust is included in other assets in the Company’s consolidated balance sheets.

Although the securities issued by each of the trusts are not included as a component of stockholders’ equity in the consolidated balance sheets, they are treated as capital for regulatory purposes. Specifically, under applicable regulatory guidelines, the $25,000,000 of TruPS issued by the trusts qualify as Tier 1 capital, up to a maximum of 25% of capital on an aggregate basis. Any amount that exceeds 25% qualifies as Tier 2 capital. At

28

September 30, 2016, the full $25,000,000 of the TruPS qualified as Tier 1 capital. The $40,000,000 issuance from July 2016 qualifies for inclusion in Tier 2 capital.

Under the Dodd-Frank Act and a joint rule from the Federal Reserve Board, the Office of the Comptroller of the Currency, and the FDIC, certain TruPS are no longer eligible to be included as Tier 1 capital for regulatory purposes. However, an exception to this statutory prohibition applies to securities issued prior to May 19, 2010 by bank holding companies with less than $15 billion of total assets. As we have less than $15 billion in total assets and issued all of our TruPS prior to May 19, 2010, we expect that our TruPS will continue to be eligible to be treated as Tier 1 capital, subject to other rules and limitations.

The following table summarizes the terms of each outstanding subordinated debenture issuance at September 30, 2016(dollars in thousands):

	Date Issued	Amount	Maturity Date	Call Date *	Fixed or Variable	Rate Adjuster		Current Rate		Next Rate Reset Date**
CenBank Trust III	4/8/2004	15,464	4/15/2034	1/15/2017	Variable	LIBOR + 2.65	%	3.33	%	1/15/2017
Guaranty Capital Trust III	6/30/2003	10,310	7/7/2033	1/7/2017	Variable	LIBOR + 3.10	%	3.78	%	1/7/2017
Subordinated Notes	7/18/2016	40,000	7/20/2026	N/A	Fixed	LIBOR + 4.73	%	5.75	%	7/20/2021

* Call date represents the earliest or next date the Company can call the debentures.

** On October 7, 2016, the rate on the Guaranty Capital Trust III subordinated debentures reset to 3.98%. On October 15, 2016, the rate on the CenBank Trust III subordinated debentures reset to 3.53%. The subordinated notes issued July 18, 2016 are fixed at 5.75% until July 20, 2021 at which point the notes turn to floating rate at three-month LIBOR plus 4.73%.

(8)Commitments

The Bank enters into credit-related financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and commercial letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Bank’s exposure to credit loss is represented by the contractual amount of these commitments. The Bank follows the same credit policies in making commitments,  including obtaining collateral, if necessary,  as it does for on-balance sheet instruments.

At the dates indicated, the following financial instruments were outstanding whose contract amounts represented credit risk:

		September 30, 2016		December 31, 2015
		(In thousands)
Commitments to extend credit:
Variable	$	419,370	$	307,463
Fixed		94,078		61,184
Total commitments to extend credit	$	513,448	$	368,647
Standby letters of credit	$	10,429	$	8,857

At September 30, 2016, the rates on the fixed rate commitments to extend credit ranged from 1.95% to 7.00%.

A commitment to extend credit is an agreement to lend to a customer as long as there is no violation of any condition established in the underlying contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Several of the commitments may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated.

A commitment to extend credit under an overdraft protection agreement is a commitment for a possible future extension of credit to an existing deposit customer. These lines of credit are uncollateralized and usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Bank is committed.

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Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. These letters of credit are primarily issued to support public and private borrowing arrangements. A majority of letters of credit issued have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank generally holds collateral supporting those commitments if deemed necessary.

(9)Fair Value Measurements and Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets.

Level 2 - Significant other observable inputs other than Level 1 prices such as quoted prices in markets that are not active, quoted prices for similar assets or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset.

Level 3 - Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Transfers of financial instruments between levels within the fair value hierarchy are recognized on the date management determines that the underlying circumstances or assumptions have changed.

Fair values of our securities are determined through the utilization of evaluated pricing models that vary by asset class and incorporate available market information (Level 2). The evaluated pricing models apply available information, as applicable, through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing to prepare evaluations. These models assess interest rate impact, develop prepayment scenarios and take into account market conventions. For securities where routine valuation techniques are not used, management utilizes a discounted cash flow model with market-adjusted discount rates or other unobservable inputs to estimate fair value. Due to the lack of ratings available on these securities, management determined that a relationship to other benchmark quoted securities was unobservable, and as a result, these securities should be classified as Level 3 (Level 3 inputs). The valuation of the Company’s Level 3 bonds is highly sensitive to changes in unobservable inputs.

Currently, the Company uses interest rate swapsto manage interest rate risk. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2 inputs). The Company considers the value of the swaps to be sensitive to fluctuations in interest rates.

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Financial Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
		(In thousands)
Assets/(Liabilities) at September 30, 2016
U.S. government agencies	$	-	$	5,018	$	-	$	5,018
State and municipal securities		-		110,496		31,961		142,457
Mortgage-backed securities – agency /
residential		-		130,544		-		130,544
Mortgage-backed securities – private /
residential		-		270		-		270
Asset-backed securities		-		2,151		-		2,151
Corporate securities		-		63,422		-		63,422
Collateralized loan obligations		-		20,487				20,487
Interest rate swaps - cash flow hedge		-		(3,425)		-		(3,425)
Assets/(Liabilities) at December 31, 2015
State and municipal securities	$	-	$	2,673	$	32,040	$	34,713
Mortgage-backed securities – agency /
residential		-		129,017		-		129,017
Mortgage-backed securities – private /
residential		-		274		-		274
Trust preferred securities		-		17,806		-		17,806
Corporate securities		-		65,291		-		65,291
Collateralized loan obligations		-		8,330				8,330
Interest rate swaps - cash flow hedge		-		(2,558)		-		(2,558)

There were no transfers of financial assets and liabilities among Level 1, Level 2 and Level 3 during the nine months ended September 30, 2016.

The tables below present a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2016 and September 30, 2015:  

		State and Municipal Securities
		Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
		(In thousands)
Beginning balance	$	31,909	$	32,040
Total unrealized gains (losses) included in:
Net income		2		5
Other comprehensive income (loss)		-		-
Sales, calls and prepayments		(81)		(215)
Acquisition of Level 3 security		131		131
Transfers in and (out) of Level 3		-		-
Balance end of period	$	31,961	$	31,961

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		State and Municipal Securities
		Three Months Ended September 30, 2015		Nine Months Ended September 30, 2015
		(In thousands)
Beginning balance	$	32,038	$	32,317
Total unrealized gains (losses) included in:
Net income		1		3
Other comprehensive income (loss)		-		(1)
Sales, calls and prepayments		-		-
Transfer to held to maturity		-		(280)
Transfers in and (out) of Level 3		-		-
Balance end of period	$	32,039	$	32,039

For the three and nine months ended September 30, 2016, there was no other comprehensive income or loss for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as a result of consistent mark-to-market valuation. For the three and nine months ended September 30, 2016 and September 30,2015, the amounts included in net income in the above tables include accretion of any discount on these Level 3 bonds.  

The following tables present quantitative information about Level 3 fair value measurements on the Company’s state and municipal securities at September 30, 2016 and December 31, 2015:

September 30, 2016		Fair Value	Valuation Technique	Unobservable Inputs	Range
		(In thousands)
State and municipal securities	$	31,961	discounted cash flow	discount rate	2.19%-4.75%
Total	$	31,961

December 31, 2015		Fair Value	Valuation Technique	Unobservable Inputs	Range
		(In thousands)
State and municipal securities	$	32,040	discounted cash flow	discount rate	2.05%-4.75%
Total	$	32,040

Financial Assets and Liabilities Measured on a Nonrecurring Basis

Financial assets and liabilities measured at fair value on a nonrecurring basis were not material as of September 30, 2016 and December 31, 2015.  

Nonfinancial Assets and Liabilities Measured on a Nonrecurring Basis

Nonfinancial assets and liabilities measured at fair value on a nonrecurring basis were not material as of September 30, 2016 and December 31, 2015.

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Fair Value of Financial Instruments

The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows:

				Fair Value Measurements at September 30, 2016:
		Carrying Amount		Level 1		Level 2		Level 3		Total
		(In thousands)
Financial assets:
Cash and cash equivalents	$	163,908	$	163,908	$	-	$	-	$	163,908
Securities available for sale		364,349		-		332,388		31,961		364,349
Securities held to maturity		183,184		-		185,245		3,108		188,353
Bank stocks		14,558		n/a		n/a		n/a		n/a
Loans held for investment, net		2,389,699		-		-		2,391,039		2,391,039
Accrued interest receivable		9,314		-		9,314		-		9,314
Financial liabilities:
Deposits	$	2,752,112	$	-	$	2,751,953	$	-	$	2,751,953
Federal funds purchased and sold under
agreements to repurchase		35,936		-		35,936		-		35,936
Subordinated debentures		64,973		-		-		59,571		59,571
Long-term borrowings		122,521		-		122,898		-		122,898
Accrued interest payable		1,070		-		1,070		-		1,070
Interest rate swap - cash flow hedge		3,425		-		3,425		-		3,425

				Fair Value Measurements at December 31, 2015:
		Carrying Amount		Level 1		Level 2		Level 3		Total
		(In thousands)
Financial assets:
Cash and cash equivalents	$	26,711	$	26,711	$	-	$	-	$	26,711
Securities available for sale		255,431		-		223,391		32,040		255,431
Securities held to maturity		148,761		-		145,698		4,424		150,122
Bank stocks		20,500		n/a		n/a		n/a		n/a
Loans held for investment, net		1,791,536		-		-		1,791,128		1,791,128
Accrued interest receivable		6,554		-		6,554		-		6,554
Financial liabilities:
Deposits	$	1,801,845	$	-	$	1,800,112	$	-	$	1,800,112
Federal funds purchased and sold under
agreements to repurchase		26,477		-		26,477		-		26,477
Short-term borrowings		185,847		-		185,847		-		185,847
Subordinated debentures		25,774		-		-		18,640		18,640
Long-term borrowings		95,000		-		95,353		-		95,353
Accrued interest payable		508		-		508		-		508
Interest rate swap - cash flow hedge		2,558		-		2,558		-		2,558

The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

Certain financial instruments and all nonfinancial instruments are excluded from the disclosure requirements. Therefore, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

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The following methods and assumptions are used by the Company in estimating fair value disclosures for financial instruments:

(a) Cash and Cash Equivalents

The carrying amounts of cash and short-term instruments approximate fair values (Level 1).

(b) Securities and Bank Stocks

Fair values for securities available for sale and held to maturity are generally determined through the utilization of evaluated pricing models that vary by asset class and incorporate available market information (Level 2). The evaluated pricing models apply available information, as applicable, through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing to prepare evaluations. These models assess interest rate impact, develop prepayment scenarios and take into account market conventions. For positions that are not traded in active markets or are subject to transfer restrictions (i.e., bonds valued with Level 3 inputs), management uses a combination of reviews of the underlying financial statements, appraisals and management’s judgment regarding credit quality and intent to sell in order to determine the value of the bond.

It is not practical to determine the fair value of bank stocks due to restrictions placed on the transferability of FHLB stock, Federal Reserve Bank stock, Bankers’ Bank of the West stock and Pacific Coast Bankers’ Bank stock. These three stocks comprise the majority of the balance of the Company’s bank stocks.

(c) Loans Held for Investment

For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values (Level 3). Fair values for other loans (e.g., commercial real estate and investment property mortgage loans and commercial loans) are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality (Level3). Impaired loans are valued at the lower of cost or fair value when specific reserves are attributed to these loans because the present value of expected cash flows or the net realizable value of collateral is less than the impaired loan’s recorded investment. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

(d) Loans Held for Sale

Loans held for sale are carried at the lower of cost or fair value, with fair value determined by the sales price agreed upon in negotiation with the purchaser (Level 1).

(e) Deposits

The fair values of demand deposits (e.g., interest and non-interest checking, passbook savings and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) (Level 2). The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date (Level 2). Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits (Level 2).

(f) Short-term Borrowings

The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings maturing within 90 days approximate their fair values (Level 2).

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(g) Long-term Borrowings

The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2).

(h) Subordinated Debentures

The fair values of the Company’s Debentures are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 3).

(i) Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value (Level 2).

(j) Interest Rate Swaps, net

The fair value of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments).The variable cash receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2).

(k) Off-balance Sheet Instruments

Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is immaterial.

(10)Derivatives and Hedging Activities

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company utilizes derivative financial instruments to assist in the management of interest rate risk, primarily helping to secure long-term borrowing rates. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment or receipt of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments or receipts principally related to certain variable-rate borrowings. The Company does not use derivatives for trading or speculative purposes.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheet as of September 30, 2016 and December 31, 2015:

	Balance		Fair Value
	Sheet		September 30,		December 31,
	Location		2016		2015
			(In thousands)
Derivatives designated as hedging instruments
Assets:
Interest rate swaps	Other assets	$	-	$	-
Liabilities:
Interest rate swaps	Other liabilities	$	3,425	$	2,558

The Company’s objectives in using interest rate derivatives are to add stability and predictability to interest expense and to manage the Company’s exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. For hedges of the Company’s variable-rate borrowings, interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed payments. As of September 30, 2016, the Company had two forward-starting interest rate swaps with an aggregate notional amount

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of $50,000,000 that were designated as cash flow hedges associated with the Company’s forecasted variable-rate borrowings. The first $25,000,000swap became effective in June 2015 at a fixed rate of 2.46% and matures in June2020. The second $25,000,000 swap became effective in March 2016 at a fixed rate of 3.00%and maturesin March2021.

Summary information about the interest-rate swaps designated as cash flow hedges as of September30, 2016 and December 31, 2015 is included in the table below:

		September 30, 2016			December 31, 2015
		(Dollars in thousands)
Notional amounts	$	50,000		$	50,000
Weighted average pay rates		2.73	%		2.73	%
Weighted average receive rates		3 month LIBOR			3 month LIBOR
Weighted average maturity		4.1 years			4.9 years
Unrealized gains (losses)	$	(3,425)		$	(2,558)

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company’s cash flow hedges are used to hedge the forecasted variable cash outflows associated with forecasted issuances of FHLB advances. During the nine months ended September 30, 2016 and September30, 2015, the income statement effect of hedge ineffectiveness was not material.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate liabilities. Management expects that, during the next 12 months,approximately $909,000 will be reclassified from AOCI into interest expense.

The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with another third-party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The impact of these customer interest rate swaps on the Company’s financial statements was immaterial for the periods covered by this report.

The table below presents the effect of the Company’s derivative financial instruments on both comprehensive income and net income for the three and nine months ended September 30, 2016 and September 30, 2015:

	Income		Three Months Ended				Nine Months Ended
Interest Rate Swaps with	Statement		September 30,				September 30,
Hedge Designation	Location		2016		2015		2016		2015
			(In thousands)
Gain or (loss) recognized in OCI on
derivative - net of tax	Not applicable	$	235	$	(800)	$	(963)	$	(1,097)
(Gain) or loss reclassified from
accumulated OCI into income
(effective portion) - net of tax	Interest expense		161		51		426		51

The Company has agreements with its derivative counterparties that contain a cross-default provision whereby if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company has minimum collateral posting thresholds with certain of its derivative counterparties and as of September 30, 2016 had posted $4,690,000 against its obligations under these agreements. If the Company had breached any of these provisions at September 30, 2016, it could have been required to settle its obligations under the agreements at the termination value.

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(11)Stock-Based Compensation

Under the Company’s Incentive Plan, which expired by its terms on April 4, 2015, the Company’s Board of Directors had the authority to grant stock-based compensation awards prior to the plan’s expiration. Under the 2015 Plan, which was approved by the Company’s stockholders at the May 5, 2015 annual meeting, the Company’s Board of Directors maintains the authority to grant stock-based compensation awards to nonemployee directors, key employees, consultants and prospective employees under the terms described in each of the plans.

Stock-based compensation awards issuable under either plan include the grant of stock-based compensation awards in the form of options, restricted stock awards, restricted stock unit awards, performance stock awards, stock appreciation rights and other equity based awards. Likewise, the Incentive Plan provided for, and the 2015 Plan provides, that eligible participants may be granted shares of Company common stock that are subject to forfeiture until the grantee vests in the stock award based on the established conditions, which may include service conditions, established performance measures or both.

Prior to the vesting of stock awards that are subject to a service vesting condition, each grantee has the rights of a stockholder with respect to voting the shares of stock represented by the award. The grantee is not entitled to dividend rights with respect to the shares of stock until vesting occurs. Prior to vesting of the stock awards with performance vesting conditions, each grantee has the rights of a stockholder with respect to voting of the shares of stock represented by the award. The recipient is generally not entitled to dividend rights with respect to unvested shares. Other than the stock awards with service and performance-based vesting conditions, no other grants have been made under either the Incentive Plan or the 2015 Plan.

Under the provisions of the 2015 Plan and the Incentive Plan, grants of stock-based compensation awards of 935,000 and 1,700,000 shares, respectively, were authorized, subject to adjustments upon the occurrence of certain events. As of September 30, 2016, there were 187,617 and 376,759outstanding awards under the 2015 Plan and the Incentive Plan, respectively. As of September 30, 2016, there were 730,175 shares remaining available for grant under the 2015 Plan. Although the Incentive Plan expired by its terms on April 4, 2015, awards previously granted under the Incentive Plan remain outstanding in accordance with their terms.

Of the 564,376 sharesrepresented by unvested awards at September 30, 2016,  approximately 542,000shares are expected to vest. At September 30, 2016 there were 315,031shares of restricted stock outstanding that were subject to a performance condition. As of September 30, 2016, management expects that approximately 304,000 of these shares will vest and that the remaining shares will expire unvested. The performance shares that are expected to vest relate to awards granted to various key employees from February 2014 through August 2016. The vesting of these performance shares is contingent upon the meeting of certain return on asset performance criteria. The performance-based shares awarded in 2014, 2015 and 2016 each include a “threshold” and “target” performance level, with vesting determined based on where actual performance falls in relation to the numeric range represented by these performance criteria. As of September 30, 2016, management expected that all of the performance awards made in 2014, 2015 and 2016 will vest (with the exception of  estimated forfeitures), which is consistent with the level of expense currently being recognized over the vesting period. Should this expectation change, the accrual of compensation expense in future periods could be impacted.

A summary of the status of unearned stock awards and the change during the nine months ended September 30, 2016 is presented in the table below:

	Shares		Weighted Average Fair Value on Award Date
Unearned at January 1, 2016	590,755	$	12.88
Awarded	189,164		15.66
Forfeited	(21,500)		12.76
Vested	(194,043)		11.35
Unearned at September 30, 2016	564,376	$	14.34

The Company recognized $2,304,000 and  $2,094,000 in stock-based compensation expense for services rendered for the nine months ended September 30, 2016 and September 30, 2015, respectively. The total income tax benefit recognized for share-based compensation arrangements was $876,000 and$796,000 for the nine months ended September 30, 2016 and September 30, 2015, respectively. The grant date fair value of restricted stock awards granted in the nine months ended September 30, 2016 and September 30, 2015 was $2,963,000and $2,391,000, respectively.  The fair value of awards that vested in the nine months ended September 30, 2016 and

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September 30, 2015 was approximately $3,053,000and $1,347,000, respectively.  At September 30, 2016,  compensation cost of $4,598,000 related to unvested awards not yet recognized is expected to be recognized over a weighted-average period of 1.7 years.

(12)Capital Ratios

The following table provides the capital ratios of the Company and Bank as of the dates presented, along with the applicable regulatory capital requirements:

	Ratio at September 30, 2016		Ratio at December 31, 2015		Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer		Minimum Requirement for "Well-Capitalized" Institution
Common Equity Tier 1 Risk-Based
Capital Ratio
Consolidated	10.79	%	10.94	%	7.00	%	N/A
Guaranty Bank and Trust Company	12.74	%	11.96	%	7.00	%	6.50	%
Tier 1 Risk-Based Capital Ratio
Consolidated	11.72	%	12.11	%	8.50	%	N/A
Guaranty Bank and Trust Company	12.74	%	11.96	%	8.50	%	8.00	%
Total Risk-Based Capital Ratio
Consolidated	14.07	%	13.24	%	10.50	%	N/A
Guaranty Bank and Trust Company	13.61	%	13.09	%	10.50	%	10.00	%
Leverage Ratio
Consolidated	12.40	%	10.68	%	4.00	%	N/A
Guaranty Bank and Trust Company	13.48	%	10.55	%	4.00	%	5.00	%

(13)Contingencies

The Company and the Bank are defendants, from time-to-time, in legal actions at various points of the legal process, including appeals, arising from transactions conducted in the ordinary course of business. Management believes, after consultation with legal counsel, that it is not probable that the outcome of current legal actions will result in a liability that has a material adverse effect on the Company’s consolidated financial position, results of operations, comprehensive income or cash flows. In the event that such legal action results in an unfavorable outcome, the resulting liability could have a material adverse effect on the Company’s consolidated financial position, results of operations, comprehensive income or cash flows.

On May 20, 2016, a putative stockholder class action lawsuit (the “Merger Litigation”), was filed against the Company and the individual members of Company’s board of directors in connection with the Company entering into the Agreement and Plan of Reorganization (the “Merger Agreement”). The action, Sciabacucchi v. Cordes et al., Case No. 16cv31793, was filed in Colorado District Court, Denver County.

The Merger Litigation alleged that the members of the Company’s board of directors breached their fiduciary duties owed to the Company’s stockholders by causing a materially incomplete registration statement to be filed. The plaintiff in the Merger Litigation generally sought, among other things, declaratory and injunctive relief concerning the alleged breach of fiduciary duties, injunctive relief prohibiting consummation of the transaction and attorneys’ fees and costs, and other further relief.

On July 5, 2016, the parties to the merger litigation entered into a Memorandum of Agreement providing that, among other things: (1) the Company would make specified additional disclosures in the joint proxy statement/prospectus filed in connection with the transaction; (2) the merger litigation is stayed; and (3) the parties would enter into a stipulation providing for certification of a class for settlement purposes and a class release. The joint proxy statement/prospectus filing filed on July 19, 2016, included these specific additional disclosures. The proposed settlement is subject to, among other things, approval of the District Court, City and County of Denver,

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Colorado. Under the terms of the proposed settlement, following final court approval, the action will be dismissed with prejudice.

On September 9, 2016, the parties entered into a Final Stipulation of Settlement and Release filed with the Colorado District Court, Denver County. A copy of the settlement was mailed to all stockholders of record between March 16, 2016 and July 5, 2016 in September 2016. The hearing to approve the settlement is scheduled for January 2017. There can be no assurances however, that court approval of the settlement will be obtained.

(14)Subsequent Events

On November 8, 2016, the Company’s board of directors declared a quarterly cash dividend of $0.115 per common share. The dividend is payable on November 28, 2016 to stockholders of record as of close of business on November 18, 2016.

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ITEM 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements and Factors That Could Affect Future Results

Certain statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), notwithstanding that such statements are not specifically identified as such. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statements of plans, objectives and expectations of the Company or its management or board of directors, including those relating to products or services;  (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes”, “anticipates”, “expects”, “intends”, “targeted”, “projected”, “continue”, “remain”, “will”, “should”, “could”, “may” and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements and the lack of such an identifying word does not necessarily indicate the absence of a forward-looking statement.

Forward-looking statements are based on assumptions and involve risks and uncertainties, many of which are beyond our control, which may cause actual results to differ materially from those discussed in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

· Local, regional, national and international economic conditions and the impact they may have on us and our customers, and our assessment of that impact on our estimates including, but not limited to, the allowance for loan losses.

· The effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Federal Open Market Committee of the Federal Reserve Board.

· Requirements imposed by regulatory agencies to increase our capital to a level greater than the current level required for well-capitalized financial institutions (including the impact of the joint rule by the Federal Reserve Board, the OCC, and the FDIC to revise the regulatory capital rules, including the Basel III standards), the failure to maintain capital above the level required to be well-capitalized under the regulatory capital adequacy guidelines, the availability of capital from private or government sources, or the failure to raise additional capital as needed.

· Changes in the level of nonperforming assets and charge-offs and the deterioration of other credit quality measures, and their impact on the adequacy of the allowance for loan losses and provision for loan losses.

· Changes in sources and uses of funds, including loans, deposits and borrowings, including the ability of the Bank to retain and grow core deposits, to purchase brokered deposits and to maintain unsecured federal funds lines and secured lines of credit with correspondent banks.

· Failure, interruption or breach in security of our electronic communications, information systems and computer systems.

· The effects of inflation and interest rate, securities marketand monetary supply fluctuations.

· Political instability, acts of war or terrorism and natural disasters.

· Our ability to develop and promote customer acceptance of new products and services in a timely manner and customers’ perceived overall value of these products and services.

· Changes in consumer spending, borrowings and savings habits.

· Competition for loans and deposits and failure to attract or retain loans and deposits.

· Changes in the financial performance or condition of the Bank’s borrowers and the ability of the Bank’s borrowers to perform under the terms of their loans and the terms of other credit agreements.

· Our ability to receive regulatory approval for the Bank to declare and pay dividends to the holding company.

· Our ability to acquire, operate and maintain cost effective and efficient systems.

40

· The timing, impact and other uncertainties of any future acquisitions, including our ability to identify suitable future acquisition candidates, success or failure in the integration of their operations, the ability to raise capital or issue debt to fund acquisitions and the ability to enter new markets successfully and capitalize on growth opportunities.

· Our ability to successfully implement changes in accounting policies and practices, adopted by regulatory agencies, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (the “FASB”) and other accounting standard setters.

· The loss of senior management or operating personnel and the potential inability to hire qualified personnel at reasonable compensation levels.

· The costs and other effects resulting from changes in laws and regulations and of other legal and regulatory developments, including, but not limited to, increases in FDIC insurance premiums, the commencement of legal proceedings or regulatory or other governmental inquiries, and our ability to successfully undergo regulatory examinations, reviews and other inquiries.

· Other risks and uncertainties listed from time to time in the Company’s reports and documents filed with the Securities and Exchange Commission (the “SEC”).

Forward-looking statements speak only as of the date on which such statements are made. We do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our unaudited condensed consolidated financial statements and unaudited statistical information included elsewhere in this Report, Part II, Item 1A of this Report and Items 1, 1A, 7, 7A and 8 of our 2015 Annual Report on Form 10-K.

Overview

Guaranty Bancorp is a bank holding company with its principal business to serve as the holding company for its Colorado-based bank subsidiary, Guaranty Bank and Trust Company (the “Bank”). The Bank is the sole member of several limited liability companies that hold real estate as well as the sole owner of two investment management firms, Private Capital Management LLC (“PCM”) and Cherry Hills Investment Advisors, Inc. (“CHIA”).  References to “Company”, “us”, “we” and “our” refer to Guaranty Bancorp on a consolidated basis. References to “Guaranty Bancorp” or to the “holding company” refer to the parent company on a stand-alone basis. References to the “Bank” refer to Guaranty Bank and Trust Company, our bank subsidiary.

On March 16, 2016, the Company entered into the Merger Agreement with Home State, parent company of Home State Bank, a Colorado state chartered bank headquartered in Loveland, Colorado whereby Home State would merge into the Company. The transaction closed on September 8, 2016.

Through the Bank, we provide banking and other financial services throughout our targeted Colorado markets to small to medium-sized businesses, including the owners and employees of those businesses, and consumers. Our line of banking products and services include accepting demand and time deposits and originating real estate loans (including construction loans), commercial loans, SBA guaranteed loans and consumer loans. The Bank, PCM and CHIA also provide wealth management solutions, including trust and investment management services. We derive our income primarily from interest (including loan origination fees) received on loans and, to a lesser extent, interest on investment securities and other fees received in connection with servicing loan and deposit accounts, trust and investment management services. Our major operating expenses include the interest we pay on deposits and borrowings and general operating expenses. We rely primarily on locally generated deposits to provide us with funds for making loans.

In addition to building growth organically through our existing branches, we seek opportunities to acquire small to medium-sized banks or specialty finance companies that will allow us to expand our franchise in a manner consistent with our communitybank focus. Ideally, the financial institutions we seek to acquire will be in or contiguous to our existing footprint, which would allow us to use the acquisition to consolidate duplicative costs and administrative functions and to rationalize operating expenses. We believe that by streamlining the administrative and operational functions of an acquired financial institution, we are able to substantially lower operating costs, operate more efficiently and integrate the acquired financial institution while maintaining the stability of our existing business. In certain circumstances, we may seek to acquire financial institutions that may be located outside of our

41

existing footprint. We also seek opportunities which will allow us to further diversify our noninterest income base, including adding to our wealth management platform.

We are subject to competition from other financial institutions, non-financial companies and other competitors and our operating results, like those of other financial institutions operating exclusively or primarily in Colorado, are significantly influenced by economic conditions in Colorado, including the strength of the Colorado real estate market. In addition, the fiscal, monetary and regulatory policies of the federal government and regulatory authorities that govern financial institutions and market interest rates impact our financial condition, results of operations and cash flows.  

42

Earnings Summary

The following table summarizes certain key financial results for the periods indicated:

Table 1

	Three Months Ended September 30,									Nine Months Ended September 30,
								Change									Change
								Favorable									Favorable
		2016			2015			(Unfavorable)			2016			2015			(Unfavorable)
		(In thousands, except for share data and ratios)
Results of Operations:
Interest income	$	25,342		$	20,863		$	4,479		$	69,053		$	60,876		$	8,177
Interest expense		2,592			1,457			(1,135)			6,487			3,753			(2,734)
Net interest income		22,750			19,406			3,344			62,566			57,123			5,443
Provision for loan losses		27			14			(13)			53			104			51
Net interest income after
provision for loan losses		22,723			19,392			3,331			62,513			57,019			5,494
Noninterest income		4,705			4,399			306			13,025			12,918			107
Noninterest expense		18,624			14,866			(3,758)			49,550			45,092			(4,458)
Income before income taxes		8,804			8,925			(121)			25,988			24,845			1,143
Income tax expense		3,043			2,923			(120)			9,007			8,282			(725)
Net income	$	5,761		$	6,002		$	(241)		$	16,981		$	16,563		$	418
Common Share Data:
Basic earnings per common share	$	0.25		$	0.28		$	(0.03)		$	0.78		$	0.79		$	(0.01)
Diluted earnings per common
share	$	0.25		$	0.28		$	(0.03)		$	0.77		$	0.78		$	(0.01)
Average common shares
outstanding		22,811,386			21,076,380			1,735,006			21,750,153			21,061,445			688,708
Diluted average common shares
outstanding		22,957,268			21,224,989			1,732,279			21,965,047			21,215,435			749,612
Average equity to average assets		9.70	%		9.55	%		0.15	%		9.63	%		9.74	%		(0.11)	%
Return on average equity		9.04	%		10.99	%		(1.95)	%		9.64	%		10.37	%		(0.73)	%
Return on average assets		0.88	%		1.05	%		(0.17)	%		0.93	%		1.01	%		(0.08)	%
Dividend payout ratio		42.44	%		35.12	%		7.32	%		43.16	%		38.16	%		5.00	%

	September 30,		September 30,
	2016		2015		Change
Selected Balance Sheet Ratios:
Total risk-based capital to
risk-weighted assets	14.07	%	13.39	%	0.68	%
Leverage ratio	12.40	%	10.75	%	1.65	%
Loans(1), net of deferred costs
to deposits	87.68	%	93.44	%	(5.76)	%
Allowance for loan losses to loans (1),
net of deferred costs	0.97	%	1.33	%	(0.36)	%
Allowance for loan losses + unaccreted
discount to loans (1),
net of deferred costs	1.61	%	1.33	%	0.28	%
Allowance for loan losses to
nonperforming loans	667.94	%	157.73	%	510.21	%
Classified assets to allowance
and Tier 1 capital (2)	10.69	%	13.51	%	(2.82)	%
Noninterest bearing deposits to
total deposits	31.14	%	37.02	%	(5.88)	%
Time deposits to total deposits	13.73	%	13.25	%	0.48	%
___________________________
(1) Loans held for investment
(2) Based on Bank only Tier 1 capital

43

Third quarter 2016 net income decreased $0.2 million to $5.8 million as compared to $6.0 million for the same quarter in 2015. The $0.2 million decrease in net income was primarily attributable to a $3.8 million increase in noninterest expense, impacted by $2.2 million in merger-related expenses. Excluding merger-related expense, noninterest expense increased by an additional $1.6 million in the third quarter 2016, compared to the third quarter 2015. Offsetting the increased noninterest expense, net interest income increased by $3.3 million to $22.8 million compared to $19.4 million in the third quarter 2015. This increase in net interest income was comprised of a $4.5 million increase in interest income and a $1.1 million increase in interest expense in the third quarter of 2016 compared to the third quarter 2015. Additionally, noninterest income increased by $0.3 million, and income tax expense increased $0.1 million in the third quarter 2016 compared to the third quarter 2015. The $2.2 million in merger-related expenses were comprised of $1.4 million in salaries and employee benefit expense related to severance and retention payments and $0.8 million in other general and administrative expenses, primarily legal and conversion-related. Excluding the severance and retention expense included in salaries and employee benefits, this category of expense increased $1.1 million in the third quarter 2016 compared to the third quarter 2015, mostly due to the additional expense associated with an increased number of employees subsequent to the transaction with Home State. The $4.5 million increase in interest income was primarily the result of a $307.4 million, or 18.0% increase in average loan balances in the third quarter 2016 as compared to the same quarter in 2015, a $0.8 million interest income recovery on a nonaccrual loan received in the third quarter 2016 and $0.3 million related to accretion of the discount applied to loans acquired in the Home State transaction. The increase in interest expense was due to a $0.5 million increase in subordinated debt expense, a $0.3 million increase in Federal Home Loan Bank (FHLB) borrowings expense and a $0.4 million increase in interest expense on deposits. The $0.3 million increase in noninterest income in the third quarter 2016, as compared to the third quarter 2015, was attributable to an increase in deposit service and other fees primarily generated by deposits acquired in the transaction with Home State.

For the nine months ended September 30, 2016, net income was $17.0 million as compared to $16.6 million for the same period in 2015. The $0.4 million increase in net income during the nine months ended September 30, 2016 was primarily the result of a $5.4 million increase in net interest income, comprised of an $8.2 million increase in interest income, partially offset by a $2.7 million increase in interest expense, mostly offset by a $4.5 million increase in noninterest expense and a $0.7 million increase in income tax expense. The year-to-date increase in interest income was driven by a $274.0 million, or 16.9%, increase in average loans, as compared to the same period in 2015, in addition to the $0.8 million interest income recovery and the $0.3 million in discount accretion described above. The $2.7 million increase in interest expense during the first nine months of 2016, as compared to the same period in 2015, was due to a $1.2 million increase in FHLB borrowing expense, a $1.0 million increase in interest expense on deposits, and a $0.6 million increase in interest expense on subordinated debt. The $4.5 million increase in noninterest expense during the nine months ended September 30, 2016, as compared to the same period in the prior year, was primarily attributable to $3.2 million in merger-related expenses incurred during the first nine months of 2016. The $3.2 million in merger-related expenses incurred during the first nine months of 2016 were comprised of $1.4 million in salaries and employee benefits related to severance and retention payments and $1.8 million in other general and administrative expenses. Excluding the merger-related expenses, noninterest expense increased $1.3 million for the first nine months of 2016, as compared to the same period in 2015, due to a $2.0 million increase in salaries and employee benefits, partially offset by a $0.8 million decline in occupancy expense. Income tax expense increased $0.7 million as a result of increased pretax income in addition to an increase in the effective tax rate from 33.3% to 34.7%, resulting from reduced tax exempt income as a percentage of total pretax income in addition to the impact of certain nondeductible merger expenses.

Net Interest Income and Net Interest Margin

Net interest income, which is our primary source of income, represents the difference between interest earned on assets and interest paid on liabilities. The interest rate spread is the difference between the yield on our interest-bearing assets and liabilities. Net interest margin is net interest income expressed as a percentage of average interest-earning assets.

