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Rick Green, Southwest Bancorp's President and Chief Executive Officer, stated, "An important element of our strategic vision calls for careful expansion of community banking operations in Kansas, Oklahoma, and Texas. In 2007, we acquired Bank of Kansas, headquartered in the Hutchinson market. This year, Bank of Kansas acquired assets and assumed liabilities of First National Bank of Anthony ("FNBA"), Anthony, Kansas, in an FDIC-assisted transaction with loss sharing. The loss sharing agreement requires the FDIC to cover 80% of any net losses on covered loans and related assets up to $35.0 million, and 95% of net losses above $35.0 million. In June, we recorded a one-time pre-tax gain of $3.3 million as a result of fair value accounting for the transaction using outside valuations of the acquired assets and assumed deposits. We anticipate that this transaction will be accretive to future earnings, but we cannot estimate the timing or amount of this accretion.
"The new Kansas acquisition gives Bank of Kansas six additional community banking offices in Kansas, $117.1 million in loans and $135.0 million in deposits The acquired loans include our current estimate of $33.1 million loss share receivable from the FDIC.
"In the first half of 2009, we increased portfolio loans (excluding FNBA portfolio loans) by $95.9 million, up 4%, from year-end 2008, and increased our core deposits (total deposits less time deposits of $100,000 or more and brokered deposits) by $67.1 million, up 5% (excluding FNBA core deposits). At June 30, 2009, our shareholders' equity totaled $305.4 million, up $3.2 million, or 1%, from year-end 2008, and our capital ratios exceeded the levels for regulatory classification as "well-capitalized".
"Nonperforming assets (excluding FNBA nonperforming assets) were essentially unchanged from March 31, 2009 at $88.2 million."
Please review the following "Financial Overview" and the accompanying tables for important additional information regarding our results and plans.
Financial Overview
Condition: Total assets were $3.0 billion at June 30, 2009, an increase of 6% from December 31, 2008. At June 30, 2009 total loans were $2.7 billion, an increase of 7% from December 31, 2008.
At June 30, 2009, the allowance for loan losses was $51.8 million, up 65% from June 30, 2008 and up 30% from year-end 2008; and represented 1.91% of portfolio loans versus 1.32% at June 30, 2008 and 1.59% at December 31, 2008. The methodology used to determine the appropriate amount of the allowance for loan losses at a particular time includes consideration of risk factors related to Southwest and to our markets, including regular assessments of national and local economic conditions and trends. For the six months ended June 30, 2009, the provision for loan losses increased by $12.9 million, or 238%, over the provision for the comparable period ended June 30, 2008.
Nonperforming assets to portfolio loans and other real estate owned were 3.83% at June 30, 2009 compared to 1.45% at June 30, 2008 and 2.80% at December 31, 2008. A breakdown of portfolio loans and nonperforming assets by type are shown in the following table:
Percentage
of total Percentage of
(dollars in Portfolio portfolio Nonperforming nonperforming
thousands) loans loans assets assets
----- ----- ------ ------
Real estate
construction $739,433 27.34% $42,977 41.40%
Commercial
real estate 1,223,496 45.24 30,253 29.14
Commercial 569,336 21.06 11,022 10.62
Other real
estate owned - - 8,941 8.61
Residential
real estate
mortgages 126,887 4.69 10,320 9.94
Other
consumer
loans 45,174 1.67 307 0.29
------ ---- --- ----
Total $2,704,326 100.00% $103,820 100.00%
Included above are $15.6 million of nonperforming assets acquired from FNBA, which are subject to protection under the existing loss share agreements. Nonaccrual loans, which are the majority of nonperforming assets, were $82.8 million as of June 30, 2009, an increase of $9.4 million from March 31, 2009 and $23.5 million from December 31, 2008. These loans are carried at their estimated collectible amounts and no longer accrue interest. Loans 90 days or more past due, another component of nonperforming assets, increased $1.5 million from March 31, 2009 and increased $7.4 million from December 31, 2008. These loans are deemed to have sufficient collateral and are in the process of being collected. Performing loans considered potential problem loans, which are not included in the past due, nonaccrual, or restructured categories, but for which known information about possible credit problems cause management to be uncertain as to the continued ability of the borrowers to comply with the present loan repayment terms in future periods, amounted to approximately $184.1 million at June 30, 2009, an increase of $50.2 million from March 31, 2009 and $52.5 million from December 31, 2008. Included are $6.0 million of potential problem loans acquired from FNBA, which are subject to protection under the existing loss share agreements. These loans are subject to continuing management attention and are considered by management in determining the level of the allowance for loan losses.
Total deposits were $2.5 billion at June 30, 2009, up $272.2 million from December 31, 2008. At June 30, 2009, wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 17% of total funding compared to 24% at December 31, 2008.
