10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2013

Commission File Number 001-34110

SOUTHWEST BANCORP, INC.

(Exact name of registrant as specified in its charter)

Oklahoma	73-1136584
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
608 South Main Street, Stillwater, Oklahoma	74074
(Address of principal executive office)	(Zip Code)

Registrant’s telephone number, including area code: (405) 742-1800

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on which Registered
Common Stock, par value $1.00 per share	The NASDAQ Stock Market

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  [  ] YES  [X] NO

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  [  ] YES  [X] NO

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.   [X] 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).  [X] YES   [  ] NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   [  ]

Indicate by a check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “accelerated filer,” “large accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one): Large Accelerated filer [  ]        Accelerated filer [X]    Non-accelerated filer [  ]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   [X] NO

The registrant's Common Stock is traded on the NASDAQ Global Select Market under the symbol OKSB.The aggregate market value of approximately 18,759,647 shares of Common Stock of the registrant issued and outstanding held by nonaffiliates on June 30, 2013, the last day of the registrant’s most recently completed second fiscal quarter, was approximately $247.6 million based on the closing sales price of $13.20 per share of the registrant's Common Stock on that date. Solely for purposes of this calculation, it is assumed that directors, officers, and 5% stockholders of the registrant (other than institutional investors) are affiliates.

As of the close of business on March 6,  2014, 19,786,206 shares of the registrant's Common Stock were outstanding.

Documents Incorporated by Reference

Portions of the definitive Proxy Statement relating to registrant’s Annual Meeting of Shareholders, to be held on April 23, 2014, are incorporated by reference into Part III of this Form 10-K to the extent described therein.

SOUTHWEST BANCORP, INC.

Annual Report on Form 10-K

Table of Contents

		Page
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	17
Item 2.	Properties	18
Item 3.	Legal Proceedings	20
Item 4.	Mine Safety Disclosures	20
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	21
Item 6.	Selected Financial Data	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 8.	Financial Statements and Supplementary Data	49
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosures	91
Item 9A.	Controls and Procedures	91
Item 9B.	Other Information	93
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	93
Item 11.	Executive Compensation	93
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	93
Item 13.	Certain Relationships and Related Transactions, and Director Independence	93
Item 14.	Principal Accounting Fees and Services	93
PART IV
Item 15.	Exhibits, Financial Statement Schedules	94
	Signatures	97

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Caution  about Forward-Looking Statements

Southwest Bancorp, Inc. (“we”, “our”, “us”, or “Southwest”) makes forward-looking statements in this Annual Report on Form 10-K that are subject to risks and uncertainties.  We intend these statements to be covered by the safe harbor provision for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include:

· Statements of our goals, intentions, and expectations;

· Estimates of risks and of future costs and benefits;

· Expectations regarding our future financial performance and the financial performance of our  operating segments;

· Expectations regarding regulatory actions;

· Expectations regarding our ability to utilize tax loss benefits;

· Assessments of loan quality, probable loan losses, and the amount and timing of loan payoffs;

· Estimates of the value of assets held for sale or available for sale; and

· Statements of our ability to achieve financial and other goals. 

These forward-looking statements are subject to significant uncertainties because they are based upon: the amount and timing of future changes in interest rates, market behavior, and other economic conditions; future laws, regulations, and accounting principles; changes in regulatory standards and examination policies; and a variety of other matters.  These other matters include, among other things, the direct and indirect effects of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators.  Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.  In addition, our past growth and performance do not necessarily indicate our future results.  For other factors, risks, and uncertainties that could cause actual results to differ materially from estimates and projections contained in forward-looking statements, please read the “Risk Factors” contained in this report and our future reports to the Securities and Exchange Commission (“SEC”).

These forward-looking statements speak only as of the date on which the statements were made.  We do not intend, and undertake no obligation, to update or revise any forward-looking statements contained in this release, whether as a result of differences in actual results, changes in assumptions, or changes in other factors affecting such statements, except as required by law. 

We are required under generally accepted accounting principles to evaluate subsequent events and their impact, if any, on its financial statements as of December 31, 2013 through the date its financial statements are filed with the Securities and Exchange Commission.  The December 31, 2013 financial statements included in this release will be adjusted if necessary to properly reflect the impact of subsequent events on estimates used to prepare those statements.

PART i

ITEM 1.  BUSINESS

Business

General

We are a financial holding company headquartered in Stillwater, Oklahoma for our banking subsidiary Bank SNB, National Association (“Bank SNB”).  We were organized in 1981 as the holding company for Bank SNB, which was chartered in 1894.  We are registered as a financial holding company pursuant to the Bank Holding Company Act of 1956, as amended by the Financial Services Modernization Act or Gramm-Leach-Bliley Act (the "Holding Company Act").  As such, we are subject to supervision and regulation by the Federal Reserve.  Bank SNBis a national bank subject to supervision and regulation by the Office of the Comptroller of the Currency (“OCC”).  Bank SNB’s deposit accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) to the maximum permitted by law.

Effective as of the close of business on November 15, 2013, we merged our wholly-owned subsidiary state bank, Bank of Kansas,with and intoour wholly-owned national bank, which was then known as The Stillwater National Bank and Trust Company (“Stillwater National”).  Immediately following the merger, our national bank was renamed Bank SNB, National

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Association, which is the new name for business in all markets.  The consolidation and new name unified our brand as one bank to better serve our clients and prepares us for growth in the future.

Products and Services

We focus on providing customers with exceptional service and meeting all of their banking needs by offering a wide variety of commercial and consumer banking services including commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services and products.Our area of expertise focuses on the special financial needs of healthcare and health professionals, commercial real estate borrowers, businesses and their managers and owners, commercial lending, and energy banking. The healthcare and real estate industries make up the majority of our loan portfolio.

Our commercial lending services include (i) commercial real estate loans, (ii) working capital loans, (iii) construction loans, (iv) loans to small businesses (v) loans for equipment and general business expansion, (vi) loans to energy companies based on proved producing reserves and (vii) loans to a broad variety of healthcare providers, business, and related concerns.  Consumer lending services include (i) residential real estate loans and mortgage banking services, and (ii) personal lines of credit (iii) loans for the purchase of automobiles, and (iv) other installment loans.  We also offer deposit and personal banking services, including (i) commercial deposit services, commercial checking, money market, and other deposit accounts, and (ii) retail deposit services such as certificates of deposit, money market accounts, checking accounts, NOW accounts, savings accounts, and automatic teller machine (“ATM”) access.  Bank SNB offers personal brokerage services through a relationship with an independent institution.

We have developed internet banking services, called BankSNB DirectBanker®, for consumer and commercial customers, a highly automated lockbox, document imaging, and information service for commercial customers called “Bank SNB Digital Lockbox,” and deposit products that automatically sweep excess funds from commercial demand deposit accounts and invest them in interest bearing funds (“Sweep Agreements”). 

Strategic Focus

Our bank has and will continue to position itself for future growth. We seek to produce consistent and sustainable revenue growth by enhancing, clarifying, and expanding our geographic markets and increasing and diversifying our revenue base. This consists of, but is not limited to: building out existing markets with robust and profitable growth potential; expanding our professional team; identifying, targeting, and acquiring earning assets under appropriate risk guidelines; and continuing to source, evaluate, and execute acquisitions. 

We also seek to provide customers with exceptional service while, at the same time, improving operating efficiency. Over many years, we have refined our approach to customer service by listening to our customers’ needs and desires.  We actively seek to make the customer experience consistent over time and across all of our locations.  We improve operating efficiency by focusing on internal policy, process and procedure, along with technology, with the goal of continuous improvement while providing an exceptional experience to our clients.  We build close relationships with businesses and their principals,  business professionals and individuals by providing personalized financial solutions that gives them more control over their financial futures. We also apply a philosophy of continuous improvement to internal and external information reporting to improve our decision making processes and product delivery.  

Organization

Our business operations are conducted through five operating segments that include Oklahoma Banking, Texas Banking, Kansas Banking, Mortgage Banking, and an Other Operations segment that includes funds management (investment portfolio and funding) and corporate investments.  Our organizational structure is designed to facilitate high-level customer service, prompt response, efficiency, and appropriate, uniform credit standards and other controls.

Banking Segments – Our banking segments include Oklahoma Banking, which includes the Stillwater division, the Central Oklahoma division based in Oklahoma City, and the Tulsa division; Texas Banking, which includes the Dallas-Frisco division, the Dallas-Preston Center division, the Austin division, and the San Antonio division; and Kansas Banking, which includes the Harper and Anthony Branches, the Hutchinson division, the Wichita division, and the Kansas City division.  Emphasizingboth commercial and consumer lending,the Stillwater division,  Harper and Anthony Branches, and Hutchinson

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divisions serve their respective markets as full-service community banks.  The other eight divisions pursue a more focused marketing strategy, targeting managers, professionals, and businesses for lending, and offering more specialized services.  All of the regional divisions focus on commercial and consumer financial services to local businesses and their senior employees and to other managers and professionals living and working in our market areas.  We manage our mortgage and student lending operations through our home office located in Stillwater, Oklahoma.  We originate first mortgage loans for sale to the Federal National Mortgage Association (“FNMA”) or private investors.  Servicing on these loans may be released or retained in connection with the sale.

Support and Control Functions – Support and control functions are centralized, although each segment has support and control personnel.  Costs of centrally managed support and control functions other than funds management (which is included in the Other Operations segment) are allocated to the Banking segments.  Our philosophy of customer service extends to our support and control functions.  We manage and offer products that are technology based, or that otherwise are more efficiently offered centrally through our home office.  These include products that are marketed through the regional offices, such as our internet banking product for commercial and retail customers (BankSNB DirectBanker®), commercial information, and item processing services (Bank SNB Digital Lockbox).  Our technology products are marketed to existing customers and to help develop new customer relationships.  Use of these products by customers enables us to serve our customers more effectively, use our resources more efficiently, and increase our fee income.

For additional information regarding our operating segments, please see “Note 18 Operating Segments” in the Notes to the Consolidated Financial Statements. 

Banking Offices and Geographic Markets

Through Bank SNB, we have twenty-three full-service banking offices primarily located along the heavily populated areas on the I-35 corridor through Texas, Oklahoma, and Kansas.  We have four located in Stillwater, Oklahoma, four located in the Oklahoma City, Oklahoma, metropolitan area, two each located in the Tulsa, Oklahoma and Dallas, Texas metropolitan areas, two each located in Hutchinson, Kansas and in Wichita, Kansas and, one each in Chickasha, Oklahoma, Austin, San Antonio, and Tilden, Texas, and Anthony, Harper, and Overland Park, Kansas.On January 16, 2014, we announced the execution of agreements to sell branch banks in Anthony, Harper, and Overland Park, Kansas. 

We focus our efforts on markets with characteristics that will allow us to capitalize on our strengths and to continue establishing new offices in those markets.  Beyond Oklahoma, Texas, and Kansas, loans are extended to borrowers in other states.Acquisitions of other financial institutions and other companies are considered as opportunities become available. 

Employees

Another major component of our strategy is to be an employer of choice in our markets. We aim to employ talented and devoted people who embrace our vision and feel invested in our success.  As of December 31, 2013, we employed 402 persons on a full-time equivalent basis, including executive officers, loan and other banking officers, branch personnel, and others.  None of our employees or any of our consolidated subsidiary employees are represented by a union or covered under a collective bargaining agreement.  Our management considers our employee relations to be excellent.

Competition

We encounter competition in seeking deposits and in obtaining loan, cash management, investment, and other customers.  The level of competition for deposits is high.  Our principal competitors for deposits are other financial institutions, including other national banks, state banks, federal savings banks, and credit unions.  Competition among these institutions is based primarily on interest rates and other terms offered, service charges imposed on deposit accounts, the quality of services rendered, and the convenience of banking facilities.  Additional competition for depositors' funds comes from U.S. Government securities, private issuers of debt obligations, and suppliers of other investment alternatives for depositors, such as securities firms.  Competition from credit unions has intensified as historic federal limits on membership have been relaxed.  Because federal law subsidizes credit unions by giving them a general exemption from federal income taxes, credit unions have a significant cost advantage over national banks, federal savings banks, and state banks, which are fully subject to federal income taxes.  Credit unions may use this advantage to offer rates that are more competitive than those offered by national banks, federal savings banks, and state banks.

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We also compete in our lending activities with other financial institutions such as securities firms, insurance companies, credit unions, small loan companies, finance companies, mortgage companies, real estate investment trusts, and other sources of funds.  Many of our nonbank competitors are not subject to the same extensive federal regulations that govern bank holding companies and federally-insured banks.  As a result, such nonbank competitors have advantages over us in providing certain services. A number of the financial institutions with which we compete in lending, deposit, investment, cash management, and other activities are larger than us or have a significantly larger market share.  Our Texas and Kansas divisions compete for loans, deposits, and other services against local and nationally based financial institutions, many of which have much larger market shares and widespread office networks.  In recent periods, competition has increased in our Oklahoma market areas as new entrants and existing competitors have sought to more aggressively expand their loan and deposit market shares.

The business of mortgage banking is highly competitive.  We compete for loan originations with other financial institutions, such as mortgage bankers, state and national banks, federal savings banks, credit unions, and insurance companies.  Many of our competitors have financial resources that are substantially greater than those available to us.  We compete principally by providing competitive pricing, by motivating our sales force through the payment of commissions on loans originated and by providing high quality service to builders, borrowers, and realtors.

Supervision and Regulation

We are a financial holding company under the Holding Company Act and are regulated by the Federal Reserve.  Bank SNB is a national banking association and is subject to regulation, supervision, and examination by the OCC. This regulation is intended primarily for the protection of depositors, the deposit insurance fund, and the banking system as a whole, and not for the protection of our shareholders.  For ease of reference the term “banks” is used below to include national and federal savings banks and state banks, unless otherwise indicated.  The term “commercial banks” includes national and state banks but excludes federal savings associations or federal savings banks.

The following summarizes certain provisions of existing laws and regulations that affect our operations and those of Bank SNB.  Any discussion of laws and regulations applicable to a bank holding company also apply to us as a financial holding company.  This summary does not address all aspects of these laws and regulations or include all laws and regulations that affect us now or may affect us in the future.

General  –On December 11, 2013, we changed from being a bank holding company to a financial holding company.  To be eligible to make this change, Bank SNB had to be well-capitalized and well-managed and have a satisfactory or better rating under the Community Reinvestment Act.  As a financial holding company, we are still regulated under the Holding Company Act and remain subject to supervision and regular examination by the Federal Reserve.  Under the Holding Company Act, we are required to furnish to the Federal Reserve annual and quarterly reports of our operations and additional information and reports. 

A financial holding company may engage in certain financial activities, including, without limitation, securities underwriting and dealing, insurance agency and underwriting activities and merchant banking activities.  To engage in any such new financial activity, each insured depository institution of the financial holding company must have received a rating of at least satisfactory in its most recent examination under the Community Reinvestment Act, and the financial holding company must notify the Federal Reserve within 30 days of engaging in such new activity.  We are currently eligible to engage in new financial activities but have no immediate plan to do so.

Under the Holding Company Act, a financial holding company must obtain the prior approval of the Federal Reserve before (1) acquiring direct or indirect ownership or control of any class of voting securities of any national or state bank or bank holding company if, after the acquisition, the bank holding company would directly or indirectly own or control more than 5% of the class; (2) acquiring all or substantially all of the assets of another national bank or bank holding company; or (3) merging or consolidating with another bank holding company.

Also under the Holding Company Act, any company must obtain approval of the Federal Reserve prior to acquiring control of us or Bank SNB.  For purposes of the Holding Company Act, "control" is defined as ownership of more than 25% of any class of voting securities, the ability to control the election of a majority of the directors, or the exercise of a controlling influence over management or policies.

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The federal Change in Bank Control Act and the related regulations of the Federal Reserve require any person or persons acting in concert (except for companies required to make application under the Holding Company Act) to file a written notice with the Federal Reserve before the person or persons acquire control of us or Bank SNB.  The Change in Bank Control Act defines "control" as the direct or indirect power to vote 25% or more of any class of voting securities or to direct the management or policies of a bank holding company or an insured bank.

The Holding Company Act also limits the investments and activities of bank holding companies.  In general, a bank holding company is prohibited from acquiring direct or indirect ownership or control of more than 5% of the voting shares of a company that is not a commercial bank or a bank holding company or from engaging directly or indirectly in activities other than those of banking, managing, or controlling commercial banks, providing services for its subsidiaries, non-bank activities that are closely related to banking and other financially related activities.  Our activities are subject to these legal and regulatory limitations under the Holding Company Act and Federal Reserve regulations.  Non-bank and financially related activities of bank holding companies also may be subject to regulation and oversight by regulators other than the Federal Reserve.

The Federal Reserve also has the power to order a bank holding company or its subsidiaries to terminate any activity, or to terminate its ownership or control of any subsidiary, when it has reasonable cause to believe that the continuation of such activity or such ownership or control constitutes a serious risk to the financial safety, soundness, or stability of any banking subsidiary of that holding company.

The Federal Reserve has adopted guidelines regarding the capital adequacy of bank holding companies, which require bank holding companies to maintain specified minimum ratios of capital to total assets and capital to risk-weighted assets.  See “Regulatory Capital Requirements” on page 9 of this report.

The Federal Reserve has the power to prohibit dividends by bank holding companies if their actions constitute unsafe or unsound practices.  The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies, which expresses the Federal Reserve's view that a bank holding company should pay cash dividends only to the extent that the company's net income for the past year is sufficient to cover both the cash dividends and a rate of earnings retention that is consistent with the company's capital needs, asset quality, and overall financial condition.

Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank Act”) – The Dodd-Frank Act, enacted in July 2010, made significant changes in laws regarding the structure of banking regulation, the powers of the Federal Reserve and other federal banking regulators, deposit insurance assessments, the handling of troubled institutions, regulatory capital calculations, reporting and governance obligations of public companies, and many other provisions affecting supervision of banks, bank holding companies, and other financial services organizations.  Among other things, the Dodd-Frank Act:

· Created the Consumer Financial Protection Bureau, whose regulations may adversely affect the business operations of financial institutions offering consumer financial products or services, including us. Although the Consumer Financial Protection Bureau has jurisdiction over banks with $10 billion or greater in assets, rules, regulations and policies issued by the Bureau may also apply to Bank SNB through the adoption of similar policies by the Federal Reserve, OCC, and FDIC.

· Weakened federal preemption rules permitting states more authority to enforce consumer protection laws against national banks like Bank SNB.

· Made permanent the $250,000 deposit insurance limit for insured deposits.

· Revised the assessment base for calculating an insured depository institution’s deposit insurance premiums paid to the Deposit Insurance Fund to be based on average consolidated total assets minus average tangible equity rather than on deposits, and makes changes to the minimum designated reserve ratio of the Deposit Insurance Fund.

· Eliminated theprohibition against payment of interest on demand deposits, which allows businesses to have interest bearing demand accounts formerly prohibited by law and Federal Reserve regulations.

· Changed the requirements for certain transactions with affiliates and insiders.

· Required banking regulators to establish standards prohibiting as an unsafe and unsound practice any compensation plan of a bank holding company that provides an insider or other employee with excessive compensation or compensation that gives rise to excessive risk or could lead to a material financial loss to the institution.

· Limited the use of new trust preferred securities issued after May 19, 2010 as regulatory capital.

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· Permitted banks to engage in de novo branching outside of their home states, provided that the laws of the target state permit banks chartered in that state to branch within that state.

Significant elements of the Dodd-Frank Act have been implemented, but implementation of other elements of the Act requires additional regulations, many of which have not yet been established.  It is too early to fully assess the effects of the Dodd-Frank Act and related regulations on our business, financial condition, or results of operations.

Source of Strength Doctrine – Federal Reserve policy requires a bank holding company to serve as a source of financial and managerial strength to its subsidiary banks and does not permit a bank holding company to conduct its operations in an unsafe or unsound manner.  Under this "source of strength doctrine," a bank holding company is expected to stand ready to use its available resources to provide adequate capital funds to its subsidiary banks during periods of financial stress or adversity, and to maintain resources and the capacity to raise capital that it can commit to its subsidiary banks.  Any capital loans by a bank holding company to any of its subsidiary banks are subordinate in right of payment of deposits and to certain other indebtedness of such subsidiary banks.  The Holding Company Act provides that, in the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to priority of payment.  In addition, under the National Bank Act, if the capital stock of Bank SNB is impaired by losses or otherwise, the OCC is authorized to require payment of the deficiency by assessment upon us.  If the assessment is not paid within three months, the OCC could order a sale of Bank SNB stock held by us to make good the deficiency.  Furthermore, the Federal Reserve has the right to order a bank holding company to terminate any activity that the Federal Reserve believes is a serious risk to the financial safety, soundness or stability of any subsidiary bank. The Dodd-Frank Act codifies the "source of strength doctrine."

National Bank Regulation – As a national bank, Bank SNB is subject to the primary supervision of the OCC under the National Bank Act.  The prior approval of the OCC is required for a national bank to establish or relocate a branch office or to engage in any merger, consolidation, or significant purchase or sale of assets. 

The OCC regularly examines the operations and condition of Bank SNB including but not limited to its capital adequacy, loans, allowance for loan losses, investments, liquidity, interest rate risk, and management practices.  In addition, Bank SNB is required to furnish quarterly and annual reports to the OCC.  The OCC's enforcement authority includes the power to remove officers and directors and the authority to issue cease-and-desist orders to prevent a national bank from engaging in unsafe or unsound practices or violating laws or regulations governing its business.

Dividend Restrictions – Dividends from Bank SNB constitute the principal source of our cash revenues.  The payment of dividends by Bank SNB is subject to regulatory restrictions.   No national bank may pay dividends from its paid-in capital.  All dividends must be paid out of current or retained net profits.  The National Bank Act further restricts the payment of dividends out of net profits by prohibiting a national bank from declaring a dividend on its shares of common stock until the surplus fund equals the amount of capital stock or, if the surplus fund does not equal the amount of capital stock, until one-tenth of a national bank's net profits for the preceding half year in the case of quarterly or semi-annual dividends, or the preceding two half-year periods in the case of annual dividends, are transferred to the surplus fund.

The approval of the OCC is required prior to the payment of a dividend if the total of all dividends declared by a national bank in any calendar year would exceed the total of its net profits for that year combined with its retained net profits for the two preceding years, less any required transfers to surplus or a fund for the retirement of any preferred stock.  In addition, Bank SNB is prohibited by federal statute from paying dividends or making any other capital distribution that would cause Bank SNB to fail to meet its regulatory capital requirements.  Further, the OCC has authority to prohibit the payment of dividends by a national bank when it determines that their payment would be an unsafe and unsound banking practice.

Limits on Loans to One Borrower – National banks are subject to limits on the amount of loans they can make to one borrower.  With certain limited exceptions, loans and extensions of credit from national banks outstanding to any borrower (including certain related entities of the borrower) at any one time may not exceed 15% of the unimpaired capital and surplus of the institution.  A national bank may lend an additional amount, equal to 10% of unimpaired capital and surplus, if the loan is fully secured by readily marketable collateral.  Certain types of loans are exempted from the lending limits, including loans secured by in-bank deposits. 

Transactions with Affiliates – Bank SNB is subject to restrictions imposed by federal law on extensions of credit to, and certain other transactions with, us and other affiliates and on investments in our and their stock or other securities.  These restrictions prevent us and our nonbanking subsidiaries from borrowing from Bank SNB unless the loans are secured by

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specified collateral.  Additionally, the restrictions require our transactions with Bank SNB to have terms comparable to terms of arms-length transactions with third persons.  In addition, secured loans and investments by Bank SNB are generally limited to 10% of Bank SNB’s capital and surplus with respect to us and Bank SNB’s other affiliates on an individual basis, and to 20% of Bank SNB’s capital and surplus with respect to us and all other Bank SNB affiliates in the aggregate.  Certain exemptions to these limitations apply to extensions of credit by, and other transactions between, Bank SNB and our other subsidiaries.  These regulations and restrictions may limit our ability to obtain funds from Bank SNB for our cash needs, including funds for acquisitions and for payment of dividends, interest, and operating expenses. 

Real Estate Lending Guidelines – Under federal banking regulations, banks must adopt and maintain written policies that establish appropriate limits and standards for extensions of credit secured by liens or interests in real estate or that are made for the purpose of financing permanent improvements to real estate. These policies must establish loan portfolio diversification standards; prudent underwriting standards, including loan-to-value limits, that are clear and measurable; loan administration procedures; and documentation, approval, and reporting requirements.  A bank’s real estate lending policy must reflect consideration of the Guidelines for Real Estate Lending Policies (the "Guidelines") adopted by the federal banking regulators.  The Guidelines, among other things, call for internal loan-to-value limits for real estate loans that are not in excess of the limits specified in the Guidelines.  The Guidelines state, however, that it may be appropriate in individual cases to originate or purchase loans with loan-to-value ratios in excess of the supervisory loan-to-value limits.

Federal Deposit Insurance – Bank SNB pays deposit insurance premiums to the FDIC.  For additional information, see “Management’s Discussion and Analysis – FDIC and other insurance” on page 32 of this report.

Regulatory Capital Requirements – The Federal Reserve, the OCC, and the FDIC have established guidelines for maintenance of appropriate levels of capital by bank holding companies, national banks, state banks, and federal savings banks, respectively.  The regulations impose two sets of capital adequacy requirements: minimum leverage rules, which require bank holding companies and banks to maintain a specified minimum ratio of capital to total average assets, and risk-based capital rules, which require the maintenance of specified minimum ratios of capital to "risk-weighted" assets.

Federal regulations require bank holding companies and banks to maintain a minimum leverage ratio of Tier 1 capital (as defined in the risk-based capital guidelines discussed in the following paragraphs) to total assets of 3.0%.  The capital regulations state, however, that only the strongest bank holding companies and banks with composite examination ratings of 1 under the rating system used by the federal banking regulators would be permitted to operate at or near this minimum level of capital.  All other bank holding companies and banks are expected to maintain a leverage ratio of at least 1% to 2% above the minimum ratio, depending on the assessment of an individual organization's capital adequacy by its primary regulator.  A bank or bank holding company experiencing or anticipating significant growth is expected to maintain capital well above the minimum levels.  In addition, the Federal Reserve has indicated that it also may consider the level of an organization's ratio of Tier 1 capital to total assets in making an overall assessment of capital. 

The risk-based capital rules require bank holding companies and banks to maintain minimum regulatory capital levels based upon a weighting of their assets and off-balance sheet obligations according to risk.  The risk-based capital rules have two basic components: a core capital (Tier 1) requirement and a supplementary capital (Tier 2) requirement.  Core capital consists primarily of common stockholders' equity, and subject to certain limitations, qualifying perpetual preferred stock (noncumulative perpetual preferred stock with respect to national banks), trust preferred securities, minority interests in the equity accounts of consolidated subsidiaries, and deferred tax assets, less all intangible assets, except for certain mortgage servicing rights and purchased credit card relationships.  Supplementary capital elements include, subject to certain limitations, the allowance for losses on loans and leases, and the amount of perpetual preferred stock and trust preferred securities that does not qualify as Tier 1 capital, long-term preferred stock with an original maturity of at least 20 years from issuance, hybrid capital instruments, including perpetual debt and mandatory convertible securities, subordinated debt, intermediate-term preferred stock, and up to 45% of pre-tax net unrealized gains on available for sale equity securities.

The Dodd-Frank Act includes certain provisions concerning the components of regulatory capital.  Certain of these provisions are intended to eliminate or significantly reduce use of hybrid capital instruments, especially trust preferred securities, as regulatory capital.  Under these provisions, trust preferred securities issued before May 19, 2010 by a company, such as us, with total consolidated assets of less than $15 billion and are eligible to be treated as regulatory capital, but any such securities issued after May 19, 2010 are not eligible to be treated as regulatory capital.

The risk-based capital regulations assign balance sheet assets and credit equivalent amounts of off-balance sheet obligations to one of four broad risk categories based principally on the degree of credit risk associated with the obligor.  The assets and

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off-balance sheet items in the four risk categories are weighted at 0%, 20%, 50%, and 100%.  These computations result in the total risk-weighted assets.  The risk-based capital regulations require all banks and bank holding companies to maintain a minimum ratio of total capital to total risk-weighted assets of 8%, with at least 4% as core capital.  For the purpose of calculating these ratios: (i) supplementary capital is limited to no more than 100% of core capital; and (ii) the aggregate amount of certain types of supplementary capital is limited.  In addition, the risk-based capital regulations limit the allowance for loan losses that may be included in capital to 1.25% of total risk-weighted assets.

The federal banking regulatory agencies have established a joint policy regarding the evaluation of banks' capital adequacy for interest rate risk.  Under the policy, the assessment of a bank's capital adequacy includes an assessment of exposure to adverse changes in interest rates.  Management believes our interest rate risk management systems and our capital relative to our interest rate risk are adequate.

Federal banking regulations also require banks with significant trading assets or liabilities to maintain supplemental risk-based capital based upon their levels of market risk.  Bank SNB did not have any trading assets or liabilities during 2013, 2012, or 2011 and was not required to maintain such supplemental capital. 

The federal banking regulators have established regulations that classify banks by capital levels and provide for various "prompt corrective actions" to resolve the problems of any bank that fails to satisfy the capital standards.  Under these regulations, a well-capitalized bank is one that is not subject to any regulatory order or directive to meet any specific capital level and that has a total risk-based capital ratio of 10% or more, a Tier 1 risk-based capital ratio of 6% or more, and a leverage ratio of 5% or more.  An adequately capitalized bank is one that does not qualify as well-capitalized but meets or exceeds the following capital requirements: a total risk-based capital ratio of 8%, a Tier 1 risk-based capital ratio of 4%, and a leverage ratio of either (i) 4% or (ii) 3% if the bank has the highest composite examination rating.  A bank that does not meet these standards is categorized as undercapitalized, significantly undercapitalized, or critically undercapitalized, depending on its capital levels.  A bank that falls within any of these three undercapitalized categories is subject to severe regulatory sanctions.  As of December 31, 2013, Bank SNB was well-capitalized as defined in applicable banking regulations.  For information regarding Bank SNB’s compliance with its regulatory capital requirements, see “Management's Discussion and Analysis – Capital Resources” on page43 of this reportand in the Notes to the Consolidated Financial Statements in this report, “Note 14  Capital Requirements and Regulatory Matters”.

Basel III – United States banking regulators are members of the Basel Committee on Banking Supervision (the “Basel Committee”).  The Basel Committee issues accords, which include capital guidelines for use by regulators in individual countries, generally referred to as Basel I (1988), Basel II (2004), and Basel III (2011).  Basel III is intended for institutions with assets of $250 million or more or significant foreign exposure.  However, United States banking regulators are considering the Basel III guidelines in their determination of appropriate capital standards for all banking institutions. These may result in higher minimum capital requirements, a countercyclical capital buffer requirement, and liquidity standards. U.S. banking agencies have not yet published the final proposed rules to implement Basel III in the United States. 

Brokered Deposits – Well-capitalized institutions are not subject to limitations on brokered deposits, while an adequately capitalized institution is able to accept, renew, or rollover brokered deposits only with a waiver from the FDIC and subject to certain restrictions on the yield paid on such deposits.  Undercapitalized institutions are not permitted to accept brokered deposits.  Bank SNB is well-capitalized and therefore is eligible to accept brokered deposits without limitation.  Bank SNB makes use of brokered deposits, but has reduced its reliance on brokered deposits and other non-core funding sources, and does not anticipate any increase in the usage of brokered deposits.

Supervision and Regulation of Mortgage Banking Operations – Bank SNB’s mortgage banking business is subject to the rules and regulations of the U.S. Department of Housing and Urban Development ("HUD"), the Federal Housing Administration ("FHA"), the Veterans' Administration ("VA"), and FNMA with respect to originating, processing, selling, and servicing mortgage loans.  Those rules and regulations, among other things, prohibit discrimination and establish underwriting guidelines, which include provisions for inspections and appraisals, require credit reports on prospective borrowers, and fix maximum loan amounts.  Lenders such as Bank SNB are required to submit financial statements to FNMA, FHA, and VA annually.  Each regulatory entity has its own financial requirements.  Lenders’ affairs are also subject to examination by the Federal Reserve, FNMA, FHA, and VA at all times to assure compliance with the applicable regulations, policies, and procedures.  Mortgage origination activities are subject to, among others, the Equal Credit Opportunity Act, Federal Truth-in-Lending Act, Fair Housing Act, Home Mortgage Disclosure Act, Fair Credit Reporting Act, the National Flood Insurance Act, and the Real Estate Settlement Procedures Act, and related regulations that prohibit

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discrimination and require the disclosure of certain basic information to mortgagors concerning credit terms and settlement costs.  Bank SNB mortgage banking operations are also affected by various state and local laws and regulations and the requirements of various private mortgage investors. 

Community Reinvestment – Under the Community Reinvestment Act (“CRA”), a financial institution has a continuing and affirmative obligation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.  The CRA does not establish specific lending requirements or programs for financial institutions or limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community.  However, institutions are rated on their performance in meeting the needs of their communities.  Performance is tested in three areas: (a) lending, to evaluate the institution’s record of making loans in its assessment areas; (b) investment, to evaluate the institution’s record of investing in community development projects, affordable housing, and programs benefiting low- or moderate-income individuals and businesses; and (c) service, to evaluate the institution’s delivery of services through its branches, ATMs and other offices.  The CRA requires each federal banking agency, in connection with its examination of a financial institution, to assess and assign one of four ratings to the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by the institution, including applications for charters, branches, and other deposit facilities, relocations, mergers, consolidations, acquisitions of assets or assumptions of liabilities, and savings and loan holding company acquisitions.  The CRA also requires that all institutions make public disclosure of their CRA ratings.  Our banking subsidiary was assigned a “satisfactory” rating as a result of its last CRA examination. 

Bank Secrecy Act; Patriot Act – Under the Bank Secrecy Act (“BSA”), a financial institution is required to have systems in place to detect certain transactions based on the size and nature of the transaction.  Financial institutions are generally required to report cash transactions involving more than $10,000 to the United States Treasury.  In addition, financial institutions are required to file suspicious activity reports for transactions that involve more than $5,000 and which the financial institution knows, suspects, or has reason to suspect involves illegal funds, is designed to evade the requirements of the BSA, or has no lawful purpose.  The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act, commonly referred to as the “USA PATRIOT Act” or the “Patriot Act,” enacted in response to the September 11, 2001 terrorist attacks, contains prohibitions against specified financial transactions and account relationships, as well as enhanced due diligence standards intended to prevent the use of the United States financial system for money laundering and terrorist financing activities.  The Patriot Act requires banks and other depository institutions, brokers, dealers and certain other businesses involved in the transfer of money to establish anti-money laundering programs, including employee training and independent audit requirements meeting minimum standards specified by the act, to follow standards for customer identification and maintenance of customer identification records, and to compare customer lists against lists of suspected terrorists, terrorist organizations, and money launderers.  The Patriot Act also requires federal bank regulators to evaluate the effectiveness of an applicant in combating money laundering in determining whether to approve a proposed bank acquisition.

Other Laws and Regulations – Some of the aspects of the lending and deposit business of Bank SNB are subject to regulation by the Federal Reserve and the FDIC, including reserve requirements and disclosure requirements in connection with personal and mortgage loans and deposit accounts.  Bank SNB’s federal student lending activities are subject to regulation and examination by the United States Department of Education.  In addition, Bank SNB is subject to numerous federal and state laws and regulations that include specific restrictions and procedural requirements with respect to the establishment of branches, investments, interest rates on loans, credit practices, the disclosure of credit terms, and discrimination in credit transactions.

Enforcement Actions – Federal statutes and regulations provide financial institution regulatory agencies with great flexibility to undertake an enforcement action against an institution that fails to comply with regulatory requirements.  Possible enforcement actions range from the imposition of a capital plan and capital directive to civil money penalties, cease-and-desist orders, receivership, conservatorship, or the termination of deposit insurance.

Available Information

We provide internet access to Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports through our Investor Relations section at www.oksb.com (This site is also accessible through Bank SNB’s website at www.banksnb.com.)  The SEC maintains a website (www.sec.gov) where these filings also are available through the SEC’s EDGAR system.  There is no charge for access to these filings through either our site or the SEC’s site, although users should understand that there may be costs associated with electronic

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access, such as usage charges from Internet access providers and telephone companies, that they may bear.  The public also may read and copy materials filed by Southwest with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

ITEM 1A.  RISK FACTORS

The following are some important risk factors that could affect our future financial performance or could cause our future earnings to be lower or our financial condition to be less favorable than we expect.  In addition, other risks of which we are not aware, or which we do not believe are material, may also impair or adversely affect our business, financial condition or results of operation.

Risks Relating to our Business 

Difficult and unsettled market conditions may affect our profits and loan quality and may continue to do so for an unknown period.

Unsettled market conditions may increase the likelihood and the severity of adverse effects discussed in the following risk factors, in particular: 

· There may be less demand for our products and services; 

· Competition in our industry could intensify as a result of increased consolidation of the banking industry; 

· It may become more difficult to estimate losses inherent in our loan portfolio; 

· Loan delinquencies and problem assets may increase; 

· Collateral for loans may decline in value, increasing loan to value ratios and reducing our customers’ borrowing power and the security for our loans; 

· Deposits and borrowings may become even more expensive relative to yields on loans and securities, reducing our net interest margin, and making it more difficult to maintain adequate sources of liquidity; 

· Asset based liquidity, which depends upon the marketability of assets such as student loans and mortgages, may be reduced; and 

· Compliance with banking regulations enacted in connection with stimulus legislation and other legislation may increase our costs, limit our ability to pursue business opportunities, and impair our ability to hire and retain talented managers. 

Changes in interest rates and other factors beyond our control may adversely affect our earnings and financial condition. 

Our net income depends to a great extent upon the level of our net interest income.  Changes in interest rates can increase or decrease net interest income and net income.  Net interest income is the difference between the interest income we earn on loans, investments, and other interest-earning assets, and the interest we pay on interest-bearing liabilities, such as deposits and borrowings.  Net interest income is affected by changes in market interest rates, because different types of assets and liabilities may react differently, and at different times, to market interest rate changes.  When interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a period, an increase in market rates of interest could reduce net interest income.  Similarly, when interest-earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could reduce net interest income. 

Market interest rates are affected by many factors beyond our control, including inflation, unemployment, money supply, international events, and events in world financial markets.  We attempt to manage our risk from changes in market interest rates by adjusting the rates, maturity, repricing, and balances of the different types of interest-earning assets and interest-bearing liabilities, but interest rate risk management techniques are not exact.  As a result, a rapid increase or decrease in interest rates could have an adverse effect on our net interest margin and results of operations.  Changes in the market interest rates for types of products and services in our various markets also may vary significantly from location to location and over time based upon competition and local or regional economic factors.  The results of our interest rate sensitivity simulation model depend upon a number of assumptions which may not prove to be accurate.  There can be no assurance that we will be able to successfully manage our interest rate risk. 

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Changes in local economic conditions could adversely affect our business. 

Our commercial and commercial real estate lending operations are concentrated in the metropolitan areas of Oklahoma City, Stillwater, Edmond, and Tulsa, Oklahoma; Dallas, Austin, San Antonio, and Houston, Texas; and Hutchinson, Wichita, and Kansas City, Kansas.  Our success depends in part upon economic conditions in these markets.  Adverse changes in economic conditions in these markets could reduce our growth in loans and deposits, impair our ability to collect our loans, increase our problem loans and charge-offs and otherwise negatively affect our performance and financial condition. 

Adverse changes in healthcare-related businesses could lead to slower loan growth and higher levels of problem loans and charge-offs. 

We have approximately 33% of noncovered loans to individuals and businesses involved in the healthcare industry, including business and personal loans to physicians, dentists, and other healthcare professionals, and loans to for-profit hospitals, nursing homes, suppliers and other healthcare-related businesses.  Our strategy calls for continued growth in healthcare lending.  This concentration exposes us to the risk that adverse developments in the healthcare industry could hurt our profitability and financial condition as a result of increased levels of nonperforming loans and charge-offs and reduced loan demand and deposit growth.  

The Patient Protection and Affordable Care Act, as amended by the Health Care and Educations Reconciliations Act of 2010, is expected to have effects on the provision of healthcare in the United States.  We have assessed its potential outcome on the market for healthcare and our services for the healthcare industry, and believe it is too early to conclude the impact on them.  The law is complex and implementation requires the adoption of significant regulations.  As a result, the new laws could have adverse effects on the growth and profitability of our healthcare business. 

Our allowance for loan losses may not be adequate to cover our actual loan losses, which could adversely affect our earnings. 

We maintain an allowance for loan losses in an amount that we believe is appropriate to provide for losses inherent in the portfolio.  While we strive to carefully monitor credit quality and to identify loans that may become nonperforming, at any time there are loans included in the portfolio that will result in losses but that have not been identified as nonperforming or potential problem loans.  We cannot be sure that we will be able to identify deteriorating loans before they become nonperforming assets or that we will be able to limit losses on those loans that are identified.  As a result, future additions to the allowance may be necessary.  Additionally, future additions may be required based on changes in the loans comprising the portfolio and changes in the financial condition of borrowers, such as may result from changes in economic conditions or as a result of incorrect assumptions by management in determining the allowance.  Federal banking regulators, as an integral part of their supervisory function, periodically review our allowance for loan losses.  These regulatory agencies may require us to increase our provision for loan losses or to recognize further loan charge-offs based upon their judgments, which may be different from ours.  Any increase in the allowance for loan losses could have a negative effect on our financial condition and results of operations. 

Commercial and commercial real estate loans comprise a significant portion of our total loan portfolio.  These types of loans typically are larger than residential real estate loans and other consumer loans.  Because our loan portfolio contains a significant number of commercial and commercial real estate loans with relatively large balances, the deterioration of one or a few of these loans may cause a significant increase in nonperforming assets.  An increase in nonperforming loans could result in a loss of earnings from these loans, an increase in the provision for loan losses, or an increase in loan charge-offs, which could have an adverse impact on our results of operations and financial condition. 

The results of our most recent internal credit stress test may not accurately predict the impact on our financial condition if the economy’s performance is worse than we expect.  

We perform internal assessments of our capital and asset quality as part of our planning process.  Our process includes stress tests using alternative credit quality assumptions in order to estimate their effects on loan loss provisions, net income, and regulatory capital ratios.  The alternative assumptions include mild and severe credit quality stress scenarios.   

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The results of these stress tests involve assumptions about the economy, future loan losses and default rates, which may not accurately reflect the impact on our earnings or financial condition or actual future conditions.  Actual future economic conditions may result in significantly higher credit losses than we assume in our stress tests, with a corresponding negative impact on our earnings, financial condition, and capital than those predicted by our internal stress test. 

We may not realize our deferred tax assets.  

We may experience negative or unforeseen tax consequences.  We reviewthe probability of the realization of our deferred tax assets based on forecasts of taxable income quarterly.  This review uses historical results, projected future operating results based on approved business plans, eligible carryforward and carryback periods, tax-planning opportunities and other relevant considerations.  Adverse changes in the profitability and financial outlook in the U.S. and our industry may require the creation of a valuation allowance to reduce our deferred tax assets.  Such changes could result in material non-cash expenses in the period in which the changes are made and could have a material adverse impact on ourresults of operations and financial condition. 

Our earnings and financial condition may be adversely affected by changes in accounting principles and in tax laws, or the interpretation of them.

Changes in U.S. generally accepted accounting principles could have negative effects on our reported earnings and financial condition. 

Changes in tax laws, rules, and regulations, including changes in the interpretation or implementation of tax laws, rules, and regulations by the Internal Revenue Service or other governmental bodies, could affect us in significant and unpredictable ways.  Such changes could subject us to additional costs, among other things.  Failure to comply with tax laws, rules, and regulations could result in sanctions by regulatory agencies, civil money penalties, and reputation damage. 

Additionally, we conduct quarterly assessments of our deferred tax assets.  The carrying value of these assets is dependent upon earnings forecasts and prior period changes, among other things.  A significant change in our assumptions could affect the carrying value of our deferred tax assets on our balance sheet. 

Government regulation significantly affects our business. 

The banking industry is heavily regulated.  Banking regulations are primarily intended to protect the federal deposit insurance funds and depositors, not shareholders.  Bank SNB is subject to regulation and supervision by the OCC.We are subject to regulation and supervision by the Board of Governors of the Federal Reserve System.  The burden imposed by federal and state regulations puts banks at a competitive disadvantage compared to less regulated competitors such as finance companies, mortgage banking companies, and leasing companies.

Changes in the laws, regulations, and regulatory practices affecting the banking industry may limit our ability to increase or assess fees for services provided, increase our costs of doing business or otherwise adversely affect us and create competitive advantages for others.  Regulations affecting banks and financial services companies undergo continuous change, and we cannot predict the ultimate effect of these changes, which could have a material adverse effect on our profitability and financial condition.  Federal economic and monetary policy may also affect our ability to attract deposits and other funding sources, make loans and investments, and achieve satisfactory interest spreads.   

The FDIC insures deposits at insured financial institutions up to certain limits.  The FDIC charges insured financial institutions premiums to maintain the Deposit Insurance Fund.  Economic conditions in the past several years have increased bank failures.  The FDIC may increase our deposit insurance costs by increasing regular assessment rates and levying special assessments, which may in the future significantly and adversely affect our net income. 

The Dodd-Frank Act will continue to increase our regulatory compliance burden and costs, may place restrictions on certain products and services, and limit our future capital raising alternatives.  

The Dodd-Frank Act made significant, wide-ranging changes in the regulation of the financial services industry that affect all financial institutions, including us.  The Dodd-Frank Act is likely to continue to increase ourregulatory compliance

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burden, increase the costs associated with regulatory examinations and compliance measures, and increase other operating costs.  

Among other things, the Dodd-Frank Act eliminated the prohibition of paying interest on commercial demand deposits, which may increase ourfunding costs, and limits the use of new trust preferred securities as regulatory capital.  In addition, the Dodd-Frank Act created the Consumer Financial Protection Bureau, whose regulations may adversely affect ourbusiness operations.  Although the Consumer Financial Protection Bureau has jurisdiction over banks with $10 billion or greater in assets, rules, regulations and policies issued by the Bureau may also apply to usthrough the adoption of similar policies by the Federal Reserve or OCC.  

Significant elements of the Dodd-Frank Act have been implemented, but implementation of other elements of the Dodd-Frank Act requires additional regulations, many of which have not yet been established.  

Examination reports may include significant findings and assessments about our condition and operations that are not publicly disclosed.  Assessments by bank examiners may cause us to increase our publicly reported problem assets and potential problem loans, charge-offs, or provisions for loan losses.

Examinations by federal regulatory agencies include assessments of risk, financial health, capital adequacy, loan risk, and other factors that federal banking laws do not allow to be publicly disclosed.  The assignment of loans to credit risk categories involves judgment and the application of credit policies.  In their examinations, federal banking examiners may assign different risk categories to loans than those assigned by management. In that case, wemust amend ourrisk categorizations to match those assigned by the bank examiners, which may result in increases in publicly reported problem and potential problem loans, charge-offs, or provisions for loan losses. 

Our decisions regarding the fair value of assets acquired could be inaccurate and our estimated loss share receivable in FDIC-assisted acquisitions may be inadequate, which could adversely affect our business, financial condition, results of operations, and future prospects.

In accordance with generally accepted accounting principles, we record assets acquired and liabilities assumed in business combinations at their fair values.  The determination of the initial fair values can be complex and involves a high degree of judgment.  Goodwill is initially recorded as the excess of the fair value of liabilities assumed over the fair value of tangible and identifiable intangible assets acquired in a business combination, and thereafter is tested for impairment at least annually.  If the current fair value is determined to be less than the carrying value, an impairment loss is recorded. 

Management makes various assumptions and judgments about the collectability of acquired loan portfolios, including the creditworthiness of borrowers and the value of the real estate and other assets serving as collateral for the repayment of secured loans.  In FDIC-assisted acquisitions that include loss share agreements, we may record a loss share receivable that we consider adequate to absorb future losses which may occur in the acquired loan portfolio.  In determining the size of the loss share receivable, we analyze the loan portfolio based on historical loss experience, volume and classification of loans, volume and trends in delinquencies and nonaccruals, local economic conditions, and other pertinent information.   

If our assumptions are incorrect, our current loss share receivable may be insufficient to cover future loan losses, and increased loss reserves may be needed to respond to different economic conditions or adverse developments in the acquired loan portfolio.  Any increase in future loan losses could have a negative effect on our operating results. 

The acquisition of banks, bank branches, and other businesses involves risks. 

In the future we may acquire additional banks, branches or other financial institutions, or other businesses.  We cannot assure you that we will be able to adequately or profitably manage any such acquisitions.  The acquisition of banks, bank branches, and other businesses involves risk, including exposure to unknown or contingent liabilities, the uncertainties of asset quality assessment, the difficulty and expense of integrating the operations and personnel of the acquired companies with ours, the potential negative effects on our other operations of the diversion of management’s time and attention, and the possible loss of key employees and customers of the banks, businesses, or branches we acquire.  Our failure to execute our internal growth strategy or our acquisition strategy could adversely affect our business, results of operations, financial condition, and future prospects. 

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We rely on our management and other key personnel, and the loss of any of them may adversely affect our operations.  

We are and will continue to be dependent upon the services of our executive management team.  In addition, we will continue to depend on our ability to retain and recruit key commercial loan officers.  The unexpected loss of services of any key management personnel or the inability to recruit and retain qualified personnel in the future could have an adverse effect on our business and financial condition. 

Competition may decrease our growth or profits. 

We compete for loans, deposits, and investment dollars with other banks and other financial institutions and enterprises, such as securities firms, insurance companies, savings associations, credit unions, mortgage brokers, and private lenders, many of which have substantially greater resources than ours.  Credit unions have federal tax exemptions, which they may take advantage of to offer lower rates on loans and higher rates on deposits than taxpaying financial institutions such as commercial banks.  In addition, non-depository institution competitors are generally not subject to the extensive regulation applicable to institutions that offer federally insured deposits.  Other institutions may have other competitive advantages in particular markets or may be willing to accept lower profit margins on certain products.  These differences in resources, regulation, competitive advantages, and business strategy may decrease our net interest margin, may increase our operating costs, and may make it harder for us to compete profitably.  

Risks Related to Ownership of Our Common Stock 

The market price for our common stock may be highly volatile, which may make it difficult for investors to resell shares of common stock at times they desire or at prices they find attractive.

The overall market and the price of our common stock may continue tofluctuate as a result of a variety of factors, many of which are beyond our control.  These factors include, in addition to those described in these Risk Factors:  

· Actual or anticipated quarterly fluctuations in our operating results and financial condition; 

· Changes in financial estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to us or other financial institutions; 

· Speculation in the press or investment community generally or relating to our reputation or the financial services industry; 

· The size of the public float of our common stock; 

· Strategic actions by us or our competitors, such as acquisitions, restructurings, dispositions, or financings; 

· Fluctuations in the stock price and operating results of our competitors; 

· Future sales of our equity or equity-related securities; 

· Proposed or adopted regulatory changes or developments; 

· Anticipated or pending investigations, proceedings, or litigation that involve or affect us; 

· Domestic and international economic factors unrelated to our performance; and 

· General market conditions and, in particular, developments related to market conditions for the financial services industry. 

In addition, in recent years, the stock market in general has experienced extreme price and volume fluctuations as a result of general economic instability and recession.  This volatility has had a significant effect on the market price of securities issued by many companies, including volatility resulting from reasons unrelated to their performance.  These broad market fluctuations may adversely affect our stock price, notwithstanding our future operating results.  We expect that the market price of our common stock will continue to fluctuate, and there can be no assurance about the levels of the market prices for our common stock. 

There is a limited trading market for our common shares, and you may not be able to resell your shares at or above the price you paid for them. 

Although our common shares are listed for trading on the NASDAQ Global Select Market, the trading in our common shares has less liquidity than many other companies quoted on the NASDAQ Global Select Market. A public trading market having the desired characteristics of depth, liquidity, and orderliness depends on the presence in the market of

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willing buyers and sellers for our common shares at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. We cannot assure you that the volume of trading in our common shares will increase in the future. Additionally, general market forces may have a negative effect on our stock price, independent of factors affecting our stock specifically. 

Future sales of our common stock or other securities may dilute the value of our common stock.

In many situations, our board of directors has the authority, without any vote of our shareholders, to issue shares of our authorized but unissued stock, including shares authorized and unissued under our 2008 Stock Based Award Plan.  In the future, we may issue additional securities, through public or private offerings, in order to raise additional capital.  Any such issuance would dilute the percentage of ownership interest of existing shareholders and may dilute the per share book value of the common stock or reduce the market price for our common stock.  In addition, option holders may exercise their options at a time when we would otherwise be able to obtain additional equity capital on more favorable terms.  

The sale, or availability for sale, of a substantial number of shares of common stock in the public market could adversely affect the price of our common stock and could impair our ability to raise additional capital through the sale of equity securities.

Our ability to pay dividends is limited by law, contract, and banking agency discretion. 

In January 2014, our board of directors reinstated quarterly common stock dividends with their approval of a quarterly cash dividend of $0.04 per share. This is the first time dividends on our common stock have been declared since 2009. 

Our ability to pay dividends to our shareholders depends on our receipt of dividends from Bank SNB.  The amount of dividends Bank SNB may pay to us is limited by federal laws and regulations.We also may decide to limit the payment of dividends even when we have the legal ability to pay them in order to retain earnings for use in our business. 

Our ability to pay dividends to our shareholders is further limited because the Federal Reserve has the power to prohibit payment of dividends by bank holding companies if their actions constitute unsafe or unsound practices.  The Federal Reserve has issued a policy statement on the payment of cash dividends by financial holding companies, which expresses the Federal Reserve's view that a financial holding company should pay cash dividends only to the extent that the company's net income for the past year is sufficient to cover both the cash dividends and a rate of earnings retention that is consistent with the company's capital needs, asset quality, and overall financial condition.

Restrictions on unfriendly acquisitions could prevent a takeover. 

Our certificate of incorporation and bylaws contain provisions that could discourage takeover attempts that are not approved by ourboard of directors.  The Oklahoma General Corporation Act includes provisions that make an acquisition of usmore difficult.  These provisions may prevent a future takeover attempt in which our shareholders otherwise might receive a substantial premium for their shares over then-current market prices.  These provisions include supermajority provisions for the approval of certain business combinations and certain provisions relating to meetings of shareholders.  Our certificate of incorporation also authorizes the issuance of additional shares without shareholder approval on terms or in circumstances that could deter a future takeover attempt. 

ITEM 1B.  UNRESOLVED STAFF COMMMENTS

NONE.

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ITEM 2.  Properties

The locations of Southwest and its banking subsidiary are shown below:

Southwest Bancorp, Inc. Location Corporate Headquarters
608 S. Main Street P.O. Box 1988 www.oksb.com	Stillwater, Oklahoma 74076	405-742-1800
Bank SNB Locations
Corporate Headquarters 608 S. Main Street P.O. Box 1988 www.banksnb.com	Stillwater, Oklahoma 74076	405-372-2230
Drive-in Facility 308 S. Main Street P.O. Box 1988	Stillwater, Oklahoma 74076	405-372-2230
Operations Center 1624 Cimarron Plaza* P.O. Box 1988	Stillwater, Oklahoma 74076	405-372-2230
19th & Sangre Branch 1908 S. Sangre P.O. Box 1988	Stillwater, Oklahoma 74074	405-372-2230

OSU Campus Branch Bank 1102 W. Hall of Fame Avenue* P.O. Box 1988 OSU-Student Union Student Union, Room 056* P.O. Box 1988	Stillwater, Oklahoma 74076 Stillwater, Oklahoma 74076	405-372-2230 405-744-5962
Waterford Branch 6301 Waterford Boulevard Suite 101 & 102*	Oklahoma City, Oklahoma 73118	405-427-4000
South OKC Branch 8101 S. Walker Avenue Suite B OUHSC-OKC Branch 1106 N. Stonewall*	Oklahoma City, Oklahoma 73139 Oklahoma City, Oklahoma 73117	405-427-4000 405-271-3113
Edmond Branch 1440 S. Bryant Avenue*	Edmond, Oklahoma 73034	405-427-4000
Chickasha Branch 500 W. Grand Avenue	Chickasha, Oklahoma 73018	405-427-3100

18

Tulsa Utica Branch 1500 S. Utica Avenue P.O. Box 521500	Tulsa, Oklahoma 74152	918-523-3600
Tulsa 61st Branch 2431 E. 61st Suite 170* P.O. Box 521500	Tulsa, Oklahoma 74152	918-523-3600
Tilden Branch 205 Elm Street P.O. Box 299	Tilden, Texas 78072	361-274-3391
Frisco Branch 5300 Town and Country Boulevard Suite 100*	Frisco, Texas 75034	972-624-2900
Preston Center Branch 5950 Berkshire Lane Suite 350*	Dallas, Texas 75225	972-624-2900
Austin Branch 3900 N. Capital of Texas HWY Suite 100*	Austin, Texas 78746	512-314-6700
Medical Hill Branch 9324 Huebner Road	San Antonio, Texas 78240	210-442-6100

19

Anthony 203 W. Main Street P.O. Box 484 Harper 1002 Central Street* P.O. Box 7 hutchinson 100 East 30th Avenue P.O. Box 1707 524 N. Main Street                                            South Hutchinson, Kansas 67505 P.O. Box 1707 Overland Park 14435 Metcalf Avenue Wichita - East 8415 E. 21st Street North Suite 150* Wichita - West 10111 W. 21st Street North	Anthony, Kansas 67003 Harper, Kansas 67058 Hutchinson, Kansas 67502 South Hutchinson, Kansas 67505 P.O. Box 1707 Overland Park, Kansas 66223 Wichita, Kansas 67206 Wichita, Kansas 67205	620-842-1000 620-896-1035 620-728-3000 620-728-3000 913-906-4444 316-315-1600 316-315-1600
*Leased from third parties.  Other properties are owned.

ITEM 3.  LEGAL PROCEEDINGS

We and our subsidiaries are regularly subject to various claims and legal actions arising in the normal course of business.  While the outcome of these legal matters cannot be predicted with certainty, we do not expect them to have a material adverse effect on our financial condition, results of operations or cash flows.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

20

Part II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Stock Listing

Common shares of Southwest Bancorp, Inc. are traded on NASDAQ Global Select Market under the symbol OKSB.

Transfer Agents and Registrars

For Southwest Bancorp, Inc.:

Computershare Investor Services, LLC

2 North LaSalle St.

Chicago, IL 60602

Recent Stock Prices, Dividends, and Equity Compensation Plan Information

Our board of directors decides whether or not to pay dividends on common stock, and the amount of any such dividends, each quarter.  In making its decisions on dividends, the board of directors considers operating results, financial condition, capital adequacy, regulatory requirements, shareholder returns, and other factors.  Our abilityto pay dividends depends upon regulatory approval and cash resources, which include dividend payments from our banking subsidiary.  For information regarding the ability of Bank SNB to pay dividends to us and the restrictions on bank dividends under federal banking laws, see “Note 14 Capital Requirements & Regulatory Matters” in the Notes to the Consolidated Financial Statements, “Certain Regulatory Matters” on page45of this report, and “Risk Factors” on page 12of this report.

As shown on the table below, common shareholders received no cash dividends in 2013 or 2012.   In January 2014, our board of directors reinstated quarterly common stock dividends with their approval of a quarterly cash dividend of $0.04 per share.

In July 2012,wemade payments of deferred and arrears interest and dividends on ourSeries B Preferred Securities issued under the U.S. Treasury Department’s Capital Purchase Program that were deferred since August 1, 2011.  Further, in August 2012, weannounced our repurchase of all $70 million of ourSeries B Preferred Securities.  See further discussion at “Note 12 Shareholders’ Equity” in the Notes to the Consolidated Financial Statements.

As of March 3, 2014, there were approximately 400 holders of record of our common stock.  The following table sets forth the common stock dividends declared for each quarter during 2013 and 2012, and the range of high and low closing trade prices for the common stock for those periods.

	2013						2012
					Dividend						Dividend
	High		Low		Declared		High		Low		Declared
For the Quarter Ending:
March 31	$	13.48	$	11.41	$	-	$	9.50	$	5.95	$	-
June 30		14.22		11.82		-		9.81		8.02		-
September 30		16.18		13.36		-		11.45		9.07		-
December 31		17.21		14.11		-		11.47		9.57		-

21

Stock Performance

The following table compares the cumulative total return on a hypothetical investment of $100 in our common stock at the closing price on December 31, 2008 through December 31, 2013, with the hypothetical cumulative total return on the NASDAQ Stock Market Index (U.S. Companies) and the NASDAQ Bank Index for the comparable period. 

	Period ending
Index	12/31/2008	12/31/2009	12/31/2010	12/31/2011	12/31/2012	12/31/2013
Southwest Bancorp, Inc.	100.00	54.21	96.87	46.56	87.49	124.37
NASDAQ Bank Index	100.00	83.70	95.55	85.52	101.50	143.84
NASDAQ Total U.S.	100.00	145.36	171.74	170.38	200.63	281.22

Equity Compensation Plan Information

The following table presents disclosure regarding equity compensation plans in existence at December 31, 2013, consisting of the 2008 stock based award plan, which was approved by our shareholders.

Plan category	Number of securities to be issued upon exercise of outstanding options warrants and rights (a)	Weighted average exercise price of outstanding options, warrants and rights (b)	Number of securities available for future issuance under equity compensation plans excluding securities reflected in column (a) (c)
Plan approved by shareholders	0	N/A	449,554
Total	0	N/A	449,554

22

ITEM 6.  Selected Financial Data

The following table presents our selected consolidated financial data for each of the five years in the period ended December 31, 2013.  The selected consolidated financial data should be read in conjunction with our Consolidated Financial Statements, including the accompanying Notes to the Consolidated Financial Statements, presented elsewhere in this report.