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The following table summarizes the Company’s net interest income and related spread and margin for the quarter ended September 30, 2016 and the prior four quarters:

Table 2

		Three Months Ended
		September 30,			June 30,			March 31,			December 31,			September 30,
		2016			2016			2016			2015			2015
		(Dollars in thousands)
Net interest income	$	22,750		$	19,821		$	19,995		$	19,856		$	19,406
Interest rate spread		3.45	%		3.39	%		3.44	%		3.43	%		3.45	%
Net interest margin		3.66	%		3.57	%		3.60	%		3.58	%		3.59	%
Net interest margin, fully tax
equivalent		3.75	%		3.65	%		3.68	%		3.66	%		3.67	%
Loan yield		4.41	%		4.15	%		4.17	%		4.14	%		4.15	%
Average cost of interest-bearing
liabilities (including
noninterest-bearing deposits)		0.44	%		0.39	%		0.35	%		0.30	%		0.28	%
Average cost of deposits
(including noninterest-
bearing deposits)		0.23	%		0.23	%		0.22	%		0.20	%		0.19	%

Net interest income increased $3.3 million in the third quarter 2016, as compared to the same quarter in 2015, due to a $4.5 million increase in interest income, partially offset by a $1.1 million increase in interest expense. The increase in interest income was the result of a $307.4 million, or 18.0%, increase in average loan balances in the third quarter 2016, as compared to the same quarter in 2015, a $0.8 million interest income recovery on a nonaccrual loan received in the third quarter 2016 and $0.3 million related to accretion of the discount applied to loans acquired in the Home State transaction. The increase in interest expense was due to a $0.5 million increase in subordinated debt expense, a $0.3 million increase in FHLB borrowings expense and a $0.4 million increase in interest expense on deposits. On July 18, 2016, we issued $40.0 million of unsecured fixed-to-floating rate subordinated notes, to raise the cash consideration paid to the shareholders of Home State in connection with the transaction. FHLB borrowing expense increased in the third quarter 2016, as compared to the same quarter in 2015, as a result of fixed-rate hedged borrowings, $25.0 million of which became effective in the third quarter 2015 and $25.0 million of which became effective in the first quarter 2016. Interest expense on deposits increased in the third quarter 2016, as compared to the third quarter 2015, due to higher average deposit balances, attributable to both organic growth and the Home State transaction.

As compared to the second quarter 2016, net interest income increased by $2.9 million due to a $3.5 million increase in interest income, partially offset by a $0.6 million increase in interest expense. The increase in interest income during the third quarter 2016, as compared to the second quarter 2016, was primarily due to a $165.3 million increase in average loan balances and a $37.7 million increase in average investment balances. The $0.6 million increase in interest expense in the third quarter 2016, as compared to the second quarter 2016, was mostly due to the newly issued $40.0 million of unsecured fixed-to-floating rate subordinated notes, discussed above.

During the third quarter 2016, net interest margin increased nine basis points to 3.66%, as compared to the second quarter 2016 and increased seven basis points as compared to the third quarter 2015. The increase in the net interest margin in the third quarter 2016, as compared to the second quarter 2016, was primarily the result of the $0.8 million interest income recovery and $0.3 million in discount accretion on purchased loans, outlined above.

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The following table summarizes the Company’s net interest income and related spread and margin for the nine monthsended September 30, 2016 and September 30, 2015:

Table 3

		Nine Months Ended
		2016			2015
		(Dollars in thousands)
Net interest income	$	62,566		$	57,123
Interest rate spread		3.43	%		3.56	%
Net interest margin		3.61	%		3.70	%
Net interest margin, fully tax
equivalent		3.69	%		3.78	%
Loan yield		4.25	%		4.28	%
Average cost of interest-bearing
liabilities (including noninterest-
bearing deposits)		0.39	%		0.26	%
Average cost of deposits
(including noninterest-bearing
deposits)		0.23	%		0.18	%

For the nine months ended September 30, 2016, net interest income increased $5.4 million, as compared to the same period in 2015, due to an $8.2 million increase in interest income, partially offset by a $2.7 million increase in interest expense. The year-to-date increase in interest income was driven by a $274.0 million, or 16.9%, increase in average loans, as compared to the same period in 2015. The $2.7 million increase in interest expense during the first nine months of 2016, as compared to the same period in 2015, was due to a $1.2 million increase in FHLB borrowing expense, a $1.0 million increase in interest expense on deposits and a $0.6 million increase in interest expense on subordinated debt. As outlined above, the increased cost of FHLB borrowings was the result of our hedged borrowings becoming fully effective, increased borrowing levels required to fund loan growth and an increase in short-term, variable rates resulting from the December 2015 federal funds interest rate increase. The increase in interest expense on deposits in the first nine months of 2016, as compared to the same period in 2015, was the result of a five basis point increase in weighted average cost and a $185.1 million increase in average balances. The increase in interest expense on subordinated debt in the first nine months of 2016, as compared to the same period in 2015, was mostly due to the newly issued $40.0 million of unsecured fixed-to-floating rate subordinated notes, discussed above.

46

The following table presents, for the periods indicated, average assets, liabilities and stockholders’ equity, as well as interest income from average interest-earning assets, interest expense from average interest-bearing liabilities and the resultant annualized yields and costs expressed in percentages. Nonaccrual loans are included in the calculation of average loans and leases while nonaccrued interest thereon is excluded from the computation of yield earned.

Table 4

		Three Months Ended September 30,
		2016						2015
		Average Balance		Interest Income or Expense	Average Yield or Cost			Average Balance		Interest Income or Expense	Average Yield or Cost
		(Dollars in thousands)
ASSETS:
Interest-earning assets:
Gross loans, net of deferred costs (1)(2)(3)
and fees (1)(2)(3)	$	2,010,622	$	22,295	4.41	%	$	1,703,218	$	17,829	4.15	%
Investment securities (1)
Taxable		276,227		1,741	2.51	%		328,834		2,064	2.49	%
Tax-exempt		130,270		971	2.97	%		89,758		719	3.18	%
Bank Stocks (4)		17,636		237	5.35	%		18,051		249	5.47	%
Other earning assets		38,012		98	1.03	%		1,946		2	0.41	%
Total interest-earning assets		2,472,767		25,342	4.08	%		2,141,807		20,863	3.86	%
Non-earning assets:
Cash and due from banks		29,266						25,594
Other assets		111,100						101,202
Total assets	$	2,613,133					$	2,268,603
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing liabilities:
Deposits:
Interest-bearing demand and NOW	$	506,179	$	170	0.13	%	$	406,413	$	110	0.11	%
Money market		431,994		297	0.27	%		367,783		217	0.23	%
Savings		154,156		43	0.11	%		143,553		40	0.11	%
Time certificates of deposit		307,113		718	0.93	%		242,080		499	0.82	%
Total interest-bearing deposits		1,399,442		1,228	0.35	%		1,159,829		866	0.30	%
Borrowings:
Repurchase agreements		23,533		13	0.22	%		22,025		11	0.20	%
Federal funds purchased (5)		1		-	0.98	%		14		-	0.77	%
Subordinated debentures		57,844		715	4.92	%		25,774		205	3.16	%
Borrowings		157,058		636	1.61	%		194,517		375	0.76	%
Total interest-bearing liabilities		1,637,878		2,592	0.63	%		1,402,159		1,457	0.41	%
Noninterest bearing liabilities:
Demand deposits		707,283						637,184
Other liabilities		14,402						12,518
Total liabilities		2,359,563						2,051,861
Stockholders' Equity		253,570						216,742
Total liabilities and stockholders' equity	$	2,613,133					$	2,268,603
Net interest income			$	22,750					$	19,406
Net interest margin					3.66	%					3.59	%

(1) Yields on loans and securities have not been adjusted to a tax-equivalent basis. Net interest margin on a fully tax-equivalent basis would have been 3.75% and 3.67% for the three months ended September 30, 2016 and September 30, 2015, respectively. The tax-equivalent basis was computed by calculating the deemed interest on municipal bonds and tax-exempt loans that would have been earned on a fully taxable basis to yield the same after-tax income, net of the interest expense disallowance under Internal Revenue Code Sections 265 and 291, using a combined federal and state marginal tax rate of 38%.

(2) The loan average balances and rates include nonaccrual loans.

(3) Net loan fees of $0.4 million and $0.2 million for the three months ended September 30, 2016 and September 30, 2015, respectively, are included in the yield computation.

(4) Includes Bankers’ Bank of the West stock, Federal Agricultural Mortgage Corporation (Farmer Mac) stock, Federal Reserve Bank stock,  Federal Home Loan Bank stock and Pacific Coast Bankers’ Bank stock.

(5) The interest expense related to federal funds purchased for the third quarter 2016 and the third quarter 2015 rounded to zero.

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Table 4 (Continued)

		Nine Months Ended September 30,
		2016						2015
		Average Balance		Interest Income or Expense	Average Yield or Cost			Average Balance		Interest Income or Expense	Average Yield or Cost
		(Dollars in thousands)
ASSETS:
Interest-earning assets:
Gross loans, net of deferred costs
and fees (1)(2)(3)	$	1,891,756	$	60,206	4.25	%	$	1,617,724	$	51,749	4.28	%
Investment securities (1)
Taxable		283,215		5,454	2.57	%		339,330		6,265	2.47	%
Tax-exempt		105,290		2,459	3.12	%		88,425		2,133	3.23	%
Bank Stocks (4)		19,560		829	5.66	%		17,023		724	5.69	%
Other earning assets		14,634		105	0.96	%		2,085		5	0.32	%
Total interest-earning assets		2,314,455		69,053	3.99	%		2,064,587		60,876	3.94	%
Non-earning assets:
Cash and due from banks		26,345						25,690
Other assets		102,907						102,671
Total assets	$	2,443,707					$	2,192,948
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing liabilities:
Deposits:
Interest-bearing demand and NOW	$	421,109	$	356	0.11	%	$	368,334	$	284	0.10	%
Money market		410,815		823	0.27	%		369,502		641	0.23	%
Savings		152,843		127	0.11	%		141,328		116	0.11	%
Time certificates of deposit		288,620		1,993	0.92	%		214,649		1,243	0.77	%
Total interest-bearing deposits		1,273,387		3,299	0.35	%		1,093,813		2,284	0.28	%
Borrowings:
Repurchase agreements		21,324		31	0.19	%		22,868		31	0.18	%
Federal funds purchased (5)		2		-	0.98	%		19		-	0.80	%
Subordinated debentures		36,542		1,165	4.26	%		25,774		606	3.14	%
Borrowings		218,677		1,992	1.22	%		184,405		832	0.60	%
Total interest-bearing liabilities		1,549,932		6,487	0.56	%		1,326,879		3,753	0.38	%
Noninterest bearing liabilities:
Demand deposits		645,249						639,694
Other liabilities		13,189						12,885
Total liabilities		2,208,370						1,979,458
Stockholders' Equity		235,337						213,490
Total liabilities and stockholders' equity	$	2,443,707					$	2,192,948
Net interest income			$	62,566					$	57,123
Net interest margin					3.61	%					3.70	%

(1) Yields on loans and securities have not been adjusted to a tax-equivalent basis. Net interest margin on a fully tax-equivalent basis would have been 3.69% and 3.78% for the nine months ended September 30, 2016 and September 30, 2015, respectively. The tax-equivalent basis was computed by calculating the deemed interest on municipal bonds and tax-exempt loans that would have been earned on a fully taxable basis to yield the same after-tax income, net of the interest expense disallowance under Internal Revenue Code Sections 265 and 291, using a combined federal and state marginal tax rate of 38%.

(2) The loan average balances and rates include nonaccrual loans.

(3) Net loan fees of $0.5 million and $1.2 million for the nine months ended September 30, 2016 and September 30, 2015, respectively, are included in the yield computation.

(4) Includes Bankers’ Bank of the West stock, Federal Agricultural Mortgage Corporation (Farmer Mac) stock, Federal Reserve Bank stock,  Federal Home Loan Bank stock and Pacific Coast Bankers’ Bank stock.

(5) The interest expense related to federal funds purchased for the nine months ended September 30, 2016 and September 30, 2015 rounded to zero.

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The following table presents the dollar amount of changes in interest income and interest expense for the major categories of our interest-earning assets and interest-bearing liabilities. Information is provided for each category of interest-earning assets and interest-bearing liabilities with respect to (i) changes attributable to volume (i.e., changes in average balances multiplied by the prior-period average rate) and (ii) changes attributable to rate (i.e., changes in average rate multiplied by prior-period average balances). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate.

Table 5

		Three Months Ended September 30, 2016 Compared to Three Months Ended September 30, 2015						Nine Months Ended September 30, 2016 Compared to Nine Months Ended September 30, 2015
		Net Change		Rate		Volume		Net Change		Rate		Volume
		(In thousands)
Interest income:
Gross Loans, net of deferred
costs and fees	$	4,466	$	1,105	$	3,361	$	8,457	$	(263)	$	8,720
Investment Securities
Taxable		(323)		9		(332)		(811)		285		(1,096)
Tax-exempt		252		(46)		298		326		(65)		391
Bank Stocks		(12)		(6)		(6)		105		(3)		108
Other earning assets		96		7		89		100		25		75
Total interest income		4,479		1,069		3,410		8,177		(21)		8,198
Interest expense:
Deposits:
Interest-bearing demand
and NOW		60		30		30		72		29		43
Money market		80		39		41		182		106		76
Savings		3		-		3		11		1		10
Time certificates of deposit		219		73		146		750		269		481
Repurchase agreements		2		1		1		-		-		-
Federal funds purchased		-		-		-		-		-		-
Subordinated debentures		510		157		353		559		257		302
Borrowings		261		316		(55)		1,160		981		179
Total interest expense		1,135		616		519		2,734		1,643		1,091
Net interest income	$	3,344	$	453	$	2,891	$	5,443	$	(1,664)	$	7,107

Provision for Loan Losses

The provision for loan losses is a charge against earnings and represents management’s estimate of the amount required to maintain the allowance for loan losses at a level that, in our judgment, is adequate to absorb probable incurred loan losses in the loan portfolio. The provision for loan losses is based on our allowance methodology and reflects our judgments about the adequacy of the allowance for loan losses. In determining the amount of the provision, we consider certain quantitative and qualitative factors, including our historical loan loss experience, the volume and type of lending we conduct, the results of our credit review process, the amounts and severity of classified, criticized and nonperforming assets, regulatory policies, general economic conditions, underlying collateral values and other factors regarding collectability and impairment. The estimated amount of expected loss in our loan portfolio is influenced by the collateral value associated with our loans. Loans with greater collateral values, as a percentage of the outstanding loan balance, reduce our exposure to loan loss provision.

In the thirdquarter 2016, we recorded an immaterial provision for loan losses, as compared to an immaterial provision for loan losses in the second quarter 2016 and an immaterial provision for loan losses in the third quarter 2015. Management considered several factors in its calculation of the adequacy of the allowance for loan losses and resulting provision required to absorb the probable incurred losses inherent in the loan portfolio as of September 30, 2016.

Net recoveries in the third quarter 2016 were $223,000, as compared to an immaterial level of net recoveries in the second quarter 2016 and an immaterial level of net recoveries in the third quarter 2015.

49

For further discussion of the methodology and factors impacting management’s estimate of the allowance for loan losses, see “Balance Sheet Analysis — Allowance for Loan Losses” below. For a discussion of impaired loans and associated collateral values, see “Balance Sheet Analysis— Nonperforming Assets and Other Impaired Loans” below.

Noninterest Income

The following table presents the major categories of noninterest income for the current quarter and prior four quarters:

Table 6

		Three Months Ended
		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015
		(In thousands)
Noninterest income:
Deposit service and other fees	$	2,581	$	2,292	$	2,169	$	2,259	$	2,309
Investment management and trust		1,333		1,276		1,280		1,225		1,292
Increase in cash surrender value of
life insurance		490		460		448		442		447
Gain (loss) on sale of securities		(66)		(101)		45		132		-
Gain on sale of SBA loans		208		110		154		143		232
Other		159		105		82		61		119
Total noninterest income	$	4,705	$	4,142	$	4,178	$	4,262	$	4,399

Third quarter 2016 noninterest income was $4.7 million, as compared to $4.1 million in the second quarter 2016 and $4.4 million in the third quarter 2015. The $0.6 million increase in noninterest income in the third quarter 2016, as compared to the second quarter 2016, was primarily due to a $0.3 million increase in deposit service and other fees, primarily generated by deposits acquired in the transaction with Home State as well as smaller increases in other categories. The $0.3 million increase in noninterest income in the third quarter 2016, as compared to the third quarter 2015, was attributable to an increase in deposit service and other fees primarily generated by deposits acquired in the transaction with Home State.

The following table presents the major categories of noninterest income for the year-to-date periods presented:

Table 7

		Nine Months Ended
		September 30, 2016		September 30, 2015
		(In thousands)
Noninterest income:
Deposit service and other fees	$	7,042	$	6,682
Investment management and trust		3,889		3,964
Increase in cash surrender value of life insurance		1,398		1,316
Loss on sale of securities		(122)		-
Gain on sale of SBA loans		472		681
Other		346		275
Total noninterest income	$	13,025	$	12,918

For the nine months ended September 30, 2016, noninterest income increased $0.1 million to $13.0 million as compared to $12.9 million for the same period in 2015.

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Noninterest Expense

The following table presents the major categories of noninterest expense for the current quarter and prior four quarters:

Table 8

		Three Months Ended
		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015
		(In thousands)
Noninterest expense:
Salaries and employee benefits	$	10,984	$	8,520	$	8,788	$	8,643	$	8,318
Occupancy expense		1,417		1,261		1,375		1,498		1,487
Furniture and equipment		750		713		818		801		740
Amortization of intangible assets		389		239		240		495		495
Other real estate owned, net		20		5		2		16		(31)
Insurance and assessment		608		597		613		603		604
Professional fees		962		906		857		700		838
Other general and administrative		3,494		2,893		3,099		2,491		2,415
Total noninterest expense	$	18,624	$	15,134	$	15,792	$	15,247	$	14,866

Noninterest expense increased $3.8 million to $18.6 million in the third 2016, as compared to $14.9 million in the third quarter 2015 and increased $3.5 million as compared to the second quarter 2016.

Noninterest expense increased by $3.8 million in the third quarter 2016, as compared to the third quarter 2015, primarily due to $2.2 million in merger-related expenses incurred in the third quarter 2016, consisting of $1.4 million in salaries and employee benefit expense related to severance and retention payments and $0.8 million in other general and administrative expenses. Excluding the severance and retention expense included in salaries and employee benefits, this category of expense increased $1.3 million, consisting of $0.8 million related to the increased number of employees as a result of the transaction with Home State and a $0.5 million increase in base salaries and employee benefit expense.

Third quarter 2016 noninterest expense increased $3.5 million, as compared to the second quarter 2016, primarily as a result of a $1.9 million increase in merger-related expenses, consisting of a $1.4 million increase in salaries and employee benefit expense related to severance and retention payments and a $0.5 million increase in other general and administrative expenses. Excluding the severance and retention expense included in salaries and employee benefits, this category of expense increased $1.1 million, mostly due to expenses related to the increase in employees subsequent to the transaction with Home State.  

The following table presents the major categories of noninterest expense for the year-to-date periods presented:

Table 9

		Nine Months Ended
		September 30, 2016		September 30, 2015
		(In thousands)
Noninterest expense:
Salaries and employee benefits	$	28,292	$	24,921
Occupancy expense		4,053		4,814
Furniture and equipment		2,281		2,206
Amortization of intangible assets		868		1,486
Other real estate owned, net		27		64
Insurance and assessment		1,818		1,795
Professional fees		2,725		2,520
Impairment of long-lived assets		-		122
Other general and administrative		9,486		7,164
Total noninterest expense	$	49,550	$	45,092

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For the nine months ended September 30, 2016, noninterest expense was $49.6 million, as compared to $45.1 million for the same period in 2015. The $4.5 million increase in noninterest expense during the first nine months of 2016, as compared to the same period in 2015, was primarily due to $3.2 million in merger-related expenses incurred during the first nine months of 2016; consisting of $1.4 million in salaries and employee benefits related to severance and retention payments and $1.8 million in other general and administrative expenses. Excluding the merger-related expenses, noninterest expense increased $1.3 million for the first nine months of 2016, as compared to the same period in 2015, due to a $2.0 million increase in salaries and employee benefits, partially offset by a $0.8 million decline in occupancy expense. The $2.0 million increase in salaries and employee benefits was due to $0.8 million related to the increased number of employees subsequent to the transaction with Home State, a $0.8 million increase in base salaries and a $0.4 million increase in the Company’s self-funded medical plan. The increase in salaries exclusive of the increase related to former Home State employees was mostly the result of new positions within our credit, wealth management and commercial lending departments. Although we added new positions within these groups, we maintained a stable level of average FTE employees during each period. The $0.8 million decrease in occupancy expense was related to a reduction in rent and depreciation expense related to the restructure of the lease for the Company’s corporate office. 

Income Taxes

Income tax expense was $3.0 million for the third quarter 2016 as compared to $2.9 million for the third quarter 2015. The increase in taxes for the third quarter 2016 was primarily a result of the impact of certain non-deductible merger-related expenses.During the third quarter 2016, our effective tax rate increased to 34.6% from approximately 32.8% for the same period in 2015. The increase in the effective tax rate was mostly due to a decrease in tax-exempt income as a percentage of total taxable and tax-exempt income as well as the non-deductible nature of certain merger-related expenses.

BALANCE SHEET ANALYSIS

The following sets forth certain key consolidated balance sheet data:

Table 10

		September 30,		June 30,		March 31,		December 31,		September 30,
		2016		2016		2016		2015		2015
		(In thousands)
Cash and cash equivalents	$	163,908	$	30,446	$	31,142	$	26,711	$	23,750
Time deposits with banks		504		-		-		-		-
Total investments		562,091		369,008		400,890		424,692		433,299
Total loans		2,412,999		1,898,543		1,830,246		1,814,536		1,726,151
Total assets		3,346,265		2,395,015		2,362,216		2,368,525		2,285,630
Earning assets		3,095,217		2,270,331		2,233,253		2,241,058		2,161,139
Deposits		2,752,112		1,847,361		1,872,717		1,801,845		1,847,329
FHLB Borrowings		122,521		261,600		205,900		280,847		151,300

At September 30, 2016, the Company had total assets of $3.3 billion, reflecting an increase of $977.7 million as compared to December 31, 2015, and an increase of $1.1 billion as compared to September 30, 2015. The increase in total assets during the first nine months of 2016 was comprised of a $598.5 million increase in loans, a $137.4 million increase in investments, a $137.2 million increase in cash and a $67.0 million increase in intangible assets related to the transaction with Home State. In addition, there were $37.6 million of combined increases in several other categories of nonearning assets. Loans acquired in the transaction with Home State during the third quarter 2016 were $445.5 million. Excluding the loans acquired from Home State, loans grew $68.9 million, or 14.4% annualized during the third quarter 2016.

As compared to September 30, 2015, the increase in total assets of $1.1 billion was primarily due to a $686.8 million increase in loans, a $128.8 million increase in investments, a $140.2 million increase in cash and a $66.5 million increase in intangible assets related to the transaction with Home State. In addition, there were $38.3 million of combined increases in several other categories of nonearning assets. 

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The following table sets forth the amount of our loans outstanding at the dates indicated:

Table 11

		September 30,		June 30,		March 31,		December 31,		September 30,
		2016		2016		2016		2015		2015
		(In thousands)
Commercial and residential real estate	$	1,752,113	$	1,428,397	$	1,307,854	$	1,281,701	$	1,196,209
Construction		75,603		26,497		87,753		107,170		92,473
Commercial		400,281		336,069		329,939		323,552		336,414
Consumer		81,766		66,539		66,829		66,288		63,517
Other		102,887		40,640		37,534		35,570		37,420
Total gross loans		2,412,650		1,898,142		1,829,909		1,814,281		1,726,033
Deferred costs		349		401		337		255		118
Loans, net		2,412,999		1,898,543		1,830,246		1,814,536		1,726,151
Less allowance for loan losses		(23,300)		(23,050)		(23,025)		(23,000)		(22,890)
Net loans	$	2,389,699	$	1,875,493	$	1,807,221	$	1,791,536	$	1,703,261

The following table presents the changes in our loan balances (including loans held for sale) at the dates indicated:

Table 12

		September 30,		June 30,		March 31,		December 31,		September 30,
		2016		2016		2016		2015		2015
		(In thousands)
Beginning balance	$	1,898,142	$	1,829,909	$	1,814,281	$	1,726,033	$	1,668,831
New credit extended		129,064		121,753		105,843		155,745		149,502
Acquired loans of Home State Bank		445,529		-		-		-		-
Net existing credit advanced		153,390		87,524		50,482		61,165		60,784
Net pay-downs and maturities		(214,089)		(142,516)		(139,914)		(129,189)		(152,279)
Charge-offs and other		614		1,472		(783)		527		(805)
Gross loans		2,412,650		1,898,142		1,829,909		1,814,281		1,726,033
Deferred costs		349		401		337		255		118
Loans, net	$	2,412,999	$	1,898,543	$	1,830,246	$	1,814,536	$	1,726,151
Net change - loans outstanding	$	514,456	$	68,297	$	15,710	$	88,385	$	57,493

During the third quarter 2016, loans net of deferred costs and fees increased $514.5 million. Loans acquired in the transaction with Home State during the third quarter 2016 were $445.5 million. Excluding the loans acquired from Home State, loans grew $68.9 million during the third quarter 2016 despite $214.1 million in net pay-downs and maturities during the quarter. In addition to contractual loan principal payments and maturities, the third quarter 2016 included $37.7 million in early payoffs related to our borrowers selling their assets, $24.3 million in payoffs due to our strategic decision to not match certain financing terms offered by competitors and $27.8 million in loan pay-downs related to fluctuations in loan balances to existing customers.

As compared to September 30, 2015, loans net of unearned fees increased by $686.8 million, or 39.8%. Excluding the loans acquired from Home State, loans grew $241.3 million, or 14.0%, during the preceding 12 months. At September 30, 2016, our commercial and residential real estate portfolio included $482.8 million of 1-4 family residential loans. The utilization rate on commercial lines of credit was 50.3% atSeptember 30, 2016, as compared to 41.2% at December 31, 2015 and 39.7% as of September 30, 2015.

Under joint guidance from the FDIC, the Federal Reserve and the Office of the Comptroller of the Currency (the “OCC”) on sound risk management practices for financial institutions with concentrations in commercial real estate lending, a financial institution may have elevated concentration risk if it has, among other factors, (i) total reported loans for construction, land development, and other land representing 100% or more of capital (CRE 1), or (ii) total reported loans secured by multifamily and non-farm residential properties, loans for construction, land development and other land and loans otherwise sensitive to the general commercial real estate market, including loans to commercial real estate related entities, representing 300% or more of total capital (CRE 2) and an increase in its commercial real estate loan portfolio of 50% or more during the preceding 36 months. For the Bank, total loans for construction, land development and land represented 39% of capital at September 30, 2016, as compared to

53

47% at December 31, 2015 and 53% atSeptember 30, 2015. For the Bank, total commercial real estate loans represented 314% of capital atSeptember 30, 2016, as compared to 356% at December 31, 2015 and 351% at September30,2015. Including $445.5 million in loans acquired in the Home State transaction, the Bank’s commercial real estate loan portfolio increased by 74.3% during the preceding 36 months. Excluding loans acquired in the transaction with Home State, the balance of commercial real estate loans increased by 48.1% during the preceding 36 months. Management employs heightened risk management practices with respect to commercial real estate lending, including board and management oversight and strategic planning, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing. Loans secured by commercial real estate are recorded on the balance sheet as either a commercial real estate loan or commercial loan depending on the purpose of the loan, regardless of the underlying collateral.

With respect to concentrations, most of our business activity is with customers in the state of Colorado. At September 30, 2016, we did not have any significant concentrations in any particular industry.

Nonperforming Assets and Other Impaired Loans

Credit risk related to nonperforming assets is inherent in lending activities. To manage this risk, we utilize routine monitoring procedures and take prompt corrective action when necessary. We employ a risk rating system that identifies the potential risk associated with loans in our loan portfolio. This monitoring and rating system is designed to help management identify current and potential problems so that corrective actions can be taken promptly.

Loans are placed on nonaccrual or charged-off prior to the date on which they would otherwise enter past due status if collection of principal or interest is considered doubtful. The interest on a nonaccrual loan is accounted for using the cost recovery or cash-basis method until the loan qualifies for a return to the accrual basis method. Generally, payments received on a nonaccrual loan are applied first to the principal balance of the loan, and then to interest, and only to the extent that the remaining recorded investment in the loan is determined to be fully collectible. A loan is returned to accrual status after the delinquent borrower’s financial condition has improved, when all the principal and interest amounts contractually due are brought current and when the likelihood of the borrower making future timely payments is reasonably assured.

A loan is impaired when, based on current information and events, it is probable that we will be unable to collect the scheduled payments when due according to the contractual terms of the underlying loan agreement. Impaired loans consist of our nonaccrual loans, loans that are 90 days or more past due and other loans for which we determine that noncompliance with contractual terms of the loan agreement is probable. Losses onindividually identified impaired loans that are not collateral dependent are measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan. For loans that are collateral dependent, impairment is measured based on the fair value of the collateral less estimated selling costs.

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The following table summarizes the loans for which the accrual of interest has been discontinued, loans with payments more than 90 days past due and still accruing interest and OREO. For reporting purposes, OREO consists of all real estate, other than bank premises, actually owned or controlled by us, including real estate acquired through foreclosure.

Table 13

		Quarter Ended
		September 30,			June 30,			March 31,			December 31,			September 30,
		2016			2016			2016			2015			2015
		(Dollars in thousands)
Originated nonaccrual loans and leases	$	3,321		$	3,797		$	3,815		$	3,762		$	3,734
Purchased nonaccrual loans and leases		2,108			-			-			-			-
Nonperforming troubled debt
restructurings		78			9,529			9,586			10,712			10,778
Accruing loans past due 90 days or more (1)		335			-			-			-			-
Total nonperforming loans	$	5,842		$	13,326		$	13,401		$	14,474		$	14,512
Other real estate owned and foreclosed
assets		637			674			674			674			1,371
Total nonperforming assets	$	6,479		$	14,000		$	14,075		$	15,148		$	15,883
Total classified assets	$	34,675		$	25,644		$	27,191		$	26,428		$	31,208
Nonperforming loans	$	5,842		$	13,326		$	13,401		$	14,474		$	14,512
Performing troubled debt restructurings		24,353			13,065			11,402			11,679			12,131
Allocated allowance for loan losses		(575)			(489)			(281)			(293)			(277)
Net carrying amount of impaired loans	$	29,620		$	25,902		$	24,522		$	25,860		$	26,366
Accruing loans past due 30-89 days (1)	$	2,157		$	2,386		$	1,398		$	2,091		$	3,461
Allowance for loan losses	$	23,300		$	23,050		$	23,025		$	23,000		$	22,890
Unaccreted discount	$	15,721		$	-		$	-		$	-		$	-
For the Three Months Ended:
Loans charged-off	$	(72)		$	(57)		$	(302)		$	(66)		$	(75)
Recoveries		295			72			311			184			101
Net recoveries	$	223		$	15		$	9		$	118		$	26
Provision (credit) for loan losses	$	27		$	10		$	16		$	(8)		$	14
Loan Portfolio Ratios:
Allowance for loan losses to loans, net
of deferred costs (2)		0.97	%		1.21	%		1.26	%		1.27	%		1.33	%
Allowance for loan losses plus unaccreted
discount to loans, net of
deferred costs (2)		1.61	%		1.21	%		1.26	%		1.27	%		1.33	%
Allowance for loan losses plus unaccreted
discount to NPLs		667.94	%		172.97	%		171.82	%		158.91	%		157.73	%
Annualized net charge-offs to average loans		(0.04)	%		-	%		-	%		(0.03)	%		(0.01)	%
Nonperforming assets to total assets		0.19	%		0.58	%		0.60	%		0.64	%		0.69	%
Nonperforming loans to loans, net
of deferred costs (2)		0.24	%		0.70	%		0.73	%		0.80	%		0.84	%
Loans 30-89 days past due to loans, net
of deferred costs (2)		0.09	%		0.13	%		0.08	%		0.12	%		0.20	%
Texas ratio (3)		1.77	%		5.17	%		5.14	%		5.65	%		6.09	%
Classified asset ratio (4)		10.69	%		10.55	%		11.56	%		11.66	%		13.51	%
________________________
(1) Past due loans include both loans that are past due with respect to payments and loans that are past due because the loan has matured, and is in the process of renewal, but continues to be current with respect to payments.
(2) Loans, net of deferred costs, exclude loans held for sale.
(3) Texas ratio defined as total NPAs divided by subsidiary bank only Tier 1 Capital plus allowance for loan losses.
(4) Classified asset ratio defined as total classified assets to subsidiary bank only Tier 1 Capital plus allowance for loan losses.

55

As of September 30, 2016, nonperforming loans decreased by $8.6 million, as compared to December 31, 2015 and decreased by $8.7 million as compared to September 30, 2015.The decrease in nonperforming loans at September 30, 2016, as compared to December 31, 2015 was primarily the result of the transfer of a $9.4 million out-of-state syndicated loan to performing status, partially offset by $2.1 million of nonperforming loans and $0.1 million of other real estate owned acquired in the Home State transaction. As of September 30, 2016, no additional funds were committed to be advanced in connection with non-performing loans.

Net recoveries of $0.2 million were recognized during the third quarter 2016 compared to immaterial net recoveries in the second quarter 2016 and third quarter 2015.

We categorize loans into risk categories of “pass”, “pass-watch”, “special mention”, “substandard”, “doubtful” and “loss”. These internal categories are based on the definitions in the Uniform Agreement on the Classification of Assets and Appraisal of Securities Held by Banks and Thrifts issued by the OCC, the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System. In particular, we consider loans that we have internally rated as substandard, doubtful or loss as adversely classified loans. The amount of accruing loans that we have internally considered to be adversely classified was $28.5 million at September 30, 2016, as compared to $11.3 million at December 31, 2015 and $15.3 million at September 30, 2015. The increase in accruing loans adversely classified as of September 30, 2016, as compared to December 31, 2015, was primarily a result of the third quarter 2016 transfer of a $9.4 million nonaccrual loan to accruing status in addition to the acquisition of classified loans in the transaction with Home State.

At September 30, 2016, classified assets represented 10.7% of bank level capital and allowance for loan losses, as compared to 11.7% as of December 31, 2015 and 13.5% as of September 30, 2015.

In addition to adversely classified loans, we have loans that are considered to be “special mention” and “pass-watch” loans. Each internal risk rating is ultimately subjective, but is based on both objective and subjective factors and criteria. The internal risk ratings focus on an evaluation of the borrowers’ ability to meet future debt service and performance to plan and considers potential adverse market or economic conditions. As described below under “Allowance for Loan Losses”, we adjust the general component of our allowance for loan losses for trends in the volume and severity of adversely classified and “pass-watch” list loans, which encompasses any loan with a classification of “pass-watch” or worse.

Other Real Estate Owned (OREO) was $0.6 million at September 30, 2016, $0.7 million at December 31, 2015 and $1.4 million at September 30, 2015. The balance of OREO at September 30, 2016 and September 30, 2015 was comprised of three separate properties, each of which was land.

As of September 30, 2016, we had $24.4 million of loans with terms that were modified in troubled debt restructurings (TDRs) with a total allocated allowance for loan loss of $0.3 million. As of December 31, 2015, we had $22.4 million of loans with terms that were modified in TDRs with a total allocated allowance for loan loss of $0.3 million. At September 30, 2016, we had $1.9 million of unfunded commitments to borrowers whose loans were classified as TDRs.

All acquired loans are initially recorded at their estimated fair value which encompasses an estimate of credit losses. The table below presents two alternative views of credit risk coverage ratios for loans, reflecting adjustments for acquired loans and the associated purchase accounting discount:

Table 14

		Loans		Allowance / Discount		Coverage Ratio
		(Dollars in thousands)
September 30, 2016 Reported Balance	$	2,412,999		23,300		0.97	%
Unaccreted net discount		15,721		15,721	1
Adjusted September 30, 2016 Balance	$	2,428,720	$	39,021		1.61	%

1 Unaccreted net discount relates to $445.5 million of acquired loans and is assigned specifically to those loans only.  The discount represents the remaining acquisition date fair value adjustment based on market, liquidity, interest rate risk and credit risk and is being accreted into interest income over the remaining life of the respective loans. Credit deterioration on acquired loans subsequent to purchase will result in recognition of additional allowance for loan losses to the extent recorded investment exceeds net realizable value.