At June 30, 2009 Southwest exceeded all applicable regulatory capital requirements, having a total risk-based capital ratio of 13.92%, a Tier 1 risk-based capital ratio of 12.67%, and a leverage ratio of 12.70%. Southwest and each of its banking subsidiaries met the criteria for regulatory classification as "well-capitalized". Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $115.5 million. Southwest's ratio of tangible common equity to tangible assets was 7.65% as June 30, 2009. (The tangible common equity ratio is a non-GAAP measure used by Southwest and analysts based on shareholders' equity as defined by generally accepted accounting principles minus goodwill and equity that does not benefit common shareholders such as preferred equity and equity provided by the U.S. Treasury's Capital Purchase Program. See table 6.) Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators.
Year-to-date Results:
Summary: The decrease in our net income available to common shareholders from 2008 is the result of a $12.9 million increase in the provision for loan losses, a $2.3 million increase in FDIC insurance and other insurance expense, and $2.1 million in dividends on the preferred stock that we issued in December 2008, offset in part by a $4.0 million decrease in personnel costs, a $1.5 million decrease in general and administrative expenses, a $1.5 million decrease in income tax expense, a $3.1 million increase in other noninterest income, a $1.7 million increase in gain on sale of investment securities, and a $1.4 million increase in net interest income.
Net Interest Income: Net interest income totaled $45.5 million for the first six month of 2009 compared to $44.1 million for the first six months of 2008. Year-to-date net interest margin was 3.20% compared to 3.42% in 2008. Included in the second quarter net interest income is a one-time recovery of $1.9 million in interest from the successful resolution of a nonperforming loan. Net interest margin would have been 13 basis points lower without this recovery.
Provision for Loan Losses: The provision for loan losses totaled $18.4 million for the first six months of 2009 compared to $5.4 million for the first six months of 2008. Net charge offs totaled $6.4 million, or 0.51% (annualized) of average portfolio loans, year-to-date as of June 30, 2009, compared to $3.7 million, or 0.32% (annualized) of average portfolio loans, for the same period in the prior year.
Noninterest Income: For the first six months of 2009, noninterest income totaled $13.7 million compared to $8.6 million for 2008. The increase in noninterest income from 2008 was the result of a $1.7 million increase in gain on sale of investment securities and a $3.1 million increase in other noninterest income, which includes the $3.3 million gain on acquisition.
Noninterest Expense: For the first six months of 2009, noninterest expense totaled $29.3 million compared to $32.2 million for 2008. The decrease consists mainly of a $4.0 million decrease in personnel expense, a $1.1 million decrease in other general and administrative expenses, and a $458,000 decrease in provision for unfunded loan commitments, offset in part by a $2.3 million increase in FDIC and other insurance expense and a $460,000 increase in occupancy expense.
The efficiency ratio improved to 49.45% for the first six months of 2009 from 60.95% for the first six months of 2008.
Second Quarter Results:
Summary: The $748,000 increase in our net income available to common shareholders compared to the second quarter of 2008 was the result of a $3.3 million increase in noninterest income, a $2.2 million increase in net interest income and a $1.6 million decrease in noninterest expenses, offset in party by a $4.3 million increase in the provision for loan losses, a $1.0 million increase in income tax expense, and $1.0 million in quarterly dividends on the preferred stock that we issued in December 2008.
Net Interest Income: Net interest income totaled $24.5 million for the second quarter of 2009 compared to $22.3 million for the second quarter of 2008. Net interest margin was 3.41% for the second quarter of 2009 compared to 3.38% for the second quarter of 2008. Included in quarterly net interest income is a one-time recovery of $1.9 million in interest as a nonperforming loan was resolved. Net interest margin would have been 26 basis points lower without this recovery.
Provision for Loan Losses: The provision for loan losses totaled $7.5 million for the second quarter of 2009 compared to $3.2 million for the second quarter of 2008. Net charge offs totaled $2.0 million, or 0.31% (annualized) of average portfolio loans for the second quarter of 2009, compared to $1.8 million, or 0.31% (annualized) of average portfolio loans, for the second quarter of 2008.
Noninterest Income: Noninterest income totaled $7.3 million for the second quarter of 2009 compared to $4.0 million for the second quarter of 2008. The increase was primarily the result of a $3.3 million gain recognized on the FDIC-assisted acquisition.
Noninterest Expense: Noninterest expense totaled $14.7 million for the second quarter of 2009, a $1.6 million decrease from the second quarter 2008. The decrease consists mainly of a $2.0 million decrease in personnel expense, a $1.2 million decrease in other general and administrative expenses, and a $403,000 decrease in provision for unfunded loan commitments, offset in part by a $1.8 million increase in FDIC and other insurance expense.
The efficiency ratio for the second quarter of 2009 improved to 46.32% from 62.23% for the second quarter of 2008.