	For the Year Ended December 31,
(Dollars in thousands, except per share data)	2013			2012			2011			2010			2009
Operations Data
Interest income	$	73,914		$	93,171		$	120,745		$	142,807		$	150,399
Interest expense		11,264			16,608			24,413			35,476			51,708
Net interest income		62,650			76,563			96,332			107,331			98,691
Provision for loan losses (1)		(7,209)			3,107			132,101			35,560			39,176
Gain on sales of loans and securities, net		2,649			3,133			1,658			2,736			5,888
Noninterest income (2)		10,994			12,803			12,360			15,828			16,048
Noninterest expense (1) (3)		55,311			63,322			90,201			69,230			60,858
Income (loss) before taxes		28,191			26,070			(111,952)			21,105			20,593
Taxes on income		10,756			9,883			(43,657)			9,738			7,611
Net income (loss)	$	17,435		$	16,187		$	(68,295)		$	11,367		$	12,982
Net income (loss) available
to common shareholders	$	17,435		$	12,446		$	(72,548)		$	7,180		$	8,837
Dividends
Preferred stock - declared and paid (4)	$	-		$	4,405		$	1,750		$	3,500		$	3,500
Preferred stock - in arrears		-			-			1,772			-			-
Common stock		-			-			-			-			1,398
Ratio of total dividends to net income (loss)		-	%		13.56	%		(5.16)	%		30.79	%		37.73	%
Per Common Share Data
Basic earnings	$	0.89		$	0.64		$	(3.73)		$	0.40		$	0.60
Diluted earnings		0.89			0.64			(3.73)			0.40			0.60
Cash dividends		-			-			-			-			0.10
Book value (5)		13.13			12.60			11.99			15.68			16.46
Weighted average common shares outstanding:
Basic, net of unvested restricted stock		19,516,776			19,374,098			19,414,231			17,848,610			14,625,847
Diluted, net of unvested restricted stock		19,604,245			19,416,090			19,433,883			17,894,011			14,689,448
Financial Condition Data (5)
Investment securities	$	394,199		$	377,112		$	275,352		$	262,525		$	244,373
Noncovered portfolio loans (6)		1,251,416			1,321,346			1,687,178			2,331,293			2,539,294
Loans held for sale (6)		3,060			31,682			38,695			35,194			43,134
Total noncovered loans (6) (7)		1,254,476			1,353,028			1,725,873			2,366,487			2,582,428
Covered portfolio loans (8)		16,427			25,707			37,615			53,628			85,405
Interest-earning assets		1,925,019			2,007,412			2,248,936			2,723,658			2,996,849
Total assets		1,981,423			2,122,255			2,377,276			2,814,944			3,108,291
Interest-bearing deposits		1,139,290			1,285,570			1,520,397			1,875,546			2,267,901
Total deposits		1,584,086			1,709,578			1,921,382			2,252,728			2,592,730
Other borrowings		80,632			70,362			56,479			94,602			103,022
Subordinated debentures		46,393			81,963			81,963			81,963			81,963
Total shareholders' equity (9)		259,187			246,056			301,589			372,215			309,778
Common shareholders' equity		259,187			246,056			233,134			304,491			242,741
Financial Ratios
Return on average assets		0.86	%		0.72	%		(2.54)	%		0.38	%		0.43	%
Return on average total shareholders' equity		6.90			5.71			(18.33)			3.16			4.20
Return on average common equity		6.90			5.14			(23.83)			2.46			3.65
Net interest margin		3.19			3.64			3.74			3.67			3.38
Efficiency ratio (10)		72.50			68.46			81.74			54.99			50.45
Average assets per employee (11)	$	5,048		$	5,317		$	6,185		$	6,942		$	6,411

23

Selected Financial Data (Continued)

	At December 31,
(Dollars in thousands, except per share data)	2013			2012			2011			2010			2009
Asset Quality
Net loan charge-offs (5)	$	2,846		$	1,073		$	152,646		$	32,744		$	16,536
Net loan charge-offs to average portfolio loans		0.22	%		0.07	%		7.01	%		1.29	%		0.63	%
Noncovered:
Allowance for loan losses (5)	$	36,607		$	46,494		$	44,233		$	65,229		$	62,413
Allowance for loan losses to portfolio loans		2.93	%		3.52	%		2.62	%		2.80	%		2.46	%
Nonperforming loans (5) (12)	$	18,613		$	38,394		$	13,549		$	107,083		$	106,197
Nonperforming loans to portfolio loans		1.49	%		2.91	%		0.80	%		4.59	%		4.18	%
Allowance for loan losses to nonperforming loans		196.67			121.10			326.47			60.91			58.77
Nonperforming assets (5) (13)	$	19,173		$	49,709		$	33,393		$	144,805		$	124,629
Nonperforming assets to portfolio loans and
other real estate		1.53	%		3.73	%		1.96	%		6.11	%		4.87	%
Covered:
Allowance for loan losses (5)	$	56		$	224		$	451		$	-		$	-
Allowance for loan losses to portfolio loans		0.34	%		0.87	%		1.20	%		-	%		-	%
Nonperforming loans (5) (8) (12)	$	1,259		$	3,595		$	7,128		$	10,806		$	13,458
Nonperforming loans to portfolio loans (8)		7.66	%		13.98	%		18.95	%		20.15	%		15.76	%
Nonperforming assets (5) (8) (12)	$	3,353		$	7,238		$	11,657		$	14,993		$	18,206
Nonperforming assets to portfolio loans and
other real estate		18.10	%		24.66	%		27.66	%		25.93	%		20.19	%
Capital Ratios
Average shareholders' equity to average assets
Total		12.45	%		12.64	%		13.84	%		11.99	%		10.34	%
Common		12.45			10.80			11.31			9.74			8.11
Tier I capital to risk-weighted assets (5) (14)		20.28			20.28			19.51			17.78			13.28
Total capital to risk-weighted assets (5) (14)		21.59			21.56			20.78			19.06			14.55
Leverage ratio (14)		14.86			15.01			14.50			15.55			12.42

(1)  Provision for loan losses includes $74.9 million and noninterest expense includes $23.6 million from the sales of loans and other real estate transactions that occurred in December 2011.

(2)  Noninterest income in 2009 includes $3.3 million resulting from the gain on acquisition related to the FDIC-assisted acquisition. 

(3)  Noninterest expense for 2010 includes the $5.6 goodwill impairment on the Kansas segment.

(4)  Preferred stock - declared and paid includes a one-time non-cash equity charge of $1.2 million for 2012 to reflect the accelerated accretion of the remaining discount on the Series B Preferred securities repurchased in August of 2012.  Please see “Note 12 Shareholders’ Equity” in the Notes to the Consolidated Financial Statements.

(5)  At period end. 

(6)  Net of unearned discounts but before deduction of allowance for loan losses.

(7)  Total loans include loans held for sale.

(8)  These loans are covered by the FDIC loss share agreements, including the amount of expected reimbursements from the FDIC, and are shown net of unearned discounts.  Please see “Note 3 Loans and Allowance for Loan Losses” in the Notes to the Consolidated Financial Statements.

(9)  Reflects the repurchase of preferred securities in 2012, issuance of common stock through an offering in 2010.  Please see “Capital Resources” on page 43 and “Note 12Shareholders’ Equity” in the Notes to the Consolidated Financial Statements.

(10)  The efficiency ratio = noninterest expenses / (net interest income + total noninterest income) as shown on the Consolidated Statements of Operations. 

(11)  Ratio = average assets for year divided by the number of full-time equivalent employees at year-end.

(12)  Nonperforming loans consist of nonaccrual loans, loans contractually past due 90 days or more, and restructured loans not performing in accordance with restructured terms.

(13)  Nonperforming assets consist of nonperforming loans and other real estate.

(14)  2010 reflects the effects of capital raised through the public common stock offering.  Please see “Note 12 Shareholders’ Equity” and “Note 14 Capital Requirements and Regulatory Matters” in the Notes to the Consolidated Financial Statements.

(1)

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	For the Quarter Ended
(Dollars in thousands, except per share data)	12-31-13		09-30-13		06-30-13		03-31-13
Operations Data
Interest income	$	18,578	$	18,135	$	18,264	$	18,937
Interest expense		1,941		2,862		3,130		3,331
Net interest income		16,637		15,273		15,134		15,606
Provision for loan losses		(6,502)		(329)		(876)		498
Gain on sales of securities and loans		385		619		831		814
Noninterest income		2,683		2,928		2,660		2,723
Noninterest expenses		15,065		13,019		12,839		14,388
Income before taxes		11,142		6,130		6,662		4,257
Taxes on income		4,310		2,330		2,248		1,868
Net income	$	6,832	$	3,800	$	4,414	$	2,389
Net income available to common shareholders	$	6,832	$	3,800	$	4,414	$	2,389
Per Share Data
Basic earnings per common share	$	0.35	$	0.19	$	0.22	$	0.12
Diluted earnings per common share		0.35		0.19		0.22		0.12
Weighted average common shares outstanding
Basic		19,517,264		19,492,171		19,492,020		19,451,490
Diluted		19,517,264		19,492,171		19,492,020		19,451,490

(2)

	For the Quarter Ended
(Dollars in thousands, except per share data)	12-31-12		09-30-12		06-30-12		03-31-12
Operations Data
Interest income	$	21,008	$	22,616	$	24,040	$	25,507
Interest expense		3,723		3,934		4,293		4,658
Net interest income		17,285		18,682		19,747		20,849
Provision for loan losses		3,085		(1,726)		32		1,716
Gain on sales of securities and loans		1,712		1,106		617		535
Noninterest income		3,159		2,844		2,984		2,979
Noninterest expenses		17,653		14,591		16,769		14,309
Income before taxes		1,418		9,767		6,547		8,338
Taxes on income		446		3,880		2,430		3,127
Net income	$	972	$	5,887	$	4,117	$	5,211
Net income available to common shareholders	$	972	$	4,344	$	3,011	$	4,119
Per Share Data
Basic earnings per common share	$	0.05	$	0.22	$	0.15	$	0.21
Diluted earnings per common share		0.05		0.22		0.15		0.21
Weighted average common shares outstanding
Basic		19,397,573		19,447,952		19,446,086		19,444,698
Diluted		19,397,573		19,447,952		19,446,086		19,444,698

25

item 7.  Management’s Discussion and Analysis of Financial Conditions and Results of Operations

The purpose of this discussion and analysis is to provide an understanding of our financial results and condition through the eyes of management for the year ended December 31, 2013. This report should be read in conjunction with our Consolidated Financial Statements including the notes thereto, and the other financial information appearing elsewhere in this report.

Executive Summary

We are a financial holding company for Bank SNB, National Association, which has been providing banking services since 1894. Through Bank SNB, we have twenty-three full-service banking offices primarily located along the heavily populated areas on the I-35 corridor through Texas, Oklahoma, and Kansas.  We focus on providing customers with exceptional service and meeting all of their banking needs by offering a wide variety of commercial and consumer banking services, including commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services and products.

Our business operations are conducted through five operating segments that include Oklahoma Banking, Texas Banking, Kansas Banking, Mortgage Banking, and Other Operations. 

Business Strategy

Our bank has and will continue to position itself for future growth. We seek to produce consistent and sustainable revenue growth by enhancing, clarifying, and expanding our geographic markets and increasing and diversifying our revenue base. This consists of, but is not limited to: building out existing markets with robust and profitable growth potential; expanding our professional team; identifying, targeting, and acquiring earning assets under appropriate risk guidelines; and continuing to source, evaluate, and execute acquisitions. 

We also seek to provide customers with exceptional service while, at the same time, improving operating efficiency. Over many years, we have refined our approach to customer service by listening to our customers’ needs and desires.  We actively seek to make the customer experience consistent over time and across all of our locations.  We improve operating efficiency by focusing on internal policy, process and procedure, along with technology, with the goal of continuous improvement while providing an exceptional experience to our clients.  We build close relationships with businesses and their principals, business professionals and individuals by providing personalized financial solutions that gives them more control over their financial futures. We also apply a philosophy of continuous improvement to internal and external information reporting to improve our decision making processes and product delivery. 

Another major component of our strategy is to be an employer of choice in our markets. We aim to employ talented and devoted people who embrace our vision and feel invested in our success.  As of December 31, 2013, we employed 402 people on a full-time equivalent basis, including executive officers, loan and other banking officers, branch personnel, and others.

Industry Focus

Our area of expertise focuses on the special financial needs of healthcare and health professionals, commercial real estate borrowers, businesses and their managers and owners, commercial lending, and energy banking. The healthcare and real estate industries make up the majority of our loan and deposit portfolio.

Our tactical focus on healthcare lending was established in 1974. We provide credit and other services, such as deposits, cash management, and document imaging for physicians and other healthcare practitioners to start or develop their practices and finance the development and purchase of medical offices, clinics, surgical care centers, hospitals, and similar facilities. As of December 31, 2013, approximately $417.4 million, or 33%, of our non-covered loans were loans to individuals and businesses in the healthcare industry.  We conduct regular market reviews of current and potential healthcare lending business and make determinations with respect to the appropriate concentrations within healthcare based upon economic and regulatory conditions.

26

As of December 31, 2013, approximately 60% of our loan portfolio was concentrated in commercial real estate. We expect that the real estate recovery should continue to improve in 2014 as the market has progressed further through the economic and real estate cycles. Job growth, solid corporate profits, and recovery in the housing market are all positives for the real estate industry. Conversely, high unemployment rate, uncertainty over government regulation and fiscal policy, and a concern about the rising cost of debt capital are all industry risk factors.

Economic Overview

The United States economy continued to indicate a steady upward trend, despite the relatively slow pace of overall growth in 2013.  Growth is expected to accelerate in 2014, driven by an increase in consumption, further investment growth, a resilient housing market, and abating uncertainty.  Of equal importance, the economy suggests tepid inflationary pressures and less urgency for the Federal Reserve to hike interest rates despite improving growth.  With subdued indications of inflation, the U.S. government has provided accommodative economic policy to support progression in the economy and further reduction in the unemployment rate.  National unemployment rates have improved from 7.8% in December of 2012 to 7.0% in December of 2013, but are still above targeted rates.  For 2013, job growth was steady but modest.  Long-term and short-term interest rates remained low throughout the year, albeit with bouts of volatility, and are likely to rise in 2014.

The banking environment is changing rapidly.  Industry consolidation is occurring due to factors such as increased regulatory pressure, declining margins, limited revenue growth, and larger capital requirements.  Loan demand across the United States has been advancing slowly for several years, but is expected to grow above 5% in 2014.  Deposits had been growing over the last several years but abated during 2013 due to large liquidity holders not getting the yield they were seeking at banks.  Also, the low interest rate environment has forced declining margins in the banking system.  Mortgage operations boosted many bank’s non-interest income numbers over the last several years, but the growth may taper as the mortgage business has seen lower re-financing numbers and the threat of higher rates in the future could impact earnings negatively.  Credit quality improved across all sectors causing banks to release reserves, thus pushing earnings up during 2013.

Significant Developments

In 2013, we took several positive steps to restructure our balance sheet.  On May 29, 2013, we repurchased the warrant issued to the United States Department of the Treasury (the “Treasury”) as part of the TARP Capital Purchase Program (the “CPP”) for a purchase price of $2.3 million.  The warrant provided the Treasury the right to purchase up to 703,753 shares of our common stock at a price of $14.92 per share.  The repurchase of the warrant completes our repurchase of all securities issued to the Treasury in connection with the CPP.  In August 2012, we repurchased all of the 70,000 outstanding shares of our Fixed Rate Cumulative Perpetual Preferred Stock issued to the Treasury under the CPP.

Further restructuring of the balance sheet occurred on September 15, 2013, as we redeemed all of the 10.5% trust preferred securities of our subsidiary Southwest Capital Trust II (the “OKSBP Trust Preferred”) pursuant to the optional redemption provisions provided in the documents governing the OKSBP Trust Preferred.  The OKSBP Trust Preferred, par value of $34.5 million with a coupon of 10.5%, were redeemed at the liquidation amount of $25 per trust preferred security plus accrued and unpaid distributions to the redemption date of September 15, 2013.  We also redeemed $1.07 million in common securities issued by Southwest Capital Trust II and related to the OKSBP Trust Preferred.  Following the redemption, our capital levels remain well in excess of the regulatory minimum for well capitalized status.  The redemption was funded with cash on hand. 

Effective as of the close of business on November 15, 2013, we merged our wholly-owned subsidiary Bank of Kansas with and into our wholly-owned subsidiary Stillwater National.  The consolidated bank was renamed and does business in all markets under the new name, Bank SNB.  The consolidation and new name unified our brand as one bank to better serve our clients and prepares us for growth in the future.

27

Results of Operations

Net income (loss) available to common shareholders totaled $17.4 million, or $0.89  diluted per common share, in 2013 compared to $12.4 million, or $0.64 diluted per common share, in 2012 and ($72.5) million, or ($3.73)  diluted per common share, in 2011.

The following table presents components of consolidated net income and selected ratios for the years 2013, 2012, and 2011 and the annual changes between those years.

				2013 Change						2012 Change
(Dollars in thousands,	2013			From 2012			2012			From 2011			2011
except per share data)
Operations Data
Interest income	$	73,914		$	(19,257)		$	93,171		$	(27,574)		$	120,745
Interest expense		11,264			(5,344)			16,608			(7,805)			24,413
Net interest income		62,650			(13,913)			76,563			(19,769)			96,332
Provision for loan losses		(7,209)			(10,316)			3,107			(128,994)			132,101
Noninterest income		13,643			(2,293)			15,936			1,918			14,018
Noninterest expense		55,311			(8,011)			63,322			(26,879)			90,201
Income (loss) before taxes		28,191			2,121			26,070			138,022			(111,952)
Taxes on income		10,756			873			9,883			53,540			(43,657)
Net income (loss)	$	17,435		$	1,248		$	16,187		$	84,482		$	(68,295)
Net income (loss) available
to common shareholders	$	17,435		$	4,989		$	12,446		$	84,994		$	(72,548)
Per Common Share Data
Basic earnings	$	0.89		$	0.25		$	0.64		$	4.37		$	(3.73)
Diluted earnings		0.89			0.25			0.64			4.37			(3.73)
Financial Condition Data
- Averages
Investment securities	$	377,460		$	27,439		$	350,021		$	86,015		$	264,006
Total loans		1,315,001			(252,317)			1,567,318			(646,589)			2,213,907
Interest-earning assets		1,965,401			(139,416)			2,104,817			(469,849)			2,574,666
Total assets		2,029,266			(214,480)			2,243,746			(446,739)			2,690,485
Interest-bearing deposits		1,200,094			(174,892)			1,374,986			(364,540)			1,739,526
Total deposits		1,620,441			(150,636)			1,771,077			(346,229)			2,117,306
Other borrowings		74,115			12,293			61,822			(22,916)			84,738
Subordinated debentures		71,243			(10,720)			81,963			-			81,963
Total shareholders' equity		252,542			(30,974)			283,516			(88,971)			372,487
Selected Ratios
Return on average assets		0.86	%		0.14	%		0.72	%		3.26	%		(2.54)	%
Return on average total
shareholders' equity		6.90			1.19			5.71			24.04			(18.33)
Return on average common equity		6.90			1.77			5.14			28.97			(23.83)
Net interest margin		3.19			(0.45)			3.64			(0.10)			3.74

Net income available to common shareholders for 2013increased $5.0 million compared to 2012.  The increase was primarily the result of a $10.3 million decrease in provision for loan losses and an $8.0 million decrease in noninterest expense, both due to the resolution of nonperforming loans, potential problem loans, and other real estate during the year.  This increase was offset in part by a $2.3 million decrease in noninterest income and a $13.9 million decrease in net interest income primarily due to lower loan volume.

Net income available to common shareholders for 2012 increased $85.0 million compared to 2011.  The increase was primarily the result of a $129.0 million decrease in provision for loan losses and a $26.9 million decrease in noninterest expense, both due to the sale of nonperforming loans, potential problem loans, and other real estate during the fourth quarter of 2011.  This increase was offset in part by a $1.9 million increase in noninterest income and a $19.8 million decrease in net interest income primarily due to lower loan volume.

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Details of the changes in various components of net income are further discussed below.

Net Interest Income

Net interest income is the difference between interest income on earning assets, such as loans and investment securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings, which are used to fund those assets.  Net interest income is our largest source of revenue representing 82% of total revenue in 2013.  Net interest margin is net interest income as a percentage of average earning assets for the period.  Net interest income and net interest margin increase or decrease as a result of changes in the levels of interest rates, the volume and the mix of earning assets and interest-bearing liabilities, and the percentage of interest-earning assets funded by noninterest-bearing funding sources.

The Federal Reserve Board influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions.  Our loan portfolio is significantly affected by changes in the prime interest rate.  The prime interest rate, which is the rate offered on loans to borrowers with strong credit, has been at 3.25% since 2008.  Our loan portfolio is also affected, to a lesser extent, by changes in the London Interbank Offered Rate (“LIBOR”).  At December 31, 2013, the one-month and three-month U.S. dollar LIBOR rates were 0.17% and 0.25%, respectively, while at December 31, 2012 these rates were 0.21% and 0.31%, respectively, and at December 31, 2011 these rates were 0.30% and 0.58%, respectively. 

The intended federal fund rate, which is the cost of immediately available overnight funds, fluctuates in a similar manner to the prime interest rate.  It has been at or below 0.25% since 2008.   

Net interest income for 2013 was $62.7 million, a decrease of $13.9 million, or 18%, from the $76.6 million earned in 2012.  Net interest margin was 3.19% for the year ended December 31, 2013, a decrease of 45 basis points from 2012.Net interest income for 2012 was $76.6 million, a decrease of $19.8 million, or 21%, from the $96.3 million earned in 2011.  Net interest margin was 3.64% for the year ended December 31, 2012, a decrease of ten basis points from 2011.  The decline in net interest income for 2013 and 2012 was due to the decrease in interest earning assets, primarily loans, and the continued repricing of existing loans and deposits as interest rates remain at historical lows.  The yield on noncovered loans decreased to 4.99% for 2013 from 5.36% for 2012 primarily as a result of the reduction in the loan portfolio offset in part by a decrease in nonaccrual loans.

Interest rate spread, which represents the difference between the rate earned on interest-earning assets and the rate paid on interest-bearing liabilities, was 2.92% for 2013, compared to 3.34% for 2012, and 3.41% for 2011. 

We have seen growth in noninterest-bearing deposit accounts, which are a core funding source with our interest-bearing deposits and other borrowings.  The average balance of noninterest-bearing deposit accounts increased to $420.3 million in 2013 from $396.1 million in 2012 and $377.8 million in 2011.

For further analysis of asset sensitivity please see tables showing the effects of changes in interest rates and changes in volume of interest related assets and liabilities on page  30 of this report and the discussion of Quantitative and Qualitative Disclosures about Market Risk on page 46 of this report.

The following table provides information relating to our average consolidated statements of financial condition and reflects the interest income on interest-earning assets, interest expense of interest-bearing liabilities, and the average yields earned and rates paid for the periods indicated.  Yields and rates are derived by dividing income or expense reflected in our Consolidated Statements of Operations by the average daily balance of the related assets or liabilities, respectively, for the periods presented.  Nonaccrual loans have been included in the average balances of total loans.

The changes in the composition of interest-earning assets and their funding sources reflect market demand and management’s efforts to maximize net interest margin while controlling interest rate, credit, and other risks.

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Consolidated Average Balances, Yields and Rates

	For the twelve months ended December 31,
	2013							2012							2011
	Average					Average		Average					Average		Average					Average
(Dollars in thousands)	Balance			Interest		Yield/Rate		Balance			Interest		Yield/Rate		Balance			Interest		Yield/Rate
Assets
Noncovered loans (1) (2)	$	1,293,596		$	64,555	4.99	%	$	1,536,494		$	82,288	5.36	%	$	2,168,458		$	109,839	5.07	%
Covered loans (1)		21,405			1,607	7.51			30,824			2,314	7.51			45,449			3,384	7.45
Investment securities (2)		377,460			6,655	1.76			350,021			7,814	2.23			264,006			6,973	2.64
Other interest-earning assets		272,940			1,097	0.40			187,478			755	0.40			96,753			549	0.57
Total interest-earning assets		1,965,401			73,914	3.76			2,104,817			93,171	4.43			2,574,666			120,745	4.69
Other assets		63,865							138,929							115,819
Total assets	$	2,029,266						$	2,243,746						$	2,690,485
Liabilities and shareholders' equity
Interest-bearing demand deposits	$	122,106		$	148	0.12	%	$	114,974		$	219	0.19	%	$	108,808		$	382	0.35	%
Money market accounts		420,767			790	0.19			381,292			1,077	0.28			483,373			2,154	0.45
Savings accounts		39,397			44	0.11			35,741			53	0.15			29,862			49	0.16
Time deposits		617,824			4,577	0.74			842,979			8,354	0.99			1,117,483			14,208	1.27
Total interest-bearing deposits		1,200,094			5,559	0.46			1,374,986			9,703	0.71			1,739,526			16,793	0.97
Other borrowings		74,115			892	1.20			61,822			895	1.45			84,738			1,799	2.12
Subordinated debentures		71,243			4,813	6.76			81,963			6,010	7.33			81,963			5,821	7.10
Total interest-bearing liabilities		1,345,452			11,264	0.84			1,518,771			16,608	1.09			1,906,227			24,413	1.28
Noninterest-bearing demand deposits		420,347							396,091							377,780
Other liabilities		10,925							45,368							33,991
Shareholders' equity		252,542							283,516							372,487
Total liabilities and shareholders' equity	$	2,029,266						$	2,243,746						$	2,690,485
Net interest income and interest rate spread				$	62,650	2.92	%				$	76,563	3.34	%				$	96,332	3.41	%
Net interest margin (3)						3.19	%						3.64	%						3.74	%
Ratio of average interest-earning assets
to average interest-bearing liabilities		146.08	%						138.59	%						135.07	%
(1) Yields, interest rate spreads, and net interest margins are calculated using income recorded in accordance with GAAP.
(2) Fees included in interest income on loans receivable are not considered material.
(3) Net interest margin = net interest income / total average interest-earning assets.

The following table analyzes our changes in interest income and interest expense for the periods indicated.  Information is provided on changes attributable to (i) changes in volume (changes in volume multiplied by prior period’s rate); and (ii) changes in rates (changes in rate multiplied by prior period’s volume).  Changes in rate-volume (changes in rate multiplied by changes in volume) are allocated between changes in rate and changes in volume in proportion to the relative contribution of each.

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Effect of Volume and Rate Changes on Net Interest Income

(Dollars in thousands)	2013 vs. 2012						2012 vs. 2011
	Increase		Due to Change				Increase		Due to Change
	Or		In Average:				Or		In Average:
	(Decrease)		Volume		Rate		(Decrease)		Volume		Rate
Interest earned on:
Noncovered loans receivable (1)	$	(17,733)	$	(12,389)	$	(5,344)	$	(27,551)	$	(33,544)	$	5,993
Covered loans receivable		(707)		(707)		-		(1,070)		(1,098)		28
Investment securities		(1,159)		578		(1,737)		842		2,033		(1,192)
Other interest-earning assets		342		343		(1)		205		401		(195)
Total interest income		(19,257)		(12,175)		(7,082)		(27,574)		(21,089)		(6,485)
Interest paid on:
Interest-bearing demand		(71)		13		(84)		(163)		21		(184)
Money market accounts		(287)		103		(390)		(1,077)		(394)		(683)
Savings accounts		(9)		5		(14)		4		9		(5)
Time deposits		(3,777)		(1,956)		(1,821)		(5,854)		(3,103)		(2,751)
Other borrowings		(3)		162		(165)		(904)		(415)		(489)
Subordinated debentures		(1,197)		(747)		(450)		189		-		189
Total interest expense		(5,344)		(2,421)		(2,923)		(7,805)		(4,540)		(3,265)
Net interest income	$	(13,913)	$	(9,754)	$	(4,159)	$	(19,769)	$	(16,549)	$	(3,220)
(1) Average balances included nonaccrual loans. Fees included in interest income on loans receivable are not considered material. Interest on tax-exempt loans and securities is not shown on a tax-equivalent basis, because it is not considered material.

Provision for Loan Losses

The provision for loan losses is the amount that, based on our judgment, is required to maintain the allowance for loan losses at an appropriate level based upon the inherent risks in the loan portfolio.  The amount of the loan loss provision for a period is based solely upon the amount needed to cause the allowance to reach the level deemed appropriate, after the effects of net charge-offs for the period. 

Net charge-offs were $2.8 million for the year ended December 31, 2013, $1.1 million for the year ended December 31, 2012, and $152.6 million for the year ended December 31, 2011.  Included in 2011 net charge-offs was $88.6 million resulting from the fourth quarter 2011 sale of nonperforming assets.  The provisions for loan losses was a credit of($7.2) million for the year ended December 31, 2013, $3.1 million for the year ended December 31, 2012, and $132.1 million for the year ended December 31, 2011.  Included in the 2011 provision for loan losses was $74.9 million resulting from the fourth quarter 2011 sale of nonperforming assets.

See the section captioned “Allowance for Loan Losses” on page40 of this report for further analysis of the provision for loss losses.

Noninterest Income

Noninterest income was $13.6 million for 2013, a decrease of $2.3 million, or 14%, from 2012.  Noninterest income was $15.9 million for 2012, an increase of $1.9 million, or 14%, when compared with 2011.   

			2013 Change				2012 Change
(Dollars in thousands)	2013		From 2012		2012		From 2011		2011
Service charges and fees	$	10,491	$	(1,068)	$	11,559	$	(516)	$	12,075
Other noninterest income		503		96		407		122		285
Gain on sales of loans		2,649		(484)		3,133		1,475		1,658
Gain on sales/calls of investment securities		-		(837)		837		837		-
Total noninterest income	$	13,643	$	(2,293)	$	15,936	$	1,918	$	14,018

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Service charges and fees – Service charges and fees decreased $1.1 million, or 9%, in 2013 as a result of decreased brokerage fees.Service charges and fees decreased $0.5 million, or 4%, in 2012 as a result of decreased overdraft charge and the decrease in the fair market value of mortgage servicing rights.

Other noninterest income – Other noninterest income includes rent income and other miscellaneous income items. 

Gain on sales of loans – Gain on sales of loans includes the net gains recognized from the sale of mortgage loans that are classified as held for sale.  For 2013,  the decrease relates to a decrease in mortgage lending activity during the year. For 2012, the increase relates to our increased mortgage lending activity during the year. 

Gain on sales/calls of investment securities – In 2013, sales of investment securities netted to no gains on sales or calls of investment securities.  The 2012 gain on sales or calls of investment securities was primarily the result of a single security held at cost.  There were no investment securities sold or called in 2011. 

Noninterest Expense

Noninterest expense was $55.3 million for 2013, a decrease of $8.0 million, or 13%, from 2012.  Noninterest expense was $63.3 million for 2012, a decrease of $26.9 million, or 30%, from 2011.

			2013 Change				2012 Change
(Dollars in thousands)	2013		From 2012		2012		From 2011		2011
Salaries and employee benefits	$	31,877	$	1,958	$	29,919	$	39	$	29,880
Occupancy		10,779		198		10,581		(234)		10,815
FDIC and other insurance		1,764		(767)		2,531		(1,331)		3,862
Other real estate, net		(1,098)		(7,663)		6,565		(24,287)		30,852
General and administrative		11,989		(1,737)		13,726		(1,066)		14,792
Total noninterest expense	$	55,311	$	(8,011)	$	63,322	$	(26,879)	$	90,201

Salaries and employee benefits – Salaries and employee benefits increased $2.0 million, or 7% for 2013 primarily due to an increase in employee benefits costs and incentives.  Salaries and employee benefits remained flat for 2012.  The number of full-time equivalent employees decreased from 422 at the beginning of the year to 402 as of December 31, 2013.  As of December 31, 2012 the number of full-time equivalent employees had decreased to 422 from 435 at the beginning of that year.

Occupancy – Occupancy expense increased $0.2 million, or 2%, in 2013 primarily due to increased data processing expense and increased building rental expense.  Occupancy expensedecreased $0.2 million, or 2%, in 2012 primarily due to decreased depreciation expense and decreased building rental expense.

FDIC and other insurance–  Bank SNB pays deposit insurance premiums to the FDIC based on assessment rates.In 2013, the decrease of $0.8 million, or 30%, from prior year is primarily the result of the decrease in assets, which is the basis for the premium calculation, and the decrease in the assessment rates.  In 2012, the decrease of $1.3 million, or 34%, from prior year is primarily the result of the decrease in assets, which is the basis for the premium calculation, and a decrease in the assessment rates. This decrease in the FDIC assessment rates reflects improvement in asset quality for both 2013 and 2012.

Other real estate, net – The $7.7 million decrease in other real estate expense for 2013  is primarily due to the decreased write downs and net gains on sales.  The $24.3 million decrease in other real estate expense for 2012 is primarily due to the 2011 fourth quarter sales.  Other real estate was $2.7 million at December 31, 2013, $15.0 million at December 31, 2012, and $24.4 million at December 31, 2011.  The 2011 other real estate expense includes $23.6 million resulting from the fourth quarter 2011 sale of nonperforming assets.        

General and administrative – Other general and administrative expenses decreased $1.7 million, or 13%, in 2013 due to lower consulting fees and legal fees, partially offset by charter consolidation and rebranding expenses.  Other general and administrative expenses decreased $1.1 million, or 7%,  in 2012 due to lower collections costs and legal fees, partially offset by the prior year settlement of Oklahoma state tax claims for less than the amount accrued. 

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Operating Segments

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Oklahoma banking	$	8,754	$	9,808	$	(7,748)
Texas banking		10,615		5,484		(58,190)
Kansas banking		646		660		(6,912)
Mortgage banking		579		1,062		374
Other operations		(3,159)		(827)		4,181
Consolidated net income (loss)	$	17,435	$	16,187	$	(68,295)
Oklahoma banking	$	681,991	$	652,121	$	858,212
Texas banking		366,697		520,481		653,199
Kansas banking		198,992		174,451		213,382
Mortgage banking		23,215		31,682		38,695
Other operations		8		-		-
Consolidated total loans	$	1,270,903	$	1,378,735	$	1,763,488
Oklahoma banking	$	686,736	$	664,607	$	888,839
Texas banking		361,058		515,675		653,146
Kansas banking		203,631		178,291		219,481
Mortgage banking		26,162		34,304		40,876
Other operations		703,836		729,378		574,934
Consolidated total assets	$	1,981,423	$	2,122,255	$	2,377,276
Oklahoma banking	$	1,113,715	$	1,254,348	$	1,406,361
Texas banking		207,227		166,919		156,101
Kansas banking		247,884		270,368		276,757
Mortgage banking		1,895		2,420		1,430
Other operations		13,365		15,523		80,733
Consolidated total deposits	$	1,584,086	$	1,709,578	$	1,921,382

We have five reportable operating segments:  Oklahoma Banking, Texas Banking, Kansas Banking, Mortgage Banking, and Other Operations.  Prior to 2013, the Mortgage Banking segment included all loans available for sale in the secondary market.  These business segments were identified through the products and services that are offered within each segment and the geographic area they serve.

Effective January 1, 2013, portfolio loans are allocated based upon the geographic location of the relationship manager.

The contribution of the Oklahoma Banking segment decreased $1.1 million in 2013 as a result of an $3.2 million decrease in net interest income and a $0.8 million decrease in noninterest income, offset in part by a $1.4 million decrease in noninterest expense, a $0.9 million decrease in the provision for loan losses and a $0.6 million decrease in income tax expense.The contribution of the Oklahoma Banking segment increased $17.6  million in 2012 as a result of a  $26.6 million decrease in the provision for loan losses and a $7.0 million decrease in noninterest expense, offset in part by a $10.9 million increase in income tax expense and a $5.1 million decrease in net interest income.

The contribution of the Texas Banking segment increased $5.1 million in 2013 as a result of a $11.8 million decrease in the provision for loan losses and a $3.4 million decrease in noninterest expense, offset in part by a $6.2 million decrease in net interest income, a $3.2 million increase in income tax expense, and a $0.5 million decrease in noninterest income.  The contribution of the Texas Banking segment increased $63.7 million in 2012 as a result of a $93.0 million decrease in the provision for loan losses and a $15.9 million decrease in noninterest expense, offset in part by a $40.5 million increase in income tax expense and a $4.6 million decrease in net interest income.     

The contribution of the Kansas Banking segment remained flat in 2013, primarily as a result of a $2.3 million increase in the provision for loan losses and a $0.5 million decrease in noninterest income, offset in part by a $1.9 million decrease in noninterest expense and a $0.9 million increase in net interest income.  The contribution of the Kansas Banking segment increased $7.6 million in 2012, primarily as a result of a $9.4 million decrease in the provision for loan losses and a $5.4

33

million decrease in noninterest expense, offset in part by a $4.8 million increase in income tax expense and a $2.7 million decrease in net interest income.

At December 31, 2013, our eleven Oklahoma offices accounted for $682.0 million in loans, or 54% of total portfolio loans, our five Texas offices accounted for $366.7 million in loans, or 29% of total portfolio loans, and our seven Kansas offices accounted for $199.0 million in loans, or 16% of total portfolio loans.

The Mortgage Banking segment contributed net income of $0.6 million and $1.1 million in 2013 and 2012, respectively.  The decrease is primarily a result of decreased noninterest income from the sales of loans held for sale.   

For 2013 and 2012, the Other Operations segment, which includes our funds management unit and corporate investments, incurred a loss of $3.2 million and $0.8 million, respectively.  The decrease is primarily a result of decreased net interest income. The value of funds provided and cost of funds borrowed from the funds management unit by the operating segments are internally priced at rates that approximate market rates for funds with similar duration. 

The Oklahoma Banking, Texas Banking, and Kansas Banking segments provide the majority of consolidated net interest income and net earnings, and for the year ended December 31, 2013 accounted for approximately $1.3 billion, or 63%, of total assets.

The segment disclosures are based upon a number of assumptions and allocations of expense.  We allocate resources and evaluate performance of our segments after allocation of funds, indirect expenses, taxes, and capital costs.  Capital is assigned to each of the segments using a risk-based capital pricing methodology that assigns capital ratios by asset, deposit, or revenue category based on credit risk, interest rate risk, market risk, operational risk, and liquidity risk factors.

Taxes on Income

The income tax expense for 2013 totaled $10.8 million, compared to income tax expense of $9.9 million for 2012 and income tax benefit for 2011 of ($43.7) million.  The income tax expense (benefit) fluctuates in relation to pre-tax income levels.  The effective tax rate for the year ended December 31, 2013 was 38.2%, compared to 37.9% for the year ended December 31, 2012 and (39.0%) for the year ended December 31, 2011.  Our effective tax rate differs from the statutory rates primarily due to our investments in bank qualified municipal securities offset in part by certain non-deductible expense items.

Total Assets

Our total assets decreased by $140.8 million, or 7%, to $2.0 billion at December 31, 2013, compared to $2.1 billion at December 31, 2012 after decreasing by $255.0 million, or 11%, between December 31, 2011 and December 31, 2012.  The decline in assets in 2013 was primarily attributable to the $107.8 million, or 7%, decrease in total loans, a $24.5 million, or 100% decrease in income tax receivable, a 12.3 million or 82% decrease in other real estate properties, and the $13.3 million, or 26%, decrease in other assets, offset in part by the increase in our investment securities portfolio by $17.1 million, or 5%.The decline in assets in 2012 was primarily attributable to the $384.8 million, or 22%, decrease in total loans and the $12.8 million, or 20%, decrease in other assets, offset in part by the increase in our investment securities portfolio by $101.8 million, or 37%.

Investment Securities Portfolio

We maintain an investment securities portfolio consisting of securities issued by U.S. Government sponsored entities, state and political subdivisions, mortgage-backed, asset-backed securities, and other investments.  Mortgage-backed securities consist of agency securities underwritten and guaranteed by Government National Mortgage Association (“Ginnie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), and Federal National Mortgage Association (“Fannie Mae”).  Investment securities are held in safekeeping by an independent custodian.  Asset-backed securities are collateralized by student loans.

Investment securities assigned to the available for sale portfolio are generally used to supplement our liquidity, provide a prudent yield, and provide collateral for public deposits and other borrowing facilities.  Unrealized net gains and losses on available for sale securities are recorded as an adjustment to equity, net of taxes, but are not reflected in our current earnings.  If management determines that any impairment in any available for sale security is “other-than-temporary,” a

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securities loss will be recognized as a charge to earnings.  If a security is sold, any gain or loss is recorded as a credit or charge to earnings and the equity adjustment is reversed.  At December 31, 2013, we held $382.5 million in securities classified as available for sale with an unrealized loss of $2.9 million, $1.8 million net of taxes, related to these securities included in shareholders’ equity.

Investment securities assigned to the held to maturity portfolio earn a prudent yield, provide liquidity from maturities and paydowns, and provide collateral to pledge for federal, state, and local government deposits and other borrowing facilities.  The held to maturity investment portfolio at December 31, 2013 included $11.7 million in fixed-rate securities.  If management determines any impairment in any held to maturity security is “other-than-temporary,” a securities loss will be recognized as a charge to earnings.

We had no trading securities at December 31, 2013, 2012, or 2011.

A summary of the investment securities portfolio is as follows for the years ended December 31, 2013, 2012, and 2011.

	At December 31,
(Dollars in thousands)		2013		2012		2011
Federal agency securities		120,773		115,614		65,553
Obligations of states and political subdivisions		44,356		48,355		26,355
Residential mortgage-backed securities		183,170		203,675		182,147
Asset-backed securities		9,482		7,671		-
Other investments		36,418		1,797		1,297
Total investment securities	$	394,199	$	377,112	$	275,352
Available for sale (fair value)		382,479		364,315		260,100
Held to maturity (amortized cost)		11,720		12,797		15,252
Total investment securities	$	394,199	$	377,112	$	275,352

We do not have any material amounts of investment securities or other interest-earning assets, other than loans, that would have been classified as nonperforming if such assets were loans or which were recognized by management as potential problem assets based upon known information about possible credit problems of the borrower or issuer.

The following table shows the maturities, carrying value (amortized cost for investment securities being held to maturity or estimated fair value for investment securities available for sale), estimated fair market values, and average yields for our investment portfolio at December 31, 2013.  Yields are not presented on a tax-equivalent basis.  Maturities of mortgage-backed securities are based on expected maturities.  Expected maturities differ from contractual maturities because borrowers of the underlying mortgages may have the right to call or prepay obligations with or without prepayment penalties.  The securities of no single issuer (other than the United States or its agencies), or in the case of securities issued by state and political subdivisions, no source or group of sources of repayment, accounted for more than 10% of our shareholders’ equity at December 31, 2013.

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						After One			After Five
	One Year					Year through			Years through				After				Total Investment
	or Less					Five Years			Ten Years				Ten Years				Securities
(Dollars in thousands)	Cost		Yield			Cost	Yield		Cost		Yield		Cost		Yield		Cost		Market		Yield
Held to Maturity:
Obligations of states and
political subdivisions	$	1,941	1.79	%	$	2,227	2.30	%	$	4,151	2.43	%	$	3,401	3.65	%	$	11,720	$	12,115	2.65	%
Total Held to Maturity	$	1,941	1.79	%	$	2,227	2.30	%	$	4,151	2.43	%	$	3,401	3.65	%	$	11,720	$	12,115	2.65	%
Available for Sale:
Federal agency securities	$	5,926	1.28	%	$	24,161	1.19	%	$	69,655	1.72	%	$	23,590	1.08	%	$	123,332	$	120,773	1.47	%
Obligations of states and
political subdivisions		509	1.20			3,823	2.23			22,011	2.51			7,342	3.18			33,685		32,636	2.60
Residential mortgage-
backed securities		13,121	1.45			128,197	2.04			37,496	1.28			4,698	2.60			183,512		183,170	2.42
Asset-backed securities		-	-			-	-			-	-			9,578	0.77			9,578		9,482	0.77
Other securities		1,250	-			11,295	-			22,771	-			-	-			35,316		36,418	1.27
Total Available for Sale	$	20,806	1.31	%	$	167,476	1.78	%	$	151,933	1.47	%	$	45,208	1.51	%	$	385,423	$	382,479	1.87	%
Total	$	22,747			$	169,703			$	156,084			$	48,609			$	397,143	$	394,594

Note:  Average yields for investments held for sale is based on amortized cost.  Yields on tax-exempt securities are shown on a tax-equivalent basis.

Loan Portfolio

The following table presents the composition of the loan portfolio over the previous five years.

	At December 31,
(Dollars in thousands)	2013		2012		2011		2010		2009
Noncovered:
Real estate mortgage:
Commercial	$	740,997	$	870,975	$	1,028,561	$	1,310,464	$	1,212,409
One-to-four family residential		80,058		70,954		80,375		89,800		114,614
Real estate construction:
Commercial		143,650		130,753		227,098		441,265		618,078
One-to-four family residential		4,646		3,656		4,987		27,429		41,109
Commercial		254,087		240,498		346,266		452,626		520,505
Installment and consumer:
Guaranteed student loans		4,394		4,680		5,396		5,843		36,163
Other		26,644		31,512		33,190		39,060		39,550
		1,254,476		1,353,028		1,725,873		2,366,487		2,582,428
Less:  Allowance for loan losses		(36,607)		(46,494)		(44,233)		(65,229)		(62,413)
Total noncovered loans, net	$	1,217,869	$	1,306,534	$	1,681,640	$	2,301,258	$	2,520,015

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	At December 31,
(Dollars in thousands)	2013		2012		2011		2010		2009
Covered:
Real estate mortgage:
Commercial	$	11,282	$	18,298	$	23,686	$	30,997	$	39,836
One-to-four family residential		3,930		4,881		7,072		9,122		12,630
Real estate construction:
Commercial		198		382		3,746		6,840		12,515
One-to-four family residential		-		-		-		439		5,324
Commercial		971		2,037		2,841		5,554		13,412
Installment and consumer		46		109		270		676		1,688
		16,427		25,707		37,615		53,628		85,405
Less:  Allowance for loan losses		(56)		(224)		(451)		-		-
Total covered loans, net	$	16,371	$	25,483	$	37,164	$	53,628	$	85,405

Included in covered loans above are $1.8 million, $6.7 million, $10.1 million, $14.4 million, and $23.9 million for 2013, 2012, 2011, 2010 and 2009, respectively, of loss share receivable from the FDIC.

We have a strategic focus on providing loans and other services to healthcare and health professionals, businesses and their managers and owners, and commercial and commercial real estate borrowers.  At December 31, 2013 and 2012, loans to individuals and businesses in the healthcare industry totaled $417.4 million, or 33%, and $502.2 million, or 38% of noncovered loans, respectively.

The decline in loans in 2013 was due in part to the change in our lending focus away from larger average size loans and a refocus to our primary markets. 

The following table sets forth the remaining maturities for certain loan categories (including loans held for sale) at December 31, 2013.  Student loans that do not have stated maturities are treated as due in one year or less.  Real estate construction includes certain loans which will convert to permanent financing at the point when construction is completed; these loans are reported according to their final maturity.

			After one
	One year		year through		After
(Dollars in thousands)	or less		five years		five years		Total
Noncovered:
Real estate mortgage:
Commercial	$	206,842	$	407,829	$	126,326	$	740,997
One-to-four family residential		10,786		32,720		36,552		80,058
Real estate construction		68,154		71,419		8,723		148,296
Commercial		80,754		118,460		54,873		254,087
Installment and consumer:
Guaranteed student loans		4,394		-		-		4,394
Other		13,090		11,606		1,948		26,644
Total noncovered		384,020		642,034		228,422		1,254,476
Covered:
Real estate mortgage:
Commercial		3,824		1,256		6,202		11,282
One-to-four family residential		763		658		2,509		3,930
Real estate construction		41		-		157		198
Commercial		884		70		17		971
Installment and consumer		39		7		-		46
Total covered		5,551		1,991		8,885		16,427
Total	$	389,571	$	644,025	$	237,307	$	1,270,903

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As of December 31, 2013 any floating rate loans that reached a contractual floor or ceiling level are treated as fixed rate rather than floating rate until the rate is again free to float.  The following table sets forth at December 31, 2013 the dollar amount of all loans due more than one year after December 31, 2013.

(Dollars in thousands)	Fixed		Variable		Total
Noncovered:
Real estate mortgage:
Commercial	$	288,247	$	245,908	$	534,155
One-to-four family residential		40,004		29,268		69,272
Real estate construction		23,354		56,789		80,143
Commercial		74,268		99,064		173,332
Installment and consumer		5,204		8,350		13,554
Total noncovered		431,077		439,379		870,456
Covered:
Real estate mortgage:
Commercial		1,575		5,883		7,458
One-to-four family residential		426		2,741		3,167
Real estate construction		-		157		157
Commercial		22		65		87
Installment and consumer		7		-		7
Total covered		2,030		8,846		10,876
Total	$	433,107	$	448,225	$	881,332

Nonperforming Assets and Potential Problem Loans

The following table shows the amounts of nonperforming assets at the end of the periods indicated.  Please see “Note 1 Summary of Significant Accounting and Reporting Polices” in the Notes to the Consolidated Financial Statements for a description of our policy for placing loans on nonaccrual status.  Nonperforming troubled debt restructurings are included in nonaccrual loans.

	At December 31,
(Dollars in thousands)	2013			2012			2011			2010			2009
Noncovered:
Nonaccrual loans:
Commercial real estate	$	6,564		$	18,337		$	4,667		$	29,996		$	28,351
One-to-four family residential		456			563			1,468			1,984			9,387
Real estate construction		2,721			3,355			3,877			67,571			57,586
Commercial		8,769			12,761			3,371			6,977			10,404
Other consumer		50			88			123			38			159
Total nonaccrual loans		18,560			35,104			13,506			106,566			105,887
Past due 90 days or more:
Commercial real estate		-			-			-			514			100
One-to-four family residential		-			747			23			-			76
Commercial		50			2,471			3			-			18
Other consumer		3			72			17			3			116
Total past due 90 days or more		53			3,290			43			517			310
Total nonperforming loans		18,613			38,394			13,549			107,083			106,197
Other real estate		560			11,315			19,844			37,722			18,432
Total nonperforming assets	$	19,173		$	49,709		$	33,393		$	144,805		$	124,629
Nonperforming assets to portfolio loans
and other real estate		1.53	%		3.73	%		1.96	%		6.11	%		4.87	%
Nonperforming loans to portfolio loans		1.49			2.91			0.80			4.59			4.18
Allowance for loan losses to nonperforming loans		196.67			121.10			326.47			60.91			58.77
Government-guaranteed portion of nonperforming loans	$	72		$	76		$	76		$	10		$	277

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	At December 31,
(Dollars in thousands)	2013			2012			2011			2010			2009
Covered:
Nonaccrual loans:
Commercial real estate	$	1,202		$	3,087		$	3,554		$	4,391		$	1,847
One-to-four family residential		57			52			188			932			2,243
Real estate construction		-			130			3,009			4,897			7,525
Commercial		-			324			370			581			665
Other consumer		-			2			7			5			42
Total nonaccrual loans		1,259			3,595			7,128			10,806			12,322
Past due 90 days or more:
Commercial real estate		-			-			-			-			542
Real estate construction		-			-			-			-			574
Other consumer		-			-			-			-			20
Total past due 90 days or more		-			-			-			-			1,136
Total nonperforming loans		1,259			3,595			7,128			10,806			13,458
Other real estate		2,094			3,643			4,529			4,187			4,748
Total nonperforming assets	$	3,353		$	7,238		$	11,657		$	14,993		$	18,206
Nonperforming assets to portfolio loans
and other real estate		18.10	%		24.66	%		27.66	%		25.93	%		20.19	%
Nonperforming loans to portfolio loans		7.66			13.98			18.95			20.15			15.76
Allowance for loan losses to nonperforming loans		4.45			6.23			6.33			-			-
Government-guaranteed portion of nonperforming loans	$	803		$	2,456		$	4,764		$	6,948		$	3,853

At December 31, 2013, five credit relationships represented 79% of noncovered nonperforming loans and 76% of noncovered nonperforming assets, while at December 31, 2012, six credit relationships represented 81% of noncovered nonperforming loans and 63% of noncovered nonperforming assets.

Included in noncovered nonaccrual loans as of December 31, 2013 are five collateral dependent lending relationships with aggregate principal balances of approximately $14.6 million and related impairment reserves of $2.9 million which were established based on recent financials and appraisal values obtained.  Three of these lending relationships were secured by commercial real estate.

Included in noncovered nonaccrual loans as of December 31, 2012 are six collateral dependent lending relationships with aggregate principal balances of approximately $31.2 million and related impairment reserves of $6.8 million which were established based on recent financials and appraisal values obtained.  Five of these lending relationships were secured by commercial real estate.

Noncovered nonperforming assets may fluctuate from period to period.  The performance of any individual loan can be affected by external factors such as the interest rate environment, economic conditions, collateral values, or factors particular to the borrower.  No assurance can be given that additional increases in noncovered nonaccrual loans will not occur in the future.

Performing loans considered potential problem loans, 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 ability of the borrowers to comply with the present loan repayment terms, amounted to approximately $99.8 million at December 31, 2013, compared to $97.5 million at December 31, 2012.  Included are $1.7 million and $3.2 million, respectively, of covered potential problem loans, which are subject to protection under the loss share agreements with the FDIC.  Loans may be monitored by management and reported in potential problem loans for an extended period of time during which management continues to be uncertain as to the ability of certain borrowers to comply with the present loan repayment terms.  These loans are subject to continued management attention and are considered by management in determining the level of the allowance for loan losses.

Management strives to carefully monitor credit quality and to identify loans that may become nonperforming.  At any time, however, there are loans included in the portfolio that will result in losses to us but that have not been identified as

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nonperforming or potential problem loans.  Because the loan portfolio contains a significant number of commercial and commercial real estate loans with relatively large balances, the unexpected deterioration of one or a few of such loans may cause a significant increase in nonperforming assets, the provision for loan losses, and charge-offs.

We began 2011 with continued high levels of nonperforming and potential problem assets. In the spring of 2011, we reorganized and took actions intended to strengthen the credit, loan review, and workout functions. During the year, we had success in resolving some credits, but downgrades and new problem assets, mainly driven by real estate appraisal decreases with respect to collateral dependent loans, kept the total levels of unresolved credits unsatisfactorily high. The levels significantly affected our earnings. 

The board of directors carefully considered the potential costs and benefits of various alternatives to us and our shareholders, in consultation with financial and legal advisors and management. Management and the board of directors concluded that a sale of assets in the near-term was in the best interests of our shareholders. 

Based on this determination, we sold nonperforming loans, potential problem loans, and other real estate with a carrying value before transfer to assets held for sale, of approximately $300.3 million; and sold related other loans with a carrying value before transfer to assets held for sale of $1.3 million during the fourth quarter of 2011. 

The loans were transferred to loans held for sale at fair values. The actual sale price reflected a bulk sale discount, which resulted in charge-offs of $88.6 million at the time of transfer. The sales completed in the fourth quarter of 2011 resulted in net proceeds to us of approximately $187.0 million. The results for the year ended December 31, 2011 include a provision for loan losses of $74.9 million and a fair value adjustment in other real estate expenses of $23.6 million in connection with the fourth quarter sales. The provision expense was calculated in accordance with our standard methodology and was based on the amount needed to replenish the allowance for loan losses back to the required level for the remaining loan portfolio.  

As of September 30, 2011, the assets sold were loans with an aggregate fair value of $229.5 million and other real estate properties with an aggregate fair value of $67.3 million. 

Allowance for Loan Losses

We make provisions for loan losses in amounts necessary to maintain the allowance for loan losses at the level we determine is appropriate.  The amount of the allowance is based on careful, continuous review and evaluation of the loan portfolio and ongoing quarterly assessments of the probable losses inherent in the loan portfolio.  The allowance for loan losses is determined in accordance with regulatory guidelines and GAAP.  See “Allowance for Loan Losses” in “Note 1 Summary of Significant Accounting and Reporting Policies” in the Notes to the Consolidated Financial Statements for a description of our allowance for loan losses methodology.

Based upon this methodology, management established an allowance of $36.6 million, or 2.93% of total noncovered portfolio loans, at December 31, 2013, compared to an allowance of $46.5 million, or 3.52% of total noncovered portfolio loans, at December 31, 2012.  This represents a decrease in the allowance of $9.9 million, or 21%.

Changes in the amount of the allowance resulted from the application of the methodology, which is designed to estimate inherent losses on total noncovered portfolio loans, including nonperforming loans.  At December 31, 2013, the allowance on the $17.9 million in noncovered nonaccrual loans was $4.3 million (24%), compared with an allowance on the $35.1 million in noncovered nonaccrual loans at December 31, 2012 of $7.7 million (22%), representing an decrease in the allowance of $3.4 million.  At December 31, 2013, the allowance on the $42.7 million noncovered performing troubled debt restructured loans was $3.6 million, compared with an allowance on $40.6 million in noncovered performing troubled debt restructured loans of $4.0 million at December 31, 2012, representing a decrease in the allowance of $0.4 million.

Excluding the impaired loans mentioned above, at December 31, 2013, the allowance for the remaining other noncovered loans was $28.7 million (2.4%), compared to $34.8 million (2.7%) at December 31, 2012, creating a decrease in the allowance of $6.1 million.  The decrease in the allowance related to these other noncovered loans mainly resulted from the decline in loans and portfolio loss trends.  This was partially offset by consideration of certain trends and qualitative factors.  These included management’s assessment of economic risk (particularly with respect to commercial and

40

commercial real estate loans), portfolio loss trends, and asset quality trends, including levels of potential problem loans and loan concentrations in commercial real estate mortgage and construction loans, which together comprised approximately 71% of our noncovered portfolio loans at December 31, 2013.  Based on its analysis management believes the amount of the allowance is appropriate. 

Covered loans were $16.4 million at December 31, 2013.  These loans are subject to protection under the loss sharing agreements with the FDIC and currently have an allowance for loan losses of $0.06 million based on analysis of expected future cash flows and collateral valuations.  

At December 31, 2013, the allowance for loan losses was 196.67% of noncovered nonperforming loans, compared to 121.10% of noncovered nonperforming loans at December 31, 2012.  Noncovered nonaccrual loans, which comprise the majority of noncovered nonperforming loans, were $18.6 million as of December 31, 2013, a decrease of $16.5 million, or 47%, from December 31, 2012.  Noncovered nonaccrual loans at December 31, 2013 were comprised of 32 relationships and were primarily concentrated in commercial loans (47%), commercial real estate loans (35%), and real estate construction (15%) loans.  All noncovered nonaccrual loans are considered impaired and are carried at their estimated collectible amounts.  Covered nonperforming loans of $1.3 million at December 31, 2013 and $3.6 million at December 31, 2012 are subject to protection under the loss share agreements with the FDIC.

The following table presents a five-year history of the allocation of the allowance for loan losses along with the percentage of total noncovered loans in each category.

	At December 31,
(Dollars in thousands)	2013				2012				2011				2010				2009
Real estate mortgage:
Commercial	$	18,851	59	%	$	27,069	64	%	$	21,609	60	%	$	32,508	55	%	$	26,670	47	%
One-to-four family
residential		797	6			792	5			1,002	5			1,597	4			2,454	5
Real estate construction		5,523	12			5,271	10			10,919	13			19,605	20			22,241	25
Commercial		10,985	20			12,603	18			9,788	20			10,605	19			10,052	20
Installment and consumer:
Guaranteed student loans		-	-			-	-			-	-			-	-			-	1
Other		451	3			759	3			915	2			914	2			996	2
Total	$	36,607	100	%	$	46,494	100	%	$	44,233	100	%	$	65,229	100	%	$	62,413	100	%

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The following table analyzes our noncovered allowance for loan losses for the periods indicated.

	For the Year Ended December 31,
(Dollars in thousands)	2013			2012			2011			2010			2009
Balance at beginning of period	$	46,494		$	44,233		$	65,229		$	62,413		$	39,773
Loans charged-off:
Commercial real estate		741			2,158			71,066			4,571			3,622
One-to-four family residential		578			268			346			2,649			1,476
Real estate construction		(246)			-			62,070			20,910			7,464
Commercial		8,599			4,448			22,103			5,182			5,223
Other consumer		267			649			1,040			1,127			1,128
Total charge-offs		9,939			7,523			156,625			34,439			18,913
Recoveries:
Commercial real estate		171			58			411			204			438
One-to-four family residential		252			260			67			234			430
Real estate construction		4,527			1,972			1,521			610			344
Commercial		2,049			3,671			1,864			421			893
Other consumer		159			495			116			226			272
Total recoveries		7,158			6,456			3,979			1,695			2,377
Net loans charged-off		2,781			1,067			152,646			32,744			16,536
Provision for loan losses		(7,106)			3,328			131,650			35,560			39,176
Balance at end of period	$	36,607		$	46,494		$	44,233		$	65,229		$	62,413
Portfolio loans:
Noncovered end of period balance	$	1,251,416		$	1,321,346		$	1,687,178		$	2,331,293		$	2,539,294
Noncovered average balance		1,284,182			1,501,164			2,131,063			2,466,552			2,614,045
Ratio of allowance for loan losses to noncovered
portfolio loans at end of period		2.93	%		3.52	%		2.62	%		2.80	%		2.46	%
Ratio of net charge-offs to noncovered average
portfolio loans during the period		0.22	%		0.07	%		7.16	%		1.33	%		0.63	%

Short-term Borrowings

Our primary source of short-term borrowings is securities sold under agreements to repurchase.  During 2013, 2012, and 2011, no category of short-term borrowings had an average balance that exceeded 30% of ending shareholders’ equity.

42

Off-Balance Sheet Arrangements and Contractual Obligations

In the normal course of business, we make use of a number of different financial instruments to help meet the financial needs of our customers.  In accordance with GAAP, the full notional amounts of these transactions are not recorded in the accompanying consolidated financial statements and are referred to as off-balance sheet instruments.  These transactions and activities include commitments to extend lines of commercial and real estate mortgage credit and standby and commercial letters of credit and are discussed further in “Note 17 Off-Balance-Sheet Arrangements, Commitments, Guarantees and Contractual Obligations” in the Notes to the Consolidated Financial Statements.

We have various contractual obligations that require future cash payment.  The following table presents, as of December 31, 2013, significant fixed and determinable contractual obligations to third parties by payment date.

	Payments due by period
	Less than		1-3		3-5		Over
(Dollars in thousands)	1 Year		Years		Years		5 Years		Total
Deposits without stated maturity: (1)
Noninterest bearing	$	444,796	$	-	$	-	$	-	$	444,796
Interest bearing		601,864		-		-		-		601,864
Time deposits (2)		381,510		129,722		30,831		-		542,063
Other borrowings (2)		56,487		1,711		25,718		-		83,916
Subordinated debentures (2)		1,488		2,976		2,976		69,656		77,096
Operating leases		2,407		3,248		214		-		5,869
Total	$	1,488,552	$	137,657	$	59,739	$	69,656	$	1,755,604

(1)  Excludes Interest.