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The following table provides the allowance for loan losses allocated to TDRs for the current quarter and the prior four quarters:

Table 15

		September 30,		June 30,		March 31,		December 31,		September 30,
		2016		2016		2016		2015		2015
		(In thousands)
Troubled Debt Restructurings (TDRs):
Performing TDRs	$	24,353	$	13,065	$	11,402	$	11,679	$	12,131
Allocated allowance for loan losses
on performing TDRs		(309)		(289)		(258)		(270)		(257)
Net investment in performing TDRs	$	24,044	$	12,776	$	11,144	$	11,409	$	11,874
Nonperforming TDRs	$	78	$	9,529	$	9,586	$	10,712	$	10,778
Allocated allowance for loan losses
on nonperforming TDRs		(1)		(1)		(2)		(6)		(2)
Net investment in nonperforming TDRs	$	77	$	9,528	$	9,584	$	10,706	$	10,776

The following provides a rollforward of TDRs for the nine month periods ended September 30, 2016 and September 30, 2015:  

Table 16

Troubled Debt Restructuring Rollforward:		Performing TDRs		Nonperforming TDRs		Total
		(In thousands)
Balance at January 1, 2015	$	14,227	$	11,676	$	25,903
Principal repayments / advances		(2,246)		(890)		(3,136)
Charge-offs, net		-		(8)		(8)
New modifications		150		-		150
Loans removed from TDR Status		-		-		-
Transfers		-		-		-
Balance at September 30, 2015	$	12,131	$	10,778	$	22,909
Balance at January 1, 2016	$	11,679	$	10,712	$	22,391
Principal repayments / advances		(1,335)		(1,126)		(2,461)
Charge-offs, net		-		-		-
New modifications		4,765		-		4,765
Loans removed from TDR Status		(164)		(100)		(264)
Transfers		9,408		(9,408)		-
Balance at September 30, 2016	$	24,353	$	78	$	24,431

Allowance for Loan Losses

The allowance for loan losses is maintained at a level that, in our judgment, is adequate to absorb probable incurred loan losses in the loan portfolio. The amount of the allowance is based on management’s evaluation of the collectability of the loan portfolio, historical loss experience and other significant factors affecting loan portfolio collectability, including credit quality, loan class concentration levels, economic conditions, loan growth dynamics and organizational conditions. Purchased loans are recorded at fair value upon acquisition, which includes an adjustment related to expected credit losses; as a result no allowance is recorded on these loans upon acquisition.  Subsequent deterioration in the credit of purchased loans will result in the recognition of an allowance on these loans beyond the discount created upon acquisition.

The ratio of allowance for loan losses to total loans was 0.97% at September 30, 2016, as compared to 1.27% at December 31, 2015 and 1.33% at September 30, 2015. The ratio of allowance for loan losses plus unaccreted discount to total loans was 1.61% at September 30, 2016.

Our methodology for evaluating the adequacy of the allowance for loan losses has two basic elements: first, the specific identification of impaired loans and the measurement of an estimated loss for each individual loan identified; and second, estimating a nonspecific allowance for probable losses incurred on all other loans.

The specific allowance for impaired loans and the allowance calculated for probable incurred losses on other loans are combined to determine the required allowance for loan losses. The amount calculated is compared to the

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recorded allowance balance at each quarter end and any shortfall is charged against income as an additional provision for loan losses. However, if the recorded allowance exceeds the amount calculated, then the difference would be credited to income as a credit provision for loan losses. For further discussion of the provision for loan losses, see “Provision for Loan Losses” above.

In estimating the allowance for probable incurred losses on other loans, we group the balance of the loan portfolio into portfolio segments that have common characteristics, such as loan type or risk rating. For each nonspecific allowance portfolio segment, we apply loss factors to calculate the required allowance based upon actual historical loss rates over a time period that we have determined represents the current credit cycle, adjusted for qualitative factors affecting loan portfolio collectability, as described above. We also look at risk ratings of loans and compute a qualitative adjustment based on our credit quality in consideration of credit quality during the historical loss period. We also consider other qualitative factors that may warrant adjustment of the computed historical loss rate, including loan growth, loan concentrations, economic considerations and organizational factors.

During the third quarter 2016, we recorded a $27,000 provision for loan losses, as compared to  an immaterial provision for loan losses in the second quarter 2016 and an immaterial provision for loan lossesin the third quarter 2015. Management considered net recoveries, the level of nonperforming loans, loan portfolio composition and loan growth in its calculation of the adequacy of the allowance for loan losses and resulting provision required to absorb the probable incurred losses inherent in the loan portfolio as of September 30, 2016.  For further discussion of the provision for loan losses, see “Provision for Loan Losses” above.

Approximately $0.6 million, or 2.5%, of the $23.3 million allowance for loan losses at September 30, 2016 relates to specific reserve allocations. This compares to a specific reserve of $0.3 million, or 1.3%, of the total allowance for loan losses at December 31, 2015.  

The general component of the allowance as a percentage of overall loans, net of unearned loan fees, was 0.94% at September 30, 2016, as compared to 1.25% at December 31, 2015 and 1.31% at September 30, 2015. The decrease in the general reserve as a percentage of loans between September 30, 2015 and September 30, 2016 was primarily due to the impact of loans acquired in the Home State transaction, which pursuant to generally accepted accounting principles, are recorded net of a fair value purchase discountupon acquisition and without an allowance for loan losses.

We monitor the allowance for loan losses closely and adjust the allowance when necessary, based on our analysis, which includes an ongoing evaluation of substandard loans and their collateral positions.

The following table provides a summary of the activity within the allowance for loan losses account for the periods presented:

Table 17  

		Nine Months Ended September 30,
		2016		2015
		(In thousands)
Balance, beginning of period	$	23,000	$	22,490
Loan charge-offs:
Commercial and residential real estate		(10)		(14)
Construction		(203)		(7)
Commercial		(63)		(1)
Consumer		(12)		(9)
Other		(143)		(141)
Total loan charge-offs		(431)		(172)
Loan recoveries:
Commercial and residential real estate		141		119
Construction		94		19
Commercial		169		146
Consumer		13		21
Other		261		163
Total loan recoveries		678		468
Net loan recoveries		247		296
Provision for loan losses		53		104
Balance, end of period	$	23,300	$	22,890

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Securities

We manage our investment portfolio principally to provide liquidity, balance our overall interest rate risk and to provide collateral for public deposits and customer repurchase agreements.

The carrying value of our portfolio of investment securities at the dates indicated were as follows:

Table 18

		September 30,		December 31,		Increase	Percent
		2016		2015		(Decrease)	Change
		(In thousands)
Securities available for sale:
U.S. government agencies	$	5,018	$	-	$	5,018	100.0	%
State and municipal		142,457		34,713		107,744	310.4	%
Mortgage-backed - agency / residential		130,544		129,017		1,527	1.2	%
Mortgage-backed - private / residential		270		274		(4)	(1.5)	%
Asset-backed		2,151		-		2,151	100.0	%
Trust preferred		-		17,806		(17,806)	(100.0)	%
Corporate		63,422		65,291		(1,869)	(2.9)	%
Collateralized loan obligations		20,487		8,330		12,157	145.9	%
Total securities available for sale	$	364,349	$	255,431	$	108,918	42.6	%
Securities held to maturity:
State and municipal		62,248		54,853		7,395	13.5	%
Mortgage-backed - agency / residential		101,915		74,536		27,379	36.7	%
Asset-backed		17,821		19,372		(1,551)	(8.0)	%
Other		1,200		-		1,200	100.0	%
Total securities held to maturity	$	183,184	$	148,761	$	34,423	23.1	%

The carrying value of our available for sale investment securities at September 30, 2016 was $364.3 million as compared to the December 31, 2015 carrying value of $255.4 million. The $108.9 million increase in available for sale securities from December 31, 2015 was primarily a result of the acquisition of approximately $396.5 million in securities in the transaction with Home State and the subsequent sale of the majority of these securities prior to September 30, 2016. The Company sold the majority of Home State’s investment portfolio prior to September30,2016 in order to fund anticipated growth in earning assets, reduce borrowing levels and mitigate interest rate risk.

The carrying value of our held to maturity securities at September 30, 2016 was $183.2 million as compared to $148.8 million at December 31, 2015.

At September 30, 2016 and December 31, 2015, our investment securities portfolio had an average effective duration of approximately 4.7 years and 5.1 years, respectively.

The fair values of our securities are determined through the utilization of evaluated pricing models that vary by asset class and incorporate available market information. The evaluated pricing models apply available information as applicable through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. These models assess interest rate impact, develop prepayment scenarios and take into account market conventions. Standard inputs into these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

Six municipal bond issuances were priced using significant unobservable inputs as of September 30, 2016, the largest of which is a revenue bond issued by the Colorado Health Facilities Authority with a par value of $24.1 million and repayment supported by cash flows from a local hospital. We reviewed the financials of the hospital, had discussions with hospital management and reviewed the underlying collateral of the municipal bond to determine an appropriate benchmark risk-adjusted interest rate based on bonds with similar risks. Utilizing the discounted cash flow method and an estimate of current market rates for similar bonds, management determined that the estimated fair value of this bond as of September 30, 2016 was equal to its par value.

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At September 30, 2016 and December 31, 2015, we held $14.6 million and $20.5 million, respectively, of other equity securities consisting primarily of bank stocks with no maturity date, which are not reflected in Table 18above. Bank stocks are comprised of stock of the Federal Reserve Bank of Kansas City, the Federal Home Loan Bank of Topeka, Bankers’ Bank of the West and Pacific Coast Bankers’ Bank. These stocks have restrictions placed on their transferability as only members of the entities can own the stock. We review the equity securities quarterly for potential impairment. No impairment has been recognized on these equity securities.

Deposits

The following table sets forth the amounts of our deposits outstanding at the dates indicated:

Table 19

		At September 30, 2016				At December 31, 2015
		Balance	% of Total			Balance	% of Total
		(Dollars in thousands)
Noninterest-bearing demand	$	857,064	31.14	%	$	612,371	33.99	%
Interest-bearing demand and NOW		802,043	29.14	%		381,834	21.19	%
Money market		554,447	20.15	%		397,371	22.05	%
Savings		160,698	5.84	%		151,130	8.39	%
Time		377,860	13.73	%		259,139	14.38	%
Total deposits	$	2,752,112	100.00	%	$	1,801,845	100.00	%

Total deposits increased $950.3 million at September 30, 2016, as compared to December 31, 2015, including $769.7 million in deposits acquired in the Home State transaction. Excluding deposits acquired in the Home State transaction, deposits increased by $180.6 million, or 13.4%, in the first nine months of 2016. Excluding the deposits acquired in the Home State transaction, non-maturing deposits increased $145.9 million during the first nine months of 2016 as a result of seasonal cash fluctuations of various commercial customers in addition to new customer relationships. Excluding time deposits acquired in the Home State transaction, time deposits increased $34.6 million in the first nine months of 2016 due in part to a $22.4 million increase in our brokered CDs and a successful in-market retail time deposit campaign. Because of the current low interest-rate environment, and because of the span of time since the last period of increasing interest rates, we are uncertain what impact, if any, rising interest rates would have on our deposit base.

Noninterest-bearing deposits as a percentage of total deposits were approximately 31.1% at September 30, 2016, as compared to 34.0% at December 31, 2015. Noninterest-bearing deposits help reduce overall funding costs; however, due to the extremely low rate environment, the impact of noninterest-bearing deposits on the overall cost of funds is currently less significant than in a higher rate environment.

Time deposit balances comprised 13.7% of total deposits at September 30, 2016. The majority of the time deposit balance represented deposits of local customers, with $100.8 million representing brokered deposits, as compared to $78.4 million at December 31, 2015. We monitor time deposit maturities and renewals on a daily basis and will raise rates on local time deposits if necessary to grow such deposits.

Securities Sold under Agreement to Repurchase

At September 30, 2016, securities sold under agreements to repurchase were $35.9 million, an increase of $9.5 million as compared to December 31, 2015, and an increase of $5.8 million as compared to September30,2015. Securities sold under agreements to repurchase acquired in the transaction with Home State were $20.0 million as of September 8, 2016.

Borrowings and Subordinated Debentures

At September 30, 2016, our FHLB borrowings were $122.5 million as compared to $280.8 million at December 31, 2015 and $151.3 million at September 30, 2015. At September 30, 2016, borrowings consisted of $122.5 million in term notes. At December 31, 2015, our FHLB borrowings consisted of $95.0 million in term notes and $185.8 million in line of credit advances. The total FHLB commitment, including balances outstanding, at September 30, 2016 and December 31, 2015 was $831.6 million and $454.7 million, respectively.

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Under an advance, pledge and security agreement with the FHLB, the Bank had additional borrowing capacity of approximately $709.2 million atSeptember 30, 2016, which can be utilized for term and/or line of credit advances.

The FHLB term borrowings at September 30, 2016 consisted of four fixed-rate term notes and two variable-rate term notes. A $20.0 million, fixed-rate term advance matures on January 23, 2018 with an interest rate of 2.52% and is convertible on a quarterly basis by the FHLB to a variable rate borrowing. If the note is converted by the FHLB, we have the option to prepay the advance without penalty. A $50.0 million, fixed-rate term advance with an interest rate of 0.63% matured on October 24, 2016.The remaining two fixed rate term notes of $695,000 and $1,740,000 have maturity dates of April 10, 2017 and August 30, 2017, respectively. The notes were acquired in the transaction with Home State and have an unamortized fair value premium of approximately $86,000 as of September 30, 2016.A $25.0 million, variable-rate term advance with a current interest rate of 0.87% matures on August 4, 2017. A $25.0 million, variable-rate term advance with a current interest rate of 1.03% matures on March 7, 2017. We expect that both $25.0 million, variable-rate term advances will be renewed annually for the next four years given their direct relationship to our five year forward starting balance sheet swaps initiated in June 2013 and February 2014. The rates on the variable-rate term notes reset quarterly. The interest rate on our FHLB line of credit borrowing is variable and was 0.53% at September 30, 2016, however no balance was outstanding our line of credit as of September 30, 2016.

At September 30, 2016 the balance of the Company’s outstanding subordinated debentures (the “Debentures”) was $65.0 million, comprised of $65.8 million in in debt, partially offset by $0.8 million in debt issuance costs. At December 31, 2015 the balance of the Company’s Debentures was $25.8 million. As of September 30, 2016, the Company's Debentures bore a weighted average cost of funds of 4.87%.  

The Company’s Debentures were issued in three separate series. The first two issuances have maturities of 30 years from the date of issuance. These two issuances of Debentures were issued to trusts established by the Company, which in turn issued $25.0 million of trust preferred securities (“TruPS”). Generally, and with certain limitations, the Company is permitted to call the Debentures subsequent to the first five or ten years, as applicable, after issuance, if certain conditions are met, or at any time upon the occurrence and continuation of certain changes in either the tax treatment or the capital treatment of the trusts, the Debentures or the preferred securities. The Guaranty Capital Trust III TruPS became callable at each quarterly interest payment date starting on July 7, 2008. The CenBank Trust III TruPS became callable at each quarterly interest payment date starting on April 15, 2009.

The third issuance was executed on July 18, 2016 in anticipation of the transaction with Home State, in order to fund the cash consideration to be paid to Home State shareholders in conjunction with the transaction. The issuance was comprised of $40.0 million of 5.75% Fixed-to-Floating Rate Subordinated Notes (the “Notes”) due July 20, 2026. The Notes will initially bear a fixed interest rate of 5.75% per annum, payable semi-annually in arrears. On July 20, 2021, and, thereafter, the interest on the Notes will be payable quarterly in arrears, at an annual floating rate equal to three-month LIBOR as determined by the applicable quarterly period, plus 4.73%.

In April 2016, we entered into a credit agreement for a $10.0 million holding company line of credit with Wells Fargo Bank, National Association.  This line of credit is secured with the holding company’s stock in the Bank.The line of credit matures on March 17, 2017. Under the credit agreement,  we can elect a fixed or floating interest rate on each advance. As of September 30, 2016 no amounts had been borrowed on this line of credit.

Capital Resources

Current risk-based regulatory capital standards generally require banks and bank holding companies to maintain a ratio of Common Equity Tier 1 capital to risk-weighted assets of at least 4.50%, Tier 1 capital to risk-weighted assets of at least 6.00%, a ratio of Tier 1 capital to average total assets (leverage ratio) of at least 4.00% and a ratio of total capital (which includes Tier 1 capital plus certain forms of subordinated debt, a portion of the allowance for loan and lease losses and preferred stock) to risk-weighted assets of at least 8.00%. However, under the final rule on Enhanced Regulatory Capital Standards, commonly referred to as Basel III, which became effective in the first quarter 2015, a capital conservation buffer of 2.5%, comprised of Common Equity Tier 1, is established above the regulatory minimum capital requirement. The capital conservation buffer will be phased in between January 1, 2016 and year end 2018, becoming fully effective on January 1, 2019, however the fully phased-in capital conservation buffer is included in the table below.

The Bank made the one-time AOCI opt-out election on its March 31, 2015 Call Report, which allowed community banks under $250 billion,who made the one-time opt-out election, to remove the impact of certain

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unrealized gains and losses from the calculation of regulatory capital. There is no opportunity to change methodology in future periods.

Risk-weighted assets are calculated by multiplying the balance in each category of assets by a risk factor, which ranges from zero for cash assets and certain government obligations to 150% for some loans, and adding the products together.

For regulatory purposes, we maintain capital above the minimum core standards. We actively monitor our regulatory capital ratios to ensure that the Company and the Bank are more than “well capitalized” under the applicable regulatory framework. Under these regulations, a bank is considered “well capitalized” if the institution has a Common Equity Tier 1 risk-based capital ratio of 6.5% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a total risk-based capital ratio of 10.0% or greater and a leverage ratio of 5.0% or greater, and is not subject to any order or written directive by any such regulatory authority to meet and maintain a specific capital level for any capital measure. The Bank is required to maintain similar capital levels under capital adequacy guidelines. At September 30, 2016, each of the Bank’s capital ratios was above the regulatory capital threshold of “well capitalized”.

The following table provides the capital ratios of the Company and the Bank as of the dates presented, along with the applicable regulatory capital requirements.  

Table 20

	Ratio at September 30, 2016		Ratio at December 31, 2015		Ratio at September 30, 2015		Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer		Minimum Requirement for "Well-Capitalized" Institution
Common Equity Tier 1 Risk-Based
Capital Ratio
Consolidated	10.79	%	10.94	%	11.05	%	7.00	%	N/A
Guaranty Bank and Trust Company	12.74	%	11.96	%	11.94	%	7.00	%	6.50	%
Tier 1 Risk-Based Capital Ratio
Consolidated	11.72	%	12.11	%	12.23	%	8.50	%	N/A
Guaranty Bank and Trust Company	12.74	%	11.96	%	11.94	%	8.50	%	8.00	%
Total Risk-Based Capital Ratio
Consolidated	14.07	%	13.24	%	13.39	%	10.50	%	N/A
Guaranty Bank and Trust Company	13.61	%	13.09	%	13.10	%	10.50	%	10.00	%
Leverage Ratio
Consolidated	12.40	%	10.68	%	10.75	%	4.00	%	N/A
Guaranty Bank and Trust Company	13.48	%	10.55	%	10.50	%	4.00	%	5.00	%

At September 30,  2016, all of our regulatory capital ratios remain well above minimum requirements for a “well-capitalized” institution. The Company’s consolidated Tier 1 risk-based capital ratio decreased relative to December 31, 2015 whereas the Company’s total risk-based capital ratios increased compared to December 31, 2015. The transaction with Home State was financed through the issuance of $40.0 million in fixed-to-floating rate subordinated notes, which qualified for treatment as Tier 2 capital and by the issuance of common stock valued at $117.5 million, which qualified as Common Equity Tier 1 capital.

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Dividends

Holders of voting common stock are entitled to dividends out of funds legally available for such dividends, when, and if, declared by the Board of Directors. Beginning in May 2013, we paid cash dividends of two and one-half cents per share to stockholders on a quarterly basis through November 2013. Beginning in February 2014, we increased the cash dividend to five cents per share on a quarterly basis through November 2014. Beginning in February 2015, we increased the cash dividend to ten cents per share on a quarterly basis through November 2015.In February 2016, we increased the quarterly cash dividendto 11 and one half cents per share.

Our ability to pay dividends is subject to the restrictions of the Delaware General Corporation Law. Because we are a bank holding company with no significant assets other than our bank subsidiary, we currently depend upon dividends from our bank subsidiary for the majority of our revenues. Various banking laws applicable to the Bank limit the payment of dividends, management fees and other distributions by the Bank to the holding company, and may therefore limit our ability to pay dividends on our common stock. Under these laws, the Bank is currently required to request permission from the Federal Reserve prior to payment of a dividend to the holding company.

Under the terms of each of our two outstanding trust preferred financings, including our related subordinated debentures, which occurred on June 30, 2003 and April 8, 2004, respectively, we cannot declare or pay any dividends or distributions (other than stock dividends) on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares of our capital stock if (i) an event of default under any of the subordinated debenture agreements has occurred and is continuing, or (ii) we defer payment of interest on the TruPS for a period of up to 60 consecutive months. At September 30, 2016, there was no event of default under the subordinated debenture agreements and interest payments on our two trust preferred financings were current.

Any future determination relating to dividend policy will be made at the discretion of our Board of Directors and will depend upon a number of factors, including general business conditions, our financial results, our future business prospects, capital requirements, contractual, legal, and regulatory restrictions on the payment of dividends by us to our stockholders or by the Bank to the holding company, and such other factors as our Board of Directors may deem relevant.

Contractual Obligations and Off-Balance Sheet Arrangements

The Bank is a party to credit-related financial instruments with off-balance sheet risk entered into in the normal course of business to meet the financing needs of the Bank’s customers. These financial instruments include commitments to extend credit, standby letters of credit and commercial letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

Our exposure to credit loss is represented by the contractual amount of these commitments. We follow the same credit policies in making commitments as we do for on-balance sheet instruments.

At the dates indicated, the following commitments were outstanding:

Table 21

		September 30, 2016		December 31, 2015
		(In thousands)
Commitments to extend credit:
Variable	$	419,370	$	307,463
Fixed		94,078		61,184
Total commitments to extend credit	$	513,448	$	368,647
Standby letters of credit	$	10,429	$	8,857

Liquidity

The Bank relies upon deposits as its principal source of funds and therefore must be in a position to service depositors’ needs as they arise. Fluctuations in the account balances of a few large depositors may cause temporary

63

increases and decreases in liquidity from time to time. We deal with such fluctuations by using other sources of liquidity, as discussed below.

The Bank’s initial sources of liquidity are its liquid assets. At September 30, 2016, the Company had $163.9 million of cash and cash equivalents. Further, the Bank had $6.1 million in excess pledging related to customer accounts that required collateral and $165.0 million of unencumbered securities that were available for pledging to our FHLB line at September 30, 2016.  

When the level of our liquid assets does not meet our liquidity needs, other available sources of liquid assets, including the purchase of federal funds, sales of loans, including jumbo mortgage loans, brokered and internet certificates of deposit, one-way purchases of certificates of deposit through the Certificates of Deposit Account Registry Service, discount window borrowings from the Federal Reserve and our lines of credit with the FHLB and other correspondent banks, are employed to meet current and presently anticipated funding needs. At September 30, 2016, the Bank had approximately $709.2 million of availability on its FHLB line, $50.8 million of availability on its secured and unsecured federal funds lines with correspondent banks and $3.6 million of availability with the Federal Reserve discount window.

At September 30, 2016, the Bank had $115.8 million of brokered deposits, of which $15.0 million were money markets, $6.5 million will mature in the fourth quarter 2016, $13.3 million will mature in the second quarter 2017, $15.8 million will mature in the third quarter 2017, $5.0 million will mature in the fourth quarter 2017, $42.1 million will mature during 2018 and $18.1 million will mature during 2019 and 2020. As of December 31, 2015, the Bank maintained $78.4 million in brokered deposits. We continue to evaluate new brokered deposits as a source of low-cost, longer-term funding.

The holding company relies primarily on cash flow from the Bank as its source of liquidity. The holding company requires liquidity for the payment of interest on the subordinated debentures, for operating expenses, principally salaries and benefits, for repurchases of our common stock, and, if declared by our Board of Directors, for the payment of dividends to our stockholders. The Bank pays a management fee for its share of expenses paid by the holding company as well as for services provided by the holding company. As discussed in the “Capital Resources” section above, various banking laws applicable to the Bank limit the payment of dividends by the Bank to the holding company and may therefore limit our ability to pay dividends on our common stock. Under these laws, the Bank is currently required to request permission from the Federal Reserve prior to payment of a dividend to the Company. Under the terms of our TruPS financings, we may defer payment of interest on the subordinated debentures and related TruPS for a period of up to 60 consecutive months as long as we are in compliance with all covenants of the agreement.  

As of September 30,  2016, the holding company had approximately $11.5 million of cash on hand, which we expect will be sufficient to fund holding company operations and projected quarterly external stockholder dividends at the current rate through the remainder of 2016. In April 2016, the holding company entered into a credit agreement with Wells Fargo Bank, National Association for a $10.0 million secured line of credit. The line of credit is secured with the holding company’s stock in the Bank. At September 30, 2016, there were no funds drawn on the line of credit.

Application of Critical Accounting Policies and Accounting Estimates

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” discusses the Company’s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the rules and regulations of the SEC. The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates on an ongoing basis its estimates and judgments. Management bases its estimates and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which have formed the basis for making such judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from the recorded estimates under different assumptions or conditions. A summary of critical accounting policies and estimates are listed in the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of the Company’s Annual Report on Form 10-K for thefiscal year ended December 31, 2015.  There have been no changes during 2016 to the critical accounting policies listed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.  

64

ITEM3. Quantitative and Qualitative Disclosure about Market Risk

Market risk is the risk of loss in a financial instrument arising from adverse changes in market prices and rates, foreign currency exchange rates, commodity prices and equity prices. Our market risk arises primarily from interest rate risk inherent in our lending, investing and deposit taking activities. To that end, management actively monitors and manages our interest rate risk exposure. We have not entered into any market risk sensitive instruments for trading purposes. We manage our interest rate sensitivity by matching the repricing opportunities on our earning assets to those on our funding liabilities. In order to manage the repricing characteristics of our assets and liabilities, we use various strategies designed to ensure that our exposure to interest rate fluctuations is limited in accordance with our guidelines of acceptable levels of risk-taking. Balance sheet hedging strategies, including monitoring the terms and pricing of loans and deposits and managing the deployment of our securities, are used to reduce mismatches in interest rate repricing between our portfolio of assets and their funding sources.

Net Interest Income Modeling

Our Asset Liability Management Committee, or ALCO, oversees our exposure to and mitigation of interest rate risk and, along with our Board of Directors, reviews our exposure to interest rate risk at least quarterly. The committee is composed of members of our senior management. The ALCO monitors interest rate risk by analyzing the potential impact on the net portfolio value and net interest income from potential changes in interest rates, and considers the impact of alternative strategies or changes in balance sheet structure. The ALCO manages our balance sheet in part to minimize the potential impact of changes in interest rates on net portfolio value and net interest income.

Interest rate risk exposure is measured using interest rate sensitivity analysis to evaluate fluctuations in net portfolio value and net interest income in the event of hypothetical changes in interest rates. If potential changes to net portfolio value and net interest income from hypothetical interest rate changes are not within the limits approved by the Board of Directors, the Board may direct management to adjust the Bank’s mix of assets and liabilities to bring interest rate risk within these limits.

We monitor and evaluate our interest rate risk position on at least a quarterly basis using net interest income simulation analysis under 100, 200 and 300 basis point change scenarios (see below). Each of these analyses measures different interest rate risk factors inherent in the financial statements.

Our primary interest rate risk measurement tool, the “Net Interest Income Simulation Analysis”, measures interest rate risk and the effect of hypothetical interest rate changes on net interest income. This analysis incorporates all of our assets and liabilities together with forecasted changes in the balance sheet and assumptions that reflect the current interest rate environment. Through these simulations, we estimate the impact on net interest income of an immediate change in market rates of 100, 200 and 300 basis points upward or downward, over a one year period. Assumptions are made to project rates for new loans and deposits based on historical analysis, our outlook and repricing strategies. Asset prepayments and other market risks are developed from industry estimates of prepayment speeds and other market changes. Since the results of these simulations can be significantly influenced by the assumptions on which the simulations rely, we also evaluate the sensitivity of simulation results to changes in underlying assumptions.

65

The following table shows the projected net interest income increase or decrease over the 12 monthsfollowing September 30, 2016 and September 30, 2015:

Table 22

Market Risk:
		Annualized Net Interest Income
		September 30, 2016		September 30, 2015
		Amount of Change		Amount of Change
		(In thousands)
Rates in Basis Points
300	$	2,752	$	1,331
200		3,284		1,028
100		1,691		400
Static		-		-
(100)		(1,512)		(874)
(200)		(876)		(698)
(300)		N/M		N/M
N/M = not meaningful

Overall, we believe our balance sheet is mildly asset sensitive; i.e. that a change in interest rates would have a greater impact on our assets than on our liabilities. At September 30, 2016, we are positioned to have a short-term favorable impact to net interest income in the event of an immediate 300, 200 or 100 basis point increase in market interest rates. Our asset sensitivity is mostly due to the amount of variable rate loans on the books and is partially mitigated by interest rate floors, or minimum rates: as rates rise, the loan rate may continue to be at the minimum rate. We also anticipate that deposit rates, other than time deposit rates, would increase immediately in a rising rate environment, but at a reduced magnitude. Additionally, the interest rates paid on our FHLB line of credit advances would increase immediately as well. The primary reason that the benefit to net interest income is reduced between the 200 and 300 basis point increase in market interest rates is because we assume that our $20 million FHLB convertible term advance would be called by the FHLB in the event that market interest rates increased by 300 basis points. In addition to performing net interest income modeling, we also monitor the impact an instantaneous change in interest rates would have on our economic value of equity. We anticipate a reduction in the economic value of equity in a rising rate environment as the reduction in the value of our fixed rate earning assets would outweigh the corresponding increase in value of our low cost deposits. As of September 30, 2016, our asset sensitivity had increased relative toSeptember 30, 2015, primarily as a result of the recent transaction with Home State.

We estimate that our net interest income would decline in a 100 or 200 basis point falling rate environment. This is consistent with our belief that our balance sheet is asset sensitive. At September 30, 2016, it is not possible for the majority of our deposit rates to fall 100 to 300 basis points since most deposit rates were already below 100 basis points. At September 30, 2016, the loss of gross interest income in a falling interest rate environment is expected to exceed the corresponding reduction in interest expense in a falling rate environment. We believe that this scenario is unlikely. The target federal funds rate is currently set by the Federal Open Market Committee of the Federal Reserve Board at a rate of between 25 and 50 basis points and the prime rate has historically been set at a rate of 300 basis points over the target federal funds rate. Our interest rate risk modeling assumes that the prime rate would continue to be set at a rate of 300 basis points over the target federal funds rate; therefore, a 200 basis point decline in overall rates would only result in a 25 to 50 basis point decline in both target federal funds rate and the prime rate. Further, other rates that are currently below 1% or 2% (e.g. short-term U.S. Treasuries and LIBOR) are modeled to not fall below 0% with an overall 100 or 200 basis point decrease in rates. Many of our variable rate loans are set to an index tied to the prime rate, the target federal funds rate or LIBOR, therefore, a further decrease in rates would likely not have a substantial impact on loan yields.

66

ITEM 4.  Controls and Procedures

The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended [the “Exchange Act”] ) as of September 30, 2016. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective at September 30, 2016.  

The Company’s disclosure controls and procedures were designed to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 15d-15(f) under the Exchange Act) during the fiscal quarter ended September 30, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

67

PART II—OTHER INFORMATION

ITEM 1.  Legal Proceedings

The Company and the Bank are defendants, from time-to-time, in legal actions at various points of the legal process arising from transactions conducted in the ordinary course of business. Management believes that, after consultation with legal counsel, it is not probable that the outcome of current legal actions will result in a liability that would have a material adverse effect on the Company’s consolidated financial position, results of operations, comprehensive income or cash flows. In the event that such a legal action results in an unfavorable outcome, the resulting liability could have a material adverse effect on the Company’s consolidated financial position, results of operations, comprehensive income or cash flows.

ITEM 1A. Risk Factors

There have been no material changes from risk factors as previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.

(b) Not applicable.

(c) The following table provides information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our voting common stock during the third quarter 2016.

				Shares Purchased	Remaining
				under	Repurchase
	Total Shares		Average Price	Publicly Announced	Authority
	Purchased (1)		Paid per Share	Repurchase Plan	in Shares
July 1 to July 31	465	$	17.20	-	1,000,000
August 1 to August 31	-		-	-	1,000,000
September 1 to September 30	967		17.87	-	1,000,000
	1,432	$	17.65	-	1,000,000

_______________________

(1) These shares relate to the net settlement by employees related to vested, restricted stock awards and do not impact the 1,000,000 shares available for repurchase under the repurchase plan originally announced on April 3, 2014, which is scheduled to expire April 2, 2017. Net settlements represent instances where employees elect to satisfy their income tax liability related to the vesting of restricted stock through the surrender of a proportionate number of the vested shares to the Company.

ITEM 3.  Defaults Upon Senior Securities

Not applicable.

ITEM 4.  Mine Safety Disclosure

Not applicable.

ITEM 5.  Other Information

Not applicable.

68

ITEM 6.		Exhibits
Exhibit Number			Description
2.1			Agreement and Plan of Reorganization dated March 16, 2016 (incorporated by reference to Exhibit 2.1 to the Registrant’s form 8-K filed on March 16, 2016).
3.1			Second Amended and Restated Certification of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on August 12, 2009).
3.2			Certificate of Amendment to the Registrant’s Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on October 3, 2011).
3.3			Certificate of Amendment to the Registrant’s Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q filed on July31, 2013).
3.4*			Certificate of Amendment to the Registrant’s Second Amended and Restated Certificate of Incorporation.
3.5			Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K filed on May 7, 2008).
31.1*			Section 302 Certification of Chief Executive Officer.
31.2*			Section 302 Certification of Chief Financial Officer.
32.1*			Section 906 Certification of Chief Executive Officer.
32.2*			Section 906 Certification of Chief Financial Officer.
101.INS	XBRL Interactive Data File**
101.SCH	XBRL Interactive Data File**
101.CAL	XBRL Interactive Data File**
101.LAB	XBRL Interactive Data File**
101.PRE	XBRL Interactive Data File**
101.DEF	XBRL Interactive Data File**

* Filed with this Quarterly Report on Form 10-Q.

** This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

69

SIGNATURES

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

i
Dated: November 9, 2016	GUARANTY BANCORP
	/s/  CHRISTOPHER G. TREECE
	Christopher G. Treece
	Executive Vice President, Chief Financial Officer and Secretary (Principal Financial Officer)

70

EX-3.4

CERTIFICATE OF AMENDMENT

OF

SECOND AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

GUARANTY BANCORP

GUARANTY BANCORP, a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “Company”), does hereby certify:

1.That at a meeting of the Board of Directors of the Company, a resolution was duly adopted setting forth the proposed amendment of the Second Amended and Restated Certificate of Incorporation of the Company, declaring said amendment to be advisable and directing that the proposed amendment be considered at a meeting of the stockholders of the Company. The resolution setting forth the proposed amendment is as follows:

RESOLVED, that the first paragraph of Article FOURTH of the Company’s Second Amended and Restated Certificate of Incorporation, as amended, is hereby amended in its entirety to read as follows:

“FOURTH. The total number of shares of all classes of stock that the corporation shall have authority to issue is 50,000,000, of which 38,750,000 shares of the par value of one-tenth of one cent ($0.001) per share shall be a separate class designated as Voting Common Stock (“Voting Common Stock”), 1,250,000 shares of the par value of one-tenth of one cent ($0.001) shall be a separate class designated as Non-Voting Common Stock (“Non-Voting Common Stock,” and together with Voting Common Stock, “Common Stock”) and 10,000,000 shares of the par value of one-tenth of one cent ($0.001) shall be a separate class designated as Preferred Stock.”

2.That, pursuant to resolution of its Board of Directors, a meeting of the stockholders of the Company was duly called and held upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares as required by statute was voted in favor of the amendment.

3.The foregoing amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation law of the State of Delaware.