Southwest Bancorp and Subsidiaries
Southwest Bancorp is the financial holding company for Stillwater National Bank and Trust Company, Bank of Kansas, SNB Capital Corporation, Healthcare Strategic Support, Inc., and Business Consulting Group, Inc. Through its subsidiaries, Southwest offers commercial and consumer lending, deposit, and investment services, and specialized cash management, consulting, and other financial services from offices in Oklahoma City, Edmond, Stillwater, Tulsa, and Chickasha, Oklahoma; Austin, Dallas, Houston and San Antonio, Texas; and Anthony, Harper, Hutchinson, Mayfield, Olathe, Overland Park, South Hutchinson, and Wichita, Kansas, and on the Internet, through SNB DirectBanker(R).
Southwest focuses on converting its strategic vision into long-term shareholder value. Our vision includes a commercial banking model and a community banking model focused on more traditional banking operations in Texas, Oklahoma, and Kansas. Southwest's strategic growth goals include prudent growth from existing and additional commercial banking offices in carefully selected markets and continued careful expansion of community banking operations.
We plan to reduce the percentage of commercial real estate loans to total portfolio loans in view of current economic conditions. Our plan focuses on reductions in particular subcategories of commercial real estate loans that are identified in our regular real estate market reviews. In general, and with some exceptions regarding locations and particular types of facilities, we do not intend to decrease healthcare related commercial or mortgage lending or commercial mortgage lending on owner-occupied properties that otherwise meet our underwriting criteria.
Southwest's common stock is traded on the NASDAQ Global Select Market under the symbol OKSB. Southwest's trust preferred securities are traded on the NASDAQ Global Select Market under the symbol OKSBP.
Forward-Looking Statements
This Press Release includes forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include: statements of Southwest's goals, intentions, and expectations; estimates of risks and of future costs and benefits; expectations regarding future financial performance of Southwest and its operating segments; assessments of loan quality, probable loan losses, and the amount and timing of loan payoffs; liquidity, contractual obligations, off-balance sheet risk and market risk or interest rate risk; estimates of value of acquired assets, deposits, and other liabilities; and statements of Southwest's ability to achieve financial and other goals. These forward-looking statements are subject to significant uncertainties because they are based upon: the amount and time of future changes in interest rates, market behavior, and other economic conditions; future laws and regulations and accounting principles; and a variety of other matters. Because of these uncertainties, the actual future results may be materially different from the results indicated by these forward-looking statements. In addition, Southwest's past growth and performance do not necessarily indicate its future results.
Financial Tables
Unaudited Financial Highlights Table 1
Unaudited Consolidated Statements of Financial Condition Table 2
Unaudited Consolidated Statements of Operations Table 3
Unaudited Average Balances, Yields, and Rates-Quarterly Table 4
Unaudited Average Balances, Yields, and Rates-Year-to-date Table 5
Unaudited Summary Financial Data by Quarter-2009 and 2008 Table 6
Unaudited Supplemental Analytical Data by Quarter-2009 and 2008 Table 7
SOUTHWEST BANCORP, INC. Table 1
UNAUDITED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share)
Second Quarter First Quarter
QUARTERLY -----------------------------------------------------
HIGHLIGHTS % %
2009 2008 Change 2009 Change
---- ---- -------- ---- --------
Operations
Net
interest
income $24,456 $22,284 10% $21,038 16%
Provision
for loan
losses 7,477 3,190 134 10,882 (31)
Noninterest
income 7,261 3,959 83 6,477 12
Noninterest
expense 14,690 16,332 (10) 14,599 1
Income
before
taxes 9,550 6,721 42 2,034 370
Taxes on
income 3,605 2,559 41 705 411
Net income 5,945 4,162 43 1,329 347
Net income
available
to common
shareholders 4,910 4,162 18 296 1,559
Diluted
earnings
per share 0.33 0.28 18 0.02 1,550
Balance
Sheet
Total
assets 3,038,985 2,773,013 10 2,928,133 4
Loans held
for sale 26,006 62,892 (59) 76,404 (66)
Portfolio
loans 2,704,326 2,381,893 14 2,526,293 7
Total
deposits 2,452,295 2,211,001 11 2,330,089 5
Total
shareholders'
equity 305,416 224,949 36 300,406 2
Book value
per share 16.30 15.49 5 16.01 2
Key Ratios
Net
interest
margin 3.41% 3.38% 3.00%
Efficiency
ratio (GAAP-
based) 46.32 62.23 53.06
Total capital
to risk-
weighted
assets 13.92 10.65 14.11
Nonperforming
loans to
portfolio
loans 3.51 1.35 3.32
Shareholders'
equity to total
assets 10.05 8.11 10.26
Tangible common
equity to
tangible assets 7.65 7.88 7.76
Return on
average assets
(annualized) 0.81 0.62 0.18
Return on
average equity
(annualized) 7.82 7.38 1.77
YEAR-TO-DATE HIGHLIGHTS Six Months
--------------- %
2009 2008 Change
---- ---- --------
Operations
Net interest income $45,494 $44,117 3%
Provision for loan losses 18,359 5,426 238
Noninterest income 13,738 8,647 59
Noninterest expense 29,289 32,162 (9)
Income before taxes 11,584 15,176 (24)
Taxes on income 4,310 5,806 (26)
Net income 7,274 9,370 (22)
Net income available to common
shareholders 5,206 9,370 (44)
Diluted earnings per share 0.35 0.64 (45)
Balance Sheet
Total assets 3,038,985 2,773,013 10
Loans held for sale 26,006 62,892 (59)
Portfolio loans 2,704,326 2,381,893 14
Total deposits 2,452,295 2,211,001 11
Total shareholders' equity 305,416 224,949 36
Book value per share 16.30 15.49 5
Key Ratios
Net interest margin 3.20% 3.42%
Efficiency ratio (GAAP-based) 49.45 60.95
Total capital to risk-weighted
assets 13.92 10.65
Nonperforming loans to portfolio
loans 3.51 1.35
Shareholders' equity to total
assets 10.05 8.11
Tangible common equity to tangible
assets 7.65 7.88
Return on average assets
(annualized) 0.50 0.71
Return on average equity
(annualized) 4.81 8.39
-------------------------------------
Balance sheet amounts are as of period end unless otherwise noted.