(2)  Includes interest.  Interest on variable rate obligations is shown at rates in effect at December 31, 2013.  The contractual amounts to be paid on variable rate obligations are affected by changes in market interest rates.  Future changes in market interest rates could materially affect the contractual amounts to be paid.

At December 31, 2013,  the notional or principal amount of such obligations are reflected on the Consolidated Statements of Financial Condition, with the exception of operating leases.

For additional information regarding contractual obligations, please see “Quantitative and Qualitative Disclosures about Market Risk” on page 46 and in the Notes to the Consolidated Financial Statements in this report, “Note 4Premises and Equipment”, “Note 7 Deposits”, “Note 8 Borrowed Funds” “Note 9 Trust Preferred Securities and Subordinated Debentures”, and “Note 17 Off-Balance-Sheet Arrangements, Commitments, Guarantees and Contingencies”.

Capital Resources

At December 31, 2013, total shareholders’ equity was $259.2 million, compared to $246.1 million at December 31, 2012, an increase of $13.1 million.  The increase was primarily due to the $17.4 million of income, offset by other comprehensive loss of $4.7 million, for the year.  Net unrealized losses on available for sale investment securities and derivative instruments (net of tax) decreased to ($3.0) million at December 31, 2013, from net unrealized gains of $1.7 million at December 31, 2012. 

At December 31, 2012, total shareholders’ equity was $246.1 million, compared to $301.6 million at December 31, 2011 a decrease of $55.5 million.  The decrease was primarily due to the $70 million repurchase of our Series B Preferred Securities, offset in part by income, net of preferred dividends, for the year.  Net unrealized gains on available for sale investment securities and derivative instruments (net of tax) decreased to $1.7 million at December 31, 2012, from$2.1 million at December 31, 2011.  

Bank holding companies are required to maintain capital ratios in accordance with guidelines adopted by the Federal Reserve Board.  The guidelines are commonly known as Risk-Based Capital Guidelines.  On December 31, 2013, we exceeded all applicable capital requirements, having a total risk-based capital ratio of 21.59%, a Tier 1 risk-based capital ratio of 20.28%, and a Tier 1 leverage ratio of 14.86%.  Banking subsidiaries are also required to maintain capital ratios in accordance with guidelines adopted by their primary regulators.  The general regulatory minimums to be well-capitalized are a total capital to risk weighted assets ratio of 10.00%, a Tier I risk-based capital ratio of 6.00%, and a Tier 1 leverage ratio of 5.00%.  As of December 31, 2013, we and Bank SNB each met the criteria for classification as a “well-

43

capitalized” institution under the prompt corrective action rules promulgated under the Federal Deposit Insurance Act.  Designation as a well-capitalized institution under these regulations does not constitute a recommendation or endorsement of us or Bank SNB by Federal bank regulators.  See “Certain Regulatory Matters” below.

Liquidity

Liquidity is measured by a financial institution’s ability to raise funds through deposits, borrowed funds, capital, or the sale of highly marketable assets, such as available for sale investments, in order to meet current and future cash flow needs as they become due.  Additional sources of liquidity, including cash flow from the repayment of loans and maturities of investment securities, are also considered in determining whether liquidity is satisfactory.  Other sources of liquidity can be provided by FHLB/FRB, and correspondent lines of credit.  Liquidity is also achieved through growth of deposits and liquid assets and accessibility to the capital and money markets.  These funds are used to meet deposit withdrawals, maintain reserve requirements, fund loans, purchase securities, and operate the organization.

The following table indicates the amount of our certificates of deposit of $100,000 or more by time remaining until maturity as of December 31, 2013:  

(Dollars in thousands)	Amount
Three months or less (1)	$	12,368
Over three through six months (1)		7,908
Over six through 12 months (1)		60,128
Over 12 months		170,781
Total	$	251,185

(1) The amount of certificates of deposits of $100,000 and more that matures within 12 months is $80.4 million.

The following table illustrates, during the years presented, the mix of our funding sources and the assets in which those funds are invested as a percentage of Southwest’s average total assets for the period indicated.  Average assets totaled $2.0 billion in 2013, compared to $2.2 billion in 2012 and $2.7 billion in 2011.

	Percentage of Total Average Assets
	2013		2012
Sources of Funds:
Deposits:
Noninterest-bearing demand	20.71	%	17.65	%
Interest-bearing demand and money market accounts	26.75		22.12
Time and savings deposits	32.39		39.16
Other borrowings	3.65		2.76
Subordinated debentures	3.51		3.65
Other liabilities	0.54		2.02
Equity capital	12.45		12.64
Total	100.00	%	100.00	%
Uses of Funds:
Loans	64.80	%	69.85	%
Investment securities	18.60		15.60
Other interest-earning assets	13.45		8.36
Noninterest-earning assets	3.15		6.19
Total	100.00	%	100.00	%

Sources and uses of cash are presented in the Consolidated Statements of Cash Flows on page 53 of this report.  Total cash and cash equivalents decreased by $8.2 million to $279.8 million in 2013 from $288.1 million at year-end 2012.  This decrease was the net result of cash provided by investing activities of $99.4 million, primarily from a decrease in principal repayments, net of loan originated, and cash provided by operating activities of $45.2 million, offset by cash used in financing activities of $152.8 million, primarily from decreased deposits and other borrowings.

44

Total cash and cash equivalents increased by $58.2 million to  $288.1 million in 2012 from $229.9 million at year-end 2011.  This increase was the net result of cash provided by investing activities of $285.3 million, primarily from principal repayments, net of loan originated, and proceeds from sales of loans, and cash provided by operating activities of $45.1 million, offset by cash used in financing activities of $272.3 million, primarily from decreased deposits and other borrowings.

Effects of Inflation

The consolidated financial statements and related consolidated financial data in this report have been prepared in accordance with accounting principles generally accepted in the United States and practices within the banking industry that require the measurement of financial position and operating results in terms of historical dollars without considering fluctuations in the relative purchasing power of money over time due to inflation.  Unlike most industrial companies, virtually all the assets and liabilities of a financial institution are monetary in nature.  As a result, interest rates have a more significant impact on a financial institution’s performance than the effects of general levels of inflation.

Certain Regulatory Matters

Like all national banks, Bank SNB remains subject to legal and regulatory limitations on the amount of dividends that it may pay without prior approval of the OCC.  Under these regulations, the total amount of dividends that may be paid in any calendar year by Bank SNB to us without OCC approval is limited to the current year’s net profits, combined with the retained profits of the preceding two years.  Losses experienced in 2011, primarily attributable to the fourth quarter sale of approximately $300.3 million in loans and other real estate, affect Bank SNB’s ability to pay dividends without prior OCC approval.  In July 2012, with the consent of the Federal Reserve we terminated the supervisory resolution that was adopted at the request of the Federal Reserve in July 2009.  This resolution included providing prior notice to the Federal Reserve of planned dividends to security holders and planned receipts of dividends from our banking subsidiary. 

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and follow general practices within the banking industry.  Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes.  These estimates, assumptions, and judgments are based on information that is subject to change.  Certain policies inherently rely more on the use of estimates, assumptions, and judgments and as such have a greater possibility of producing results that could be materially different than originally reported.  Management is required to use estimates, assumptions, and judgments when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or valuation allowance to be established, or when an asset or liability must be recorded contingent upon a future event.  Carrying assets and liabilities at fair value inherently results in more financial statement volatility.  The fair values and the information used to record valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by other third-party sources, when readily available.

The most significant accounting policies we follow are presented in “Note 1 Summary of Significant Accounting and Reporting Policies” in the Notes to the Consolidated Financial Statements.  These policies, along with the disclosures presented in the other financial statement notes and in this discussion, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined.  Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, estimates, assumptions, and judgments underlying those amounts, management has identified the allowance for loan losses, goodwill and other intangible assets, and income tax accounting policies to be the accounting areas that require the most subjective or complex judgments, and as such could be most subject to revisions as new information becomes available.

Allowance for Loan Losses – The allowance for loan losses is an estimate of the losses that may be sustained in the loan portfolio.  The allowance is based on two basic principles of accounting: (1) ASC 450, Contingencies, which requires that losses be accrued when they are probable of occurring and estimable, and (2) ASC 310.10.35, Receivables:  Subsequent Measurement, which requires that losses be accrued when it is probable that we will not collect all principal and interest payments according to the loan’s contractual terms.

45

The allowance determination process requires significant judgment.  Estimates of probable losses inherent in the loan portfolio can vary significantly from the amounts that actually occur.  While management uses available information to recognize probable losses, future additions to the allowance may be necessary based on changes in the loans comprising the portfolio and changes in the financial condition of borrowers, such as may result from changes in economic conditions.  In addition, various regulatory agencies, as an integral part of their examination process, and independent consultants engaged by us, periodically review the loan portfolio and the allowance.  These reviews may result in additional provisions based on the agencies’ judgments based upon information available at the time of each examination.  Because the loan portfolio contains a significant number of commercial mortgage and commercial real estate construction loans with relatively large balances, the unexpected deterioration of one or a few of such loans may cause a significant increase in the provision for loan losses and nonperforming assets, and may lead to material increases in charge-offs and the provision for loan losses in future periods.

Our methodology for assessing the appropriateness of the allowance is in accordance with regulatory guidelines and GAAP, as described in “Provision for Loan Losses” on page 31 and in “Note 1 Summary of Significant Accounting and Reporting Policies” in the Notes to the Consolidated Financial Statements. 

Goodwill and Other Intangible Assets– Goodwill and other intangible assets that have indefinite useful lives are subject to an impairment test at least annually and more frequently if circumstances indicate impairment.  Goodwill is tested for impairment using a two-step process that begins with an estimation of the fair value of each of our reporting units compared with its carrying value. We define reporting units as a level below each of its operating segments for which there is discrete financial information that is regularly reviewed.  As of December 31, 2013, we have eight reporting units.  If the carrying value exceeds the fair value of a reporting unit, a second test is completed comparing the implied fair value of the reporting unit’s goodwill to its carrying value to measure the amount of impairment. 

Other identifiable intangible assets are amortized on an accelerated basis over the years expected to be benefited, which we believe are up to ten years.  These amortizable intangible assets are reviewed for impairment if circumstances indicate their carrying value may not be recoverable based on a comparison to fair value.  See “Note 5 Goodwill and Other Intangible Assets” in the Notes to the Consolidated Financial Statements for further information.

Income Taxes – Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid.  We are subject to the income tax laws of the United States and various state jurisdictions.  These tax laws are complex and require significant judgment and interpretation by the taxpayer.

We use the asset and liability method of accounting for income taxes.  Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  The net deferred tax asset is reflected as a component of other assets on the consolidated balance sheet.  A valuation allowance is recognized for a deferred tax asset if, based on the weight of available evidence, it is more likely than not that some portion or the entire deferred tax asset will not be realized.  The determination of the realizability of deferred taxes is highly subjective and dependent upon judgment concerning management’s evaluation of both positive and negative evidence.

Income tax expense or benefit is estimated based on amounts expected to be owed to the various tax jurisdictions in which we conduct business.  On a quarterly basis, management assesses the reasonableness of our effective tax rate based upon the current estimate of the amount and components of net income, tax credits and the applicable statutory tax rates expected for the full year.  The tax expense or benefit is allocated among continuing operations and other comprehensive income (loss), as applicable.  See “Note 11 Taxes on Income” in the Notes to the Consolidated Financial Statements for further information.

Item 7a.  Quantitative and Qualitative Disclosures about Market Risk

Our income is largely dependent on our net interest income.  We seek to maximize our net interest margin within an acceptable level of interest rate risk.  Interest rate risk can be defined as the amount of forecasted net interest income that may be gained or lost due to favorable or unfavorable movements in interest rates.  Interest rate risk, or sensitivity, arises when the maturity or repricing characteristics of assets differ significantly from the maturity or repricing characteristics of liabilities.  Net interest income is also affected by changes in the portion of interest-earning assets that are funded by

46

interest-bearing liabilities rather than by other sources of funds such as noninterest-bearing deposits and shareholders’ equity. 

We attempt to manage interest rate risk while enhancing net interest margin by adjusting our asset/liability position.  At times, depending on the level of general interest rates, the relationship between long-term and other interest rates, market conditions, and competitive factors, we may increase our interest rate risk position in order to increase our net interest margin.  We monitor interest rate risk and adjust the composition of our rate-sensitive assets and liabilities in order to limit our exposure to changes in interest rates on net interest income over time.  Our asset/liability committee reviews our interest rate risk position and profitability and recommends adjustments.  Our asset/liability committee also reviews the securities portfolio, formulates investment strategies, and oversees the timing and implementation of transactions.  Notwithstanding our interest rate risk management activities, the actual magnitude, direction, and relationship of future interest rates are uncertain and can have adverse effects on net income and liquidity.

Interest rate sensitivity analysis measures the cumulative differences between the amounts of assets and liabilities maturing or repricing within various time periods.

The following table shows our interest rate sensitivity gaps for selected maturity or repricing periods at December 31, 2013:

	0 to 3			4 to 12			Over 1 to			Over
(Dollars in thousands)	Months			Months			5 Years			5 Years			Total
Rate-sensitive assets:
Total loans	$	324,338		$	198,913		$	571,798		$	175,854		$	1,270,903
Investment securities		90,628			14,503			44,663			244,405			394,199
Other investments at costs		8,140			-			-			-			8,140
Due from banks		251,777			-			-			-			251,777
Total		674,883			213,416			616,461			420,259			1,925,019
Rate-sensitive liabilities:
Money market deposit accounts		439,981			-			-			-			439,981
Time deposits		118,027			261,129			158,270			-			537,426
Savings accounts		41,727			-			-			-			41,727
Interest-bearing demand		120,156			-			-			-			120,156
Other borrowings		55,632			-			25,000			-			80,632
Subordinated debentures (1)		46,393			-			-			-			46,393
Total		821,916			261,129			183,270			-			1,266,315
Interest sensitivity gap	$	(147,033)		$	(47,713)		$	433,191		$	420,259		$	658,704
Cumulative interest sensitivity gap	$	(147,033)		$	(194,746)		$	238,445		$	658,704		$	658,704
Percentage of rate-sensitive assets
to rate-sensitive liabilities		82.11	%		81.73	%		336.37	%		0.00	%		152.02	%
Percentage of cumulative gap to
total assets		(7.42)	%		(9.83)	%		12.03	%		33.24	%		33.24	%

(1) TheSBI Capital Trust II preferred securities have an associated interest rate swap contractin the amount of $25 million witha  fixedinterest rate of 6.15%. The swap is a hedging instrument that in essence establishes a fixed interest rate until the contract expires on April 7, 2018.   Please see “Note 10 Derivative Instruments” in the Notes to the Consolidated Financial Statements.

The percentage of rate-sensitive assets to rate-sensitive liabilities presents a static position as of a single day, is not necessarily indicative of our position at any other point in time, and does not take into account the sensitivity of yields and costs of specific assets and liabilities to changes in market rates.  The foregoing analysis assumes that our mortgage-backed securities mature during the period in which they are estimated to be prepaid.  No other prepayment or repricing assumptions have been applied to our interest-earning assets for this analysis.

A principal objective of our asset/liability management effort is to balance the various factors that generate interest rate risk, thereby maintaining our interest rate sensitivity within acceptable risk levels.  To measure our interest rate sensitivity

47

position, we utilize a simulation model that facilitates the forecasting of net interest income over the next twelve month period under a variety of interest rate and growth scenarios. 

The earnings simulation model uses numerous assumptions regarding the effect of changes in interest rates on the timing and extent of repricing characteristics, future cash flows, and customer behavior.  These assumptions are inherently uncertain and, as a result, the model cannot precisely estimate net income.  Actual results differ from simulated results due to the timing, magnitude, and frequency of interest rate changes and changes in market conditions, cash flows, and management strategies, among other factors.

The balance sheet is subject to quarterly testing for six alternative interest rate shock possibilities to indicate the inherent interest rate risk.  Average interest rates are shocked by +/- 100, 200, and 300 basis points (“bp”), although we may elect not to use particular scenarios that we determine are impractical in a current rate environment.  It is management’s goal to structure the balance sheet so that net interest earnings at risk over a twelve-month period and the economic value of equity at risk do not exceed policy guidelines at various interest rate shock levels. 

Measures of net interest income at risk produced by simulation analysis are indicators of an institution’s short-term performance in alternative rate environments.  These measures are typically based upon a relatively brief period, usually one year.  They do not necessarily indicate the long-term prospects or economic value of the institution.

Estimated Change in Net Interest Income

Changes in Interest Rates:	+  300 bp	+200 bp	+100 bp
December 31, 2013	6.25%	2.99%	(0.03)%
December 31, 2012	0.55%	(2.10)%	(3.64)%

The current overnight rate as established by the Federal Open Market Committee is in the 0% to 0.25% range.  We believe that all down rate scenarios are impractical since they would result in an overnight rate of less than 0%. As a result, the down 100 bp, down 200 bp and down 300 bp scenarios have been excluded.  Net interest income at risk as of December 31, 2013improved in each of the three rising interest rate scenarios when compared to the December 31, 2012 risk position. Our greatest exposure to changes in interest rate is in the +300 bp scenario with an increase in net interest income of 6.25% on December 31, 2013, a 5.70%  increase from the December 31, 2012 level of 0.55%.Bank SNB is in compliance with all policy limits established for net interest income at risk.

The measures of equity value at risk indicate our ongoing economic value by considering the effects of changes in interest rates on all of our cash flows and discounting the cash flows to estimate the present value of assets and liabilities. The difference between these discounted values of the assets and liabilities is the economic value of equity, which, in theory, approximates the fair value of our net assets.

Estimated Change in Economic Value of Equity (EVE)

Changes in Interest Rates:	+300 bp	+200 bp	+100 bp
December 31, 2013	(6.69)%	(4.63)%	(2.91)%
December 31, 2012	(8.12)%	(6.00)%	(3.64)%

As of December 31, 2013 the economic value of equity measure improved in each of the three rising interest rate scenarios when compared to the December 31, 2012 percentages. Our largest economic value of equity exposure is the +300 bp scenario. The +300 bp scenario was (6.69)% on December 31, 2013, an 1.43%  increase over the December 31, 2012 value of (8.12)%. Bank SNB is in compliance with all policy limits established for the economic value of equity.

48

Item 8.  Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements

The Board of Directors and Shareholders of Southwest Bancorp, Inc.

We have audited the accompanying consolidated statements of financial condition of Southwest Bancorp, Inc. as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Southwest Bancorp, Inc. at December 31, 2013 and 2012, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Southwest Bancorp, Inc.’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated March 7, 2014 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Tulsa, Oklahoma

March 7, 2014

49

SOUTHWEST BANCORP, INC.

Consolidated Statementsof Financial Condition

	At December 31,
(Dollars in thousands)	2013		2012
Assets:
Cash and due from banks	$	28,062	$	45,045
Interest-bearing deposits		251,777		243,034
Cash and cash equivalents		279,839		288,079
Securities held to maturity (fair values of $12,115 and $13,659, respectively)		11,720		12,797
Securities available for sale (amortized cost of $385,423 and $358,317 respectively)		382,479		364,315
Loans held for sale		3,060		31,682
Noncovered loans receivable		1,251,416		1,321,346
Less:  Allowance for loan losses		(36,607)		(46,494)
Net noncovered loans receivable		1,214,809		1,274,852
Covered loans receivable (includes loss share: $1,812 and $6,714, respectively)		16,427		25,707
Less:  Allowance for loan losses		(56)		(224)
Net covered loans receivable		16,371		25,483
Net loans receivable		1,231,180		1,300,335
Accrued interest receivable		5,335		6,365
Income tax receivable		-		24,525
Premises and equipment, net		20,833		21,691
Noncovered other real estate		560		11,315
Covered other real estate		2,094		3,643
Goodwill		1,214		1,214
Other intangible assets, net		4,980		4,864
Other assets		38,129		51,430
Total assets	$	1,981,423	$	2,122,255
Liabilities:
Deposits:
Noninterest-bearing demand	$	444,796	$	424,008
Interest-bearing demand		120,156		112,012
Money market accounts		439,981		423,417
Savings accounts		41,727		37,693
Time deposits of $100,000 or more		251,185		351,273
Other time deposits		286,241		361,175
Total deposits		1,584,086		1,709,578
Accrued interest payable		832		1,116
Income tax payable		78		-
Other liabilities		10,215		13,180
Other borrowings		80,632		70,362
Subordinated debentures		46,393		81,963
Total liabilities		1,722,236		1,876,199
Shareholders' equity:
Common stock - $1 par value; 40,000,000 shares authorized;
19,732,926, 19,529,705, shares issued and outstanding, respectively		19,733		19,530
Paid in capital		99,937		99,705
Retained earnings		142,528		125,093
Accumulated other comprehensive income (loss)		(3,011)		1,728
Total shareholders' equity		259,187		246,056
Total liabilities and shareholders' equity	$	1,981,423	$	2,122,255
The accompanying notes are an integral part of this statement.

50

SOUTHWEST BANCORP, INC.

Consolidated Statements of Operations

	For the year ended December 31,
(Dollars in thousands, except earnings per share data)	2013		2012		2011
Interest income:
Interest and fees on loans	$	66,162	$	84,602	$	113,223
Investment securities:
U.S. Government and agency obligations		1,745		1,714		1,500
Mortgage-backed securities		3,481		4,718		5,046
State and political subdivisions		1,203		1,060		411
Other securities		226		322		16
Other interest-earning assets		1,097		755		549
Total interest income		73,914		93,171		120,745
Interest expense:
Interest-bearing demand		148		219		382
Money market accounts		790		1,077		2,154
Savings accounts		44		53		49
Time deposits of $100,000 or more		2,338		4,302		7,617
Other time deposits		2,239		4,052		6,591
Other borrowings		892		895		1,799
Subordinated debentures		4,813		6,010		5,821
Total interest expense		11,264		16,608		24,413
Net interest income		62,650		76,563		96,332
Provision for loan losses		(7,209)		3,107		132,101
Net interest income (loss)  after provision for loan losses		69,859		73,456		(35,769)
Noninterest income:
Service charges and fees		10,491		11,559		12,075
Other noninterest income		503		407		285
Gain on sales of loans, net		2,649		3,133		1,658
Gain on sale/call of investment securities, net		-		837		-
Total noninterest income		13,643		15,936		14,018
Noninterest expense:
Salaries and employee benefits		31,877		29,919		29,880
Occupancy		10,779		10,581		10,815
FDIC and other insurance		1,764		2,531		3,862
Other real estate, net		(1,098)		6,565		30,852
General and administrative		11,989		13,726		14,792
Total noninterest expense		55,311		63,322		90,201
Income (loss) before taxes		28,191		26,070		(111,952)
Taxes on income		10,756		9,883		(43,657)
Net income (loss)	$	17,435	$	16,187	$	(68,295)
Net income (loss) available to common shareholders	$	17,435	$	12,446	$	(72,548)
Basic earnings per common share	$	0.89	$	0.64	$	(3.73)
Diluted earnings per common share		0.89		0.64		(3.73)
Common dividends declared per share		-		-		-
The accompanying notes are an integral part of this statement.

51

SOUTHWEST BANCORP, INC.

Consolidated Statements of Comprehensive Income

	For the year ended December 31,
(Dollars in thousands)	2013		2012		2011
Net income (loss)	$	17,435	$	16,187	$	(68,295)
Other comprehensive income:
Unrealized gain (loss) on available for sale securities		(8,942)		(133)		4,659
Reclassification adjustment for net gains arising during the period		-		(100)		-
Change in fair value of derivative used for cash flow hedge		1,228		(361)		(2,834)
Other comprehensive income (loss), before tax		(7,714)		(594)		1,825
Tax (expense) benefit related to items of other comprehensive
income (loss)		2,975		211		(693)
Other comprehensive income (loss), net of tax		(4,739)		(383)		1,132
Comprehensive income (loss)	$	12,696	$	15,804	$	(67,163)
The accompanying notes are an integral part of this statement.

52

SOUTHWEST BANCORP, INC.

Consolidated Statements of Cash Flows

	For the year ended December 31,
(Dollars in thousands)	2013		2012		2011
Operating activities:
Net income (loss)	$	17,435	$	16,187	$	(68,295)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for loan losses		(7,209)		3,107		132,101
Adjustments to other real estate		2,222		5,089		-
Deferred tax expense (benefit)		10,220		8,939		(20,463)
Depreciation and amortization		2,450		2,460		2,581
Securities premium amortization, net of discount accretion		3,454		3,308		2,197
Amortization of intangibles		1,315		1,609		1,374
Stock based compensation expense		742		115		333
Net gain on sales/calls of investment securities		-		(837)		-
Net gain on sales of available for sale loans		(2,649)		(3,133)		(1,658)
Net (gain) loss on sales of premises/equipment		195		(2)		(20)
Net (gain) loss on sales of other real estate		(3,897)		(301)		23,357
Proceeds from sales of held for sale loans		121,020		150,621		83,123
Held for sale loans originated		(129,699)		(148,479)		(81,903)
Net changes in assets and liabilities:
Accrued interest receivable		1,030		811		1,414
Other assets		5,969		1,847		3,777
Income tax receivable / payable		24,618		4,074		(31,762)
Excess tax expense from share-based payment arrangements		(15)		67		218
Accrued interest payable		(284)		(2,573)		2,112
Other liabilities		(1,678)		2,225		(1,790)
Net cash provided by operating activities		45,239		45,134		46,696
Investing activities:
Proceeds from sales of available for sale securities		2,744		6,588		-
Proceeds from principal repayments, calls and maturities:
Held to maturity securities		5,000		2,375		2,470
Available for sale securities		108,498		88,109		68,709
Proceeds from sales of other investments		-		1,865		-
Redemptions (purchases) of other investments		391		179		(50)
Purchases of held to maturity securities		(5,250)		-		(5,894)
Purchases of available for sale securities		(140,473)		(202,273)		(75,650)
Principal repayments, net of loans originated		113,588		382,669		288,795
Proceeds from sales of loans, net		-		-		153,713
Purchases of premises and equipment		(1,855)		(1,619)		(1,686)
Proceeds from sales of premises and equipment		68		170		239
Proceeds from sales of other real estate		16,645		7,261		56,425
Net cash provided by investing activities		99,356		285,324		487,071
Financing activities:
Net decrease in deposits		(125,492)		(211,804)		(331,346)
Net increase (decrease) in other borrowings		10,270		13,883		(38,123)
Net proceeds from issuance of common stock		229		127		64
Repurchase of common stock warrant		(2,287)		-		-
Redemptions of preferred stock		-		(70,000)		-
Redemption of trust preferred securities		(35,570)		-		-
Excess tax expense from share-based payment arrangements		15		(67)		(218)
Preferred stock dividends paid		-		(4,407)		(1,751)
Net cash used in financing activities		(152,835)		(272,268)		(371,374)
Net increase (decrease) in cash and cash equivalents		(8,240)		58,190		162,393
Cash and cash equivalents:
Beginning of period		288,079		229,889		67,496
End of period	$	279,839	$	288,079	$	229,889
The accompanying notes are an integral part of this statement.

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SOUTHWEST BANCORP, INC.

Consolidated Statements of Shareholders’ Equity 

										Accumulated		Total
						Additional				Other		Share-
(Dollars in thousands,	Preferred		Common Stock			Paid-in		Retained		Comprehensive		holders'
except per share data)	Stock		Shares	Amount		Capital		Earnings		Income (Loss)		Equity
Balance, December 31, 2010	$	67,724	19,421,900	$	19,422	$	98,894	$	185,196	$	979	$	372,215
Dividends (paid and/or accrued):
Preferred		-	-		-		-		(3,523)		-		(3,523)
Warrant amortization		731	-		-		-		(731)		-		-
Common stock issued		-	16,100		16		214		-		-		230
Net common stock issued under employee
plans and related tax expense		-	6,213		6		(176)		-		-		(170)
Other comprehensive income,
net of tax		-	-		-		-		-		1,132		1,132
Net income (As Restated)		-	-		-		-		(68,295)		-		(68,295)
Balance, December 31, 2011	$	68,455	19,444,213	$	19,444	$	98,932	$	112,647	$	2,111	$	301,589
Dividends (paid and/or accrued):
Preferred		-	-		-		-		(2,196)		-		(2,196)
Redemption of preferred stock /
Warrant amortization		(68,455)	-		-		-		(1,545)		-		(70,000)
Common stock issued		-	80,500		81		799		-		-		880
Net common stock issued under employee
plans and related tax expense		-	4,992		5		(26)		-		-		(21)
Other comprehensive loss,
net of tax		-	-		-		-		-		(383)		(383)
Net loss		-	-		-		-		16,187		-		16,187
Balance, December 31, 2012	$	-	19,529,705	$	19,530	$	99,705	$	125,093	$	1,728	$	246,056
Warrant repurchase		-	-		-		(2,287)		-		-		(2,287)
Common stock issued		-	201,046		201		2,478		-		-		2,679
Net common stock issued under employee
plans and related tax expense		-	2,175		2		41		-		-		43
Other comprehensive loss,
net of tax		-	-		-		-		-		(4,739)		(4,739)
Net income		-	-		-		-		17,435		-		17,435
Balance, December 31, 2013	$	-	19,732,926	$	19,733	$	99,937	$	142,528	$	(3,011)	$	259,187

The accompanying notes are an integral part of this statement.

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SOUTHWEST BANCORP, INC.

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2013, 2012 and 2011

Note 1:Summary of Significant Accounting and Reporting Policies

Organization and Nature of Operations – Southwest Bancorp Inc. (“we”, “our”, “us”, or “Southwest”), incorporated in 1981, is a financial holding company headquartered in Stillwater, Oklahoma engaged primarily in commercial and consumer banking services in the states of Oklahoma, Texas, and Kansas.The accompanying consolidated financial statements include the accounts of Bank SNB, a national bank established in 1894, and SNB Capital Corporation, a lending and loan workout subsidiary established in 2009, and consolidated subsidiaries of Bank SNB, including SNB Real Estate Holdings, Inc. Bank SNB and SNB Capital Corporation are wholly owned, direct subsidiaries of ours.All significant intercompany balances and transactions have been eliminated in consolidation.

As of the close of business on November 15, 2013, we effected an affiliated merger of our wholly-owned subsidiary banks, Bank of Kansas and Stillwater National, whereby Bank of Kansas merged with and into Stillwater National.  Stillwater National was rebranded Bank SNB (“Bank SNB”) in connection with the merger.  The consolidated bank offers customers a greater banking experience across our three state region and now does business in all markets under the new name, Bank SNB. 

Basis of Presentation – The accounting and reporting policies conform to accounting principles generally accepted in the United States and to generally accepted practices within the banking industry.  The Consolidated Financial Statements include the accounts of Southwest and all other entities in which we have a controlling financial interest.  All significant intercompany accounts and transactions have been eliminated in consolidation.

We have evaluated subsequent events for potential recognition and disclosure through the issue date of the Consolidated Financial Statements included in this Annual Report on Form 10-K.  See further discussion of subsequent events at “Note 20 – Subsequent Events”.

Management Estimates – In preparing our financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates shown on the consolidated statements of financial condition and revenues and expenses during the periods reported.  Actual results could differ significantly from those estimates.  Changes in economic conditions could affect the determination of material estimates such as the allowance for loan losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, income taxes, and the fair value of financial instruments.

Cash and Cash Equivalents – For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from depository institutions, and federal funds sold.  Interest-bearing balances held at depository institutions were $251.8  million at December 31, 2013 and $243.0 million at December 31, 2012.  Federal funds sold are sold for one-to-four day periods.

Cash paid for interest totaled $11.5 million in 2013, $19.2 million in 2012, and $26.5 million in 2011.  Cash paid for income taxes totaled $0.4 million in 2013, $1.0 million in 2012, and $5.9 million in 2011.  Noncash transactions included transfer of loans to other real estate totaling $0.9 million in 2013, $2.6 million in 2012, and $62.3 million in 2011.

Bank SNB is required by the Federal Reserve Bank (“FRB”) to maintain average reserve balances. Cash and cash equivalents in the Consolidated Statements of Financial Condition include restricted amounts of $1.8 million and $3.0 million at December 31, 2013 and December 31, 2012, respectively.

Investment Securities – Investments in debt and equity securities are identified as held to maturity or available for sale based on management considerations of asset/liability strategy, changes in interest rates and prepayment risk, the need to increase liquidity, and other factors, including management’s intent and ability to hold securities to maturity.  We have the ability and intent to hold to maturity our investment securities classified as held to maturity.  We had no investments held for trading purposes for any period presented.  Under certain circumstances (including the deterioration of the issuer’s creditworthiness, a change in tax law, or statutory or regulatory requirements), we may change the investment security classification.  The classifications we utilize determine the related accounting treatment for each category of investments. 

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Available for sale securities are accounted for at fair value with unrealized gains or losses, net of taxes, excluded from operations and reported as accumulated other comprehensive income or loss.  Held to maturity securities are accounted for at amortized cost.Securities with limited marketability, such as Federal Reserve Bank stock, Federal Home Loan Bank stock, and certain other investments, are carried at cost and included in other assets.

All investment securities are adjusted for amortization of premiums and accretion of discounts.  Amortization of premiums and accretion of discounts are recorded to operations over the contractual maturity or estimated life of the individual investment on the level yield method.  Gain or loss on sale of investments is based upon the specific identification method.  Income earned on our investments in state and political subdivisions generally is not subject to ordinary Federal income tax.

In accordance with authoritative accounting guidance under ASC 320, Debt and Equity Securities, declines in fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses.  The amount of the impairment related to other factors is recognized in other comprehensive income.  Under this guidance, we evaluate investment securities for other-than-temporary impairment on at least a quarterly basis, or more frequently when economic or market conditions warrant such an evaluation.

Federal Reserve Bank and Federal Home Loan Bank Stock – Bank SNB is a member of its regional FRB and Federal Home Loan Bank (“FHLB”) system.  FHLB members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional accounts.  Both FRB and FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.

Loans – Interest on loans is accrued and credited to operations based upon the principal amount outstanding.  Loan origination fees and certain costs of originated loans are amortized as an adjustment to the yield over the term of the loan.  Net unamortized deferred loan fees were $0.1 million at December 31, 2013 and 2012.  Loans are reported at the principal balance outstanding net of the unamortized deferred loan fees.

In general, our policy for nonaccrual loans requires that accrued interest income on nonaccrual loans is written off after the loan is 90 days past due, and that subsequent interest income is recorded when cash receipts are received from the borrower.  We identify past due loans based on contractual terms on a loan by loan basis. 

A loan is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.  The allowance for loan losses related to loans that are evaluated for impairment is based either on the discounted cash flows using the loan’s initial effective interest rate or on the fair value of the collateral for certain collateral dependent loans.  Smaller balance, homogeneous loans, including mortgage, student, and consumer, are collectively evaluated for impairment.  This evaluation is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. 

We originate real estate mortgage loans for either portfolio investment or sale in the secondary market.  During the period of origination, real estate mortgage loans are designated as held either for investment purposes or sale.  Mortgage loans held for sale are generally sold within a one-month period from loan closing at amounts determined by the investor commitment based upon the pricing of the loan.  We provide United States Department of Agriculture ("USDA”) government guaranteed commercial real estate lending services to rural healthcare providers.  The loans are available for sale in the secondary market. 

Loans Acquired through Transfer – The accounting guidance of ASC 310.30, Loan and Debt Securities Acquired with Deteriorated Credit Quality, applies to loans acquired through the completion of a transfer, including loans acquired in a business combination that have evidence of deterioration of credit quality since origination and for which it is probable, at acquisition, that we will be unable to collect all contractually required payment receivables.  In accordance with this guidance, these loans are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance.  The difference between the undiscounted cash flows expected at acquisition and the investment in the loan, or the “accretable yield”, is recognized as interest income over the life of the loan on a method that approximates the level-yield method.  Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “nonaccretable difference”, are not recognized as a yield

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adjustment, a loss accrual, or a valuation allowance.  Increases in expected cash flows subsequent to the initial investment are recognized prospectively through adjustment of the yield on the loan over its remaining life.  Decreases in expected cash flows are recognized as impairments.  Valuation allowances on these impaired loans reflect only losses incurred after the acquisition.

Loss Share Receivable – Bank SNB and the FDIC entered into loss sharing agreements that provide Bank SNB with significant protection against credit losses from loans and related assets acquired in the FNBA FDIC-assisted transaction.  Under these agreements, the FDIC will reimburse Bank SNB 80% of net losses up to $35.0 million on covered assets, primarily acquired loans and other real estate, and 95% of any net losses above $35.0 million.  Bank SNB services the covered assets.  The loss sharing agreements have terms of ten years for one-to-four family residential loans and eight years for all other loan types.  The expected payments from the FDIC under the loss sharing agreements are recorded as part of the covered loans in our Consolidated Statements of Financial Condition.  Assets subject to these agreements are referred to as “covered”.

The difference between the undiscounted expected recoveries at acquisition and the fair value of the loss share receivable is the “accretable portion” and is recognized as interest income over the estimated life of the acquired loan portfolio.  The initially recorded loss share receivable represented 85% of the aggregate loan discount related to the acquired loan portfolio.  Because of the relationship of the loss share receivable to the loan discount, when an adjustment is made to a loan discount to reflect changes in the expected cash flows of the loan, an adjustment to the corresponding loss share receivable attributable to that loan will also occur.

Allowance for Loan Losses – The allowance for loan losses is a reserve established through a provision for loan losses charged to operations.  Loan amounts which are determined to be uncollectible are charged against this allowance, and recoveries, if any, are added to the allowance.  The appropriate amount of the allowance is based on continuous review and evaluation of the loan portfolio and ongoing, quarterly assessments of the probable losses inherent in the loan portfolio.  The allowance for loan losses is determined in accordance with regulatory guidelines and generally accepted accounting principles and is comprised of two primary components, specific and general.  Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. 

The specific component relates to loans that are individually classified as impaired.  Loans deemed to be impaired are evaluated on an individual basis consistent with ASC 310.10.35, Receivables:  Subsequent Measurement.  The amount and level of the impairment allowance is ultimately determined by management’s estimate of the amount of expected future cash flows or, if the loan is collateral dependent, on the value of the collateral, which may vary from period to period depending on changes in the financial condition of the borrower or changes in the estimated value of the collateral.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and deemed as impaired, and classified as nonperforming, potential problem, or performing restructured as applicable.  Charge-offs against the allowance of impaired loans are made when and to the extent the loan is deemed uncollectible. 

The general component of the allowance is calculated based on ASC 450, Contingencies.  Loans not evaluated for specific allowance are segmented into loan pools by type of loan.  The commercial real estate and real estate construction pools are further segmented by the market in which the loan collateral is located.  Our primary markets are Oklahoma, Texas, and Kansas, and loans secured by real estate in those states are included in the “in-market” pool, with the remaining defaulting to the “out-of-market” pool.  Estimated allowances are based on historical loss trends with adjustments factored in based on qualitative risk factors both internal and external to us.  The historical loss trend is determined by loan pool and segmentation and is based on the actual loss history experienced by us over the most recent three years.  The qualitative risk factors include, but are not limited to, economic and business conditions, changes in lending staff, lending policies and procedures, quality of loan review, changes in the nature and volume of the portfolios, loss and recovery trends, asset quality trends, and legal and regulatory considerations.   

Independent appraisals on real estate collateral securing loans are obtained at origination.  New appraisals are obtained periodically and upon discovery of factors that may significantly affect the value of the collateral.  Appraisals usually are received within 30 days of request.  Results of appraisals on nonperforming and potential problem loans are reviewed promptly upon receipt and also are reviewed monthly and considered in the determination of the allowance for loan losses.  Weare not aware of any significant time lapses in the process that have resulted, or would result in, a significant

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delay in determination of a credit weakness, the identification of a loan as nonperforming, or the measurement of an impairment.

Management strives to carefully monitor credit quality and to identify loans that may become nonperforming.  At any time, however, there are loans included in the portfolio that will result in losses but that have not been identified as nonperforming or potential problem loans.  Because the loan portfolio contains a significant number of commercial and commercial real estate loans with relatively large balances, the unexpected deterioration of one or a few of such loans may cause a significant increase in nonperforming assets and may lead to a material increase in charge-offs and the provision for loan losses in future periods.

Liability for Credit Losses on Unfunded Loan Commitments – 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 for these items represents the exposure to loss, before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded. 

The reserve for unfunded loan commitments is a liability on ourConsolidated Statement of Financial Condition in other liabilities.  The reserve is computed using a methodology similar to that used to determine the allowance for loan losses, modified to take into account the probability of a drawdown on the commitment.  At December 31, 2013 and 2012 the balance was $2.8 million and $2.9 million, respectively.

Premises and Equipment – Land is carried at cost.  Premises and equipment are stated at cost less accumulated depreciation and amortization.  Depreciation and amortization are recorded on a straight-line basis over the estimated useful life of each asset.  Useful lives range from 10 years to 40 years for buildings and improvements, and 3 years to 10 years for furniture, fixtures, and equipment.  We review the carrying value of long-lived assets used in operations when changes in events or circumstances indicate that the assets might have become impaired.  This review initially includes a comparison of carrying value to the undiscounted cash flows estimated to be generated by those assets.  If this review indicates that an asset is impaired, we record a charge to operations to reduce the asset’s carrying value to fair value, which is based on estimated discounted cash flows.  Long-lived assets that are held for disposal are valued at the lower of the carrying amount or fair value less costs to sell.

Other Real Estate – Assets acquired through or instead of loan foreclosure are considered other real estate.  Other real estate is initially recorded at the lesser of the carrying value or fair value less the estimated costs to sell the asset.  Write-downs of carrying value required at the time of foreclosure are recorded as a charge to the allowance for loan losses.  Costs related to the development of such real estate are capitalized, and costs related to holding the property are expensed.  Foreclosed property is subject to periodic revaluation based upon estimates of fair value.  In determining the valuation of other real estate, management obtains independent appraisals for significant properties.  Valuation adjustments are provided, as necessary, by charges to operations.  Profits and losses from operations or sales of foreclosed property are recognized as incurred.  At December 31, 2013 and 2012, the balances of noncovered other real estate were $0.6 million and $11.3 million, respectively.

Other real estate covered under the loss sharing agreements with the FDIC is reported exclusive of expected reimbursement cash flows from the FDIC.  Fair value adjustments on covered other real estate result in a reduction of the covered other real estate carrying amount and a corresponding increase in the estimated FDIC reimbursement, with the estimated net loss charged against earnings.  At December 31, 2013 and December 31, 2012, the balances of covered other real estate were $2.1 million and $3.6 million, respectively.

Goodwill and Other Intangible Assets – Intangible assets consist of goodwill, core deposit intangibles, and loan servicing rights.  Goodwill and core deposit intangibles, which generally result from a business combination, are accounted for under the provisions of ASC 350, Intangibles - Goodwill and Other, and ASC 805, Business Combinations.  Loan servicing rights are accounted for under the provisions of ASC 860, Transfers and Servicing.

Goodwill represents the excess of the cost of businesses acquired over the fair value of the net assets acquired and is assigned to reporting units.  Goodwill is not amortized, but is tested for impairment at least annually or more frequently if conditions indicate impairment.  The evaluation of possible impairment involves significant judgment based upon short-term and long-term projections of future performance of each reporting unit. 

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Core deposit intangibles are amortized using an economic life method based on deposit attrition.  As a result, amortization will decline over time with most of the amortization occurring during the initial years.  The net book value of core deposit intangibles is evaluated for impairment when economic conditions indicate impairment may exist.

When real estate mortgage loans and other loans are sold with servicing retained, an intangible servicing right is initially capitalized based on estimated fair value at the point of origination with the income statement effect recorded in gains on sales of loans.  The servicing rights are amortized on an individual loan by loan basis over the period of estimated net servicing income.  Impairment of loan servicing rights is assessed based on the fair value of those rights.  We review the carrying value of loan servicing rights quarterly for impairment.  At least annually, we obtain estimates of fair value from outside sources to corroborate the results of the valuation model.  At December 31, 2013 and 2012, the fair values of loan servicing rights were $3.5 million and $2.3 million, respectively.

Fair Value Measurements – ASC 820, Fair Value Measurements and Disclosure, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.  In general, fair values of financial instruments are based upon quoted market prices, where available.  If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.  Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.  These adjustments may include amounts to reflect counterparty credit quality and our creditworthiness, among other things, as well as unobservable parameters.  Any such valuation adjustments are applied consistently over time.

Derivative Financial Instruments – Our hedging policy permits the use of various derivative financial instruments to manage interest rate risk or to hedge specified assets and liabilities.  All derivatives are recorded at fair value on our balance sheet. 

To qualify for hedge accounting, derivatives must be highly effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract.  We consider a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the opposite change in the fair value of the hedged item attributable to the hedged risk.  If derivative instruments are designated as hedges of fair values, and such hedges are highly effective, both the change in the fair value of the hedge and the hedged item are included in current earnings.  Fair value adjustments related to cash flow hedges are recorded in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings.  Ineffective portions of hedges are reflected in earnings as they occur. Actual cash receipts and/or payments and related accruals on derivatives related to hedges are recorded as adjustments to the interest income or interest expense associated with the hedged item.  During the life of the hedge, we will formally assess whether derivatives designated as hedging instruments continue to be highly effective in offsetting changes in the fair value or cash flows of hedged items.  If it is determined that a hedge has ceased to be highly effective, we will discontinue hedge accounting prospectively.  At such time, previous adjustments to the carrying value of the hedged item are reversed into current earnings and the derivative instrument is reclassified to a trading position recorded at fair value.

Loan Servicing Income – We earn fees for servicing real estate mortgages and other loans owned by others.  These fees are generally calculated on the outstanding principal balance of the loans serviced and are recorded as income when earned.

Taxes on Income – We file consolidated income tax returns with our subsidiaries.  Income tax expense is the total of the current year income tax due or refundable, adjusted for permanent differences between items reported in the financial statements and those reported for tax purposes and the change in deferred tax assets and liabilities.  Under the asset and liability method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  The net deferred tax asset is reflected as a component of other assets on the consolidated balance sheet.

A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized.  Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years.  We recognize net deferred tax assets to the extent that we believe these assets are more likely than not to be realized.  In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-

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planning strategies, and results of recent operations.  Management reviewed all evidence and concluded that a valuation allowance was not needed.

Earnings per Common Share –  ASC 260,  Earnings Per Share, provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method.  We have determined that our unvested restricted stock awards are participating securities.  Accordingly, earnings per common share is computed using the two-class method prescribed by ASC 260.  Using this method, basic earnings per common share is computed based upon net income available to common shareholders divided by the weighted average number of common shares outstanding during each period, which exclude the outstanding unvested restricted stock.  Diluted earnings per share is computed using the weighted average number of common shares determined for the basic earnings per common share computation plus the dilutive effect of stock options using the treasury stock method.  Stock options and warrants, where the exercise price was greater than the average market price of common shares, were not included in the computation of earnings per diluted share as they would have been antidilutive.  For the years ended December 31, 2013, 2012, and 2011, we had 0,  5,000, and 73,814 in antidilutive options to purchase common shares, respectively.  In 2013, an antidilutive warrant to purchase 703,753 shares of common stock was repurchased. This same warrant to purchase 703,753 shares of common stock was outstanding for the years ended December 31, 2012, and 2011.

A reconciliation of the weighted-average common shares used in the calculations of basic and diluted earnings per common share for the reported periods is provided at“Note 13 Earnings per Common Share”. 

Share-Based Compensation – The Southwest Bancorp, Inc. 2008 Stock Based Award Plan (the “2008 Stock Plan”), provides selected key employees with the opportunity to acquire common stock through stock options or restricted stock awards.  Compensation cost is recognized based on the fair value of these awards at the date of grant.  The exercise price of all options granted under the 2008 Stock Plan is the fair market value on the grant date, while the market price of our common stock at the date of grant is used for restricted stock awards.  Compensation cost is recognized over the required service period, generally defined as the vesting period.  Depending upon terms of the stock option agreements, stock options generally become exercisable on an annual basis and expire from five to ten years after the date of grant.

The 2008 Stock Plan authorized awards for up to 800,000 shares of our common stock over its ten-year term.

Comprehensive Income – Our comprehensive income (net income plus all other changes in shareholders’ equity from non-equity sources) consists of our net income, the after tax effect of changes in the net unrealized gains (losses) in our available for sale securities, and changes in the accumulated gain (loss) on the effective cash flow hedging instrument.

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Note 2:  Investment Securities

A summary of the amortized cost and fair values of investment securities follows:

	Amortized		Gross Unrealized				Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
At December 31, 2013
Held to Maturity:
Obligations of state and political subdivisions	$	11,720	$	395	$	-	$	12,115
Total	$	11,720	$	395	$	-	$	12,115
Available for Sale:
Federal agency securities	$	123,332	$	330	$	(2,889)	$	120,773
Obligations of state and political subdivisions		33,685		36		(1,085)		32,636
Residential mortgage-backed securities		183,512		1,747		(2,089)		183,170
Asset-backed securities		9,578		-		(96)		9,482
Equity securities		35,316		1,267		(165)		36,418
Total	$	385,423	$	3,380	$	(6,324)	$	382,479
At December 31, 2012
Held to Maturity:
Obligations of state and political subdivisions	$	12,797	$	862	$	-	$	13,659
Total	$	12,797	$	862	$	-	$	13,659
Available for Sale:
Federal agency securities	$	114,159	$	1,474	$	(19)	$	115,614
Obligations of state and political subdivisions		34,754		887		(83)		35,558
Residential mortgage-backed securities		200,310		3,668		(303)		203,675
Asset-backed securities		7,794		-		(123)		7,671
Equity securities		1,300		497		-		1,797
Total	$	358,317	$	6,526	$	(528)	$	364,315

Residential mortgage-backed securities consist of agency securities underwritten and guaranteed by Government National Mortgage Association (“Ginnie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), and Federal National Mortgage Association (“Fannie Mae”). 

Securities with limited marketability, such as Federal Reserve Bank stock, Federal Home Loan Bank stock, and certain other investments, are carried at cost and included in other assets on our Consolidated Statement of Financial Condition.  Total investments carried at cost were $8.1 million and $8.5 million at December 31, 2013 and 2012, respectively.  There are no identified events or changes in circumstances that may have a significant adverse effect on the investments carried at cost.  

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A comparison of the amortized cost and approximate fair value of our investment securities by maturity date at December 31, 2013 follows: 

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
One year or less	$	20,806	$	21,151	$	1,941	$	1,957
More than one year through five years		167,476		168,675		2,227		2,282
More than five years through ten years		151,933		147,705		4,151		4,265
More than ten years		45,208		44,948		3,401		3,611
Total	$	385,423	$	382,479	$	11,720	$	12,115

The foregoing analysis assumes that our residential mortgage-backed securities mature during the period in which they are estimated to prepay.  No other prepayment or repricing assumptions have been applied to our investment securities for this analysis. 

Gain or loss on sale or call of investments is based upon the specific identification method.  The 2013 sales of investment securities netted to zero gain. Sales of securities are as follows: 

(Dollars in thousands)		2013		2012		2011
Proceeds from sales	$	2,744	$	6,588	$	-
Gross realized gains		(0)		45		-
Gross realized losses		(0)		(10)		-

The following table shows securities with gross unrealized losses and their fair values by the length of time that the individual securities had been in a continuous unrealized loss position at December 31, 2013 and 2012.  Securities whose market values exceed cost are excluded from this table.     

				Continuous Unrealized
		Amortized cost of		Loss Existing for:				Fair value of
	Number of	securities with		Less Than		More Than		securities with
(Dollars in thousands)	Securities	unrealized losses		12 Months		12 Months		unrealized losses
At December 31, 2013
Available for Sale:
Federal agency securities	24	$	87,921	$	(2,885)	$	(4)	$	85,032
Obligations of state and political subdivisions	20		31,579		(887)		(198)		30,494
Residential mortgage-backed securities	53		104,667		(2,015)		(74)		102,578
Asset-backed securities	3		9,578		(96)		-		9,482
Other Securities	8		27,728		(165)		-		27,563
Total	108	$	261,473	$	(6,048)	$	(276)	$	255,149
At December 31, 2012
Available for Sale:
Federal agency securities	5	$	9,887	$	(19)	$	-	$	9,868
Obligations of state and political subdivisions	9		10,457		(83)		-		10,374
Residential mortgage-backed securities	23		46,787		(288)		(15)		46,484
Asset-backed securities	4		7,794		(123)		-		7,671
Total	41	$	74,925	$	(513)	$	(15)	$	74,397

We evaluate all securities on an individual basis for other-than-temporary impairment on at least a quarterly basis.  Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of us to retain our investment in the issuer for a period of time sufficient to allow for an anticipated recovery in fair value. 

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Management has the ability and intent to hold the securities classified as held to maturity in the table above until they mature, at which time we expect to receive full value for the securities.  Furthermore, as of December 31, 2013, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is not more likely than not that we will have to sell any such securities before a recovery of cost.  The declines in fair value were attributable to increases in market interest rates over the yields available at the time the underlying securities were purchased or increases in spreads over market interest rates.  Management does not believe any of the securities are impaired due to credit quality.  Accordingly, as of December 31, 2013, management believes the impairment of these investments is not deemed to be other-than-temporary. 

As required by law, available for sale investment securities are pledged to secure public and trust deposits, sweep agreements, and borrowings from the FHLB.  Securities with an amortized cost of $292.6 million and $284.2 million were pledged to meet such requirements at December 31, 2013 and 2012, respectively.  Any amount over-pledged can be released at any time.

Note 3:  Loans and Allowance for Loan Losses

We extend commercial and consumer credit primarily to customers in the states of Oklahoma, Texas, and Kansas.  Our commercial lending operations are concentrated in Oklahoma City, Dallas, Tulsa, and other metropolitan markets in Texas, Kansas, and Oklahoma.  As a result, the collectability of our loan portfolio can be affected by changes in the economic conditions in those states and markets.  Please see “Note 18 Operating Segments” for more detail regarding loans by market.  At December 31, 2013 and 2012, substantially all of our loans were collateralized with real estate, inventory, accounts receivable, and/or other assets or were guaranteed by agencies of the United States government. 

Our loan classifications were as follows: 

	At December 31, 2013				At December 31, 2012
(Dollars in thousands)	Noncovered		Covered		Noncovered		Covered
Real estate mortgage:
Commercial	$	740,997	$	11,282	$	870,975	$	18,298
One-to-four family residential		80,058		3,930		70,954		4,881
Real estate construction:
Commercial		143,650		198		130,753		382
One-to-four family residential		4,646		-		3,656		-
Commercial		254,087		971		240,498		2,037
Installment and consumer:
Guaranteed student loans		4,394		-		4,680		-
Other		26,644		46		31,512		109
		1,254,476		16,427		1,353,028		25,707
Less: Allowance for loan losses		(36,607)		(56)		(46,494)		(224)
Total loans, net	$	1,217,869	$	16,371	$	1,306,534	$	25,483

Concentrations of Credit.  At December 31, 2013, $417.4 million, or 33%, of our noncovered loans consisted of loans to individuals and businesses in the healthcare industry.  We do not have any other concentrations of loans to individuals or businesses involved in a single industry totaling 10% or more of total loans.

Loans Held for Sale.  We had loans which were held for sale of $3.1 million and $31.7 million at December 31, 2013 and 2012, respectively.  The decline is due to reclassifying the guaranteed student loans and the United States Department of Agriculture (“USDA”)government guaranteed commercial real estate loans back into the loan portfolio and not actively looking to sell these loans.  These loans were reclassified at their respective book value which approximated fair value.  The loans currently classified as held for sale, primarily residential mortgage loans, are carried at the lower of cost or market value.A substantial portion of the one-to-four family residential loans and loan servicing rights, if not retained, are primarily sold to one investor.  These mortgage loans are generally sold within a one-month period from loan closing at amounts determined by the investor commitment based upon the pricing of the loan. 

Loan Servicing.  We earn fees for servicing real estate mortgages and other loans owned by others.  The fees are generally calculated on the outstanding principal balance of the loans serviced and are recorded as noninterest income when earned. 

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The unpaid principal balance of real estate mortgage loans serviced for others totaled $390.7 million and $343.4 million at December 31, 2013 and 2012, respectively.  Loan servicing rights are capitalized based on estimated fair value at the point of origination.  The servicing rights are amortized over the period of estimated net servicing income.   

Acquired Loans.  Changes in the carrying amounts and accretable yields for ASC 310.30 loans were as follows for the year ended December 31, 2013 and 2012. 

	For the year ended December 31,
	2013				2012
			Carrying				Carrying
	Accretable		amount		Accretable		amount
(Dollars in thousands)	Yield		of loans		Yield		of loans
Balance at beginning of period	$	1,904	$	25,707	$	2,402	$	37,615
Payments received		-		(6,954)		-		(9,960)
Transfers to other real estate / repossessed assets		(36)		(2,110)		27		(2,365)
Net charge-offs		(1)		(468)		(5)		(151)
Net reclassifications to / from nonaccretable amount		235		-		192		-
Accretion		(505)		252		(712)		568
Balance at end of period	$	1,597	$	16,427	$	1,904	$	25,707

Nonperforming / Past Due Loans.  The following table shows the recorded investment in loans on nonaccrual status. 

	At December 31,
	2013				2012
(Dollars in thousands)	Noncovered		Covered		Noncovered		Covered
Real estate mortgage:
Commercial	$	6,564	$	1,202	$	18,337	$	3,087
One-to-four family residential		456		57		563		52
Real estate construction:
Commercial		2,721		-		3,355		130
Commercial		8,769		-		12,761		324
Other consumer		50		-		88		2
Total nonaccrual loans	$	18,560	$	1,259	$	35,104	$	3,595

If interest on nonaccrual loans had been accrued, the interest income as reported in the accompanying consolidated statement of operations would have increased by approximately $1.2 million, $1.2 million, and $5.7 million, for 2013, 2012, and 2011, respectively.

Net cumulative charge-offs against noncovered nonaccrual loans at December 31, 2013 and 2012 were $8.2 million and $8.3 million, respectively.

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The following table shows an age analysis of past due loans at the end of the respective reporting period.

			90 days and								Recorded loans
	30-89 days		greater		Total past				Total		> 90 days and
(Dollars in thousands)	past due		past due		due		Current		loans		accruing
At December 31, 2013
Noncovered:
Real estate mortgage:
Commercial	$	3,843	$	6,564	$	10,407	$	730,590	$	740,997	$	-
One-to-four family residential		284		456		740		79,318		80,058		-
Real estate construction:
Commercial		569		2,721		3,290		140,360		143,650		-
One-to-four family residential		-		-		-		4,646		4,646		-
Commercial		1,998		8,819		10,817		243,270		254,087		50
Other		128		53		181		30,857		31,038		3
Total - noncovered		6,822		18,613		25,435		1,229,041		1,254,476		53
Covered:
Real estate mortgage:
Commercial		8		1,202		1,210		10,072		11,282		-
One-to-four family residential		18		57		75		3,855		3,930		-
Real estate construction:
Commercial		-		-		-		198		198		-
Commercial		-		-		-		971		971		-
Other		-		-		-		46		46		-
Total - covered		26		1,259		1,285		15,142		16,427		-
Total	$	6,848	$	19,872	$	26,720	$	1,244,183	$	1,270,903	$	53
At December 31, 2012
Noncovered:
Real estate mortgage:
Commercial	$	23,348	$	18,337	$	41,685	$	829,290	$	870,975	$	-
One-to-four family residential		1,479		1,310		2,789		68,165		70,954		747
Real estate construction:
Commercial		3,501		3,355		6,856		123,897		130,753		-
One-to-four family residential		-		-		-		3,656		3,656		-
Commercial		7,358		15,232		22,590		217,908		240,498		2,471
Other		538		160		698		35,494		36,192		72
Total - noncovered		36,224		38,394		74,618		1,278,410		1,353,028		3,290
Covered:
Real estate mortgage:
Commercial real estate		1,090		3,087		4,177		14,121		18,298		-
One-to-four family residential		-		52		52		4,829		4,881		-
Real estate construction:
Commercial		-		130		130		252		382		-
Commercial		-		324		324		1,713		2,037		-
Other		-		2		2		107		109		-
Total - covered		1,090		3,595		4,685		21,022		25,707		-
Total	$	37,314	$	41,989	$	79,303	$	1,299,432	$	1,378,735	$	3,290

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Impaired Loans.  The following table presents loans individually evaluated for impairment by class of loans at the end of the respective reporting period.

	With No Specific Allowance				With A Specific Allowance
			Unpaid				Unpaid
	Recorded		Principal		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Investment		Balance		Allowance
At December 31, 2013
Noncovered:
Commercial real estate	$	32,284	$	32,784	$	15,446	$	15,729	$	4,012
One-to-four family residential		456		576		-		-		-
Real estate construction		84		106		2,636		2,762		18
Commercial		1,120		1,254		9,177		14,608		3,863
Other		4		6		46		72		46
Total noncovered	$	33,948	$	34,726	$	27,305	$	33,171	$	7,939
Covered:
Commercial real estate	$	5,793	$	6,760	$	457	$	457	$	3
One-to-four family residential		54		54		42		94		4
Total covered	$	5,847	$	6,814	$	499	$	551	$	7
At December 31, 2012
Noncovered:
Commercial real estate	$	29,425	$	30,340	$	24,630	$	27,397	$	5,094
One-to-four family residential		563		653		7		7		7
Real estate construction		3,970		7,841		232		256		50
Commercial		3,337		6,975		13,422		13,448		6,492
Other		7		8		81		100		81
Total noncovered	$	37,302	$	45,817	$	38,372	$	41,208	$	11,724
Covered:
Commercial real estate	$	4,325	$	5,347	$	2,214	$	3,979	$	22
One-to-four family residential		20		25		52		98		2
Real estate construction		130		308		-		-		-
Commercial		322		1,884		2		3		1
Other		2		4		-		-		-
Total covered	$	4,799	$	7,568	$	2,268	$	4,080	$	25

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The following table presents the average recorded investment and interest income recognized on impaired loans for the year ended December 31, 2013, 2012, and 2011.