IN WITNESS WHEREOF, the Company has caused this certificate to be signed by its duly authorized officer on this 2nd day of September 2016.

GUARANTY BANCORP
By:	/s/ Paul W. Taylor
Name: Paul W. Taylor
Tide: President and Chief Executive Officer

EX-31.1

Exhibit 31.1

Section 302 Certification

I, Paul W. Taylor, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter endedSeptember 30, 2016 of Guaranty Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects,  the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the registrant’s internal control over financial reporting.

Dated:  November 9, 2016

/s/  Paul W. Taylor

Paul W. Taylor

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Section 302 Certification

I, Christopher G. Treece, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter endedSeptember 30, 2016of Guaranty Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to statea material fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,fairly present in all material respects, the financial condition, results of operations and cash flows of theregistrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  November 9, 2016

/s/  Christopher G. Treece

Christopher G. Treece

Executive Vice President, Chief Financial Officer and Secretary

EX-32.1

Exhibit 32.1

Section 906 Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), the undersigned officer of Guaranty Bancorp (the “Company”) hereby certifies to his individual knowledge that (1) the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016(the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and (2) that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 9, 2016

	/s/Paul W. Taylor
Name:	Paul W. Taylor
Title:	President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

Section 906 Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), the undersigned officer of Guaranty Bancorp (the “Company”) hereby certifies to his individual knowledge that (1) the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and (2) that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 9, 2016

	/s/Christopher G. Treece
Name:	Christopher G. Treece
Title:	Executive Vice President, Chief Financial Officer and Secretary

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and is not being filed as part of the Report or as a separate disclosure document.

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 07, 2016
Document And Entity Information [Abstract]
Entity Registrant Name	Guaranty Bancorp
Entity Central Index Key	0001324410
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		28,349,107
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3

XML

Condensed Consolidated Balance Sheets - USD ($)		Sep. 30, 2016	Dec. 31, 2015
Assets
Cash and due from banks		$ 163,908,000	$ 26,711,000
Time deposits with banks		504,000
Securities available for sale, at fair value		364,349,000	255,431,000
Securities held to maturity (fair value of $188,353 and $150,122 at September 30, 2016 and December 31, 2015)		183,184,000	148,761,000
Bank stocks, at cost		14,558,000	20,500,000
Total investments		562,091,000	424,692,000
Loans, held for investment, net of deferred costs		2,412,999,000	1,814,536,000
Less allowance for loan losses		(23,300,000)	(23,000,000)
Net loans, held for investment		2,389,699,000	1,791,536,000
Premises and equipment, net		68,779,000	48,308,000
Other real estate owned and foreclosed assets		637,000	674,000
Goodwill		56,148,000
Other intangible assets, net		16,005,000	5,173,000
Bank-owned life insurance		65,030,000	48,909,000
Other assets		23,464,000	22,522,000
Total assets		3,346,265,000	2,368,525,000
Deposits:
Noninterest-bearing demand		857,064,000	612,371,000
Interest-bearing demand and NOW		802,043,000	381,834,000
Money market		554,447,000	397,371,000
Savings		160,698,000	151,130,000
Time		377,860,000	259,139,000
Total deposits		2,752,112,000	1,801,845,000
Securities sold under agreements to repurchase and federal funds purchased		35,936,000	26,477,000
Federal Home Loan Bank term notes		122,521,000	95,000,000
Federal Home Loan Bank line of credit borrowing			185,847,000
Subordinated debentures		64,973,000	25,774,000
Interest payable and other liabilities		19,363,000	11,943,000
Total liabilities		2,994,905,000	2,146,886,000
Stockholders' equity:
Common stock	[1]	31,000	24,000
Additional paid-in capital - common stock		831,400,000	712,310,000
Accumulated deficit		(372,495,000)	(382,147,000)
Accumulated other comprehensive loss		(2,936,000)	(4,805,000)
Treasury stock, at cost, 2,344,909 and 2,287,744 shares, respectively		(104,640,000)	(103,743,000)
Total stockholders' equity		351,360,000	221,639,000
Total liabilities and stockholders' equity		$ 3,346,265,000	$ 2,368,525,000

[1] Common stock-$0.001 par value; 40,000,000 shares authorized; 30,694,016 shares issued and 28,349,107 shares outstanding at September 30, 2016 (includes 564,376 shares of unvested restricted stock); 30,000,000 shares authorized; 23,992,596 shares issued and 21,704,852 shares outstanding at December 31, 2015 (includes 590,755 shares of unvested restricted stock).

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Condensed Consolidated Balance Sheets [Abstract]
Securities held to maturity, Fair value	$ 188,353	$ 150,122
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	40,000,000	30,000,000
Common stock, shares issued	30,694,016	23,992,596
Common stock, shares outstanding	28,349,107	21,704,852
Common stock, unvested restricted stock	564,376	590,755
Treasury stock, shares	2,344,909	2,287,744

XML

Condensed Consolidated Statements Of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Interest income:
Loans, including costs and fees	$ 22,295	$ 17,829	$ 60,206	$ 51,749
Investment securities:
Taxable	1,741	2,064	5,454	6,265
Tax-exempt	971	719	2,459	2,133
Dividends	237	249	829	724
Federal funds sold and other	98	2	105	5
Total interest income	25,342	20,863	69,053	60,876
Interest expense:
Deposits	1,228	866	3,299	2,284
Securities sold under agreement to repurchase and federal funds purchased	13	11	31	31
Borrowings	636	375	1,992	832
Subordinated debentures	715	205	1,165	606
Total interest expense	2,592	1,457	6,487	3,753
Net interest income	22,750	19,406	62,566	57,123
Provision for loan losses	27	14	53	104
Net interest income, after provision for loan losses	22,723	19,392	62,513	57,019
Noninterest income:
Deposit service and other fees	2,581	2,309	7,042	6,682
Investment management and trust	1,333	1,292	3,889	3,964
Increase in cash surrender value of life insurance	490	447	1,398	1,316
Loss on sale of securities	(66)		(122)
Gain on sale of SBA loans	208	232	472	681
Other	159	119	346	275
Total noninterest income	4,705	4,399	13,025	12,918
Noninterest expense:
Salaries and employee benefits	10,984	8,318	28,292	24,921
Occupancy expense	1,417	1,487	4,053	4,814
Furniture and equipment	750	740	2,281	2,206
Amortization of intangible assets	389	495	868	1,486
Other real estate owned, net	20	(31)	27	64
Insurance and assessments	608	604	1,818	1,795
Professional fees	962	838	2,725	2,520
Impairment of long-lived assets				122
Other general and administrative	3,494	2,415	9,486	7,164
Total noninterest expense	18,624	14,866	49,550	45,092
Income before income taxes	8,804	8,925	25,988	24,845
Income tax expense	3,043	2,923	9,007	8,282
Net income	$ 5,761	$ 6,002	$ 16,981	$ 16,563
Earnings per common share-basic:	$ 0.25	$ 0.28	$ 0.78	$ 0.79
Earnings per common share-diluted:	0.25	0.28	0.77	0.78
Dividends declared per common share:	$ 0.12	$ 0.10	$ 0.35	$ 0.30
Weighted average common shares outstanding-basic	22,811,386	21,076,380	21,750,153	21,061,445
Weighted average common shares outstanding-diluted	22,957,268	21,224,989	21,965,047	21,215,435

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Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidated Statements Of Comprehensive Income [Abstract]
Net income	$ 5,761	$ 6,002	$ 16,981	$ 16,563
Changes in net unrealized gains (losses) on available for sale securities during the period excluding the change attributable to available for sale securities reclassified to held to maturity	645	1,706	3,434	906
Changes in net unrealized gains (losses) on available for sale securities during the period excluding the change attributable to available for sale securities reclassified to held to maturity, Income tax effect	(245)	(648)	(1,305)	(344)
Change in unamortized loss on available for sale securities reclassified into held to maturity securities	105	108	326	307
Change in unamortized loss on available for sale securities reclassified into held to maturity securities, Income tax effect	(41)	(41)	(125)	(117)
Reclassification adjustment for net losses (gains) included in net income during the period	66		122
Reclassification adjustment for net losses (gains) included in net income during the period, Income tax effect	(25)		(46)
Change in fair value of derivatives during the period	379	(1,290)	(1,554)	(1,769)
Change in fair value of derivatives during the period, Income tax effect	(144)	490	591	672
Reclassification adjustment of losses (gains) on derivatives during the period	259	82	687	82
Reclassification adjustment of losses (gains) on derivatives during the period, Income tax effect	(98)	(31)	(261)	(31)
Other comprehensive income (loss)	901	376	1,869	(294)
Total comprehensive income	$ 6,662	$ 6,378	$ 18,850	$ 16,269

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Condensed Consolidated Statements Of Changes In Stockholders' Equity - USD ($) $ in Thousands	Common Stock Shares Outstanding [Member]	Common Stock and Additional Paid-in Capital [Member]	Treasury Stock [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Balance at Dec. 31, 2014		$ 709,365	$ (103,127)	$ (396,172)	$ (3,127)	$ 206,939
Balance (in shares) at Dec. 31, 2014	21,628,873
Net income				16,563		16,563
Other comprehensive income (loss)					(294)	(294)
Stock compensation awards, net of forfeitures (in shares)	121,759
Stock based compensation, net		2,094				2,094
Tax effect of restricted stock vestings		151				151
Repurchase of common stock			(329)			(329)
Repurchase of common stock (in shares)	(22,430)
Dividends paid				(6,321)		(6,321)
Balance at Sep. 30, 2015		711,610	(103,456)	(385,930)	(3,421)	218,803
Balance (in shares) at Sep. 30, 2015	21,728,202
Balance at Dec. 31, 2015		712,334	(103,743)	(382,147)	(4,805)	$ 221,639
Balance (in shares) at Dec. 31, 2015	21,704,852					21,704,852
Net income				16,981		$ 16,981
Other comprehensive income (loss)					1,869	1,869
Issuance of common stock for acquisition of Home State Bancorp net of issuance costs (in shares)	6,533,756
Issuance of common stock for acquisition of Home State Bancorp net of issuance costs		116,468				116,468
Stock compensation awards, net of forfeitures (in shares)	167,664
Stock based compensation, net		2,304				2,304
Tax effect of restricted stock vestings		325				325
Repurchase of common stock			(897)			(897)
Repurchase of common stock (in shares)	(57,165)
Dividends paid				(7,329)		(7,329)
Balance at Sep. 30, 2016		$ 831,431	$ (104,640)	$ (372,495)	$ (2,936)	$ 351,360
Balance (in shares) at Sep. 30, 2016	28,349,107					28,349,107

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Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income	$ 16,981	$ 16,563
Reconciliation of net income to net cash from operating activities:
Depreciation and amortization	2,739	3,478
Net amortization and accretion	593	752
Provision for loan losses	53	104
Impairment of long-lived assets		122
Stock compensation, net	2,304	2,094
Dividends on bank stocks	(459)	(377)
Increase in cash surrender value of life insurance	(1,121)	(1,081)
Gain on sale of securities and SBA loans	(350)	(681)
Landlord cash allowance		654
Gain on the sale of other assets	(14)
Origination of SBA loans with intent to sell	(4,510)	(5,264)
Proceeds from the sale of SBA loans originated with intent to sell	5,613	7,093
Loss, net and valuation adjustments on real estate owned	104	32
Net change in:
Interest receivable and other assets	817	1,267
Net deferred income tax assets	150	1,976
Interest payable and other liabilities	2,670	(855)
Net cash from operating activities	25,570	25,877
Activity in available for sale securities:
Sales, maturities, prepayments, calls and redemptions	388,820	29,120
Purchases	(99,363)	(8,561)
Activity in held to maturity securities and bank stocks:
Maturities, prepayments and calls	20,521	15,454
Purchases	(46,305)	(19,566)
Loan originations and purchases, net of principal collections	(151,834)	(185,738)
Purchase of bank-owned life insurance contracts	(15,000)	(5,000)
Proceeds from sale of other assets	2,204	1,293
Proceeds from sales of other real estate owned and foreclosed assets		772
Proceeds from sale of SBA loans transferred to held for sale	229	589
Additions to premises and equipment	(1,142)	(4,619)
Cash paid in acquisition, net of cash received	(23,930)	(1,457)
Net cash from investing activities	74,200	(177,713)
Cash flows from financing activities:
Net change in deposits	180,564	162,005
Net change in borrowings on Federal Home Loan Bank line of credit	(187,899)	(84,000)
Proceeds from Federal Home Loan Bank term advances	25,000	75,000
Proceeds from issuance of subordinated debt, net of issuance costs	39,199
Cash dividends on common stock	(7,329)	(6,321)
Tax effect of restricted stock vesting	325	147
Net change in repurchase agreements and federal funds purchased	(10,527)	(3,357)
Repurchase of common stock	(897)	(329)
Payment of stock issuance costs related to acquisition	(1,009)
Net cash from financing activities	37,427	143,145
Net change in cash and cash equivalents	137,197	(8,691)
Cash and cash equivalents, beginning of period	26,711	32,441
Cash and cash equivalents, end of period	$ 163,908	23,750
Supplemental disclosure of noncash activities:
Reclassification of available for sale securities into held to maturity		$ 49,084

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Organization, Operations And Basis Of Presentation

9 Months Ended

Sep. 30, 2016

Organization, Operations And Basis Of Presentation [Abstract]

Organization, Operations And Basis Of Presentation

GUARANTY BANCORP AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

(1) Organization, Operations and Basis of Presentation

Guaranty Bancorp is a bank holding company registered under the Bank Holding Company Act of 1956, as amended, and headquartered in Colorado.

The Company’s principal business is to serve as a holding company for its bank subsidiary, Guaranty Bank and Trust Company, referred to as the “Bank”.

References to “Company,” “us,” “we,” and “our” refer to Guaranty Bancorp on a consolidated basis. References to “Guaranty Bancorp” or to the “holding company” refer to the parent company on a stand-alone basis.

The Bank is a full-service community bank offering an array of banking products and services to the communities it serves along the Front Range of Colorado including: accepting time and demand deposits, originating commercial loans, commercial and residential real estate loans, Small Business Administration (“SBA”) guaranteed loans and consumer loans. The Bank, together with its wholly owned subsidiaries Private Capital Management, LLC (“PCM”) and Cherry Hills Investment Advisors, Inc. (“CHIA”), provides wealth management services, including private banking, investment management and trust services. Substantially all of the Bank’s loans are secured by specific items of collateral, including business assets, commercial and residential real estate, which include land or improved land and consumer assets. Commercial loans are generally expected to be repaid from cash flow from the operations of businesses that have taken out the loans. There are no significant concentrations of loans to any one industry or customer. On September 8, 2016, the Company completed the previously announced transaction with Home State Bancorp (“Home State”) in exchange for a combination of Company stock and cash.  Based in Loveland, Colorado Home State serves the banking needs of businesses and consumer customers in northern Colorado.

(a)Basis of Presentation

The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America. All material intercompany balances and transactions have been eliminated in consolidation. The Company’s financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of its financial position and results of operations for the periods presented. All such adjustments are of a normal and recurring nature. Subsequent events have been evaluated through the date of financial statement issuance.

Certain information and note disclosures normally included in consolidated financial statements, prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The interim operating results presented in these financial statements are not necessarily indicative of operating results for the full year. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2015.

(b)Business Combinations

The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair value upon the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine the fair values of assets acquired and liabilities assumed. Any excess of purchase price over amounts allocated to the acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill.

(c)Use of Estimates

The preparation of the consolidated financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated balance sheets and income and expense for the periods presented. Actual results could differ significantly from those estimates.

(d)Loans and Loan Commitments

The Company’s loan portfolio includes originated and purchased loans. The Company extends commercial, real estate, agricultural and consumer loans to customers. A substantial portion of the loan portfolio consists of commercial and real estate loans made to borrowers located throughout the Front Range of Colorado. The ability of the Company’s borrowers to honor their contracts is generally dependent upon the real estate and general economic conditions prevailing in Colorado, among other factors.

Originated and purchased loans for which there was no evidence of credit deterioration upon acquisition and for which collection of all contractually required payments upon acquisition was considered probable are referred to collectively as non-purchased credit impaired loans, or “Non-PCI” loans. Purchased loans for which there was at the acquisition date evidence of credit deterioration since origination and for which collection of all contractually required payments was not probable were designated as and referred to as purchased credit impaired or “PCI” loans. In the September 8, 2016 transaction with Home State, the Company designated $2,108,000 of loans as PCI.

Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding unpaid principal balances, adjusted for charge-offs, the allowance for loan losses, acquisition-related discount and any deferred fees or costs. Acquired loans are recorded upon acquisition at fair value, with no associated allowance for loan loss. However, if subsequent to acquisition the credit quality of an acquired loan deteriorates, an allowance may be required. Accounting for loans is performed consistently across all portfolio segments and classes.

A portfolio segment is defined in accounting guidance as the level at which an entity develops and documents a systematic methodology to determine its allowance for loan losses. A class is defined in accounting guidance as a group of loans having similar initial measurement attributes, risk characteristics and methods for monitoring and assessing risk.

Interest income is accrued on the unpaid principal balance of the Company’s loans. Loan origination fees, net of direct origination costs, are deferred and recognized as an adjustment to the related loan yield using the effective interest method without anticipating prepayments. Purchase discount or premium on acquired, Non-PCI loans is recognized as an adjustment to interest income over the contractual life of such loans using the effective interest method, or taken into income when the related loans are paid off or sold. With respect to PCI loans, the “accretable yield”, calculated as the excess of undiscounted expected cash flows at acquisition over the fair value at acquisition, is accreted into income over the term of the loan assuming the amount and timing of cash flows are reasonably estimable.

The accrual of interest on loans is discontinued (and the loan is put on nonaccrual status) at the time the loan is 90 days past due unless the loan is well secured and in process of collection. The time at which a loan enters past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off prior to the date on which they would otherwise enter past due status if collection of principal or interest is considered doubtful. The interest on a nonaccrual loan is accounted for using the cost-recovery or cash-basis method until the loan qualifies for a return to the accrual-basis method. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero, with payments received being applied first to the principal balance of the loan. Under the cash-basis method, interest income is recognized when the payment is received in cash. A loan is returned to accrual status after the delinquent borrower’s financial condition has improved, when all the principal and interest amounts contractually due are brought current and when the likelihood of the borrower making future timely payments is reasonably assured.

Financial instruments include off‑balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The face amount of each item represents the Company’s total exposure to loss with respect to the item before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

(e)Allowance for Loan Losses and Allowance for Unfunded Commitments

The allowance for loan losses, or “the allowance”, is a valuation allowance for probable incurred loan losses and is reported as a reduction of outstanding loan balances.

Management evaluates the amount of the allowance on a regular basis based upon its periodic review of the collectability of the Company’s loans. Factors affecting the collectability of the loans include the nature and volume of the loan portfolio, adverse situations that may affect borrowers’ ability to repay, estimated value of any underlying collateral, prevailing economic conditions and historical loss experience.  This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Management maintains the allowance at a level that it deems appropriate to adequately provide for probable incurred losses in the loan portfolio and other extensions of credit. The Company’s methodology for estimating the allowance is consistent across all portfolio segments and classes of loans.

Loans deemed to be uncollectible are charged off and deducted from the allowance. The Company’s loan portfolio primarily consists of non-homogeneous commercial and real estate loans where charge-offs are considered on a loan-by-loan basis based on the facts and circumstances, including management’s evaluation of collateral values in comparison to book values on collateral-dependent loans. Charge-offs on smaller balance unsecured homogenous type loans, such as overdrafts and ready reserves, are recognized by the time the loan in question is 90 days past due. The provision for loan losses and recoveries on loans previously charged-off are added to the allowance.

The allowance consists of both specific and general components. The specific component relates to loans that are individually classified as impaired. All loans are subject to individual impairment evaluation should the pertinent facts and circumstances suggest that such evaluation is necessary. Factors considered by management in determining impairment include the loan’s payment status and the probability of collecting scheduled principal and interest payments when they become due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the original underlying loan agreement.Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. If a loan is impaired, a portion, if any, of the allowance is allocated so that the loan is reported at the present value of estimated future cash flows using the loan’s original contractual rate or at the fair value of collateral, less estimated selling costs, if repayment is expected solely from collateral. Troubled debt restructurings (“TDRs”) are separately identified for impairment disclosures. If a TDR is considered to be a collateral-dependent loan, impairment of the loan is measuredusing the fair value of the collateral, less estimated selling costs. Likewise, if a TDR is not collateral-dependent, impairment is measured using the present value of estimated future cash flows discounted by the loan’s effective rate at inception. For TDRs that subsequently default, the Company determines the amount of reserve in accordance with its accounting policy for the allowance.

The general component of the allowance covers originated loans not specifically identified as impaired and is determined by calculating losses recognized by portfolio segment during the current credit cycle and adjusted based on management’s evaluation of various qualitative factors.In performing this calculation, loans are aggregated into one of three portfolio segments: Real Estate, Consumer and Commercial & Other. An assessment of risks impacting loans in each of these portfolio segments is performed and qualitative adjustment factors, which will adjust the historical loss rate, are estimated. These qualitative adjustment factors consider current conditions relative to conditions present throughout the current credit cycle in the following areas: credit quality, loan class concentration levels, economic conditions, loan growth dynamics and organizational conditions. The historical loss experience is adjusted for management’s estimate of the impact of these factors based on the risks present for each portfolio segment.

The Company recognizes a liability in relation to unfunded commitments that is intended to represent the estimated future losses on commitments. In calculating the amount of this liability, management considers the amount of the Company’s off-balance sheet commitments, estimated utilization factors and loan specific risk factors. The Company’s liability for unfunded commitments is calculated quarterly and the liability is included under “other liabilities” in the consolidated balance sheet.

(f)Goodwill and Other Intangible Assets

Goodwill was recorded in the transaction with Home State on September 8, 2016 and represents the excess of the purchase price over the fair value of acquired tangible assets, identifiable intangible assets and liabilities. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified.

Intangible assets acquired in a business combination are amortized over their estimated useful lives to their estimated residual values and evaluated for impairment whenever changes in circumstances indicate that such an evaluation is necessary.

Core deposit intangible assets (“CDI assets”) are recognized at the time of their acquisition based on valuations prepared by independent third parties or other estimates of fair value. In preparing such valuations, management considers variables such as deposit servicing costs, attrition rates and market discount rates. CDI assets are amortized to expense over their useful lives, ranging from 10 years to 15 years.

Customer relationship intangible assets are recognized at the time of their acquisition based upon management’s estimate of their fair value. In preparing their valuation, management considers variables such as growth in existing customer base, attrition rates and market discount rates. The customer relationship intangible assets are amortized to expense over their estimated useful life, which has been estimated to be 10 years. As of September 30, 2016, the Company had recognized three customer relationship intangible assets as a result of the acquisitions of PCM on July 31, 2012, CHIA on July 16, 2014 and Home State Bancorp (“Home State”) on September 8, 2016.

(g)Derivative Instruments

The Company records all derivatives on its consolidated balance sheets at fair value. At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the derivative’s likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). To date, the Company has entered into cash flow hedges and stand-alone derivative agreements but has not entered into any fair value hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same periods during which the hedged transaction impacts earnings. Any portion of the cash flow hedge not deemed highly effective in hedging the changes in expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings as noninterest income.

The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions, at the inception of the derivative contract. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the hedge is highly effective in offsetting changes in cash flows of the hedged items.

(h)Stock Incentive Plan

The Company’s Amended and Restated 2005 Stock Incentive Plan (the “Incentive Plan”) provided for the grant of equity-based awards representing up to a total of 1,700,000 shares of voting common stock to key employees, nonemployee directors, consultants and prospective employees. The Incentive Plan expired by its terms on April 4, 2015. At the Company’s annual meeting of stockholders on May 5, 2015, the Company’s stockholders approved the Guaranty Bancorp 2015 Long-Term Incentive Plan (the “2015 Plan”), which had been previously approved by the Company’s Board of Directors. The 2015 Plan provides for the grant of stock options, stock awards, stock unit awards, performance stock awards, stock appreciation rights and other equity-based awards representing up to a total of 935,000 shares of voting common stock to key employees, nonemployee directors, consultants and prospective employees. All awards issued under the Incentive Plan will remain outstanding in accordance with their terms despite the expiration of the Incentive Plan; however, any awards granted subsequent to the expiration of the Incentive Plan have been, and will continue to be, issued under the 2015 Plan.

As of September 30, 2016, the Company had granted stock awards under both the Incentive Plan and the 2015 Plan. The Company recognizes stock compensation expense for services received in a share-based payment transaction over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The compensation cost of employee and director services received in exchange for stock awards is based on the grant date fair value of the award, as determined by quoted market prices. Stock compensation expense is recognized using an estimated forfeiture rate, adjusted as necessary to reflect actual forfeitures. The Company has issued stock awards that vest based on the passage of time over service periods of one to five years (in some cases vesting in annual installments, in other cases cliff vesting at the end of the service period) and other stock awards that vest contingent upon the satisfaction of certain performance conditions. The last date on which outstanding performance stock awards may vest is February 14, 2019. Compensation cost related to the performance stock awards is recognized based on an evaluation of financial performance in comparison to established criteria. Should expectations of future financial performance change, the amount of expense recognized in future periods could be impacted.

(i)Stock Repurchase Plan

On February 2, 2016, the Company’s Board of Directors authorized the extension of the expiration date of the Company’s share repurchase program originally announced in April 2014. The repurchase program had been scheduled to expire 12 months from the date of its announcement and, as extended, the program is scheduled to expire on April 2, 2017. Pursuant to the program, the Company may repurchase up to 1,000,000 shares of its voting common stock, par value $0.001 per share. As of the date of this filing, the Company had not repurchased any shares under the program.

(j)Income Taxes

Income tax expense is the total of the current year’s income tax payable or refundable and the increase or decrease in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of the enactment date.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that the Company will not realize some portion of or the entire deferred tax asset. In assessing the Company’s likelihood of realizing deferred tax assets, management evaluates both positive and negative evidence, including the existence of any cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry-back years, forecasts of future income, taking into account applicable tax planning strategies and assessments of current and future economic and business conditions. Management performs this analysis quarterly and adjusts as necessary. At September 30, 2016 and December 31, 2015, the Company had a net deferred tax asset of $3,451,000 and$7,912,000, respectively, which includes the deferred tax asset (liability) associated with the net unrealized loss (gain) on securities and interest rate swaps. After analyzing the composition of, and changes in, the deferred tax assets and liabilities and considering the Company’s forecasted future taxable income and various tax planning strategies, including the intent to hold the securities available for sale that were in a loss position until maturity, management determined that as of September 30, 2016, it was “more likely than not” that the net deferred tax asset would be fully realized. As a result, there was no valuation allowance with respect to the Company’s deferred tax asset as of September 30, 2016 or December 31, 2015.  

The Company and the Bank are subject to U.S. federal income tax and state of Colorado income tax. Generally, the Company is no longer subject to examination by Federal taxing authorities for years before 2012 and is no longer subject to examination by the State for years before 2011. The Company recognizes interest related to income tax matters as interest expense and penalties related to income tax matters as other noninterest expense. At September 30, 2016 and December 31, 2015, the Company did not have any amounts accrued for interest or penalties.

(k)Earnings per Common Share

Basic earnings per common share represents the earnings allocable to common stockholders divided by the weighted average number of common shares outstanding during the period. Dilutive common shares that may be issued by the Company represent unvested stock awards subject to a service or performance condition.

Earnings per common share have been computed based on the following calculation of weighted average shares outstanding:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Average common shares outstanding	22,811,386	21,076,380	21,750,153	21,061,445
Effect of dilutive unvested stock grants (1)	145,882	148,609	214,894	153,990
Average shares outstanding for calculated
diluted earnings per common share	22,957,268	21,224,989	21,965,047	21,215,435
_____________

(1)Unvested stock grants representing 564,376 shares at September 30, 2016 had a dilutive impact of 145,882 and 214,894 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2016, respectively. Unvested stock grants representing 651,275 shares at September 30, 2015 had a dilutive impact of 148,609 and 153,990 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2015, respectively.

(l)Recently Issued Accounting Standards

Adoption of New Accounting Standards:

In April 2015, the FASB issued accounting standards update 2015-03 modifying the presentation of debt issuance costs. The update requires that debt issuance costs be presented as a direct reduction of debt balances on the balance sheet. For public business entities, the amendments of this update are effective for interim and annual periods beginning after December 15, 2015.  As a result of this update the Company has presented debt issuance costs as a reduction of the related debt balance on the Company’s Balance Sheet.

In September 2015, the FASB issued accounting standards update 2015-16 Simplifying the Accounting for Measurement-Period Adjustments. The update requires acquirers to adjust provisional amounts identified during the measurement period in the reporting period in which the adjustments are determined, rather than retrospectively adjusting previously reported information. Additional disclosure of the impact of measurement period adjustments on current year earnings will also be required. For public business entities, the amendments of this update are effective for interim and annual periods beginning after December 15, 2015. This update does not have a material impact on the Company’s financial position, results of operations or cash flows.

Recently Issued but not yet Effective Accounting Standards:

In May 2014, the FASB issued accounting standards update 2014-09 Revenue from Contracts with Customers. The main provisions of the update require the identification of performance obligations within a contract and require the recognition of revenue based on a stand-alone allocation of contract revenue to each performance obligation. Performance obligations may be satisfied and revenue recognized over a period of time if: (i) the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs, or (ii) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (iii) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. The amendments of the update are to be effective for public entities beginning with interim and annual reporting periods beginning after December 15, 2017. Management does not expect the requirements of this update to have a material impact on the Company’s financial position, results of operations or cash flows.

In January 2016, the FASB released accounting standards update 2016-01 Recognition and Measurement of Financial Assets and Liabilities. The main provisions of the update are to eliminate the available for sale classification of accounting for equity securities and to adjust the fair value disclosures for financial instruments carried at amortized costs such that the disclosed fair values represent an exit price as opposed to an entry price. The provisions of this update will require that equity securities be carried at fair market value on the balance sheet and any periodic changes in value will be adjustments to the income statement. A practical expedient is provided for equity securities without a readily determinable fair value, such that these securities can be carried at cost less any impairment. The provisions of this update become effective for interim and annual periods beginning after December 15, 2017. Management does not expect the requirements of this update to have a material impact on the Company’s financial position, results of operations or cash flows.

In February 2016, the FASB issued accounting standards update 2016-02 Leases. The update requires all leases, with the exception of short-term leases that have contractual terms no greater than one year, to be recorded on the balance sheet. Under the provisions of the update, leases classified as operating will be reflected on the balance sheet with the recognition of both a right-of-use asset and a lease liability. Under the update, a distinction will exist between finance and operating type leases and the rules for determining which classification a lease will fall into are similar to existing rules. For public business entities, the amendments of this update are effective for interim and annual periods beginning after December 15, 2018. The update requires a modified retrospective transition under which comparative balance sheets from the earliest historical period presented will be revised to reflect what the financials would have looked like were the provisions of the update applied consistently in all prior periods. Management is in the process of evaluating the impacts of the update on the Company’s financial position and does not expect the requirements of the update to have a material impact on the Company’s results of operations or cash flows.

In March 2016, the FASB issued accounting standards update 2016-09 Compensation-Stock Compensation. The purpose of the update was to simplify the accounting for share-based payment transactions, including the income tax consequences of such transactions. Under the provisions of the update the income tax consequences of excess tax benefits and deficiencies should be recognized in income tax expense in the reporting period in which the awards vest. Currently, excess tax benefits or deficiencies impact stockholder’s equity directly to the extent there is a cumulative excess tax benefit. In the event that a tax deficiency has occurred during the reporting period and a cumulative excess tax benefit does not exist, the tax deficiency is recognized in income tax expense under current GAAP. The update also provides that entities may continue to estimate forfeitures in accounting for stock based compensation or recognize them as they occur. The provisions of this update become effective for interim and annual periods beginning after December 15, 2016. The update requires a modified retrospective transition under which a cumulative effect to equity will be recognized in the period of adoption. Management is in the process of evaluating the impact of the update on the Company’s financial position, results of operations and cash flows.

In June 2016, the FASB issued accounting standards update 2016-13 Financial Instruments - Credit Losses, commonly referred to as “CECL”. The provisions of the update eliminate the probable initial recognition threshold under current GAAP which requires reserves to be based on an incurred loss methodology. Under CECL reserves required for financial assets measured at amortized cost will reflect an organization’s estimate of all expected credit losses over the contractual term of the financial asset and thereby require the use of reasonable and supportable forecasts to estimate future credit losses. Because CECL encompasses all financial assets carried at amortized cost, the requirement that reserves be established based on an organization’s reasonable and supportable estimate of expected credit losses extends to held to maturity (“HTM”) debt securities. Under the provisions of the update credit losses recognized on available for sale (“AFS”) debt securities will be presented as an allowance as opposed to a write-down. In addition, CECL will modify the accounting for purchased loans, with credit deterioration since origination, so that reserves are established at the date of acquisition for purchased loans. Under current GAAP a purchased loan’s contractual balance is adjusted to fair value through a credit discount and no reserve is recorded on the purchased loan upon acquisition. Since under CECL reserves will be established for purchased loans at the time of acquisition the accounting for purchased loans is made more comparable to the accounting for originated loans. Finally, increased disclosure requirements under CECL require organizations to present the currently required credit quality disclosures disaggregated by the year of origination or vintage. The FASB expects that the evaluation of underwriting standards and credit quality trends by financial statement users will be enhanced with the additional vintage disclosures. For public business entities that are SEC filers the amendments of the update will become effective beginning January 1, 2020. Management is in the process of evaluating the impact of CECL on the Company’s financial position, results of operations and cash flows as well as its required disclosures.

In August 2016, the FASB issued accounting standards update 2016-15, Statement of Cash Flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this update are effective for fiscal years and interim periods beginning after December 15, 2017; however early adoption is permitted. Management is currently in the process of evaluating the impact of the update on the Company’s statement of cash flows.

(m)Reclassifications

Certain reclassifications of prior year balances have been made to conform to the current year presentation. These reclassifications had no impact on the Company’s consolidated financial position, results of operations or cash flows.

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Business Combination

9 Months Ended

Sep. 30, 2016

Business Combination [Abstract]

Business Combination

(2)Business Combination

On March 16, 2016, the Company entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) with Home State, a Colorado state chartered bank headquartered in Loveland, Colorado whereby Home State would merge into the Company. The transaction closed on September 8, 2016 with an aggregate transaction value of $152,478,000.  The Merger Agreement provided that, subject to certain conditions, Home State shareholders would receive 6,533,756 shares of Company voting common stock valued at $117,477,000 based on the Company’s closing stock price on September 8, 2016 of $17.98, in addition to $35,001,000 in cash.

The Company believes that the transaction will enhance its liquidity and its market share in northern Colorado.

Home State’s results of operations have been included in the Company’s results of operations beginning September 9, 2016, however, it is impracticable to provide separate information on Home State’s revenues and income subsequent to September 8, 2016 due to changes in the consolidated balance sheet.Pre-tax merger expenses of $2,205,000 and $3,227,000were included in the Company’s results of operations for the three and nine months ended September 30, 2016. Of the $2,205,000 in pre-tax merger expenses incurred in the three months ended September 30, 2016, $1,389,000 was included in salaries and employee benefits expense, while $816,000 was included in other general and administrative expense.  Of the $3,227,000 in pre-tax merger expenses incurred in the nine months ended September 30, 2016, $1,389,000 was included in salaries and employee benefits expense, while $1,838,000 was included in other general and administrative expense.  In addition to merger-related costs recognized as expense, the Company incurred debt-issuance and stock-issuance costs of $801,000 and $1,009,000, respectively, as of September 30, 2016.  Debt-issuance costs were recorded as a reduction to subordinated debentures and stock-issuance costs were recorded as a reduction to additional paid in capital on the Company’s balance sheet.