Please see accompanying tables for additional financial information.
SOUTHWEST BANCORP, INC. Table 2
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share)
June 30, December 31, June 30,
2009 2008 2008
---- ---- ----
Assets
Cash and due from banks $33,724 $27,287 $51,462
Federal funds sold 809 - -
--- - -
Cash and cash equivalents 34,533 27,287 51,462
Investment securities:
Held to maturity. Fair
value: $6,834 $7,293,
$8,282 6,795 7,343 8,340
Available for sale.
Amortized cost: $214,944
$233,293, $210,721 216,293 238,037 208,640
Other investments, at cost 19,989 18,786 17,449
Loans held for sale 26,006 56,941 62,892
Loans receivable (1) 2,704,326 2,494,506 2,381,893
Less: Allowance for loan
losses (51,753) (39,773) (31,341)
------- ------- -------
Net loans receivable 2,652,573 2,454,733 2,350,552
Accrued interest
receivable 10,753 11,512 12,624
Premises and equipment,
net 24,743 24,580 23,607
Other real estate owned (2) 8,941 6,092 2,523
Goodwill 6,811 7,071 7,071
Other intangible assets,
net 5,974 3,764 4,157
Other assets 25,574 23,616 23,696
------ ------ ------
Total assets $3,038,985 $2,879,762 $2,773,013
========== ========== ==========
Liabilities and
shareholders' equity
Deposits:
Noninterest-bearing demand $291,014 $261,940 $299,699
Interest-bearing demand 94,060 76,027 81,415
Money market accounts 483,162 454,250 548,099
Savings accounts 25,660 14,135 13,809
Time deposits of $100,000 or
more 905,202 802,244 740,174
Other time deposits 653,197 571,526 527,805
------- ------- -------
Total deposits 2,452,295 2,180,122 2,211,001
Accrued interest payable 5,953 7,018 9,680
Income tax payable 5,752 3,651 3,924
Other liabilities 11,238 9,667 11,452
Other borrowings 176,368 295,138 265,614
Subordinated debentures 81,963 81,963 46,393
------ ------ ------
Total liabilities 2,733,569 2,577,559 2,548,064
Shareholders' equity
Preferred stock, Series
B -$1,000 par value;
1,250,000 shares
authorized; 70,000
shares issued 66,710 66,392 -
Common stock - $1 par
value; 20,000,000 shares
authorized; 14,658,042
shares issued 14,658 14,658 14,658
Paid in capital 48,387 49,101 45,818
Retained earnings 175,089 170,579 168,099
Accumulated other
comprehensive income
(loss) 853 2,921 (1,256)
Treasury stock, at
cost, 15,602,
80,383, 131,566
shares (281) (1,448) (2,370)
---- ------ ------
Total shareholders' equity 305,416 302,203 224,949
------- ------- -------
Total liabilities and
shareholders' equity $3,038,985 $2,879,762 $2,773,013
========== ========== ==========
(1) Includes $80.8 million which is subject to FDIC support through the
loss share agreement which provides for 80% recovery of net losses up
to $35.0 million and 95% recovery for net losses exceeding this
amount.
(2) Includes $3.3 million which is subject to FDIC support through the
loss share agreement as discussed in (1).