	As of and for the year ended December 31,
	2013				2012				2011
	Average				Average				Average
	Recorded		Interest		Recorded		Interest		Recorded		Interest
(Dollars in thousands)	Investment		Income		Investment		Income		Investment		Income
Noncovered:
Commercial real estate	$	47,835	$	1,784	$	36,373	$	1,517	$	10,012	$	1,852
One-to-four family residential		362		-		427		8		1,317		8
Real estate construction		2,488		-		4,507		51		8,222		805
Commercial		11,468		87		4,494		137		9,144		746
Other		63		-		104		-		97		-
Total noncovered	$	62,216	$	1,871	$	45,905	$	1,713	$	28,792	$	3,411
Covered:
Commercial real estate	$	15,290	$	328	$	21,110	$	184	$	26,642	$	-
One-to-four family residential		4,283		1		5,627		1		7,926		-
Real estate construction		313		-		1,721		-		6,003		-
Commercial		1,431		-		2,175		-		4,403		-
Other		66		-		158		-		438		-
Total covered	$	21,383	$	329	$	30,791	$	185	$	45,412	$	-

Included in interest income recognized on impaired loans are $2.4 million and  $1.9 million, and $3.3 million,  for December 31, 2013, 2012, and 2011, respectively, in interest on accruing troubled debt restructurings.

Troubled Debt Restructurings.  The loan portfolio also includes certain loans that have been modified in a troubled debt restructuring, where economic concessions have been granted to borrowers who have experienced financial difficulties.  These concessions typically result from loss mitigation activities and can include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions.  Troubled debt restructurings are classified as impaired at the time of restructuring and classified as nonperforming, potential problem, or performing restructured, as applicable.  Loans modified in troubled debt restructurings may be returned to performing status after considering the borrowers’ sustained repayment for a reasonable period of at least six months. 

When we modify loans in a troubled debt restructuring, an evaluation of any possible impairment is performed similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or use of the current fair value of the collateral, less selling costs for collateral dependent loans.  If it is determined that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs, and unamortized premium or discount), an impairment is recognized through an allowance estimate or a charge-off to the allowance.  In periods subsequent to modification, all loans modified in troubled debt restructurings are evaluated, including those that have payment defaults, for possible impairment. 

Troubled debt restructured loans outstanding as of December 31, 2013 and 2012 are as follows: 

	At December 31, 2013				At December 31, 2012
(Dollars in thousands)	Accruing		Nonaccrual		Accruing		Nonaccrual
Commercial real estate	$	44,442	$	4,456	$	39,170	$	2,953
One-to-four family residential		18		162		27		134
Real estate construction		-		-		847		130
Commercial		1,527		648		3,998		351
Consumer		-		46		-		81
Total	$	45,987	$	5,312	$	44,042	$	3,649

At December 31, 2013 and 2012,  we had no significant commitments to lend additional funds to debtors whose loan terms have been modified in troubled debt restructuring.

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Loans modified as troubled debt restructurings that occurred during the year ended December 31, 2013 and 2012 are shown in the following tables:  

	For the year ended December 31,
	2013				2012
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Modifications		Investment		Modifications		Investment
Commercial real estate		9	$	4,732		12	$	22,713
One-to-four family residential		1		68		3		110
Real estate construction		-		-		1		847
Commercial		5		784		7		3,328
Consumer		-		-		1		80
Total		15	$	5,584		24	$	27,078

The modifications of loans identified as troubled debt restructurings primarily related to payment extensions and/or reductions in the interest rate.  The financial impact of troubled debt restructurings is not significant.   

The following tables present the recorded investment and the number of loans modified as a troubled debt restructuring which subsequently defaulted forthe year ended December 31, 2013 and 2012.  Default, for this purpose, is deemed to occur when a loan is 90 days or more past due or transferred to nonaccrual and is within twelve months of restructuring.   

	For the year ended December 31,
	2013				2012
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial real estate		1	$	166		-	$	-
Commercial		-		-		3		1,658
Real estate construction		-		-		1		130
Total		1	$	166		4	$	1,788

Credit Quality Indicators.  To assess the credit quality of loans, we categorize loans into risk categories based on relevant information about the ability of the borrowers to service their debts such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.  This analysis is performed on a quarterly basis.  We use the following definitions for risk ratings:   

Special mention – Loans classified as special mention have potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for these loans or of the institution’s credit position at some future date. 

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligors or of the collateral pledged, if any.  Loans so classified have one or more well-defined weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.  These loans are considered potential problem or nonperforming loans depending on the accrual status of the loans.    

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

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Loans not meeting the criteria above that are analyzed as part of the above described process are considered to be pass rated loans.  As of December 31, 2013 and 2012, based on the most recent analysis performed as of those dates, the risk category of loans by class is as follows: 

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2013
Grade:
Pass	$	610,929	$	81,534	$	101,715	$	233,132	$	30,893	$	1,058,203
Special Mention		62,932		1,452		22,576		6,130		141		93,231
Substandard		77,453		944		24,203		11,329		50		113,979
Doubtful		965		58		-		4,467		-		5,490
Total	$	752,279	$	83,988	$	148,494	$	255,058	$	31,084	$	1,270,903
At December 31, 2012
Grade:
Pass	$	718,054	$	71,975	$	83,350	$	208,019	$	35,897	$	1,117,295
Special Mention		88,167		1,901		25,964		7,047		181		123,260
Substandard		80,104		1,923		25,477		26,887		223		134,614
Doubtful		2,948		36		-		582		-		3,566
Total	$	889,273	$	75,835	$	134,791	$	242,535	$	36,301	$	1,378,735

Allowance for Loan Losses.  The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment evaluation method as of December 31, 2013 and 2012.  

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2013
Balance at beginning of period	$	27,223	$	861	$	5,271	$	12,604	$	759	$	46,718
Loans charged-off		(806)		(578)		246		(8,599)		(267)		(10,004)
Recoveries		171		253		4,527		2,049		158		7,158
Provision for loan losses		(7,734)		314		(4,521)		4,931		(199)		(7,209)
Balance at end of period	$	18,854	$	850	$	5,523	$	10,985	$	451	$	36,663
Allowance for loan losses ending balance:
Individually evaluated for impairment	$	4,012	$	-	$	18	$	3,863	$	46	$	7,939
Collectively evaluated for impairment		14,839		797		5,505		7,122		405		28,668
Acquired with deteriorated credit quality		3		53		-		-		-		56
Total ending allowance balance	$	18,854	$	850	$	5,523	$	10,985	$	451	$	36,663
Loans receivable ending balance:
Individually evaluated for impairment	$	47,730	$	456	$	2,720	$	10,297	$	50	$	61,253
Collectively evaluated for impairment		693,267		79,602		145,576		243,790		30,988		1,193,223
Acquired with deteriorated credit quality		11,282		3,930		198		971		46		16,427
Total ending loans balance	$	752,279	$	83,988	$	148,494	$	255,058	$	31,084	$	1,270,903

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	Commercial		1-4 Family		Real Estate
	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2012
Balance at beginning of period	$	21,749	$	1,016	$	11,177	$	9,827	$	915	$	44,684
Loans charged-off		(2,167)		(269)		-		(4,455)		(649)		(7,540)
Recoveries		58		271		1,972		3,671		495		6,467
Provision for loan losses		7,583		(157)		(7,878)		3,561		(2)		3,107
Balance at end of period	$	27,223	$	861	$	5,271	$	12,604	$	759	$	46,718
Allowance for loan losses ending balances:
Individually evaluated for impairment	$	5,094	$	7	$	50	$	6,492	$	81	$	11,724
Collectively evaluated for impairment		21,975		785		5,221		6,111		678		34,770
Acquired with deteriorated credit quality		154		69		-		1		-		224
Total ending allowance balance	$	27,223	$	861	$	5,271	$	12,604	$	759	$	46,718
Loans receivable ending balance:
Individually evaluated for impairment	$	54,055	$	570	$	4,202	$	16,759	$	88	$	75,674
Collectively evaluated for impairment		816,920		70,384		130,207		223,739		36,104		1,277,354
Acquired with deteriorated credit quality		18,298		4,881		382		2,037		109		25,707
Total ending loans balance	$	889,273	$	75,835	$	134,791	$	242,535	$	36,301	$	1,378,735

	Commercial		1-4 Family		Real Estate
	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2011
Balance at beginning of period	$	32,508	$	1,597	$	19,605	$	10,605	$	914	$	65,229
Loans charged-off		(71,066)		(346)		(62,070)		(22,103)		(1,040)		(156,625)
Recoveries		411		67		1,521		1,864		116		3,979
Provision for loan losses		59,896		(302)		52,121		19,461		925		132,101
Balance at end of period	$	21,749	$	1,016	$	11,177	$	9,827	$	915	$	44,684
Allowance for loan losses ending balances:
Individually evaluated for impairment	$	411	$	21	$	73	$	349	$	112	$	966
Collectively evaluated for impairment		21,198		981		10,846		9,439		803		43,267
Acquired with deteriorated credit quality		140		14		258		39		-		451
Total ending allowance balance	$	21,749	$	1,016	$	11,177	$	9,827	$	915	$	44,684
Loans receivable ending balance:
Individually evaluated for impairment	$	21,701	$	1,468	$	11,983	$	10,490	$	123	$	45,765
Collectively evaluated for impairment		1,006,860		78,907		220,102		335,776		38,463		1,680,108
Acquired with deteriorated credit quality		23,686		7,072		3,746		2,841		270		37,615
Total ending loans balance	$	1,052,247	$	87,447	$	235,831	$	349,107	$	38,856	$	1,763,488

Note 4:  Premises and Equipment

Year-end premises and equipment were as follows:

	At December 31,
(Dollars in thousands)	2013		2012
Land	$	6,057	$	6,059
Buildings and improvements		21,751		18,237
Furniture, fixtures, and equipment		27,268		30,911
Construction/remodeling in progress		1,159		129
		56,235		55,336
Accumulated depreciation and amortization		(35,402)		(33,645)
Total premises and equipment, net	$	20,833	$	21,691

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Depreciation of premises and equipment totaled $2.5 million in 2013 and 2012, and $2.6 million in 2011.

We lease certain equipment and premises for our operations.  Future minimum annual rental payments required under operating leases, net of sublease agreements, that have initial or remaining lease terms in excess of one year as of December 31, 2013 were as follows:   

(Dollars in thousands)
2014	$	2,407
2015		2,043
2016		1,204
2017		143
2018		72
Thereafter		-
Total	$	5,869

The total rental expense was $2.6 million, $2.5 million, and $2.6 million in 2013, 2012, and 2011, respectively.

Note 5:  Goodwill and Other Intangible Assets

We have recorded goodwill and other identifiable intangible assets associated with purchase business combinations.  Goodwill is not amortized, but is periodically evaluated for impairment.  We perform an annual goodwill impairment test as of October 1 of each year and assess qualitative factors on a quarterly basis that would indicate events or circumstances that an impairment might have taken place.

Goodwill totaled $1.2 million at December 31, 2013 and 2012, of which, $0.2 million of goodwill is reported in the Oklahoma Banking segment and $1.0 million is reported in the Texas Banking segment.  Further information regarding operating segments can be found in “Note 18 Operating Segments”.

Based on our annual goodwill impairment test as of October 1, 2013 and updated through December 31, 2013, management does not believe any of its goodwill is impaired as of December 31, 2013.  We did not recognize an impairment during the years ended December 31, 2013, 2012 and 2011.

The following table presents the gross carrying amount of other intangible assets and accumulated amortization.

	At December 31,
(Dollars in thousands)	2013		2012
Core deposit premiums	$	5,400	$	5,400
Less accumulated amortization		(3,343)		(2,857)
Core deposit premiums, net		2,057		2,543
Loan servicing rights		11,689		10,257
Less accumulated amortization		(8,766)		(7,936)
Loan servicing rights, net		2,923		2,321
Other intangible assets, net	$	4,980	$	4,864

Core deposit intangibles are amortized using an economic life method based on deposit attrition.  As a result, amortization will decline over time with most of the amortization occurring during the initial years.  The weighted average amortization period for core deposit intangibles is approximately 10 years.  Amortization expense related to core deposit intangibles totaled $0.5  million in 2013, 2012, and 2011.

During 2013 and 2012,  we had recorded loan servicing right amortization expense of $0.8 million and $0.7 million, respectively. 

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The estimated aggregate future amortization expense for other intangible assets remaining as of December 31, 2013 is as follows:

(Dollars in thousands)	Core Deposit Premiums		Loan Servicing Rights		Total
2014	$	514	$	512	$	1,026
2015		474		476		950
2016		425		400		825
2017		249		333		582
2018		182		274		456
Thereafter		213		928		1,141
	$	2,057	$	2,923	$	4,980

Note 6:  Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an 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.  In estimating fair value, we utilize valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach.  Such valuation techniques are consistently applied.  Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability.   

ASC 820, Fair Value Measurements and Disclosure, establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The fair value hierarchy is as follows: 

Level 1Quoted prices in active markets for identical instruments. 

Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.   

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.   

The estimated fair value amounts have been determined by us using available market information and appropriate valuation methodologies.  However, considerable judgment is required to interpret market data to develop the estimates of fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amount we could realize in a current market exchange.  The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts.  There were no changes in valuation methods used to estimate fair value during the year ended December 31, 2013. 

A description of the valuation methodologies used for instruments measured at fair value on a recurring basis is as follows: 

Loans held for sale – Real estate mortgage loans held for sale are carried at the lower of cost or market, which is determined on an individual loan basis.  The fair value of loans held for sale is based on existing investor commitments. Guaranteed student loans held for sale are carried at the lower of cost or market, which is determined on an aggregate basis.

Available for sale securities – The fair value of U.S. Government and federal agency securities, equity securities, and residential mortgage-backed securities is estimated based on quoted market prices or dealer quotes.  The fair value of other investments such as obligations of state and political subdivisions is estimated based on quoted market prices, when available.  We obtain fair value measurements from an independent pricing service.  The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and bond’s terms and conditions, among other things.  We review the prices supplied by the independent pricing service, as well as their

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underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. 

The fair value of a single private equity investment is estimated based on our proportionate share of the net asset value, $2.4 million and $1.7 million as of December 31, 2013 and December 31, 2012, respectively.  The investee invests in small and mid-sized U.S. financial institutions and other financial-related companies.  This investment has a quarterly redemption with sixty-five days’ notice.

Derivative instrument – We utilize an interest rate swap agreement to convert one of our variable-rate subordinated debentures to a fixed rate (cash flow hedge).  The fair value of the interest rate swap agreement is obtained from dealer quotes.   

The following table summarizes financial assets measured at fair value on a recurring basis as of December 31, 2013 and 2012. 

			Fair Value Measurement at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
At December 31, 2013
Loans held for sale:
Student loans	$	-	$	-	$	-	$	-
One-to-four family residential		2,235		-		2,235		-
Government guaranteed commercial real estate		769		-		769		-
Other loans held for sale		56		-		56		-
Available for sale securities:
Federal agency securities		120,773		-		120,773		-
Obligations of state and political subdivisions		32,636		-		32,636		-
Residential mortgage-backed securities		183,170		-		183,170		-
Asset-backed securities		9,482				9,482
Other securities		36,418		151		36,267		-
Derivative instrument		(1,967)		-		(1,967)		-
Total	$	383,572	$	151	$	383,421	$	-
At December 31, 2012
Loans held for sale:
Student loans	$	4,680	$	-	$	4,680	$	-
One-to-four family residential		5,112		-		5,112		-
Government guaranteed commercial real estate		21,794		-		21,794		-
Other loans held for sale		96		-		96		-
Available for sale securities:
Federal agency securities		115,614		-		115,614		-
Obligations of state and political subdivisions		35,558		-		35,558		-
Residential mortgage-backed securities		203,675		-		203,675		-
Asset-backed securities		7,671				7,671
Other securities		1,797		111		1,686		-
Derivative instrument		(3,195)		-		(3,195)		-
Total	$	392,802	$	111	$	392,691	$	-

Certain financial assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).  These assets are recorded at the lower of cost or fair value.  Valuation methodologies for assets measured on a nonrecurring basis are as follows: 

Impaired loans – Certain impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from collateral.  Collateral values are estimated using Level 2 inputs based on third-party appraisals.  Certain other impaired loans are remeasured and reported through a specific valuation allowance allocation of the allowance for loan losses based upon the net present value of cash flows.

Other real estate – Other real estate fair value is based on third-party appraisals for properties less the estimated costs to sell the asset.   

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Goodwill – Fair value of goodwill is based on the fair value of each of our reporting units to which goodwill is allocated compared with their respective carrying value.  There has been no impairment during 2013 or 2012; therefore, no fair value adjustment was recorded through earnings. 

Core deposit premiums – The fair value of core deposit premiums are based on third-party appraisals. There has been no impairment during 2013 or 2012; therefore, no fair value adjustment was recorded through earnings. 

Mortgage loan servicing rights – There is no active trading market for loan servicing rights.  The fair value of loan servicing rights is estimated by calculating the present value of net servicing revenue over the anticipated life of each loan.  A cash flow model is used to determine fair value.  Key assumptions and estimates, including projected prepayment speeds and assumed servicing costs, earnings on escrow deposits, ancillary income, and discount rates, used by this model are based on current market sources.  A separate third party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults, and other relevant factors.  The prepayment model is updated for changes in market conditions.   

Assets that are measured at fair value on a nonrecurring basis as of December 31, 2013 and 2012 are summarized below.   

			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Gains
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)		(Losses)
At December 31, 2013
Noncovered impaired loans at fair value :
Commercial real estate	$	20,423	$	-	$	20,423	$	-	$	3,075
One-to-four family residential		-		-		-		-		-
Real estate construction		2,636		-		2,636		-		(18)
Commercial		9,176		-		9,176		-		(2,989)
Other consumer		46		-		46		-		35
Noncovered other real estate		560		-		560		-		(1,520)
Covered other real estate		2,094		-		2,094		-		(702)
Mortgage loan servicing rights		3,492		-		-		3,492		-
Total	$	38,427	$	-	$	34,935	$	3,492	$	(2,119)
At December 31, 2012
Noncovered impaired loans at fair value :
Commercial real estate	$	33,137	$	-	$	33,137	$	-	$	(6,674)
One-to-four family residential		23		-		23		-		(7)
Real estate construction		232		-		232		-		3,532
Commercial		13,473		-		13,473		-		(6,637)
Other consumer		81		-		81		-		31
Noncovered other real estate		11,315		-		11,315		-		(3,998)
Covered other real estate		3,643		-		3,643		-		(180)
Mortgage loan servicing rights		2,321		-		-		2,321		(465)
Total	$	64,225	$	-	$	61,904	$	2,321	$	(14,398)

Noncovered impaired loans measured at fair value with a carrying amount of $45.5 million were written down to a fair value of $32.3 million, resulting in a life-to-date impairment of $27.3 million, of which $0.1 million was included in the provision for loan losses for the year ended December 31, 2013.  As of December 31, 2012, noncovered impaired loans measured at fair value with a carrying amount of $61.0 million were written down to the fair value of $46.9 million at December 31, 2012, resulting in a life-to-date impairment charge of $14.1 million, of which $9.8 million was included in the provision for loan losses for the year ended December 31, 2012. 

As of December 31, 2013, noncovered and covered other real estate assets were written down to their fair values, resulting in an impairment charge of approximately $1.5 million and $0.7 million, respectively, which was included in noninterest expense for the year ended December 31, 2013.  In the prior year, noncovered and covered other real estate assets were written down to their respective fair values, resulting in impairment charges of $4.0 million and $0.2 million, respectively, which were included in noninterest expense for the year ended December 31, 2012.

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For the year ended December 31, 2013,no impairment of mortgage loan servicing rights was incurred. As of December 31, 2012, mortgage loan servicing rights were written down to their fair value, resulting in an impairment charge of  $0.5 million, which were included in noninterest income for the period.   

ASC 825, Financial Instruments, requires an entity to provide disclosures about fair value of financial instruments, including those that are not measured and reported at fair value on a recurring or nonrecurring basis.   The methodologies used in estimating the fair value of financial instruments that are measured on a recurring or nonrecurring basis are discussed above.  The methodologies for the other financial instruments are discussed below: 

Cash and cash equivalents – For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value. 

Securities held to maturity – The investment securities held to maturity are carried at cost.  The fair value of the held to maturity securities is estimated based on quoted market prices or dealer quotes. 

Loans, net of allowance – Fair values are estimated for certain homogenous categories of loans adjusted for differences in loan characteristics.  Our loans have been aggregated by categories consisting of commercial, real estate, student, and other consumer.  The fair value of loans is estimated by discounting the cash flows using risks inherent in the loan category and interest rates currently offered for loans with similar terms and credit risks. 

Accrued interest receivable – The carrying amount is a reasonable estimate of fair value for accrued interest receivable. 

Investment included in other assets – The estimated fair value of investments included in other assets, which primarily consists of investments carried at cost, approximates their carrying values. 

Deposits – The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the statement of financial condition date.  The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. 

Other liabilities and accrued interest payable – The estimated fair value of other liabilities, which primarily includes trade accounts payable and accrued interest payable, approximates their carrying values. 

Other borrowings – Included in other borrowings are FHLB advances, securities sold under agreements to repurchase, and treasury tax and loan demand notes.  The fair value for fixed rate FHLB advances is based upon discounted cash flow analysis using interest rates currently being offered for similar instruments.  The fair values of other borrowings are the amounts payable at the statement of financial condition date, as the carrying amount is a reasonable estimate of fair value due to the short-term maturity rates.   

Subordinated debentures – Two subordinated debentures have floating rates that reset quarterly.  The fair value of the floating rate subordinated debentures approximates carrying value at December 31, 2013 and December 31, 2012.  A third subordinated debenture with a fixed rate was redeemed on September 15, 2013. The fair value of the fixed rate subordinated debenture was based on market price.

The carrying values and estimated fair values of our financial instruments segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value are as follows:

	At December 31, 2013				At December 31, 2012
	Carrying		Fair		Carrying		Fair
(Dollars in thousands)	Values		Values		Values		Values
Financial assets:
Level 2 inputs:
Cash and cash equivalents	$	279,839	$	279,839	$	288,079	$	288,079
Securities held to maturity		11,720		12,115		12,797		13,659
Accrued interest receivable		5,335		5,335		6,365		6,365
Investments included in other assets		8,140		8,140		8,531		8,531
Level 3 inputs:
Total loans, net of allowance		1,234,240		1,190,869		1,332,017		1,301,942
Financial liabilities:
Level 2 inputs:
Deposits		1,584,086		1,486,939		1,709,578		1,666,653
Accrued interest payable		832		832		1,116		1,116
Other liabilities		8,248		8,248		9,985		9,985
Derivative instrument		1,967		1,967		3,195		3,195
Other borrowings		80,632		83,593		70,362		74,057
Subordinated debentures		46,393		46,393		81,963		82,998

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Note 7:  Deposits

The following table summarizes deposits as of December 31, 2013 and 2012.

(Dollars in thousands)	2013		2012
Noninterest-bearing demand	$	444,796	$	424,008
Interest-bearing demand		120,156		112,012
Money market accounts		439,981		423,417
Savings accounts		41,727		37,693
Time deposits of $100,000 or more		251,185		351,273
Other time deposits		286,241		361,175
Total deposits	$	1,584,086	$	1,709,578

The total amount of overdrawn deposit accounts that were reclassified as loans at December 31, 2013 and 2012 was $0.5 million and $0.4 million, respectively.

Some of our interest-bearing deposits were obtained through brokered transactions and we participate in the Certificate of Deposit Account Registry Service (“CDARS”).  There were no brokered certificate of deposits as of December 31, 2013 and 2012.CDARS deposits totaled $1.3 million at December 31, 2013 and $9.9 million at December 31, 2012.  There were no  capital market certificate of deposits at December 31, 2013 and December 31, 2012.

Scheduled time deposit maturities as of December 31, 2013 are as follows: 

(Dollars in thousands)
2014	$ 380,504
2015	96,028
2016	31,540
2017	20,738
2018	8,616
Thereafter	-
Total time deposits	$ 537,426

Note 8:  Borrowed Funds

We have available various forms of other borrowings for cash management and liquidity purposes.  These forms of borrowings include short term federal funds purchased and securities sold under agreements to repurchase, and advances from the FHLB and the FRB.  The following table summarizes borrowed funds for the periods indicated:

	2013						2012
(Dollars in thousands)	Balance at December 31		Average Balance		Weighted Average Rate		Balance at December 31		Average Balance		Weighted Average Rate
Securities sold under repurchase
agreements	$	55,632	$	49,115	0.05	%	$	45,362	$	36,823	0.05	%
Federal Home Loan Bank advances		25,000		25,000	3.47			25,000		25,000	3.48
	$	80,632					$	70,362

We have approved federal funds purchase lines totaling $150.0 million with five financial entities.  We sell securities under agreements to repurchase with us retaining custody of the collateral.  Collateral consists of direct obligations of U.S. Government and Federal Agency issues, which are designated as pledged with our safekeeping agent.  The type of collateral required, the retention of the collateral, and the security sold, minimize our risk of exposure to loss.  These transactions are for one-to-four day periods.  At December 31, 2013 and 2012,  no repurchase agreement exceeded 10% of equity capital.

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We haveentered into an agreement with the FHLB to obtain advances from the FHLB from time to time.  At December 31, 2013, the Bank SNB FHLB line of credit had an outstanding balance of $25.0 million.  The terms of the agreement are set forth in the Advance, Pledge and Security Agreement (the “Agreement”).  The FHLB requires that we pledge collateral on such advances.  Under the terms of the Agreement, the discounted value of the collateral, as defined by the FHLB, should at all times be at least equal to the amount borrowed by us.  Such advances outstanding are subject to a blanket collateral arrangement, which requires the pledging of eligible collateral to secure such advances.  Such collateral principally includes certain loans and securities.  At December 31, 2013 and 2012, loans pledged under the Agreement were $517.8 million and $532.9 million, and investment securities pledged (at carrying value) were $50.1 million and $12.2 million, respectively.  There are no scheduled minimum future principal payments on the FHLB line of credit until after 2016. 

We are qualified to borrow funds from the FRB through their Borrower-In-Custody (“BIC”) program.  Collateral under this program consists of pledged selected commercial and industrial loans.  Currently, the collateral will allow us to borrow up to $44.6 million.  We also have substantial unused borrowing availability in the form of unsecured brokered certificate of deposits program from Bank of America Merrill Lynch, Morgan Stanley & Co., Citigroup Global Markets, Inc., Wells Fargo Bank, NA, UBS Securities LLC, and RBC Capital Markets Corp.  In conjunction with these lines of credit, we hadno retail certificates of deposit included in total deposits at December 31, 2013 and 2012.

Note 9:  Trust Preferred Securities and Subordinated Debentures

At December 31, 2013 and 2012,  wehad the following issues of trust preferred securities outstanding and subordinated debentures owed to the Trusts.

At December 31, 2013
(Dollars in thousands)		Subordinated Debentures Owed to Trusts		Trust Preferred Securities of the Trusts	Rates	Final Maturity Date
OKSB Statutory Trust I	$	20,619	$	20,000	3.35%	June 26, 2033
SBI Capital Trust II		25,774		25,000	3.09%	October 7, 2033
	$	46,393	$	45,000

At December 31, 2012
(Dollars in thousands)		Subordinated Debentures Owed to Trusts		Trust Preferred Securities of the Trusts	Rates	Final Maturity Date
OKSB Statutory Trust I	$	20,619	$	20,000	3.41%	June 26, 2033
SBI Capital Trust II		25,774		25,000	3.19%	October 7, 2033
Southwest Capital Trust II		35,570		34,500	10.50%	September 15, 2038
	$	81,963	$	79,500

On June 26, 2003, our subsidiary, OKSB Statutory Trust I, sold to investors in a private placement offering $20.0 million of adjustable rate trust preferred securities (the “OKSB Trust Preferred”).  The OKSB Trust Preferred bear interest, adjustable quarterly, at 90-day LIBOR plus 3.10%.  In addition to these adjustable rate securities, OKSB Statutory Trust I sold $0.6 million of trust common equity to Southwest.  The aggregate proceeds of $20.6 million were used to purchase an equal principal amount of adjustable rate subordinated debentures that bear interest, adjustable quarterly, at 90-day LIBOR plus 3.10% (the “OKSB Subordinated Debentures”).  After deducting underwriter’s compensation and noninterest expenses of the offering, the net proceeds were available to us to increase capital and for general corporate purposes.  Interest payments on the OKSB Subordinated Debentures are deductible for federal income tax purposes.

On October 14, 2003,  our subsidiary, SBI Capital Trust II, sold to investors in a private placement offering $25.0 million of adjustable rate trust preferred securities (the “SBI II Trust Preferred”).  The SBI II Trust Preferred bear interest, adjustable quarterly, at 90-day LIBOR plus 2.85%.  In addition to these adjustable rate securities, SBI Capital Trust II sold $0.8 million of trust common equity to us.  The aggregate proceeds of $25.8 million were used to purchase an equal principal amount of our adjustable rate subordinated debenturesthat bear interest, adjustable quarterly 90-day LIBOR plus 2.85% (the “SBI II Subordinated Debentures”).  The proceeds were available to us to increase capital and for general

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corporate purposes.  Interest payments on the SBI II Subordinated Debentures are deductible for federal income tax purposes.

In July 2008, our subsidiary, Southwest Capital Trust II, sold to investors in a public offering $34.5 million of 10.50% trust preferred securities (the “OKSBP Trust Preferred”).  In addition to these trust preferred securities, Southwest Capital Trust II sold $1.1 million of trust common equity to us.  The aggregated proceeds of $35.6 million were used to purchase an equal amount of our10.50% subordinated debentures (the “OKSBP Subordinated Debentures”).On September 15, 2013, we redeemed all of the OKSBP Trust Preferred pursuant to the optional redemption provisions provided in the documents governing the OKSBP Trust Preferred.  The OKSBP Trust Preferred were redeemed at the liquidation amount of $25 per trust preferred security plus accrued and unpaid distributions to the redemption date of September 15, 2013; settlement occurred on September 16, 2013.  We also redeemed $1.07 million in common securities issued by Southwest Capital Trust II and related to the OKSBP Trust Preferred.  Following the redemption, our capital levels remained well in excess of the regulatory minimum for well capitalized status.  The redemption was funded with cash on hand.

At December 31, 2013, we had an aggregate of $46.4 million of subordinated debentures outstanding and had an asset of $1.4 million representing our total investment in the common equity issued by the Trusts.  The sole assets of the Trusts are the subordinated debentures and the liabilities of the Trusts of the OKSB Trust Preferred and SBI II Trust Preferred.  We have, through various contractual arrangements, unconditionally guaranteed payment of all obligations of our Trusts with respect to our OKSB Trust Preferred and our SBI II Trust Preferred.

The OKSB Trust Preferred, the OKSB Subordinated Debentures, the SBI II Trust Preferred, and the SBI II Subordinated Debentures, mature at or near the thirtieth anniversary date of their issuance.  However, if certain conditions are met, the OKSB Trust Preferred and the OKSB Subordinated Debentures and the SBI II Trust Preferred and the SBI II Subordinated Debentures may be called at our discretion with thirty days’ notice.

We, OKSB Statutory Trust I, and SBI Capital Trust II believe that, taken together, our obligations under the Trust Preferred Guarantee Agreements, the Amended and Restated Trust Agreements, the Subordinated Debentures, the Indentures and the Agreements as to Expenses and Liabilities, entered into in connection with the offering of the Trust Preferred and the Subordinated Debentures, in the aggregate constitute a full and unconditional guarantee by us of the obligations of OKSB Statutory Trust I and SBI Capital Trust II under the Trust Preferred.

OKSB Statutory Trust I is a Connecticut statutory trust created for the purpose of issuing the OKSB Trust Preferred and purchasing the OKSB Subordinated Debentures, which are its sole assets.  We own all of the 619 outstanding common securities of OKSB Statutory Trust I; the liquidation value is $1,000 per share.

SBI Capital Trust II is a Delaware statutory trust created for the purpose of issuing the SBI II Trust Preferred and purchasing the SBI II Subordinated Debentures, which are its sole assets.  We own all of the 774 outstanding common securities of SBI Capital Trust II; the liquidation value is $1,000 per share.

Southwest Capital Trust II was a Delaware statutory trust created for the purpose of issuing the OKSBP Trust Preferred and purchasing the OKSBP Subordinated Debentures, which are its sole assets. All trust assets were redeemed on September 15, 2013. 

Each of the Trust Preferred issuances meets the regulatory criteria for Tier I capital, subject to Federal Reserve guidelines that limit the amount of the Trust Preferred and cumulative perpetual preferred stock to an aggregate of 25% of Tier I capital.  At December 31, 2013, $45.0 million of the Trust Preferred was included in Tier I capital.

We de-consolidate our investments in OKSB Statutory Trust I and SBI Capital Trust II (the “Trusts”) in this Annual Report and all future reports.  Due to this required de-consolidation, the trust preferred securities are not presented on the consolidated statements of financial condition and the subordinated debentures are presented on the consolidated statements of financial condition as a separate liability category.

In July 2012, we paid all previously deferred dividends on our three issues of outstanding debentures and dividends on the related trust preferred securities.  Payments of deferred and arrears interest and dividends were completed in July 2012, and all payments are now current.  In July 2011, we suspended payments of interest on our three issues of outstanding debentures effective August 1, 2011 and dividends on the related trust preferred securities.

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The terms of the debentures allow us to defer payments of interest for up to 20 consecutive quarterly periods without default or penalty.  These terms also allow us to resume payments at the end of any deferral period, or to extend the deferral up to the maximum 20 quarters in total.  No deferral can extend past the maturity date of the debenture.

Note 10:  Derivative Instruments

We have an interest rate swap agreement with a total notional amount of $25.0 million.  The interest rate swap contract was designated as a cash flow hedging instrument with the objective of protecting the overall cash flow from our quarterly interest payments on the SBI Capital Trust II preferred securities throughout the seven year period beginning February 11, 2011 and ending April 7, 2018 from the risk of variability of those payments resulting from changes in the three-month London Interbank Offered Rate (“LIBOR”).  Under the swap, we will pay a fixed interest rate of 6.15% and receive a variable interest rate of three-month LIBOR plus a margin of 2.85%  on a total notional amount of $25.0 million, with quarterly settlements.  The rate received by us as of December 31, 2013 was 3.09%.

The estimated fair value of the interest rate derivative contract outstanding as of December 31, 2013 and 2012 resulted in a pre-tax loss of $2.0  million and $3.2 million, respectively, and was included in other liabilities in the Consolidated Statement of Financial Condition. 

The effective portion of the gain or loss due to changes in the fair value of the derivative hedging instrument, a $0.7 million gain and a $0.2 million loss for the year ended December 31, 2013 and 2012, respectively, is included in other comprehensive income, net of tax, while the ineffective portion (indicated by the excess of the cumulative change in the fair value of the derivative over that which is necessary to offset the cumulative change in expected future cash flows on the hedge transaction) is included in other noninterest income or other noninterest expense.  No ineffectiveness related to the interest rate derivative was recognized during either reporting period.   

Net cash flows as a result of the interest rate swap agreement were $0.8 million  for year ended December 31, 2013 and $0.7 million for the year ended 2012, and were included in interest expense on subordinated debentures.   

Derivative contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms.  Institutional counterparties must have an investment grade credit rating and be approved by our asset/liability management committee.  Our credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty.  Credit exposure may be reduced by the amount of collateral pledged by the counterparty.  There are no credit-risk-related contingent features associated with our derivative contract. 

The fair value of cash and securities posted as collateral by us related to the derivative contract was $4.1 million and $4.2 million at December 31, 2013 and 2012, respectively.

Note 11:  Taxes on Income

The components of taxes on income follow:

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Current tax (benefit) expense:
Federal	$	462	$	712	$	(18,319)
State		74		232		(4,875)
Deferred tax expense (benefit):
Federal		9,362		8,145		(18,375)
State		858		794		(2,088)
Taxes on income	$	10,756	$	9,883	$	(43,657)

A reconciliation from the expected tax expense (benefit) using the U.S. Federal income tax rate of 35% to consolidated effective income tax expense (benefit) follows:

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	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Computed tax (benefit) expense at statutory rates	$	9,867	$	9,124	$	(39,183)
Increase (decrease) in income taxes resulting from:
Benefit of income not subject to U.S. Federal income tax		(213)		(213)		(165)
Expenses not deductible for U.S. Federal income tax		96		150		124
State income taxes, net of Federal income tax benefit		749		476		(3,755)
Reversal of FIN 48 reserve		-		-		(953)
State payment or refund from prior periods (federally tax affected)		-		50		-
Tax credit recapture		76		-		-
Other		181		296		275
Taxes on income	$	10,756	$	9,883	$	(43,657)

The calculated year-to-date effective tax rate is 38.2% for 2013,  37.9% for 2012, and (39.0%) for 2011.

At December 31, 2013,  we had $10.7 million federal net operating loss carryforward expiring in 2031, $53.1 million of state net operating loss carryforward expiring in 2031, and $0.6 million of state net operating loss carryforward expiring in 2021.  In addition, we had $2.5 million alternative minimum tax credit that can be carried forward indefinitely.

A deferred tax asset or liability is recognized for the tax consequences of temporary differences in the recognition of certain income and expense items for financial statement reporting purposes.  A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. 

We conducted an analysis to assess the need for a valuation allowance at December 31, 2013. As part of this assessment, all available evidence, including both positive and negative, was considered to determine whether based on the weight of such evidence, a valuation allowance for deferred tax assets was needed.  In accordance with ASC 740, Income Taxes, a valuation allowance is deemed to be needed when, based on the weight of the available evidence, it is more likely than not (a likelihood of more than 50%) that some portion or all of a deferred tax asset will not be realized.  The future realization of the tax benefit depends on the existence of sufficient taxable income within the carryback and carryforward periods. 

As part of our analysis, we considered the following positive evidence:

· Taxes paid in prior carryback years;

· Ability to carryforward federal and Oklahoma tax losses for 20 years;

· Long history of earnings profitability;

· Projected future taxable income, exclusive of tax planning strategies, sufficient to utilize the deferred tax assets;

· Current year income exceeding forecasted income;

· Improvement in overall asset quality and related credit metrics;

· Redemption of Trust Preferred Securities; and

· Change in executive management.

Due to the loss incurred in 2011, we remain in a three-year cumulative pretax loss position that is considered significant negative evidence in the determination of the need for a valuation allowance.  Included in the three-year pretax loss position is $101.0 million related to the nonrecurring sale of nonperforming assets and potential problem loans during 2011.  Management believes that the combination of a strong history of taxable income, the quick utilization of existing net operating loss carryforwards, and projected pre-tax income in future years represents positive evidence that the tax benefit will be realized.  While realization of the deferred tax benefits is not assured, it is management’s judgment, after review of all available evidence and based on the weight of such evidence, that a valuation allowance is not necessary, as realization of these benefits meets the “more likely than not” standard. 

Net deferred tax assets of $24.9 million and $32.2 million at December 31, 2013 and 2012, respectively, are reflected in the accompanying consolidated statements of financial condition in other assets. 

Temporary differences that give rise to the deferred tax assets include the following:

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		At December 31,
(Dollars in thousands)		2013		2012
Deferred tax assets:
	Provision for loan losses	$	15,072	$	19,246
	Net operating loss carryforward		5,065		12,674
	Tax credit carryforward		3,443		3,070
	Write-downs on other real estate		-		1,669
	Nonaccrual loan interest		539		527
	Deferred compensation & profit sharing accrual		173		551
	Investments		468		457
	Section 597 gain - FDIC-assisted acquisition		1,214		(119)
	Accrued Expenses		812		-
	Other		43		(51)
Total deferred tax assets			26,829		38,024
Deferred tax liabilities:
	Accumulated depreciation		(2,476)		(2,835)
	Amortizable assets		(614)		(749)
	Dividend - Equity vs. Cost Method		(316)		(492)
	Prepaid expenses		(188)		(254)
	FHLB stock dividends		(192)		(220)
	Stock-based compensation		(6)		(216)
Total deferred tax liabilities			(3,792)		(4,766)
	Deferred taxes (payable) receivable on investment
	securities available for sale		1,900		(1,075)
Net deferred tax asset		$	24,937	$	32,183

We or one of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  Weare no longer subject to U.S. federal or state tax examinations for years before 2010.  On February 15, 2012, we were notified by the Internal Revenue Service that the 2009 income tax filing was under audit and on January 14, 2013, we received final notice that the examination was completed with no adjustments proposed.  Additionally, as procedurally required, our company’s 2010 and 2011 federal returns were examined in connection with the 2011 net operating loss carryback and no adjustments were required.

Unrecognized Tax Benefits – ASC 740, Income Taxes, provides guidance on the recognition, measurement, and classification of income tax uncertainties, along with any related interest and penalties.  As of December 31, 2013, we have no unrecognized tax benefits related to Federal or State income tax matters and do not anticipate any changes within the next twelve months.  Additionally, no interest and penalties have been accrued related to uncertain tax positions.

Note 12:  Shareholders’ Equity

On December 5, 2008,  we issued to the United States Department of the Treasury (the “Treasury Department”) 70,000 shares of Fixed Rate Cumulative Preferred Stock, Series B, par value $1,000 per share (the “Series B Preferred Stock”), having a liquidation amount per share equal to $1,000, for a total price of $70.0 million.  The Series B Preferred Stock paid cumulative dividends at a rate of 5% per year for the first 5 years and thereafter at a rate of 9% per year.  As part of its purchase of the Series B Preferred Stock, the Treasury Department received a warrant to purchase 703,753 shares of common stock at an initial per share exercise price of $14.92.  The warrant expiresten years from the issuance date.  Pursuant to the Securities Purchase Agreement, the Treasury Department agreed not to exercise voting power with respect to any shares of common stock issued upon exercise of the warrant.

We allocated $66.3 million to the Series B Preferred Stock and $3.7 million to the warrant based on their relative fair values at the issue date.  The amount allocated to the warrant was accreted over the estimated life of the Series B Preferred Stock using five years.  Such accretion for the year ended December 31, 2013 was $0 million and $1.5 million for the year ended December 31, 2012, and $0.7 million for December 31, 2011.

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In August 2012, we repurchased from the Treasury Department all 70,000 outstanding shares of our Series B Preferred Stock. As a result of the repurchase, we took a one-time, non-cash equity charge of approximately $1.2 million to reflect accelerated accretion of the remaining discount on the Series B Preferred.

On May 29, 2013, we repurchased the warrant issued to the Treasury Department as part of the TARP Capital Purchase Program (CPP) for a purchase price of $2.3 million.  The repurchase of the warrant completed our repurchase of all securities issued to the Treasury in connection with the CPP. 

We have reserved for issuance 150,000 shares of common stock pursuant to the terms of the Employee Stock Purchase Plan.  The Employee Stock Purchase Plan allows our employees to acquire additional common shares through payroll deductions.  From July 1999 to August 2009, shares issued out of this plan came from treasury shares, subsequent shares issued came from the reserved shares.  As of December 31, 2013, 56,136 new shares had been issued and 52,500 treasury shares had been reissued under this plan.

We have reserved 800,000 shares of common stock pursuant to the terms of the 2008 Stock Plan.  The 2008 Stock Plan provides selected key employees with the opportunity to acquire common stock.  As of December 31, 2013, 323,927 new shares had been issued and 25,725 treasury shares had been reissued by the 2008 Stock Plan.

Note 13:  Earnings per Common Share

The following table shows the computation of basic and diluted earnings per common share: 

(Dollars in thousands, except earnings per share data)	2013		2012		2011
Numerator:
Net income (loss)	$	17,435	$	16,187	$	(68,295)
Preferred dividend		-		(2,196)		(3,522)
Warrant amortization		-		(1,545)		(731)
Net income (loss) available to common shareholders		17,435		12,446		(72,548)
Earnings allocated to participating securities		(139)		-		-
Numerator for basic earnings per common share	$	17,296	$	12,446	$	(72,548)
Effect of reallocating undistributed earnings
of participating securities		139		-		-
Numerator for diluted earnings per common share	$	17,435	$	12,446	$	(72,548)
Denominator:
Denominator for basic earnings per common share		19,516,776		19,374,098		19,414,231
Dilutive effect of stock compensation		87,469		-		-
Denominator for diluted earnings per common share		19,604,245		19,374,098		19,414,231
Earnings per common share:
Basic	$	0.89	$	0.64	$	(3.73)
Diluted	$	0.89	$	0.64	$	(3.73)

Note 14:  Capital Requirements and Regulatory Matters

We and Bank SNB are subject to various regulatory capital requirements administered by the federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our andBank SNB’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we and Bank SNB must meet specific capital guidelines that involve quantitative measures of our and Bank SNB’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  Our and Bank SNB’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.  Quantitative measures established by regulation to ensure capital adequacy require us and Bank SNB to maintain minimum amounts of Total and Tier I Capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I Capital (as defined) to average assets (as defined). 

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Management believes that, as of December 31, 2013, we and Bank SNB met all capital adequacy requirements and that as of December 31, 2012, we, Stillwater National, and Bank of Kansas met all capital adequacy requirements.

As of December 31, 2013, Bank SNB was categorized as well-capitalized under the regulatory framework for prompt corrective action.  As of December 31, 2012, Stillwater National and Bank of Kansas were categorized as well-capitalized under the regulatory framework for prompt corrective action.  To be categorized as well-capitalized, the Bank must maintain minimum Total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the following table.

A summary of actual capital amounts and ratios as of December 31, 2013 are presented below.

					To Be Well Capitalized
					Under Prompt Corrective				For Capital
	Actual				Action Provisions				Adequacy Purposes
(Dollars in thousands)	Amount		Ratio			Amount	Ratio			Amount	Ratio
As of December 31, 2013:
Total Capital (to risk-weighted assets)
Southwest	$	310,867	21.59	%	$	N/A	N/A	%	$	115,194	8.00	%
Bank SNB		284,388	19.83			143,413	10.00			114,730	8.00
Tier I Capital (to risk-weighted assets)
Southwest		292,051	20.28			N/A	N/A			57,597	4.00
Bank SNB		266,132	18.56			86,048	6.00			57,365	4.00
Tier I Leverage (to average assets)
Southwest		292,051	14.86			N/A	N/A			78,597	4.00
Bank SNB		266,132	13.62			97,719	5.00			78,175	4.00

A summary of actual capital amounts and ratios of Stillwater National and Bank of Kansas as of December 31, 2012 are presented below.

					To Be Well Capitalized
					Under Prompt Corrective				For Capital
	Actual				Action Provisions				Adequacy Purposes
(Dollars in thousands)	Amount		Ratio			Amount	Ratio			Amount	Ratio
As of December 31, 2012:
Total Capital (to risk-weighted assets)
Southwest	$	339,964	21.56	%	$	N/A	N/A	%	$	126,122	8.00	%
Stillwater National		269,323	19.55			137,793	10.00			110,234	8.00
Bank of Kansas		33,356	18.37			18,161	10.00			14,529	8.00
Tier I Capital (to risk-weighted assets)
Southwest		319,665	20.28			N/A	N/A			63,061	4.00
Stillwater National		236,705	17.18			82,676	6.00			55,117	4.00
Bank of Kansas		31,064	17.10			10,896	6.00			7,264	4.00
Tier I Leverage (to average assets)
Southwest		319,665	15.01			N/A	N/A			85,201	4.00
Stillwater National		236,705	13.14			90,088	5.00			72,070	4.00
Bank of Kansas		31,064	10.02			15,506	5.00			12,405	4.00

The approval of the OCC is required if the total of all dividends declared by Bank SNB in any calendar year exceeds the total of its net profits of that year combined with its retained net profits of the preceding two years.  In addition, Bank SNB may not pay a dividend if, after paying the dividend, Bank SNB would be undercapitalized.  For the year ended December 31, 2013,  Bank SNBdeclared $19.5 million in dividends. For the year ended December 31, 2012, Bank SNB declared $65.0 million in dividends, and no dividends were declared by Bank SNB for the year ended December 31, 2011.  

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Note 15:  Employee Benefits

We sponsor a 401(k) defined contribution savings plan. The plan covers all employees who have completed one year of service and have attained the age of 21.  The plan is subject to the Employee Retirement Income Security Act of 1974, as amended.  This plan permits participants to make before or after-tax contributions in an amount not exceeding 90% of eligible compensation and subject to dollar limits from Internal Revenue Service regulations.  We will make an annual nonelective contribution of 3% of eligible compensation.  We made contributions of $1.0 million and  $0.7 million in 2013 and2012, respectively.

Stock Options– We recorded no share-based compensation expense with respect to stock options for the years ended December 31, 2013 and 2012. The share-based compensation is calculated using the accrual method, which treats each vesting tranche as a separate award and amortizes expense evenly from grant date to vest date for each tranche.  The amortization of stock-based compensation reflects actual forfeitures, and as of December 31, 2013, there was no unrecognized compensation expense.  The deferred tax asset that was recorded related to this compensation expense was approximately $0 for tax years 2013 and 2012 and $92,000 for tax year 2011.

We have computed the estimated fair values of all share-based compensation using the Black-Scholes option pricing model.  No options were granted in 2013, 2012, or in 2011.

A summary of option activity under the Stock Plans as of December 31, 2013 and changes during the three-year period then ended is presented below.

				Weighted
		Weighted		Average Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual	Value (dollars
	Options	Price		Life (Years)	in thousands)
Outstanding at December 31, 2010	202,215	$	24.00
Granted	-		-
Exercised	-		-
Canceled/expired	(128,401)		23.59
Outstanding at December 31, 2011	73,814	$	24.72
Granted	-		-
Exercised	-		-
Canceled/expired	(68,814)		25.28
Outstanding at December 31, 2012	5,000	$	16.93
Granted	-		-
Exercised	-		-
Canceled/expired	(5,000)		16.93
Outstanding at December 31, 2013	-	$	-	-	-
Total exercisable at December 31, 2011	73,814	$	24.72
Total exercisable at December 31, 2012	5,000	$	16.93
Total exercisable at December 31, 2013	-	$	-		-

No stock options were exercised in 2013, 2012 and 2011.

Restricted Stock -Restricted shares granted as of December 31, 2013, 2012 and 2011 was 401,844,  200,798, and 120,298, respectively.  We recognized $0.7 million for the year ended December 31, 2013 and $0.1 million for the year ended December 31, 2012 and $0.2 million for the year ended December 31, 2011, in compensation expense, net of tax, related to all restricted shares outstanding.  At December 31, 2013, there was $0.7 million of total unrecognized compensation expense related to restricted shares granted under the 2008 Stock Plan. Of the total unrecognized compensation expense at December 31, 2013, $0.4 million will be recognized in 2014, and the remainder will be recognized the following three years.

The 2013 and 2012 grants of restricted stock have a vesting period between six months to 3 years.  The restrictions on the shares expire one year after the award date or upon a change in control of us (subject to the prohibition on parachute

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payments imposed by the American Reinvestment and Recovery Act) or the permanent and total disability or death of the participant.  We recognize compensation expense over the restricted period.

Note 16:  Related Party Transactions

Directors and officers of us and Bank SNB were customers of, and had transactions with,usin the ordinary course of business, and similar transactions are expected in the future.  All loans included in such transactions were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and in management’s opinion did not involve more than normal risk of loss or present other unfavorable features.  Certain directors, and companies in which they have ownership interests, had indebtedness to us totaling $3.2 million and $3.7 million at December 31, 2013 and 2012, respectively.  During 2013, $9.4million of new loans and advances on existing loans were made to these persons and repayments totaled $9.9 million.

At December 31, 2013 and 2012, directors, officers and other related parties had demand, non-interest bearing deposits of $1.7 million and $2.4 million, respectively, savings and interest-bearing transaction accounts of $17.0 million and $12.3 million, respectively, and time certificates of deposit of $0.7 million and $0.8 million, respectively.

Note  17:  Off-Balance-Sheet Arrangements, Commitments, Guarantees and Contingencies

Financial Instruments with Off-Balance-Sheet Risk –In the normal course of business, wemake use of a number of different financial instruments to help meet the financial needs of ourcustomers.  In accordance with U.S. generally accepted accounting principles, these transactions are not presented in the accompanying consolidated financial statements and are referred to as off-balance sheet instruments.  These transactions and activities include commitments to extend lines of commercial and real estate mortgage credit and standby and commercial letters of credit.

The following table provides a summary of ouroff-balance sheet financial instruments:

	At December 31,
(Dollars in thousands)	2013		2012
Commitments to extend commercial and real estate mortgage credit	$	323,925	$	248,337
Standby and commercial letters of credit		5,800		6,744
Total	$	329,725	$	255,081

A loan commitment is a binding contract to lend up to a maximum amount for a specified period of time provided there is no violation of any financial, economic, or other terms of the contract.  A standby letter of credit obligates us to honor a financial commitment to a third party should our customer fail to perform.  Many loan commitments and most standby letters of credit expire unfunded, and, therefore, total commitments do not represent our future funding obligations.  Loan commitments and letters of credit are made under normal credit terms, including interest rates and collateral prevailing at the time, and usually require the payment of a fee by the customer.  Commercial letters of credit are commitments generally issued to finance the movement of goods between buyers and sellers.  Our exposure to credit loss, assuming commitments are funded, in the event of nonperformance by the other party to the financial instrument is represented by the contractual amount of those instruments.  We do not anticipate any material losses as a result of the commitments.

Litigation – In the normal course of business, we areat all times subject to various pending and threatened legal actions.  The relief or damages sought in some of these actions may be substantial.  After reviewing pending and threatened actions with counsel, management considers that the outcome of such actions will not have a material adverse effect on our financial position; however, we are not able to predict whether the outcome of such actions may or may not have a material adverse effect on results of operations in a particular future period as the timing and amount of any resolution of such actions and relationship to the future results of operations are not known.

Severance Compensation Plan and Change in Control Agreements –We have adopted a Severance Compensation Plan and a Change of Control Agreement (the “Plans”) for the benefit of certain officers and key members of management.  The Plan’s purpose is to protect and retain certain qualified employees in the event of a change in control and to reward those qualified employees for loyal service to us by providing severance compensation to them upon their involuntary termination of employment after a change in control of Southwest.  At December 31, 2013,  we have not recorded any

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amounts in the Consolidated Financial Statements relating to the Plans.  If a change of control were to occur, the maximum amount payable to certain officers and key members of management would approximate $4.8  million.

Note 18:  Operating Segments

We operatefive principal segments:  Oklahoma Banking, Texas Banking, Kansas Banking,  Mortgage Banking, and Other Operations.  The Oklahoma Banking segment, the Texas Banking segment, and the Kansas Banking segment provide deposit and lending services.  The Mortgage Banking segment consists of residential mortgage lending services to customers.Prior to 2013, the Mortgage Banking segment included all loans available for sale in the secondary market. This adjustment had an immaterial impact on interest income for 2012 and 2011.  Other Operations includes our funds management unit and corporate investments. 

The primary purpose of the funds management unit is to manage our overall internal liquidity needs and interest rate risk.  Each segment borrows funds from or provides funds to the funds management unit as needed to support its operations.  The value of funds provided to and the cost of funds borrowed from the funds management unit by each segment are internally priced at rates that approximate market rates for funds with similar duration.  The yield used in the funds transfer pricing curve is a blend of rates based on the volume usage of retail and brokered certificates of deposit and Federal Home Loan Bank advances. 

Effective January 1, 2013, and as a result of new management, we began to identify reportable segments by geographic location of relationship manager.  Operating results are adjusted for allocated service and management costs. In addition to this realignment, management decided to eliminate a capital credit allocation between the reportable segments.  The prior year information has been realigned and reallocated for consistency with current identified reportable segments.

The accounting policies of each reportable segment are the same as ours.  Expenses for consolidated back-office operations are allocated to operating segments based on estimated uses of those services.  General overhead expenses such as executive administration, accounting, and audit are allocated based on the direct expense and/or deposit and loan volumes of the operating segment.  Income tax expense for the operating segments is calculated at statutory rates.  The Other Operations segment records the tax expense or benefit necessary to reconcile to the consolidated financial statements. 

Capital is assigned to each of the segments using a risk-based capital pricing methodology that assigns capital ratios by asset, deposit, or revenue category based on credit risk, interest rate risk, market risk, operational risk, and liquidity risk factors.   

The following table summarizes financial results by operating segment: 

For the year ended December 31,2013
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	34,725	$	18,949	$	10,527	$	670	$	(2,221)	$	62,650
Provision for loan losses		(486)		(6,403)		(472)		148		4		(7,209)
Noninterest income		6,943		1,305		1,944		2,701		750		13,643
Noninterest expenses		28,000		9,494		11,898		2,287		3,632		55,311
Income (loss) before taxes		14,154		17,163		1,045		936		(5,107)		28,191
Taxes on income		5,400		6,548		399		357		(1,948)		10,756
Net income (loss)	$	8,754	$	10,615	$	646	$	579	$	(3,159)	$	17,435
* Includes externally generated loss of $1.6 million, primarily from investing services, and an internally generated revenue of $0.1 million from the funds management unit
Fixed asset expenditures	$	85	$	$ 9	$	$ 8	$	-	$	$ 1,753	$	1,855
Total loans at period end		681,991		366,697		198,992		23,215		8		1,270,903
Total assets at period end		686,736		361,058		203,631		26,162		703,836		1,981,423
Total deposits at period end		1,113,715		207,227		247,884		1,895		13,365		1,584,086

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For the year ended December 31,2012
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	37,954	$	25,190	$	9,685	$	1,370	$	2,364	$	76,563
Provision for loan losses		448		5,364		(2,705)		-		-		3,107
Noninterest income		7,697		1,854		2,440		2,771		1,174		15,936
Noninterest expenses		29,406		12,848		13,767		2,430		4,871		63,322
Income (loss) before taxes		15,797		8,832		1,063		1,711		(1,333)		26,070
Taxes on income		5,989		3,348		403		649		(506)		9,883
Net income (loss)	$	9,808	$	5,484	$	660	$	1,062	$	(827)	$	16,187
* Includes externally generated revenue of $0.8 million, primarily from investing services, and an internally generated revenue of $2.8 million from the funds management unit
Fixed asset expenditures	$	178	$	$ 71	$	$ 8	$	-	$	$ 1,362	$	1,619
Total loans at period end		652,121		520,481		174,451		31,682		-		1,378,735
Total assets at period end		664,607		515,675		178,291		34,304		729,378		2,122,255
Total deposits at period end		1,254,348		166,919		270,368		2,420		15,523		1,709,578

For the year ended December 31,2011
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	43,005	$	29,820	$	12,414	$	1,438	$	9,655	$	96,332
Provision for loan losses		27,087		98,335		6,679		-		-		132,101
Noninterest income		7,781		1,856		2,065		1,297		1,019		14,018
Noninterest expenses		36,402		28,727		19,131		2,121		3,820		90,201
Income (loss) before taxes		(12,703)		(95,386)		(11,331)		614		6,854		(111,952)
Taxes on income		(4,955)		(37,196)		(4,419)		240		2,673		(43,657)
Net income (loss)	$	(7,748)	$	(58,190)	$	(6,912)	$	374	$	4,181	$	(68,295)
* Includes externally generated revenue of $2.8 million, primarily from investing services, and an internally generated revenue of $7.9 million from the funds management unit
Fixed asset expenditures	$	366	$	3	$	193	$	5	$	1,119	$	1,686
Total loans at period end		858,212		653,199		213,382		38,695		-		1,763,488
Total assets at period end		888,839		653,146		219,481		40,876		574,934		2,377,276
Total deposits at period end		1,406,361		156,101		276,757		1,430		80,733		1,921,382

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Note 19:  Parent Company Condensed Financial Information 

Following are the condensed financial statements of Southwest Bancorp, Inc. (“Parent Company only”) for the periods indicated:

	At December 31,
(Dollars in thousands)	2013		2012
Statements of Financial Condition
Assets:
Cash and cash equivalents	$	12,039	$	18,245
Investment in subsidiary banks		273,849		293,573
Investments in other subsidiaries		8,284		9,355
Investment securities, available for sale		3,161		2,462
Other assets		10,909		8,391
Total	$	308,242	$	332,026
Liabilities:
Subordinated debentures		46,393		81,963
Other liabilities		2,660		4,007
Shareholders' Equity:
Common stock and related accounts		259,189		246,056
Total	$	308,242	$	332,026

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Statements of Operations
Income:
Cash dividends from subsidiaries	$	19,625	$	70,175	$	160
Noninterest income		333		595		774
Investment income		243		340		31
Other operating income		-		-		45
Total income		20,201		71,110		1,010
Expense:
Interest on subordinated debentures		4,168		5,463		5,306
Noninterest expense		1,808		3,187		2,107
Total expense		5,976		8,650		7,413
Total income (loss) before taxes and equity in
undistributed income of subsidiaries		14,225		62,460		(6,403)
Taxes on income		(2,027)		(2,900)		(2,563)
Income (loss) before equity in undistributed
income of subsidiaries		16,252		65,360		(3,840)
Equity in undistributed income (loss) of subsidiaries		1,183		(49,173)		(64,455)
Net income (loss)	$	17,435	$	16,187	$	(68,295)

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	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Statements of Cash Flows
Operating activities:
Net income	$	17,435	$	16,187	$	(68,295)
Equity in undistributed income of subsidiaries		(1,183)		49,173		64,455
Other, net		(2,341)		(5,437)		499
Net cash provided by (used in) operating activities		13,911		59,923		(3,341)
Investing activities:
Available for sale securities:
Purchases		-		(247)		(724)
Sales / Maturities		32		-		46
Investment in/capital contribution to other subsidiaries		15,000		-		-
Net cash used in investing activities		15,032		(247)		(678)
Financing activities:
Net proceeds from issuance of common stock		2,708		925		278
Proceeds from issuance of subordinated debentures		(35,570)		-		-
Preferred stock dividend		-		(74,330)		(1,751)
Other, net		(2,287)		(76)		-
Net cash provided by (used in) financing activities		(35,149)		(73,481)		(1,473)
Net increase (decrease) in cash and cash equivalents		(6,206)		(13,805)		(5,492)
Cash and cash equivalents,
Beginning of year		18,245		32,050		37,542
End of year	$	12,039	$	18,245	$	32,050

Note 20:  Subsequent Events

On January 16, 2014 we announced the execution of agreements to sell branch banks in Anthony, Harper and Overland Park, Kansas. Bank branches in Anthony and Harper, Kansas, with $123 million in combined total deposits,will be purchased by BancCentral, National Association, in Alva, Oklahoma. The Overland Park branch, with $11 million in deposits, will be purchased by Fidelity Bank, in Wichita, Kansas.  The transactions are expected to be completed during the second quarter of 2014, subject to regulatory approvals and other customary terms and conditions.  The banking offices will continue to be staffed by the current employees of each market.