Goodwill of $56,148,000 was recognized in the transaction and represents expected synergies and cost savings resulting from combining the operations of Home State with the Company. Due to the tax-free structure of the transaction, goodwill is not deductible for tax purposes. The fair values of assets acquired and liabilities assumed at acquisition is preliminary and pending receipt of final valuations. Additionally, preliminary valuations of Home State’s deferred tax assets are subject to adjustment, pending completion of the “stub” period return, covering Home State’s operations from January 1, 2016 through September 8, 2016.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the September 8, 2016 transaction with Home State:

Assets acquired:
		(In thousands)
Cash and cash equivalents	$	11,849
Time deposits with banks		504
Securities available-for-sale		396,450
Securities held-to-maturity		850
Bank stocks		1,355
Net Loans		445,529
Premises and equipment, net		23,460
Other real estate owned		67
Goodwill		56,148
Other intangible assets, net		11,701
Other assets		8,244
Total assets acquired		956,157
Liabilities assumed:
Deposits		769,709
Securities sold under agreement to repurchase and federal funds purchased		19,985
Federal Home Loan Bank term notes		2,525
Federal Home Loan Bank line of credit borrowing		2,052
Other liabilities		9,408
Total liabilities assumed		803,679
Net assets acquired	$	152,478

The fair value of net assets acquired includes fair value adjustments to certain loans that were considered impaired as of the acquisition date. The fair value adjustments were determined using discounted expected cash flows. Acquired loans that evidence credit deterioration since origination, for which the acquirer does not expect to collect all contractual cash flows are designated as PCI upon acquisition. The gross contractual amount of loans identified as PCI as of the acquisition date totaled $2,834,000, however, contractual cash flows not expected to be collected as of acquisition date on these PCI loans totaled $531,000, representing 18.7% of their contractual balance.  Additionally, PCI loans had an interest rate fair value adjustment as of September 8, 2016 of $195,000 bringing the net fair value to $2,108,000 as of September 8, 2016. Cash flows on PCI loans cannot be reliably estimated and as a result these loans have been designated as nonaccrual. Loans that were not designated PCI at acquisition had a fair value of $443,423,000 and a contractual balance of $458,014,000 as of September 8, 2016. The credit component of the fair value adjustment on non-PCI loans as of acquisition totaled$8,358,000, representing 1.8% of their contractual balances. No allowance for loan losses related to acquired loans was brought over as a result of the Home State transaction. The composition of Home State’s portfolio as of September 8, 2016 is detailed in the table below:

		September 30,
		2016
		(In thousands)
Commercial and residential real estate	$	294,069
Construction		39,947
Commercial		45,996
Agricultural		7,906
Consumer		16,460
SBA		25,227
Other		15,924
Total gross loans		445,529

The following tables present pro-forma financial information as if the transaction occurred as of January 1, 2015. The pro-forma information includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction and the related tax effects. The unaudited pro forma financial information has been adjusted to exclude one-time expenses related to the transaction. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on January 1, 2015.  

		Three Months Ended September 30,
		2016		2015
UNAUDITED		(Dollars in thousands, except per share data)
Net interest income	$	28,832	$	27,134
Noninterest income		6,124		6,309
Net income		8,419		8,940
Earnings per common share-basic:	$	0.30	$	0.32
Earnings per common share-diluted:	$	0.30	$	0.32

		Nine Months Ended September 30,
		2016		2015
UNAUDITED		(Dollars in thousands, except per share data)
Net interest income	$	84,004	$	80,182
Noninterest income		19,326		18,190
Net income		25,503		23,265
Earnings per common share-basic:	$	0.92	$	0.84
Earnings per common share-diluted:	$	0.91	$	0.84

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Securities

9 Months Ended

Sep. 30, 2016

Securities [Abstract]

Securities

(3)Securities

The fair value of available for sale debt securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) (“AOCI”) were as follows at the dates presented:

	September 30, 2016
		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
		(In thousands)
Securities available for sale:
U.S. government agencies	$	5,018	$	-	$	-	$	5,018
State and municipal		142,457		257		(376)		142,576
Mortgage-backed - agency / residential		130,544		887		(256)		129,913
Mortgage-backed - private / residential		270		-		(5)		275
Asset-backed		2,151		-		(1)		2,152
Corporate		63,422		648		(456)		63,230
Collateralized loan obligations		20,487		11		(62)		20,538
Total securities available for sale	$	364,349	$	1,803	$	(1,156)	$	363,702

	December 31, 2015
		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
		(In thousands)
Securities available for sale:
State and municipal	$	34,713	$	20	$	-	$	34,693
Mortgage-backed - agency / residential		129,017		1,081		(1,929)		129,865
Mortgage-backed - private / residential		274		-		(10)		284
Trust preferred		17,806		100		(2,294)		20,000
Corporate		65,291		660		(389)		65,020
Collateralized loan obligations		8,330		-		(148)		8,478
Total securities available for sale	$	255,431	$	1,861	$	(4,770)	$	258,340

During the first quarter of 2015, the Company reclassified, at fair value, approximately $49,084,000 in available for sale mortgage-backed, asset-backed and municipal securities to the held to maturity category, including related unrealized pre-tax losses of approximately $750,000. As of September 30, 2016, unrealized pre-tax losses of approximately $575,000 remained in accumulated other comprehensive income (loss) and will continue to be accreted over the remaining life of the securities.  No gains or losses were recognized at the time of reclassification.  

The carrying amount, unrecognized gains/losses and fair value of securities held to maturity were as follows at the dates presented:

		Fair Value		Gross Unrecognized Gains		Gross Unrecognized Losses		Amortized Cost
		(In thousands)
September 30, 2016:
State and municipal	$	64,285	$	2,289	$	(252)	$	62,248
Mortgage-backed - agency / residential		104,453		2,566		(28)		101,915
Asset-backed		18,415		594		-		17,821
Other		1,200		-		-		1,200
	$	188,353	$	5,449	$	(280)	$	183,184
December 31, 2015:
State and municipal	$	55,812	$	1,349	$	(390)	$	54,853
Mortgage-backed - agency / residential		74,692		767		(611)		74,536
Asset-backed		19,618		273		(27)		19,372
	$	150,122	$	2,389	$	(1,028)	$	148,761

The proceeds from sales and calls of securities and the associated gains are listed below:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2016		2015		2016		2015
		(In thousands)
Proceeds	$	317,630	$	-	$	370,111	$	2,868
Gross gains		1,434		-		2,486		16
Gross losses		(1,500)		-		(2,608)		(16)
Net tax (benefit) expense related to
gains (losses) on sale		(25)		-		(46)		-

The amortized cost and estimated fair value of available for sale and held to maturity debt securities by contractual maturity at September30, 2016 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties. Securities not due at a single maturity date are presented separately.

		Available for Sale
		Fair Value		Amortized Cost
		(In thousands)
Securities available for sale:
Due in one year or less	$	16,092	$	16,068
Due after one year through five years		19,915		19,516
Due after five years through ten years		106,052		106,014
Due after ten years		68,838		69,226
Total AFS, excluding mortgage-backed (MBS), asset-backed
and collateralized loan obligations		210,897		210,824
Mortgage-backed, asset-backed and collateralized
loan obligations		153,452		152,878
Total securities available for sale	$	364,349	$	363,702

		Held to Maturity
		Fair Value		Amortized Cost
		(In thousands)
Securities held to maturity:
Due in one year or less	$	592	$	592
Due after one year through five years		3,513		3,426
Due after five years through ten years		29,307		28,515
Due after ten years		32,073		30,915
Total HTM, excluding MBS and asset-backed		65,485		63,448
Mortgage-backed and asset-backed		122,868		119,736
Total securities held to maturity	$	188,353	$	183,184

The following tables present the fair value and the unrealized loss on securities that were temporarily impaired as of September 30, 2016 and December 31, 2015, aggregated by major security type and length of time in a continuous unrealized loss position:

September 30, 2016		Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(In thousands)
Description of securities:
Available for sale:
State and municipal	$	91,119	$	(376)	$	-	$	-	$	91,119	$	(376)
Mortgage-backed - agency /
residential		33,061		(148)		10,160		(108)		43,221		(256)
Mortgage-backed - private /
residential		-		-		270		(5)		270		(5)
Asset-backed		2,151		(1)		-		-		2,151		(1)
Corporate		14,042		(456)		-		-		14,042		(456)
Collateralized loan obligations		2,988		-		5,475		(62)		8,463		(62)
Held to maturity:
State and municipal		2,630		(17)		610		(246)		3,240		(263)
Mortgage-backed - agency /
residential		12,965		(402)		-		-		12,965		(402)
Asset-backed		7,562		(119)		3,315		(5)		10,877		(124)
Total temporarily impaired	$	166,518	$	(1,519)	$	19,830	$	(426)	$	186,348	$	(1,945)

December 31, 2015		Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(In thousands)
Description of securities:
Available for sale:
Mortgage-backed - agency /
residential	$	56,204	$	(800)	$	31,755	$	(1,129)	$	87,959	$	(1,929)
Mortgage-backed - private /
residential		274		(10)		-		-		274		(10)
Trust preferred		-		-		7,706		(2,294)		7,706		(2,294)
Corporate		27,176		(389)		-		-		27,176		(389)
Collateralized loan obligations		8,330		(148)		-		-		8,330		(148)
Held to maturity:
State and municipal		6,726		(351)		10,056		(102)		16,782		(453)
Mortgage-backed - agency /
residential		39,280		(781)		25,838		(820)		65,118		(1,601)
Asset-backed		-		-		19,618		(438)		19,618		(438)
Total temporarily impaired	$	137,990	$	(2,479)	$	94,973	$	(4,783)	$	232,963	$	(7,262)

The table above presents unrealized losses on held to maturity securities since the date of the securities purchase, independent of the impact associated with changes in cost basis upon transfer from available for sale to held to maturity.

In determining whether or not there is an other-than-temporary-impairment (“OTTI”) for a security, management considers many factors, including: (i) the length of time for which and the extent to which the security’s fair value has been less than cost, (ii) the financial condition and near-term prospects of the security’s issuer, (iii) whether the decline in the security’s value was affected by macroeconomic conditions, and (iv)whether the Company intends to sell the security and whether it is more likely than not that the Company will be required to sell the security before a recovery in its fair value. The assessment of whether an OTTI exists involves a high degree of subjectivity and judgment and is based on the information available to management at a particular point in time. There were no accumulated credit losses on any of the Company’s securities as of September30, 2016 or December 31, 2015.

At September30, 2016,  there were 152 individual securities in an unrealized loss position, including 10 individual securities that had been in a continuous unrealized loss position for 12 months or longer. Management has evaluated these securities, in addition to the remaining 142 securities in an unrealized loss position, and has determined that the decline in value since their purchase dates was primarily attributable to fluctuations in market interest rates and does not reflect a decline in the underlying issuers’ ability to repay. The decrease in the number of securities in an unrealized loss position in excess of 12 months from 43 securities at December 31, 2015 to 10 securities at September 30, 2016 was primarily attributable to the timing of interest rate fluctuations in addition to a restructuring of the investment portfolio immediately following the transaction with Home State. The total number of securities in an unrealized loss position increasedfrom 88 individual securities at December 31, 2015 to 152 securities at September 30, 2016primarily as a result of the increase in the number of securities as a result of the September 8, 2016 transaction with Home State. At September 30, 2016, the Company did not intend to sell, and did not consider it likely that it would be required to sell, any of these securities prior to recovery in their fair value.

The Company’s unrated and rated municipal bond securities, along with the Company’s other rated investment securities, are subject to an annual internal review process that management has historically performed in the fourth quarter. The review process includes a review of the securities’ issuers’ most recent financial statements, including an evaluation of the expected sufficiency of the issuers’ cash flows relative to their debt service requirements. In addition, management considers any interim information made available to it that would prompt the need for more frequent review. At September 30, 2016 and December 31, 2015, the Company’s unrated municipal bonds comprised approximately 5.3% and13.8%, respectively, of the carrying value of the Company’s entire municipal bond portfolio.

Certain mortgage backed securities with an aggregate market value of approximately $36,105,000 as of September 30, 2016 were pledged to secure overnight repurchase agreement borrowings. Fluctuations in the fair value of these securities, and or the fluctuation in customer repurchase agreement balances, may result in the need to pledge additional securities against these borrowings. Management monitors the Bank’s collateral position with respect to repurchase agreement borrowings on a daily basis. The Company also pledges certain securities to public deposits under the Colorado Public Deposit Protection Act and pledges securities as collateral for funding lines. At September 30,2016, the Company’s total pledged securities were $229,337,000.

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Loans

9 Months Ended

Sep. 30, 2016

Loans [Abstract]

Loans

(4)Loans

A summary of net loans held for investment by loan type at the dates indicated is as follows:

		September 30,		December 31,
		2016		2015
		(In thousands)
Commercial and residential real estate	$	1,752,113	$	1,281,701
Construction		75,603		107,170
Commercial		400,281		323,552
Agricultural		18,245		9,294
Consumer		81,766		66,288
SBA		51,480		25,645
Other		33,162		631
Total gross loans		2,412,650		1,814,281
Deferred costs, net		349		255
Loans, held for investment, net		2,412,999		1,814,536
Less allowance for loan losses		(23,300)		(23,000)
Net loans, held for investment	$	2,389,699	$	1,791,536

In the second and third quarters of 2016, the Company purchased $22.7 million and $29.3 million, respectively, in performing loans included in our Real Estate portfolio segment. In the third quarter of 2015, the Company purchased $20.1 million in performing loans included in our Real Estate portfolio segment.

Activity in the allowance for loan losses for the period indicated is as follows:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2016		2015		2016		2015
		(In thousands)
Balance, beginning of period	$	23,050	$	22,850	$	23,000	$	22,490
Provision for loan losses		27		14		53		104
Loans charged-off		(72)		(75)		(431)		(172)
Recoveries on loans previously
charged-off		295		101		678		468
Balance, end of period	$	23,300	$	22,890	$	23,300	$	22,890

The Company’s additional disclosures relating to loans and the allowance for loan losses are broken out into two subsets, portfolio segment and class. The portfolio segment level is defined as the level where financing receivables are aggregated in developing the Company’s systematic method for calculating its allowance for loan losses. The class level is the second level at which credit information is presented and represents the categorization of financing related receivables at a slightly less aggregated level than the portfolio segment level. Because data presented according to class is dependent upon the underlying purpose of the loan, whereas loan data organized by portfolio segment is determined by the loan’s underlying collateral, disclosures broken out by portfolio segment versus class may not be in agreement. The disclosures in this footnote include both Non-PCI and PCI loans. As of September 30, 2016 PCI loans acquired in the Home State transaction are not considered material and as a result separate PCI disclosures are not included. 

The following tables provide detail for the ending balances in the Company’s allowance for loan losses and loans held for investment, broken down by portfolio segment as of the dates indicated. In addition, the tables also provide a roll-forward by portfolio segment of the allowance for loan losses for the three and nine months ended September 30, 2016 and September 30, 2015. The detail provided for the amount of the allowance for loan losses and loans individually versus collectively evaluated for impairment (i.e., the specific component versus the general component of the allowance for loan losses) corresponds to the Company’s systematic methodology for estimating its allowance for loan losses.

		Real Estate		Consumer and Installment		Commercial and Other		Total
		(In thousands)
Allowance for Loan Losses
Balance as of December 31, 2015	$	20,306	$	71	$	2,623	$	23,000
Charge-offs		(213)		(12)		(206)		(431)
Recoveries		235		13		430		678
Provision (credit)		(143)		(15)		211		53
Balance as of September 30, 2016	$	20,185	$	57	$	3,058	$	23,300
Balance as of June 30, 2016	$	20,171	$	75	$	2,804	$	23,050
Charge-offs		(9)		(5)		(58)		(72)
Recoveries		150		2		143		295
Provision (credit)		(127)		(15)		169		27
Balance as of September 30, 2016	$	20,185	$	57	$	3,058	$	23,300

Balances at September 30, 2016:
Allowance for Loan Losses
Individually evaluated	$	301	$	-	$	274	$	575
Collectively evaluated		19,884		57		2,784		22,725
Total	$	20,185	$	57	$	3,058	$	23,300
Loans
Individually evaluated	$	24,783	$	-	$	5,412	$	30,195
Collectively evaluated		1,990,126		5,995		386,683		2,382,804
Total	$	2,014,909	$	5,995	$	392,095	$	2,412,999

		Real Estate		Consumer and Installment		Commercial and Other		Total
		(In thousands)
Allowance for Loan Losses
Balance as of December 31, 2014	$	19,607	$	39	$	2,844	$	22,490
Charge-offs		(21)		(9)		(142)		(172)
Recoveries		138		21		309		468
Provision (credit)		368		10		(274)		104
Balance as of September 30, 2015	$	20,092	$	61	$	2,737	$	22,890
Allowance for Loan Losses
Balance as of June 30, 2015	$	20,006	$	54	$	2,790	$	22,850
Charge-offs		(14)		(5)		(56)		(75)
Recoveries		66		9		26		101
Provision (credit)		34		3		(23)		14
Balance as of September 30, 2015	$	20,092	$	61	$	2,737	$	22,890

Balances at December 31, 2015:
Allowance for Loan Losses
Individually evaluated	$	282	$	-	$	11	$	293
Collectively evaluated		20,024		71		2,612		22,707
Total	$	20,306	$	71	$	2,623	$	23,000
Loans
Individually evaluated	$	23,846	$	2	$	2,305	$	26,153
Collectively evaluated		1,489,211		5,716		293,456		1,788,383
Total	$	1,513,057	$	5,718	$	295,761	$	1,814,536

The following tables provide additional detail with respect to impaired loans broken out according to class as of the dates indicated. The recorded investment included in the following table represents customer balances net of any partial charge-offs recognized on the loans, net of any deferred fees and costs. The unpaid balance represents the recorded balance prior to any partial charge-offs. Interest income recognized year-to-date may exclude an immaterial amount of interest income on matured loans that are 90 days or more past due, but that are in the process of being renewed and thus are still accruing.

September 30, 2016		Recorded Investment		Unpaid Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized YTD
		(In thousands)
Impaired loans with no related allowance:
Commercial and residential real estate	$	12,832	$	12,862	$	-	$	12,225	$	1,248
Construction		-		-		-		740		-
Commercial		591		591		-		248		13
Consumer		19		19		-		142		1
Other		754		1,124		-		412		-
Total	$	14,196	$	14,596	$	-	$	13,767	$	1,262
Impaired loans with a related allowance:
Commercial and residential real estate	$	11,450	$	11,561	$	293	$	10,296	$	317
Construction		-		-		-		-		-
Commercial		3,500		3,542		28		2,079		110
Consumer		379		467		8		410		7
Other		670		723		246		336		-
Total	$	15,999	$	16,293	$	575	$	13,121	$	434
Total impaired loans:
Commercial and residential real estate	$	24,282	$	24,423	$	293	$	22,521	$	1,565
Construction		-		-		-		740		-
Commercial		4,091		4,133		28		2,327		123
Consumer		398		486		8		552		8
Other		1,424		1,847		246		748		-
Total impaired loans	$	30,195	$	30,889	$	575	$	26,888	$	1,696

December 31, 2015		Recorded Investment		Unpaid Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized YTD
		(In thousands)
Impaired loans with no related allowance:
Commercial and residential real estate	$	12,756	$	14,472	$	-	$	14,194	$	242
Construction		986		986		-		789		-
Commercial		-		-		-		19		-
Consumer		271		310		-		307		5
Other		250		588		-		171		-
Total	$	14,263	$	16,356	$	-	$	15,480	$	247
Impaired loans with a related allowance:
Commercial and residential real estate	$	10,232	$	10,472	$	268	$	9,989	$	388
Construction		-		-		-		-		-
Commercial		1,204		1,220		11		492		18
Consumer		454		529		14		493		13
Other		-		-		-		-		-
Total	$	11,890	$	12,221	$	293	$	10,974	$	419
Total impaired loans:
Commercial and residential real estate	$	22,988	$	24,944	$	268	$	24,183	$	630
Construction		986		986		-		789		-
Commercial		1,204		1,220		11		511		18
Consumer		725		839		14		800		18
Other		250		588		-		171		-
Total impaired loans	$	26,153	$	28,577	$	293	$	26,454	$	666

The interest income recognized on impaired loans in the third quarter was $1,180,000; of this $969,000 was recognized on impaired loans with no related allowance and $211,000 was recognized on loans with a related allowance. The majority of the $969,000 was comprised of a $775,000 interest recovery on a commercial real estate nonaccrual loan in the third quarter 2016. The gross year-to-date interest income that would have been recorded had the nonaccrual loans been current in accordance with their original terms was $209,000 for the nine months ended September 30, 2016 and $510,000 for the nine months ended September 30, 2015. For the three months ended September 30, 2016 and September30, 2015, gross interest income that would have been recorded on nonaccrual loans, had the loans been current in accordance with their original terms, was approximately $77,000 and $171,000 respectively. During the three and nine months ended September 30, 2016, approximately $83,000 and $332,000, respectively, in cash-basis interest income was recognized on the Company’s largest nonaccrual loan. This loan was moved into accruing status in September 2016. No cash-basis interest income was recognized in the first nine months of 2015.

The following tables summarize, by class, loans classified as past due in excess of 30 days or more, in addition to those loans classified as nonaccrual:

September 30, 2016		30-89 Days Past Due		90 Days + Past Due and Still Accruing		Nonaccrual		Total Nonaccrual and Past Due		Total Loans, Held for Investment
		(In thousands)
Commercial and residential
real estate	$	803	$	-	$	3,008	$	3,811	$	1,752,366
Construction		-		-		-		-		75,614
Commercial		1,090		335		828		2,253		400,339
Consumer		57		-		248		305		81,778
Other		207		-		1,423		1,630		102,902
Total	$	2,157	$	335	$	5,507	$	7,999	$	2,412,999

December 31, 2015		30-89 Days Past Due		90 Days + Past Due and Still Accruing		Nonaccrual		Total Nonaccrual and Past Due		Total Loans, Held for Investment
		(In thousands)
Commercial and residential
real estate	$	653	$	-	$	11,905	$	12,558	$	1,281,881
Construction		-		-		986		986		107,185
Commercial		1,147		-		874		2,021		323,598
Consumer		291		-		459		750		66,297
Other		-		-		250		250		35,575
Total	$	2,091	$	-	$	14,474	$	16,565	$	1,814,536

The Company categorizes loans into risk categories based on relevant information about the ability of a particular borrower to service its debt, such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company uses the following definitions for risk ratings, which are consistent with the definitions used in supervisory guidance:

Substandard.  Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral, if any, pledged to secure the loan. Loans so classified have a well-defined weakness or weaknesses that jeopardize the collection of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful.  Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Loans not meeting the criteria above are considered to be non-classified loans.

The following tables provide detail for the risk categories of loans, by class of loans, based on the most recent credit analysis performed as of the dates indicated:

September 30, 2016		Commercial & Residential Real Estate		Construction		Commercial		Consumer		Other		Total
		(In thousands)
Non-classified	$	1,725,406	$	75,603	$	395,917	$	81,351	$	100,335	$	2,378,612
Substandard		26,707		-		4,364		415		2,552		34,038
Doubtful		-		-		-		-		-		-
Subtotal		1,752,113		75,603		400,281		81,766		102,887		2,412,650
Deferred costs, net		253		11		58		12		15		349
Loans, held for investment, net	$	1,752,366	$	75,614	$	400,339	$	81,778	$	102,902	$	2,412,999

December 31, 2015		Commercial & Residential Real Estate		Construction		Commercial		Consumer		Other		Total
		(In thousands)
Non-classified	$	1,260,134	$	106,184	$	322,650	$	65,365	$	34,194	$	1,788,527
Substandard		21,567		986		902		923		1,376		25,754
Doubtful		-		-		-		-		-		-
Subtotal		1,281,701		107,170		323,552		66,288		35,570		1,814,281
Deferred costs, net		180		15		46		9		5		255
Loans, held for investment, net	$	1,281,881	$	107,185	$	323,598	$	66,297	$	35,575	$	1,814,536

The book balance of TDRs at September 30, 2016 and December 31, 2015 was $24,431,000 and $22,391,000, respectively. Management established approximately $310,000 and $276,000 in specific reserves with respect to these loans as of September 30, 2016 and December31,2015, respectively. The Company had an additional $1,864,000and $953,000 committed on loans classified as TDRs at September 30, 2016 and December 31, 2015,  respectively.

During the nine months ended September 30, 2016, the terms of three loans totaling $4,765,000, were modified in troubled debt restructurings. The modification of the terms of such loans included two restructurings of payment terms and one renewal of a loan with a stated interest rate below market. During the three months ended September 30, 2016 the repayment terms of a single loan with a balance of $2,900,000 were modified in a troubled debt restructuring. During the three and nine months ended September 30, 2015 there were nomaterial modifications of loans designated as TDRs.

For reporting purposes, a loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no defaults on TDRs during the three and nine months ended September 30, 2016 orSeptember 30, 2015.

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Goodwill And Other Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill And Other Intangible Assets [Abstract]

Goodwill And Other Intangible Assets

(5)Goodwill and Other Intangible Assets

The Company recognized $56,148,000 in goodwill as a result of the Home State transaction on September 8, 2016. Current estimates of the fair value of acquired assets and liabilities assumed are preliminary and subject to change in the twelve months after the transaction if subsequently additional information becomes available impacting acquisition date fair values. Subsequent changes to estimates of acquisition date fair value will impact the amount recognized as goodwill.

Other intangible assets with finite lives are amortized over their respective estimated useful lives to their estimated residual values. As of September 30, 2016, the Company had intangible assets comprised of its core deposit intangible assets and customer relationship intangible assets.

The following table presents the gross amounts of core deposit intangible assets and customer relationship intangible assets and the related accumulated amortization at the dates indicated:

			September 30,		December 31,
	Useful Life		2016		2015
			(In thousands)
Core deposit intangible assets	10 - 15 years	$	73,655	$	62,975
Core deposit intangible assets accumulated amortization			(62,561)		(62,124)
Core deposit intangible assets, net		$	11,094	$	851
Customer relationship intangible assets	10 years		6,674		5,654
Customer relationship intangible assets accumulated amortization			(1,763)		(1,332)
Customer relationship intangible assets, net		$	4,911	$	4,322
Total other intangible assets, net		$	16,005	$	5,173

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Borrowings

9 Months Ended

Sep. 30, 2016

Borrowings [Abstract]

Borrowings

(6)Borrowings

At September 30, 2016, the Company’s outstanding borrowings were $122,521,000 as compared to $280,847,000 at December 31, 2015. These borrowings at September 30, 2016 consisted of $122,521,000 in term notes with the Federal Home Loan Bank (the “FHLB”). The Company also maintains a line of credit at the FHLB, however, it had no outstanding borrowings on the line of credit as of September 30, 2016. At December 31, 2015, outstanding borrowings consisted of $95,000,000 of term notes and $185,847,000 in advances on our line of credit, both with the FHLB.

The interest rate on the FHLB line of credit varies with the federal funds rate and was 0.53% atSeptember 30, 2016. The Company has six term notes with the FHLB. Four of the term notes have fixed interest rates, the first a $20,000,000 term note at 2.52% that is payable at its maturity date of January 23, 2018, with a prepayment penalty if paid prior to maturity and is convertible to floating rate on predetermined conversion dates at the discretion of the FHLB. If the note is converted by the FHLB, the Bank has the option to prepay the note without penalty. If the note is not converted by the FHLB, the note continues to be convertible quarterly thereafter, with the option to convert to floating rate at the discretion of the FHLB. The second fixed rate term note of $50,000,000 carried an interest rate of 0.63% and matured October 24, 2016 and was not renewed. The remaining two fixed rate term notes of $695,000 and $1,740,000 have maturity dates of April 10, 2017 and August 30, 2017, respectively. The notes were assumedin the transaction with Home State and have an unamortized fair value premium of approximately $86,000 as of September 30, 2016.The Company also has two variable rate term notes of $25,000,000 each that mature on March 7, 2017and August 4, 2017 and have interest rates that reset quarterly, currently set as 1.03% and 0.87%, respectively. The next rate reset dates on the variable rate term notes are December 7, 2016 and November 5, 2016.

The Company has an advance, pledge and security agreement with the FHLB and had pledged qualifying loans and securities in the amount of $831,636,000 atSeptember 30, 2016 and $454,748,000 at December 31, 2015. The maximum credit allowance for future borrowings, including term notes and advances on the line of credit, was $709,201,000 at September 30, 2016 and $173,901,000 at December 31, 2015.

In April 2016, the holding company entered into a credit agreement for a $10,000,000 secured line of credit with Wells Fargo Bank, National Association. The holding company’s stock in the Bank is pledged as collateral to the line of credit. The line of credit matures on March 17, 2017. Under the credit agreement, we elect a fixed or floating interest rate on each advance. As of September 30, 2016 no amounts had been borrowed on the Wells Fargo line of credit.

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Subordinated Debentures And Trust Preferred Securities

9 Months Ended

Sep. 30, 2016

Subordinated Debentures And Trust Preferred Securities [Abstract]

Subordinated Debentures and Trust Preferred Securities

(7)Subordinated Debentures and Trust Preferred Securities

At September 30, 2016 the balance of the Company’s outstanding subordinated debentures (the “Debentures”) was $64,973,000, comprised of $65,774,000 in debt, partially offset by $801,000 in debt issuance costs. At December 31, 2015 the balance of the Company’s Debentures was $25,774,000. As of September 30, 2016, the Company's Debentures bore a weighted average cost of funds of 4.87%.  

The Company’s Debentures were issued in three separate series. The first two issuances have maturities of 30 years from the date of issuance. These two issuances of Debentures were issued to trusts established by the Company, which in turn issued $25,000,000 of trust preferred securities (“TruPS”). Generally, and with certain limitations, the Company is permitted to call the Debentures subsequent to the first five or ten years, as applicable, after issuance, if certain conditions are met, or at any time upon the occurrence and continuation of certain changes in either the tax treatment or the capital treatment of the trusts, the Debentures or the preferred securities. The Guaranty Capital Trust III TruPS became callable at each quarterly interest payment date starting on July 7, 2008. The CenBank Trust III TruPS became callable at each quarterly interest payment date starting on April 15, 2009.

The third issuance was executed on July 18, 2016 in anticipation of the transaction with Home State, in order to fund the cash consideration to be paid to Home State shareholders in conjunction with the transaction. The issuance was comprised of $40,000,000 of 5.75% Fixed-to-Floating Rate Subordinated Notes (the “Notes”) due July 20, 2026. The Notes will initially bear a fixed interest rate of 5.75% per annum, payable semi-annually in arrears. On July 20, 2021, and, thereafter, the interest on the Notes will be payable quarterly in arrears, at an annual floating rate equal to three-month LIBOR as determined by the applicable quarterly period, plus 4.73%.

As of September 30, 2016, the Company was in compliance with all financial covenants of the Debentures.

The Company had accrued, unpaid interest on its Debentures of approximately $698,000 at September 30, 2016 and approximately $208,000 at December 31, 2015. Interest payable on Debentures is included in interest payable and other liabilities on the consolidated balance sheets.

The Company is not considered the primary beneficiary of the trusts that issued the TruPS (variable interest entities); therefore, the trusts are not consolidated in the Company’s financial statements and the Debentures are shown as liabilities. The Company’s investment in the common stock of each trust is included in other assets in the Company’s consolidated balance sheets.

Although the securities issued by each of the trusts are not included as a component of stockholders’ equity in the consolidated balance sheets, they are treated as capital for regulatory purposes. Specifically, under applicable regulatory guidelines, the $25,000,000 of TruPS issued by the trusts qualify as Tier 1 capital, up to a maximum of 25% of capital on an aggregate basis. Any amount that exceeds 25% qualifies as Tier 2 capital. At September 30, 2016, the full $25,000,000 of the TruPS qualified as Tier 1 capital. The $40,000,000 issuance from July 2016 qualifies for inclusion in Tier 2 capital.

Under the Dodd-Frank Act and a joint rule from the Federal Reserve Board, the Office of the Comptroller of the Currency, and the FDIC, certain TruPS are no longer eligible to be included as Tier 1 capital for regulatory purposes. However, an exception to this statutory prohibition applies to securities issued prior to May 19, 2010 by bank holding companies with less than $15 billion of total assets. As we have less than $15 billion in total assets and issued all of our TruPS prior to May 19, 2010, we expect that our TruPS will continue to be eligible to be treated as Tier 1 capital, subject to other rules and limitations.

The following table summarizes the terms of each outstanding subordinated debenture issuance at September 30, 2016(dollars in thousands):

	Date Issued	Amount	Maturity Date	Call Date *	Fixed or Variable	Rate Adjuster		Current Rate		Next Rate Reset Date**
CenBank Trust III	4/8/2004	15,464	4/15/2034	1/15/2017	Variable	LIBOR + 2.65	%	3.33	%	1/15/2017
Guaranty Capital Trust III	6/30/2003	10,310	7/7/2033	1/7/2017	Variable	LIBOR + 3.10	%	3.78	%	1/7/2017
Subordinated Notes	7/18/2016	40,000	7/20/2026	N/A	Fixed	LIBOR + 4.73	%	5.75	%	7/20/2021

*  Call date represents the earliest or next date the Company can call the debentures.

** On October 7, 2016, the rate on the Guaranty Capital Trust III subordinated debentures reset to 3.98%. On October 15, 2016, the rate on the CenBank Trust III subordinated debentures reset to 3.53%. The subordinated notes issued July 18, 2016 are fixed at 5.75% until July 20, 2021 at which point the notes turn to floating rate at three-month LIBOR plus 4.73%.

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Commitments

9 Months Ended

Sep. 30, 2016

Commitments [Abstract]

Commitments

(8)Commitments

The Bank enters into credit-related financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, standby letters of credit and commercial letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Bank’s exposure to credit loss is represented by the contractual amount of these commitments. The Bank follows the same credit policies in making commitments,  including obtaining collateral, if necessary,  as it does for on-balance sheet instruments.

At the dates indicated, the following financial instruments were outstanding whose contract amounts represented credit risk:

		September 30, 2016		December 31, 2015
		(In thousands)
Commitments to extend credit:
Variable	$	419,370	$	307,463
Fixed		94,078		61,184
Total commitments to extend credit	$	513,448	$	368,647
Standby letters of credit	$	10,429	$	8,857

At September 30, 2016, the rates on the fixed rate commitments to extend credit ranged from 1.95% to 7.00%.

A commitment to extend credit is an agreement to lend to a customer as long as there is no violation of any condition established in the underlying contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Several of the commitments may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated.

A commitment to extend credit under an overdraft protection agreement is a commitment for a possible future extension of credit to an existing deposit customer. These lines of credit are uncollateralized and usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Bank is committed.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. These letters of credit are primarily issued to support public and private borrowing arrangements. A majority of letters of credit issued have expiration dates within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank generally holds collateral supporting those commitments if deemed necessary.

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Fair Value Measurements And Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2016

Fair Value Measurements And Fair Value Of Financial Instruments [Abstract]

Fair Value Measurements and Fair Value of Financial Instruments

(9)Fair Value Measurements and Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets.

Level 2 - Significant other observable inputs other than Level 1 prices such as quoted prices in markets that are not active, quoted prices for similar assets or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset.

Level 3 - Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Transfers of financial instruments between levels within the fair value hierarchy are recognized on the date management determines that the underlying circumstances or assumptions have changed.

Fair values of our securities are determined through the utilization of evaluated pricing models that vary by asset class and incorporate available market information (Level 2). The evaluated pricing models apply available information, as applicable, through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing to prepare evaluations. These models assess interest rate impact, develop prepayment scenarios and take into account market conventions. For securities where routine valuation techniques are not used, management utilizes a discounted cash flow model with market-adjusted discount rates or other unobservable inputs to estimate fair value. Due to the lack of ratings available on these securities, management determined that a relationship to other benchmark quoted securities was unobservable, and as a result, these securities should be classified as Level 3 (Level 3 inputs). The valuation of the Company’s Level 3 bonds is highly sensitive to changes in unobservable inputs.

Currently, the Company uses interest rate swapsto manage interest rate risk. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2 inputs). The Company considers the value of the swaps to be sensitive to fluctuations in interest rates.

Financial Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
		(In thousands)
Assets/(Liabilities) at September 30, 2016
U.S. government agencies	$	-	$	5,018	$	-	$	5,018
State and municipal securities		-		110,496		31,961		142,457
Mortgage-backed securities – agency /
residential		-		130,544		-		130,544
Mortgage-backed securities – private /
residential		-		270		-		270
Asset-backed securities		-		2,151		-		2,151
Corporate securities		-		63,422		-		63,422
Collateralized loan obligations		-		20,487				20,487
Interest rate swaps - cash flow hedge		-		(3,425)		-		(3,425)
Assets/(Liabilities) at December 31, 2015
State and municipal securities	$	-	$	2,673	$	32,040	$	34,713
Mortgage-backed securities – agency /
residential		-		129,017		-		129,017
Mortgage-backed securities – private /
residential		-		274		-		274
Trust preferred securities		-		17,806		-		17,806
Corporate securities		-		65,291		-		65,291
Collateralized loan obligations		-		8,330				8,330
Interest rate swaps - cash flow hedge		-		(2,558)		-		(2,558)

There were no transfers of financial assets and liabilities among Level 1, Level 2 and Level 3 during the nine months ended September 30, 2016.