SOUTHWEST BANCORP, INC. Table 3
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share)
For the three For the six
months months
ended June 30, ended June 30,
---------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Interest income
Loans $36,009 $37,485 $69,277 $78,095
Investment
securities 2,079 2,426 4,591 4,762
Other interest-
earning assets 3 20 9 48
--- --- --- ---
Total
interest
income 38,091 39,931 73,877 82,905
Interest expense
Interest-
bearing
deposits 11,072 15,107 23,132 33,361
Other borrowings 1,180 1,887 2,464 3,916
Subordinated
debentures 1,383 653 2,787 1,511
----- --- ----- -----
Total
interest
expense 13,635 17,647 28,383 38,788
------ ------ ------ ------
Net interest income 24,456 22,284 45,494 44,117
Provision for loan losses 7,477 3,190 18,359 5,426
----- ----- ------ -----
Net interest income after
provision for loan losses 16,979 19,094 27,135 38,691
Noninterest income
Service
charges and
fees 2,817 2,812 5,417 5,269
Gain on acquisition 3,281 - 3,281 -
Gain on
sales of
loans 926 603 1,644 1,443
Gain (loss) on
investment
securities (9) 3 2,912 1,248
Other
noninterest
income 246 541 484 687
--- --- --- ---
Total
noninterest
income 7,261 3,959 13,738 8,647
Noninterest expense
Salaries and
employee
benefits 6,887 8,856 14,126 18,078
Occupancy 2,789 2,602 5,520 5,060
FDIC and
other
insurance 2,319 521 3,310 974
Other real
estate, net 103 197 1 207
General and administrative 2,592 4,156 6,332 7,843
----- ----- ----- -----
Total
noninterest
expenses 14,690 16,332 29,289 32,162
------ ------ ------ ------
Income before taxes 9,550 6,721 11,584 15,176
Taxes on income 3,605 2,559 4,310 5,806
----- ----- ----- -----
Net income $5,945 $4,162 $7,274 $9,370
====== ====== ====== ======
Net income available to
common shareholders $4,910 $4,162 $5,206 $9,370
====== ====== ====== ======
Basic earnings
per common share $0.34 $0.29 $0.36 $0.65
Diluted earnings
per common share 0.33 0.28 0.35 0.64
Common dividends
declared per share 0.0238 0.0950 0.0476 0.1900
SOUTHWEST BANCORP, INC. Table 4
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES
(Dollars in thousands)
For the three months ended
June 30,
---------------------------
2009
---------------------------
Average Average
Balance Interest Yield/Rate
------- -------- ----------
Assets
Loans $2,649,140 $36,009 5.45%
Investment securities 225,353 2,079 3.70
Other interest-earning assets 4,321 3 0.28
----- ---
Total interest-earning assets 2,878,814 38,091 5.31
Other assets 67,725
------
Total assets $2,946,539
==========
Liabilities and Shareholders' Equity
Interest-bearing demand deposits $87,036 $150 0.69%
Money market accounts 470,506 1,211 1.03
Savings accounts 17,309 14 0.32
Time deposits 1,497,651 9,697 2.60
--------- -----
Total interest-bearing deposits 2,072,502 11,072 2.14
Other borrowings 198,936 1,180 2.38
Subordinated debentures 81,963 1,383 6.75
------ -----
Total interest-bearing liabilities 2,353,401 13,635 2.32
------ ----
Noninterest-bearing demand deposits 267,406
Other liabilities 20,827
Shareholders' equity 304,905
-------
Total liabilities and
shareholders' equity $2,946,539
==========
Net interest income and spread $24,456 2.99%
======= ====
Net interest margin (1) 3.41%
====
Average interest-earning assets
to average interest-bearing
liabilities 122.33%
======
For the three months ended
June 30,
---------------------------
2008
-----------------------------
Average Average
Balance Interest Yield/Rate
------- -------- ----------
Assets
Loans $2,414,012 $37,485 6.25%
Investment securities 233,101 2,426 4.19
Other interest-earning assets 3,406 20 2.36
----- ---
Total interest-earning assets 2,650,519 39,931 6.06
Other assets 66,385
------
Total assets $2,716,904
==========
Liabilities and Shareholders' Equity
Interest-bearing demand deposits $79,273 $166 0.84%
Money market accounts 548,020 3,062 2.25
Savings accounts 13,586 19 0.56
Time deposits 1,230,327 11,860 3.88
--------- ------
Total interest-bearing deposits 1,871,206 15,107 3.25
Other borrowings 284,828 1,887 2.66
Subordinated debentures 46,393 653 5.63
------ ---
Total interest-bearing liabilities 2,202,427 17,647 3.22
------ ----
Noninterest-bearing demand deposits 267,026