Note21:  New Authoritative Accounting Guidance

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-11, Balance Sheet (Topic 201) – Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”).  ASU 2011-11 amends Topic 210, “Balance Sheet,” to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement.  In January 2013, FASB issued Accounting Standards Update No. 2013-01 Balance Sheet (Topic 210) – Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”) which clarifies that ordinary trade receivables are not within the scope of ASU 2011-11.  ASU 2011-11, as amended by ASU 2013-01, became effective for us on January 1, 2013 and did not have a significant impact on the financial statements. 

In October 2012, FASB issued Accounting Standards Update No. 2012-06, Business Combinations (Topic 805) – Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a financial Institution (“ASU 2012-06”). ASU 2012-06 requires that when a reporting entity

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initially recognizes an indemnification asset (in accordance with Subtopic 805-20, Business Combinations—Identifiable Assets and Liabilities, and Any Noncontrolling Interest) as a result of a government-assisted acquisition of a financial institution and subsequently a change in the cash flows expected to be collected on the indemnification asset occurs, the reporting entity would be required to account for the change in the measurement of the indemnification asset on the same basis as the change in the assets subject to indemnification. Any amortization of changes in value of the indemnification asset would be limited to the contractual term of the indemnification agreement (that is, the lesser of the term of the indemnification agreement and the remaining term of the indemnified assets). The amendments resulting from ASU 2012-06 would be applied prospectively to any new indemnification assets acquired and to changes in expected cash flows of existing indemnification assets occurring on or after the date of adoption. The guidance became effective for us on January 1, 2013 and did not have a significant impact on the financial statements.

In February 2013, FASB issued Accounting Standard Update No. 2013-02, Comprehensive Income (Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles (GAAP) to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU 2013-02 became effective for us on January 1, 2013 and did not have a significant impact on the financial statements.

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Item 9.  Change in and disagreements with accountants on accounting and financial disclosures

None.

item 9A.  Controls and Procedures

Management’s Assessment of the Effectiveness of Disclosure Controls and Procedures

As required by SEC rules, our management evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2013.  Our Chief Executive Officer and Chief Financial Officer participated in the evaluation.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2013.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As required by SEC rules, our management evaluated the effectiveness of our internal control over financial reporting as defined in SEC Rule 13a-15 as of December 31, 2013. Our Chief Executive Officer and Chief Financial Officer participated in the evaluation, which was based upon the criteria for effective internal control over financial reporting included in the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission in 1992. Based on this evaluation, our management concluded that our internal control over financial reporting was  effective as of December 31, 2013.

The report by our independent registered public accounting firm, Ernst & Young LLP, on our internal control over financial reporting is included on page92.

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Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting

The Board of Directors and Shareholders of Southwest Bancorp, Inc.

We have audited Southwest Bancorp, Inc.’s internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). Southwest Bancorp, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Southwest Bancorp, Inc. maintained effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria. 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial condition of Southwest Bancorp, Inc. as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2013, and our report dated March 7, 2014 expressed an unqualified opinion on those financial statements.

/s/ Ernst & Young LLP

Tulsa, Oklahoma

March 7, 2014

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Item 9B.  Other Information

None.

PART III

Item 10.  Directors, Executive Officers and Corporate Governance

The information required by this Item is incorporated herein by reference to the Proxy Statement (Schedule 14A) for its 2014Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

Item 11.  Executive Compensation

The information required by this Item is incorporated herein by reference to the Proxy Statement (Schedule 14A) for its 2014Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is incorporated herein by reference to the Proxy Statement (Schedule 14A) for its 2014 Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

Item 13.  Certain Relationships and Related Transactions and Director Independence

The information required by this Item is incorporated herein by reference to the Proxy Statement (Schedule 14A) for its 2014Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

ITEM 14.  pRINCIPAL aCCOUNTING fEES AND sERVICES

The information required by this Item is incorporated herein by reference to the Proxy Statement (Schedule 14A) for its 2014Annual Meeting of Shareholders to be filed with the SEC within 120 days of our fiscal year-end.

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PART IV

Item 15.  Exhibits, Financial Statement Schedules

(a) Documents Filed as Part of this Report

(1) Financial Statements.  The following financial statements are filed as part of this report:

Independent Registered Public Accounting Firm’s Report for the Years Ended December 31, 2013 and 2012

Consolidated Statements of Financial Condition at December 31, 2013 and 2012

Consolidated Statements of Operations for the Years Ended December 31, 2013, 2012, and 2011

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2013, 2012, and 2011

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2013, 2012, and 2011

Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2012, and 2011

Notes to the Consolidated Financial Statements for the Years Ended December 31, 2013, 2012, and 2011

(2) Financial Statement Schedules.  All schedules for which provision is made in the applicable accounting regulations of the SEC are omitted because of the absence of conditions under which they are required or because the required information is included in the consolidated financial statements and related notes thereto.

(3) Exhibits. The following is a list of exhibits filed as part of this Annual Report on Form 10‑K.

	Exhibit Number	Exhibit Description
	3.1	Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 5.1 to Current Report on Form 8-K filed October 2, 2012)
	3.2	Amended and Restated Bylaws of Southwest Bancorp, Inc. (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed December 27, 2012)
*	10.1	Southwest Bancorp, Inc. Employee Stock Purchase Plan (incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-8 (File No. 33-97850))
*	10.2	Southwest Bancorp, Inc. and Affiliates Amended and Restated Severance Compensation Plan (incorporated by reference to Exhibit 10.6 to Current Report on Form 8-K filed January 2, 2008)
*	10.3	Stillwater National Bank and Trust Company 2002 and 2003 Deferred Compensation Plans (incorporated by reference to Exhibit 10.5 to Annual Report on Form 10-K for the fiscal year ended December 31, 2002)
	10.4	Indemnification Agreements by and between Southwest Bancorp, Inc. and James E. Berry II, Thomas D. Berry, Russell W. Teubner, and John Cohlmia (incorporated by reference to Exhibit 10.9 to Annual Report on Form 10-K for the fiscal year ended December 31, 2005)
	10.5 10.6 10.7	Indemnification Agreements by and between Southwest Bancorp, Inc. and David S. Crockett, Jr. (incorporated by reference to Exhibit 10(a) to Quarterly Report on Form 10-Q for the quarter ended September 30, 2006) Indemnification Agreements by and between Southwest Bancorp, Inc. and James M. Johnson (incorporated by reference to Exhibit 10(b) to Quarterly Report on Form 10-Q for the quarter ended September 30, 2006) Director’s Deferred Compensation Plan by and between Southwest Bancorp, Inc. and James M. Johnson (incorporated by reference to Exhibit 10 to Current Report on Form 8-K filed January 3, 2007)

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	Exhibit Number	Exhibit Description
*	10.8	Amendment to Director’s Deferred Compensation Plan by and between Southwest Bancorp, Inc. and James M. Johnson (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed January 2, 2008)
	10.9	Audit Committee Financial Expert Agreement by and between Southwest Bancorp, Inc. and David S. Crockett, Jr. (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K for the fiscal year ended December 31, 2006)
*	10.10	Southwest Bancorp, Inc. 2008 Stock Based Award Plan (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2008)
*	10.11	Southwest Bancorp, Inc. Form of Restricted Stock Agreement Amendments (incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2008)
	10.12	Loan and Real Estate Sale Agreement by and between Southwest Bancorp, Inc. and SW Loan Portfolio Holdings, L.P., dated December 1, 2011 (incorporated by reference to Exhibit 10.20 to Annual Report on Form 10-K for the fiscal year ended December 31, 2011)
*	10.13	Form of TARP Restricted Employee Agreement dated June 18, 2012 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed June 18, 2012)
*	10.14	Change of Control Agreement by and between Southwest Bancorp, Inc. and Priscilla Barnes dated August 3, 2012(incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)
	10.15	Letter Agreement dated August 8, 2012, by and between the United Stated Department of the Treasury and Southwest Bancorp, Inc. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed August 8, 2012)
*	10.16	Employment Agreement dated August 30, 2012 by and among Southwest Bancorp, Inc., the Stillwater National Bank and Trust Company, Bank of Kansas, and Mark W. Funke (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed September 5, 2012)
*	10.17	Mandatory Retirement Age Policy—Chief Executive Officer (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed September 5, 2012)
*	10.18	Employment Agreement dated November 15, 2012 by and among Southwest Bancorp, Inc., Stillwater National Bank and Trust Company, Bank of Kansas, and Joe T. Shockley, Jr. (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed November 16, 2012)
*	10.19	Description of Stillwater National Bank and Trust Company 2013 Elective Non-Qualified Deferred Compensation Plan (incorporated by reference to Current Report on Form 8-K filed December 27, 2012)
*	10.20	Description of Southwest Bancorp, Inc. 2013 Senior Management Incentive Plan (incorporated by reference to Current Report on Form 8-K filed December 27, 2012)
* * *	10.21 10.22 10.23	Change of Control Agreement by and between Southwest Bancorp, Inc. and Kimberly Sinclair dated March6, 2013 (incorporated by reference to Exhibit 10.24 to Annual Report on Form 10-K for the fiscal year ended December 31, 2012) Change of Control Agreement by and between Southwest Bancorp, Inc. and Brent Bates dated July 27, 2012 (filed herewith) Change of Control Agreement by and between Southwest Bancorp, Inc. and Rusty LaForge dated July 27, 2012 (filed herewith)
	21	Subsidiaries of the Registrant
	23	Consent of Independent Registered Public Accounting Firm
	31(a), (b)	Rule 13a-14(a)/15d-14(a) Certifications
	32(a), (b)	18 U.S.C. Section 1350 Certifications

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Exhibit Number	Exhibit Description
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements
*  Management contract or compensatory plan or arrangement required to be filed pursuant to Item 14(c) of Form 10-K.

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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SOUTHWEST BANCORP, INC.

March 7, 2014by: /s/ Mark W. Funke          

     Mark W. Funke

     Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Officers

/s/ Mark W. Funke	March 7, 2014
Mark W. Funke
Director and Chief Executive Officer
(Principal Executive Officer)
/s/ Joe T. Shockley, Jr.	March 7, 2014
Joe T. Shockley, Jr.
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

Directors

/s/ James E. Berry, II	March 7, 2014	/s/ David P. Lambert	March 7, 2014
James E. Berry, II		David P. Lambert
/s/ Thomas D. Berry	March 7, 2014	/s/ Larry J. Lanie	March 7, 2014
Thomas D. Berry		Larry J. Lanie
/s/ John Cohlmia	March 7, 2014	/s/ Marran Ogilvie	March 7, 2014
John Cohlmia		Marran Ogilvie
/s/ David S. Crockett, Jr.	March 7, 2014		March 7, 2014
David S. Crockett, Jr.		James M. Morris, II
/s/ J. Berry Harrison	March 7, 2014	/s/ Russell W. Teubner	March 7, 2014
J. Berry Harrison		Russell W. Teubner
/s/ James M. Johnson	March 7, 2014
James M. Johnson

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EX-10.22

CHANGE OF CONTROL AGREEMENT

THIS CHANGE OF CONTROL AGREEMENT (the “Agreement”) entered into between Southwest Bancorp, Inc. (the “Company”), andBrent Bates, an individual (the “Executive”), dated as of the 27th day of July,  2012.

The Board of Directors of Southwest Bancorp, Inc. (the “Board”) has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a “Change of Control” (as defined in Section 2 of this Agreement) of the Company.  The Board believes it is important to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, and to encourage the Executive’s full attention and dedication to the affairs of the Company during the term of this Agreement and upon the occurrence of such event.  The Board also believes the Company is best served by providing the Executive with compensation arrangements upon a Change of Control which provide the Executive with individual financial security and which are competitive with those of other corporations.  In order to accomplish these objectives, the Board has caused Southwest Bancorp, Inc. to enter into this Agreement.  For the purposes of Section 2 of this Agreement, “Company” means Southwest Bancorp, Inc.; and, for all other purposes in this Agreement, “Company” means Southwest Bancorp, Inc., and/or any successor to all or a portion of its business and/or assets which assumes and agrees to perform this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions.

(a) The “Effective Date” shall be the first date during the “Change of Control Period” (as defined in Section 1(b) of this Agreement) on which a Change of Control (as defined below) occurs, and, except as provided in the following sentence, no amount shall be paid or benefits provided under this Agreement if the Executive’s employment is terminated for any reason prior to a Change of Control.  Anything in this Agreement to the contrary notwithstanding, if the Executive’s employment with the Company is terminated prior to the date on which a Change of Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination.

(b) The “Change of Control Period” is the period commencing on the date hereof and ending on the earlier to occur of (i) the third anniversary of such date or (ii) the first day of the month next following the Executive’s attainment of age 65 (“Normal Retirement Date”); provided, however, that commencing on the date two (2) years after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as the “Renewal Date”), the Change of Control Period shall be automatically extended so as to terminate on the earlier of (i) two (2) years from such Renewal Date or (ii) the first day of the month coinciding with or next following the Executive’s Normal Retirement Date, unless, at least 60 days prior to the Renewal Date, the Company shall give notice that the Change of Control Period

Change of Control Agreement (July 2012) – Brent Bates

shall not be so extended in which event this Agreement shall continue for the remainder of its then current term and terminate as provided herein.

2. Change of Control.  For the purpose of this Agreement, a “Change of Control” shall mean:

(a) the date any entity or person, including a group as defined in Section 13(d)(iii) of the Securities Exchange Act of 1934 shall become the beneficial owner of, or shall have obtained voting control over, 50 percent or more of the outstanding common shares of either the Company or Stillwater National Bank and Trust Company (“SNB-Stillwater”);

(b) the date the shareholders of either the Company or SNB-Stillwater approve a definitive agreement (i) to merge or consolidate either the Company or SNB-Stillwater with or into another corporation in which either the Company or SNB-Stillwater, respectively, is not the continuing or surviving corporation or pursuant to which any common shares of either the Company or SNB-Stillwater would be converted into cash, securities, or other property of another, other than a merger of either the Company or SNB-Stillwater in which holders of common shares immediately prior to the merger have the same proportionate interest of common stock of the surviving corporation immediately after the merger as immediately before, or (ii) to sell or otherwise dispose of substantially all of the assets of either the Company or SNB-Stillwater; or

(c) the date there shall have been change in a majority of the Board of either the Company or SNB-Stillwater within a 12-month period unless the nomination of each new director was approved by the vote of two-thirds (2/3) of directors then still in office who were in office at the beginning of the 12-month period.

3. Agreement Not Employment Contract – Employment at Will.  This Agreement shall be considered solely as a “severance agreement” obligating the Company to pay to the Executive certain amounts of compensation in the event and only in the event of his termination of employment after the Effective Date for the reasons and at the time specified herein.  Apart from the obligation of the Company to provide the amounts of additional compensation as provided in this Agreement, the Company shall at all times retain the right to terminate the employment of the Executive since the obligation of the Company to the Executive shall only be considered as an employment relationship which exists between the Company and the Executive which may be terminated at will by either party subject to the obligation of the Company to make payment and perform its obligations as provided in this Agreement.

4. Termination.

(a) Death or Disability.  This Agreement shall terminate automatically upon the Executive’s death.  If the Company determines in good faith that the Disability of the Executive has occurred (pursuant to the definition of “Disability” set forth below), it may give to the Executive written notice of its intention to terminate the Executive’s employment.  In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after the date of such notice (the “Disability Effective Date”), provided that, within such time period, the Executive shall not have returned to full-time performance of the Executive’s duties.  For purposes of this Agreement, “Disability” means disability (either physical or mental) which, at least twenty-six (26) weeks after its commencement, is determined by a physician selected by the Company or

Change of Control Agreement (July 2012) – Brent Bates2

its insurers and acceptable to the Executive or the Executive’s legal representative to be total and permanent (such agreement as to acceptability not to be withheld unreasonably).

(b) Cause.  The Company has the right to terminate Executive’s employment for Cause, and such termination will not be a breach of this Agreement by the Company.  “Cause” means termination of employment for one of the following reasons: (i) the conviction of the Executive by a federal or state court of competent jurisdiction of a felony which relates to the Executive’s employment at the Company; (ii) an act or acts of dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive at the expense of the Company; or (iii) the Executive’s “willful” failure to follow a direct lawful written order from his supervisor, within the reasonable scope of the Executive’s duties, which failure is not cured within thirty (30) days.  Further, for purposes of this Section (b):

(1) No act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Company.

(2) The Executive shall not be deemed to have been terminated for Cause unless and until there has been delivered to the Executive a copy of the resolution duly adopted by the affirmative vote of not less than three-fourths (3/4ths) of the entire membership of the Board of Directors of the Company, at a meeting of the Board of Directors called and held for such purpose (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board of Directors), finding that in the good faith opinion of the Board of Directors the Executive was guilty of conduct set forth in clauses (i), (ii), or (iii) above and specifying the particulars thereof in detail.

(a) Good Reason.  The Executive’s employment may be terminated by the Executive for Good Reason.  For purposes of this Agreement, “Good Reason” means:

(i) A reduction by more than 10% in Executive’s base salary and target bonus, as compared with the base salary and most recently established target bonus, or if no target bonus has been set then the bonus most recently paid, prior to the Change in Control;

(ii) A relocation of Executive’s principal office with the Company or its successor that increases the Executive’s commute by more than thirty-five (35) miles per day;

(iii) A substantial and adverse change in the Executive’s duties, control, authority, status or position, or the assignment to the Executive of duties or responsibilities which are materially inconsistent with such status or position, or a material reduction in the duties and responsibilities previously exercised by the Executive, or a loss of title, loss of office, loss of significant authority, power or control, or any removal of Executive from, or any failure to reappoint or reelect him to, such positions; or

(iv) Any material breach by the Company or its successor of any other material provision of this Agreement.

Notwithstanding the foregoing definition of “Good Reason”, the Executive cannot terminate his employment hereunder for Good Reason unless he (A) first notifies the Board in

Change of Control Agreement (July 2012) – Brent Bates3

writing of the event (or events) which the Executive believes constitutes a Good Reason event under subparagraphs (i), (ii), (iii) or (iv) (above) within 90 days from the date of such event,  (B) provides the Company with at least 30 days to cure, correct or mitigate the Good Reason event so that it either (1) does not constitute a Good Reason event hereunder or (2) Executive agrees, in writing, that after any such modification or accommodation made by the Company that such event shall not constitute a Good Reason event hereunder,  (C) Executive provides a notice of termination to the Company within thirty (30) days of the expiration of the Company’s period to remedy the condition, and (D) Executive terminates employment within ninety (90) days after Executive provides written notice to the Company of the existence of the condition referred to in clause (A).

(b) Notice of Termination.  Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12 of this Agreement.  For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provisions in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).  The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing his rights hereunder.

(c) Date of Termination.  “Date of Termination” means (i) if Executive’s employment is terminated by his death, the date of his death, (ii) if Executive’s employment is terminated for Good Reason, the date on which a notice of termination  provided in accordance with subsection (c) of this Section 4 is given or any later date (within thirty (30) days after the giving of such notice of termination) set forth in such notice of termination, (iii)  if Executive’s employment is terminated voluntarily by Executive without Good Reason, the earlier of thirty  (30) days after notice of such termination is provided or the date performance of services actually ceases, or (iv) if Executive’s employment is terminated for any other reason, the date on which a notice of termination is given or any later date (within thirty (30) days after the giving of such notice of termination) set forth in such notice of termination.  

5. Obligations of the Company upon Termination Following Change of Control.

(a) Good Reason; Termination Other Than for Cause, Disability or Death.  If, within twenty-four (24) months after the Effective Date, the Company terminates the Executive’s employment other than for Cause, Disability or death, or if the Executive terminates his employment for Good Reason:

(i) the Company will pay to the Executive in a single lump sum payment within 30 days of the Date of Termination (A)base salary and accrued vacation pay through the Date of Termination, and (B) an amount equal to 200% of Executive’s highest annual base salary in effect during the three (3) years immediately prior to the Effective Date;

Change of Control Agreement (July 2012) – Brent Bates4

(ii) the Company will maintain in full force and effect, for the continued benefit of Executive (and Executive’s spouse and/or eligible dependents, as applicable) for a period of twelve  (12) months following the Termination Date, participation by Executive (and Executive’s spouse and/or eligible dependents, as applicable) in the medical, hospitalization, and dental programs maintained by the Company for the benefit of its executive officers as in effect on the Termination Date, at such level and terms and conditions (including, without limitation, contributions required by Executive for such benefits) as in effect on the Termination Date; provided, if Executive (or his spouse) is eligible for Medicare or a similar type of governmental medical benefit, such benefit shall be the primary provider before Company medical benefits are provided.  However, if Executive becomes reemployed with another employer and is eligible to receive medical, hospitalization and dental benefits under another employer-provided plan, the medical, hospitalization and dental benefits described herein shall be secondary to those provided under such other plan during the applicable period.  If any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A of the Code under Treasury Regulation Section 1.409A-1(a)(5), then an amount equal to each remaining premium payment shall thereafter be paid to Executive as currently taxable compensation in substantially equal monthly installments over the continuation coverage period (or the remaining portion thereof).

(iii) the Company will reimburse Executive pursuant to the Company’s policy for reasonable business expenses incurred, but not paid, prior to termination of employment, unless such termination resulted from a misappropriation of Company funds; and

(iv) Executive will be entitled to any other rights, compensation and/or benefits as may be due to Executive following termination to which he is otherwise entitled in accordance with the terms and provisions of any plans or programs of the Company.

(b) Termination for Cause, Disability or Death or by the Executive Other than for Good Reason.  If the Executive’s employment is terminated for Cause, Disability, death or by the Executive other than for Good Reason:

(i) the Company will pay Executive his base salary and his accrued vacation pay (to the extent required by law or the Company’s vacation policy) through the Date of Termination, as soon as practicable following the Date of Termination;

(ii) the Company will reimburse Executive pursuant to the Company’s policy for reasonable business expenses incurred, but not paid, prior to termination of employment, unless such termination resulted from a misappropriation of Company funds; and

(iii) Executive will be entitled to any other rights, compensation and/or benefits as may be due to Executive following termination to which he is otherwise entitled in accordance with the terms and provisions of any plans or programs of the Company.

6. No Duplication of Benefits.  Notwithstanding the fact that the Executive is entitled to benefits as provided under this Agreement, if the Executive is also entitled to receive

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payment of severancebenefits under another agreement or plan, and payment of severance benefits under this Agreement, then, such payments due upon termination of employment of the Executive shall only be paid under this Agreement

7. Mitigation.  Executive will not be required to mitigate amounts payable under this Agreement by seeking other employment or otherwise, and there will be no offset against amounts due Executive under this Agreement on account of subsequent employment except as specifically provided herein.

8. Confidential Information, Ownership of Documents.

(a) Confidential Information.  Executive will hold in a fiduciary capacity for the benefit of the Company all trade secrets and confidential information, knowledge or data relating to the Company and its businesses and investments and its Affiliates, obtained by Executive during Executive’s employment by the Company and which is not generally available public knowledge (other than by acts by Executive in violation of this Agreement).

(b) Removal of Documents; Rights to Products; Other Property.  All records, files, drawings, documents, models, equipment, and the like relating to the Company’s business and its Affiliates, which Executive has control over may not be removed from the Company’s premises without its written consent, unless removal is in the furtherance of the Company’s business or is in connection with Executive’s carrying out his duties under this Agreement and, if so removed, shall be returned to the Company promptly after termination of Executive’s employment under this Agreement.

(c) Injunctive Relief.  In the event of a breach or threatened breach of this Section 8, Executive agrees that the Company shall be entitled to injunctive relief in a court of appropriate jurisdiction to remedy any such breach or threatened breach, Executive acknowledges that damages would be inadequate and insufficient.

(d) Continuing Operation.  Except as specifically provided in this Section 8, the termination of Executive’s employment or of this Agreement will have no effect on the continuing operation of this Section 8.

(e) Additional Related Agreements.  Executive agrees to sign and to abide by the provisions of any additional agreements, policies or requirements of the Company related to the subject of this Section 8.

9. Arbitration; Legal Fees and Expenses.  The parties agree that Executive’s employment and this Agreement relate to interstate commerce, and that any and all disputes, claims or controversies between Executive and the Company which may arise out of or relate to Executive’s employment relationship or this Agreement shall be settled by arbitration.  This agreement to arbitrate shall survive the termination of this Agreement.  Any arbitration shall be before a single arbitrator in accordance with the American Arbitration Association’s National Rules for the Resolution of Employment Disputes pertaining to individually-negotiated contracts and shall be undertaken pursuant to the Federal Arbitration Act.  Arbitration will be held in Oklahoma City, Oklahoma unless the parties mutually agree on another location.  Unless parties mutually agree to self-administer the arbitration or to use a different arbitration service, it will be administered by the Dallas, Texas office of the American Arbitration Association.  The decision of

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the arbitrator will be enforceable in any court of competent jurisdiction.  The parties agree that punitive, liquidated or indirect damages shall not be awarded by the arbitrator unless such damages would have been awarded by a court of competent jurisdiction.The arbitrator shall also have the discretion and authority to award costs and attorney fees to the prevailing party or, alternatively, may order each party to bear its own costs and attorney fees in connection with the arbitration to the extent permitted by applicable law.  Nothing in this Agreement to arbitrate, however, shall preclude the Company from obtaining injunctive relief from a court of competent jurisdiction prohibiting any ongoing breaches by Executive of this Agreement including, without limitation, violations of Section8.

10. Agreement Binding on Successors.

(a) Company’s Successors.  No rights or obligations of the Company under this Agreement may be assigned or transferred except that the Company will require any successor (whether direct or indirect, by purchase, merger, reorganization, sale, transfer of stock, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no succession had taken place.  As used in this Agreement, “Company” means the Company as hereinbefore defined and any successor to its business and/or assets (by merger, purchase or otherwise as provided in this Section 10(a)) which executes and delivers the agreement provided for in this Section 10 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

(b) Executive’s Successors.  No rights or obligations of Executive under this Agreement may be assigned or transferred by Executive other than his rights to payments or benefits under this Agreement, which may be transferred only by will or the laws of descent and distribution.  Upon Executive’s death, this Agreement and all rights of Executive under this Agreement shall inure to the benefit of and be enforceable by Executive’s beneficiary or beneficiaries, personal or legal representatives, or estate, to the extent any such person succeeds to Executive’s interests under this Agreement.  Executive will be entitled to select and change a beneficiary or beneficiaries to receive any benefit or compensation payable under this Agreement following Executive’s death by giving the Company written notice thereof in a form acceptable to the Company.  In the event of Executive’s death or a judicial determination of his incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to his beneficiary(ies), estate or other legal representative(s).  If Executive should die following his Date of Termination while any amounts would still be payable to him under this Agreement if he had continued to live, all such amounts unless otherwise provided shall be paid in accordance with the terms of this Agreement to such person or persons so appointed in writing by Executive, or otherwise to his legal representatives or estate.

11. Limitation on Payments and Benefits.  Notwithstanding any provision of this Agreement to the contrary, if any amount or benefit to be paid or provided under this Agreement would be an “Excess Parachute Payment,” within the meaning of Section 280G of the Code, but for the application of this sentence, then the payments and benefits to be paid or provided under this Agreement will be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of any such payment or benefit, as so reduced, constitutes an Excess Parachute Payment; provided, however, that the foregoing reduction will be made only if and to the extent that such reduction would result in an increase in the aggregate payment and benefits to be provided,

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determined on an after-tax basis (taking into account the excise tax imposed pursuant to Section 4999 of the Code, any tax imposed by any comparable provision of state law, and any applicable federal, state and local income and employment taxes).  Whether requested by the Executive or the Company, the determination of whether any reduction in such payments or benefits to be provided under this Agreement or otherwise is required pursuant to the preceding sentence will be made at the expense of the Company by the Company’s independent accountants in effect prior to the Change in Control.  The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 5 will not of itself limit or otherwise affect any other rights of the Executive other than pursuant to this Agreement.  In the event that any payment or benefit intended to be provided under this Agreement or otherwise is required to be reduced pursuant to this Section 5, the Executive will be entitled to designate the payments and/or benefits to be so reduced in order to give effect to this Section 5.  The Company will provide the Executive with all information reasonably requested by the Executive to permit the Executive to make such designation.  In the event that the Executive fails to make such designation within 10 business days of the Termination Date, the Company may effect such reduction in any manner it deems appropriate.

12. Notice.  For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered either personally or by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:

If to Executive:

At his last known address

evidenced on the Company’s

payroll records.

If to the Company:

Southwest Bancorp, Inc.

608 S. Main

Stillwater, OK  74074

Attention:  Chief Executive Officer

or to such other address as any party may have furnished to the others in writing in accordance with this Agreement, except that notices of change of address shall be effective only upon receipt.

13. Withholding.  All payments and benefits hereunder will be subject to any required withholding of federal, state and local taxes pursuant to any applicable law or regulation.

14. Compliance with Code Section 409A.

(a) It is the intention of the Company and Executive that the provisions of this Agreement are exempt from Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), the Treasury regulations and other guidance promulgated or issued thereunder (“Section 409A”) pursuant to available exemptions under Section 409A, including but not limited to the “short-term deferral exception” and the “involuntary separation pay plan exception”, and the provisions of this Agreement shall be construed in a manner consistent with that intention. 

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However, to the extent that the requirements of Section 409A are determined to be applicable to any provision of this Agreement, such provision shall be construed in a manner that complies with Section 409A and any provision required for compliance with Section 409A that is omitted from this Agreement shall be incorporated herein by reference and shall apply retroactively, if necessary, and be deemed a part of this Agreement to the same extent as though expressly set forth herein.  If any provision of this Agreement would cause Executive to incur any additional tax or interest under Section 409A, the Company shall, upon Executive’s specific request, use its reasonable business efforts to in good faith reform such provision to comply with Section 409A; provided, that to the maximum extent practicable, the original intent and economic benefit to Executive and the Company of the applicable provision shall be maintained, but the Company shall have no obligation to make any changes that could create any additional economic cost or loss of benefit to the Company.  The Company shall not have any liability to Executive with respect to tax obligations that result under any tax law and makes no representation with respect to the tax treatment of the payments and/or benefits provided under this Agreement.

(b) To the extent any payment herein is required to comply with Section 409A and is payable on a termination of employment, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for such payment unless such termination is also a “separation from service” (excluding death) within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean  “separation from service” (excluding death).  If Executive is deemed on the date of termination to be a “specified employee,” within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by the Company from time to time, or if none, the default methodology, then with regard to any payment or the providing of any benefit made under this Agreement, to the extent required to be delayed in compliance with Section 409A(a)(2)(B) of the Code, and any other payment or the provision of any other benefit that is required to be delayed in compliance with Section 409A(a)(2)(B) of the Code, such payment or benefit shall not be made or provided prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s “separation from service” or (ii) the date of Executive’s death.  On the first day of the seventh month following the date of Executive’s “separation from service,” or if earlier, on the date of Executive’s death, all payments delayed pursuant to this subparagraph and Section 409A (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified herein.

15. Miscellaneous.  No provisions of this Agreement may be amended, modified, or waived unless agreed to in writing and signed by Executive and by a duly authorized officer of the Company.  No waiver by either party of any breach by the other party of any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  The respective rights and obligations of the parties under this Agreement shall survive Executive’s termination of employment and the termination of this Agreement to the extent necessary for the intended preservation of such rights and obligations.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Oklahoma without regard to its conflicts of law principles.

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16. Validity.  The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

17. Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.

18. Section Headings.  The section headings in this Agreement are for convenience of reference only, and they form no part of this Agreement and will not affect its interpretation.

19. Entire Agreement.  Except as provided elsewhere herein, this Agreement sets forth the entire agreement of the parties with respect to its subject matter and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party to this Agreement with respect of such subject matter.

20. TARP Compliance.  The parties acknowledge and agree (i) that the Company has received financial assistance under the Troubled Asset Relief Program (“TARP”) of the federal government and (ii) that Executive is or may become an “SEO” and/or one of the five most highly compensated employees of the Company as determined pursuant to 31 CFR 30.3 (a “Covered Employee”).  The parties agree that no payments shall be made to Executive pursuant to this agreement in violation of the Emergency Economic Stabilization Act, as amended (“EESA”),  or any regulation, guidance or order issued pursuant to the EESA (collectively with EESA, the “TARP Restrictions”).  Without limiting the generality of the foregoing, for all periods that Executive is a Covered Employee and the Company is subject to the TARP Restrictions, Executive and Company agree as follows:

(a) Clawback.If any bonus, retention award or incentive compensation paid to Executive is deemed by the Company or any regulatory authority to have been (i) paid based on materially inaccurate financial statements or any other materially inaccurate performance criteria, or (ii) paid in violation of subparagraph (b) of this Section 20, or otherwise in violation of TARP Restrictions, then such payment(s) shall be repaid to the Company, or otherwise subject to a clawback, at the request of the Company or any regulatory authority. 

(b) Limitation on Payment.   The Company shall not make any payment under this Agreement if such payment is a “golden parachute payment” or a “bonus,” as such terms are defined in the TARP Restrictions,  and if payment of such golden parachute payment or bonus is prohibited by the TARP Restrictions.

(c) Modifications to Comply with TARP Restrictions.  The Executive acknowledges that the TARP Restrictions may be amended, modified or supplemented from time to time, or a court or regulatory authority could determine that this Agreement is not in compliance with the existing TARP Restrictions.  In any such event, Executive agrees that this Agreement shall be amended to comply with the TARP Restrictions. 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

SOUTHWEST BANCORP, INC.

By:/s/Rick Green

Rick Green, Chief Executive Officer

EXECUTIVE

By: /s/Brent Bates

Brent Bates

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EX-10.23

CHANGE OF CONTROL AGREEMENT

THIS CHANGE OF CONTROL AGREEMENT (the “Agreement”) entered into between Southwest Bancorp, Inc. (the “Company”), andRusty LaForge, an individual (the “Executive”), dated as of the 27th day of July,  2012.

The Board of Directors of Southwest Bancorp, Inc. (the “Board”) has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat, or occurrence of a “Change of Control” (as defined in Section 2 of this Agreement) of the Company.  The Board believes it is important to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, and to encourage the Executive’s full attention and dedication to the affairs of the Company during the term of this Agreement and upon the occurrence of such event.  The Board also believes the Company is best served by providing the Executive with compensation arrangements upon a Change of Control which provide the Executive with individual financial security and which are competitive with those of other corporations.  In order to accomplish these objectives, the Board has caused Southwest Bancorp, Inc. to enter into this Agreement.  For the purposes of Section 2 of this Agreement, “Company” means Southwest Bancorp, Inc.; and, for all other purposes in this Agreement, “Company” means Southwest Bancorp, Inc., and/or any successor to all or a portion of its business and/or assets which assumes and agrees to perform this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions.

(a) The “Effective Date” shall be the first date during the “Change of Control Period” (as defined in Section 1(b) of this Agreement) on which a Change of Control (as defined below) occurs, and, except as provided in the following sentence, no amount shall be paid or benefits provided under this Agreement if the Executive’s employment is terminated for any reason prior to a Change of Control.  Anything in this Agreement to the contrary notwithstanding, if the Executive’s employment with the Company is terminated prior to the date on which a Change of Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination.

(b) The “Change of Control Period” is the period commencing on the date hereof and ending on the earlier to occur of (i) the third anniversary of such date or (ii) the first day of the month next following the Executive’s attainment of age 65 (“Normal Retirement Date”); provided, however, that commencing on the date two (2) years after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as the “Renewal Date”), the Change of Control Period shall be automatically extended so as to terminate on the earlier of (i) two (2) years from such Renewal Date or (ii) the first day of the month coinciding with or next following the Executive’s Normal Retirement Date, unless, at least 60 days prior to the Renewal Date, the Company shall give notice that the Change of Control Period

Change of Control Agreement (July 2012) – Rusty LaForge

shall not be so extended in which event this Agreement shall continue for the remainder of its then current term and terminate as provided herein.

2. Change of Control.  For the purpose of this Agreement, a “Change of Control” shall mean:

(a) the date any entity or person, including a group as defined in Section 13(d)(iii) of the Securities Exchange Act of 1934 shall become the beneficial owner of, or shall have obtained voting control over, 50 percent or more of the outstanding common shares of either the Company or Stillwater National Bank and Trust Company (“SNB-Stillwater”);

(b) the date the shareholders of either the Company or SNB-Stillwater approve a definitive agreement (i) to merge or consolidate either the Company or SNB-Stillwater with or into another corporation in which either the Company or SNB-Stillwater, respectively, is not the continuing or surviving corporation or pursuant to which any common shares of either the Company or SNB-Stillwater would be converted into cash, securities, or other property of another, other than a merger of either the Company or SNB-Stillwater in which holders of common shares immediately prior to the merger have the same proportionate interest of common stock of the surviving corporation immediately after the merger as immediately before, or (ii) to sell or otherwise dispose of substantially all of the assets of either the Company or SNB-Stillwater; or

(c) the date there shall have been change in a majority of the Board of either the Company or SNB-Stillwater within a 12-month period unless the nomination of each new director was approved by the vote of two-thirds (2/3) of directors then still in office who were in office at the beginning of the 12-month period.

3. Agreement Not Employment Contract – Employment at Will.  This Agreement shall be considered solely as a “severance agreement” obligating the Company to pay to the Executive certain amounts of compensation in the event and only in the event of his termination of employment after the Effective Date for the reasons and at the time specified herein.  Apart from the obligation of the Company to provide the amounts of additional compensation as provided in this Agreement, the Company shall at all times retain the right to terminate the employment of the Executive since the obligation of the Company to the Executive shall only be considered as an employment relationship which exists between the Company and the Executive which may be terminated at will by either party subject to the obligation of the Company to make payment and perform its obligations as provided in this Agreement.

4. Termination.

(a) Death or Disability.  This Agreement shall terminate automatically upon the Executive’s death.  If the Company determines in good faith that the Disability of the Executive has occurred (pursuant to the definition of “Disability” set forth below), it may give to the Executive written notice of its intention to terminate the Executive’s employment.  In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after the date of such notice (the “Disability Effective Date”), provided that, within such time period, the Executive shall not have returned to full-time performance of the Executive’s duties.  For purposes of this Agreement, “Disability” means disability (either physical or mental) which, at least twenty-six (26) weeks after its commencement, is determined by a physician selected by the Company or

Change of Control Agreement (July 2012) – Rusty LaForge2

its insurers and acceptable to the Executive or the Executive’s legal representative to be total and permanent (such agreement as to acceptability not to be withheld unreasonably).

(b) Cause.  The Company has the right to terminate Executive’s employment for Cause, and such termination will not be a breach of this Agreement by the Company.  “Cause” means termination of employment for one of the following reasons: (i) the conviction of the Executive by a federal or state court of competent jurisdiction of a felony which relates to the Executive’s employment at the Company; (ii) an act or acts of dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive at the expense of the Company; or (iii) the Executive’s “willful” failure to follow a direct lawful written order from his supervisor, within the reasonable scope of the Executive’s duties, which failure is not cured within thirty (30) days.  Further, for purposes of this Section (b):

(1) No act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Company.

(2) The Executive shall not be deemed to have been terminated for Cause unless and until there has been delivered to the Executive a copy of the resolution duly adopted by the affirmative vote of not less than three-fourths (3/4ths) of the entire membership of the Board of Directors of the Company, at a meeting of the Board of Directors called and held for such purpose (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board of Directors), finding that in the good faith opinion of the Board of Directors the Executive was guilty of conduct set forth in clauses (i), (ii), or (iii) above and specifying the particulars thereof in detail.

(a) Good Reason.  The Executive’s employment may be terminated by the Executive for Good Reason.  For purposes of this Agreement, “Good Reason” means:

(i) A reduction by more than 10% in Executive’s base salary and target bonus, as compared with the base salary and most recently established target bonus, or if no target bonus has been set then the bonus most recently paid, prior to the Change in Control;

(ii) A relocation of Executive’s principal office with the Company or its successor that increases the Executive’s commute by more than thirty-five (35) miles per day;

(iii) A substantial and adverse change in the Executive’s duties, control, authority, status or position, or the assignment to the Executive of duties or responsibilities which are materially inconsistent with such status or position, or a material reduction in the duties and responsibilities previously exercised by the Executive, or a loss of title, loss of office, loss of significant authority, power or control, or any removal of Executive from, or any failure to reappoint or reelect him to, such positions; or

(iv) Any material breach by the Company or its successor of any other material provision of this Agreement.

Notwithstanding the foregoing definition of “Good Reason”, the Executive cannot terminate his employment hereunder for Good Reason unless he (A) first notifies the Board in

Change of Control Agreement (July 2012) – Rusty LaForge3

writing of the event (or events) which the Executive believes constitutes a Good Reason event under subparagraphs (i), (ii), (iii) or (iv) (above) within 90 days from the date of such event,  (B) provides the Company with at least 30 days to cure, correct or mitigate the Good Reason event so that it either (1) does not constitute a Good Reason event hereunder or (2) Executive agrees, in writing, that after any such modification or accommodation made by the Company that such event shall not constitute a Good Reason event hereunder,  (C) Executive provides a notice of termination to the Company within thirty (30) days of the expiration of the Company’s period to remedy the condition, and (D) Executive terminates employment within ninety (90) days after Executive provides written notice to the Company of the existence of the condition referred to in clause (A).

(b) Notice of Termination.  Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12 of this Agreement.  For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provisions in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice).  The failure by the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Executive hereunder or preclude the Executive from asserting such fact or circumstance in enforcing his rights hereunder.

(c) Date of Termination.  “Date of Termination” means (i) if Executive’s employment is terminated by his death, the date of his death, (ii) if Executive’s employment is terminated for Good Reason, the date on which a notice of termination  provided in accordance with subsection (c) of this Section 4 is given or any later date (within thirty (30) days after the giving of such notice of termination) set forth in such notice of termination, (iii)  if Executive’s employment is terminated voluntarily by Executive without Good Reason, the earlier of thirty  (30) days after notice of such termination is provided or the date performance of services actually ceases, or (iv) if Executive’s employment is terminated for any other reason, the date on which a notice of termination is given or any later date (within thirty (30) days after the giving of such notice of termination) set forth in such notice of termination.  

5. Obligations of the Company upon Termination Following Change of Control.

(a) Good Reason; Termination Other Than for Cause, Disability or Death.  If, within twenty-four (24) months after the Effective Date, the Company terminates the Executive’s employment other than for Cause, Disability or death, or if the Executive terminates his employment for Good Reason:

(i) the Company will pay to the Executive in a single lump sum payment within 30 days of the Date of Termination (A)base salary and accrued vacation pay through the Date of Termination, and (B) an amount equal to 200% of Executive’s highest annual base salary in effect during the three (3) years immediately prior to the Effective Date;

Change of Control Agreement (July 2012) – Rusty LaForge4

(ii) the Company will maintain in full force and effect, for the continued benefit of Executive (and Executive’s spouse and/or eligible dependents, as applicable) for a period of twelve  (12) months following the Termination Date, participation by Executive (and Executive’s spouse and/or eligible dependents, as applicable) in the medical, hospitalization, and dental programs maintained by the Company for the benefit of its executive officers as in effect on the Termination Date, at such level and terms and conditions (including, without limitation, contributions required by Executive for such benefits) as in effect on the Termination Date; provided, if Executive (or his spouse) is eligible for Medicare or a similar type of governmental medical benefit, such benefit shall be the primary provider before Company medical benefits are provided.  However, if Executive becomes reemployed with another employer and is eligible to receive medical, hospitalization and dental benefits under another employer-provided plan, the medical, hospitalization and dental benefits described herein shall be secondary to those provided under such other plan during the applicable period.  If any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A of the Code under Treasury Regulation Section 1.409A-1(a)(5), then an amount equal to each remaining premium payment shall thereafter be paid to Executive as currently taxable compensation in substantially equal monthly installments over the continuation coverage period (or the remaining portion thereof).

(iii) the Company will reimburse Executive pursuant to the Company’s policy for reasonable business expenses incurred, but not paid, prior to termination of employment, unless such termination resulted from a misappropriation of Company funds; and

(iv) Executive will be entitled to any other rights, compensation and/or benefits as may be due to Executive following termination to which he is otherwise entitled in accordance with the terms and provisions of any plans or programs of the Company.

(b) Termination for Cause, Disability or Death or by the Executive Other than for Good Reason.  If the Executive’s employment is terminated for Cause, Disability, death or by the Executive other than for Good Reason:

(i) the Company will pay Executive his base salary and his accrued vacation pay (to the extent required by law or the Company’s vacation policy) through the Date of Termination, as soon as practicable following the Date of Termination;

(ii) the Company will reimburse Executive pursuant to the Company’s policy for reasonable business expenses incurred, but not paid, prior to termination of employment, unless such termination resulted from a misappropriation of Company funds; and

(iii) Executive will be entitled to any other rights, compensation and/or benefits as may be due to Executive following termination to which he is otherwise entitled in accordance with the terms and provisions of any plans or programs of the Company.

6. No Duplication of Benefits.  Notwithstanding the fact that the Executive is entitled to benefits as provided under this Agreement, if the Executive is also entitled to receive

Change of Control Agreement (July 2012) – Rusty LaForge5

payment of severancebenefits under another agreement or plan, and payment of severance benefits under this Agreement, then, such payments due upon termination of employment of the Executive shall only be paid under this Agreement

7. Mitigation.  Executive will not be required to mitigate amounts payable under this Agreement by seeking other employment or otherwise, and there will be no offset against amounts due Executive under this Agreement on account of subsequent employment except as specifically provided herein.

8. Confidential Information, Ownership of Documents.

(a) Confidential Information.  Executive will hold in a fiduciary capacity for the benefit of the Company all trade secrets and confidential information, knowledge or data relating to the Company and its businesses and investments and its Affiliates, obtained by Executive during Executive’s employment by the Company and which is not generally available public knowledge (other than by acts by Executive in violation of this Agreement).

(b) Removal of Documents; Rights to Products; Other Property.  All records, files, drawings, documents, models, equipment, and the like relating to the Company’s business and its Affiliates, which Executive has control over may not be removed from the Company’s premises without its written consent, unless removal is in the furtherance of the Company’s business or is in connection with Executive’s carrying out his duties under this Agreement and, if so removed, shall be returned to the Company promptly after termination of Executive’s employment under this Agreement.

(c) Injunctive Relief.  In the event of a breach or threatened breach of this Section 8, Executive agrees that the Company shall be entitled to injunctive relief in a court of appropriate jurisdiction to remedy any such breach or threatened breach, Executive acknowledges that damages would be inadequate and insufficient.

(d) Continuing Operation.  Except as specifically provided in this Section 8, the termination of Executive’s employment or of this Agreement will have no effect on the continuing operation of this Section 8.

(e) Additional Related Agreements.  Executive agrees to sign and to abide by the provisions of any additional agreements, policies or requirements of the Company related to the subject of this Section 8.

9. Arbitration; Legal Fees and Expenses.  The parties agree that Executive’s employment and this Agreement relate to interstate commerce, and that any and all disputes, claims or controversies between Executive and the Company which may arise out of or relate to Executive’s employment relationship or this Agreement shall be settled by arbitration.  This agreement to arbitrate shall survive the termination of this Agreement.  Any arbitration shall be before a single arbitrator in accordance with the American Arbitration Association’s National Rules for the Resolution of Employment Disputes pertaining to individually-negotiated contracts and shall be undertaken pursuant to the Federal Arbitration Act.  Arbitration will be held in Oklahoma City, Oklahoma unless the parties mutually agree on another location.  Unless parties mutually agree to self-administer the arbitration or to use a different arbitration service, it will be administered by the Dallas, Texas office of the American Arbitration Association.  The decision of

Change of Control Agreement (July 2012) – Rusty LaForge6

the arbitrator will be enforceable in any court of competent jurisdiction.  The parties agree that punitive, liquidated or indirect damages shall not be awarded by the arbitrator unless such damages would have been awarded by a court of competent jurisdiction.The arbitrator shall also have the discretion and authority to award costs and attorney fees to the prevailing party or, alternatively, may order each party to bear its own costs and attorney fees in connection with the arbitration to the extent permitted by applicable law.  Nothing in this Agreement to arbitrate, however, shall preclude the Company from obtaining injunctive relief from a court of competent jurisdiction prohibiting any ongoing breaches by Executive of this Agreement including, without limitation, violations of Section8.

10. Agreement Binding on Successors.

(a) Company’s Successors.  No rights or obligations of the Company under this Agreement may be assigned or transferred except that the Company will require any successor (whether direct or indirect, by purchase, merger, reorganization, sale, transfer of stock, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no succession had taken place.  As used in this Agreement, “Company” means the Company as hereinbefore defined and any successor to its business and/or assets (by merger, purchase or otherwise as provided in this Section 10(a)) which executes and delivers the agreement provided for in this Section 10 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

(b) Executive’s Successors.  No rights or obligations of Executive under this Agreement may be assigned or transferred by Executive other than his rights to payments or benefits under this Agreement, which may be transferred only by will or the laws of descent and distribution.  Upon Executive’s death, this Agreement and all rights of Executive under this Agreement shall inure to the benefit of and be enforceable by Executive’s beneficiary or beneficiaries, personal or legal representatives, or estate, to the extent any such person succeeds to Executive’s interests under this Agreement.  Executive will be entitled to select and change a beneficiary or beneficiaries to receive any benefit or compensation payable under this Agreement following Executive’s death by giving the Company written notice thereof in a form acceptable to the Company.  In the event of Executive’s death or a judicial determination of his incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to his beneficiary(ies), estate or other legal representative(s).  If Executive should die following his Date of Termination while any amounts would still be payable to him under this Agreement if he had continued to live, all such amounts unless otherwise provided shall be paid in accordance with the terms of this Agreement to such person or persons so appointed in writing by Executive, or otherwise to his legal representatives or estate.

11. Limitation on Payments and Benefits.  Notwithstanding any provision of this Agreement to the contrary, if any amount or benefit to be paid or provided under this Agreement would be an “Excess Parachute Payment,” within the meaning of Section 280G of the Code, but for the application of this sentence, then the payments and benefits to be paid or provided under this Agreement will be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of any such payment or benefit, as so reduced, constitutes an Excess Parachute Payment; provided, however, that the foregoing reduction will be made only if and to the extent that such reduction would result in an increase in the aggregate payment and benefits to be provided,

Change of Control Agreement (July 2012) – Rusty LaForge7

determined on an after-tax basis (taking into account the excise tax imposed pursuant to Section 4999 of the Code, any tax imposed by any comparable provision of state law, and any applicable federal, state and local income and employment taxes).  Whether requested by the Executive or the Company, the determination of whether any reduction in such payments or benefits to be provided under this Agreement or otherwise is required pursuant to the preceding sentence will be made at the expense of the Company by the Company’s independent accountants in effect prior to the Change in Control.  The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 5 will not of itself limit or otherwise affect any other rights of the Executive other than pursuant to this Agreement.  In the event that any payment or benefit intended to be provided under this Agreement or otherwise is required to be reduced pursuant to this Section 5, the Executive will be entitled to designate the payments and/or benefits to be so reduced in order to give effect to this Section 5.  The Company will provide the Executive with all information reasonably requested by the Executive to permit the Executive to make such designation.  In the event that the Executive fails to make such designation within 10 business days of the Termination Date, the Company may effect such reduction in any manner it deems appropriate.

12. Notice.  For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered either personally or by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:

If to Executive:

At his last known address

evidenced on the Company’s

payroll records.

If to the Company:

Southwest Bancorp, Inc.

608 S. Main

Stillwater, OK  74074

Attention:  Chief Executive Officer

or to such other address as any party may have furnished to the others in writing in accordance with this Agreement, except that notices of change of address shall be effective only upon receipt.

13. Withholding.  All payments and benefits hereunder will be subject to any required withholding of federal, state and local taxes pursuant to any applicable law or regulation.

14. Compliance with Code Section 409A.

(a) It is the intention of the Company and Executive that the provisions of this Agreement are exempt from Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), the Treasury regulations and other guidance promulgated or issued thereunder (“Section 409A”) pursuant to available exemptions under Section 409A, including but not limited to the “short-term deferral exception” and the “involuntary separation pay plan exception”, and the provisions of this Agreement shall be construed in a manner consistent with that intention. 

Change of Control Agreement (July 2012) – Rusty LaForge8

However, to the extent that the requirements of Section 409A are determined to be applicable to any provision of this Agreement, such provision shall be construed in a manner that complies with Section 409A and any provision required for compliance with Section 409A that is omitted from this Agreement shall be incorporated herein by reference and shall apply retroactively, if necessary, and be deemed a part of this Agreement to the same extent as though expressly set forth herein.  If any provision of this Agreement would cause Executive to incur any additional tax or interest under Section 409A, the Company shall, upon Executive’s specific request, use its reasonable business efforts to in good faith reform such provision to comply with Section 409A; provided, that to the maximum extent practicable, the original intent and economic benefit to Executive and the Company of the applicable provision shall be maintained, but the Company shall have no obligation to make any changes that could create any additional economic cost or loss of benefit to the Company.  The Company shall not have any liability to Executive with respect to tax obligations that result under any tax law and makes no representation with respect to the tax treatment of the payments and/or benefits provided under this Agreement.

(b) To the extent any payment herein is required to comply with Section 409A and is payable on a termination of employment, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for such payment unless such termination is also a “separation from service” (excluding death) within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “resignation,” “termination,” “termination of employment” or like terms shall mean  “separation from service” (excluding death).  If Executive is deemed on the date of termination to be a “specified employee,” within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by the Company from time to time, or if none, the default methodology, then with regard to any payment or the providing of any benefit made under this Agreement, to the extent required to be delayed in compliance with Section 409A(a)(2)(B) of the Code, and any other payment or the provision of any other benefit that is required to be delayed in compliance with Section 409A(a)(2)(B) of the Code, such payment or benefit shall not be made or provided prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s “separation from service” or (ii) the date of Executive’s death.  On the first day of the seventh month following the date of Executive’s “separation from service,” or if earlier, on the date of Executive’s death, all payments delayed pursuant to this subparagraph and Section 409A (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified herein.

15. Miscellaneous.  No provisions of this Agreement may be amended, modified, or waived unless agreed to in writing and signed by Executive and by a duly authorized officer of the Company.  No waiver by either party of any breach by the other party of any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  The respective rights and obligations of the parties under this Agreement shall survive Executive’s termination of employment and the termination of this Agreement to the extent necessary for the intended preservation of such rights and obligations.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Oklahoma without regard to its conflicts of law principles.

Change of Control Agreement (July 2012) – Rusty LaForge9

16. Validity.  The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

17. Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.

18. Section Headings.  The section headings in this Agreement are for convenience of reference only, and they form no part of this Agreement and will not affect its interpretation.

19. Entire Agreement.  Except as provided elsewhere herein, this Agreement sets forth the entire agreement of the parties with respect to its subject matter and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party to this Agreement with respect of such subject matter.

20. TARP Compliance.  The parties acknowledge and agree (i) that the Company has received financial assistance under the Troubled Asset Relief Program (“TARP”) of the federal government and (ii) that Executive is or may become an “SEO” and/or one of the five most highly compensated employees of the Company as determined pursuant to 31 CFR 30.3 (a “Covered Employee”).  The parties agree that no payments shall be made to Executive pursuant to this agreement in violation of the Emergency Economic Stabilization Act, as amended (“EESA”),  or any regulation, guidance or order issued pursuant to the EESA (collectively with EESA, the “TARP Restrictions”).  Without limiting the generality of the foregoing, for all periods that Executive is a Covered Employee and the Company is subject to the TARP Restrictions, Executive and Company agree as follows:

(a) Clawback.If any bonus, retention award or incentive compensation paid to Executive is deemed by the Company or any regulatory authority to have been (i) paid based on materially inaccurate financial statements or any other materially inaccurate performance criteria, or (ii) paid in violation of subparagraph (b) of this Section 20, or otherwise in violation of TARP Restrictions, then such payment(s) shall be repaid to the Company, or otherwise subject to a clawback, at the request of the Company or any regulatory authority. 

(b) Limitation on Payment.   The Company shall not make any payment under this Agreement if such payment is a “golden parachute payment” or a “bonus,” as such terms are defined in the TARP Restrictions,  and if payment of such golden parachute payment or bonus is prohibited by the TARP Restrictions.

(c) Modifications to Comply with TARP Restrictions.  The Executive acknowledges that the TARP Restrictions may be amended, modified or supplemented from time to time, or a court or regulatory authority could determine that this Agreement is not in compliance with the existing TARP Restrictions.  In any such event, Executive agrees that this Agreement shall be amended to comply with the TARP Restrictions. 

Change of Control Agreement (July 2012) – Rusty LaForge10

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

SOUTHWEST BANCORP, INC.

By:/s/Rick Green

Rick Green, Chief Executive Officer

EXECUTIVE

By: /s/Rusty LaForge

Rusty LaForge

Change of Control Agreement (July 2012) – Rusty LaForge11

EX-21

Exhibit21

SUBSIDIARIESOFTHEREGISTRANT

ThefollowingisalistofallsubsidiariesoftheRegistrantasofMarch7,2014:

Jurisdictionof

NameIncorporation OKSBStatutoryTrustIConnecticut SBICapitalTrustIIDelaware SouthwestCapitalTrustIIDelaware

SNBCapitalCorporationOklahoma Bank SNB, National AssociationUnitedStates QuadJHoldings,LLC*Oklahoma

CashSource,Inc.*Oklahoma  StillwaterNationalBuildingCorporation*Oklahoma

CRKProperties,Inc.*Oklahoma CRKTechnologies,LLC**Oklahoma               CRKStretford,LLC**Oklahoma

BastropCRK,LLC**Oklahoma

SNBRealEstateHoldings,Inc.*Delaware

SNBREIT,Inc.***Delaware

StillwaterProperties,Inc.*  Oklahoma

GrandHillInvestments,LLC****Oklahoma

*DirectsubsidiaryofBank SNB, National Association

**DirectsubsidiaryofCRKProperties,Inc.

***DirectsubsidiaryofSNBRealEstateHoldings,Inc.

****DirectsubsidiaryofStillwaterProperties,Inc.

EX-23

Exhibit23

CONSENTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM

Weconsenttotheincorporationby referenceinthefollowingRegistrationStatements:

(1)  RegistrationStatement(FormS-8,No.333-92143)pertainingtothe1999StockOptionPlanof

SouthwestBancorp,Inc.

(2)  RegistrationStatement(FormS-8,No.333-120685)pertainingtothe1999StockOptionPlanof

SouthwestBancorp,Inc.

(3)  RegistrationStatement(FormS-8,No.33-97850)pertainingtotheEmployeeStockPurchasePlan ofSouthwestBancorp,Inc.

(4)  RegistrationStatement(FormS-8,No.333-147249)pertainingtothe1999StockOptionPlanof

SouthwestBancorp,Inc.

(5)  Registration Statement (Form S-3, Nos. 333-151384 and  151384-3) pertaining to  the  shelf registrationofsecuritiesofSouthwestBancorp,Inc.

(6)  RegistrationStatement(Form S-8,No.333-155648)pertainingtothe2008Stock BasedAwardPlan ofSouthwestBancorp,Inc.

(7)  RegistrationStatement(FormS-3,No.333-156572)pertainingtotheCapitalPurchaseProgram participationby SouthwestBancorp,Inc.

(8)  RegistrationStatement(FormS-3,No.333-165451) pertainingtotheshelfregistrationofsecurities ofSouthwestBancorp,Inc.

ofourreportsdatedMarch  7,2014,withrespecttotheconsolidated financialstatements  ofSouthwest Bancorp,Inc.,andtheeffectivenessofinternalcontroloverfinancialreportingofSouthwestBancorp, Inc., includedin this AnnualReport(Form10-K)of SouthwestBancorp,Inc. for theyear ended December31,2013.

/s/Ernst&YoungLLP Tulsa,Oklahoma

March7,2014

EX-31.(A)

Exhibit31(a)

Rule13a-14(a)/15d-14(a) Certifications

I,MarkW.Funke,certifythat:

1.  IhavereviewedthisreportonForm10-KofSouthwestBancorp,Inc.;

2.  Basedonmyknowledge,thisannualreportdoesnotcontainanyuntruestatementofamaterial factoromittostatea materialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementswere made,notmisleadingwithrespecttotheperiodcoveredby thisreport;

3.  Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairly present inallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrant asof,and for,theperiodspresentedinthisreport;

4.  Theregistrant’sothercertifying officerandIareresponsibleforestablishingandmaintainingdisclosure controlsand procedures (asdefinedinExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting (asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantandhave:

(a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobe designedunderoursupervision, toensurethatmaterialinformation relatingtotheregistrant,includingits consolidated subsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodin whichthisreportisbeingprepared;

(b)Designedsuchinternalcontrol overfinancialreporting,orcaused suchinternal  controloverfinancialreportingto bedesignedunderoursupervision,toprovidereasonableassuranceregardingthereliabilityoffinancialreporting and the preparation of financial statements for external purposes, in accordance  with  generally accepted accountingprinciples;

(c) Evaluatedtheeffectiveness oftheregistrant’sdisclosurecontrolsandproceduresandpresentedinthisreportour conclusionsabouttheeffectivenessofthedisclosurecontrolsandproceduresasoftheendoftheperiodcovered by thisreportbaseduponsuchevaluation;and

(d)Disclosedin thisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduring theregistrant’smostrecentfiscalquarter(theregistrant’sfourthfiscalquarterinthecase ofanannualreport)that hasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’s internalcontroloverfinancial reporting;and

5.  Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontrol overfinancialreporting,totheregistrant’s auditorsandtheauditcommitteeoftheregistrant’s boardofdirectors(or personsperformingtheequivalentfunction):

(a)  Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancial reportingwhich arereasonablylikely toadverselyaffect theregistrant’sabilitytorecord,process,summarizeand reportfinancialinformation;and

(b)Anyfraud,whetherornotmaterial,thatinvolvesmanagement orotheremployeeswhohaveasignificantrolein theregistrant’sinternalcontroloverfinancialreporting.