The tables below present a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2016 and September 30, 2015:  

		State and Municipal Securities
		Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
		(In thousands)
Beginning balance	$	31,909	$	32,040
Total unrealized gains (losses) included in:
Net income		2		5
Other comprehensive income (loss)		-		-
Sales, calls and prepayments		(81)		(215)
Acquisition of Level 3 security		131		131
Transfers in and (out) of Level 3		-		-
Balance end of period	$	31,961	$	31,961

		State and Municipal Securities
		Three Months Ended September 30, 2015		Nine Months Ended September 30, 2015
		(In thousands)
Beginning balance	$	32,038	$	32,317
Total unrealized gains (losses) included in:
Net income		1		3
Other comprehensive income (loss)		-		(1)
Sales, calls and prepayments		-		-
Transfer to held to maturity		-		(280)
Transfers in and (out) of Level 3		-		-
Balance end of period	$	32,039	$	32,039

For the three and nine months ended September 30, 2016, there was no other comprehensive income or loss for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as a result of consistent mark-to-market valuation. For the three and nine months ended September 30, 2016 and September 30,2015, the amounts included in net income in the above tables include accretion of any discount on these Level 3 bonds.  

The following tables present quantitative information about Level 3 fair value measurements on the Company’s state and municipal securities at September 30, 2016 and December 31, 2015:

September 30, 2016		Fair Value	Valuation Technique	Unobservable Inputs	Range
		(In thousands)
State and municipal securities	$	31,961	discounted cash flow	discount rate	2.19%-4.75%
Total	$	31,961

December 31, 2015		Fair Value	Valuation Technique	Unobservable Inputs	Range
		(In thousands)
State and municipal securities	$	32,040	discounted cash flow	discount rate	2.05%-4.75%
Total	$	32,040

Financial Assets and Liabilities Measured on a Nonrecurring Basis

Financial assets and liabilities measured at fair value on a nonrecurring basis were not material as of September 30, 2016 and December 31, 2015.  

Nonfinancial Assets and Liabilities Measured on a Nonrecurring Basis

Nonfinancial assets and liabilities measured at fair value on a nonrecurring basis were not material as of September 30, 2016 and December 31, 2015.

Fair Value of Financial Instruments

The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows:

				Fair Value Measurements at September 30, 2016:
		Carrying Amount		Level 1		Level 2		Level 3		Total
		(In thousands)
Financial assets:
Cash and cash equivalents	$	163,908	$	163,908	$	-	$	-	$	163,908
Securities available for sale		364,349		-		332,388		31,961		364,349
Securities held to maturity		183,184		-		185,245		3,108		188,353
Bank stocks		14,558		n/a		n/a		n/a		n/a
Loans held for investment, net		2,389,699		-		-		2,391,039		2,391,039
Accrued interest receivable		9,314		-		9,314		-		9,314
Financial liabilities:
Deposits	$	2,752,112	$	-	$	2,751,953	$	-	$	2,751,953
Federal funds purchased and sold under
agreements to repurchase		35,936		-		35,936		-		35,936
Subordinated debentures		64,973		-		-		59,571		59,571
Long-term borrowings		122,521		-		122,898		-		122,898
Accrued interest payable		1,070		-		1,070		-		1,070
Interest rate swap - cash flow hedge		3,425		-		3,425		-		3,425

				Fair Value Measurements at December 31, 2015:
		Carrying Amount		Level 1		Level 2		Level 3		Total
		(In thousands)
Financial assets:
Cash and cash equivalents	$	26,711	$	26,711	$	-	$	-	$	26,711
Securities available for sale		255,431		-		223,391		32,040		255,431
Securities held to maturity		148,761		-		145,698		4,424		150,122
Bank stocks		20,500		n/a		n/a		n/a		n/a
Loans held for investment, net		1,791,536		-		-		1,791,128		1,791,128
Accrued interest receivable		6,554		-		6,554		-		6,554
Financial liabilities:
Deposits	$	1,801,845	$	-	$	1,800,112	$	-	$	1,800,112
Federal funds purchased and sold under
agreements to repurchase		26,477		-		26,477		-		26,477
Short-term borrowings		185,847		-		185,847		-		185,847
Subordinated debentures		25,774		-		-		18,640		18,640
Long-term borrowings		95,000		-		95,353		-		95,353
Accrued interest payable		508		-		508		-		508
Interest rate swap - cash flow hedge		2,558		-		2,558		-		2,558

The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

Certain financial instruments and all nonfinancial instruments are excluded from the disclosure requirements. Therefore, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

The following methods and assumptions are used by the Company in estimating fair value disclosures for financial instruments:

(a) Cash and Cash Equivalents

The carrying amounts of cash and short-term instruments approximate fair values (Level 1).

(b) Securities and Bank Stocks

Fair values for securities available for sale and held to maturity are generally determined through the utilization of evaluated pricing models that vary by asset class and incorporate available market information (Level 2). The evaluated pricing models apply available information, as applicable, through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing to prepare evaluations. These models assess interest rate impact, develop prepayment scenarios and take into account market conventions. For positions that are not traded in active markets or are subject to transfer restrictions (i.e., bonds valued with Level 3 inputs), management uses a combination of reviews of the underlying financial statements, appraisals and management’s judgment regarding credit quality and intent to sell in order to determine the value of the bond.

It is not practical to determine the fair value of bank stocks due to restrictions placed on the transferability of FHLB stock, Federal Reserve Bank stock, Bankers’ Bank of the West stock and Pacific Coast Bankers’ Bank stock. These three stocks comprise the majority of the balance of the Company’s bank stocks.

(c) Loans Held for Investment

For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values (Level 3). Fair values for other loans (e.g., commercial real estate and investment property mortgage loans and commercial loans) are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality (Level3). Impaired loans are valued at the lower of cost or fair value when specific reserves are attributed to these loans because the present value of expected cash flows or the net realizable value of collateral is less than the impaired loan’s recorded investment. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

(d) Loans Held for Sale

Loans held for sale are carried at the lower of cost or fair value, with fair value determined by the sales price agreed upon in negotiation with the purchaser (Level 1).

(e) Deposits

The fair values of demand deposits (e.g., interest and non-interest checking, passbook savings and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) (Level 2). The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date (Level 2). Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits (Level 2).

(f) Short-term Borrowings

The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings maturing within 90 days approximate their fair values (Level 2).

(g) Long-term Borrowings

The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 2).

(h) Subordinated Debentures

The fair values of the Company’s Debentures are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements (Level 3).

(i) Accrued Interest Receivable/Payable

The carrying amounts of accrued interest approximate fair value (Level 2).

(j) Interest Rate Swaps, net

The fair value of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments).The variable cash receipts (or payments) are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2).

(k) Off-balance Sheet Instruments

Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is immaterial.

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Derivatives And Hedging Activities

9 Months Ended

Sep. 30, 2016

Derivatives And Hedging Activities [Abstract]

Derivative And Hedging Activities

(10)Derivatives and Hedging Activities

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company utilizes derivative financial instruments to assist in the management of interest rate risk, primarily helping to secure long-term borrowing rates. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment or receipt of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments or receipts principally related to certain variable-rate borrowings. The Company does not use derivatives for trading or speculative purposes.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheet as of September 30, 2016 and December 31, 2015:

	Balance		Fair Value
	Sheet		September 30,		December 31,
	Location		2016		2015
			(In thousands)
Derivatives designated as hedging instruments
Assets:
Interest rate swaps	Other assets	$	-	$	-
Liabilities:
Interest rate swaps	Other liabilities	$	3,425	$	2,558

The Company’s objectives in using interest rate derivatives are to add stability and predictability to interest expense and to manage the Company’s exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. For hedges of the Company’s variable-rate borrowings, interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed payments. As of September 30, 2016, the Company had two forward-starting interest rate swaps with an aggregate notional amount of $50,000,000 that were designated as cash flow hedges associated with the Company’s forecasted variable-rate borrowings. The first $25,000,000swap became effective in June 2015 at a fixed rate of 2.46% and matures in June2020. The second $25,000,000 swap became effective in March 2016 at a fixed rate of 3.00%and maturesin March2021.

Summary information about the interest-rate swaps designated as cash flow hedges as of September30, 2016 and December 31, 2015 is included in the table below:

		September 30, 2016			December 31, 2015
		(Dollars in thousands)
Notional amounts	$	50,000		$	50,000
Weighted average pay rates		2.73	%		2.73	%
Weighted average receive rates		3 month LIBOR			3 month LIBOR
Weighted average maturity		4.1 years			4.9 years
Unrealized gains (losses)	$	(3,425)		$	(2,558)

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company’s cash flow hedges are used to hedge the forecasted variable cash outflows associated with forecasted issuances of FHLB advances. During the nine months ended September 30, 2016 and September30, 2015, the income statement effect of hedge ineffectiveness was not material.

Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate liabilities. Management expects that, during the next 12 months,approximately $909,000 will be reclassified from AOCI into interest expense.

The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with another third-party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The impact of these customer interest rate swaps on the Company’s financial statements was immaterial for the periods covered by this report.

The table below presents the effect of the Company’s derivative financial instruments on both comprehensive income and net income for the three and nine months ended September 30, 2016 and September 30, 2015:

	Income		Three Months Ended				Nine Months Ended
Interest Rate Swaps with	Statement		September 30,				September 30,
Hedge Designation	Location		2016		2015		2016		2015
			(In thousands)
Gain or (loss) recognized in OCI on
derivative - net of tax	Not applicable	$	235	$	(800)	$	(963)	$	(1,097)
(Gain) or loss reclassified from
accumulated OCI into income
(effective portion) - net of tax	Interest expense		161		51		426		51

The Company has agreements with its derivative counterparties that contain a cross-default provision whereby if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company has minimum collateral posting thresholds with certain of its derivative counterparties and as of September 30, 2016 had posted $4,690,000 against its obligations under these agreements. If the Company had breached any of these provisions at September 30, 2016, it could have been required to settle its obligations under the agreements at the termination value.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2016

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(11)Stock-Based Compensation

Under the Company’s Incentive Plan, which expired by its terms on April 4, 2015, the Company’s Board of Directors had the authority to grant stock-based compensation awards prior to the plan’s expiration. Under the 2015 Plan, which was approved by the Company’s stockholders at the May 5, 2015 annual meeting, the Company’s Board of Directors maintains the authority to grant stock-based compensation awards to nonemployee directors, key employees, consultants and prospective employees under the terms described in each of the plans.

Stock-based compensation awards issuable under either plan include the grant of stock-based compensation awards in the form of options, restricted stock awards, restricted stock unit awards, performance stock awards, stock appreciation rights and other equity based awards. Likewise, the Incentive Plan provided for, and the 2015 Plan provides, that eligible participants may be granted shares of Company common stock that are subject to forfeiture until the grantee vests in the stock award based on the established conditions, which may include service conditions, established performance measures or both.

Prior to the vesting of stock awards that are subject to a service vesting condition, each grantee has the rights of a stockholder with respect to voting the shares of stock represented by the award. The grantee is not entitled to dividend rights with respect to the shares of stock until vesting occurs. Prior to vesting of the stock awards with performance vesting conditions, each grantee has the rights of a stockholder with respect to voting of the shares of stock represented by the award. The recipient is generally not entitled to dividend rights with respect to unvested shares. Other than the stock awards with service and performance-based vesting conditions, no other grants have been made under either the Incentive Plan or the 2015 Plan.

Under the provisions of the 2015 Plan and the Incentive Plan, grants of stock-based compensation awards of 935,000 and 1,700,000 shares, respectively, were authorized, subject to adjustments upon the occurrence of certain events. As of September 30, 2016, there were 187,617 and 376,759outstanding awards under the 2015 Plan and the Incentive Plan, respectively. As of September 30, 2016, there were 730,175 shares remaining available for grant under the 2015 Plan. Although the Incentive Plan expired by its terms on April 4, 2015, awards previously granted under the Incentive Plan remain outstanding in accordance with their terms.

Of the 564,376 sharesrepresented by unvested awards at September 30, 2016,  approximately 542,000shares are expected to vest. At September 30, 2016 there were 315,031shares of restricted stock outstanding that were subject to a performance condition. As of September 30, 2016, management expects that approximately 304,000 of these shares will vest and that the remaining shares will expire unvested. The performance shares that are expected to vest relate to awards granted to various key employees from February 2014 through August 2016. The vesting of these performance shares is contingent upon the meeting of certain return on asset performance criteria. The performance-based shares awarded in 2014, 2015 and 2016 each include a “threshold” and “target” performance level, with vesting determined based on where actual performance falls in relation to the numeric range represented by these performance criteria. As of September 30, 2016, management expected that all of the performance awards made in 2014, 2015 and 2016 will vest (with the exception of  estimated forfeitures), which is consistent with the level of expense currently being recognized over the vesting period. Should this expectation change, the accrual of compensation expense in future periods could be impacted.

A summary of the status of unearned stock awards and the change during the nine months ended September 30, 2016 is presented in the table below:

	Shares		Weighted Average Fair Value on Award Date
Unearned at January 1, 2016	590,755	$	12.88
Awarded	189,164		15.66
Forfeited	(21,500)		12.76
Vested	(194,043)		11.35
Unearned at September 30, 2016	564,376	$	14.34

The Company recognized $2,304,000 and  $2,094,000 in stock-based compensation expense for services rendered for the nine months ended September 30, 2016 and September 30, 2015, respectively. The total income tax benefit recognized for share-based compensation arrangements was $876,000 and$796,000 for the nine months ended September 30, 2016 and September 30, 2015, respectively. The grant date fair value of restricted stock awards granted in the nine months ended September 30, 2016 and September 30, 2015 was $2,963,000and $2,391,000, respectively.  The fair value of awards that vested in the nine months ended September 30, 2016 and September 30, 2015 was approximately $3,053,000and $1,347,000, respectively.  At September 30, 2016,  compensation cost of $4,598,000 related to unvested awards not yet recognized is expected to be recognized over a weighted-average period of 1.7 years.

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Capital Ratios

9 Months Ended

Sep. 30, 2016

Capital Ratios [Abstract]

Capital Ratios

(12)Capital Ratios

The following table provides the capital ratios of the Company and Bank as of the dates presented, along with the applicable regulatory capital requirements:

	Ratio at September 30, 2016		Ratio at December 31, 2015		Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer		Minimum Requirement for "Well-Capitalized" Institution
Common Equity Tier 1 Risk-Based
Capital Ratio
Consolidated	10.79	%	10.94	%	7.00	%	N/A
Guaranty Bank and Trust Company	12.74	%	11.96	%	7.00	%	6.50	%
Tier 1 Risk-Based Capital Ratio
Consolidated	11.72	%	12.11	%	8.50	%	N/A
Guaranty Bank and Trust Company	12.74	%	11.96	%	8.50	%	8.00	%
Total Risk-Based Capital Ratio
Consolidated	14.07	%	13.24	%	10.50	%	N/A
Guaranty Bank and Trust Company	13.61	%	13.09	%	10.50	%	10.00	%
Leverage Ratio
Consolidated	12.40	%	10.68	%	4.00	%	N/A
Guaranty Bank and Trust Company	13.48	%	10.55	%	4.00	%	5.00	%

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Contingencies

9 Months Ended

Sep. 30, 2016

Contingencies [Abstract]

Contingencies

(13)Contingencies

The Company and the Bank are defendants, from time-to-time, in legal actions at various points of the legal process, including appeals, arising from transactions conducted in the ordinary course of business. Management believes, after consultation with legal counsel, that it is not probable that the outcome of current legal actions will result in a liability that has a material adverse effect on the Company’s consolidated financial position, results of operations, comprehensive income or cash flows. In the event that such legal action results in an unfavorable outcome, the resulting liability could have a material adverse effect on the Company’s consolidated financial position, results of operations, comprehensive income or cash flows.

On May 20, 2016, a putative stockholder class action lawsuit (the “Merger Litigation”), was filed against the Company and the individual members of Company’s board of directors in connection with the Company entering into the Agreement and Plan of Reorganization (the “Merger Agreement”). The action, Sciabacucchi v. Cordes et al., Case No. 16cv31793, was filed in Colorado District Court, Denver County.

The Merger Litigation alleged that the members of the Company’s board of directors breached their fiduciary duties owed to the Company’s stockholders by causing a materially incomplete registration statement to be filed. The plaintiff in the Merger Litigation generally sought, among other things, declaratory and injunctive relief concerning the alleged breach of fiduciary duties, injunctive relief prohibiting consummation of the transaction and attorneys’ fees and costs, and other further relief.

On July 5, 2016, the parties to the merger litigation entered into a Memorandum of Agreement providing that, among other things: (1) the Company would make specified additional disclosures in the joint proxy statement/prospectus filed in connection with the transaction; (2) the merger litigation is stayed; and (3) the parties would enter into a stipulation providing for certification of a class for settlement purposes and a class release. The joint proxy statement/prospectus filing filed on July 19, 2016, included these specific additional disclosures. The proposed settlement is subject to, among other things, approval of the District Court, City and County of Denver, Colorado. Under the terms of the proposed settlement, following final court approval, the action will be dismissed with prejudice.

On September 9, 2016, the parties entered into a Final Stipulation of Settlement and Release filed with the Colorado District Court, Denver County. A copy of the settlement was mailed to all stockholders of record between March 16, 2016 and July 5, 2016 in September 2016. The hearing to approve the settlement is scheduled for January 2017. There can be no assurances however, that court approval of the settlement will be obtained.

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Subsequent Events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

(14)Subsequent Events

On November 8, 2016, the Company’s board of directors declared a quarterly cash dividend of $0.115 per common share. The dividend is payable on November 28, 2016 to stockholders of record as of close of business on November 18, 2016.

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Organization, Operations, And Basis Of Presenstation (Policy)

9 Months Ended

Sep. 30, 2016

Organization, Operations And Basis Of Presentation [Abstract]

Basis of Presentation

(a)Basis of Presentation

The accounting and reporting policies of the Company conform to generally accepted accounting principles in the United States of America. All material intercompany balances and transactions have been eliminated in consolidation. The Company’s financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of its financial position and results of operations for the periods presented. All such adjustments are of a normal and recurring nature. Subsequent events have been evaluated through the date of financial statement issuance.

Certain information and note disclosures normally included in consolidated financial statements, prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The interim operating results presented in these financial statements are not necessarily indicative of operating results for the full year. For further information, refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2015.

Business Combinations

(b)Business Combinations

The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair value upon the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine the fair values of assets acquired and liabilities assumed. Any excess of purchase price over amounts allocated to the acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill.

Use of Estimates

(c)Use of Estimates

The preparation of the consolidated financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated balance sheets and income and expense for the periods presented. Actual results could differ significantly from those estimates.

Loans and Loan Commitments

(d)Loans and Loan Commitments

The Company’s loan portfolio includes originated and purchased loans. The Company extends commercial, real estate, agricultural and consumer loans to customers. A substantial portion of the loan portfolio consists of commercial and real estate loans made to borrowers located throughout the Front Range of Colorado. The ability of the Company’s borrowers to honor their contracts is generally dependent upon the real estate and general economic conditions prevailing in Colorado, among other factors.

Originated and purchased loans for which there was no evidence of credit deterioration upon acquisition and for which collection of all contractually required payments upon acquisition was considered probable are referred to collectively as non-purchased credit impaired loans, or “Non-PCI” loans. Purchased loans for which there was at the acquisition date evidence of credit deterioration since origination and for which collection of all contractually required payments was not probable were designated as and referred to as purchased credit impaired or “PCI” loans. In the September 8, 2016 transaction with Home State, the Company designated $2,108,000 of loans as PCI.

Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are reported at their outstanding unpaid principal balances, adjusted for charge-offs, the allowance for loan losses, acquisition-related discount and any deferred fees or costs. Acquired loans are recorded upon acquisition at fair value, with no associated allowance for loan loss. However, if subsequent to acquisition the credit quality of an acquired loan deteriorates, an allowance may be required. Accounting for loans is performed consistently across all portfolio segments and classes.

A portfolio segment is defined in accounting guidance as the level at which an entity develops and documents a systematic methodology to determine its allowance for loan losses. A class is defined in accounting guidance as a group of loans having similar initial measurement attributes, risk characteristics and methods for monitoring and assessing risk.

Interest income is accrued on the unpaid principal balance of the Company’s loans. Loan origination fees, net of direct origination costs, are deferred and recognized as an adjustment to the related loan yield using the effective interest method without anticipating prepayments. Purchase discount or premium on acquired, Non-PCI loans is recognized as an adjustment to interest income over the contractual life of such loans using the effective interest method, or taken into income when the related loans are paid off or sold. With respect to PCI loans, the “accretable yield”, calculated as the excess of undiscounted expected cash flows at acquisition over the fair value at acquisition, is accreted into income over the term of the loan assuming the amount and timing of cash flows are reasonably estimable.

The accrual of interest on loans is discontinued (and the loan is put on nonaccrual status) at the time the loan is 90 days past due unless the loan is well secured and in process of collection. The time at which a loan enters past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off prior to the date on which they would otherwise enter past due status if collection of principal or interest is considered doubtful. The interest on a nonaccrual loan is accounted for using the cost-recovery or cash-basis method until the loan qualifies for a return to the accrual-basis method. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero, with payments received being applied first to the principal balance of the loan. Under the cash-basis method, interest income is recognized when the payment is received in cash. A loan is returned to accrual status after the delinquent borrower’s financial condition has improved, when all the principal and interest amounts contractually due are brought current and when the likelihood of the borrower making future timely payments is reasonably assured.

Financial instruments include off‑balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The face amount of each item represents the Company’s total exposure to loss with respect to the item before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Allowance for Loan Losses and Allowance for Unfunded Commitments

(e)Allowance for Loan Losses and Allowance for Unfunded Commitments

The allowance for loan losses, or “the allowance”, is a valuation allowance for probable incurred loan losses and is reported as a reduction of outstanding loan balances.

Management evaluates the amount of the allowance on a regular basis based upon its periodic review of the collectability of the Company’s loans. Factors affecting the collectability of the loans include the nature and volume of the loan portfolio, adverse situations that may affect borrowers’ ability to repay, estimated value of any underlying collateral, prevailing economic conditions and historical loss experience.  This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. Management maintains the allowance at a level that it deems appropriate to adequately provide for probable incurred losses in the loan portfolio and other extensions of credit. The Company’s methodology for estimating the allowance is consistent across all portfolio segments and classes of loans.

Loans deemed to be uncollectible are charged off and deducted from the allowance. The Company’s loan portfolio primarily consists of non-homogeneous commercial and real estate loans where charge-offs are considered on a loan-by-loan basis based on the facts and circumstances, including management’s evaluation of collateral values in comparison to book values on collateral-dependent loans. Charge-offs on smaller balance unsecured homogenous type loans, such as overdrafts and ready reserves, are recognized by the time the loan in question is 90 days past due. The provision for loan losses and recoveries on loans previously charged-off are added to the allowance.

The allowance consists of both specific and general components. The specific component relates to loans that are individually classified as impaired. All loans are subject to individual impairment evaluation should the pertinent facts and circumstances suggest that such evaluation is necessary. Factors considered by management in determining impairment include the loan’s payment status and the probability of collecting scheduled principal and interest payments when they become due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the original underlying loan agreement.Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. If a loan is impaired, a portion, if any, of the allowance is allocated so that the loan is reported at the present value of estimated future cash flows using the loan’s original contractual rate or at the fair value of collateral, less estimated selling costs, if repayment is expected solely from collateral. Troubled debt restructurings (“TDRs”) are separately identified for impairment disclosures. If a TDR is considered to be a collateral-dependent loan, impairment of the loan is measuredusing the fair value of the collateral, less estimated selling costs. Likewise, if a TDR is not collateral-dependent, impairment is measured using the present value of estimated future cash flows discounted by the loan’s effective rate at inception. For TDRs that subsequently default, the Company determines the amount of reserve in accordance with its accounting policy for the allowance.

The general component of the allowance covers originated loans not specifically identified as impaired and is determined by calculating losses recognized by portfolio segment during the current credit cycle and adjusted based on management’s evaluation of various qualitative factors.In performing this calculation, loans are aggregated into one of three portfolio segments: Real Estate, Consumer and Commercial & Other. An assessment of risks impacting loans in each of these portfolio segments is performed and qualitative adjustment factors, which will adjust the historical loss rate, are estimated. These qualitative adjustment factors consider current conditions relative to conditions present throughout the current credit cycle in the following areas: credit quality, loan class concentration levels, economic conditions, loan growth dynamics and organizational conditions. The historical loss experience is adjusted for management’s estimate of the impact of these factors based on the risks present for each portfolio segment.

The Company recognizes a liability in relation to unfunded commitments that is intended to represent the estimated future losses on commitments. In calculating the amount of this liability, management considers the amount of the Company’s off-balance sheet commitments, estimated utilization factors and loan specific risk factors. The Company’s liability for unfunded commitments is calculated quarterly and the liability is included under “other liabilities” in the consolidated balance sheet.

Goodwill And Other Intangible Assets

(f)Goodwill and Other Intangible Assets

Goodwill was recorded in the transaction with Home State on September 8, 2016 and represents the excess of the purchase price over the fair value of acquired tangible assets, identifiable intangible assets and liabilities. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified.

Intangible assets acquired in a business combination are amortized over their estimated useful lives to their estimated residual values and evaluated for impairment whenever changes in circumstances indicate that such an evaluation is necessary.

Core deposit intangible assets (“CDI assets”) are recognized at the time of their acquisition based on valuations prepared by independent third parties or other estimates of fair value. In preparing such valuations, management considers variables such as deposit servicing costs, attrition rates and market discount rates. CDI assets are amortized to expense over their useful lives, ranging from 10 years to 15 years.

Customer relationship intangible assets are recognized at the time of their acquisition based upon management’s estimate of their fair value. In preparing their valuation, management considers variables such as growth in existing customer base, attrition rates and market discount rates. The customer relationship intangible assets are amortized to expense over their estimated useful life, which has been estimated to be 10 years. As of September 30, 2016, the Company had recognized three customer relationship intangible assets as a result of the acquisitions of PCM on July 31, 2012, CHIA on July 16, 2014 and Home State Bancorp (“Home State”) on September 8, 2016.

Derivative Instruments

(g)Derivative Instruments

The Company records all derivatives on its consolidated balance sheets at fair value. At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the derivative’s likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). To date, the Company has entered into cash flow hedges and stand-alone derivative agreements but has not entered into any fair value hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same periods during which the hedged transaction impacts earnings. Any portion of the cash flow hedge not deemed highly effective in hedging the changes in expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings as noninterest income.

The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions, at the inception of the derivative contract. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the hedge is highly effective in offsetting changes in cash flows of the hedged items.

Stock Incentive Plan

(h)Stock Incentive Plan

The Company’s Amended and Restated 2005 Stock Incentive Plan (the “Incentive Plan”) provided for the grant of equity-based awards representing up to a total of 1,700,000 shares of voting common stock to key employees, nonemployee directors, consultants and prospective employees. The Incentive Plan expired by its terms on April 4, 2015. At the Company’s annual meeting of stockholders on May 5, 2015, the Company’s stockholders approved the Guaranty Bancorp 2015 Long-Term Incentive Plan (the “2015 Plan”), which had been previously approved by the Company’s Board of Directors. The 2015 Plan provides for the grant of stock options, stock awards, stock unit awards, performance stock awards, stock appreciation rights and other equity-based awards representing up to a total of 935,000 shares of voting common stock to key employees, nonemployee directors, consultants and prospective employees. All awards issued under the Incentive Plan will remain outstanding in accordance with their terms despite the expiration of the Incentive Plan; however, any awards granted subsequent to the expiration of the Incentive Plan have been, and will continue to be, issued under the 2015 Plan.

As of September 30, 2016, the Company had granted stock awards under both the Incentive Plan and the 2015 Plan. The Company recognizes stock compensation expense for services received in a share-based payment transaction over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The compensation cost of employee and director services received in exchange for stock awards is based on the grant date fair value of the award, as determined by quoted market prices. Stock compensation expense is recognized using an estimated forfeiture rate, adjusted as necessary to reflect actual forfeitures. The Company has issued stock awards that vest based on the passage of time over service periods of one to five years (in some cases vesting in annual installments, in other cases cliff vesting at the end of the service period) and other stock awards that vest contingent upon the satisfaction of certain performance conditions. The last date on which outstanding performance stock awards may vest is February 14, 2019. Compensation cost related to the performance stock awards is recognized based on an evaluation of financial performance in comparison to established criteria. Should expectations of future financial performance change, the amount of expense recognized in future periods could be impacted.

Stock Repurchase Plan

(i)Stock Repurchase Plan

On February 2, 2016, the Company’s Board of Directors authorized the extension of the expiration date of the Company’s share repurchase program originally announced in April 2014. The repurchase program had been scheduled to expire 12 months from the date of its announcement and, as extended, the program is scheduled to expire on April 2, 2017. Pursuant to the program, the Company may repurchase up to 1,000,000 shares of its voting common stock, par value $0.001 per share. As of the date of this filing, the Company had not repurchased any shares under the program.

Income Taxes

(j)Income Taxes

Income tax expense is the total of the current year’s income tax payable or refundable and the increase or decrease in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of the enactment date.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that the Company will not realize some portion of or the entire deferred tax asset. In assessing the Company’s likelihood of realizing deferred tax assets, management evaluates both positive and negative evidence, including the existence of any cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry-back years, forecasts of future income, taking into account applicable tax planning strategies and assessments of current and future economic and business conditions. Management performs this analysis quarterly and adjusts as necessary. At September 30, 2016 and December 31, 2015, the Company had a net deferred tax asset of $3,451,000 and$7,912,000, respectively, which includes the deferred tax asset (liability) associated with the net unrealized loss (gain) on securities and interest rate swaps. After analyzing the composition of, and changes in, the deferred tax assets and liabilities and considering the Company’s forecasted future taxable income and various tax planning strategies, including the intent to hold the securities available for sale that were in a loss position until maturity, management determined that as of September 30, 2016, it was “more likely than not” that the net deferred tax asset would be fully realized. As a result, there was no valuation allowance with respect to the Company’s deferred tax asset as of September 30, 2016 or December 31, 2015.  

The Company and the Bank are subject to U.S. federal income tax and state of Colorado income tax. Generally, the Company is no longer subject to examination by Federal taxing authorities for years before 2012 and is no longer subject to examination by the State for years before 2011. The Company recognizes interest related to income tax matters as interest expense and penalties related to income tax matters as other noninterest expense. At September 30, 2016 and December 31, 2015, the Company did not have any amounts accrued for interest or penalties.

Earnings Per Common Share

(k)Earnings per Common Share

Basic earnings per common share represents the earnings allocable to common stockholders divided by the weighted average number of common shares outstanding during the period. Dilutive common shares that may be issued by the Company represent unvested stock awards subject to a service or performance condition.

Earnings per common share have been computed based on the following calculation of weighted average shares outstanding:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Average common shares outstanding	22,811,386	21,076,380	21,750,153	21,061,445
Effect of dilutive unvested stock grants (1)	145,882	148,609	214,894	153,990
Average shares outstanding for calculated
diluted earnings per common share	22,957,268	21,224,989	21,965,047	21,215,435
_____________

(1)Unvested stock grants representing 564,376 shares at September 30, 2016 had a dilutive impact of 145,882 and 214,894 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2016, respectively. Unvested stock grants representing 651,275 shares at September 30, 2015 had a dilutive impact of 148,609 and 153,990 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2015, respectively.

Recently Issued Accounting Standards

(l)Recently Issued Accounting Standards

Adoption of New Accounting Standards:

In April 2015, the FASB issued accounting standards update 2015-03 modifying the presentation of debt issuance costs. The update requires that debt issuance costs be presented as a direct reduction of debt balances on the balance sheet. For public business entities, the amendments of this update are effective for interim and annual periods beginning after December 15, 2015.  As a result of this update the Company has presented debt issuance costs as a reduction of the related debt balance on the Company’s Balance Sheet.

In September 2015, the FASB issued accounting standards update 2015-16 Simplifying the Accounting for Measurement-Period Adjustments. The update requires acquirers to adjust provisional amounts identified during the measurement period in the reporting period in which the adjustments are determined, rather than retrospectively adjusting previously reported information. Additional disclosure of the impact of measurement period adjustments on current year earnings will also be required. For public business entities, the amendments of this update are effective for interim and annual periods beginning after December 15, 2015. This update does not have a material impact on the Company’s financial position, results of operations or cash flows.

Recently Issued but not yet Effective Accounting Standards:

In May 2014, the FASB issued accounting standards update 2014-09 Revenue from Contracts with Customers. The main provisions of the update require the identification of performance obligations within a contract and require the recognition of revenue based on a stand-alone allocation of contract revenue to each performance obligation. Performance obligations may be satisfied and revenue recognized over a period of time if: (i) the customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs, or (ii) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (iii) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. The amendments of the update are to be effective for public entities beginning with interim and annual reporting periods beginning after December 15, 2017. Management does not expect the requirements of this update to have a material impact on the Company’s financial position, results of operations or cash flows.

In January 2016, the FASB released accounting standards update 2016-01 Recognition and Measurement of Financial Assets and Liabilities. The main provisions of the update are to eliminate the available for sale classification of accounting for equity securities and to adjust the fair value disclosures for financial instruments carried at amortized costs such that the disclosed fair values represent an exit price as opposed to an entry price. The provisions of this update will require that equity securities be carried at fair market value on the balance sheet and any periodic changes in value will be adjustments to the income statement. A practical expedient is provided for equity securities without a readily determinable fair value, such that these securities can be carried at cost less any impairment. The provisions of this update become effective for interim and annual periods beginning after December 15, 2017. Management does not expect the requirements of this update to have a material impact on the Company’s financial position, results of operations or cash flows.

In February 2016, the FASB issued accounting standards update 2016-02 Leases. The update requires all leases, with the exception of short-term leases that have contractual terms no greater than one year, to be recorded on the balance sheet. Under the provisions of the update, leases classified as operating will be reflected on the balance sheet with the recognition of both a right-of-use asset and a lease liability. Under the update, a distinction will exist between finance and operating type leases and the rules for determining which classification a lease will fall into are similar to existing rules. For public business entities, the amendments of this update are effective for interim and annual periods beginning after December 15, 2018. The update requires a modified retrospective transition under which comparative balance sheets from the earliest historical period presented will be revised to reflect what the financials would have looked like were the provisions of the update applied consistently in all prior periods. Management is in the process of evaluating the impacts of the update on the Company’s financial position and does not expect the requirements of the update to have a material impact on the Company’s results of operations or cash flows.

In March 2016, the FASB issued accounting standards update 2016-09 Compensation-Stock Compensation. The purpose of the update was to simplify the accounting for share-based payment transactions, including the income tax consequences of such transactions. Under the provisions of the update the income tax consequences of excess tax benefits and deficiencies should be recognized in income tax expense in the reporting period in which the awards vest. Currently, excess tax benefits or deficiencies impact stockholder’s equity directly to the extent there is a cumulative excess tax benefit. In the event that a tax deficiency has occurred during the reporting period and a cumulative excess tax benefit does not exist, the tax deficiency is recognized in income tax expense under current GAAP. The update also provides that entities may continue to estimate forfeitures in accounting for stock based compensation or recognize them as they occur. The provisions of this update become effective for interim and annual periods beginning after December 15, 2016. The update requires a modified retrospective transition under which a cumulative effect to equity will be recognized in the period of adoption. Management is in the process of evaluating the impact of the update on the Company’s financial position, results of operations and cash flows.