Other liabilities 20,687
Shareholders' equity 226,764
-------
Total liabilities and
shareholders' equity $2,716,904
==========
Net interest income and spread $22,284 2.84%
======= ====
Net interest margin (1) 3.38%
====
Average interest-earning assets
to average interest-bearing
liabilities 120.35%
======
(1) Net interest margin = annualized net interest income / average
interest-earning assets
SOUTHWEST BANCORP, INC. Table 5
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES
(Dollars in thousands)
For the six months ended June 30,
------------------------------
2009
------------------------------
Average Average
Balance Interest Yield/Rate
------- -------- ----------
Assets
Loans $2,622,282 $69,277 5.33%
Investment securities 236,862 4,591 3.91
Other interest-earning assets 3,557 9 0.51
----- ---
Total interest-earning assets 2,862,701 73,877 5.20
Other assets 68,333
------
Total assets $2,931,034
==========
Liabilities and Shareholders' Equity
Interest-bearing demand deposits $87,870 $303 0.70%
Money market accounts 469,970 2,564 1.10
Savings accounts 16,198 23 0.29
Time deposits 1,470,271 20,242 2.78
--------- ------
Total interest-bearing deposits 2,044,309 23,132 2.28
Other borrowings 217,597 2,464 2.28
Subordinated debentures 81,963 2,787 6.80
------ -----
Total interest-bearing liabilities 2,343,869 28,383 2.44
------ ----
Noninterest-bearing demand deposits 261,980
Other liabilities 20,119
Shareholders' equity 305,066
-------
Total liabilities and
shareholders' equity $2,931,034
==========
Net interest income and spread $45,494 2.76%
======= ====
Net interest margin (1) 3.20%
====
Average interest-earning assets
to average interest-bearing
liabilities 122.14%
======
For the six months ended June 30,
------------------------------
2008
------------------------------
Average Average
Balance Interest Yield/Rate
------- -------- ----------
Assets
Loans $2,359,489 $78,095 6.66%
Investment securities 236,071 4,762 4.08
Other interest-earning assets 3,084 48 3.13
----- --
Total interest-earning assets 2,598,644 82,905 6.42
Other assets 68,492
------
Total assets $2,667,136
==========
Liabilities and Shareholders' Equity
Interest-bearing demand deposits $76,003 $307 0.81%
Money market accounts 547,027 7,590 2.79
Savings accounts 13,525 41 0.61
Time deposits 1,219,554 25,423 4.19
--------- ------
Total interest-bearing deposits 1,856,109 33,361 3.61
Other borrowings 261,819 3,916 3.01
Subordinated debentures 46,393 1,511 6.51
------ -----
Total interest-bearing liabilities 2,164,321 38,788 3.60
------ ----
Noninterest-bearing demand deposits 257,133
Other liabilities 21,181
Shareholders' equity 224,501
-------
Total liabilities and
shareholders' equity $2,667,136
==========
Net interest income and spread $44,117 2.82%
======= ====
Net interest margin (1) 3.42%
====
Average interest-earning assets
to average interest-bearing
liabilities 120.07%
======
(1) Net interest margin = annualized net interest income / average
interest-earning assets
SOUTHWEST BANCORP, INC. Table 6
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA
(Dollars in thousands except per share)
2009
------------------------
Jun. 30 Mar. 31
----------- -----------
OPERATIONS
Interest income:
Loans $36,009 $33,268
Investment securities 2,079 2,512
Other interest-earning assets 3 6
-- --
Total interest income 38,091 35,786
Interest expense:
Interest bearing demand
deposits 150 153
Money market accounts 1,211 1,353
Savings accounts 14 9
Time deposits of $100,000 or
more 5,552 5,980
Other time deposits 4,145 4,565
----- -----
Total interest-bearing deposits 11,072 12,060
Other borrowings 1,180 1,284
Subordinated debentures 1,383 1,404
----- -----
Total interest expense 13,635 14,748
------ ------
Net interest income 24,456 21,038
Provision for loan losses 7,477 10,882
Noninterest income:
Service charges and fees 2,817 2,600
Gain on sales of loans 926 718
Gain (loss) on investment
securities (9) 2,921
Other noninterest income 3,527 238
----- ---
Total noninterest income 7,261 6,477
Noninterest expense:
Salaries and employee benefits 6,887 7,239
Occupancy 2,789 2,731
FDIC and other insurance 2,319 991
Other real estate, net 103 (102)
Provision for unfunded loan