Date:  March 7,  2014/s/  Mark W.  Funke

Mark W.  Funke

President andChief Executive Officer

(PrincipalExecutiveOfficer)

EX-31.(B)

Exhibit31(b)

Rule13a-14(a)/15d-14(a) Certifications

I,JoeT.Shockley,Jr.,certifythat:

1.  IhavereviewedthisreportonForm10-KofSouthwestBancorp,Inc.;

2.  Basedonmyknowledge,thisannualreportdoesnotcontainanyuntruestatementofamaterial factoromittostatea materialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementswere made,notmisleadingwithrespecttotheperiodcoveredby thisreport;

3.  Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairly present inallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrant asof,and for,theperiodspresentedinthisreport;

4.  Theregistrant’sothercertifying officerandIareresponsibleforestablishingandmaintainingdisclosure controlsand procedures (asdefinedinExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting (asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantandhave:

(a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobe designedunderoursupervision, toensurethatmaterialinformation relatingtotheregistrant,includingits consolidated subsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodin whichthisreportisbeingprepared;

(b)Designedsuchinternalcontrol overfinancialreporting,orcaused suchinternal  controloverfinancialreportingto bedesignedunderoursupervision,toprovidereasonableassuranceregardingthereliabilityoffinancialreporting and the preparation of financial statements for external purposes, in accordance  with  generally accepted accountingprinciples;

(c) Evaluatedtheeffectiveness oftheregistrant’sdisclosurecontrolsandproceduresandpresentedinthisreportour conclusionsabouttheeffectivenessofthedisclosurecontrolsandproceduresasoftheendoftheperiodcovered by thisreportbaseduponsuchevaluation;and

(d)Disclosedin thisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduring theregistrant’smostrecentfiscalquarter(theregistrant’sfourthfiscalquarterinthecase ofanannualreport)that hasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’s internalcontroloverfinancial reporting;and

5.  Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontrol overfinancialreporting,totheregistrant’s auditorsandtheauditcommitteeoftheregistrant’s boardofdirectors(or personsperformingtheequivalentfunction):

(a)  Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancial reportingwhich arereasonablylikely toadverselyaffect theregistrant’sabilitytorecord,process,summarizeand reportfinancialinformation;and

(b)Anyfraud,whetherornotmaterial,thatinvolvesmanagement orotheremployeeswhohaveasignificantrolein theregistrant’sinternalcontroloverfinancialreporting.

Date: March 7, 2014 /s/ JoeT.Shockley, Jr.

JoeT.Shockley,Jr.

ExecutiveVice President, Chief FinancialOfficer

(Principal Financial Officer)

EX-32.(A)

Exhibit32(a)

18 U.S.C.Section1350Certifications

Iherebycertifypursuantto18U.S.C. §1350,asadoptedpursuantto§906oftheSarbanes-OxleyActof

2002,tothebestofmyknowledgeandbelief,thattheaccompanyingForm10-KofSouthwestBancorp, Inc.(“Southwest”)fortheannualperiodendedDecember31,2013,fullycomplies withtherequirements ofsection13(a)or15(d)oftheSecurities Exchange Actof1934(15U.S.C.78mor78o(d));andthatthe informationcontainedinthisForm10-Kfairlypresents,inallmaterialrespects,thefinancialcondition andresultsofoperationsofSouthwest.

By:/s/MarkW.FunkeMarch7,2014 MarkW.FunkeDate

PresidentandChiefExecutiveOfficer

(PrincipalExecutiveOfficer)

EX-32.(B)

Exhibit32(b)

18 U.S.C.Section1350Certifications

Iherebycertifypursuantto18U.S.C. §1350,asadoptedpursuantto§906oftheSarbanes-OxleyActof

2002,tothebestofmyknowledgeandbelief,thattheaccompanyingForm10-KofSouthwestBancorp, Inc.(“Southwest”)fortheannualperiodendedDecember31,2013,fullycomplies withtherequirements ofsection13(a)or15(d)oftheSecurities Exchange Actof1934(15U.S.C.78mor78o(d));andthatthe informationcontainedinthisForm10-Kfairlypresents,inallmaterialrespects,thefinancialcondition andresultsofoperationsofSouthwest.

By:/s/JoeT.Shockley,Jr.March7,2014Joe T.Shockley,Jr.Date

ExecutiveVicePresident,ChiefFinancial

Officer

(PrincipalFinancialOfficer)

XML

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Computation Of Basic And Diluted Earnings Per Common Share

(Dollars in thousands, except earnings per share data)	2013		2012		2011
Numerator:
Net income (loss)	$	17,435	$	16,187	$	(68,295)
Preferred dividend		-		(2,196)		(3,522)
Warrant amortization		-		(1,545)		(731)
Net income (loss) available to common shareholders		17,435		12,446		(72,548)
Earnings allocated to participating securities		(139)		-		-
Numerator for basic earnings per common share	$	17,296	$	12,446	$	(72,548)
Effect of reallocating undistributed earnings
of participating securities		139		-		-
Numerator for diluted earnings per common share	$	17,435	$	12,446	$	(72,548)
Denominator:
Denominator for basic earnings per common share		19,516,776		19,374,098		19,414,231
Dilutive effect of stock compensation		87,469		-		-
Denominator for diluted earnings per common share		19,604,245		19,374,098		19,414,231
Earnings per common share:
Basic	$	0.89	$	0.64	$	(3.73)
Diluted	$	0.89	$	0.64	$	(3.73)

XML

Loans And Allowance For Loan Losses (Recorded Investment In Loans On Nonaccrual Status) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	$ 18,560	$ 35,104
Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	1,259	3,595
Real Estate Mortgage [Member] | Commercial Real Estate [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	6,564	18,337
Real Estate Mortgage [Member] | Commercial Real Estate [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	1,202	3,087
Real Estate Mortgage [Member] | One-To-Four Family Residential [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	456	563
Real Estate Mortgage [Member] | One-To-Four Family Residential [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	57	52
Real Estate Construction [Member] | Commercial Real Estate [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	2,721	3,355
Real Estate Construction [Member] | Commercial Real Estate [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans		130
Commercial [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	8,769	12,761
Commercial [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans		324
Other [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	50	88
Other [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans		$ 2

XML

Investment Securities (Amortized Cost And Approximate Fair Value Of Investment Securities By Maturity Date) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Amortized cost and approximate fair value [Abstract]
One year or less, Amortized cost, Available for Sale	$ 20,806
One year or less, Fair Value, Available for Sale	21,151
One year or less, Amortized Cost, Held to Maturity	1,941
One year or less, Fair Value, Held to Maturity	1,957
More than one year through five years, Amortized Cost, Available for Sale	167,476
More than one year through five years, Fair Value, Available for Sale	168,675
More than one year through five years, Amortized Cost, Held to Maturity	2,227
More than one year through five years, Fair Value, Held to Maturity	2,282
More than five years through ten years, Amortized Cost, Available for Sale	151,933
More than five years through ten years, Fair Value, Available for Sale	147,705
More than five years through ten years, Amortized Cost, Held to Maturity	4,151
More than five years through ten years, Fair Value, Held to Maturity	4,265
More than ten years, Amortized Cost, Available for Sale	45,208
More than ten years, Fair Value, Available for Sale	44,948
More than ten years, Amortized Cost, Held to Maturity	3,401
More than ten years, Fair Value, Held to Maturity	3,611
Total, Amortized Cost, Available for Sale	385,423
Total, Fair Value, Available for Sale	382,479
Held-to-maturity Securities, Total	11,720	12,797
Fair Value, Held to Maturity	$ 12,115	$ 13,659

XML

Fair Value Measurements (Summary Of Financial Assets Measured At Fair Value On A Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	$ 382,479	$ 364,315
Parent Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	3,161	2,462
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets at Fair Value on a recurring basis	383,572	392,802
Fair Value, Measurements, Recurring [Member] | Student Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale		4,680
Fair Value, Measurements, Recurring [Member] | One-To-Four Family Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	2,235	5,112
Fair Value, Measurements, Recurring [Member] | Government Guaranteed Commercial Real Estate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	769	21,794
Fair Value, Measurements, Recurring [Member] | Other Loans Held For Sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	56	96
Fair Value, Measurements, Recurring [Member] | Federal Agency Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	120,773	115,614
Fair Value, Measurements, Recurring [Member] | Obligations Of State And Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	32,636	35,558
Fair Value, Measurements, Recurring [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	183,170	203,675
Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	9,482	7,671
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	36,418	1,797
Fair Value, Measurements, Recurring [Member] | Derivative Instrument [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instrument	(1,967)	(3,195)
Fair Value, Measurements, Recurring [Member] | Level 1 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets at Fair Value on a recurring basis	151	111
Fair Value, Measurements, Recurring [Member] | Level 1 Inputs [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	151	111
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets at Fair Value on a recurring basis	383,421	392,691
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Student Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale		4,680
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | One-To-Four Family Residential [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	2,235	5,112
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Government Guaranteed Commercial Real Estate [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	769	21,794
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Other Loans Held For Sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	56	96
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Federal Agency Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	120,773	115,614
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Obligations Of State And Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	32,636	35,558
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	183,170	203,675
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	9,482	7,671
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	36,267	1,686
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Derivative Instrument [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instrument	$ (1,967)	$ (3,195)

XML

Loans And Allowance For Loan Losses (Age Analysis Of Past Due Loans) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	$ 6,848	$ 37,314
90 days and greater past due	19,872	41,989
Total past due	26,720	79,303
Current	1,244,183	1,299,432
Loans receivable, Noncovered	1,254,476	1,353,028
Loans receivable, Covered	16,427	25,707
Recorded loans > 90 days and accruing	53	3,290
Total	1,270,903	1,378,735	1,763,488
Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	6,822	36,224
90 days and greater past due	18,613	38,394
Total past due	25,435	74,618
Current	1,229,041	1,278,410
Loans receivable, Noncovered	1,254,476	1,353,028
Recorded loans > 90 days and accruing	53	3,290
Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	26	1,090
90 days and greater past due	1,259	3,595
Total past due	1,285	4,685
Current	15,142	21,022
Loans receivable, Covered	16,427	25,707
Other [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	128	538
90 days and greater past due	53	160
Total past due	181	698
Current	30,857	35,494
Loans receivable, Noncovered	31,038	36,192
Recorded loans > 90 days and accruing	3	72
Other [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
90 days and greater past due		2
Total past due		2
Current	46	107
Loans receivable, Covered	46	109
Real Estate Mortgage [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, Noncovered	740,997	870,975
Loans receivable, Covered	11,282	18,298
Real Estate Mortgage [Member] | Commercial Real Estate [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	3,843	23,348
90 days and greater past due	6,564	18,337
Total past due	10,407	41,685
Current	730,590	829,290
Loans receivable, Noncovered	740,997	870,975
Real Estate Mortgage [Member] | Commercial Real Estate [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	8	1,090
90 days and greater past due	1,202	3,087
Total past due	1,210	4,177
Current	10,072	14,121
Loans receivable, Covered	11,282	18,298
Real Estate Mortgage [Member] | One-To-Four Family Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, Noncovered	80,058	70,954
Loans receivable, Covered	3,930	4,881
Real Estate Mortgage [Member] | One-To-Four Family Residential [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	284	1,479
90 days and greater past due	456	1,310
Total past due	740	2,789
Current	79,318	68,165
Loans receivable, Noncovered	80,058	70,954
Recorded loans > 90 days and accruing		747
Real Estate Mortgage [Member] | One-To-Four Family Residential [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	18
90 days and greater past due	57	52
Total past due	75	52
Current	3,855	4,829
Loans receivable, Covered	3,930	4,881
Real Estate Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	148,494	134,791	235,831
Real Estate Construction [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, Noncovered	143,650	130,753
Loans receivable, Covered	198	382
Real Estate Construction [Member] | Commercial Real Estate [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	569	3,501
90 days and greater past due	2,721	3,355
Total past due	3,290	6,856
Current	140,360	123,897
Loans receivable, Noncovered	143,650	130,753
Real Estate Construction [Member] | Commercial Real Estate [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
90 days and greater past due		130
Total past due		130
Current	198	252
Loans receivable, Covered	198	382
Real Estate Construction [Member] | One-To-Four Family Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable, Noncovered	4,646	3,656
Real Estate Construction [Member] | One-To-Four Family Residential [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	4,646	3,656
Loans receivable, Noncovered	4,646	3,656
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	255,058	242,535	349,107
Commercial [Member] | Noncovered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-89 days past due	1,998	7,358
90 days and greater past due	8,819	15,232
Total past due	10,817	22,590
Current	243,270	217,908
Loans receivable, Noncovered	254,087	240,498
Recorded loans > 90 days and accruing	50	2,471
Commercial [Member] | Covered [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
90 days and greater past due		324
Total past due		324
Current	971	1,713
Loans receivable, Covered	$ 971	$ 2,037

XML

Borrowed Funds (Schedule Of Borrowed Funds) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Short-term Debt	$ 80,632	$ 70,362
Securities Sold under Agreements to Repurchase [Member]
Short-term Debt	55,632	45,362
Short-term Debt, Average Outstanding Amount	49,115	36,823
Short-term Debt, Weighted Average Interest Rate	0.05%	0.05%
Federal Home Loan Bank Advances [Member]
Short-term Debt	25,000	25,000
Short-term Debt, Average Outstanding Amount	$ 25,000	$ 25,000
Short-term Debt, Weighted Average Interest Rate	3.47%	3.48%

XML

Investment Securities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Investment Securities [Abstract]
Total investments carried at cost	$ 8.1	$ 8.5
Available for sale debt securities amortized cost pledged as collateral	$ 292.6	$ 284.2

XML

Goodwill And Other Intangible Assets (Tables)

12 Months Ended

24 Months Ended

Dec. 31, 2013

Dec. 31, 2013

Goodwill And Other Intangible Assets [Abstract]

Gross Carrying Amount Of Other Intangible Assets And Accumulated Amortization

	At December 31,
(Dollars in thousands)	2013		2012
Core deposit premiums	$	5,400	$	5,400
Less accumulated amortization		(3,343)		(2,857)
Core deposit premiums, net		2,057		2,543
Loan servicing rights		11,689		10,257
Less accumulated amortization		(8,766)		(7,936)
Loan servicing rights, net		2,923		2,321
Other intangible assets, net	$	4,980	$	4,864

Future Amortization Expense For Other Intangibles Assets

(Dollars in thousands)	Core Deposit Premiums		Loan Servicing Rights		Total
2014	$	514	$	512	$	1,026
2015		474		476		950
2016		425		400		825
2017		249		333		582
2018		182		274		456
Thereafter		213		928		1,141
	$	2,057	$	2,923	$	4,980

XML

Subordinated Debentures (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Subordinated Borrowing [Line Items]
Trust Preferred Securities	$ 45,000,000	$ 79,500,000
Subordinated debentures	46,393,000	81,963,000
Investment in common equity issued by Trusts	1,400,000
OKSB Statutory Trust I [Member]
Subordinated Borrowing [Line Items]
Trust Preferred Securities	20,000,000	20,000,000
Adjustable rate	90-day LIBOR
Adjustable rate, additional percentage	3.10%
Amount of trust common equity sold to Southwest	600,000
Subordinated debentures	20,619,000	20,619,000
Outstanding common securities of the Trust	619
Trust liquidation value per share	$ 1,000
SBI Capital Trust II [Member]
Subordinated Borrowing [Line Items]
Trust Preferred Securities	25,000,000	25,000,000
Adjustable rate	90-day LIBOR
Adjustable rate, additional percentage	2.85%
Amount of trust common equity sold to Southwest	800,000
Subordinated debentures	25,774,000	25,774,000
Outstanding common securities of the Trust	774
Trust liquidation value per share	$ 1,000
Southwest Capital Trust II [Member]
Subordinated Borrowing [Line Items]
Trust Preferred Securities	34,500,000	34,500,000
Adjustable rate, additional percentage	10.50%
Amount of trust common equity sold to Southwest	1,100,000
Subordinated debentures		35,570,000
OKSB Subordinated Debentures [Member]
Subordinated Borrowing [Line Items]
Adjustable rate	90-day LIBOR
Adjustable rate, additional percentage	3.10%
Principal amount of subordinated debentures	20,600,000
SBI II Subordinated Debentures [Member]
Subordinated Borrowing [Line Items]
Adjustable rate, additional percentage	2.85%
Principal amount of subordinated debentures	25,800,000
OKSBP Subordinated Debentures [Member]
Subordinated Borrowing [Line Items]
Adjustable rate, additional percentage	10.50%
Principal amount of subordinated debentures	35,600,000
Trust Preferred Securities [Member]
Subordinated Borrowing [Line Items]
Trust liquidation value per share	$ 25
Tier one capital	$ 45,000,000

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Deposits (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Deposits [Abstract]
Deposit Liabilities Reclassified as Loans Receivable	$ 0.5	$ 0.4
Certificate of Deposits Account Registry Services Deposits	$ 1.3	$ 9.9

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Capital Requirements And Regulatory Agreements (Southwest’s, Stillwater National’s, and Bank of Kansas’ Actual Capital Amounts And Ratios) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Southwest [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total Capital, Actual, Amount	$ 310,867	$ 339,964
Total Capital to risk-weighted assets, Actual, Ratio	21.59%	21.56%
Total Capital, For Capital Adequacy Purposes, Amount	115,194	126,122
Total Capital to risk-weighted assets, For Capital Adequacy Purposes, Ratio	8.00%	8.00%
Tier 1 Capital, Actual, Amount	292,051	319,665
Tier 1 Capital to risk-weighted assets, Actual, Ratio	20.28%	20.28%
Tier 1 Capital, For Capital Adequacy Purposes, Amount	57,597	63,061
Tier 1 Capital to risk-weighted assets, For Capital Adequacy Purposes, Ratio	4.00%	4.00%
Tier 1 Leverage, Actual, Amount	292,051	319,665
Tier 1 Leverage to average assets, Actual, Ratio	14.86%	15.01%
Tier 1 Leverage, For Capital Adequacy Purposes, Amount	78,597	85,201
Tier 1 Leverage to average assets, For Capital Adequacy Purposes, Ratio	4.00%	4.00%
Stillwater National [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total Capital, Actual, Amount		269,323
Total Capital to risk-weighted assets, Actual, Ratio		19.55%
Total Capital, To Be Well Capitalized, Amount		137,793
Total Capital to risk-weighted assets, To Be Well Capitalized, Ratio		10.00%
Total Capital, For Capital Adequacy Purposes, Amount		110,234
Total Capital to risk-weighted assets, For Capital Adequacy Purposes, Ratio		8.00%
Tier 1 Capital, Actual, Amount		236,705
Tier 1 Capital to risk-weighted assets, Actual, Ratio		17.18%
Tier 1 Capital, To Be Well Capitalized, Amount		82,676
Tier 1 Capital to risk-weighted assets, To Be Well Capitalized, Ratio		6.00%
Tier 1 Capital, For Capital Adequacy Purposes, Amount		55,117
Tier 1 Capital to risk-weighted assets, For Capital Adequacy Purposes, Ratio		4.00%
Tier 1 Leverage, Actual, Amount		236,705
Tier 1 Leverage to average assets, Actual, Ratio		13.14%
Tier 1 Leverage, To Be Well Capitalized, Amount		90,088
Tier 1 Leverage to average assets, To Be Well Capitalized, Ratio		5.00%
Tier 1 Leverage, For Capital Adequacy Purposes, Amount		72,070
Tier 1 Leverage to average assets, For Capital Adequacy Purposes, Ratio		4.00%
Bank Of Kansas [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total Capital, Actual, Amount		33,356
Total Capital to risk-weighted assets, Actual, Ratio		18.37%
Total Capital, To Be Well Capitalized, Amount		18,161
Total Capital to risk-weighted assets, To Be Well Capitalized, Ratio		10.00%
Total Capital, For Capital Adequacy Purposes, Amount		14,529
Total Capital to risk-weighted assets, For Capital Adequacy Purposes, Ratio		8.00%
Tier 1 Capital, Actual, Amount		31,064
Tier 1 Capital to risk-weighted assets, Actual, Ratio		17.10%
Tier 1 Capital, To Be Well Capitalized, Amount		10,896
Tier 1 Capital to risk-weighted assets, To Be Well Capitalized, Ratio		6.00%
Tier 1 Capital, For Capital Adequacy Purposes, Amount		7,264
Tier 1 Capital to risk-weighted assets, For Capital Adequacy Purposes, Ratio		4.00%
Tier 1 Leverage, Actual, Amount		31,064
Tier 1 Leverage to average assets, Actual, Ratio		10.02%
Tier 1 Leverage, To Be Well Capitalized, Amount		15,506
Tier 1 Leverage to average assets, To Be Well Capitalized, Ratio		5.00%
Tier 1 Leverage, For Capital Adequacy Purposes, Amount		12,405
Tier 1 Leverage to average assets, For Capital Adequacy Purposes, Ratio		4.00%
Bank SNB [Member]
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Total Capital, Actual, Amount	284,388
Total Capital to risk-weighted assets, Actual, Ratio	19.83%
Total Capital, To Be Well Capitalized, Amount	143,413
Total Capital to risk-weighted assets, To Be Well Capitalized, Ratio	10.00%
Total Capital, For Capital Adequacy Purposes, Amount	114,730
Total Capital to risk-weighted assets, For Capital Adequacy Purposes, Ratio	8.00%
Tier 1 Capital, Actual, Amount	266,132
Tier 1 Capital to risk-weighted assets, Actual, Ratio	18.56%
Tier 1 Capital, To Be Well Capitalized, Amount	86,048
Tier 1 Capital to risk-weighted assets, To Be Well Capitalized, Ratio	6.00%
Tier 1 Capital, For Capital Adequacy Purposes, Amount	57,365
Tier 1 Capital to risk-weighted assets, For Capital Adequacy Purposes, Ratio	4.00%
Tier 1 Leverage, Actual, Amount	266,132
Tier 1 Leverage to average assets, Actual, Ratio	13.62%
Tier 1 Leverage, To Be Well Capitalized, Amount	97,719
Tier 1 Leverage to average assets, To Be Well Capitalized, Ratio	5.00%
Tier 1 Leverage, For Capital Adequacy Purposes, Amount	$ 78,175
Tier 1 Leverage to average assets, For Capital Adequacy Purposes, Ratio	4.00%

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Loans And Allowance For Loan Losses (Average Recorded Investment And Interest Income Recognized On Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Noncovered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 62,216	$ 45,905	$ 28,792
Interest Income	1,871	1,713	3,411
Covered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	21,383	30,791	45,412
Interest Income	329	185
Commercial Real Estate [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	47,835	36,373	10,012
Interest Income	1,784	1,517	1,852
Commercial Real Estate [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	15,290	21,110	26,642
Interest Income	328	184
One-To-Four Family Residential [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	362	427	1,317
Interest Income		8	8
One-To-Four Family Residential [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	4,283	5,627	7,926
Interest Income	1	1
Real Estate Construction [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	2,488	4,507	8,222
Interest Income		51	805
Real Estate Construction [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	313	1,721	6,003
Commercial [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	11,468	4,494	9,144
Interest Income	87	137	746
Commercial [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,431	2,175	4,403
Other [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	63	104	97
Other [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 66	$ 158	$ 438

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Deposits (Time Deposits Maturities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Deposits [Abstract]
2013	$ 380,504
2014	96,028
2015	31,540
2016	20,738
2017	8,616
Total time deposits	$ 537,426

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Shareholders' Equity (Details) (USD $)	0 Months Ended	12 Months Ended
	Dec. 05, 2008	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Common stock reserved for issuance		800,000
Net proceeds from issuance of common stock		$ 229,000	$ 127,000	$ 64,000
Preferred stock share issued	70,000
Preferred stock par value	$ 1,000
Preferred stock liquidation amount per share	$ 1,000
Preferred stock liquidation amount	70,000,000
Preferred stock dividend percentage	5.00%
Preferred stock dividend percentage, thereafter	9.00%
Preferred stock redemption restriction period		5 years
Warrant issued	703,753
Warrant exercise price	$ 14.92
Warrant expiration period	10 years
Preferred stock allocated amount	3,700,000
Preferred Stock, Accretion of Redemption Discount		0	1,500,000	700,000
Amount of Treasury Department Shares Repurchased		70,000
Accelerated accretion of discount from repurchase of Treasury Department Shares		1,200,000
Series B Preferred Stock [Member]
Preferred stock allocated amount	$ 66,300,000
Employee Stock Purchase Plan [Member]
Common stock reserved for issuance		150,000
Common stock issued, shares		56,136
Treasury shares reissued		52,500
2008 Stock Based Award Plan [Member]
Common stock reserved for issuance		800,000
Treasury shares reissued		25,725

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Derivative Instruments (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Derivative Instruments [Abstract]
Interest rate swap agreement Notional amount	$ 25.0
Interest payment period	7 years
Fixed interest rate	6.15%
Variable rate basis	three-month LIBOR
Variable interest rate	2.85%
Rate received by Southwest	3.09%
Pretax loss related to derivative contracts	2.0	3.2
Gain or loss due to changes in the fair value of the derivative hedging instrument	0.7	0.2
Net cash flows as a result of the interest rate swap agreement	0.8	0.7
The fair value of cash and securities posted as collateral	$ 4.1	$ 4.2

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Computation of basic and diluted earnings per common share
Antidilutive options to purchase common shares	0	5,000	73,814
Numerator:
Net income	$ 17,435	$ 16,187	$ (68,295)
Preferred dividend		(2,196)	(3,522)
Warrant amortization		(1,545)	(731)
Net income available to common shareholders	17,435	12,446	(72,548)
Earnings allocated to participating securities	(139)
Numerator for basic earnings per common share	17,296	12,446	(72,548)
Effect of reallocating undistributed earnings of participating securities	139
Numerator for diluted earnings per common share	$ 17,435	$ 12,446	$ (72,548)
Denominator:
Weighted average common shares outstanding	19,516,776	19,374,098	19,414,231
Effect of dilutive securities:
Stock options	87,469
Denominator for diluted earnings per common share	19,604,245	19,374,098	19,414,231
Earnings per common share:
Basic	$ 0.89	$ 0.64	$ (3.73)
Diluted	$ 0.89	$ 0.64	$ (3.73)

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Borrowed Funds (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 item entity	Dec. 31, 2012
Federal funds purchase line available under repurchase agreements	$ 150,000,000
Number of Entities with Repurchase Agreement Lines Available	5
Repurchase Agreement transaction period	one-to-four day
Number of Repurchase Agreements that Exceed Ten Percent of Equity Capital	0
Loans pledged under FHLB agreement	517,800,000	532,900,000
Investment Securities Pledged Under FHLB Agreement	50,100,000	12,200,000
Total Amount Available Under the Borrower-In-Custody Program	0
First Year of Scheduled FHLB Principlal Payments	2016
Line of Credit Facility, Maximum Borrowing Capacity	44,600,000
Bank SNB [Member]
Federal Home Loan Bank Advances	$ 25,000,000

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Fair Value Measurements (Asset Measured At Fair Value On A Nonrecurring Basis) (Details) (Fair Value Measurements Nonrecurring [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Noncovered impaired loans at fair value:
Assets fair value, Total	$ 38,427	$ 64,225
Noncovered Impaired Loans at Fair Value Total Gains (Losses)	(2,119)	(14,398)
Commercial Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	20,423	33,137
Noncovered Impaired Loans at Fair Value Total Gains (Losses)	3,075	(6,674)
One-To-Four Family Residential [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total		23
Noncovered Impaired Loans at Fair Value Total Gains (Losses)		(7)
Real Estate Construction [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	2,636	232
Noncovered Impaired Loans at Fair Value Total Gains (Losses)	(18)	3,532
Commercial [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	9,176	13,473
Noncovered Impaired Loans at Fair Value Total Gains (Losses)	(2,989)	(6,637)
Other Consumer [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	46	81
Noncovered Impaired Loans at Fair Value Total Gains (Losses)	35	31
Noncovered Other Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	560	11,315
Noncovered Impaired Loans at Fair Value Total Gains (Losses)	(1,520)	(3,998)
Covered Other Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	2,094	3,643
Noncovered Impaired Loans at Fair Value Total Gains (Losses)	(702)	(180)
Mortgage Loan Servicing Rights [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	3,492	2,321
Noncovered Impaired Loans at Fair Value Total Gains (Losses)		(465)
Level 2 Inputs [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	34,935	61,904
Level 2 Inputs [Member] | Commercial Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	20,423	33,137
Level 2 Inputs [Member] | One-To-Four Family Residential [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total		23
Level 2 Inputs [Member] | Real Estate Construction [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	2,636	232
Level 2 Inputs [Member] | Commercial [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	9,176	13,473
Level 2 Inputs [Member] | Other Consumer [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	46	81
Level 2 Inputs [Member] | Noncovered Other Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	560	11,315
Level 2 Inputs [Member] | Covered Other Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	2,094	3,643
Level 3 Inputs [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	3,492	2,321
Level 3 Inputs [Member] | Mortgage Loan Servicing Rights [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	$ 3,492	$ 2,321

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Operating Segments

12 Months Ended

Dec. 31, 2013

Operating Segments [Abstract]

Operating Segments

Note 18:  Operating Segments

We operatefive principal segments:  Oklahoma Banking, Texas Banking, Kansas Banking,  Mortgage Banking, and Other Operations.  The Oklahoma Banking segment, the Texas Banking segment, and the Kansas Banking segment provide deposit and lending services.  The Mortgage Banking segment consists of residential mortgage lending services to customers.Prior to 2013, the Mortgage Banking segment included all loans available for sale in the secondary market. This adjustment had an immaterial impact on interest income for 2012 and 2011.  Other Operations includes our funds management unit and corporate investments. 

The primary purpose of the funds management unit is to manage our overall internal liquidity needs and interest rate risk.  Each segment borrows funds from or provides funds to the funds management unit as needed to support its operations.  The value of funds provided to and the cost of funds borrowed from the funds management unit by each segment are internally priced at rates that approximate market rates for funds with similar duration.  The yield used in the funds transfer pricing curve is a blend of rates based on the volume usage of retail and brokered certificates of deposit and Federal Home Loan Bank advances. 

Effective January 1, 2013, and as a result of new management, we began to identify reportable segments by geographic location of relationship manager.  Operating results are adjusted for allocated service and management costs. In addition to this realignment, management decided to eliminate a capital credit allocation between the reportable segments.  The prior year information has been realigned and reallocated for consistency with current identified reportable segments.

The accounting policies of each reportable segment are the same as ours.  Expenses for consolidated back-office operations are allocated to operating segments based on estimated uses of those services.  General overhead expenses such as executive administration, accounting, and audit are allocated based on the direct expense and/or deposit and loan volumes of the operating segment.  Income tax expense for the operating segments is calculated at statutory rates.  The Other Operations segment records the tax expense or benefit necessary to reconcile to the consolidated financial statements. 

Capital is assigned to each of the segments using a risk-based capital pricing methodology that assigns capital ratios by asset, deposit, or revenue category based on credit risk, interest rate risk, market risk, operational risk, and liquidity risk factors.   

The following table summarizes financial results by operating segment: 

For the year ended December 31,2013
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	34,725	$	18,949	$	10,527	$	670	$	(2,221)	$	62,650
Provision for loan losses		(486)		(6,403)		(472)		148		4		(7,209)
Noninterest income		6,943		1,305		1,944		2,701		750		13,643
Noninterest expenses		28,000		9,494		11,898		2,287		3,632		55,311
Income (loss) before taxes		14,154		17,163		1,045		936		(5,107)		28,191
Taxes on income		5,400		6,548		399		357		(1,948)		10,756
Net income (loss)	$	8,754	$	10,615	$	646	$	579	$	(3,159)	$	17,435
* Includes externally generated loss of $1.6 million, primarily from investing services, and an internally generated revenue of $0.1 million from the funds management unit
Fixed asset expenditures	$	85	$	$ 9	$	$ 8	$	-	$	$ 1,753	$	1,855
Total loans at period end		681,991		366,697		198,992		23,215		8		1,270,903
Total assets at period end		686,736		361,058		203,631		26,162		703,836		1,981,423
Total deposits at period end		1,113,715		207,227		247,884		1,895		13,365		1,584,086

For the year ended December 31,2012
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	37,954	$	25,190	$	9,685	$	1,370	$	2,364	$	76,563
Provision for loan losses		448		5,364		(2,705)		-		-		3,107
Noninterest income		7,697		1,854		2,440		2,771		1,174		15,936
Noninterest expenses		29,406		12,848		13,767		2,430		4,871		63,322
Income (loss) before taxes		15,797		8,832		1,063		1,711		(1,333)		26,070
Taxes on income		5,989		3,348		403		649		(506)		9,883
Net income (loss)	$	9,808	$	5,484	$	660	$	1,062	$	(827)	$	16,187
* Includes externally generated revenue of $0.8 million, primarily from investing services, and an internally generated revenue of $2.8 million from the funds management unit
Fixed asset expenditures	$	178	$	$ 71	$	$ 8	$	-	$	$ 1,362	$	1,619
Total loans at period end		652,121		520,481		174,451		31,682		-		1,378,735
Total assets at period end		664,607		515,675		178,291		34,304		729,378		2,122,255
Total deposits at period end		1,254,348		166,919		270,368		2,420		15,523		1,709,578

For the year ended December 31,2011
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	43,005	$	29,820	$	12,414	$	1,438	$	9,655	$	96,332
Provision for loan losses		27,087		98,335		6,679		-		-		132,101
Noninterest income		7,781		1,856		2,065		1,297		1,019		14,018
Noninterest expenses		36,402		28,727		19,131		2,121		3,820		90,201
Income (loss) before taxes		(12,703)		(95,386)		(11,331)		614		6,854		(111,952)
Taxes on income		(4,955)		(37,196)		(4,419)		240		2,673		(43,657)
Net income (loss)	$	(7,748)	$	(58,190)	$	(6,912)	$	374	$	4,181	$	(68,295)
* Includes externally generated revenue of $2.8 million, primarily from investing services, and an internally generated revenue of $7.9 million from the funds management unit
Fixed asset expenditures	$	366	$	3	$	193	$	5	$	1,119	$	1,686
Total loans at period end		858,212		653,199		213,382		38,695		-		1,763,488
Total assets at period end		888,839		653,146		219,481		40,876		574,934		2,377,276
Total deposits at period end		1,406,361		156,101		276,757		1,430		80,733		1,921,382

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Investment Securities (Summary Of Securities With Gross Unrealized Losses And Their Fair Values) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013 security	Dec. 31, 2012 security
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale	108	41
Amortized cost of securities with unrealized losses, Available for Sale	$ 261,473	$ 74,925
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(6,048)	(513)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale	(276)	(15)
Fair value of securities with unrealized losses, Available for Sale	255,149	74,397
Other Securities [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale	8
Amortized cost of securities with unrealized losses, Available for Sale	27,728
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(165)
Fair value of securities with unrealized losses, Available for Sale	27,563
Federal Agency Securities [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale	24	5
Amortized cost of securities with unrealized losses, Available for Sale	87,921	9,887
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(2,885)	(19)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale	(4)
Fair value of securities with unrealized losses, Available for Sale	85,032	9,868
Obligations Of State And Political Subdivisions [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale	20	9
Amortized cost of securities with unrealized losses, Available for Sale	31,579	10,457
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(887)	(83)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale	(198)
Fair value of securities with unrealized losses, Available for Sale	30,494	10,374
Residential Mortgage-Backed Securities [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale	53	23
Amortized cost of securities with unrealized losses, Available for Sale	104,667	46,787
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(2,015)	(288)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale	(74)	(15)
Fair value of securities with unrealized losses, Available for Sale	102,578	46,484
Asset-Backed Securities [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale	3	4
Amortized cost of securities with unrealized losses, Available for Sale	9,578	7,794
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(96)	(123)
Fair value of securities with unrealized losses, Available for Sale	$ 9,482	$ 7,671

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Off-Balance-Sheet Arrangments, Commitments, Guarantees And Contingencies (Tables)

12 Months Ended

Dec. 31, 2013

Off-Balance-Sheet Arrangments, Commitments, Guarantees And Contingencies [Abstract]

Summary Of Off-Balance-Sheet Financial Instruments

	At December 31,
(Dollars in thousands)	2013		2012
Commitments to extend commercial and real estate mortgage credit	$	323,925	$	248,337
Standby and commercial letters of credit		5,800		6,744
Total	$	329,725	$	255,081

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Deposits (Schedule Of Deposits) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Deposits [Abstract]
Noninterest-bearing demand	$ 444,796	$ 424,008
Interest-bearing demand	120,156	112,012
Money market accounts	439,981	423,417
Savings accounts	41,727	37,693
Time deposits of $100,000 or more	251,185	351,273
Other time deposits	286,241	361,175
Total deposits	$ 1,584,086	$ 1,709,578	$ 1,921,382

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Parent Company Condensed Financial Information (Statements Of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Net income	$ 17,435	$ 16,187	$ (68,295)
Net cash provided by (used in) operating activities	45,239	45,134	46,696
Purchases of available for sale securities	(140,473)	(202,273)	(75,650)
Net cash used in investing activities	99,356	285,324	487,071
Net proceeds from issuance of common stock	229	127	64
Preferred stock dividends paid		(4,407)	(1,751)
Net cash provided by (used in) financing activities	(152,835)	(272,268)	(371,374)
Net increase (decrease) in cash and cash equivalents	(8,240)	58,190	162,393
Beginning of period	288,079	229,889	67,496
End of period	279,839	288,079	229,889
Parent Company [Member]
Net income	17,435	16,187	(68,295)
Equity in undistributed income (loss) of subsidiaries	(1,183)	49,173	64,455
Other, net	(2,341)	(5,437)	499
Net cash provided by (used in) operating activities	13,911	59,923	(3,341)
Purchases of available for sale securities		(247)	(724)
Available for sale securities, Sales/Maturities	32		46
Investment in/capital contribution to other subsidiaries	15,000
Net cash used in investing activities	15,032	(247)	(678)
Net proceeds from issuance of common stock	2,708	925	278
Proceeds from issuance of subordinated debentures	(35,570)
Preferred stock dividends paid		(74,330)	(1,751)
Other, net	(2,287)	(76)
Net cash provided by (used in) financing activities	(35,149)	(73,481)	(1,473)
Net increase (decrease) in cash and cash equivalents	(6,206)	(13,805)	(5,492)
Beginning of period	18,245	32,050	37,542
End of period	$ 12,039	$ 18,245	$ 32,050

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Subordinated Debentures (Tables)

12 Months Ended

Dec. 31, 2013

Subordinated Debentures [Abstract]

Schedule of Trust Preferred Securities

At December 31, 2013
(Dollars in thousands)		Subordinated Debentures Owed to Trusts		Trust Preferred Securities of the Trusts	Rates	Final Maturity Date
OKSB Statutory Trust I	$	20,619	$	20,000	3.35%	June 26, 2033
SBI Capital Trust II		25,774		25,000	3.09%	October 7, 2033
	$	46,393	$	45,000

At December 31, 2012
(Dollars in thousands)		Subordinated Debentures Owed to Trusts		Trust Preferred Securities of the Trusts	Rates	Final Maturity Date
OKSB Statutory Trust I	$	20,619	$	20,000	3.41%	June 26, 2033
SBI Capital Trust II		25,774		25,000	3.19%	October 7, 2033
Southwest Capital Trust II		35,570		34,500	10.50%	September 15, 2038
	$	81,963	$	79,500

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Loans And Allowance For Loan Losses (Southwest's Loan Classifications) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, Noncovered	$ 1,254,476	$ 1,353,028
Less: Allowance for loan losses	(36,607)	(46,494)
Total loans, net, Noncovered	1,217,869	1,306,534
Loans receivable, Covered	16,427	25,707
Less: Allowance for loan losses	(56)	(224)
Net covered loans receivable	16,371	25,483
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, Noncovered	254,087	240,498
Loans receivable, Covered	971	2,037
Commercial Real Estate [Member] | Real Estate Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, Noncovered	740,997	870,975
Loans receivable, Covered	11,282	18,298
Commercial Real Estate [Member] | Real Estate Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, Noncovered	143,650	130,753
Loans receivable, Covered	198	382
One-To-Four Family Residential [Member] | Real Estate Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, Noncovered	80,058	70,954
Loans receivable, Covered	3,930	4,881
One-To-Four Family Residential [Member] | Real Estate Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, Noncovered	4,646	3,656
Guaranteed Student Loans [Member] | Installment And Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, Noncovered	4,394	4,680
Other [Member] | Installment And Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable, Noncovered	26,644	31,512
Loans receivable, Covered	$ 46	$ 109

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Goodwill and Other Intangible Assets (Gross Carrying Amount of Other Intangible Assets and Accumulated Amortization) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Other Intangible assets, net	$ 4,980	$ 4,864
Core Deposits [Member]
Finite-Lived Intangible Assets, Gross	5,400	5,400
Finite-Lived Intangible Assets, Accumulated Amortization	(3,343)	(2,857)
Other Intangible assets, net	2,057	2,543
Servicing Contracts [Member]
Finite-Lived Intangible Assets, Gross	11,689	10,257
Finite-Lived Intangible Assets, Accumulated Amortization	(8,766)	(7,936)
Other Intangible assets, net	$ 2,923	$ 2,321

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Loans And Allowance For Loan Losses (Classification Of Risk Category Of Loans, By Classes) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment [Line Items]
Total	$ 1,270,903	$ 1,378,735	$ 1,763,488
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,058,203	1,117,295
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	93,231	123,260
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	113,979	134,614
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	5,490	3,566
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	752,279	889,273	1,052,247
Commercial Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	610,929	718,054
Commercial Real Estate [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	62,932	88,167
Commercial Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	77,453	80,104
Commercial Real Estate [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	965	2,948
One-To-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	83,988	75,835	87,447
One-To-Four Family Residential [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	81,534	71,975
One-To-Four Family Residential [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	1,452	1,901
One-To-Four Family Residential [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	944	1,923
One-To-Four Family Residential [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	58	36
Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	148,494	134,791	235,831
Real Estate Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	101,715	83,350
Real Estate Construction [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	22,576	25,964
Real Estate Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	24,203	25,477
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	255,058	242,535	349,107
Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	233,132	208,019
Commercial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	6,130	7,047
Commercial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	11,329	26,887
Commercial [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	4,467	582
Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	31,084	36,301	38,856
Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	30,893	35,897
Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	141	181
Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total	$ 50	$ 223

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Investment Securities (Summary Of Amortized Cost And Fair Values Of Investment Securities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Held to Maturity	$ 11,720	$ 12,797
Gross Unrealized Gains, Held to Maturity	395	862
Fair Value, Held to Maturity	12,115	13,659
Amortized Cost, Available for Sale	385,423	358,317
Gross Unrealized Gains, Available for Sale	3,380	6,526
Gross Unrealized Losses, Available for Sale	(6,324)	(528)
Available-for-Sale Securities, Total	382,479	364,315
Parent Company [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Available-for-Sale Securities, Total	3,161	2,462
Federal Agency Securities [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Available for Sale	123,332	114,159
Gross Unrealized Gains, Available for Sale	330	1,474
Gross Unrealized Losses, Available for Sale	(2,889)	(19)
Available-for-Sale Securities, Total	120,773	115,614
Obligations Of State And Political Subdivisions [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Held to Maturity	11,720	12,797
Gross Unrealized Gains, Held to Maturity	395	862
Fair Value, Held to Maturity	12,115	13,659
Amortized Cost, Available for Sale	33,685	34,754
Gross Unrealized Gains, Available for Sale	36	887
Gross Unrealized Losses, Available for Sale	(1,085)	(83)
Available-for-Sale Securities, Total	32,636	35,558
Residential Mortgage-Backed Securities [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Available for Sale	183,512	200,310
Gross Unrealized Gains, Available for Sale	1,747	3,668
Gross Unrealized Losses, Available for Sale	(2,089)	(303)
Available-for-Sale Securities, Total	183,170	203,675
Asset-Backed Securities [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Available for Sale	9,578	7,794
Gross Unrealized Losses, Available for Sale	(96)	(123)
Available-for-Sale Securities, Total	9,482	7,671
Equity Securities [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Available for Sale	35,316	1,300
Gross Unrealized Gains, Available for Sale	1,267	497
Gross Unrealized Losses, Available for Sale	(165)
Available-for-Sale Securities, Total	$ 36,418	$ 1,797

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Investment Securities

12 Months Ended

Dec. 31, 2013

Investment Securities [Abstract]

Investment Securities

Note 2:  Investment Securities

A summary of the amortized cost and fair values of investment securities follows:

	Amortized		Gross Unrealized				Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
At December 31, 2013
Held to Maturity:
Obligations of state and political subdivisions	$	11,720	$	395	$	-	$	12,115
Total	$	11,720	$	395	$	-	$	12,115
Available for Sale:
Federal agency securities	$	123,332	$	330	$	(2,889)	$	120,773
Obligations of state and political subdivisions		33,685		36		(1,085)		32,636
Residential mortgage-backed securities		183,512		1,747		(2,089)		183,170
Asset-backed securities		9,578		-		(96)		9,482
Equity securities		35,316		1,267		(165)		36,418
Total	$	385,423	$	3,380	$	(6,324)	$	382,479
At December 31, 2012
Held to Maturity:
Obligations of state and political subdivisions	$	12,797	$	862	$	-	$	13,659
Total	$	12,797	$	862	$	-	$	13,659
Available for Sale:
Federal agency securities	$	114,159	$	1,474	$	(19)	$	115,614
Obligations of state and political subdivisions		34,754		887		(83)		35,558
Residential mortgage-backed securities		200,310		3,668		(303)		203,675
Asset-backed securities		7,794		-		(123)		7,671
Equity securities		1,300		497		-		1,797
Total	$	358,317	$	6,526	$	(528)	$	364,315

Residential mortgage-backed securities consist of agency securities underwritten and guaranteed by Government National Mortgage Association (“Ginnie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), and Federal National Mortgage Association (“Fannie Mae”). 

Securities with limited marketability, such as Federal Reserve Bank stock, Federal Home Loan Bank stock, and certain other investments, are carried at cost and included in other assets on our Consolidated Statement of Financial Condition.  Total investments carried at cost were $8.1 million and $8.5 million at December 31, 2013 and 2012, respectively.  There are no identified events or changes in circumstances that may have a significant adverse effect on the investments carried at cost.  

A comparison of the amortized cost and approximate fair value of our investment securities by maturity date at December 31, 2013 follows: 

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
One year or less	$	20,806	$	21,151	$	1,941	$	1,957
More than one year through five years		167,476		168,675		2,227		2,282
More than five years through ten years		151,933		147,705		4,151		4,265
More than ten years		45,208		44,948		3,401		3,611
Total	$	385,423	$	382,479	$	11,720	$	12,115

The foregoing analysis assumes that our residential mortgage-backed securities mature during the period in which they are estimated to prepay.  No other prepayment or repricing assumptions have been applied to our investment securities for this analysis. 

Gain or loss on sale or call of investments is based upon the specific identification method.  The 2013 sales of investment securities netted to zero gain. Sales of securities are as follows: 

(Dollars in thousands)		2013		2012		2011
Proceeds from sales	$	2,744	$	6,588	$	-
Gross realized gains		(0)		45		-
Gross realized losses		(0)		(10)		-

The following table shows securities with gross unrealized losses and their fair values by the length of time that the individual securities had been in a continuous unrealized loss position at December 31, 2013 and 2012.  Securities whose market values exceed cost are excluded from this table.     

				Continuous Unrealized
		Amortized cost of		Loss Existing for:				Fair value of
	Number of	securities with		Less Than		More Than		securities with
(Dollars in thousands)	Securities	unrealized losses		12 Months		12 Months		unrealized losses
At December 31, 2013
Available for Sale:
Federal agency securities	24	$	87,921	$	(2,885)	$	(4)	$	85,032
Obligations of state and political subdivisions	20		31,579		(887)		(198)		30,494
Residential mortgage-backed securities	53		104,667		(2,015)		(74)		102,578
Asset-backed securities	3		9,578		(96)		-		9,482
Other Securities	8		27,728		(165)		-		27,563
Total	108	$	261,473	$	(6,048)	$	(276)	$	255,149
At December 31, 2012
Available for Sale:
Federal agency securities	5	$	9,887	$	(19)	$	-	$	9,868
Obligations of state and political subdivisions	9		10,457		(83)		-		10,374
Residential mortgage-backed securities	23		46,787		(288)		(15)		46,484
Asset-backed securities	4		7,794		(123)		-		7,671
Total	41	$	74,925	$	(513)	$	(15)	$	74,397

We evaluate all securities on an individual basis for other-than-temporary impairment on at least a quarterly basis.  Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of us to retain our investment in the issuer for a period of time sufficient to allow for an anticipated recovery in fair value. 

Management has the ability and intent to hold the securities classified as held to maturity in the table above until they mature, at which time we expect to receive full value for the securities.  Furthermore, as of December 31, 2013, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is not more likely than not that we will have to sell any such securities before a recovery of cost.  The declines in fair value were attributable to increases in market interest rates over the yields available at the time the underlying securities were purchased or increases in spreads over market interest rates.  Management does not believe any of the securities are impaired due to credit quality.  Accordingly, as of December 31, 2013, management believes the impairment of these investments is not deemed to be other-than-temporary. 

As required by law, available for sale investment securities are pledged to secure public and trust deposits, sweep agreements, and borrowings from the FHLB.  Securities with an amortized cost of $292.6 million and $284.2 million were pledged to meet such requirements at December 31, 2013 and 2012, respectively.  Any amount over-pledged can be released at any time.

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Loans And Allowance For Loan Losses (By Balance In The Allowance For Loan Losses And The Recorded Investment In Loans Portfolio Classification Disaggregated On The Basis Of Impairment Evaluation Method) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period	$ 46,718	$ 44,684	$ 65,229
Loans charged-off	(10,004)	(7,540)	(156,625)
Recoveries	7,158	6,467	3,979
Provision for loan losses	(7,209)	3,107	132,101
Balance at end of period	36,663	46,718	44,684
Individually evaluated for impairment	7,939	11,724	966
Collectively evaluated for impairment	28,668	34,770	43,267
Acquired with deteriorated credit quality	56	224	451
Individually evaluated for impairment	61,253	75,674	45,765
Collectively evaluated for impairment	1,193,223	1,277,354	1,680,108
Acquired with deteriorated credit quality	16,427	25,707	37,615
Total ending loans balance	1,270,903	1,378,735	1,763,488
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period	27,223	21,749	32,508
Loans charged-off	(806)	(2,167)	(71,066)
Recoveries	171	58	411
Provision for loan losses	(7,734)	7,583	59,896
Balance at end of period	18,854	27,223	21,749
Individually evaluated for impairment	4,012	5,094	411
Collectively evaluated for impairment	14,839	21,975	21,198
Acquired with deteriorated credit quality	3	154	140
Individually evaluated for impairment	47,730	54,055	21,701
Collectively evaluated for impairment	693,267	816,920	1,006,860
Acquired with deteriorated credit quality	11,282	18,298	23,686
Total ending loans balance	752,279	889,273	1,052,247
One-To-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period	861	1,016	1,597
Loans charged-off	(578)	(269)	(346)
Recoveries	253	271	67
Provision for loan losses	314	(157)	(302)
Balance at end of period	850	861	1,016
Individually evaluated for impairment		7	21
Collectively evaluated for impairment	797	785	981
Acquired with deteriorated credit quality	53	69	14
Individually evaluated for impairment	456	570	1,468
Collectively evaluated for impairment	79,602	70,384	78,907
Acquired with deteriorated credit quality	3,930	4,881	7,072
Total ending loans balance	83,988	75,835	87,447
Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period	5,271	11,177	19,605
Loans charged-off	246		(62,070)
Recoveries	4,527	1,972	1,521
Provision for loan losses	(4,521)	(7,878)	52,121
Balance at end of period	5,523	5,271	11,177
Individually evaluated for impairment	18	50	73
Collectively evaluated for impairment	5,505	5,221	10,846
Acquired with deteriorated credit quality			258
Individually evaluated for impairment	2,720	4,202	11,983
Collectively evaluated for impairment	145,576	130,207	220,102
Acquired with deteriorated credit quality	198	382	3,746
Total ending loans balance	148,494	134,791	235,831
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period	12,604	9,827	10,605
Loans charged-off	(8,599)	(4,455)	(22,103)
Recoveries	2,049	3,671	1,864
Provision for loan losses	4,931	3,561	19,461
Balance at end of period	10,985	12,604	9,827
Individually evaluated for impairment	3,863	6,492	349
Collectively evaluated for impairment	7,122	6,111	9,439
Acquired with deteriorated credit quality		1	39
Individually evaluated for impairment	10,297	16,759	10,490
Collectively evaluated for impairment	243,790	223,739	335,776
Acquired with deteriorated credit quality	971	2,037	2,841
Total ending loans balance	255,058	242,535	349,107
Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period	759	915	914
Loans charged-off	(267)	(649)	(1,040)
Recoveries	158	495	116
Provision for loan losses	(199)	(2)	925
Balance at end of period	451	759	915
Individually evaluated for impairment	46	81	112
Collectively evaluated for impairment	405	678	803
Individually evaluated for impairment	50	88	123
Collectively evaluated for impairment	30,988	36,104	38,463
Acquired with deteriorated credit quality	46	109	270
Total ending loans balance	$ 31,084	$ 36,301	$ 38,856

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Operating Segments (Tables)

12 Months Ended

Dec. 31, 2013

Operating Segments [Abstract]

Financial Results By Operating Segment

For the year ended December 31,2013
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	34,725	$	18,949	$	10,527	$	670	$	(2,221)	$	62,650
Provision for loan losses		(486)		(6,403)		(472)		148		4		(7,209)
Noninterest income		6,943		1,305		1,944		2,701		750		13,643
Noninterest expenses		28,000		9,494		11,898		2,287		3,632		55,311
Income (loss) before taxes		14,154		17,163		1,045		936		(5,107)		28,191
Taxes on income		5,400		6,548		399		357		(1,948)		10,756
Net income (loss)	$	8,754	$	10,615	$	646	$	579	$	(3,159)	$	17,435
* Includes externally generated loss of $1.6 million, primarily from investing services, and an internally generated revenue of $0.1 million from the funds management unit
Fixed asset expenditures	$	85	$	$ 9	$	$ 8	$	-	$	$ 1,753	$	1,855
Total loans at period end		681,991		366,697		198,992		23,215		8		1,270,903
Total assets at period end		686,736		361,058		203,631		26,162		703,836		1,981,423
Total deposits at period end		1,113,715		207,227		247,884		1,895		13,365		1,584,086

For the year ended December 31,2012
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	37,954	$	25,190	$	9,685	$	1,370	$	2,364	$	76,563
Provision for loan losses		448		5,364		(2,705)		-		-		3,107
Noninterest income		7,697		1,854		2,440		2,771		1,174		15,936
Noninterest expenses		29,406		12,848		13,767		2,430		4,871		63,322
Income (loss) before taxes		15,797		8,832		1,063		1,711		(1,333)		26,070
Taxes on income		5,989		3,348		403		649		(506)		9,883
Net income (loss)	$	9,808	$	5,484	$	660	$	1,062	$	(827)	$	16,187
* Includes externally generated revenue of $0.8 million, primarily from investing services, and an internally generated revenue of $2.8 million from the funds management unit
Fixed asset expenditures	$	178	$	$ 71	$	$ 8	$	-	$	$ 1,362	$	1,619
Total loans at period end		652,121		520,481		174,451		31,682		-		1,378,735
Total assets at period end		664,607		515,675		178,291		34,304		729,378		2,122,255
Total deposits at period end		1,254,348		166,919		270,368		2,420		15,523		1,709,578

For the year ended December 31,2011
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	43,005	$	29,820	$	12,414	$	1,438	$	9,655	$	96,332
Provision for loan losses		27,087		98,335		6,679		-		-		132,101
Noninterest income		7,781		1,856		2,065		1,297		1,019		14,018
Noninterest expenses		36,402		28,727		19,131		2,121		3,820		90,201
Income (loss) before taxes		(12,703)		(95,386)		(11,331)		614		6,854		(111,952)
Taxes on income		(4,955)		(37,196)		(4,419)		240		2,673		(43,657)
Net income (loss)	$	(7,748)	$	(58,190)	$	(6,912)	$	374	$	4,181	$	(68,295)
* Includes externally generated revenue of $2.8 million, primarily from investing services, and an internally generated revenue of $7.9 million from the funds management unit
Fixed asset expenditures	$	366	$	3	$	193	$	5	$	1,119	$	1,686
Total loans at period end		858,212		653,199		213,382		38,695		-		1,763,488
Total assets at period end		888,839		653,146		219,481		40,876		574,934		2,377,276
Total deposits at period end		1,406,361		156,101		276,757		1,430		80,733		1,921,382

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Summary Of Significant Accounting And Reporting Policies

12 Months Ended

Dec. 31, 2013

Significant Accounting And Reporting Policies [Abstract]

Organization and Nature of Operations

Organization and Nature of Operations – Southwest Bancorp Inc. (“we”, “our”, “us”, or “Southwest”), incorporated in 1981, is a financial holding company headquartered in Stillwater, Oklahoma engaged primarily in commercial and consumer banking services in the states of Oklahoma, Texas, and Kansas.The accompanying consolidated financial statements include the accounts of Bank SNB, a national bank established in 1894, and SNB Capital Corporation, a lending and loan workout subsidiary established in 2009, and consolidated subsidiaries of Bank SNB, including SNB Real Estate Holdings, Inc. Bank SNB and SNB Capital Corporation are wholly owned, direct subsidiaries of ours.All significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

Basis of Presentation – The accounting and reporting policies conform to accounting principles generally accepted in the United States and to generally accepted practices within the banking industry.  The Consolidated Financial Statements include the accounts of Southwest and all other entities in which we have a controlling financial interest.  All significant intercompany accounts and transactions have been eliminated in consolidation.

We have evaluated subsequent events for potential recognition and disclosure through the issue date of the Consolidated Financial Statements included in this Annual Report on Form 10-K.  See further discussion of subsequent events at “Note 20 – Subsequent Events”.

Management Estimates

Management Estimates – In preparing our financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates shown on the consolidated statements of financial condition and revenues and expenses during the periods reported.  Actual results could differ significantly from those estimates.  Changes in economic conditions could affect the determination of material estimates such as the allowance for loan losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, income taxes, and the fair value of financial instruments.

Cash and Cash Equivalents

Cash and Cash Equivalents – For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from depository institutions, and federal funds sold.  Interest-bearing balances held at depository institutions were $251.8  million at December 31, 2013 and $243.0 million at December 31, 2012.  Federal funds sold are sold for one-to-four day periods.

Cash paid for interest totaled $11.5 million in 2013, $19.2 million in 2012, and $26.5 million in 2011.  Cash paid for income taxes totaled $0.4 million in 2013, $1.0 million in 2012, and $5.9 million in 2011.  Noncash transactions included transfer of loans to other real estate totaling $0.9 million in 2013, $2.6 million in 2012, and $62.3 million in 2011.

Bank SNB is required by the Federal Reserve Bank (“FRB”) to maintain average reserve balances. Cash and cash equivalents in the Consolidated Statements of Financial Condition include restricted amounts of $1.8 million and $3.0 million at December 31, 2013 and December 31, 2012, respectively.

Investment Securities

Investment Securities – Investments in debt and equity securities are identified as held to maturity or available for sale based on management considerations of asset/liability strategy, changes in interest rates and prepayment risk, the need to increase liquidity, and other factors, including management’s intent and ability to hold securities to maturity.  We have the ability and intent to hold to maturity our investment securities classified as held to maturity.  We had no investments held for trading purposes for any period presented.  Under certain circumstances (including the deterioration of the issuer’s creditworthiness, a change in tax law, or statutory or regulatory requirements), we may change the investment security classification.  The classifications we utilize determine the related accounting treatment for each category of investments.  Available for sale securities are accounted for at fair value with unrealized gains or losses, net of taxes, excluded from operations and reported as accumulated other comprehensive income or loss.  Held to maturity securities are accounted for at amortized cost.Securities with limited marketability, such as Federal Reserve Bank stock, Federal Home Loan Bank stock, and certain other investments, are carried at cost and included in other assets.

All investment securities are adjusted for amortization of premiums and accretion of discounts.  Amortization of premiums and accretion of discounts are recorded to operations over the contractual maturity or estimated life of the individual investment on the level yield method.  Gain or loss on sale of investments is based upon the specific identification method.  Income earned on our investments in state and political subdivisions generally is not subject to ordinary Federal income tax.

In accordance with authoritative accounting guidance under ASC 320, Debt and Equity Securities, declines in fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses.  The amount of the impairment related to other factors is recognized in other comprehensive income.  Under this guidance, we evaluate investment securities for other-than-temporary impairment on at least a quarterly basis, or more frequently when economic or market conditions warrant such an evaluation.

Federal Reserve Bank and Federal Home Loan Bank Stock

Federal Reserve Bank and Federal Home Loan Bank Stock – Bank SNB is a member of its regional FRB and Federal Home Loan Bank (“FHLB”) system.  FHLB members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional accounts.  Both FRB and FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.

Loans

Loans – Interest on loans is accrued and credited to operations based upon the principal amount outstanding.  Loan origination fees and certain costs of originated loans are amortized as an adjustment to the yield over the term of the loan.  Net unamortized deferred loan fees were $0.1 million at December 31, 2013 and 2012.  Loans are reported at the principal balance outstanding net of the unamortized deferred loan fees.

In general, our policy for nonaccrual loans requires that accrued interest income on nonaccrual loans is written off after the loan is 90 days past due, and that subsequent interest income is recorded when cash receipts are received from the borrower.  We identify past due loans based on contractual terms on a loan by loan basis. 

A loan is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.  The allowance for loan losses related to loans that are evaluated for impairment is based either on the discounted cash flows using the loan’s initial effective interest rate or on the fair value of the collateral for certain collateral dependent loans.  Smaller balance, homogeneous loans, including mortgage, student, and consumer, are collectively evaluated for impairment.  This evaluation is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. 

We originate real estate mortgage loans for either portfolio investment or sale in the secondary market.  During the period of origination, real estate mortgage loans are designated as held either for investment purposes or sale.  Mortgage loans held for sale are generally sold within a one-month period from loan closing at amounts determined by the investor commitment based upon the pricing of the loan.  We provide United States Department of Agriculture ("USDA”) government guaranteed commercial real estate lending services to rural healthcare providers.  The loans are available for sale in the secondary market. 