In June 2016, the FASB issued accounting standards update 2016-13 Financial Instruments - Credit Losses, commonly referred to as “CECL”. The provisions of the update eliminate the probable initial recognition threshold under current GAAP which requires reserves to be based on an incurred loss methodology. Under CECL reserves required for financial assets measured at amortized cost will reflect an organization’s estimate of all expected credit losses over the contractual term of the financial asset and thereby require the use of reasonable and supportable forecasts to estimate future credit losses. Because CECL encompasses all financial assets carried at amortized cost, the requirement that reserves be established based on an organization’s reasonable and supportable estimate of expected credit losses extends to held to maturity (“HTM”) debt securities. Under the provisions of the update credit losses recognized on available for sale (“AFS”) debt securities will be presented as an allowance as opposed to a write-down. In addition, CECL will modify the accounting for purchased loans, with credit deterioration since origination, so that reserves are established at the date of acquisition for purchased loans. Under current GAAP a purchased loan’s contractual balance is adjusted to fair value through a credit discount and no reserve is recorded on the purchased loan upon acquisition. Since under CECL reserves will be established for purchased loans at the time of acquisition the accounting for purchased loans is made more comparable to the accounting for originated loans. Finally, increased disclosure requirements under CECL require organizations to present the currently required credit quality disclosures disaggregated by the year of origination or vintage. The FASB expects that the evaluation of underwriting standards and credit quality trends by financial statement users will be enhanced with the additional vintage disclosures. For public business entities that are SEC filers the amendments of the update will become effective beginning January 1, 2020. Management is in the process of evaluating the impact of CECL on the Company’s financial position, results of operations and cash flows as well as its required disclosures.

In August 2016, the FASB issued accounting standards update 2016-15, Statement of Cash Flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice of how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this update are effective for fiscal years and interim periods beginning after December 15, 2017; however early adoption is permitted. Management is currently in the process of evaluating the impact of the update on the Company’s statement of cash flows.

Reclassifications

(m)Reclassifications

Certain reclassifications of prior year balances have been made to conform to the current year presentation. These reclassifications had no impact on the Company’s consolidated financial position, results of operations or cash flows.

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Organization, Operations And Basis Of Presentation (Tables)

9 Months Ended

Sep. 30, 2016

Organization, Operations And Basis Of Presentation [Abstract]

Earnings (Loss) Per Common Share

	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Average common shares outstanding	22,811,386	21,076,380	21,750,153	21,061,445
Effect of dilutive unvested stock grants (1)	145,882	148,609	214,894	153,990
Average shares outstanding for calculated
diluted earnings per common share	22,957,268	21,224,989	21,965,047	21,215,435
_____________

(1)Unvested stock grants representing 564,376 shares at September 30, 2016 had a dilutive impact of 145,882 and 214,894 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2016, respectively. Unvested stock grants representing 651,275 shares at September 30, 2015 had a dilutive impact of 148,609 and 153,990 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2015, respectively.

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Business Combination (Tables)

9 Months Ended

Sep. 30, 2016

Business Combination [Abstract]

Schedule Of Assets And Liabilities Acquired

Assets acquired:
		(In thousands)
Cash and cash equivalents	$	11,849
Time deposits with banks		504
Securities available-for-sale		396,450
Securities held-to-maturity		850
Bank stocks		1,355
Net Loans		445,529
Premises and equipment, net		23,460
Other real estate owned		67
Goodwill		56,148
Other intangible assets, net		11,701
Other assets		8,244
Total assets acquired		956,157
Liabilities assumed:
Deposits		769,709
Securities sold under agreement to repurchase and federal funds purchased		19,985
Federal Home Loan Bank term notes		2,525
Federal Home Loan Bank line of credit borrowing		2,052
Other liabilities		9,408
Total liabilities assumed		803,679
Net assets acquired	$	152,478

Composition Of Acquired Portfolio

		September 30,
		2016
		(In thousands)
Commercial and residential real estate	$	294,069
Construction		39,947
Commercial		45,996
Agricultural		7,906
Consumer		16,460
SBA		25,227
Other		15,924
Total gross loans		445,529

Schedule Of Pro Forma Financial Information

		Three Months Ended September 30,
		2016		2015
UNAUDITED		(Dollars in thousands, except per share data)
Net interest income	$	28,832	$	27,134
Noninterest income		6,124		6,309
Net income		8,419		8,940
Earnings per common share-basic:	$	0.30	$	0.32
Earnings per common share-diluted:	$	0.30	$	0.32

		Nine Months Ended September 30,
		2016		2015
UNAUDITED		(Dollars in thousands, except per share data)
Net interest income	$	84,004	$	80,182
Noninterest income		19,326		18,190
Net income		25,503		23,265
Earnings per common share-basic:	$	0.92	$	0.84
Earnings per common share-diluted:	$	0.91	$	0.84

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Securities (Tables)

9 Months Ended

Sep. 30, 2016

Securities [Abstract]

Fair Value Of Available For Sale Debt Securities

	September 30, 2016
		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
		(In thousands)
Securities available for sale:
U.S. government agencies	$	5,018	$	-	$	-	$	5,018
State and municipal		142,457		257		(376)		142,576
Mortgage-backed - agency / residential		130,544		887		(256)		129,913
Mortgage-backed - private / residential		270		-		(5)		275
Asset-backed		2,151		-		(1)		2,152
Corporate		63,422		648		(456)		63,230
Collateralized loan obligations		20,487		11		(62)		20,538
Total securities available for sale	$	364,349	$	1,803	$	(1,156)	$	363,702

	December 31, 2015
		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Amortized Cost
		(In thousands)
Securities available for sale:
State and municipal	$	34,713	$	20	$	-	$	34,693
Mortgage-backed - agency / residential		129,017		1,081		(1,929)		129,865
Mortgage-backed - private / residential		274		-		(10)		284
Trust preferred		17,806		100		(2,294)		20,000
Corporate		65,291		660		(389)		65,020
Collateralized loan obligations		8,330		-		(148)		8,478
Total securities available for sale	$	255,431	$	1,861	$	(4,770)	$	258,340

Unrecognized Gains and Losses, Securities Held To Maturity

		Fair Value		Gross Unrecognized Gains		Gross Unrecognized Losses		Amortized Cost
		(In thousands)
September 30, 2016:
State and municipal	$	64,285	$	2,289	$	(252)	$	62,248
Mortgage-backed - agency / residential		104,453		2,566		(28)		101,915
Asset-backed		18,415		594		-		17,821
Other		1,200		-		-		1,200
	$	188,353	$	5,449	$	(280)	$	183,184
December 31, 2015:
State and municipal	$	55,812	$	1,349	$	(390)	$	54,853
Mortgage-backed - agency / residential		74,692		767		(611)		74,536
Asset-backed		19,618		273		(27)		19,372
	$	150,122	$	2,389	$	(1,028)	$	148,761

Proceeds From Sales And Calls of Securities

		Three Months Ended September 30,				Nine Months Ended September 30,
		2016		2015		2016		2015
		(In thousands)
Proceeds	$	317,630	$	-	$	370,111	$	2,868
Gross gains		1,434		-		2,486		16
Gross losses		(1,500)		-		(2,608)		(16)
Net tax (benefit) expense related to
gains (losses) on sale		(25)		-		(46)		-

Investments Classified by Contractual Maturity Date

		Available for Sale
		Fair Value		Amortized Cost
		(In thousands)
Securities available for sale:
Due in one year or less	$	16,092	$	16,068
Due after one year through five years		19,915		19,516
Due after five years through ten years		106,052		106,014
Due after ten years		68,838		69,226
Total AFS, excluding mortgage-backed (MBS), asset-backed
and collateralized loan obligations		210,897		210,824
Mortgage-backed, asset-backed and collateralized
loan obligations		153,452		152,878
Total securities available for sale	$	364,349	$	363,702

		Held to Maturity
		Fair Value		Amortized Cost
		(In thousands)
Securities held to maturity:
Due in one year or less	$	592	$	592
Due after one year through five years		3,513		3,426
Due after five years through ten years		29,307		28,515
Due after ten years		32,073		30,915
Total HTM, excluding MBS and asset-backed		65,485		63,448
Mortgage-backed and asset-backed		122,868		119,736
Total securities held to maturity	$	188,353	$	183,184

Fair Value And The Unrealized Loss On Temporarily Impaired Securities

September 30, 2016		Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(In thousands)
Description of securities:
Available for sale:
State and municipal	$	91,119	$	(376)	$	-	$	-	$	91,119	$	(376)
Mortgage-backed - agency /
residential		33,061		(148)		10,160		(108)		43,221		(256)
Mortgage-backed - private /
residential		-		-		270		(5)		270		(5)
Asset-backed		2,151		(1)		-		-		2,151		(1)
Corporate		14,042		(456)		-		-		14,042		(456)
Collateralized loan obligations		2,988		-		5,475		(62)		8,463		(62)
Held to maturity:
State and municipal		2,630		(17)		610		(246)		3,240		(263)
Mortgage-backed - agency /
residential		12,965		(402)		-		-		12,965		(402)
Asset-backed		7,562		(119)		3,315		(5)		10,877		(124)
Total temporarily impaired	$	166,518	$	(1,519)	$	19,830	$	(426)	$	186,348	$	(1,945)

December 31, 2015		Less than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(In thousands)
Description of securities:
Available for sale:
Mortgage-backed - agency /
residential	$	56,204	$	(800)	$	31,755	$	(1,129)	$	87,959	$	(1,929)
Mortgage-backed - private /
residential		274		(10)		-		-		274		(10)
Trust preferred		-		-		7,706		(2,294)		7,706		(2,294)
Corporate		27,176		(389)		-		-		27,176		(389)
Collateralized loan obligations		8,330		(148)		-		-		8,330		(148)
Held to maturity:
State and municipal		6,726		(351)		10,056		(102)		16,782		(453)
Mortgage-backed - agency /
residential		39,280		(781)		25,838		(820)		65,118		(1,601)
Asset-backed		-		-		19,618		(438)		19,618		(438)
Total temporarily impaired	$	137,990	$	(2,479)	$	94,973	$	(4,783)	$	232,963	$	(7,262)

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Loans (Tables)

9 Months Ended

Sep. 30, 2016

Loans [Abstract]

Loans Held For Investment By Loan Type

		September 30,		December 31,
		2016		2015
		(In thousands)
Commercial and residential real estate	$	1,752,113	$	1,281,701
Construction		75,603		107,170
Commercial		400,281		323,552
Agricultural		18,245		9,294
Consumer		81,766		66,288
SBA		51,480		25,645
Other		33,162		631
Total gross loans		2,412,650		1,814,281
Deferred costs, net		349		255
Loans, held for investment, net		2,412,999		1,814,536
Less allowance for loan losses		(23,300)		(23,000)
Net loans, held for investment	$	2,389,699	$	1,791,536

Allowance For Loan Losses

		Three Months Ended September 30,				Nine Months Ended September 30,
		2016		2015		2016		2015
		(In thousands)
Balance, beginning of period	$	23,050	$	22,850	$	23,000	$	22,490
Provision for loan losses		27		14		53		104
Loans charged-off		(72)		(75)		(431)		(172)
Recoveries on loans previously
charged-off		295		101		678		468
Balance, end of period	$	23,300	$	22,890	$	23,300	$	22,890

Allowance For Loan Losses And Loans Held For Investment By Portfolio Segment

		Real Estate		Consumer and Installment		Commercial and Other		Total
		(In thousands)
Allowance for Loan Losses
Balance as of December 31, 2015	$	20,306	$	71	$	2,623	$	23,000
Charge-offs		(213)		(12)		(206)		(431)
Recoveries		235		13		430		678
Provision (credit)		(143)		(15)		211		53
Balance as of September 30, 2016	$	20,185	$	57	$	3,058	$	23,300
Balance as of June 30, 2016	$	20,171	$	75	$	2,804	$	23,050
Charge-offs		(9)		(5)		(58)		(72)
Recoveries		150		2		143		295
Provision (credit)		(127)		(15)		169		27
Balance as of September 30, 2016	$	20,185	$	57	$	3,058	$	23,300

Balances at September 30, 2016:
Allowance for Loan Losses
Individually evaluated	$	301	$	-	$	274	$	575
Collectively evaluated		19,884		57		2,784		22,725
Total	$	20,185	$	57	$	3,058	$	23,300
Loans
Individually evaluated	$	24,783	$	-	$	5,412	$	30,195
Collectively evaluated		1,990,126		5,995		386,683		2,382,804
Total	$	2,014,909	$	5,995	$	392,095	$	2,412,999

		Real Estate		Consumer and Installment		Commercial and Other		Total
		(In thousands)
Allowance for Loan Losses
Balance as of December 31, 2014	$	19,607	$	39	$	2,844	$	22,490
Charge-offs		(21)		(9)		(142)		(172)
Recoveries		138		21		309		468
Provision (credit)		368		10		(274)		104
Balance as of September 30, 2015	$	20,092	$	61	$	2,737	$	22,890
Allowance for Loan Losses
Balance as of June 30, 2015	$	20,006	$	54	$	2,790	$	22,850
Charge-offs		(14)		(5)		(56)		(75)
Recoveries		66		9		26		101
Provision (credit)		34		3		(23)		14
Balance as of September 30, 2015	$	20,092	$	61	$	2,737	$	22,890

Balances at December 31, 2015:
Allowance for Loan Losses
Individually evaluated	$	282	$	-	$	11	$	293
Collectively evaluated		20,024		71		2,612		22,707
Total	$	20,306	$	71	$	2,623	$	23,000
Loans
Individually evaluated	$	23,846	$	2	$	2,305	$	26,153
Collectively evaluated		1,489,211		5,716		293,456		1,788,383
Total	$	1,513,057	$	5,718	$	295,761	$	1,814,536

Schedule Of Impaired Loans

September 30, 2016		Recorded Investment		Unpaid Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized YTD
		(In thousands)
Impaired loans with no related allowance:
Commercial and residential real estate	$	12,832	$	12,862	$	-	$	12,225	$	1,248
Construction		-		-		-		740		-
Commercial		591		591		-		248		13
Consumer		19		19		-		142		1
Other		754		1,124		-		412		-
Total	$	14,196	$	14,596	$	-	$	13,767	$	1,262
Impaired loans with a related allowance:
Commercial and residential real estate	$	11,450	$	11,561	$	293	$	10,296	$	317
Construction		-		-		-		-		-
Commercial		3,500		3,542		28		2,079		110
Consumer		379		467		8		410		7
Other		670		723		246		336		-
Total	$	15,999	$	16,293	$	575	$	13,121	$	434
Total impaired loans:
Commercial and residential real estate	$	24,282	$	24,423	$	293	$	22,521	$	1,565
Construction		-		-		-		740		-
Commercial		4,091		4,133		28		2,327		123
Consumer		398		486		8		552		8
Other		1,424		1,847		246		748		-
Total impaired loans	$	30,195	$	30,889	$	575	$	26,888	$	1,696

December 31, 2015		Recorded Investment		Unpaid Balance		Related Allowance		Average Recorded Investment YTD		Interest Income Recognized YTD
		(In thousands)
Impaired loans with no related allowance:
Commercial and residential real estate	$	12,756	$	14,472	$	-	$	14,194	$	242
Construction		986		986		-		789		-
Commercial		-		-		-		19		-
Consumer		271		310		-		307		5
Other		250		588		-		171		-
Total	$	14,263	$	16,356	$	-	$	15,480	$	247
Impaired loans with a related allowance:
Commercial and residential real estate	$	10,232	$	10,472	$	268	$	9,989	$	388
Construction		-		-		-		-		-
Commercial		1,204		1,220		11		492		18
Consumer		454		529		14		493		13
Other		-		-		-		-		-
Total	$	11,890	$	12,221	$	293	$	10,974	$	419
Total impaired loans:
Commercial and residential real estate	$	22,988	$	24,944	$	268	$	24,183	$	630
Construction		986		986		-		789		-
Commercial		1,204		1,220		11		511		18
Consumer		725		839		14		800		18
Other		250		588		-		171		-
Total impaired loans	$	26,153	$	28,577	$	293	$	26,454	$	666

Summary Of Past Due Loans By Class

September 30, 2016		30-89 Days Past Due		90 Days + Past Due and Still Accruing		Nonaccrual		Total Nonaccrual and Past Due		Total Loans, Held for Investment
		(In thousands)
Commercial and residential
real estate	$	803	$	-	$	3,008	$	3,811	$	1,752,366
Construction		-		-		-		-		75,614
Commercial		1,090		335		828		2,253		400,339
Consumer		57		-		248		305		81,778
Other		207		-		1,423		1,630		102,902
Total	$	2,157	$	335	$	5,507	$	7,999	$	2,412,999

December 31, 2015		30-89 Days Past Due		90 Days + Past Due and Still Accruing		Nonaccrual		Total Nonaccrual and Past Due		Total Loans, Held for Investment
		(In thousands)
Commercial and residential
real estate	$	653	$	-	$	11,905	$	12,558	$	1,281,881
Construction		-		-		986		986		107,185
Commercial		1,147		-		874		2,021		323,598
Consumer		291		-		459		750		66,297
Other		-		-		250		250		35,575
Total	$	2,091	$	-	$	14,474	$	16,565	$	1,814,536

Summary Of The Risk Category Of Loans By Class Of Loans

September 30, 2016		Commercial & Residential Real Estate		Construction		Commercial		Consumer		Other		Total
		(In thousands)
Non-classified	$	1,725,406	$	75,603	$	395,917	$	81,351	$	100,335	$	2,378,612
Substandard		26,707		-		4,364		415		2,552		34,038
Doubtful		-		-		-		-		-		-
Subtotal		1,752,113		75,603		400,281		81,766		102,887		2,412,650
Deferred costs, net		253		11		58		12		15		349
Loans, held for investment, net	$	1,752,366	$	75,614	$	400,339	$	81,778	$	102,902	$	2,412,999

December 31, 2015		Commercial & Residential Real Estate		Construction		Commercial		Consumer		Other		Total
		(In thousands)
Non-classified	$	1,260,134	$	106,184	$	322,650	$	65,365	$	34,194	$	1,788,527
Substandard		21,567		986		902		923		1,376		25,754
Doubtful		-		-		-		-		-		-
Subtotal		1,281,701		107,170		323,552		66,288		35,570		1,814,281
Deferred costs, net		180		15		46		9		5		255
Loans, held for investment, net	$	1,281,881	$	107,185	$	323,598	$	66,297	$	35,575	$	1,814,536

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Goodwill And Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill And Other Intangible Assets [Abstract]

Schedule Of Finite Lived Intangible Assets And Related Accumulated Amortization

			September 30,		December 31,
	Useful Life		2016		2015
			(In thousands)
Core deposit intangible assets	10 - 15 years	$	73,655	$	62,975
Core deposit intangible assets accumulated amortization			(62,561)		(62,124)
Core deposit intangible assets, net		$	11,094	$	851
Customer relationship intangible assets	10 years		6,674		5,654
Customer relationship intangible assets accumulated amortization			(1,763)		(1,332)
Customer relationship intangible assets, net		$	4,911	$	4,322
Total other intangible assets, net		$	16,005	$	5,173

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Subordinated Debentures And Trust Preferred Securities (Tables)

9 Months Ended

Sep. 30, 2016

Subordinated Debentures And Trust Preferred Securities [Abstract]

Schedule Of Subordinated Debenture Issuance

	Date Issued	Amount	Maturity Date	Call Date *	Fixed or Variable	Rate Adjuster		Current Rate		Next Rate Reset Date**
CenBank Trust III	4/8/2004	15,464	4/15/2034	1/15/2017	Variable	LIBOR + 2.65	%	3.33	%	1/15/2017
Guaranty Capital Trust III	6/30/2003	10,310	7/7/2033	1/7/2017	Variable	LIBOR + 3.10	%	3.78	%	1/7/2017
Subordinated Notes	7/18/2016	40,000	7/20/2026	N/A	Fixed	LIBOR + 4.73	%	5.75	%	7/20/2021

*  Call date represents the earliest or next date the Company can call the debentures.

** On October 7, 2016, the rate on the Guaranty Capital Trust III subordinated debentures reset to 3.98%. On October 15, 2016, the rate on the CenBank Trust III subordinated debentures reset to 3.53%. The subordinated notes issued July 18, 2016 are fixed at 5.75% until July 20, 2021 at which point the notes turn to floating rate at three-month LIBOR plus 4.73%.

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Commitments (Tables)

9 Months Ended

Sep. 30, 2016

Commitments [Abstract]

Commitments To Extend Credit

		September 30, 2016		December 31, 2015
		(In thousands)
Commitments to extend credit:
Variable	$	419,370	$	307,463
Fixed		94,078		61,184
Total commitments to extend credit	$	513,448	$	368,647
Standby letters of credit	$	10,429	$	8,857

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Fair Value Measurements And Fair Value Of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Measurements And Fair Value Of Financial Instruments [Abstract]

Financial Assets and Liabilities Measured on a Recurring Basis

		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
		(In thousands)
Assets/(Liabilities) at September 30, 2016
U.S. government agencies	$	-	$	5,018	$	-	$	5,018
State and municipal securities		-		110,496		31,961		142,457
Mortgage-backed securities – agency /
residential		-		130,544		-		130,544
Mortgage-backed securities – private /
residential		-		270		-		270
Asset-backed securities		-		2,151		-		2,151
Corporate securities		-		63,422		-		63,422
Collateralized loan obligations		-		20,487				20,487
Interest rate swaps - cash flow hedge		-		(3,425)		-		(3,425)
Assets/(Liabilities) at December 31, 2015
State and municipal securities	$	-	$	2,673	$	32,040	$	34,713
Mortgage-backed securities – agency /
residential		-		129,017		-		129,017
Mortgage-backed securities – private /
residential		-		274		-		274
Trust preferred securities		-		17,806		-		17,806
Corporate securities		-		65,291		-		65,291
Collateralized loan obligations		-		8,330				8,330
Interest rate swaps - cash flow hedge		-		(2,558)		-		(2,558)

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

		State and Municipal Securities
		Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
		(In thousands)
Beginning balance	$	31,909	$	32,040
Total unrealized gains (losses) included in:
Net income		2		5
Other comprehensive income (loss)		-		-
Sales, calls and prepayments		(81)		(215)
Acquisition of Level 3 security		131		131
Transfers in and (out) of Level 3		-		-
Balance end of period	$	31,961	$	31,961

		State and Municipal Securities
		Three Months Ended September 30, 2015		Nine Months Ended September 30, 2015
		(In thousands)
Beginning balance	$	32,038	$	32,317
Total unrealized gains (losses) included in:
Net income		1		3
Other comprehensive income (loss)		-		(1)
Sales, calls and prepayments		-		-
Transfer to held to maturity		-		(280)
Transfers in and (out) of Level 3		-		-
Balance end of period	$	32,039	$	32,039

Quantitative Information About Level 3 Fair Value Measurements

September 30, 2016		Fair Value	Valuation Technique	Unobservable Inputs	Range
		(In thousands)
State and municipal securities	$	31,961	discounted cash flow	discount rate	2.19%-4.75%
Total	$	31,961

December 31, 2015		Fair Value	Valuation Technique	Unobservable Inputs	Range
		(In thousands)
State and municipal securities	$	32,040	discounted cash flow	discount rate	2.05%-4.75%
Total	$	32,040

Estimated Fair Values And Related Carrying Amounts Of Financial Instruments

				Fair Value Measurements at September 30, 2016:
		Carrying Amount		Level 1		Level 2		Level 3		Total
		(In thousands)
Financial assets:
Cash and cash equivalents	$	163,908	$	163,908	$	-	$	-	$	163,908
Securities available for sale		364,349		-		332,388		31,961		364,349
Securities held to maturity		183,184		-		185,245		3,108		188,353
Bank stocks		14,558		n/a		n/a		n/a		n/a
Loans held for investment, net		2,389,699		-		-		2,391,039		2,391,039
Accrued interest receivable		9,314		-		9,314		-		9,314
Financial liabilities:
Deposits	$	2,752,112	$	-	$	2,751,953	$	-	$	2,751,953
Federal funds purchased and sold under
agreements to repurchase		35,936		-		35,936		-		35,936
Subordinated debentures		64,973		-		-		59,571		59,571
Long-term borrowings		122,521		-		122,898		-		122,898
Accrued interest payable		1,070		-		1,070		-		1,070
Interest rate swap - cash flow hedge		3,425		-		3,425		-		3,425

				Fair Value Measurements at December 31, 2015:
		Carrying Amount		Level 1		Level 2		Level 3		Total
		(In thousands)
Financial assets:
Cash and cash equivalents	$	26,711	$	26,711	$	-	$	-	$	26,711
Securities available for sale		255,431		-		223,391		32,040		255,431
Securities held to maturity		148,761		-		145,698		4,424		150,122
Bank stocks		20,500		n/a		n/a		n/a		n/a
Loans held for investment, net		1,791,536		-		-		1,791,128		1,791,128
Accrued interest receivable		6,554		-		6,554		-		6,554
Financial liabilities:
Deposits	$	1,801,845	$	-	$	1,800,112	$	-	$	1,800,112
Federal funds purchased and sold under
agreements to repurchase		26,477		-		26,477		-		26,477
Short-term borrowings		185,847		-		185,847		-		185,847
Subordinated debentures		25,774		-		-		18,640		18,640
Long-term borrowings		95,000		-		95,353		-		95,353
Accrued interest payable		508		-		508		-		508
Interest rate swap - cash flow hedge		2,558		-		2,558		-		2,558

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Derivatives And Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2016

Derivatives And Hedging Activities [Abstract]

Schedule Of Derivative Financial Instruments As Well As Their Classification On The Balance Sheet

	Balance		Fair Value
	Sheet		September 30,		December 31,
	Location		2016		2015
			(In thousands)
Derivatives designated as hedging instruments
Assets:
Interest rate swaps	Other assets	$	-	$	-
Liabilities:
Interest rate swaps	Other liabilities	$	3,425	$	2,558

Summary Of Interest Rate Swaps Designated As Cash Flow Hedges

		September 30, 2016			December 31, 2015
		(Dollars in thousands)
Notional amounts	$	50,000		$	50,000
Weighted average pay rates		2.73	%		2.73	%
Weighted average receive rates		3 month LIBOR			3 month LIBOR
Weighted average maturity		4.1 years			4.9 years
Unrealized gains (losses)	$	(3,425)		$	(2,558)

Schedule Of Derivative Financial Instruments On Both Comprehensive Income And Net Income

	Income		Three Months Ended				Nine Months Ended
Interest Rate Swaps with	Statement		September 30,				September 30,
Hedge Designation	Location		2016		2015		2016		2015
			(In thousands)
Gain or (loss) recognized in OCI on
derivative - net of tax	Not applicable	$	235	$	(800)	$	(963)	$	(1,097)
(Gain) or loss reclassified from
accumulated OCI into income
(effective portion) - net of tax	Interest expense		161		51		426		51

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Stock-Based Compensation [Abstract]

Stock-Based Compensation Change During The Period

	Shares		Weighted Average Fair Value on Award Date
Unearned at January 1, 2016	590,755	$	12.88
Awarded	189,164		15.66
Forfeited	(21,500)		12.76
Vested	(194,043)		11.35
Unearned at September 30, 2016	564,376	$	14.34

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Capital Ratios (Tables)

9 Months Ended

Sep. 30, 2016

Capital Ratios [Abstract]

Schedule Of Company's And Bank's Capital Ratios

	Ratio at September 30, 2016		Ratio at December 31, 2015		Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer		Minimum Requirement for "Well-Capitalized" Institution
Common Equity Tier 1 Risk-Based
Capital Ratio
Consolidated	10.79	%	10.94	%	7.00	%	N/A
Guaranty Bank and Trust Company	12.74	%	11.96	%	7.00	%	6.50	%
Tier 1 Risk-Based Capital Ratio
Consolidated	11.72	%	12.11	%	8.50	%	N/A
Guaranty Bank and Trust Company	12.74	%	11.96	%	8.50	%	8.00	%
Total Risk-Based Capital Ratio
Consolidated	14.07	%	13.24	%	10.50	%	N/A
Guaranty Bank and Trust Company	13.61	%	13.09	%	10.50	%	10.00	%
Leverage Ratio
Consolidated	12.40	%	10.68	%	4.00	%	N/A
Guaranty Bank and Trust Company	13.48	%	10.55	%	4.00	%	5.00	%

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Organizations, Operations And Basis Of Presentation (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016 USD ($) segment $ / shares item customer shares	Sep. 08, 2016 USD ($)	Dec. 31, 2015 USD ($) $ / shares
Organizations Operations And Basis Of Presentation [Line Items]
Number of days for an unsecured loan to become delinquent	90 days
Number of days past due before smaller loans trigger charge offs	90 days
Number of portfolio segment loans are designated into | segment	3
Number of customer relationship intangible assets acquired | customer	3
Number of derivative categories | item	3
Shares authorized for repurchase | shares	1,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.001		$ 0.001
Deferred Tax Assets, Net	$ 3,451,000		$ 7,912,000
Deferred Tax Assets, Valuation Allowance	0		0
Interest and penalties accrued	$ 0		$ 0
Home State Acquisition [Member]
Organizations Operations And Basis Of Presentation [Line Items]
PCI loans, fair value		$ 2,108,000
2005 Stock Incentive Plan [Member]
Organizations Operations And Basis Of Presentation [Line Items]
Number of grants authorized | shares	1,700,000
2015 Stock Incentive Plan [Member]
Organizations Operations And Basis Of Presentation [Line Items]
Number of grants authorized | shares	935,000
Customer Relationship [Member]
Organizations Operations And Basis Of Presentation [Line Items]
Intangible assets, Useful life	10 years
Minimum [Member]
Organizations Operations And Basis Of Presentation [Line Items]
Vesting period	1 year
Minimum [Member] | Core Deposits [Member]
Organizations Operations And Basis Of Presentation [Line Items]
Intangible assets, Useful life	10 years
Maximum [Member]
Organizations Operations And Basis Of Presentation [Line Items]
Vesting period	5 years
Maximum [Member] | Core Deposits [Member]
Organizations Operations And Basis Of Presentation [Line Items]
Intangible assets, Useful life	15 years

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Organizations, Operations And Basis Of Presentation (Earnings Loss Per Common Share) (Details) - shares		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Organization, Operations And Basis Of Presentation [Abstract]
Average common shares outstanding		22,811,386	21,076,380	21,750,153	21,061,445
Effect of dilutive unvested stock grants	[1]	145,882	148,609	214,894	153,990
Average shares outstanding for calculated diluted earnings per common share		22,957,268	21,224,989	21,965,047	21,215,435
Unvested stock grants		564,376	651,275	564,376	651,275	590,755

[1] Unvested stock grants representing 564,376 shares at September 30, 2016 had a dilutive impact of 145,882 and 214,894 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2016, respectively. Unvested stock grants representing 651,275 shares at September 30, 2015 had a dilutive impact of 148,609 and 153,990 shares in the diluted earnings per share calculation for the three and nine months ended September 30, 2015, respectively.

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Business Combination (Narratvie) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	9 Months Ended
	Sep. 08, 2016	Sep. 30, 2016	Sep. 30, 2016
Business Acquisition [Line Items]
Goodwill		$ 56,148	$ 56,148
Salaries And Employee Benefit Expense [Member]
Business Acquisition [Line Items]
Merger expenses		1,389	1,389
General and Administrative Expense [Member]
Business Acquisition [Line Items]
Merger expenses		816	1,838
Home State Acquisition [Member]
Business Acquisition [Line Items]
Value of acquisition	$ 152,478
Shares issued in acquisition	6,533,756
Value of shares issued in acquisition, gross	$ 117,477
Share Price	$ 17.98
Cash consideration for acquisition	$ 35,001
Merger expenses		2,205	3,227
Debt issuance costs		801	801
Stock issuance costs		$ 1,009	$ 1,009
Goodwill	56,148
Contactual amount of PCI loans	2,834
Contractual cash flows not expected to be collected	$ 531
Cash flows not expected to be collected as percentage of contractual balance	18.70%
PCI loans, Interest rate fair value adjustment	$ 195
PCI loans, fair value	2,108
Loans not designated PCI, fair value	443,423
Loans not designated PCI, contractual balance	458,014
Loans not designated PCI, purchase discount	$ 8,358
Purchase discount as percent of contractual balance	1.80%

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Business Combination (Schedule Of Assets And Liabilities Acquired) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 08, 2016
Business Acquisition [Line Items]
Goodwill	$ 56,148
Home State Acquisition [Member]
Business Acquisition [Line Items]
Cash and cash equivalents		$ 11,849
Time deposits with banks		504
Securities available-for-sale		396,450
Securities held-to-maturity		850
Bank stocks		1,355
Net Loans		445,529
Premises and equipment, net		23,460
Other real estate owned		67
Goodwill		56,148
Other intangible assets, net		11,701
Other assets		8,244
Total assets acquired		956,157
Deposits		769,709
Securities sold under agreement to repurchase and federal funds purchased		19,985
Federal Home Loan Bank term notes		2,525
Federal Home Loan Bank line of credit borrowing		2,052
Other liabilities		9,408
Total liabilities assumed		803,679
Net assets acquired		$ 152,478

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Business Combination (Composition Of Acquired Portfolio) (Details) - Home State Acquisition [Member] $ in Thousands	Sep. 30, 2016 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	$ 445,529
Commercial And Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	294,069
Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	39,947
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	45,996
Agricultural Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	7,906
Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	16,460
SBA [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	25,227
Other Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	$ 15,924

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Business Combination (Schedule Of Pro Forma Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Business Combination [Abstract]
Net interest income	$ 28,832	$ 27,134	$ 84,004	$ 80,182
Noninterest income	6,124	6,309	19,326	18,190
Net income	$ 8,419	$ 8,940	$ 25,503	$ 23,265
Earnings per common share-basic:	$ 0.30	$ 0.32	$ 0.92	$ 0.84
Earnings per common share-diluted:	$ 0.30	$ 0.32	$ 0.91	$ 0.84

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Securities (Narrative) (Details)	3 Months Ended
	Mar. 31, 2015 USD ($)	Sep. 30, 2016 USD ($) security	Dec. 31, 2015 USD ($) security
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Reclassification of available for sale mortgage-backed securities, asset-backed securities and municipal securities to held to maturity securities at fair value	$ 49,084,000
Unrealized pre-tax losses of available for sale securities		$ 575,000
Unrealized pre-tax losses of available for sale securities transferred to Held to maturity	750,000
Realized gain (loss) on transfer to held to maturity	$ 0
Accumulated credit losses		$ 0	$ 0
Securities in an unrealized loss position | security		152	88
Securities in an unrealized loss position for 12 months or longer | security		10	43
Securities in an unrealized loss position for less than 12 months | security		142
Percent of Bank's municipal bond securities that are unrated		5.30%	13.80%
Marketable securities		$ 562,091,000	$ 424,692,000
Securities Pledged as Collateral [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Marketable securities		229,337,000
Mortgage Backed Securities [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Securites pledged to secure overnight repurchase agreements		$ 36,105,000

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Securities (Fair Value Of Available For Sale Debt Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 364,349	$ 255,431
Gross unrealized gains	1,803	1,861
Gross unrealized losses	(1,156)	(4,770)
Amortized cost	363,702	258,340
U.S. Government Agencies Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value	5,018
Amortized cost	5,018
State And Municipal Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value	142,457	34,713
Gross unrealized gains	257	20
Gross unrealized losses	(376)
Amortized cost	142,576	34,693
Mortgage-Backed Securities - Agency/Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value	130,544	129,017
Gross unrealized gains	887	1,081
Gross unrealized losses	(256)	(1,929)
Amortized cost	129,913	129,865
Mortgage-Backed Securities - Private/Residential [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value	270	274
Gross unrealized losses	(5)	(10)
Amortized cost	275	284
Trust Preferred Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value		17,806
Gross unrealized gains		100
Gross unrealized losses		(2,294)
Amortized cost		20,000
Asset-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value	2,151
Gross unrealized losses	(1)
Amortized cost	2,152
Corporate [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value	63,422	65,291
Gross unrealized gains	648	660
Gross unrealized losses	(456)	(389)
Amortized cost	63,230	65,020
Collateralized Loan Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value	20,487	8,330
Gross unrealized gains	11
Gross unrealized losses	(62)	(148)
Amortized cost	$ 20,538	$ 8,478