commitments (388) 90
Other general and administrative 2,980 3,650
----- -----
Total noninterest expenses 14,690 14,599
------ ------
Income before taxes 9,550 2,034
Taxes on income 3,605 705
----- ---
Net income $5,945 $1,329
====== ======
Net income available to common
shareholders $4,910 $296
====== ====
PER SHARE DATA
Basic earnings per common share $0.34 $0.02
Diluted earnings per common share 0.33 0.02
Common dividends declared per
share 0.0238 0.0238
Book value per share 16.30 16.01
Tangible book value per share 15.84 15.52
OTHER FINANCIAL DATA
Investment securities $243,077 $179,006
Loans held for sale 26,006 76,404
Portfolio loans 2,704,326 2,526,293
Total loans 2,730,332 2,602,697
Total assets 3,038,985 2,928,133
Total deposits 2,452,295 2,330,089
Other borrowings 176,368 193,739
Subordinated debentures 81,963 81,963
Total shareholders' equity 305,416 300,406
Mortgage servicing portfolio 209,425 179,959
2008
-------------------------------------------------
Dec. 31 Sep. 30 Jun. 30 Mar. 31
----------- ----------- ----------- -----------
OPERATIONS
Interest income:
Loans $36,183 $38,441 $37,485 $40,610
Investment
securities 2,693 2,531 2,426 2,336
Other interest-
earning assets 19 22 20 28
-- -- -- --
Total interest
income 38,895 40,994 39,931 42,974
Interest expense:
Interest bearing
demand deposits 130 147 166 141
Money market
accounts 2,132 2,898 3,062 4,528
Savings
accounts 11 17 19 22
Time deposits of
$100,000 or more 6,419 6,879 7,051 7,865
Other time
deposits 4,571 4,457 4,809 5,698
----- ----- ----- -----
Total interest-
bearing deposits 13,263 14,398 15,107 18,254
Other borrowings 1,487 1,839 1,887 2,029
Subordinated
debentures 1,731 1,569 653 858
----- ----- --- ---
Total interest
expense 16,481 17,806 17,647 21,141
------ ------ ------ ------
Net interest income 22,414 23,188 22,284 21,833
Provision for
loan losses 6,698 6,855 3,190 2,236
Noninterest income:
Service
charges and
fees 2,908 2,849 2,812 2,457
Gain on
sales of
loans 620 601 603 840
Gain (loss) on
investment
securities (296) (50) 3 1,245
Other
noninterest
income 197 662 541 146
--- --- --- ---
Total
noninterest
income 3,429 4,062 3,959 4,688
Noninterest expense:
Salaries and
employee
benefits 6,389 8,863 8,856 9,222
Occupancy 2,844 2,968 2,602 2,458
FDIC and
other
insurance 645 469 521 453
Other real
estate, net 31 (92) 197 10
Provision for
unfunded loan
commitments 385 90 15 145
Other general and
administrative 3,499 4,235 4,141 3,542
----- ----- ----- -----
Total
noninterest
expenses 13,793 16,533 16,332 15,830
------ ------ ------ ------
Income before taxes 5,352 3,862 6,721 8,455
Taxes on income 2,127 1,556 2,559 3,247
----- ----- ----- -----
Net income $3,225 $2,306 $4,162 $5,208
====== ====== ====== ======
Net income available
to common
shareholders $2,982 $2,306 $4,162 $5,208
====== ====== ====== ======
PER SHARE DATA
Basic earnings
per common share $0.21 $0.16 $0.29 $0.36
Diluted earnings
per common share 0.20 0.16 0.28 0.36
Common dividends
declared per share 0.0950 0.0950 0.0950 0.0950
Book value per
share 16.18 15.56 15.49 15.43
Tangible book
value per share 15.69 15.08 15.00 14.95
OTHER FINANCIAL DATA
Investment
securities $264,166 $241,728 $234,429 $236,059
Loans held for sale 56,941 72,248 62,892 66,364
Portfolio loans 2,494,506 2,440,091 2,381,893 2,287,606
Total loans 2,551,447 2,512,339 2,444,785 2,353,970
Total assets 2,879,762 2,832,371 2,773,013 2,670,580
Total deposits 2,180,122 2,198,719 2,211,001 2,094,927
Other borrowings 295,138 299,118 265,614 282,513
Subordinated
debentures 81,963 81,963 46,393 46,393
Total
shareholders'
equity 302,203 226,123 224,949 224,155
Mortgage
servicing
portfolio 158,143 153,250 147,672 145,028
Continued
SOUTHWEST BANCORP, INC. Table 6
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA Continued
(Dollars in thousands except per share)
------------------------
2009
------------------------
Jun. 30 Mar. 31
----------- -----------
PERFORMANCE RATIOS
Return on average assets
(annualized) 0.81% 0.18%
Return on average common
equity (annualized) 8.26 1.77
Return on average tangible
equity (annualized) 8.12 1.83
Net interest margin 3.41 3.00
Total dividends declared to
net income 20.58 92.00
Effective tax rate 37.75 34.66