Loans Acquired through Transfer

Loans Acquired through Transfer – The accounting guidance of ASC 310.30, Loan and Debt Securities Acquired with Deteriorated Credit Quality, applies to loans acquired through the completion of a transfer, including loans acquired in a business combination that have evidence of deterioration of credit quality since origination and for which it is probable, at acquisition, that we will be unable to collect all contractually required payment receivables.  In accordance with this guidance, these loans are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance.  The difference between the undiscounted cash flows expected at acquisition and the investment in the loan, or the “accretable yield”, is recognized as interest income over the life of the loan on a method that approximates the level-yield method.  Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “nonaccretable difference”, are not recognized as a yield adjustment, a loss accrual, or a valuation allowance.  Increases in expected cash flows subsequent to the initial investment are recognized prospectively through adjustment of the yield on the loan over its remaining life.  Decreases in expected cash flows are recognized as impairments.  Valuation allowances on these impaired loans reflect only losses incurred after the acquisition.

Loss Share Receivable

Loss Share Receivable – Bank SNB and the FDIC entered into loss sharing agreements that provide Bank SNB with significant protection against credit losses from loans and related assets acquired in the FNBA FDIC-assisted transaction.  Under these agreements, the FDIC will reimburse Bank SNB 80% of net losses up to $35.0 million on covered assets, primarily acquired loans and other real estate, and 95% of any net losses above $35.0 million.  Bank SNB services the covered assets.  The loss sharing agreements have terms of ten years for one-to-four family residential loans and eight years for all other loan types.  The expected payments from the FDIC under the loss sharing agreements are recorded as part of the covered loans in our Consolidated Statements of Financial Condition.  Assets subject to these agreements are referred to as “covered”.

The difference between the undiscounted expected recoveries at acquisition and the fair value of the loss share receivable is the “accretable portion” and is recognized as interest income over the estimated life of the acquired loan portfolio.  The initially recorded loss share receivable represented 85% of the aggregate loan discount related to the acquired loan portfolio.  Because of the relationship of the loss share receivable to the loan discount, when an adjustment is made to a loan discount to reflect changes in the expected cash flows of the loan, an adjustment to the corresponding loss share receivable attributable to that loan will also occur.

Allowance for Loan Losses

Allowance for Loan Losses – The allowance for loan losses is a reserve established through a provision for loan losses charged to operations.  Loan amounts which are determined to be uncollectible are charged against this allowance, and recoveries, if any, are added to the allowance.  The appropriate amount of the allowance is based on continuous review and evaluation of the loan portfolio and ongoing, quarterly assessments of the probable losses inherent in the loan portfolio.  The allowance for loan losses is determined in accordance with regulatory guidelines and generally accepted accounting principles and is comprised of two primary components, specific and general.  Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. 

The specific component relates to loans that are individually classified as impaired.  Loans deemed to be impaired are evaluated on an individual basis consistent with ASC 310.10.35, Receivables:  Subsequent Measurement.  The amount and level of the impairment allowance is ultimately determined by management’s estimate of the amount of expected future cash flows or, if the loan is collateral dependent, on the value of the collateral, which may vary from period to period depending on changes in the financial condition of the borrower or changes in the estimated value of the collateral.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and deemed as impaired, and classified as nonperforming, potential problem, or performing restructured as applicable.  Charge-offs against the allowance of impaired loans are made when and to the extent the loan is deemed uncollectible. 

The general component of the allowance is calculated based on ASC 450, Contingencies.  Loans not evaluated for specific allowance are segmented into loan pools by type of loan.  The commercial real estate and real estate construction pools are further segmented by the market in which the loan collateral is located.  Our primary markets are Oklahoma, Texas, and Kansas, and loans secured by real estate in those states are included in the “in-market” pool, with the remaining defaulting to the “out-of-market” pool.  Estimated allowances are based on historical loss trends with adjustments factored in based on qualitative risk factors both internal and external to us.  The historical loss trend is determined by loan pool and segmentation and is based on the actual loss history experienced by us over the most recent three years.  The qualitative risk factors include, but are not limited to, economic and business conditions, changes in lending staff, lending policies and procedures, quality of loan review, changes in the nature and volume of the portfolios, loss and recovery trends, asset quality trends, and legal and regulatory considerations.   

Independent appraisals on real estate collateral securing loans are obtained at origination.  New appraisals are obtained periodically and upon discovery of factors that may significantly affect the value of the collateral.  Appraisals usually are received within 30 days of request.  Results of appraisals on nonperforming and potential problem loans are reviewed promptly upon receipt and also are reviewed monthly and considered in the determination of the allowance for loan losses.  Weare not aware of any significant time lapses in the process that have resulted, or would result in, a significant delay in determination of a credit weakness, the identification of a loan as nonperforming, or the measurement of an impairment.

Management strives to carefully monitor credit quality and to identify loans that may become nonperforming.  At any time, however, there are loans included in the portfolio that will result in losses but that have not been identified as nonperforming or potential problem loans.  Because the loan portfolio contains a significant number of commercial and commercial real estate loans with relatively large balances, the unexpected deterioration of one or a few of such loans may cause a significant increase in nonperforming assets and may lead to a material increase in charge-offs and the provision for loan losses in future periods.

Liability for Credit Losses on Unfunded Loan Commitments

Liability for Credit Losses on Unfunded Loan Commitments – 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 for these items represents the exposure to loss, before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded. 

The reserve for unfunded loan commitments is a liability on ourConsolidated Statement of Financial Condition in other liabilities.  The reserve is computed using a methodology similar to that used to determine the allowance for loan losses, modified to take into account the probability of a drawdown on the commitment.  At December 31, 2013 and 2012 the balance was $2.8 million and $2.9 million, respectively.

Premises and Equipment

Premises and Equipment – Land is carried at cost.  Premises and equipment are stated at cost less accumulated depreciation and amortization.  Depreciation and amortization are recorded on a straight-line basis over the estimated useful life of each asset.  Useful lives range from 10 years to 40 years for buildings and improvements, and 3 years to 10 years for furniture, fixtures, and equipment.  We review the carrying value of long-lived assets used in operations when changes in events or circumstances indicate that the assets might have become impaired.  This review initially includes a comparison of carrying value to the undiscounted cash flows estimated to be generated by those assets.  If this review indicates that an asset is impaired, we record a charge to operations to reduce the asset’s carrying value to fair value, which is based on estimated discounted cash flows.  Long-lived assets that are held for disposal are valued at the lower of the carrying amount or fair value less costs to sell.

Other Real Estate

Other Real Estate – Assets acquired through or instead of loan foreclosure are considered other real estate.  Other real estate is initially recorded at the lesser of the carrying value or fair value less the estimated costs to sell the asset.  Write-downs of carrying value required at the time of foreclosure are recorded as a charge to the allowance for loan losses.  Costs related to the development of such real estate are capitalized, and costs related to holding the property are expensed.  Foreclosed property is subject to periodic revaluation based upon estimates of fair value.  In determining the valuation of other real estate, management obtains independent appraisals for significant properties.  Valuation adjustments are provided, as necessary, by charges to operations.  Profits and losses from operations or sales of foreclosed property are recognized as incurred.  At December 31, 2013 and 2012, the balances of noncovered other real estate were $0.6 million and $11.3 million, respectively.

Other real estate covered under the loss sharing agreements with the FDIC is reported exclusive of expected reimbursement cash flows from the FDIC.  Fair value adjustments on covered other real estate result in a reduction of the covered other real estate carrying amount and a corresponding increase in the estimated FDIC reimbursement, with the estimated net loss charged against earnings.  At December 31, 2013 and December 31, 2012, the balances of covered other real estate were $2.1 million and $3.6 million, respectively.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets – Intangible assets consist of goodwill, core deposit intangibles, and loan servicing rights.  Goodwill and core deposit intangibles, which generally result from a business combination, are accounted for under the provisions of ASC 350, Intangibles - Goodwill and Other, and ASC 805, Business Combinations.  Loan servicing rights are accounted for under the provisions of ASC 860, Transfers and Servicing.

Goodwill represents the excess of the cost of businesses acquired over the fair value of the net assets acquired and is assigned to reporting units.  Goodwill is not amortized, but is tested for impairment at least annually or more frequently if conditions indicate impairment.  The evaluation of possible impairment involves significant judgment based upon short-term and long-term projections of future performance of each reporting unit. 

Core deposit intangibles are amortized using an economic life method based on deposit attrition.  As a result, amortization will decline over time with most of the amortization occurring during the initial years.  The net book value of core deposit intangibles is evaluated for impairment when economic conditions indicate impairment may exist.

When real estate mortgage loans and other loans are sold with servicing retained, an intangible servicing right is initially capitalized based on estimated fair value at the point of origination with the income statement effect recorded in gains on sales of loans.  The servicing rights are amortized on an individual loan by loan basis over the period of estimated net servicing income.  Impairment of loan servicing rights is assessed based on the fair value of those rights.  We review the carrying value of loan servicing rights quarterly for impairment.  At least annually, we obtain estimates of fair value from outside sources to corroborate the results of the valuation model.  At December 31, 2013 and 2012, the fair values of loan servicing rights were $3.5 million and $2.3 million, respectively.

Fair Value Measurements

Fair Value Measurements – ASC 820, Fair Value Measurements and Disclosure, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.  In general, fair values of financial instruments are based upon quoted market prices, where available.  If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.  Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.  These adjustments may include amounts to reflect counterparty credit quality and our creditworthiness, among other things, as well as unobservable parameters.  Any such valuation adjustments are applied consistently over time.

Derivative Financial Instruments

Derivative Financial Instruments – Our hedging policy permits the use of various derivative financial instruments to manage interest rate risk or to hedge specified assets and liabilities.  All derivatives are recorded at fair value on our balance sheet. 

To qualify for hedge accounting, derivatives must be highly effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract.  We consider a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the opposite change in the fair value of the hedged item attributable to the hedged risk.  If derivative instruments are designated as hedges of fair values, and such hedges are highly effective, both the change in the fair value of the hedge and the hedged item are included in current earnings.  Fair value adjustments related to cash flow hedges are recorded in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings.  Ineffective portions of hedges are reflected in earnings as they occur. Actual cash receipts and/or payments and related accruals on derivatives related to hedges are recorded as adjustments to the interest income or interest expense associated with the hedged item.  During the life of the hedge, we will formally assess whether derivatives designated as hedging instruments continue to be highly effective in offsetting changes in the fair value or cash flows of hedged items.  If it is determined that a hedge has ceased to be highly effective, we will discontinue hedge accounting prospectively.  At such time, previous adjustments to the carrying value of the hedged item are reversed into current earnings and the derivative instrument is reclassified to a trading position recorded at fair value.

Loan Servicing Income

Loan Servicing Income – We earn fees for servicing real estate mortgages and other loans owned by others.  These fees are generally calculated on the outstanding principal balance of the loans serviced and are recorded as income when earned.

Taxes on Income

Taxes on Income – We file consolidated income tax returns with our subsidiaries.  Income tax expense is the total of the current year income tax due or refundable, adjusted for permanent differences between items reported in the financial statements and those reported for tax purposes and the change in deferred tax assets and liabilities.  Under the asset and liability method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  The net deferred tax asset is reflected as a component of other assets on the consolidated balance sheet.

A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized.  Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years.  We recognize net deferred tax assets to the extent that we believe these assets are more likely than not to be realized.  In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.  Management reviewed all evidence and concluded that a valuation allowance was not needed.

Earnings per Common Share

Earnings per Common Share –  ASC 260,  Earnings Per Share, provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method.  We have determined that our unvested restricted stock awards are participating securities.  Accordingly, earnings per common share is computed using the two-class method prescribed by ASC 260.  Using this method, basic earnings per common share is computed based upon net income available to common shareholders divided by the weighted average number of common shares outstanding during each period, which exclude the outstanding unvested restricted stock.  Diluted earnings per share is computed using the weighted average number of common shares determined for the basic earnings per common share computation plus the dilutive effect of stock options using the treasury stock method.  Stock options and warrants, where the exercise price was greater than the average market price of common shares, were not included in the computation of earnings per diluted share as they would have been antidilutive.  For the years ended December 31, 2013, 2012, and 2011, we had 0,  5,000, and 73,814 in antidilutive options to purchase common shares, respectively.  In 2013, an antidilutive warrant to purchase 703,753 shares of common stock was repurchased. This same warrant to purchase 703,753 shares of common stock was outstanding for the years ended December 31, 2012, and 2011.

A reconciliation of the weighted-average common shares used in the calculations of basic and diluted earnings per common share for the reported periods is provided at“Note 13 Earnings per Common Share”.

Share-Based Compensation

Share-Based Compensation – The Southwest Bancorp, Inc. 2008 Stock Based Award Plan (the “2008 Stock Plan”), provides selected key employees with the opportunity to acquire common stock through stock options or restricted stock awards.  Compensation cost is recognized based on the fair value of these awards at the date of grant.  The exercise price of all options granted under the 2008 Stock Plan is the fair market value on the grant date, while the market price of our common stock at the date of grant is used for restricted stock awards.  Compensation cost is recognized over the required service period, generally defined as the vesting period.  Depending upon terms of the stock option agreements, stock options generally become exercisable on an annual basis and expire from five to ten years after the date of grant.

The 2008 Stock Plan authorized awards for up to 800,000 shares of our common stock over its ten-year term.

Comprehensive Income

Comprehensive Income – Our comprehensive income (net income plus all other changes in shareholders’ equity from non-equity sources) consists of our net income, the after tax effect of changes in the net unrealized gains (losses) in our available for sale securities, and changes in the accumulated gain (loss) on the effective cash flow hedging instrument.

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New Authoritative Accounting Guidance

12 Months Ended

Dec. 31, 2013

New Authoritative Accounting Guidance [Abstract]

New Authoritative Accounting Guidance

Note 21:  New Authoritative Accounting Guidance

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-11, Balance Sheet (Topic 201) – Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”).  ASU 2011-11 amends Topic 210, “Balance Sheet,” to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement.  In January 2013, FASB issued Accounting Standards Update No. 2013-01 Balance Sheet (Topic 210) – Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (“ASU 2013-01”) which clarifies that ordinary trade receivables are not within the scope of ASU 2011-11.  ASU 2011-11, as amended by ASU 2013-01, became effective for us on January 1, 2013 and did not have a significant impact on the financial statements. 

In October 2012, FASB issued Accounting Standards Update No. 2012-06, Business Combinations (Topic 805) – Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a financial Institution (“ASU 2012-06”). ASU 2012-06 requires that when a reporting entity initially recognizes an indemnification asset (in accordance with Subtopic 805-20, Business Combinations—Identifiable Assets and Liabilities, and Any Noncontrolling Interest) as a result of a government-assisted acquisition of a financial institution and subsequently a change in the cash flows expected to be collected on the indemnification asset occurs, the reporting entity would be required to account for the change in the measurement of the indemnification asset on the same basis as the change in the assets subject to indemnification. Any amortization of changes in value of the indemnification asset would be limited to the contractual term of the indemnification agreement (that is, the lesser of the term of the indemnification agreement and the remaining term of the indemnified assets). The amendments resulting from ASU 2012-06 would be applied prospectively to any new indemnification assets acquired and to changes in expected cash flows of existing indemnification assets occurring on or after the date of adoption. The guidance became effective for us on January 1, 2013 and did not have a significant impact on the financial statements.

In February 2013, FASB issued Accounting Standard Update No. 2013-02, Comprehensive Income (Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. generally accepted accounting principles (GAAP) to be reclassified in its entirety to net income. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU 2013-02 became effective for us on January 1, 2013 and did not have a significant impact on the financial statements.

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Loans And Allowance For Loan Losses (Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Noncovered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	$ 33,948	$ 37,302
With No Specific Allowance Unpaid Principal Balance	34,726	45,817
With A Specific Allowance Recorded Investment	27,305	38,372
With A Specific Allowance Unpaid Principal Balance	33,171	41,208
With A Specific Allowance Related Allowance	7,939	11,724
Covered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	5,847	4,799
With No Specific Allowance Unpaid Principal Balance	6,814	7,568
With A Specific Allowance Recorded Investment	499	2,268
With A Specific Allowance Unpaid Principal Balance	551	4,080
With A Specific Allowance Related Allowance	7	25
Commercial Real Estate [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	32,284	29,425
With No Specific Allowance Unpaid Principal Balance	32,784	30,340
With A Specific Allowance Recorded Investment	15,446	24,630
With A Specific Allowance Unpaid Principal Balance	15,729	27,397
With A Specific Allowance Related Allowance	4,012	5,094
Commercial Real Estate [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	5,793	4,325
With No Specific Allowance Unpaid Principal Balance	6,760	5,347
With A Specific Allowance Recorded Investment	457	2,214
With A Specific Allowance Unpaid Principal Balance	457	3,979
With A Specific Allowance Related Allowance	3	22
One-To-Four Family Residential [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	456	563
With No Specific Allowance Unpaid Principal Balance	576	653
With A Specific Allowance Recorded Investment		7
With A Specific Allowance Unpaid Principal Balance		7
With A Specific Allowance Related Allowance		7
One-To-Four Family Residential [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	54	20
With No Specific Allowance Unpaid Principal Balance	54	25
With A Specific Allowance Recorded Investment	42	52
With A Specific Allowance Unpaid Principal Balance	94	98
With A Specific Allowance Related Allowance	4	2
Real Estate Construction [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	84	3,970
With No Specific Allowance Unpaid Principal Balance	106	7,841
With A Specific Allowance Recorded Investment	2,636	232
With A Specific Allowance Unpaid Principal Balance	2,762	256
With A Specific Allowance Related Allowance	18	50
Real Estate Construction [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment		130
With No Specific Allowance Unpaid Principal Balance		308
Commercial [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	1,120	3,337
With No Specific Allowance Unpaid Principal Balance	1,254	6,975
With A Specific Allowance Recorded Investment	9,177	13,422
With A Specific Allowance Unpaid Principal Balance	14,608	13,448
With A Specific Allowance Related Allowance	3,863	6,492
Commercial [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment		322
With No Specific Allowance Unpaid Principal Balance		1,884
With A Specific Allowance Recorded Investment		2
With A Specific Allowance Unpaid Principal Balance		3
With A Specific Allowance Related Allowance		1
Other [Member] | Noncovered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	4	7
With No Specific Allowance Unpaid Principal Balance	6	8
With A Specific Allowance Recorded Investment	46	81
With A Specific Allowance Unpaid Principal Balance	72	100
With A Specific Allowance Related Allowance	46	81
Other [Member] | Covered [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment		2
With No Specific Allowance Unpaid Principal Balance		$ 4

XML

Parent Company Condensed Financial Information (Tables)

12 Months Ended

Dec. 31, 2013

Parent Company Condensed Financial Information [Abstract]

Parent Company Statements of Financial Condition

	At December 31,
(Dollars in thousands)	2013		2012
Statements of Financial Condition
Assets:
Cash and cash equivalents	$	12,039	$	18,245
Investment in subsidiary banks		273,849		293,573
Investments in other subsidiaries		8,284		9,355
Investment securities, available for sale		3,161		2,462
Other assets		10,909		8,391
Total	$	308,242	$	332,026
Liabilities:
Subordinated debentures		46,393		81,963
Other liabilities		2,660		4,007
Shareholders' Equity:
Common stock and related accounts		259,189		246,056
Total	$	308,242	$	332,026

Parent Company Statements of Operations

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Statements of Operations
Income:
Cash dividends from subsidiaries	$	19,625	$	70,175	$	160
Noninterest income		333		595		774
Investment income		243		340		31
Other operating income		-		-		45
Total income		20,201		71,110		1,010
Expense:
Interest on subordinated debentures		4,168		5,463		5,306
Noninterest expense		1,808		3,187		2,107
Total expense		5,976		8,650		7,413
Total income (loss) before taxes and equity in
undistributed income of subsidiaries		14,225		62,460		(6,403)
Taxes on income		(2,027)		(2,900)		(2,563)
Income (loss) before equity in undistributed
income of subsidiaries		16,252		65,360		(3,840)
Equity in undistributed income (loss) of subsidiaries		1,183		(49,173)		(64,455)
Net income (loss)	$	17,435	$	16,187	$	(68,295)

Parent Company Statements of Cash Flows

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Statements of Cash Flows
Operating activities:
Net income	$	17,435	$	16,187	$	(68,295)
Equity in undistributed income of subsidiaries		(1,183)		49,173		64,455
Other, net		(2,341)		(5,437)		499
Net cash provided by (used in) operating activities		13,911		59,923		(3,341)
Investing activities:
Available for sale securities:
Purchases		-		(247)		(724)
Sales / Maturities		32		-		46
Investment in/capital contribution to other subsidiaries		15,000		-		-
Net cash used in investing activities		15,032		(247)		(678)
Financing activities:
Net proceeds from issuance of common stock		2,708		925		278
Proceeds from issuance of subordinated debentures		(35,570)		-		-
Preferred stock dividend		-		(74,330)		(1,751)
Other, net		(2,287)		(76)		-
Net cash provided by (used in) financing activities		(35,149)		(73,481)		(1,473)
Net increase (decrease) in cash and cash equivalents		(6,206)		(13,805)		(5,492)
Cash and cash equivalents,
Beginning of year		18,245		32,050		37,542
End of year	$	12,039	$	18,245	$	32,050

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Investment Securities (Tables)

12 Months Ended

Dec. 31, 2013

Investment Securities [Abstract]

Summary Of Amortized Cost And Fair Values Of Investment Securities

	Amortized		Gross Unrealized				Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
At December 31, 2013
Held to Maturity:
Obligations of state and political subdivisions	$	11,720	$	395	$	-	$	12,115
Total	$	11,720	$	395	$	-	$	12,115
Available for Sale:
Federal agency securities	$	123,332	$	330	$	(2,889)	$	120,773
Obligations of state and political subdivisions		33,685		36		(1,085)		32,636
Residential mortgage-backed securities		183,512		1,747		(2,089)		183,170
Asset-backed securities		9,578		-		(96)		9,482
Equity securities		35,316		1,267		(165)		36,418
Total	$	385,423	$	3,380	$	(6,324)	$	382,479
At December 31, 2012
Held to Maturity:
Obligations of state and political subdivisions	$	12,797	$	862	$	-	$	13,659
Total	$	12,797	$	862	$	-	$	13,659
Available for Sale:
Federal agency securities	$	114,159	$	1,474	$	(19)	$	115,614
Obligations of state and political subdivisions		34,754		887		(83)		35,558
Residential mortgage-backed securities		200,310		3,668		(303)		203,675
Asset-backed securities		7,794		-		(123)		7,671
Equity securities		1,300		497		-		1,797
Total	$	358,317	$	6,526	$	(528)	$	364,315

Amortized Cost And Approximate Fair Value Of Investment Securities By Maturity Date

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
One year or less	$	20,806	$	21,151	$	1,941	$	1,957
More than one year through five years		167,476		168,675		2,227		2,282
More than five years through ten years		151,933		147,705		4,151		4,265
More than ten years		45,208		44,948		3,401		3,611
Total	$	385,423	$	382,479	$	11,720	$	12,115

Summary Of Sales Of Available For Sale Securities

(Dollars in thousands)		2013		2012		2011
Proceeds from sales	$	2,744	$	6,588	$	-
Gross realized gains		(0)		45		-
Gross realized losses		(0)		(10)		-

Summary Of Securities With Gross Unrealized Losses And Their Fair Values

				Continuous Unrealized
		Amortized cost of		Loss Existing for:				Fair value of
	Number of	securities with		Less Than		More Than		securities with
(Dollars in thousands)	Securities	unrealized losses		12 Months		12 Months		unrealized losses
At December 31, 2013
Available for Sale:
Federal agency securities	24	$	87,921	$	(2,885)	$	(4)	$	85,032
Obligations of state and political subdivisions	20		31,579		(887)		(198)		30,494
Residential mortgage-backed securities	53		104,667		(2,015)		(74)		102,578
Asset-backed securities	3		9,578		(96)		-		9,482
Other Securities	8		27,728		(165)		-		27,563
Total	108	$	261,473	$	(6,048)	$	(276)	$	255,149
At December 31, 2012
Available for Sale:
Federal agency securities	5	$	9,887	$	(19)	$	-	$	9,868
Obligations of state and political subdivisions	9		10,457		(83)		-		10,374
Residential mortgage-backed securities	23		46,787		(288)		(15)		46,484
Asset-backed securities	4		7,794		(123)		-		7,671
Total	41	$	74,925	$	(513)	$	(15)	$	74,397

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Loans And Allowance For Loan Losses (Tables)

12 Months Ended

Dec. 31, 2013

Loans And Allowance For Loan Losses [Abstract]

Southwest's Loan Classifications

	At December 31, 2013				At December 31, 2012
(Dollars in thousands)	Noncovered		Covered		Noncovered		Covered
Real estate mortgage:
Commercial	$	740,997	$	11,282	$	870,975	$	18,298
One-to-four family residential		80,058		3,930		70,954		4,881
Real estate construction:
Commercial		143,650		198		130,753		382
One-to-four family residential		4,646		-		3,656		-
Commercial		254,087		971		240,498		2,037
Installment and consumer:
Guaranteed student loans		4,394		-		4,680		-
Other		26,644		46		31,512		109
		1,254,476		16,427		1,353,028		25,707
Less: Allowance for loan losses		(36,607)		(56)		(46,494)		(224)
Total loans, net	$	1,217,869	$	16,371	$	1,306,534	$	25,483

Changes In The Carrying Amounts And Accretable Yields For ASC 310.30 Loans

	For the year ended December 31,
	2013				2012
			Carrying				Carrying
	Accretable		amount		Accretable		amount
(Dollars in thousands)	Yield		of loans		Yield		of loans
Balance at beginning of period	$	1,904	$	25,707	$	2,402	$	37,615
Payments received		-		(6,954)		-		(9,960)
Transfers to other real estate / repossessed assets		(36)		(2,110)		27		(2,365)
Net charge-offs		(1)		(468)		(5)		(151)
Net reclassifications to / from nonaccretable amount		235		-		192		-
Accretion		(505)		252		(712)		568
Balance at end of period	$	1,597	$	16,427	$	1,904	$	25,707

Recorded Investment In Loans On Nonaccrual Status

	At December 31,
	2013				2012
(Dollars in thousands)	Noncovered		Covered		Noncovered		Covered
Real estate mortgage:
Commercial	$	6,564	$	1,202	$	18,337	$	3,087
One-to-four family residential		456		57		563		52
Real estate construction:
Commercial		2,721		-		3,355		130
Commercial		8,769		-		12,761		324
Other consumer		50		-		88		2
Total nonaccrual loans	$	18,560	$	1,259	$	35,104	$	3,595

Age Analysis Of Past Due Loans

			90 days and								Recorded loans
	30-89 days		greater		Total past				Total		> 90 days and
(Dollars in thousands)	past due		past due		due		Current		loans		accruing
At December 31, 2013
Noncovered:
Real estate mortgage:
Commercial	$	3,843	$	6,564	$	10,407	$	730,590	$	740,997	$	-
One-to-four family residential		284		456		740		79,318		80,058		-
Real estate construction:
Commercial		569		2,721		3,290		140,360		143,650		-
One-to-four family residential		-		-		-		4,646		4,646		-
Commercial		1,998		8,819		10,817		243,270		254,087		50
Other		128		53		181		30,857		31,038		3
Total - noncovered		6,822		18,613		25,435		1,229,041		1,254,476		53
Covered:
Real estate mortgage:
Commercial		8		1,202		1,210		10,072		11,282		-
One-to-four family residential		18		57		75		3,855		3,930		-
Real estate construction:
Commercial		-		-		-		198		198		-
Commercial		-		-		-		971		971		-
Other		-		-		-		46		46		-
Total - covered		26		1,259		1,285		15,142		16,427		-
Total	$	6,848	$	19,872	$	26,720	$	1,244,183	$	1,270,903	$	53
At December 31, 2012
Noncovered:
Real estate mortgage:
Commercial	$	23,348	$	18,337	$	41,685	$	829,290	$	870,975	$	-
One-to-four family residential		1,479		1,310		2,789		68,165		70,954		747
Real estate construction:
Commercial		3,501		3,355		6,856		123,897		130,753		-
One-to-four family residential		-		-		-		3,656		3,656		-
Commercial		7,358		15,232		22,590		217,908		240,498		2,471
Other		538		160		698		35,494		36,192		72
Total - noncovered		36,224		38,394		74,618		1,278,410		1,353,028		3,290
Covered:
Real estate mortgage:
Commercial real estate		1,090		3,087		4,177		14,121		18,298		-
One-to-four family residential		-		52		52		4,829		4,881		-
Real estate construction:
Commercial		-		130		130		252		382		-
Commercial		-		324		324		1,713		2,037		-
Other		-		2		2		107		109		-
Total - covered		1,090		3,595		4,685		21,022		25,707		-
Total	$	37,314	$	41,989	$	79,303	$	1,299,432	$	1,378,735	$	3,290

Impaired Loans

	With No Specific Allowance				With A Specific Allowance
			Unpaid				Unpaid
	Recorded		Principal		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Investment		Balance		Allowance
At December 31, 2013
Noncovered:
Commercial real estate	$	32,284	$	32,784	$	15,446	$	15,729	$	4,012
One-to-four family residential		456		576		-		-		-
Real estate construction		84		106		2,636		2,762		18
Commercial		1,120		1,254		9,177		14,608		3,863
Other		4		6		46		72		46
Total noncovered	$	33,948	$	34,726	$	27,305	$	33,171	$	7,939
Covered:
Commercial real estate	$	5,793	$	6,760	$	457	$	457	$	3
One-to-four family residential		54		54		42		94		4
Total covered	$	5,847	$	6,814	$	499	$	551	$	7
At December 31, 2012
Noncovered:
Commercial real estate	$	29,425	$	30,340	$	24,630	$	27,397	$	5,094
One-to-four family residential		563		653		7		7		7
Real estate construction		3,970		7,841		232		256		50
Commercial		3,337		6,975		13,422		13,448		6,492
Other		7		8		81		100		81
Total noncovered	$	37,302	$	45,817	$	38,372	$	41,208	$	11,724
Covered:
Commercial real estate	$	4,325	$	5,347	$	2,214	$	3,979	$	22
One-to-four family residential		20		25		52		98		2
Real estate construction		130		308		-		-		-
Commercial		322		1,884		2		3		1
Other		2		4		-		-		-
Total covered	$	4,799	$	7,568	$	2,268	$	4,080	$	25

Average Recorded Investment And Interest Income Recognized On Impaired Loans

	As of and for the year ended December 31,
	2013				2012				2011
	Average				Average				Average
	Recorded		Interest		Recorded		Interest		Recorded		Interest
(Dollars in thousands)	Investment		Income		Investment		Income		Investment		Income
Noncovered:
Commercial real estate	$	47,835	$	1,784	$	36,373	$	1,517	$	10,012	$	1,852
One-to-four family residential		362		-		427		8		1,317		8
Real estate construction		2,488		-		4,507		51		8,222		805
Commercial		11,468		87		4,494		137		9,144		746
Other		63		-		104		-		97		-
Total noncovered	$	62,216	$	1,871	$	45,905	$	1,713	$	28,792	$	3,411
Covered:
Commercial real estate	$	15,290	$	328	$	21,110	$	184	$	26,642	$	-
One-to-four family residential		4,283		1		5,627		1		7,926		-
Real estate construction		313		-		1,721		-		6,003		-
Commercial		1,431		-		2,175		-		4,403		-
Other		66		-		158		-		438		-
Total covered	$	21,383	$	329	$	30,791	$	185	$	45,412	$	-

Troubled Debt Restructured Loans Outstanding

	At December 31, 2013				At December 31, 2012
(Dollars in thousands)	Accruing		Nonaccrual		Accruing		Nonaccrual
Commercial real estate	$	44,442	$	4,456	$	39,170	$	2,953
One-to-four family residential		18		162		27		134
Real estate construction		-		-		847		130
Commercial		1,527		648		3,998		351
Consumer		-		46		-		81
Total	$	45,987	$	5,312	$	44,042	$	3,649

Loans Modified As Troubled Debt Restructurings

	For the year ended December 31,
	2013				2012
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Modifications		Investment		Modifications		Investment
Commercial real estate		9	$	4,732		12	$	22,713
One-to-four family residential		1		68		3		110
Real estate construction		-		-		1		847
Commercial		5		784		7		3,328
Consumer		-		-		1		80
Total		15	$	5,584		24	$	27,078

Recorded Investment And The Number Of Loans Modified As Troubled Debt Restructuring Which Subsequently Defaulted

	For the year ended December 31,
	2013				2012
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial real estate		1	$	166		-	$	-
Commercial		-		-		3		1,658
Real estate construction		-		-		1		130
Total		1	$	166		4	$	1,788

Classification Of Risk Category Of Loans, By Classes

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2013
Grade:
Pass	$	610,929	$	81,534	$	101,715	$	233,132	$	30,893	$	1,058,203
Special Mention		62,932		1,452		22,576		6,130		141		93,231
Substandard		77,453		944		24,203		11,329		50		113,979
Doubtful		965		58		-		4,467		-		5,490
Total	$	752,279	$	83,988	$	148,494	$	255,058	$	31,084	$	1,270,903
At December 31, 2012
Grade:
Pass	$	718,054	$	71,975	$	83,350	$	208,019	$	35,897	$	1,117,295
Special Mention		88,167		1,901		25,964		7,047		181		123,260
Substandard		80,104		1,923		25,477		26,887		223		134,614
Doubtful		2,948		36		-		582		-		3,566
Total	$	889,273	$	75,835	$	134,791	$	242,535	$	36,301	$	1,378,735

By Balance In The Allowance For Loan Losses And The Recorded Investment In Loans Portfolio Classification Disaggregated On The Basis Of Impairment Evaluation Method

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2013
Balance at beginning of period	$	27,223	$	861	$	5,271	$	12,604	$	759	$	46,718
Loans charged-off		(806)		(578)		246		(8,599)		(267)		(10,004)
Recoveries		171		253		4,527		2,049		158		7,158
Provision for loan losses		(7,734)		314		(4,521)		4,931		(199)		(7,209)
Balance at end of period	$	18,854	$	850	$	5,523	$	10,985	$	451	$	36,663
Allowance for loan losses ending balance:
Individually evaluated for impairment	$	4,012	$	-	$	18	$	3,863	$	46	$	7,939
Collectively evaluated for impairment		14,839		797		5,505		7,122		405		28,668
Acquired with deteriorated credit quality		3		53		-		-		-		56
Total ending allowance balance	$	18,854	$	850	$	5,523	$	10,985	$	451	$	36,663
Loans receivable ending balance:
Individually evaluated for impairment	$	47,730	$	456	$	2,720	$	10,297	$	50	$	61,253
Collectively evaluated for impairment		693,267		79,602		145,576		243,790		30,988		1,193,223
Acquired with deteriorated credit quality		11,282		3,930		198		971		46		16,427
Total ending loans balance	$	752,279	$	83,988	$	148,494	$	255,058	$	31,084	$	1,270,903

	Commercial		1-4 Family		Real Estate
	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2012
Balance at beginning of period	$	21,749	$	1,016	$	11,177	$	9,827	$	915	$	44,684
Loans charged-off		(2,167)		(269)		-		(4,455)		(649)		(7,540)
Recoveries		58		271		1,972		3,671		495		6,467
Provision for loan losses		7,583		(157)		(7,878)		3,561		(2)		3,107
Balance at end of period	$	27,223	$	861	$	5,271	$	12,604	$	759	$	46,718
Allowance for loan losses ending balances:
Individually evaluated for impairment	$	5,094	$	7	$	50	$	6,492	$	81	$	11,724
Collectively evaluated for impairment		21,975		785		5,221		6,111		678		34,770
Acquired with deteriorated credit quality		154		69		-		1		-		224
Total ending allowance balance	$	27,223	$	861	$	5,271	$	12,604	$	759	$	46,718
Loans receivable ending balance:
Individually evaluated for impairment	$	54,055	$	570	$	4,202	$	16,759	$	88	$	75,674
Collectively evaluated for impairment		816,920		70,384		130,207		223,739		36,104		1,277,354
Acquired with deteriorated credit quality		18,298		4,881		382		2,037		109		25,707
Total ending loans balance	$	889,273	$	75,835	$	134,791	$	242,535	$	36,301	$	1,378,735

	Commercial		1-4 Family		Real Estate
	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2011
Balance at beginning of period	$	32,508	$	1,597	$	19,605	$	10,605	$	914	$	65,229
Loans charged-off		(71,066)		(346)		(62,070)		(22,103)		(1,040)		(156,625)
Recoveries		411		67		1,521		1,864		116		3,979
Provision for loan losses		59,896		(302)		52,121		19,461		925		132,101
Balance at end of period	$	21,749	$	1,016	$	11,177	$	9,827	$	915	$	44,684
Allowance for loan losses ending balances:
Individually evaluated for impairment	$	411	$	21	$	73	$	349	$	112	$	966
Collectively evaluated for impairment		21,198		981		10,846		9,439		803		43,267
Acquired with deteriorated credit quality		140		14		258		39		-		451
Total ending allowance balance	$	21,749	$	1,016	$	11,177	$	9,827	$	915	$	44,684
Loans receivable ending balance:
Individually evaluated for impairment	$	21,701	$	1,468	$	11,983	$	10,490	$	123	$	45,765
Collectively evaluated for impairment		1,006,860		78,907		220,102		335,776		38,463		1,680,108
Acquired with deteriorated credit quality		23,686		7,072		3,746		2,841		270		37,615
Total ending loans balance	$	1,052,247	$	87,447	$	235,831	$	349,107	$	38,856	$	1,763,488

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Significant Accounting And Reporting Policies

12 Months Ended

Dec. 31, 2013

Significant Accounting And Reporting Policies [Abstract]

Significant Accounting And Reporting Policies

SOUTHWEST BANCORP, INC.

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2013, 2012 and 2011

Note 1:Summary of Significant Accounting and Reporting Policies

Organization and Nature of Operations – Southwest Bancorp Inc. (“we”, “our”, “us”, or “Southwest”), incorporated in 1981, is a financial holding company headquartered in Stillwater, Oklahoma engaged primarily in commercial and consumer banking services in the states of Oklahoma, Texas, and Kansas.The accompanying consolidated financial statements include the accounts of Bank SNB, a national bank established in 1894, and SNB Capital Corporation, a lending and loan workout subsidiary established in 2009, and consolidated subsidiaries of Bank SNB, including SNB Real Estate Holdings, Inc. Bank SNB and SNB Capital Corporation are wholly owned, direct subsidiaries of ours.All significant intercompany balances and transactions have been eliminated in consolidation.

As of the close of business on November 15, 2013, we effected an affiliated merger of our wholly-owned subsidiary banks, Bank of Kansas and Stillwater National, whereby Bank of Kansas merged with and into Stillwater National.  Stillwater National was rebranded Bank SNB (“Bank SNB”) in connection with the merger.  The consolidated bank offers customers a greater banking experience across our three state region and now does business in all markets under the new name, Bank SNB. 

Basis of Presentation – The accounting and reporting policies conform to accounting principles generally accepted in the United States and to generally accepted practices within the banking industry.  The Consolidated Financial Statements include the accounts of Southwest and all other entities in which we have a controlling financial interest.  All significant intercompany accounts and transactions have been eliminated in consolidation.

We have evaluated subsequent events for potential recognition and disclosure through the issue date of the Consolidated Financial Statements included in this Annual Report on Form 10-K.  See further discussion of subsequent events at “Note 20 – Subsequent Events”.

Management Estimates – In preparing our financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates shown on the consolidated statements of financial condition and revenues and expenses during the periods reported.  Actual results could differ significantly from those estimates.  Changes in economic conditions could affect the determination of material estimates such as the allowance for loan losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, income taxes, and the fair value of financial instruments.

Cash and Cash Equivalents – For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from depository institutions, and federal funds sold.  Interest-bearing balances held at depository institutions were $251.8  million at December 31, 2013 and $243.0 million at December 31, 2012.  Federal funds sold are sold for one-to-four day periods.

Cash paid for interest totaled $11.5 million in 2013, $19.2 million in 2012, and $26.5 million in 2011.  Cash paid for income taxes totaled $0.4 million in 2013, $1.0 million in 2012, and $5.9 million in 2011.  Noncash transactions included transfer of loans to other real estate totaling $0.9 million in 2013, $2.6 million in 2012, and $62.3 million in 2011.

Bank SNB is required by the Federal Reserve Bank (“FRB”) to maintain average reserve balances. Cash and cash equivalents in the Consolidated Statements of Financial Condition include restricted amounts of $1.8 million and $3.0 million at December 31, 2013 and December 31, 2012, respectively.

Investment Securities – Investments in debt and equity securities are identified as held to maturity or available for sale based on management considerations of asset/liability strategy, changes in interest rates and prepayment risk, the need to increase liquidity, and other factors, including management’s intent and ability to hold securities to maturity.  We have the ability and intent to hold to maturity our investment securities classified as held to maturity.  We had no investments held for trading purposes for any period presented.  Under certain circumstances (including the deterioration of the issuer’s creditworthiness, a change in tax law, or statutory or regulatory requirements), we may change the investment security classification.  The classifications we utilize determine the related accounting treatment for each category of investments.  Available for sale securities are accounted for at fair value with unrealized gains or losses, net of taxes, excluded from operations and reported as accumulated other comprehensive income or loss.  Held to maturity securities are accounted for at amortized cost.Securities with limited marketability, such as Federal Reserve Bank stock, Federal Home Loan Bank stock, and certain other investments, are carried at cost and included in other assets.

All investment securities are adjusted for amortization of premiums and accretion of discounts.  Amortization of premiums and accretion of discounts are recorded to operations over the contractual maturity or estimated life of the individual investment on the level yield method.  Gain or loss on sale of investments is based upon the specific identification method.  Income earned on our investments in state and political subdivisions generally is not subject to ordinary Federal income tax.

In accordance with authoritative accounting guidance under ASC 320, Debt and Equity Securities, declines in fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other-than-temporary are reflected in earnings as realized losses to the extent the impairment is related to credit losses.  The amount of the impairment related to other factors is recognized in other comprehensive income.  Under this guidance, we evaluate investment securities for other-than-temporary impairment on at least a quarterly basis, or more frequently when economic or market conditions warrant such an evaluation.

Federal Reserve Bank and Federal Home Loan Bank Stock – Bank SNB is a member of its regional FRB and Federal Home Loan Bank (“FHLB”) system.  FHLB members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional accounts.  Both FRB and FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.

Loans – Interest on loans is accrued and credited to operations based upon the principal amount outstanding.  Loan origination fees and certain costs of originated loans are amortized as an adjustment to the yield over the term of the loan.  Net unamortized deferred loan fees were $0.1 million at December 31, 2013 and 2012.  Loans are reported at the principal balance outstanding net of the unamortized deferred loan fees.

In general, our policy for nonaccrual loans requires that accrued interest income on nonaccrual loans is written off after the loan is 90 days past due, and that subsequent interest income is recorded when cash receipts are received from the borrower.  We identify past due loans based on contractual terms on a loan by loan basis. 

A loan is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.  The allowance for loan losses related to loans that are evaluated for impairment is based either on the discounted cash flows using the loan’s initial effective interest rate or on the fair value of the collateral for certain collateral dependent loans.  Smaller balance, homogeneous loans, including mortgage, student, and consumer, are collectively evaluated for impairment.  This evaluation is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. 

We originate real estate mortgage loans for either portfolio investment or sale in the secondary market.  During the period of origination, real estate mortgage loans are designated as held either for investment purposes or sale.  Mortgage loans held for sale are generally sold within a one-month period from loan closing at amounts determined by the investor commitment based upon the pricing of the loan.  We provide United States Department of Agriculture ("USDA”) government guaranteed commercial real estate lending services to rural healthcare providers.  The loans are available for sale in the secondary market. 

Loans Acquired through Transfer – The accounting guidance of ASC 310.30, Loan and Debt Securities Acquired with Deteriorated Credit Quality, applies to loans acquired through the completion of a transfer, including loans acquired in a business combination that have evidence of deterioration of credit quality since origination and for which it is probable, at acquisition, that we will be unable to collect all contractually required payment receivables.  In accordance with this guidance, these loans are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance.  The difference between the undiscounted cash flows expected at acquisition and the investment in the loan, or the “accretable yield”, is recognized as interest income over the life of the loan on a method that approximates the level-yield method.  Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “nonaccretable difference”, are not recognized as a yield adjustment, a loss accrual, or a valuation allowance.  Increases in expected cash flows subsequent to the initial investment are recognized prospectively through adjustment of the yield on the loan over its remaining life.  Decreases in expected cash flows are recognized as impairments.  Valuation allowances on these impaired loans reflect only losses incurred after the acquisition.

Loss Share Receivable – Bank SNB and the FDIC entered into loss sharing agreements that provide Bank SNB with significant protection against credit losses from loans and related assets acquired in the FNBA FDIC-assisted transaction.  Under these agreements, the FDIC will reimburse Bank SNB 80% of net losses up to $35.0 million on covered assets, primarily acquired loans and other real estate, and 95% of any net losses above $35.0 million.  Bank SNB services the covered assets.  The loss sharing agreements have terms of ten years for one-to-four family residential loans and eight years for all other loan types.  The expected payments from the FDIC under the loss sharing agreements are recorded as part of the covered loans in our Consolidated Statements of Financial Condition.  Assets subject to these agreements are referred to as “covered”.

The difference between the undiscounted expected recoveries at acquisition and the fair value of the loss share receivable is the “accretable portion” and is recognized as interest income over the estimated life of the acquired loan portfolio.  The initially recorded loss share receivable represented 85% of the aggregate loan discount related to the acquired loan portfolio.  Because of the relationship of the loss share receivable to the loan discount, when an adjustment is made to a loan discount to reflect changes in the expected cash flows of the loan, an adjustment to the corresponding loss share receivable attributable to that loan will also occur.

Allowance for Loan Losses – The allowance for loan losses is a reserve established through a provision for loan losses charged to operations.  Loan amounts which are determined to be uncollectible are charged against this allowance, and recoveries, if any, are added to the allowance.  The appropriate amount of the allowance is based on continuous review and evaluation of the loan portfolio and ongoing, quarterly assessments of the probable losses inherent in the loan portfolio.  The allowance for loan losses is determined in accordance with regulatory guidelines and generally accepted accounting principles and is comprised of two primary components, specific and general.  Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. 

The specific component relates to loans that are individually classified as impaired.  Loans deemed to be impaired are evaluated on an individual basis consistent with ASC 310.10.35, Receivables:  Subsequent Measurement.  The amount and level of the impairment allowance is ultimately determined by management’s estimate of the amount of expected future cash flows or, if the loan is collateral dependent, on the value of the collateral, which may vary from period to period depending on changes in the financial condition of the borrower or changes in the estimated value of the collateral.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and deemed as impaired, and classified as nonperforming, potential problem, or performing restructured as applicable.  Charge-offs against the allowance of impaired loans are made when and to the extent the loan is deemed uncollectible. 

The general component of the allowance is calculated based on ASC 450, Contingencies.  Loans not evaluated for specific allowance are segmented into loan pools by type of loan.  The commercial real estate and real estate construction pools are further segmented by the market in which the loan collateral is located.  Our primary markets are Oklahoma, Texas, and Kansas, and loans secured by real estate in those states are included in the “in-market” pool, with the remaining defaulting to the “out-of-market” pool.  Estimated allowances are based on historical loss trends with adjustments factored in based on qualitative risk factors both internal and external to us.  The historical loss trend is determined by loan pool and segmentation and is based on the actual loss history experienced by us over the most recent three years.  The qualitative risk factors include, but are not limited to, economic and business conditions, changes in lending staff, lending policies and procedures, quality of loan review, changes in the nature and volume of the portfolios, loss and recovery trends, asset quality trends, and legal and regulatory considerations.   

Independent appraisals on real estate collateral securing loans are obtained at origination.  New appraisals are obtained periodically and upon discovery of factors that may significantly affect the value of the collateral.  Appraisals usually are received within 30 days of request.  Results of appraisals on nonperforming and potential problem loans are reviewed promptly upon receipt and also are reviewed monthly and considered in the determination of the allowance for loan losses.  Weare not aware of any significant time lapses in the process that have resulted, or would result in, a significant delay in determination of a credit weakness, the identification of a loan as nonperforming, or the measurement of an impairment.

Management strives to carefully monitor credit quality and to identify loans that may become nonperforming.  At any time, however, there are loans included in the portfolio that will result in losses but that have not been identified as nonperforming or potential problem loans.  Because the loan portfolio contains a significant number of commercial and commercial real estate loans with relatively large balances, the unexpected deterioration of one or a few of such loans may cause a significant increase in nonperforming assets and may lead to a material increase in charge-offs and the provision for loan losses in future periods.

Liability for Credit Losses on Unfunded Loan Commitments – 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 for these items represents the exposure to loss, before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded. 

The reserve for unfunded loan commitments is a liability on ourConsolidated Statement of Financial Condition in other liabilities.  The reserve is computed using a methodology similar to that used to determine the allowance for loan losses, modified to take into account the probability of a drawdown on the commitment.  At December 31, 2013 and 2012 the balance was $2.8 million and $2.9 million, respectively.

Premises and Equipment – Land is carried at cost.  Premises and equipment are stated at cost less accumulated depreciation and amortization.  Depreciation and amortization are recorded on a straight-line basis over the estimated useful life of each asset.  Useful lives range from 10 years to 40 years for buildings and improvements, and 3 years to 10 years for furniture, fixtures, and equipment.  We review the carrying value of long-lived assets used in operations when changes in events or circumstances indicate that the assets might have become impaired.  This review initially includes a comparison of carrying value to the undiscounted cash flows estimated to be generated by those assets.  If this review indicates that an asset is impaired, we record a charge to operations to reduce the asset’s carrying value to fair value, which is based on estimated discounted cash flows.  Long-lived assets that are held for disposal are valued at the lower of the carrying amount or fair value less costs to sell.

Other Real Estate – Assets acquired through or instead of loan foreclosure are considered other real estate.  Other real estate is initially recorded at the lesser of the carrying value or fair value less the estimated costs to sell the asset.  Write-downs of carrying value required at the time of foreclosure are recorded as a charge to the allowance for loan losses.  Costs related to the development of such real estate are capitalized, and costs related to holding the property are expensed.  Foreclosed property is subject to periodic revaluation based upon estimates of fair value.  In determining the valuation of other real estate, management obtains independent appraisals for significant properties.  Valuation adjustments are provided, as necessary, by charges to operations.  Profits and losses from operations or sales of foreclosed property are recognized as incurred.  At December 31, 2013 and 2012, the balances of noncovered other real estate were $0.6 million and $11.3 million, respectively.

Other real estate covered under the loss sharing agreements with the FDIC is reported exclusive of expected reimbursement cash flows from the FDIC.  Fair value adjustments on covered other real estate result in a reduction of the covered other real estate carrying amount and a corresponding increase in the estimated FDIC reimbursement, with the estimated net loss charged against earnings.  At December 31, 2013 and December 31, 2012, the balances of covered other real estate were $2.1 million and $3.6 million, respectively.

Goodwill and Other Intangible Assets – Intangible assets consist of goodwill, core deposit intangibles, and loan servicing rights.  Goodwill and core deposit intangibles, which generally result from a business combination, are accounted for under the provisions of ASC 350, Intangibles - Goodwill and Other, and ASC 805, Business Combinations.  Loan servicing rights are accounted for under the provisions of ASC 860, Transfers and Servicing.

Goodwill represents the excess of the cost of businesses acquired over the fair value of the net assets acquired and is assigned to reporting units.  Goodwill is not amortized, but is tested for impairment at least annually or more frequently if conditions indicate impairment.  The evaluation of possible impairment involves significant judgment based upon short-term and long-term projections of future performance of each reporting unit. 

Core deposit intangibles are amortized using an economic life method based on deposit attrition.  As a result, amortization will decline over time with most of the amortization occurring during the initial years.  The net book value of core deposit intangibles is evaluated for impairment when economic conditions indicate impairment may exist.

When real estate mortgage loans and other loans are sold with servicing retained, an intangible servicing right is initially capitalized based on estimated fair value at the point of origination with the income statement effect recorded in gains on sales of loans.  The servicing rights are amortized on an individual loan by loan basis over the period of estimated net servicing income.  Impairment of loan servicing rights is assessed based on the fair value of those rights.  We review the carrying value of loan servicing rights quarterly for impairment.  At least annually, we obtain estimates of fair value from outside sources to corroborate the results of the valuation model.  At December 31, 2013 and 2012, the fair values of loan servicing rights were $3.5 million and $2.3 million, respectively.

Fair Value Measurements – ASC 820, Fair Value Measurements and Disclosure, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.  In general, fair values of financial instruments are based upon quoted market prices, where available.  If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.  Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.  These adjustments may include amounts to reflect counterparty credit quality and our creditworthiness, among other things, as well as unobservable parameters.  Any such valuation adjustments are applied consistently over time.

Derivative Financial Instruments – Our hedging policy permits the use of various derivative financial instruments to manage interest rate risk or to hedge specified assets and liabilities.  All derivatives are recorded at fair value on our balance sheet. 

To qualify for hedge accounting, derivatives must be highly effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract.  We consider a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the opposite change in the fair value of the hedged item attributable to the hedged risk.  If derivative instruments are designated as hedges of fair values, and such hedges are highly effective, both the change in the fair value of the hedge and the hedged item are included in current earnings.  Fair value adjustments related to cash flow hedges are recorded in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings.  Ineffective portions of hedges are reflected in earnings as they occur. Actual cash receipts and/or payments and related accruals on derivatives related to hedges are recorded as adjustments to the interest income or interest expense associated with the hedged item.  During the life of the hedge, we will formally assess whether derivatives designated as hedging instruments continue to be highly effective in offsetting changes in the fair value or cash flows of hedged items.  If it is determined that a hedge has ceased to be highly effective, we will discontinue hedge accounting prospectively.  At such time, previous adjustments to the carrying value of the hedged item are reversed into current earnings and the derivative instrument is reclassified to a trading position recorded at fair value.

Loan Servicing Income – We earn fees for servicing real estate mortgages and other loans owned by others.  These fees are generally calculated on the outstanding principal balance of the loans serviced and are recorded as income when earned.

Taxes on Income – We file consolidated income tax returns with our subsidiaries.  Income tax expense is the total of the current year income tax due or refundable, adjusted for permanent differences between items reported in the financial statements and those reported for tax purposes and the change in deferred tax assets and liabilities.  Under the asset and liability method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  The net deferred tax asset is reflected as a component of other assets on the consolidated balance sheet.

A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized.  Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years.  We recognize net deferred tax assets to the extent that we believe these assets are more likely than not to be realized.  In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.  Management reviewed all evidence and concluded that a valuation allowance was not needed.

Earnings per Common Share –  ASC 260,  Earnings Per Share, provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method.  We have determined that our unvested restricted stock awards are participating securities.  Accordingly, earnings per common share is computed using the two-class method prescribed by ASC 260.  Using this method, basic earnings per common share is computed based upon net income available to common shareholders divided by the weighted average number of common shares outstanding during each period, which exclude the outstanding unvested restricted stock.  Diluted earnings per share is computed using the weighted average number of common shares determined for the basic earnings per common share computation plus the dilutive effect of stock options using the treasury stock method.  Stock options and warrants, where the exercise price was greater than the average market price of common shares, were not included in the computation of earnings per diluted share as they would have been antidilutive.  For the years ended December 31, 2013, 2012, and 2011, we had 0,  5,000, and 73,814 in antidilutive options to purchase common shares, respectively.  In 2013, an antidilutive warrant to purchase 703,753 shares of common stock was repurchased. This same warrant to purchase 703,753 shares of common stock was outstanding for the years ended December 31, 2012, and 2011.

A reconciliation of the weighted-average common shares used in the calculations of basic and diluted earnings per common share for the reported periods is provided at“Note 13 Earnings per Common Share”. 

Share-Based Compensation – The Southwest Bancorp, Inc. 2008 Stock Based Award Plan (the “2008 Stock Plan”), provides selected key employees with the opportunity to acquire common stock through stock options or restricted stock awards.  Compensation cost is recognized based on the fair value of these awards at the date of grant.  The exercise price of all options granted under the 2008 Stock Plan is the fair market value on the grant date, while the market price of our common stock at the date of grant is used for restricted stock awards.  Compensation cost is recognized over the required service period, generally defined as the vesting period.  Depending upon terms of the stock option agreements, stock options generally become exercisable on an annual basis and expire from five to ten years after the date of grant.

The 2008 Stock Plan authorized awards for up to 800,000 shares of our common stock over its ten-year term.

Comprehensive Income – Our comprehensive income (net income plus all other changes in shareholders’ equity from non-equity sources) consists of our net income, the after tax effect of changes in the net unrealized gains (losses) in our available for sale securities, and changes in the accumulated gain (loss) on the effective cash flow hedging instrument.

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Premises And Equipment (Tables)

12 Months Ended

Dec. 31, 2013

Premises And Equipment [Abstract]

Premises And Equipment

	At December 31,
(Dollars in thousands)	2013		2012
Land	$	6,057	$	6,059
Buildings and improvements		21,751		18,237
Furniture, fixtures, and equipment		27,268		30,911
Construction/remodeling in progress		1,159		129
		56,235		55,336
Accumulated depreciation and amortization		(35,402)		(33,645)
Total premises and equipment, net	$	20,833	$	21,691

Future Minimum Annual Rental Payments

(Dollars in thousands)
2014	$	2,407
2015		2,043
2016		1,204
2017		143
2018		72
Thereafter		-
Total	$	5,869

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Taxes On Income (Tax Components) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Current tax (benefit) expense:
Federal	$ 462	$ 712	$ (18,319)
State	74	232	(4,875)
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract]
Federal	9,362	8,145	(18,375)
State	858	794	(2,088)
Income Tax Expense (Benefit), Total	10,756	9,883	(43,657)
Parent Company [Member]
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract]
Income Tax Expense (Benefit), Total	$ (2,027)	$ (2,900)	$ (2,563)

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Capital Requirements And Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2013

Capital Requirements And Regulatory Matters [Abstract]

Southwest’s, Stillwater National’s, and Bank of Kansas’ Actual Capital Amounts And Ratios

A summary of actual capital amounts and ratios as of December 31, 2013 are presented below.

					To Be Well Capitalized
					Under Prompt Corrective				For Capital
	Actual				Action Provisions				Adequacy Purposes
(Dollars in thousands)	Amount		Ratio			Amount	Ratio			Amount	Ratio
As of December 31, 2013:
Total Capital (to risk-weighted assets)
Southwest	$	310,867	21.59	%	$	N/A	N/A	%	$	115,194	8.00	%
Bank SNB		284,388	19.83			143,413	10.00			114,730	8.00
Tier I Capital (to risk-weighted assets)
Southwest		292,051	20.28			N/A	N/A			57,597	4.00
Bank SNB		266,132	18.56			86,048	6.00			57,365	4.00
Tier I Leverage (to average assets)
Southwest		292,051	14.86			N/A	N/A			78,597	4.00
Bank SNB		266,132	13.62			97,719	5.00			78,175	4.00

A summary of actual capital amounts and ratios of Stillwater National and Bank of Kansas as of December 31, 2012 are presented below.