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Securities (Unrecognized Gains And Losses Securities Held To Maturity) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
Fair value	$ 188,353	$ 150,122
Gross Unrealized Gains	5,449	2,389
Gross Unrealized Losses	(280)	(1,028)
Amortized Cost	183,184	148,761
State And Municipal Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair value	64,285	55,812
Gross Unrealized Gains	2,289	1,349
Gross Unrealized Losses	(252)	(390)
Amortized Cost	62,248	54,853
Mortgage-Backed Securities - Agency/Residential [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair value	104,453	74,692
Gross Unrealized Gains	2,566	767
Gross Unrealized Losses	(28)	(611)
Amortized Cost	101,915	74,536
Asset-Backed Securities [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair value	18,415	19,618
Gross Unrealized Gains	594	273
Gross Unrealized Losses		(27)
Amortized Cost	17,821	$ 19,372
Other [Member]
Schedule of Held-to-maturity Securities [Line Items]
Fair value	1,200
Amortized Cost	$ 1,200

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Securities (Proceeds From Sales And Calls Of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015
Securities [Abstract]
Proceeds	$ 317,630	$ 370,111	$ 2,868
Gross gains	1,434	2,486	16
Gross losses	(1,500)	(2,608)	$ (16)
Net tax (benefit) expense related to gains (losses) on sale	$ (25)	$ (46)

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Securities (Investments Classified by Contractual Maturity Date) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Due in one year or less, Amortized Cost	$ 16,068
Due after one years through five years, Amortized cost	19,516
Due after five years through ten years, Amortized cost	106,014
Due after ten years, Amortized cost	69,226
Total AFS, excluding mortgage-backed (MBS), asset-backed and collaterized loan obligations, Amortized cost	210,824
Mortgage-backed, asset-backed and collaterized loan obligations, Amortized cost	152,878
Total securities available for sale, Amortized cost	363,702
Due in one year or less, Fair value	16,092
Due after one year through five years, Fair value	19,915
Due after five years through ten years, Fair value	106,052
Due after ten years, Fair value	68,838
Total AFS, excluding mortgage-backed (MBS), asset-backed and collaterized loan obligations, Fair value	210,897
Mortgage-backed, asset-backed and collaterized loan obligations, Fair value	153,452
Total securities available for sale, Fair value	364,349	$ 255,431
Securities held to maturity, Due in one year or less, Amortized Cost	592
Securities held to maturity, Due after one year through five years, Amortized cost	3,426
Securities held to maturity, Due after five years through ten years, Amortized cost	28,515
Securities held to maturity, Due after ten years, Amortized cost	30,915
Total HTM, excluding MBS and asset-backed, Amortized cost	63,448
Total securities held to maturity, Amortized cost	183,184	148,761
Securities held to maturity, Due in one year or less, Fair value	592
Securities held to maturity, Due after one year through five years, Fair value	3,513
Securities held to maturity, Due after five years through ten years, Fair value	29,307
Securities held to maturity, Due after ten years, Fair value	32,073
Total HTM, excluding MBS, asset-backed, Fair value	65,485
Securities held to maturity, Fair value	188,353	$ 150,122
Mortgage Backed And Asset Backed Securities [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Securities held to maturity, Mortgage-backed and asset-backed, Amortized cost	119,736
Securities held to maturity, Mortgage-backed and asset-backed, Fair value	$ 122,868

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Securities (Fair Value And The Unrealized Loss On Temporarily Impaired Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Held to maturity, Total, Unrealized losses	$ (280)	$ (1,028)
Total temporarily impaired, Less than 12 months, Fair value	166,518	137,990
Total temporarily impaired, More than 12 months, Fair Value	19,830	94,973
Total temporarily impaired, Total, Fair value	186,348	232,963
Total temporarily impaired, Less than 12 months, Unrealized losses	(1,519)	(2,479)
Total temporarily impaired, More than 12 months, Unrealized losses	(426)	(4,783)
Total temporarily impaired, Total, Unrealized losses	(1,945)	(7,262)
State And Municipal Securities [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available for sale, Less than 12 months, Fair value	91,119
Available for sale, Total, Fair value	91,119
Available for sale, Less than 12 months, Unrealized losses	(376)
Available for sale, Total, Unrealized losses	(376)
Held to maturity, Less than 12 months, Fair value	2,630	6,726
Held to maturity, 12 months or more, Fair value	610	10,056
Held to maturity, Total, Fair value	3,240	16,782
Held to maturity, Less than 12 months, Unrealized losses	(17)	(351)
Held to maturity, 12 months or more, Unrealized losses	(246)	(102)
Held to maturity, Total, Unrealized losses	(263)	(453)
Mortgage-Backed Securities - Agency/Residential [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available for sale, Less than 12 months, Fair value	33,061	56,204
Available for sale, 12 months or more, Fair value	10,160	31,755
Available for sale, Total, Fair value	43,221	87,959
Available for sale, Less than 12 months, Unrealized losses	(148)	(800)
Available for sale, 12 months or more, Unrealized losses	(108)	(1,129)
Available for sale, Total, Unrealized losses	(256)	(1,929)
Held to maturity, Less than 12 months, Fair value	12,965	39,280
Held to maturity, 12 months or more, Fair value		25,838
Held to maturity, Total, Fair value	12,965	65,118
Held to maturity, Less than 12 months, Unrealized losses	(402)	(781)
Held to maturity, 12 months or more, Unrealized losses		(820)
Held to maturity, Total, Unrealized losses	(402)	(1,601)
Mortgage-Backed Securities - Private/Residential [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available for sale, Less than 12 months, Fair value		274
Available for sale, 12 months or more, Fair value	270
Available for sale, Total, Fair value	270	274
Available for sale, Less than 12 months, Unrealized losses		(10)
Available for sale, 12 months or more, Unrealized losses	(5)
Available for sale, Total, Unrealized losses	(5)	(10)
Trust Preferred Securities [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available for sale, 12 months or more, Fair value		7,706
Available for sale, Total, Fair value		7,706
Available for sale, 12 months or more, Unrealized losses		(2,294)
Available for sale, Total, Unrealized losses		(2,294)
Asset-Backed Securities [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available for sale, Less than 12 months, Fair value	2,151
Available for sale, Total, Fair value	2,151
Available for sale, Less than 12 months, Unrealized losses	(1)
Available for sale, Total, Unrealized losses	(1)
Held to maturity, Less than 12 months, Fair value	7,562
Held to maturity, 12 months or more, Fair value	3,315	19,618
Held to maturity, Total, Fair value	10,877	19,618
Held to maturity, Less than 12 months, Unrealized losses	(119)
Held to maturity, 12 months or more, Unrealized losses	(5)	(438)
Held to maturity, Total, Unrealized losses	(124)	(438)
Corporate [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available for sale, Less than 12 months, Fair value	14,042	27,176
Available for sale, Total, Fair value	14,042	27,176
Available for sale, Less than 12 months, Unrealized losses	(456)	(389)
Available for sale, Total, Unrealized losses	(456)	(389)
Collateralized Loan Obligations [Member]
Schedule Of Available For Sale And Held To Maturity Securities [Line Items]
Available for sale, Less than 12 months, Fair value	2,988	8,330
Available for sale, 12 months or more, Fair value	5,475
Available for sale, Total, Fair value	8,463	8,330
Available for sale, Less than 12 months, Unrealized losses		(148)
Available for sale, 12 months or more, Unrealized losses	(62)
Available for sale, Total, Unrealized losses	$ (62)	$ (148)

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Loans (Narrative) (Details)	3 Months Ended			9 Months Ended
	Sep. 30, 2016 USD ($) loan item	Jun. 30, 2016 USD ($)	Sep. 30, 2015 USD ($) loan item	Sep. 30, 2016 USD ($) loan item	Sep. 30, 2015 USD ($) loan item	Sep. 08, 2016 USD ($)	Dec. 31, 2015 USD ($)
Loans And Leases Receivable Disclosure [Line Items]
Interest income on impaired loans	$ 1,180,000
Interest income on impaired loans with no related allowance	969,000
Interest income on impaired loans with related allowance	211,000
Gross interest income on nonaccrual loans	77,000		$ 171,000	$ 209,000	$ 510,000
Cash-basis interest income	83,000			332,000	$ 0
Book balance of troubled debt restructurings	24,431,000			24,431,000			$ 22,391,000
Specific reserves	310,000			310,000			276,000
Amounts committed on loans designated as TDRs	$ 1,864,000			$ 1,864,000			$ 953,000
Number of loans modified in troubled debt restructuring | loan	1		0	3	0
Pre-Modification Outstanding Recorded Investment	$ 2,900,000			$ 4,765,000
Defaults on TDRs | item	0		0	0	0
Real Estate [Member]
Loans And Leases Receivable Disclosure [Line Items]
Performing loans purchased	$ 29,300,000	$ 22,700,000			$ 20,100,000
Commercial Loans [Member]
Loans And Leases Receivable Disclosure [Line Items]
Interest income recovery	$ 775,000
Home State Acquisition [Member]
Loans And Leases Receivable Disclosure [Line Items]
PCI loans, fair value						$ 2,108,000

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Loans (Loans Held For Investment By Loan Type) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	$ 2,412,650	$ 1,814,281
Deferred costs, net	349	255
Loans, held for investment, net	2,412,999	1,814,536
Less allowance for loan losses	(23,300)	(23,000)
Net loans, held for investment	2,389,699	1,791,536
Commercial And Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	1,752,113	1,281,701
Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	75,603	107,170
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	400,281	323,552
Agricultural Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	18,245	9,294
Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	81,766	66,288
SBA [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	51,480	25,645
Other Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans	$ 33,162	$ 631

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Loans (Allowance For Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Loans [Abstract]
Balance, beginning of period	$ 23,050	$ 22,850	$ 23,000	$ 22,490
Provision for loan losses	27	14	53	104
Loans charged-off	(72)	(75)	(431)	(172)
Recoveries on loans previously charged-off	295	101	678	468
Balance, end of period	$ 23,300	$ 22,890	$ 23,300	$ 22,890

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Loans (Allowance For Loan Losses And Loans Held For Investment By Portfolio Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	$ 23,050	$ 22,850	$ 23,000	$ 22,490
Charge-offs	(72)	(75)	(431)	(172)
Recoveries	295	101	678	468
Provision for loan losses	27	14	53	104
Balance, end of period	23,300	22,890	23,300	22,890
Allowance for Loan Losses, Individually evaluated					$ 575	$ 293
Allowance for Loan Losses, Collectively evaluated					22,725	22,707
Allowance for Loan Losses, Total	23,050	22,850	23,000	22,490	23,300	23,000
Loans, Individually evaluated					30,195	26,153
Loans, Collectively evaluated					2,382,804	1,788,383
Financing Receivable, Net, Total					2,412,999	1,814,536
Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	20,171	20,006	20,306	19,607
Charge-offs	(9)	(14)	(213)	(21)
Recoveries	150	66	235	138
Provision for loan losses	(127)	34	(143)	368
Balance, end of period	20,185	20,092	20,185	20,092
Allowance for Loan Losses, Individually evaluated					301	282
Allowance for Loan Losses, Collectively evaluated					19,884	20,024
Allowance for Loan Losses, Total	20,171	20,006	20,306	19,607	20,185	20,306
Loans, Individually evaluated					24,783	23,846
Loans, Collectively evaluated					1,990,126	1,489,211
Financing Receivable, Net, Total					2,014,909	1,513,057
Consumer And Installment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	75	54	71	39
Charge-offs	(5)	(5)	(12)	(9)
Recoveries	2	9	13	21
Provision for loan losses	(15)	3	(15)	10
Balance, end of period	57	61	57	61
Allowance for Loan Losses, Collectively evaluated					57	71
Allowance for Loan Losses, Total	75	54	71	39	57	71
Loans, Individually evaluated						2
Loans, Collectively evaluated					5,995	5,716
Financing Receivable, Net, Total					5,995	5,718
Commercial And Other [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, beginning of period	2,804	2,790	2,623	2,844
Charge-offs	(58)	(56)	(206)	(142)
Recoveries	143	26	430	309
Provision for loan losses	169	(23)	211	(274)
Balance, end of period	3,058	2,737	3,058	2,737
Allowance for Loan Losses, Individually evaluated					274	11
Allowance for Loan Losses, Collectively evaluated					2,784	2,612
Allowance for Loan Losses, Total	$ 2,804	$ 2,790	$ 2,623	$ 2,844	3,058	2,623
Loans, Individually evaluated					5,412	2,305
Loans, Collectively evaluated					386,683	293,456
Financing Receivable, Net, Total					$ 392,095	$ 295,761

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Loans (Schedule Of Impaired Loans) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Impaired [Line Items]
Impaired loans with no related allowance, Recorded Investment	$ 14,196	$ 14,263
Impaired loans with related allowance, Recorded Investment	15,999	11,890
Total Impaired Loans, Recorded Investment	30,195	26,153
Impaired loans with no related allowance, Unpaid Balance	14,596	16,356
Impaired loans with related allowance, Unpaid Balance	16,293	12,221
Total Impaired Loans, Unpaid Balance	30,889	28,577
Total Impaired Loans, Related Allowance	575	293
Impaired loans with no related allowance, Average Recorded Investment YTD	13,767	15,480
Impaired loans with related allowance, Average Recorded Investment YTD	13,121	10,974
Total Impaired Loans, Average Related Investment YTD	26,888	26,454
Impaired loans with no related allowance, Interest Income Recognized YTD	1,262	247
Impaired loans with related allowance, Interest Income Recognized YTD	434	419
Total Impaired Loans, Interest Income Recognized YTD	1,696	666
Commercial And Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans with no related allowance, Recorded Investment	12,832	12,756
Impaired loans with related allowance, Recorded Investment	11,450	10,232
Total Impaired Loans, Recorded Investment	24,282	22,988
Impaired loans with no related allowance, Unpaid Balance	12,862	14,472
Impaired loans with related allowance, Unpaid Balance	11,561	10,472
Total Impaired Loans, Unpaid Balance	24,423	24,944
Total Impaired Loans, Related Allowance	293	268
Impaired loans with no related allowance, Average Recorded Investment YTD	12,225	14,194
Impaired loans with related allowance, Average Recorded Investment YTD	10,296	9,989
Total Impaired Loans, Average Related Investment YTD	22,521	24,183
Impaired loans with no related allowance, Interest Income Recognized YTD	1,248	242
Impaired loans with related allowance, Interest Income Recognized YTD	317	388
Total Impaired Loans, Interest Income Recognized YTD	1,565	630
Construction Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans with no related allowance, Recorded Investment		986
Total Impaired Loans, Recorded Investment		986
Impaired loans with no related allowance, Unpaid Balance		986
Total Impaired Loans, Unpaid Balance		986
Impaired loans with no related allowance, Average Recorded Investment YTD	740	789
Total Impaired Loans, Average Related Investment YTD	740	789
Commercial Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans with no related allowance, Recorded Investment	591
Impaired loans with related allowance, Recorded Investment	3,500	1,204
Total Impaired Loans, Recorded Investment	4,091	1,204
Impaired loans with no related allowance, Unpaid Balance	591
Impaired loans with related allowance, Unpaid Balance	3,542	1,220
Total Impaired Loans, Unpaid Balance	4,133	1,220
Total Impaired Loans, Related Allowance	28	11
Impaired loans with no related allowance, Average Recorded Investment YTD	248	19
Impaired loans with related allowance, Average Recorded Investment YTD	2,079	492
Total Impaired Loans, Average Related Investment YTD	2,327	511
Impaired loans with no related allowance, Interest Income Recognized YTD	13
Impaired loans with related allowance, Interest Income Recognized YTD	110	18
Total Impaired Loans, Interest Income Recognized YTD	123	18
Consumer Loans [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans with no related allowance, Recorded Investment	19	271
Impaired loans with related allowance, Recorded Investment	379	454
Total Impaired Loans, Recorded Investment	398	725
Impaired loans with no related allowance, Unpaid Balance	19	310
Impaired loans with related allowance, Unpaid Balance	467	529
Total Impaired Loans, Unpaid Balance	486	839
Total Impaired Loans, Related Allowance	8	14
Impaired loans with no related allowance, Average Recorded Investment YTD	142	307
Impaired loans with related allowance, Average Recorded Investment YTD	410	493
Total Impaired Loans, Average Related Investment YTD	552	800
Impaired loans with no related allowance, Interest Income Recognized YTD	1	5
Impaired loans with related allowance, Interest Income Recognized YTD	7	13
Total Impaired Loans, Interest Income Recognized YTD	8	18
Other [Member]
Financing Receivable, Impaired [Line Items]
Impaired loans with no related allowance, Recorded Investment	754	250
Impaired loans with related allowance, Recorded Investment	670
Total Impaired Loans, Recorded Investment	1,424	250
Impaired loans with no related allowance, Unpaid Balance	1,124	588
Impaired loans with related allowance, Unpaid Balance	723
Total Impaired Loans, Unpaid Balance	1,847	588
Total Impaired Loans, Related Allowance	246
Impaired loans with no related allowance, Average Recorded Investment YTD	412	171
Impaired loans with related allowance, Average Recorded Investment YTD	336
Total Impaired Loans, Average Related Investment YTD	$ 748	$ 171

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Loans (Summary Of Past Due Loans By Class) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 Days Past Due	$ 2,157	$ 2,091
90 Days + Past Due and Still Accruing	335
Nonaccrual Loans	5,507	14,474
Total Nonaccrual and Past Due	7,999	16,565
Total Loans	2,412,999	1,814,536
Commercial And Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 Days Past Due	803	653
Nonaccrual Loans	3,008	11,905
Total Nonaccrual and Past Due	3,811	12,558
Total Loans	1,752,366	1,281,881
Construction Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Nonaccrual Loans		986
Total Nonaccrual and Past Due		986
Total Loans	75,614	107,185
Commercial Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 Days Past Due	1,090	1,147
90 Days + Past Due and Still Accruing	335
Nonaccrual Loans	828	874
Total Nonaccrual and Past Due	2,253	2,021
Total Loans	400,339	323,598
Consumer Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 Days Past Due	57	291
Nonaccrual Loans	248	459
Total Nonaccrual and Past Due	305	750
Total Loans	81,778	66,297
Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 Days Past Due	207
Nonaccrual Loans	1,423	250
Total Nonaccrual and Past Due	1,630	250
Total Loans	$ 102,902	$ 35,575

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Loans (Summary Of The Risk Category Of Loans By Class Of Loans) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Subtotal	$ 2,412,650	$ 1,814,281
Less: Deferred costs, net	349	255
Loans, held for investment, net	2,412,999	1,814,536
Non-classified [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	2,378,612	1,788,527
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	34,038	25,754
Commercial And Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	1,752,113	1,281,701
Less: Deferred costs, net	253	180
Loans, held for investment, net	1,752,366	1,281,881
Commercial And Residential Real Estate [Member] | Non-classified [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	1,725,406	1,260,134
Commercial And Residential Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	26,707	21,567
Construction Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	75,603	107,170
Less: Deferred costs, net	11	15
Loans, held for investment, net	75,614	107,185
Construction Loans [Member] | Non-classified [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	75,603	106,184
Construction Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal		986
Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	400,281	323,552
Less: Deferred costs, net	58	46
Loans, held for investment, net	400,339	323,598
Commercial Loans [Member] | Non-classified [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	395,917	322,650
Commercial Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	4,364	902
Consumer Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	81,766	66,288
Less: Deferred costs, net	12	9
Loans, held for investment, net	81,778	66,297
Consumer Loans [Member] | Non-classified [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	81,351	65,365
Consumer Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	415	923
Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	102,887	35,570
Less: Deferred costs, net	15	5
Loans, held for investment, net	102,902	35,575
Other [Member] | Non-classified [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	100,335	34,194
Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Subtotal	$ 2,552	$ 1,376

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Goodwill And Other Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 08, 2016
Business Acquisition [Line Items]
Goodwill	$ 56,148
Home State Bancorp Acquisition [Member]
Business Acquisition [Line Items]
Goodwill		$ 56,148

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Goodwill And Other Intangible Assets (Schedule Of Finite Lived Intangible Assets And Related Accumulated Amortization) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 16,005	$ 5,173
Core Deposits [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	73,655	62,975
Intangible asset accumulated amortization	(62,561)	(62,124)
Intangible assets, net	$ 11,094	851
Core Deposits [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, Useful life	15 years
Core Deposits [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, Useful life	10 years
Customer Relationship [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 6,674	5,654
Intangible asset accumulated amortization	(1,763)	(1,332)
Intangible assets, net	$ 4,911	$ 4,322
Intangible assets, Useful life	10 years

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Borrowings (Details)	9 Months Ended
	Sep. 30, 2016 USD ($) loan	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Outstanding borrowings	$ 122,521,000	$ 280,847,000
Federal Home Loan Bank term notes	122,521,000	95,000,000
Advances on line of credit	0	185,847,000
Pledging and security agreement with FHLB	831,636,000	454,748,000
Remaining credit allowance for future borrowings	$ 709,201,000	$ 173,901,000
Interest rate on the line of credit	0.53%
Number of FHLB term notes | loan	6
FHLB Term Note 1 [Member]
Debt Instrument [Line Items]
Federal Home Loan Bank term notes	$ 20,000,000
Current Rate	2.52%
Maturity Date	Jan. 23, 2018
FHLB Term Note 2 [Member]
Debt Instrument [Line Items]
Federal Home Loan Bank term notes	$ 50,000,000
Current Rate	0.63%
Maturity Date	Oct. 24, 2016
FHLB Term Note 3 [Member]
Debt Instrument [Line Items]
Federal Home Loan Bank term notes	$ 25,000,000
Current Rate	0.87%
Maturity Date	Aug. 04, 2017
FHLB Term Note 4 [Member]
Debt Instrument [Line Items]
Federal Home Loan Bank term notes	$ 25,000,000
Current Rate	1.03%
Maturity Date	Mar. 07, 2017
FHLB Term Note 5 [Member]
Debt Instrument [Line Items]
Federal Home Loan Bank term notes	$ 695,000
Maturity Date	Apr. 10, 2017
FHLB Term Note 6 [Member]
Debt Instrument [Line Items]
Federal Home Loan Bank term notes	$ 1,740,000
Maturity Date	Aug. 30, 2017
Wells Fargo [Member] | Line of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity on line of credit	$ 10,000,000

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Subordinated Debentures And Trust Preferred Securities (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016 USD ($) item	Dec. 31, 2015 USD ($)
Subordinated Borrowing [Line Items]
Balance of subordinated debentures outstanding	$ 64,973,000	$ 25,774,000
Debt before debt issuance cost	65,774,000
Debt issuance cost	$ 801,000
Subordinated debentures outstanding weighted average cost, percent	4.87%
Subordinated debenture maturity in years	30 years
Trust preferred securities	$ 25,000,000
Number of subordinated debentures issued | item	3
Subordinated debt, unpaid interest	$ 698,000	208,000
Percent of Tier 1 capital, maximum	25.00%
Securities issued by the trusts qualify as Tier 2 capital threshold, percent	25.00%
Trusts' securities qualified as Tier 1 capital	$ 25,000,000
Securities qualified as Tier 2 capital	40,000,000
Limit on total assets to qualify as Tier 1 capital	15,000,000,000
Total assets	$ 3,346,265,000	$ 2,368,525,000
Minimum [Member]
Subordinated Borrowing [Line Items]
Debentures callable to subsequent time period in years	5 years
Maximum [Member]
Subordinated Borrowing [Line Items]
Debentures callable to subsequent time period in years	10 years
Total assets	$ 15,000,000,000
Subordinated Notes [Member]
Subordinated Borrowing [Line Items]
Balance of subordinated debentures outstanding	40,000,000
Subordinated notes	$ 40,000,000
Initial fixed interest rate	5.75%
Variable rate	4.73%
Current Rate	5.75%

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Subordinated Debentures And Trust Preferred Securities (Schedule Of Subordinated Debenture Issuance) (Details) - USD ($)		9 Months Ended
		Sep. 30, 2016	Oct. 15, 2016	Oct. 07, 2016	Dec. 31, 2015
Subordinated Borrowing [Line Items]
Subordinated Debt		$ 64,973,000			$ 25,774,000
Subordinated Notes [Member]
Subordinated Borrowing [Line Items]
Date Issued		Jul. 18, 2016
Subordinated Debt		$ 40,000,000
Maturity Date		Jul. 20, 2026
Fixed Or Variable		Fixed
Rate Adjuster		4.73%
Current Rate		5.75%
Next Rate Reset Date	[1]	Jul. 20, 2021
Initial fixed interest rate		5.75%
Variable rate		4.73%
CenBank Trust III [Member]
Subordinated Borrowing [Line Items]
Date Issued		Apr. 08, 2004
Subordinated Debt		$ 15,464,000
Maturity Date		Apr. 15, 2034
Call Date	[2]	Jan. 15, 2017
Fixed Or Variable		Variable
Rate Adjuster		2.65%
Current Rate		3.33%	3.53%
Next Rate Reset Date	[1]	Jan. 15, 2017
Guaranty Capital Trust [Member]
Subordinated Borrowing [Line Items]
Date Issued		Jun. 30, 2003
Subordinated Debt		$ 10,310,000
Maturity Date		Jul. 07, 2033
Call Date	[2]	Jan. 07, 2017
Fixed Or Variable		Variable
Rate Adjuster		3.10%
Current Rate		3.78%		3.98%
Next Rate Reset Date	[1]	Jan. 07, 2017

[1] On October 7, 2016, the rate on the Guaranty Capital Trust III subordinated debentures reset to 3.98%. On October 15, 2016, the rate on the CenBank Trust III subordinated debentures reset to 3.53%. The subordinated notes issued July 18, 2016 are fixed at 5.75% until July 20, 2021 at which point the notes turn to floating rate at three-month LIBOR plus 4.73%.

[2] Call date represents the earliest or next date the Company can call the debentures.

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Commitments (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Other Commitments [Line Items]
Commitments to extend credit, Variable	$ 419,370	$ 307,463
Commitments to extend credit, Fixed	94,078	61,184
Total commitments to extend credit	513,448	368,647
Standby letters of credit	$ 10,429	$ 8,857
Letters of credit issued expiration time period, maximum	1 year
Minimum [Member]
Other Commitments [Line Items]
Fixed rate commitments to extend credit	1.95%
Maximum [Member]
Other Commitments [Line Items]
Fixed rate commitments to extend credit	7.00%

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Fair Value Measurements And Fair Value Of Financial Instruments (Narrative) (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Fair Value Measurements And Fair Value Of Financial Instruments [Abstract]
Asset transfers		$ 0
Liability transfers		0
Other comprehensive income (loss) related to asset valuation	$ 0	$ 0

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Fair Value Measurements And Fair Value Of Financial Instruments (Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
U.S. Government Agencies Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	$ 5,018
U.S. Government Agencies Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	5,018
State And Municipal Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	142,457	$ 34,713
State And Municipal Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	110,496	2,673
State And Municipal Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	31,961	32,040
Mortgage-Backed Securities - Agency/Residential [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	130,544	129,017
Mortgage-Backed Securities - Agency/Residential [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	130,544	129,017
Mortgage-Backed Securities - Private/Residential [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	270	274
Mortgage-Backed Securities - Private/Residential [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	270	274
Asset-Backed Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	2,151
Asset-Backed Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	2,151
Trust Preferred Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring		17,806
Trust Preferred Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring		17,806
Corporate Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	63,422	65,291
Corporate Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	63,422	65,291
Collateralized Loan Obligations [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	20,487	8,330
Collateralized Loan Obligations [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Assets, Fair Value Disclosure, Recurring	20,487	8,330
Interest Rate Swap - Cash Flow Hedge [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities, Fair Value Disclosure, Recurring	(3,425)	(2,558)
Interest Rate Swap - Cash Flow Hedge [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities, Fair Value Disclosure, Recurring	$ (3,425)	$ (2,558)

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Fair Value Measurements And Fair Value Of Financial Instruments (Fair Value Measurements Using Significant Unobservable Inputs Level 3) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total unrealized gains (losses), Other comprehensive income (loss)	$ 0		$ 0
Significant Unobservable Inputs (Level 3) [Member] | State And Municipal Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning Balance	31,909,000	$ 32,038,000	32,040,000	$ 32,317,000
Total unrealized gains (losses), Net income (loss)	2,000	1,000	5,000	3,000
Total unrealized gains (losses), Other comprehensive income (loss)				(1,000)
Sales, calls and prepayments	(81,000)		(215,000)
Acquisition of Level 3 security	131,000		131,000
Transfer to held to maturity				(280,000)
Transfers in and (out) of Level 3
Ending Balance	$ 31,961,000	$ 32,039,000	$ 31,961,000	$ 32,039,000

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Fair Value Measurements And Fair Value Of Financial Instruments (Quantitative Information About Level 3 Fair Value Measurements) (Details) - State And Municipal Securities [Member] - Significant Unobservable Inputs (Level 3) [Member] - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total	$ 31,961	$ 31,909	$ 32,040	$ 32,039	$ 32,038	$ 32,317
Discounted Cash Flow [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total	$ 31,961		$ 32,040
Maximum [Member] | Discounted Cash Flow [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Valuation Technique Range	4.75%		4.75%
Minimum [Member] | Discounted Cash Flow [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Valuation Technique Range	2.19%		2.05%

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Fair Value Measurements And Fair Value Of Financial Instruments (Estimated Fair Values And Related Carrying Amounts Of Financial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	$ 364,349	$ 255,431
Securities held to maturity, Fair value	188,353	150,122
Bank stocks	14,558	20,500
Short-term borrowings		185,847
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	163,908	26,711
Securities available for sale	364,349	255,431
Securities held to maturity, Fair value	183,184	148,761
Bank stocks	14,558	20,500
Loans held for investment, net	2,389,699	1,791,536
Accrued interest receivable	9,314	6,554
Deposits	2,752,112	1,801,845
Federal funds purchased and sold under agreements to repurchase	35,936	26,477
Short-term borrowings		185,847
Subordinated debentures	64,973	25,774
Long-term borrowings	122,521	95,000
Accrued interest payable	1,070	508
Interest rate swap - cash flow hedge	3,425	2,558
Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	163,908	26,711
Securities available for sale	364,349	255,431
Securities held to maturity, Fair value	188,353	150,122
Loans held for investment, net	2,391,039	1,791,128
Accrued interest receivable	9,314	6,554
Deposits	2,751,953	1,800,112
Federal funds purchased and sold under agreements to repurchase	35,936	26,477
Short-term borrowings		185,847
Subordinated debentures	59,571	18,640
Long-term borrowings	122,898	95,353
Accrued interest payable	1,070	508
Interest rate swap - cash flow hedge	3,425	2,558
Fair Value Measurement [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	163,908	26,711
Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	332,388	223,391
Securities held to maturity, Fair value	185,245	145,698
Accrued interest receivable	9,314	6,554
Deposits	2,751,953	1,800,112
Federal funds purchased and sold under agreements to repurchase	35,936	26,477
Short-term borrowings		185,847
Long-term borrowings	122,898	95,353
Accrued interest payable	1,070	508
Interest rate swap - cash flow hedge	3,425	2,558
Fair Value Measurement [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities available for sale	31,961	32,040
Securities held to maturity, Fair value	3,108	4,424
Loans held for investment, net	2,391,039	1,791,128
Subordinated debentures	$ 59,571	$ 18,640

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Derivatives And Hedging Activities (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Amount expected to be reclassified from AOCI into interest expense	$ 909,000
The amount of collateral posted in relation to the company's obligation to the swap counterparty	4,690,000
Interest Rate Swap - Cash Flow Hedge [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount designated as cash flow hedge	50,000,000
Interest Rate Swap - Cash Flow Hedge [Member] | Swap One [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount designated as cash flow hedge	$ 25,000,000
Fixed interest rate	2.46%
Interest Rate Swap - Cash Flow Hedge [Member] | Swap Two [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount designated as cash flow hedge	$ 25,000,000
Fixed interest rate	3.00%

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Derivatives And Hedging Activities (Schedule Of Derivative Financial Instruments As Well As Their Classification On The Balance Sheet) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Interest Rate Swap - Cash Flow Hedge [Member] | Other Liabilities [Member] | Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	$ 3,425	$ 2,558

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Derivatives And Hedging Activities (Summary Of Interest Rate Swaps Designated As Cash Flow Hedges) (Details) - Interest Rate Swap - Cash Flow Hedge [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Derivative [Line Items]
Notional amounts	$ 50,000,000	$ 50,000,000
Weighted average pay rates	2.73%	2.73%
Weighted average receive rates	3 month LIBOR
Weighted average maturity	4 years 1 month 6 days	4 years 10 months 24 days
Unrealized gains (losses)	$ (3,425,000)	$ (2,558,000)

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Derivatives And Hedging Activities (Schedule Of Derivative Financial Instruments On Both Comprehensive Income And Net Income) (Details) - Interest Rate Swap - Cash Flow Hedge [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Gain or (loss) recognized in OCI on derivative - net of tax	$ 235	$ (800)	$ (963)	$ (1,097)
Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain or (loss) reclassified from accumulated OCI into income (effective portion) - net of tax	$ 161	$ 51	$ 426	$ 51

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Stock-Based Compensation (Narrative) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding awards, unvested stock	564,376	651,275	590,755
Shares expected to vest	542,000
Number of performance condition restricted shares expected to vest	304,000
Recognized stock-based compensation expense	$ 2,304,000	$ 2,094,000
Total income tax effect recognized for share-based compensation arrangements	876,000	796,000
Fair value of awards granted	2,963,000	2,391,000
Fair value of awards that vested	3,053,000	$ 1,347,000
Unrecognized expense on nonvested awards not yet recognized	$ 4,598,000
Weighted-average period of nonvested awards expected to be recognized over	1 year 8 months 12 days
Restricted Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares outstanding	315,031
2005 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Approved Stock Awards	1,700,000
Awards outstanding	376,759
2015 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Approved Stock Awards	935,000
Awards outstanding	187,617
Shares available for grant under Incentive Plan	730,175

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Stock-Based Compensation (Stock-Based Compensation Change During The Period) (Details)	9 Months Ended
	Sep. 30, 2016 $ / shares shares
Stock-Based Compensation [Abstract]
Beginning Balance, Unearned, Shares | shares	590,755
Awarded, Shares | shares	189,164
Forfeited, Shares | shares	(21,500)
Vested, Shares | shares	(194,043)
Ending Balance, Unearned, Shares | shares	564,376
Beginning Balance, Unearned, Weighted Average Fair Value on Award Date | $ / shares	$ 12.88
Awarded, Weighted Average Fair Value on Award Date | $ / shares	15.66
Forfeited, Weighted Average Fair Value on Award Date | $ / shares	12.76
Vested, Weighted Average Fair Value on Award Date | $ / shares	11.35
Ending Balance, Unearned, Weighted Average Fair Value on Award Date | $ / shares	$ 14.34

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Capital Ratios (Details)	Sep. 30, 2016	Dec. 31, 2015
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common Equity Tier 1 Risk-Based Capital Ratio	10.79%	10.94%
Common Equity Tier 1 Risk-Based Capital Ratio, Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer	7.00%
Tier 1 Risk-Based Capital Ratio	11.72%	12.11%
Tier 1 Risk-Based Capital Ratio, Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer	8.50%
Total Risk-Based Capital Ratio	14.07%	13.24%
Total Risk-Based Capital Ratio, Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer	10.50%
Leverage Ratio	12.40%	10.68%
Leverage Ratio, Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer	4.00%
Guaranty Bank And Trust Company [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Common Equity Tier 1 Risk-Based Capital Ratio	12.74%	11.96%
Common Equity Tier 1 Risk-Based Capital Ratio, Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer	7.00%
Common Equity Tier 1 Risk-Based Capital Ratio, Minimum Requirement for "Well Capitalized" Institution	6.50%
Tier 1 Risk-Based Capital Ratio	12.74%	11.96%
Tier 1 Risk-Based Capital Ratio, Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer	8.50%
Tier 1 Risk-Based Capital Ratio, Minimum Requirement for "Well Capitalized" Institution	8.00%
Total Risk-Based Capital Ratio	13.61%	13.09%
Total Risk-Based Capital Ratio, Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer	10.50%
Total Risk-Based Capital Ratio, Minimum Requirement for "Well Capitalized" Institution	10.00%
Leverage Ratio	13.48%	10.55%
Leverage Ratio, Minimum Requirement for “Adequately Capitalized” Institution plus fully phased in Capital Conservation Buffer	4.00%
Leverage Ratio, Minimum Requirement for "Well Capitalized" Institution	5.00%

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Subsequent Events (Narrative) (Details) - Subsequent Event [Member]	Nov. 08, 2016 $ / shares
Subsequent Event [Line Items]
Dividends Payable, Date Declared	Nov. 08, 2016
Dividends Payable, Amount Per Share	$ 0.115
Dividends Payable, Date to be Paid	Nov. 28, 2016
Dividends Payable, Date of Record	Nov. 18, 2016