Efficiency ratio 46.32 53.06
ASSET QUALITY RATIOS
Nonperforming assets to
portfolio loans and
other real estate owned 3.83% 3.53%
Nonperforming loans to
portfolio loans 3.51 3.32
Net loan charge-offs to
average portfolio loans 0.31 0.71
Allowance for loan losses to
total loans 1.90 1.78
Allowance for loan losses to
portfolio loans 1.91 1.83
Allowance for loan losses to
nonperforming loans 54.55 55.12
CAPITAL RATIOS
Average total shareholders'
equity to
average assets 10.35% 10.47%
Leverage ratio 12.70 12.72
Tier 1 capital to risk-
weighted assets 12.67 12.85
Total capital to risk-
weighted assets 13.92 14.11
Tangible common equity to
tangible assets* 7.65 7.76
LOANS BY SEGMENT
Oklahoma banking $967,981 $949,454
Texas banking 1,037,694 990,135
Kansas banking 412,314 309,774
Other states banking 286,337 276,930
------- -------
Subtotal 2,704,326 2,526,293
Secondary market 26,006 76,404
Total loans $2,730,332 $2,602,697
========== ==========
NET INCOME BY SEGMENT
Oklahoma banking $3,284 $3,210
Texas banking 3,662 1,119
Kansas banking 548 598
Other states banking (78) (1,974)
--- ------
Subtotal 7,416 2,953
Secondary market 117 (61)
Other operations (1,588) (1,563)
------ ------
Net income $5,945 $1,329
====== ======
OFFICES AND EMPLOYEES
FTE Employees 478 425
ATM's 44 40
Branches 24 18
Loan production offices 3 3
Assets per employee $6,358 $6,890
* Calculation of Tangible
Capital to Tangible Assets
(Non-GAAP Financial
Measure)
Total shareholders' equity $305,416 $300,406
Less:
Goodwill** 6,811 7,071
Preferred stock 66,710 66,549
------ ------
Tangible common equity $231,895 $226,786
======== ========
Total assets $3,038,985 $2,928,133
Less goodwill 6,811 7,071
----- -----
Tangible assets $3,032,174 $2,921,062
========== ==========
Tangible common equity to
tangible assets 7.65% 7.76%
2008
--------------------------------------------------
Dec. 31 Sep. 30 Jun. 30 Mar. 31
----------- ----------- ----------- -----------
PERFORMANCE RATIOS
Return on average
assets (annualized) 0.45% 0.33% 0.62% 0.80%
Return on average
common equity
(annualized) 5.15 3.97 7.38 9.43
Return on average
tangible equity
(annualized) 5.79 4.26 7.86 9.94
Net interest
margin 3.22 3.39 3.38 3.45
Total dividends
declared to net
income 50.49 59.85 33.16 26.37
Effective tax
rate 39.74 40.29 38.07 38.40
Efficiency ratio 53.37 60.67 62.23 59.69
ASSET QUALITY RATIOS
Nonperforming assets
to portfolio
loans and
other real
estate owned 2.80% 2.72% 1.45% 1.41%
Nonperforming loans
to portfolio
loans 2.56 2.62 1.35 1.27
Net loan charge-offs
to average
portfolio
loans 0.44 0.39 0.31 0.34
Allowance for loan
losses to total
loans 1.56 1.43 1.28 1.27
Allowance for loan
losses to
portfolio
loans 1.59 1.47 1.32 1.31
Allowance for loan
losses to
nonperforming
loans 62.16 56.07 97.62 103.49
CAPITAL RATIOS
Average total
shareholders' equity
to average assets 8.85% 8.26% 8.35% 8.49%
Leverage ratio 13.06 10.51 9.66 9.91
Tier 1 capital to
risk-weighted
assets 13.01 10.49 9.40 9.47
Total capital to
risk-weighted
assets 14.26 11.88 10.65 10.69
Tangible common
equity to
tangible
assets* 7.96 7.75 7.88 8.15
LOANS BY SEGMENT
Oklahoma banking $966,243 $962,611 $965,952 $943,331
Texas banking 947,603 892,998 857,160 797,700
Kansas banking 304,855 288,268 277,887 287,339
Other states
banking 275,805 296,214 280,894 259,236
------- ------- ------- -------
Subtotal 2,494,506 2,440,091 2,381,893 2,287,606
Secondary market 56,941 72,248 62,892 66,364
Total loans $2,551,447 $2,512,339 $2,444,785 $2,353,970
========== ========== ========== ==========
NET INCOME BY SEGMENT
Oklahoma banking $3,783 $3,295 $2,923 $2,503
Texas banking 2,036 1,332 1,777 2,406
Kansas banking (204) (1,336) (40) 458
Other states
banking (89) 848 1,028 969
--- --- ----- ---
Subtotal 5,526 4,139 5,688 6,336
Secondary market 139 (149) 40 (174)
Other operations (2,440) (1,684) (1,566) (954)
------ ------ ------ ----
Net income $3,225 $2,306 $4,162 $5,208
====== ====== ====== ======
OFFICES AND EMPLOYEES
FTE Employees 442 458 463 467
ATM's 41 41 40 40
Branches 18 18 17 17
Loan production
offices 3 3 3 3
Assets per
employee $6,515 $6,184 $5,989 $5,719
*Calculation of
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