					To Be Well Capitalized
					Under Prompt Corrective				For Capital
	Actual				Action Provisions				Adequacy Purposes
(Dollars in thousands)	Amount		Ratio			Amount	Ratio			Amount	Ratio
As of December 31, 2012:
Total Capital (to risk-weighted assets)
Southwest	$	339,964	21.56	%	$	N/A	N/A	%	$	126,122	8.00	%
Stillwater National		269,323	19.55			137,793	10.00			110,234	8.00
Bank of Kansas		33,356	18.37			18,161	10.00			14,529	8.00
Tier I Capital (to risk-weighted assets)
Southwest		319,665	20.28			N/A	N/A			63,061	4.00
Stillwater National		236,705	17.18			82,676	6.00			55,117	4.00
Bank of Kansas		31,064	17.10			10,896	6.00			7,264	4.00
Tier I Leverage (to average assets)
Southwest		319,665	15.01			N/A	N/A			85,201	4.00
Stillwater National		236,705	13.14			90,088	5.00			72,070	4.00
Bank of Kansas		31,064	10.02			15,506	5.00			12,405	4.00

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Loans And Allowance For Loan Losses (Changes In The Carrying Amounts And Accretable Yields For ASC 310.30 Loans) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Loans And Allowance For Loan Losses [Abstract]
Balance at beginning of period, Accretable Yield	$ 1,904	$ 2,402
Transfers to other real estate/ repossessed assets, Accretable Yield	(36)	27
Charge-offs, Accretable Yield	(1)	(5)
Net reclassifications to / from nonaccretable amount, Accretable Yield	235	192
Accretion, Accretable yield	(505)	(712)
Balance at end of period, Accretable Yield	1,597	1,904
Balance at beginning of period, Carrying amount of loans	25,707	37,615
Payments Received, Carrying amount of loans	(6,954)	(9,960)
Transfers to other real estate / repossessed assets, Carrying amount of loans	(2,110)	(2,365)
Charged-offs, Carrying amount of loans	(468)	(151)
Accretion, Carrying amount of loans	252	568
Balance at end of period, Carrying amount of loans	$ 16,427	$ 25,707

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Fair Value Measurements (Carrying Values And Estimated Fair Values Of Financial Instruments Segregated By The Level Of The Valuation Inputs) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financial Assets:
Held to maturity securities, fair value	$ 12,115	$ 13,659
Accrued interest receivable	5,335	6,365
Financial Liabilities:
Accrued interest payable	832	1,116
Other borrowings	80,632	70,362
Carrying Values [Member] | Level 2 Inputs [Member]
Financial Assets:
Cash and cash equivalents	279,839	288,079
Held to maturity securities, fair value	11,720	12,797
Accrued interest receivable	5,335	6,365
Investments included in other assets	8,140	8,531
Financial Liabilities:
Deposits	1,584,086	1,709,578
Accrued interest payable	832	1,116
Other liabilities	8,248	9,985
Derivative instrument	1,967	3,195
Other borrowings	80,632	70,362
Subordinated debentures	46,393	81,963
Carrying Values [Member] | Level 3 Inputs [Member]
Financial Assets:
Total loans, net of allowance	1,234,240	1,332,017
Fair Values [Member] | Level 2 Inputs [Member]
Financial Assets:
Cash and cash equivalents	279,839	288,079
Held to maturity securities, fair value	12,115	13,659
Accrued interest receivable	5,335	6,365
Investments included in other assets	8,140	8,531
Financial Liabilities:
Deposits	1,486,939	1,666,653
Accrued interest payable	832	1,116
Other liabilities	8,248	9,985
Derivative instrument	1,967	3,195
Other borrowings	83,593	74,057
Subordinated debentures	46,393	82,998
Fair Values [Member] | Level 3 Inputs [Member]
Financial Assets:
Total loans, net of allowance	$ 1,190,869	$ 1,301,942

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Consolidated Statements Of Financial Condition (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Assets:
Cash and due from banks	$ 28,062	$ 45,045
Interest-bearing deposits	251,777	243,034
Cash and cash equivalents	279,839	288,079
Securities held to maturity (fair values of $12,115 and $13,659, respectively)	11,720	12,797
Securities available for sale (amortized cost of $385,423 and $358,317, respectively)	382,479	364,315
Loans held for sale	3,060	31,682
Noncovered loans receivable	1,251,416	1,321,346
Less: Allowance for loan losses	(36,607)	(46,494)
Net noncovered loans receivable	1,214,809	1,274,852
Covered loans receivable (includes loss share: $1,812 and $6,714, respectively)	16,427	25,707
Less: Allowance for loan losses	(56)	(224)
Net covered loans receivable	16,371	25,483
Net loans receivable	1,231,180	1,300,335
Accrued interest receivable	5,335	6,365
Income tax receivable		24,525
Premises and equipment, net	20,833	21,691
Noncovered other real estate	560	11,315
Covered other real estate	2,094	3,643
Goodwill	1,214	1,214
Other intangible assets, net	4,980	4,864
Other assets	38,129	51,430
Total assets	1,981,423	2,122,255
Deposits:
Noninterest-bearing demand	444,796	424,008
Interest-bearing demand	120,156	112,012
Money market accounts	439,981	423,417
Savings accounts	41,727	37,693
Time deposits of $100,000 or more	251,185	351,273
Other time deposits	286,241	361,175
Total deposits	1,584,086	1,709,578
Accrued interest payable	832	1,116
Income tax payable	78
Other liabilities	10,215	13,180
Other borrowings	80,632	70,362
Subordinated debentures	46,393	81,963
Total liabilities	1,722,236	1,876,199
Shareholders' equity:
Common stock - $1 par value; 40,000,000 shares authorized; 19,732,926, 19,529,705, shares issued and outstanding, respectively	19,733	19,530
Paid in capital	99,937	99,705
Retained earnings	142,528	125,093
Accumulated other comprehensive income (loss)	(3,011)	1,728
Total shareholders' equity	259,187	246,056
Total liabilities & shareholders' equity	$ 1,981,423	$ 2,122,255

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Summary Of Significant Accounting And Reporting Policies (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Interest-bearing balances held at depository institutions	$ 251,800,000	$ 243,000,000
Interest paid	11,500,000	19,200,000	26,500,000
Income taxes paid	400,000	1,000,000	5,900,000
Transfer of loans to other real estate (noncash)	900,000	2,600,000	62,300,000
Restricted cash and cash equivalents	1,800,000	3,000,000
Net unamortized deferred loan fees	100,000
Percentage of losses covered by the FDIC	80.00%
Reserve for unfunded loan commitments	2,800,000	2,900,000
Other Real Estate, Non Covered	560,000	11,315,000
Other Real Estate, Covered	2,094,000	3,643,000
Fair value of loan servicing rights	$ 3,500,000	$ 2,300,000
Antidilutive warrant to purchase shares of common stock		703,753
Common stock reserved for issuance	800,000
Loss share receivable % of loan discount	85.00%
Minimum [Member]
Percentage change in fair value to be considered highly effective	80.00%
Stock option expiration period after grant	5 years
Minimum [Member] | Building and Building Improvements [Member]
Premises and equipmet, useful life	10 years
Minimum [Member] | Furniture, Fixtures and Equipment [Member]
Premises and equipmet, useful life	3 years
Maximum [Member]
Percentage of losses covered by the FDIC	95.00%
Percentage change in fair value to be considered highly effective	125.00%
Stock option expiration period after grant	10 years
Maximum [Member] | Building and Building Improvements [Member]
Premises and equipmet, useful life	40 years
Maximum [Member] | Furniture, Fixtures and Equipment [Member]
Premises and equipmet, useful life	10 years
2008 Stock Based Award Plan [Member]
Common stock reserved for issuance	800,000
Warrant [Member]
Antidilutive warrant to purchase shares of common stock	703,753

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Parent Company Condensed Financial Information (Statements Of Operations) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Noninterest income	$ 13,643	$ 15,936	$ 14,018
Subordinated debentures	4,813	6,010	5,821
Noninterest expenses	55,311	63,322	90,201
Total income (loss) before taxes and equity in undistributed income of subsidiaries	28,191	26,070	(111,952)
Taxes on income	10,756	9,883	(43,657)
Net income	17,435	16,187	(68,295)
Parent Company [Member]
Cash dividends from subsidiaries	19,625	70,175	160
Noninterest income	333	595	774
Investment income	243	340	31
Other operating income			45
Total income	20,201	71,110	1,010
Subordinated debentures	4,168	5,463	5,306
Noninterest expenses	1,808	3,187	2,107
Total expense	5,976	8,650	7,413
Total income (loss) before taxes and equity in undistributed income of subsidiaries	14,225	62,460	(6,403)
Taxes on income	(2,027)	(2,900)	(2,563)
Income (loss) before equity in undistributed income of subsidiaries	16,252	65,360	(3,840)
Equity in undistributed income (loss) of subsidiaries	1,183	(49,173)	(64,455)
Net income	$ 17,435	$ 16,187	$ (68,295)

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Consolidated Statements Of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating activities:
Net income	$ 17,435,000	$ 16,187,000	$ (68,295,000)
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	(7,209,000)	3,107,000	132,101,000
Adjustments to other real estate	2,222,000	5,089,000
Deferred tax expense	10,220,000	8,939,000	(20,463,000)
Asset depreciation	2,450,000	2,460,000	2,581,000
Securities premium amortization, net of discount accretion	3,454,000	3,308,000	2,197,000
Amortization of intangibles	1,315,000	1,609,000	1,374,000
Stock based compensation expense	742,000	115,000	333,000
Net gain on sales/calls of investment securities		(837,000)
Net gain on sales of available for sale loans	(2,649,000)	(3,133,000)	(1,658,000)
Net gains on sales of premises/equipment	195,000	(2,000)	(20,000)
Net gain on sales of other real estate	(3,897,000)	(301,000)	23,357,000
Proceeds from sales of held for sale loans	121,020,000	150,621,000	83,123,000
Held for sale loans originated for resale	(129,699,000)	(148,479,000)	(81,903,000)
Net changes in assets and liabilities:
Accrued interest receivable	1,030,000	811,000	1,414,000
Other assets	5,969,000	1,847,000	3,777,000
Income taxes receivable / payable	24,618,000	4,074,000	(31,762,000)
Excess Tax Benefit from Share-based Compensation, Operating Activities	15,000	(67,000)	(218,000)
Accrued interest payable	(284,000)	(2,573,000)	2,112,000
Other liabilities	(1,678,000)	2,225,000	(1,790,000)
Net cash provided by operating activities	45,239,000	45,134,000	46,696,000
Investing activities:
Proceeds from sales of available for sale securities	2,744,000	6,588,000
Held to maturity securities	5,000,000	2,375,000	2,470,000
Available for sale securities	108,498,000	88,109,000	68,709,000
Proceeds from sales of other investments		1,865,000
Redemptions (purchases) of other investments	391,000	179,000	(50,000)
Purchases of held to maturity securities	(5,250,000)		(5,894,000)
Purchases of available for sale securities	(140,473,000)	(202,273,000)	(75,650,000)
Principal repayments, net of loans originated	113,588,000	382,669,000	288,795,000
Proceeds from sales of loans, net			153,713,000
Purchases of premises and equipment	(1,855,000)	(1,619,000)	(1,686,000)
Proceeds from sales of premises and equipment	68,000	170,000	239,000
Proceeds from sales of other real estate	16,645,000	7,261,000	56,425,000
Net cash provided by investing activities	99,356,000	285,324,000	487,071,000
Financing activities:
Net decrease in deposits	(125,492,000)	(211,804,000)	(331,346,000)
Net increase in other borrowings	10,270,000	13,883,000	(38,123,000)
Net proceeds from issuance of common stock	229,000	127,000	64,000
Repurchase of common stock warrant	(2,287,000)
Redemptions of preferred stock		(70,000,000)
Redemption of trust preferred securities	(35,570,000)
Excess tax expense from share-based payment arrangements	15,000	(67,000)	(218,000)
Preferred stock dividends paid		(4,407,000)	(1,751,000)
Net cash used in financing activities	(152,835,000)	(272,268,000)	(371,374,000)
Net increase in cash and cash equivalents	(8,240,000)	58,190,000	162,393,000
Cash and cash equivalents:
Beginning of period	288,079,000	229,889,000	67,496,000
End of period	$ 279,839,000	$ 288,079,000	$ 229,889,000

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Operating Segments (Financial Results By Operating Segment) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Financial results by operating segment
Net interest income	$ 62,650,000	$ 76,563,000	$ 96,332,000
Provision for loan losses	(7,209,000)	3,107,000	132,101,000
Noninterest income	13,643,000	15,936,000	14,018,000
Noninterest expenses	55,311,000	63,322,000	90,201,000
Income (loss) before taxes	28,191,000	26,070,000	(111,952,000)
Taxes on income	10,756,000	9,883,000	(43,657,000)
Net income (loss)	17,435,000	16,187,000	(68,295,000)
Fixed asset expenditures	1,855,000	1,619,000	1,686,000
Total loans at period end	1,270,903,000	1,378,735,000	1,763,488,000
Total assets at period end	1,981,423,000	2,122,255,000	2,377,276,000
Total deposits at period end	1,584,086,000	1,709,578,000	1,921,382,000
Oklahoma Banking [Member]
Financial results by operating segment
Net interest income	34,725,000	37,954,000	43,005,000
Provision for loan losses	(486,000)	448,000	27,087,000
Noninterest income	6,943,000	7,697,000	7,781,000
Noninterest expenses	28,000,000	29,406,000	36,402,000
Income (loss) before taxes	14,154,000	15,797,000	(12,703,000)
Taxes on income	5,400,000	5,989,000	(4,955,000)
Net income (loss)	8,754,000	9,808,000	(7,748,000)
Fixed asset expenditures	85,000	178,000	366,000
Total loans at period end	681,991,000	652,121,000	858,212,000
Total assets at period end	686,736,000	664,607,000	888,839,000
Total deposits at period end	1,113,715,000	1,254,348,000	1,406,361,000
Texas Banking [Member]
Financial results by operating segment
Net interest income	18,949,000	25,190,000	29,820,000
Provision for loan losses	(6,403,000)	5,364,000	98,335,000
Noninterest income	1,305,000	1,854,000	1,856,000
Noninterest expenses	9,494,000	12,848,000	28,727,000
Income (loss) before taxes	17,163,000	8,832,000	(95,386,000)
Taxes on income	6,548,000	3,348,000	(37,196,000)
Net income (loss)	10,615,000	5,484,000	(58,190,000)
Fixed asset expenditures	9,000	71,000	3,000
Total loans at period end	366,697,000	520,481,000	653,199,000
Total assets at period end	361,058,000	515,675,000	653,146,000
Total deposits at period end	207,227,000	166,919,000	156,101,000
Kansas Banking [Member]
Financial results by operating segment
Net interest income	10,527,000	9,685,000	12,414,000
Provision for loan losses	(472,000)	(2,705,000)	6,679,000
Noninterest income	1,944,000	2,440,000	2,065,000
Noninterest expenses	11,898,000	13,767,000	19,131,000
Income (loss) before taxes	1,045,000	1,063,000	(11,331,000)
Taxes on income	399,000	403,000	(4,419,000)
Net income (loss)	646,000	660,000	(6,912,000)
Fixed asset expenditures	8,000	8,000	193,000
Total loans at period end	198,992,000	174,451,000	213,382,000
Total assets at period end	203,631,000	178,291,000	219,481,000
Total deposits at period end	247,884,000	270,368,000	276,757,000
Secondary Market [Member]
Financial results by operating segment
Net interest income	670,000	1,370,000	1,438,000
Provision for loan losses	148,000
Noninterest income	2,701,000	2,771,000	1,297,000
Noninterest expenses	2,287,000	2,430,000	2,121,000
Income (loss) before taxes	936,000	1,711,000	614,000
Taxes on income	357,000	649,000	240,000
Net income (loss)	579,000	1,062,000	374,000
Fixed asset expenditures			5,000
Total loans at period end	23,215,000	31,682,000	38,695,000
Total assets at period end	26,162,000	34,304,000	40,876,000
Total deposits at period end	1,895,000	2,420,000	1,430,000
Other Operations [Member]
Financial results by operating segment
Net interest income	(2,221,000)	2,364,000	9,655,000
Provision for loan losses	4,000
Noninterest income	750,000	1,174,000	1,019,000
Noninterest expenses	3,632,000	4,871,000	3,820,000
Income (loss) before taxes	(5,107,000)	(1,333,000)	6,854,000
Taxes on income	(1,948,000)	(506,000)	2,673,000
Net income (loss)	(3,159,000)	(827,000)	4,181,000
Externally generated revenue from investing activities	1,600,000	800,000	2,800,000
Internally generated loss from fund management	100,000	2,800,000	7,900,000
Fixed asset expenditures	1,753,000	1,362,000	1,119,000
Total loans at period end	8,000
Total assets at period end	703,836,000	729,378,000	574,934,000
Total deposits at period end	$ 13,365,000	$ 15,523,000	$ 80,733,000

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Loans And Allowance For Loan Losses (Loans Modified As Troubled Debt Restructurings) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 contract	Dec. 31, 2012 contract
Financing Receivable, Modifications [Line Items]
Number of Modifications	15	24
Recorded Investment	$ 5,584	$ 27,078
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Modifications	9	12
Recorded Investment	4,732	22,713
One-To-Four Family Residential [Member]
Financing Receivable, Modifications [Line Items]
Number of Modifications	1	3
Recorded Investment	68	110
Real Estate Construction [Member]
Financing Receivable, Modifications [Line Items]
Number of Modifications		1
Recorded Investment		847
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Modifications	5	7
Recorded Investment	784	3,328
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Number of Modifications		1
Recorded Investment		$ 80

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Deposits (Tables)

12 Months Ended

Dec. 31, 2013

Deposits [Abstract]

Schedule Of Deposits

(Dollars in thousands)	2013		2012
Noninterest-bearing demand	$	444,796	$	424,008
Interest-bearing demand		120,156		112,012
Money market accounts		439,981		423,417
Savings accounts		41,727		37,693
Time deposits of $100,000 or more		251,185		351,273
Other time deposits		286,241		361,175
Total deposits	$	1,584,086	$	1,709,578

Scheduled Time Deposits

(Dollars in thousands)
2014	$ 380,504
2015	96,028
2016	31,540
2017	20,738
2018	8,616
Thereafter	-
Total time deposits	$ 537,426

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Premises And Equipment (Future Minimum Annual Rental Payments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Premises And Equipment [Abstract]
2013	$ 2,407
2014	2,043
2015	1,204
2016	143
2017	72
Total	$ 5,869

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Employee Benefits

12 Months Ended

Dec. 31, 2013

Employee Benefits [Abstract]

Employee Benefits

Note 15:  Employee Benefits

We sponsor a 401(k) defined contribution savings plan. The plan covers all employees who have completed one year of service and have attained the age of 21.  The plan is subject to the Employee Retirement Income Security Act of 1974, as amended.  This plan permits participants to make before or after-tax contributions in an amount not exceeding 90% of eligible compensation and subject to dollar limits from Internal Revenue Service regulations.  We will make an annual nonelective contribution of 3% of eligible compensation.  We made contributions of $1.0 million and  $0.7 million in 2013 and2012, respectively.

Stock Options– We recorded no share-based compensation expense with respect to stock options for the years ended December 31, 2013 and 2012. The share-based compensation is calculated using the accrual method, which treats each vesting tranche as a separate award and amortizes expense evenly from grant date to vest date for each tranche.  The amortization of stock-based compensation reflects actual forfeitures, and as of December 31, 2013, there was no unrecognized compensation expense.  The deferred tax asset that was recorded related to this compensation expense was approximately $0 for tax years 2013 and 2012 and $92,000 for tax year 2011.

We have computed the estimated fair values of all share-based compensation using the Black-Scholes option pricing model.  No options were granted in 2013, 2012, or in 2011.

A summary of option activity under the Stock Plans as of December 31, 2013 and changes during the three-year period then ended is presented below.

				Weighted
		Weighted		Average Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual	Value (dollars
	Options	Price		Life (Years)	in thousands)
Outstanding at December 31, 2010	202,215	$	24.00
Granted	-		-
Exercised	-		-
Canceled/expired	(128,401)		23.59
Outstanding at December 31, 2011	73,814	$	24.72
Granted	-		-
Exercised	-		-
Canceled/expired	(68,814)		25.28
Outstanding at December 31, 2012	5,000	$	16.93
Granted	-		-
Exercised	-		-
Canceled/expired	(5,000)		16.93
Outstanding at December 31, 2013	-	$	-	-	-
Total exercisable at December 31, 2011	73,814	$	24.72
Total exercisable at December 31, 2012	5,000	$	16.93
Total exercisable at December 31, 2013	-	$	-		-

No stock options were exercised in 2013, 2012 and 2011.

Restricted Stock -Restricted shares granted as of December 31, 2013, 2012 and 2011 was 401,844,  200,798, and 120,298, respectively.  We recognized $0.7 million for the year ended December 31, 2013 and $0.1 million for the year ended December 31, 2012 and $0.2 million for the year ended December 31, 2011, in compensation expense, net of tax, related to all restricted shares outstanding.  At December 31, 2013, there was $0.7 million of total unrecognized compensation expense related to restricted shares granted under the 2008 Stock Plan. Of the total unrecognized compensation expense at December 31, 2013, $0.4 million will be recognized in 2014, and the remainder will be recognized the following three years.

The 2013 and 2012 grants of restricted stock have a vesting period betweensix months to 3 years.  The restrictions on the shares expire one year after the award date or upon a change in control of us (subject to the prohibition on parachute payments imposed by the American Reinvestment and Recovery Act) or the permanent and total disability or death of the participant.  We recognize compensation expense over the restricted period.

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Borrowed Funds (Tables)

12 Months Ended

Dec. 31, 2013

Borrowed Funds [Abstract]

Schedule Of Borrowed Funds

	2013						2012
(Dollars in thousands)	Balance at December 31		Average Balance		Weighted Average Rate		Balance at December 31		Average Balance		Weighted Average Rate
Securities sold under repurchase
agreements	$	55,632	$	49,115	0.05	%	$	45,362	$	36,823	0.05	%
Federal Home Loan Bank advances		25,000		25,000	3.47			25,000		25,000	3.48
	$	80,632					$	70,362

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Off Balance Sheet Arrangements, Commitments, Guarantees, And Contractual Obligations

12 Months Ended

Dec. 31, 2013

Off-Balance-Sheet Arrangments, Commitments, Guarantees And Contingencies [Abstract]

Off-Balance-Sheet Arrangements, Commitments, Guarantees And Contingencies

Note 17:  Off-Balance-Sheet Arrangements, Commitments, Guarantees and Contingencies

Financial Instruments with Off-Balance-Sheet Risk – In the normal course of business, we make use of a number of different financial instruments to help meet the financial needs of our customers.  In accordance with U.S. generally accepted accounting principles, these transactions are not presented in the accompanying consolidated financial statements and are referred to as off-balance sheet instruments.  These transactions and activities include commitments to extend lines of commercial and real estate mortgage credit and standby and commercial letters of credit.

The following table provides a summary of our off-balance sheet financial instruments:

	At December 31,
(Dollars in thousands)	2013		2012
Commitments to extend commercial and real estate mortgage credit	$	323,925	$	248,337
Standby and commercial letters of credit		5,800		6,744
Total	$	329,725	$	255,081

A loan commitment is a binding contract to lend up to a maximum amount for a specified period of time provided there is no violation of any financial, economic, or other terms of the contract.  A standby letter of credit obligates us to honor a financial commitment to a third party should our customer fail to perform.  Many loan commitments and most standby letters of credit expire unfunded, and, therefore, total commitments do not represent our future funding obligations.  Loan commitments and letters of credit are made under normal credit terms, including interest rates and collateral prevailing at the time, and usually require the payment of a fee by the customer.  Commercial letters of credit are commitments generally issued to finance the movement of goods between buyers and sellers.  Our exposure to credit loss, assuming commitments are funded, in the event of nonperformance by the other party to the financial instrument is represented by the contractual amount of those instruments.  We do not anticipate any material losses as a result of the commitments.

Litigation – In the normal course of business, we are at all times subject to various pending and threatened legal actions.  The relief or damages sought in some of these actions may be substantial.  After reviewing pending and threatened actions with counsel, management considers that the outcome of such actions will not have a material adverse effect on our financial position; however, we are not able to predict whether the outcome of such actions may or may not have a material adverse effect on results of operations in a particular future period as the timing and amount of any resolution of such actions and relationship to the future results of operations are not known.

Severance Compensation Plan and Change in Control Agreements – We have adopted a Severance Compensation Plan and a Change of Control Agreement (the “Plans”) for the benefit of certain officers and key members of management.  The Plan’s purpose is to protect and retain certain qualified employees in the event of a change in control and to reward those qualified employees for loyal service to us by providing severance compensation to them upon their involuntary termination of employment after a change in control of Southwest.  At December 31, 2013, we have not recorded any amounts in the Consolidated Financial Statements relating to the Plans.  If a change of control were to occur, the maximum amount payable to certain officers and key members of management would approximate $4.8  million.

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Goodwill and Other Intangible Assets (Estimated Aggregate Future Amortization Expense for Other Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
2013	$ 1,026
2014	950
2015	825
2016	582
2017	456
Thereafter	1,141
Other Intangible assets, net	4,980	4,864
Core Deposits [Member]
2013	514
2014	474
2015	425
2016	249
2017	182
Thereafter	213
Other Intangible assets, net	2,057	2,543
Servicing Contracts [Member]
2013	512
2014	476
2015	400
2016	333
2017	274
Thereafter	928
Other Intangible assets, net	$ 2,923	$ 2,321

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Consolidated Statement Of Shareholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income	Total
Beginning balance at Dec. 31, 2010	$ 67,724	$ 19,422	$ 98,894	$ 185,196	$ 979	$ 372,215
Beginning balance, Shares at Dec. 31, 2010		19,421,900
Dividends (paid and/ or accrued):
Preferred				(3,523)		(3,523)
Warrant amortization	731			(731)
Common stock issued		16	214			230
Common stock issued, shares		16,100
Net common stock issued under employee plans and related tax expense		6	(176)			(170)
Net common stock issued under employee plans and related tax expense, shares		6,213
Other comprehensive loss, net of tax					1,132	1,132
Net income				(68,295)		(68,295)
Ending balance at Dec. 31, 2011	68,455	19,444	98,932	112,647	2,111	301,589
Ending balance, Shares at Dec. 31, 2011		19,444,213
Dividends (paid and/ or accrued):
Preferred				(2,196)		(2,196)
Warrant amortization	(68,455)			(1,545)		(70,000)
Common stock issued		81	799			880
Common stock issued, shares		80,500
Net common stock issued under employee plans and related tax expense		5	(26)			(21)
Net common stock issued under employee plans and related tax expense, shares		4,992
Other comprehensive loss, net of tax					(383)	(383)
Net income				16,187		16,187
Ending balance at Dec. 31, 2012		19,530	99,705	125,093	1,728	246,056
Ending balance, Shares at Dec. 31, 2012		19,529,705				19,529,705
Dividends (paid and/ or accrued):
Warrant repurchase			(2,287)			(2,287)
Common stock issued		201	2,478			2,679
Common stock issued, shares		201,046
Net common stock issued under employee plans and related tax expense		2	41			43
Net common stock issued under employee plans and related tax expense, shares		2,175
Other comprehensive loss, net of tax					(4,739)	(4,739)
Net income				17,435		17,435
Ending balance at Dec. 31, 2013		$ 19,733	$ 99,937	$ 142,528	$ (3,011)	$ 259,187
Ending balance, Shares at Dec. 31, 2013		19,732,926				19,732,926

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Consolidated Statements Of Financial Condition (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements Of Financial Condition [Abstract]
Held to maturity securities, fair value	$ 12,115	$ 13,659
Available for sale securities, amortized cost	385,423	358,317
Covered loans receivable, loss share	$ 1,812	$ 6,714
Common stock, par value	$ 1
Common stock, shares authorized	40,000,000
Common stock, shares issued	19,732,926	19,529,705
Common stock, shares outstanding	19,732,926	19,529,705

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Derivative Instruments

12 Months Ended

Dec. 31, 2013

Derivative Instruments [Abstract]

Derivative Instruments

Note 10:  Derivative Instruments

We have an interest rate swap agreement with a total notional amount of $25.0 million.  The interest rate swap contract was designated as a cash flow hedging instrument with the objective of protecting the overall cash flow from our quarterly interest payments on the SBI Capital Trust II preferred securities throughout the seven year period beginning February 11, 2011 and ending April 7, 2018 from the risk of variability of those payments resulting from changes in the three-month London Interbank Offered Rate (“LIBOR”).  Under the swap, we will pay a fixed interest rate of 6.15% and receive a variable interest rate of three-month LIBOR plus a margin of 2.85%  on a total notional amount of $25.0 million, with quarterly settlements.  The rate received by us as of December 31, 2013 was 3.09%.

The estimated fair value of the interest rate derivative contract outstanding as of December 31, 2013 and 2012 resulted in a pre-tax loss of $2.0  million and $3.2 million, respectively, and was included in other liabilities in the Consolidated Statement of Financial Condition. 

The effective portion of the gain or loss due to changes in the fair value of the derivative hedging instrument, a $0.7 million gain and a $0.2 million loss for the year ended December 31, 2013 and 2012, respectively, is included in other comprehensive income, net of tax, while the ineffective portion (indicated by the excess of the cumulative change in the fair value of the derivative over that which is necessary to offset the cumulative change in expected future cash flows on the hedge transaction) is included in other noninterest income or other noninterest expense.  No ineffectiveness related to the interest rate derivative was recognized during either reporting period.   

Net cash flows as a result of the interest rate swap agreement were $0.8 million  for year ended December 31, 2013 and $0.7 million for the year ended 2012, and were included in interest expense on subordinated debentures.   

Derivative contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms.  Institutional counterparties must have an investment grade credit rating and be approved by our asset/liability management committee.  Our credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty.  Credit exposure may be reduced by the amount of collateral pledged by the counterparty.  There are no credit-risk-related contingent features associated with our derivative contract. 

The fair value of cash and securities posted as collateral by us related to the derivative contract was $4.1 million and $4.2 million at December 31, 2013 and 2012, respectively.

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Off-Balance-Sheet Arrangements, Commitments, Guarantees And Contingencies (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Off-Balance-Sheet Arrangments, Commitments, Guarantees And Contingencies [Abstract]
Commitments to extend commercial and real estate mortgage credit	$ 323,925,000	$ 248,337,000
Standby and commercial letters of credit	5,800,000	6,744,000
Total	329,725,000	255,081,000
Maximum amount payable for Severance Compensation Plan	$ 4,800,000

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Employee Benefits (Schedule Of Stock Option Activity) (Details) (USD $)	12 Months Ended			36 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Employee Benefits [Abstract]
Outstanding at December 31, Number of Options	5,000	73,814	202,215	202,215
Granted, Number of Options				0
Canceled/expired, Number of Options	(5,000)	(68,814)	(128,401)
Outstanding at December 31, Number of Options		5,000	73,814
Total exercisable at December 31, Number of Options		5,000	73,814
Outstanding at December 31, Weighted Average Exercise Price	$ 16.93	$ 24.72	$ 24.00	$ 24.00
Canceled/expired, Weighted Average Exercise Price	$ 16.93	$ 25.28	$ 23.59
Outstanding at December 31, Weighted Average Exercise Price		$ 16.93	$ 24.72
Total exercisable at December 31, Weighted Average Exercise Price		$ 16.93	$ 24.72

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 06, 2014	Jun. 30, 2013
Document And Entity Information [Abstract]
Entity Registrant Name	SOUTHWEST BANCORP INC
Entity Central Index Key	0000914374
Document Type	10-K
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Trading Symbol	oksb
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 247,600,000
Entity Common Stock, Shares Outstanding		19,786,206
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes

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Taxes On Income

12 Months Ended

Dec. 31, 2013

Taxes On Income [Abstract]

Taxes On Income

Note 11:  Taxes on Income

The components of taxes on income follow:

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Current tax (benefit) expense:
Federal	$	462	$	712	$	(18,319)
State		74		232		(4,875)
Deferred tax expense (benefit):
Federal		9,362		8,145		(18,375)
State		858		794		(2,088)
Taxes on income	$	10,756	$	9,883	$	(43,657)

A reconciliation from the expected tax expense (benefit) using the U.S. Federal income tax rate of 35% to consolidated effective income tax expense (benefit) follows:

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Computed tax (benefit) expense at statutory rates	$	9,867	$	9,124	$	(39,183)
Increase (decrease) in income taxes resulting from:
Benefit of income not subject to U.S. Federal income tax		(213)		(213)		(165)
Expenses not deductible for U.S. Federal income tax		96		150		124
State income taxes, net of Federal income tax benefit		749		476		(3,755)
Reversal of FIN 48 reserve		-		-		(953)
State payment or refund from prior periods (federally tax affected)		-		50		-
Tax credit recapture		76		-		-
Other		181		296		275
Taxes on income	$	10,756	$	9,883	$	(43,657)

The calculated year-to-date effective tax rate is 38.2% for 2013,  37.9% for 2012, and (39.0%) for 2011.

At December 31, 2013,  we had $10.7 million federal net operating loss carryforward expiring in 2031, $53.1 million of state net operating loss carryforward expiring in 2031, and $0.6 million of state net operating loss carryforward expiring in 2021.  In addition, we had $2.5 million alternative minimum tax credit that can be carried forward indefinitely.

A deferred tax asset or liability is recognized for the tax consequences of temporary differences in the recognition of certain income and expense items for financial statement reporting purposes.  A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. 

We conducted an analysis to assess the need for a valuation allowance at December 31, 2013. As part of this assessment, all available evidence, including both positive and negative, was considered to determine whether based on the weight of such evidence, a valuation allowance for deferred tax assets was needed.  In accordance with ASC 740, Income Taxes, a valuation allowance is deemed to be needed when, based on the weight of the available evidence, it is more likely than not (a likelihood of more than 50%) that some portion or all of a deferred tax asset will not be realized.  The future realization of the tax benefit depends on the existence of sufficient taxable income within the carryback and carryforward periods. 

As part of our analysis, we considered the following positive evidence:

· Taxes paid in prior carryback years;

· Ability to carryforward federal and Oklahoma tax losses for 20 years;

· Long history of earnings profitability;

· Projected future taxable income, exclusive of tax planning strategies, sufficient to utilize the deferred tax assets;

· Current year income exceeding forecasted income;

· Improvement in overall asset quality and related credit metrics;

· Redemption of Trust Preferred Securities; and

· Change in executive management.

Due to the loss incurred in 2011, we remain in a three-year cumulative pretax loss position that is considered significant negative evidence in the determination of the need for a valuation allowance.  Included in the three-year pretax loss position is $101.0 million related to the nonrecurring sale of nonperforming assets and potential problem loans during 2011.  Management believes that the combination of a strong history of taxable income, the quick utilization of existing net operating loss carryforwards, and projected pre-tax income in future years represents positive evidence that the tax benefit will be realized.  While realization of the deferred tax benefits is not assured, it is management’s judgment, after review of all available evidence and based on the weight of such evidence, that a valuation allowance is not necessary, as realization of these benefits meets the “more likely than not” standard. 

Net deferred tax assets of $24.9 million and $32.2 million at December 31, 2013 and 2012, respectively, are reflected in the accompanying consolidated statements of financial condition in other assets. 

Temporary differences that give rise to the deferred tax assets include the following:

		At December 31,
(Dollars in thousands)		2013		2012
Deferred tax assets:
	Provision for loan losses	$	15,072	$	19,246
	Net operating loss carryforward		5,065		12,674
	Tax credit carryforward		3,443		3,070
	Write-downs on other real estate		-		1,669
	Nonaccrual loan interest		539		527
	Deferred compensation & profit sharing accrual		173		551
	Investments		468		457
	Section 597 gain - FDIC-assisted acquisition		1,214		(119)
	Accrued Expenses		812		-
	Other		43		(51)
Total deferred tax assets			26,829		38,024
Deferred tax liabilities:
	Accumulated depreciation		(2,476)		(2,835)
	Amortizable assets		(614)		(749)
	Dividend - Equity vs. Cost Method		(316)		(492)
	Prepaid expenses		(188)		(254)
	FHLB stock dividends		(192)		(220)
	Stock-based compensation		(6)		(216)
Total deferred tax liabilities			(3,792)		(4,766)
	Deferred taxes (payable) receivable on investment
	securities available for sale		1,900		(1,075)
Net deferred tax asset		$	24,937	$	32,183

We or one of our subsidiaries files income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  Weare no longer subject to U.S. federal or state tax examinations for years before 2010.  On February 15, 2012, we were notified by the Internal Revenue Service that the 2009 income tax filing was under audit and on January 14, 2013, we received final notice that the examination was completed with no adjustments proposed.  Additionally, as procedurally required, our company’s 2010 and 2011 federal returns were examined in connection with the 2011 net operating loss carryback and no adjustments were required.

Unrecognized Tax Benefits – ASC 740, Income Taxes, provides guidance on the recognition, measurement, and classification of income tax uncertainties, along with any related interest and penalties.  As of December 31, 2013, we have no unrecognized tax benefits related to Federal or State income tax matters and do not anticipate any changes within the next twelve months.  Additionally, no interest and penalties have been accrued related to uncertain tax positions.

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Subordinated Debentures (Schedule of Trust Preferred Securities) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Subordinated Borrowing [Line Items]
Subordinated debentures	$ 46,393	$ 81,963
Trust Preferred Securities of the Trusts	45,000	79,500
OKSB Statutory Trust I [Member]
Subordinated Borrowing [Line Items]
Subordinated debentures	20,619	20,619
Trust Preferred Securities of the Trusts	20,000	20,000
Rates	3.35%	3.41%
Final Maturity Date	Jun. 26, 2033	Jun. 26, 2033
SBI Capital Trust II [Member]
Subordinated Borrowing [Line Items]
Subordinated debentures	25,774	25,774
Trust Preferred Securities of the Trusts	25,000	25,000
Rates	3.09%	3.19%
Final Maturity Date	Oct. 07, 2033	Oct. 07, 2033
Southwest Capital Trust II [Member]
Subordinated Borrowing [Line Items]
Subordinated debentures		35,570
Trust Preferred Securities of the Trusts	$ 34,500	$ 34,500
Rates		10.50%
Final Maturity Date		Sep. 15, 2038

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Employee Benefits (Narrative) (Details) (USD $)	12 Months Ended			24 Months Ended	36 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013	Dec. 31, 2013
Maximum percentage of elegible compensation able to be contributed to the defined contribution plan	90.00%
Employer match contribution	3.00%
Amount contributed to the defined contribution plan	$ 1,000,000	$ 700,000
Share-based compensation expense				0
Deferred tax asset related to stock-based compensation expense	0		92,000	0	0
Restricted shares granted	401,844	200,798	120,298	401,844	401,844
Recognized compensation expense related to restricted shares outstanding	700,000	100,000	200,000
Unrecognized compensation expense related to restricted shares granted	700,000			700,000	700,000
Unrecognized compensation expense, expected to be recognized in next fiscal year	$ 400,000			$ 400,000	$ 400,000
Unrecognized compensation expense, period of recognition	3 years
Expiration period of restricted shares	1 year
Granted, Number of Options					0
Maximum [Member]
Vesting period of restriced stock	3 years
Minimum [Member]
Vesting period of restriced stock	6 months

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Consolidated Statements Of Operations (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Interest income:
Interest and fees on loans	$ 66,162,000	$ 84,602,000	$ 113,223,000
Investment securities:
U.S. Government and agency obligations	1,745,000	1,714,000	1,500,000
Mortgage-backed securities	3,481,000	4,718,000	5,046,000
State and political subdivisions	1,203,000	1,060,000	411,000
Other securities	226,000	322,000	16,000
Other interest-earning assets	1,097,000	755,000	549,000
Total interest income	73,914,000	93,171,000	120,745,000
Interest expense:
Interest-bearing demand	148,000	219,000	382,000
Money market accounts	790,000	1,077,000	2,154,000
Savings accounts	44,000	53,000	49,000
Time deposits of $100,000 or more	2,338,000	4,302,000	7,617,000
Other time deposits	2,239,000	4,052,000	6,591,000
Other borrowings	892,000	895,000	1,799,000
Subordinated debentures	4,813,000	6,010,000	5,821,000
Total interest expense	11,264,000	16,608,000	24,413,000
Net interest income	62,650,000	76,563,000	96,332,000
Provision for loan losses	(7,209,000)	3,107,000	132,101,000
Net interest income after provision for loan losses	69,859,000	73,456,000	(35,769,000)
Noninterest income:
Service charges and fees	10,491,000	11,559,000	12,075,000
Gain on sales of loans, net	2,649,000	3,133,000	1,658,000
Gain on sale/call of investment securities, net		837,000
Other noninterest income	503,000	407,000	285,000
Total noninterest income	13,643,000	15,936,000	14,018,000
Noninterest expense:
Salaries and employee benefits	31,877,000	29,919,000	29,880,000
Occupancy	10,779,000	10,581,000	10,815,000
FDIC and other insurance	1,764,000	2,531,000	3,862,000
Other real estate, net	(1,098,000)	6,565,000	30,852,000
General and administrative	11,989,000	13,726,000	14,792,000
Total noninterest expense	55,311,000	63,322,000	90,201,000
Income (loss) before taxes	28,191,000	26,070,000	(111,952,000)
Taxes on income	10,756,000	9,883,000	(43,657,000)
Net income	17,435,000	16,187,000	(68,295,000)
Net income available to common shareholders	$ 17,435,000	$ 12,446,000	$ (72,548,000)
Basic earnings per common share	$ 0.89	$ 0.64	$ (3.73)
Diluted earnings per common share	$ 0.89	$ 0.64	$ (3.73)
Common dividends declared per share

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Goodwill And Other Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill And Other Intangible Assets [Abstract]

Goodwil And Other Intangible Assets

Note 5:  Goodwill and Other Intangible Assets

We have recorded goodwill and other identifiable intangible assets associated with purchase business combinations.  Goodwill is not amortized, but is periodically evaluated for impairment.  We perform an annual goodwill impairment test as of October 1 of each year and assess qualitative factors on a quarterly basis that would indicate events or circumstances that an impairment might have taken place.

Goodwill totaled $1.2 million at December 31, 2013 and 2012, of which, $0.2 million of goodwill is reported in the Oklahoma Banking segment and $1.0 million is reported in the Texas Banking segment.  Further information regarding operating segments can be found in “Note 18 Operating Segments”.

Based on our annual goodwill impairment test as of October 1, 2013 and updated through December 31, 2013, management does not believe any of its goodwill is impaired as of December 31, 2013.  We did not recognize an impairment during the years ended December 31, 2013, 2012 and 2011.

The following table presents the gross carrying amount of other intangible assets and accumulated amortization.

	At December 31,
(Dollars in thousands)	2013		2012
Core deposit premiums	$	5,400	$	5,400
Less accumulated amortization		(3,343)		(2,857)
Core deposit premiums, net		2,057		2,543
Loan servicing rights		11,689		10,257
Less accumulated amortization		(8,766)		(7,936)
Loan servicing rights, net		2,923		2,321
Other intangible assets, net	$	4,980	$	4,864

Core deposit intangibles are amortized using an economic life method based on deposit attrition.  As a result, amortization will decline over time with most of the amortization occurring during the initial years.  The weighted average amortization period for core deposit intangibles is approximately 10 years.  Amortization expense related to core deposit intangibles totaled $0.5  million in 2013, 2012, and 2011.

During 2013 and 2012,  we had recorded loan servicing right amortization expense of $0.8 million and $0.7 million, respectively. 

The estimated aggregate future amortization expense for other intangible assets remaining as of December 31, 2013 is as follows:

(Dollars in thousands)	Core Deposit Premiums		Loan Servicing Rights		Total
2014	$	514	$	512	$	1,026
2015		474		476		950
2016		425		400		825
2017		249		333		582
2018		182		274		456
Thereafter		213		928		1,141
	$	2,057	$	2,923	$	4,980

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Premises And Equipment

12 Months Ended

Dec. 31, 2013

Premises And Equipment [Abstract]

Premises And Equipment

Note 4:  Premises and Equipment

Year-end premises and equipment were as follows:

	At December 31,
(Dollars in thousands)	2013		2012
Land	$	6,057	$	6,059
Buildings and improvements		21,751		18,237
Furniture, fixtures, and equipment		27,268		30,911
Construction/remodeling in progress		1,159		129
		56,235		55,336
Accumulated depreciation and amortization		(35,402)		(33,645)
Total premises and equipment, net	$	20,833	$	21,691

Depreciation of premises and equipment totaled $2.5 million in 2013 and 2012, and $2.6 million in 2011.

We lease certain equipment and premises for our operations.  Future minimum annual rental payments required under operating leases, net of sublease agreements, that have initial or remaining lease terms in excess of one year as of December 31, 2013 were as follows:   

(Dollars in thousands)
2014	$	2,407
2015		2,043
2016		1,204
2017		143
2018		72
Thereafter		-
Total	$	5,869

The total rental expense was $2.6 million, $2.5 million, and $2.6 million in 2013, 2012, and 2011, respectively.

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Related Party Transactions

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Note 16:  Related Party Transactions

Directors and officers of us and Bank SNB were customers of, and had transactions with,us in the ordinary course of business, and similar transactions are expected in the future.  All loans included in such transactions were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and in management’s opinion did not involve more than normal risk of loss or present other unfavorable features.  Certain directors, and companies in which they have ownership interests, had indebtedness to us totaling $3.2 million and $3.7 million at December 31, 2013 and 2012, respectively.  During 2013, $9.4 million of new loans and advances on existing loans were made to these persons and repayments totaled $9.9 million.

At December 31, 2013 and 2012, directors, officers and other related parties had demand, non-interest bearing deposits of $1.7 million and $2.4 million, respectively, savings and interest-bearing transaction accounts of $17.0 million and $12.3 million, respectively, and time certificates of deposit of $0.7 million and $0.8 million, respectively.

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Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Shareholders' Equity [Abstract]

Shareholders' Equity

Note 12:  Shareholders’ Equity

On December 5, 2008,  we issued to the United States Department of the Treasury (the “Treasury Department”) 70,000 shares of Fixed Rate Cumulative Preferred Stock, Series B, par value $1,000 per share (the “Series B Preferred Stock”), having a liquidation amount per share equal to $1,000, for a total price of $70.0 million.  The Series B Preferred Stock paid cumulative dividends at a rate of 5% per year for the first 5 years and thereafter at a rate of 9% per year.  As part of its purchase of the Series B Preferred Stock, the Treasury Department received a warrant to purchase 703,753 shares of common stock at an initial per share exercise price of $14.92.  The warrant expiresten years from the issuance date.  Pursuant to the Securities Purchase Agreement, the Treasury Department agreed not to exercise voting power with respect to any shares of common stock issued upon exercise of the warrant.

We allocated $66.3 million to the Series B Preferred Stock and $3.7 million to the warrant based on their relative fair values at the issue date.  The amount allocated to the warrant was accreted over the estimated life of the Series B Preferred Stock using five years.  Such accretion for the year ended December 31, 2013 was $0 million and $1.5 million for the year ended December 31, 2012, and $0.7 million for December 31, 2011.

In August 2012, we repurchased from the Treasury Department all 70,000 outstanding shares of our Series B Preferred Stock. As a result of the repurchase, we took a one-time, non-cash equity charge of approximately $1.2 million to reflect accelerated accretion of the remaining discount on the Series B Preferred.

On May 29, 2013, we repurchased the warrant issued to the Treasury Department as part of the TARP Capital Purchase Program (CPP) for a purchase price of $2.3 million.  The repurchase of the warrant completed our repurchase of all securities issued to the Treasury in connection with the CPP. 

We have reserved for issuance 150,000 shares of common stock pursuant to the terms of the Employee Stock Purchase Plan.  The Employee Stock Purchase Plan allows our employees to acquire additional common shares through payroll deductions.  From July 1999 to August 2009, shares issued out of this plan came from treasury shares, subsequent shares issued came from the reserved shares.  As of December 31, 2013, 56,136 new shares had been issued and 52,500 treasury shares had been reissued under this plan.

We have reserved 800,000 shares of common stock pursuant to the terms of the 2008 Stock Plan.  The 2008 Stock Plan provides selected key employees with the opportunity to acquire common stock.  As of December 31, 2013, 323,927 new shares had been issued and 25,725 treasury shares had been reissued by the 2008 Stock Plan.

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Taxes On Income (Reconciliation from the Expected Tax Expense (Benefit) Using the U.S. Federal Income Tax Rate) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Computed tax (benefit) expense at statutory rates	$ 9,867	$ 9,124	$ (39,183)
Increase (decrease) in income taxes results from:
Benefit of income not subject to U.S. Federal income tax	(213)	(213)	(165)
Expenses not deductible for U.S. Federal income tax	96	150	124
State income taxes, net of Federal income tax benefit	749	476	(3,755)
Reversal of FIN 48 Reserve			(953)
Texas tax refund (federally tax affected)		50
Other	181	296	275
Income Tax Expense (Benefit), Total	10,756	9,883	(43,657)
Tax Credit Recapture	76
Parent Company [Member]
Increase (decrease) in income taxes results from:
Income Tax Expense (Benefit), Total	$ (2,027)	$ (2,900)	$ (2,563)

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Borrowed Funds

12 Months Ended

Dec. 31, 2013

Borrowed Funds [Abstract]

Borrowed Funds

Note 8:  Borrowed Funds

We have available various forms of other borrowings for cash management and liquidity purposes.  These forms of borrowings include short term federal funds purchased and securities sold under agreements to repurchase, and advances from the FHLB and the FRB.  The following table summarizes borrowed funds for the periods indicated:

	2013						2012
(Dollars in thousands)	Balance at December 31		Average Balance		Weighted Average Rate		Balance at December 31		Average Balance		Weighted Average Rate
Securities sold under repurchase
agreements	$	55,632	$	49,115	0.05	%	$	45,362	$	36,823	0.05	%
Federal Home Loan Bank advances		25,000		25,000	3.47			25,000		25,000	3.48
	$	80,632					$	70,362

We have approved federal funds purchase lines totaling $150.0 million with five financial entities.  We sell securities under agreements to repurchase with us retaining custody of the collateral.  Collateral consists of direct obligations of U.S. Government and Federal Agency issues, which are designated as pledged with our safekeeping agent.  The type of collateral required, the retention of the collateral, and the security sold, minimize our risk of exposure to loss.  These transactions are for one-to-four day periods.  At December 31, 2013 and 2012,  no repurchase agreement exceeded 10% of equity capital.

We haveentered into an agreement with the FHLB to obtain advances from the FHLB from time to time.  At December 31, 2013, the Bank SNB FHLB line of credit had an outstanding balance of $25.0 million.  The terms of the agreement are set forth in the Advance, Pledge and Security Agreement (the “Agreement”).  The FHLB requires that we pledge collateral on such advances.  Under the terms of the Agreement, the discounted value of the collateral, as defined by the FHLB, should at all times be at least equal to the amount borrowed by us.  Such advances outstanding are subject to a blanket collateral arrangement, which requires the pledging of eligible collateral to secure such advances.  Such collateral principally includes certain loans and securities.  At December 31, 2013 and 2012, loans pledged under the Agreement were $517.8 million and $532.9 million, and investment securities pledged (at carrying value) were $50.1 million and $12.2 million, respectively.  There are no scheduled minimum future principal payments on the FHLB line of credit until after 2016. 

We are qualified to borrow funds from the FRB through their Borrower-In-Custody (“BIC”) program.  Collateral under this program consists of pledged selected commercial and industrial loans.  Currently, the collateral will allow us to borrow up to $44.6 million.  We also have substantial unused borrowing availability in the form of unsecured brokered certificate of deposits program from Bank of America Merrill Lynch, Morgan Stanley & Co., Citigroup Global Markets, Inc., Wells Fargo Bank, NA, UBS Securities LLC, and RBC Capital Markets Corp.  In conjunction with these lines of credit, we hadno retail certificates of deposit included in total deposits at December 31, 2013 and 2012.

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Loans And Allowance For Loan Losses (Recorded Investment And The Number Of Loans Modified As Troubled Debt Restructuring Which Subsequently Defaulted) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 contract	Dec. 31, 2012 contract
Financing Receivable, Modifications [Line Items]
Number of Contracts	1	4
Recorded Investment	$ 166	$ 1,788
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	1
Recorded Investment	166
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts		3
Recorded Investment		1,658
Real Estate Construction [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts		1
Recorded Investment		$ 130

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Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 6:  Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an 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.  In estimating fair value, we utilize valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach.  Such valuation techniques are consistently applied.  Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability.   

ASC 820, Fair Value Measurements and Disclosure, establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The fair value hierarchy is as follows: 

Level 1Quoted prices in active markets for identical instruments. 

Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.   

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.   

The estimated fair value amounts have been determined by us using available market information and appropriate valuation methodologies.  However, considerable judgment is required to interpret market data to develop the estimates of fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amount we could realize in a current market exchange.  The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts.  There were no changes in valuation methods used to estimate fair value during the year ended December 31, 2013. 

A description of the valuation methodologies used for instruments measured at fair value on a recurring basis is as follows: 

Loans held for sale – Real estate mortgage loans held for sale are carried at the lower of cost or market, which is determined on an individual loan basis.  The fair value of loans held for sale is based on existing investor commitments. Guaranteed student loans held for sale are carried at the lower of cost or market, which is determined on an aggregate basis.

Available for sale securities – The fair value of U.S. Government and federal agency securities, equity securities, and residential mortgage-backed securities is estimated based on quoted market prices or dealer quotes.  The fair value of other investments such as obligations of state and political subdivisions is estimated based on quoted market prices, when available.  We obtain fair value measurements from an independent pricing service.  The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and bond’s terms and conditions, among other things.  We review the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. 

The fair value of a single private equity investment is estimated based on our proportionate share of the net asset value, $2.4 million and $1.7 million as of December 31, 2013 and December 31, 2012, respectively.  The investee invests in small and mid-sized U.S. financial institutions and other financial-related companies.  This investment has a quarterly redemption with sixty-five days’ notice.

Derivative instrument – We utilize an interest rate swap agreement to convert one of our variable-rate subordinated debentures to a fixed rate (cash flow hedge).  The fair value of the interest rate swap agreement is obtained from dealer quotes.   

The following table summarizes financial assets measured at fair value on a recurring basis as of December 31, 2013 and 2012. 

			Fair Value Measurement at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
At December 31, 2013
Loans held for sale:
Student loans	$	-	$	-	$	-	$	-
One-to-four family residential		2,235		-		2,235		-
Government guaranteed commercial real estate		769		-		769		-
Other loans held for sale		56		-		56		-
Available for sale securities:
Federal agency securities		120,773		-		120,773		-
Obligations of state and political subdivisions		32,636		-		32,636		-
Residential mortgage-backed securities		183,170		-		183,170		-
Asset-backed securities		9,482				9,482
Other securities		36,418		151		36,267		-
Derivative instrument		(1,967)		-		(1,967)		-
Total	$	383,572	$	151	$	383,421	$	-
At December 31, 2012
Loans held for sale:
Student loans	$	4,680	$	-	$	4,680	$	-
One-to-four family residential		5,112		-		5,112		-
Government guaranteed commercial real estate		21,794		-		21,794		-
Other loans held for sale		96		-		96		-
Available for sale securities:
Federal agency securities		115,614		-		115,614		-
Obligations of state and political subdivisions		35,558		-		35,558		-
Residential mortgage-backed securities		203,675		-		203,675		-
Asset-backed securities		7,671				7,671
Other securities		1,797		111		1,686		-
Derivative instrument		(3,195)		-		(3,195)		-
Total	$	392,802	$	111	$	392,691	$	-

Certain financial assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).  These assets are recorded at the lower of cost or fair value.  Valuation methodologies for assets measured on a nonrecurring basis are as follows: 

Impaired loans – Certain impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from collateral.  Collateral values are estimated using Level 2 inputs based on third-party appraisals.  Certain other impaired loans are remeasured and reported through a specific valuation allowance allocation of the allowance for loan losses based upon the net present value of cash flows.

Other real estate – Other real estate fair value is based on third-party appraisals for properties less the estimated costs to sell the asset.   

Goodwill – Fair value of goodwill is based on the fair value of each of our reporting units to which goodwill is allocated compared with their respective carrying value.  There has been no impairment during 2013 or 2012; therefore, no fair value adjustment was recorded through earnings. 

Core deposit premiums – The fair value of core deposit premiums are based on third-party appraisals. There has been no impairment during 2013 or 2012; therefore, no fair value adjustment was recorded through earnings. 

Mortgage loan servicing rights – There is no active trading market for loan servicing rights.  The fair value of loan servicing rights is estimated by calculating the present value of net servicing revenue over the anticipated life of each loan.  A cash flow model is used to determine fair value.  Key assumptions and estimates, including projected prepayment speeds and assumed servicing costs, earnings on escrow deposits, ancillary income, and discount rates, used by this model are based on current market sources.  A separate third party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults, and other relevant factors.  The prepayment model is updated for changes in market conditions.   

Assets that are measured at fair value on a nonrecurring basis as of December 31, 2013 and 2012 are summarized below.   

			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Gains
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)		(Losses)
At December 31, 2013
Noncovered impaired loans at fair value :
Commercial real estate	$	20,423	$	-	$	20,423	$	-	$	3,075
One-to-four family residential		-		-		-		-		-
Real estate construction		2,636		-		2,636		-		(18)
Commercial		9,176		-		9,176		-		(2,989)
Other consumer		46		-		46		-		35
Noncovered other real estate		560		-		560		-		(1,520)
Covered other real estate		2,094		-		2,094		-		(702)
Mortgage loan servicing rights		3,492		-		-		3,492		-
Total	$	38,427	$	-	$	34,935	$	3,492	$	(2,119)
At December 31, 2012
Noncovered impaired loans at fair value :
Commercial real estate	$	33,137	$	-	$	33,137	$	-	$	(6,674)
One-to-four family residential		23		-		23		-		(7)
Real estate construction		232		-		232		-		3,532
Commercial		13,473		-		13,473		-		(6,637)
Other consumer		81		-		81		-		31
Noncovered other real estate		11,315		-		11,315		-		(3,998)
Covered other real estate		3,643		-		3,643		-		(180)
Mortgage loan servicing rights		2,321		-		-		2,321		(465)
Total	$	64,225	$	-	$	61,904	$	2,321	$	(14,398)

Noncovered impaired loans measured at fair value with a carrying amount of $45.5 million were written down to a fair value of $32.3 million, resulting in a life-to-date impairment of $27.3 million, of which $0.1 million was included in the provision for loan losses for the year ended December 31, 2013.  As of December 31, 2012, noncovered impaired loans measured at fair value with a carrying amount of $61.0 million were written down to the fair value of $46.9 million at December 31, 2012, resulting in a life-to-date impairment charge of $14.1 million, of which $9.8 million was included in the provision for loan losses for the year ended December 31, 2012. 

As of December 31, 2013, noncovered and covered other real estate assets were written down to their fair values, resulting in an impairment charge of approximately $1.5 million and $0.7 million, respectively, which was included in noninterest expense for the year ended December 31, 2013.  In the prior year, noncovered and covered other real estate assets were written down to their respective fair values, resulting in impairment charges of $4.0 million and $0.2 million, respectively, which were included in noninterest expense for the year ended December 31, 2012.

For the year ended December 31, 2013,no impairment of mortgage loan servicing rights was incurred. As of December 31, 2012, mortgage loan servicing rights were written down to their fair value, resulting in an impairment charge of  $0.5 million, which were included in noninterest income for the period.   

ASC 825, Financial Instruments, requires an entity to provide disclosures about fair value of financial instruments, including those that are not measured and reported at fair value on a recurring or nonrecurring basis.   The methodologies used in estimating the fair value of financial instruments that are measured on a recurring or nonrecurring basis are discussed above.  The methodologies for the other financial instruments are discussed below: 

Cash and cash equivalents – For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value. 

Securities held to maturity – The investment securities held to maturity are carried at cost.  The fair value of the held to maturity securities is estimated based on quoted market prices or dealer quotes. 

Loans, net of allowance – Fair values are estimated for certain homogenous categories of loans adjusted for differences in loan characteristics.  Our loans have been aggregated by categories consisting of commercial, real estate, student, and other consumer.  The fair value of loans is estimated by discounting the cash flows using risks inherent in the loan category and interest rates currently offered for loans with similar terms and credit risks. 

Accrued interest receivable – The carrying amount is a reasonable estimate of fair value for accrued interest receivable. 

Investment included in other assets – The estimated fair value of investments included in other assets, which primarily consists of investments carried at cost, approximates their carrying values. 

Deposits – The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the statement of financial condition date.  The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. 

Other liabilities and accrued interest payable – The estimated fair value of other liabilities, which primarily includes trade accounts payable and accrued interest payable, approximates their carrying values. 

Other borrowings – Included in other borrowings are FHLB advances, securities sold under agreements to repurchase, and treasury tax and loan demand notes.  The fair value for fixed rate FHLB advances is based upon discounted cash flow analysis using interest rates currently being offered for similar instruments.  The fair values of other borrowings are the amounts payable at the statement of financial condition date, as the carrying amount is a reasonable estimate of fair value due to the short-term maturity rates.   

Subordinated debentures – Two subordinated debentures have floating rates that reset quarterly.  The fair value of the floating rate subordinated debentures approximates carrying value at December 31, 2013 and December 31, 2012.  A third subordinated debenture with a fixed rate was redeemed on September 15, 2013. The fair value of the fixed rate subordinated debenture was based on market price.

The carrying values and estimated fair values of our financial instruments segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value are as follows:

	At December 31, 2013				At December 31, 2012
	Carrying		Fair		Carrying		Fair
(Dollars in thousands)	Values		Values		Values		Values
Financial assets:
Level 2 inputs:
Cash and cash equivalents	$	279,839	$	279,839	$	288,079	$	288,079
Securities held to maturity		11,720		12,115		12,797		13,659
Accrued interest receivable		5,335		5,335		6,365		6,365
Investments included in other assets		8,140		8,140		8,531		8,531
Level 3 inputs:
Total loans, net of allowance		1,234,240		1,190,869		1,332,017		1,301,942
Financial liabilities:
Level 2 inputs:
Deposits		1,584,086		1,486,939		1,709,578		1,666,653
Accrued interest payable		832		832		1,116		1,116
Other liabilities		8,248		8,248		9,985		9,985
Derivative instrument		1,967		1,967		3,195		3,195
Other borrowings		80,632		83,593		70,362		74,057
Subordinated debentures		46,393		46,393		81,963		82,998

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Deposits

12 Months Ended

Dec. 31, 2013

Deposits [Abstract]

Deposits

Note 7:  Deposits

The following table summarizes deposits as of December 31, 2013 and 2012.

(Dollars in thousands)	2013		2012
Noninterest-bearing demand	$	444,796	$	424,008
Interest-bearing demand		120,156		112,012
Money market accounts		439,981		423,417
Savings accounts		41,727		37,693
Time deposits of $100,000 or more		251,185		351,273
Other time deposits		286,241		361,175
Total deposits	$	1,584,086	$	1,709,578

The total amount of overdrawn deposit accounts that were reclassified as loans at December 31, 2013 and 2012 was $0.5 million and $0.4 million, respectively.

Some of our interest-bearing deposits were obtained through brokered transactions and we participate in the Certificate of Deposit Account Registry Service (“CDARS”).  There were no brokered certificate of deposits as of December 31, 2013 and 2012.CDARS deposits totaled $1.3 million at December 31, 2013 and $9.9 million at December 31, 2012.  There were no  capital market certificate of deposits at December 31, 2013 and December 31, 2012.

Scheduled time deposit maturities as of December 31, 2013 are as follows: 

(Dollars in thousands)
2014	$ 380,504
2015	96,028
2016	31,540
2017	20,738
2018	8,616
Thereafter	-
Total time deposits	$ 537,426

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Subordinated Debentures

12 Months Ended

Dec. 31, 2013

Subordinated Debentures [Abstract]

Subordinated Debentures

Note 9:  Trust Preferred Securities and Subordinated Debentures

At December 31, 2013 and 2012,  wehad the following issues of trust preferred securities outstanding and subordinated debentures owed to the Trusts.

At December 31, 2013
(Dollars in thousands)		Subordinated Debentures Owed to Trusts		Trust Preferred Securities of the Trusts	Rates	Final Maturity Date
OKSB Statutory Trust I	$	20,619	$	20,000	3.35%	June 26, 2033
SBI Capital Trust II		25,774		25,000	3.09%	October 7, 2033
	$	46,393	$	45,000

At December 31, 2012
(Dollars in thousands)		Subordinated Debentures Owed to Trusts		Trust Preferred Securities of the Trusts	Rates	Final Maturity Date
OKSB Statutory Trust I	$	20,619	$	20,000	3.41%	June 26, 2033
SBI Capital Trust II		25,774		25,000	3.19%	October 7, 2033
Southwest Capital Trust II		35,570		34,500	10.50%	September 15, 2038
	$	81,963	$	79,500

On June 26, 2003, our subsidiary, OKSB Statutory Trust I, sold to investors in a private placement offering $20.0 million of adjustable rate trust preferred securities (the “OKSB Trust Preferred”).  The OKSB Trust Preferred bear interest, adjustable quarterly, at 90-day LIBOR plus 3.10%.  In addition to these adjustable rate securities, OKSB Statutory Trust I sold $0.6 million of trust common equity to Southwest.  The aggregate proceeds of $20.6 million were used to purchase an equal principal amount of adjustable rate subordinated debentures that bear interest, adjustable quarterly, at 90-day LIBOR plus 3.10% (the “OKSB Subordinated Debentures”).  After deducting underwriter’s compensation and noninterest expenses of the offering, the net proceeds were available to us to increase capital and for general corporate purposes.  Interest payments on the OKSB Subordinated Debentures are deductible for federal income tax purposes.

On October 14, 2003,  our subsidiary, SBI Capital Trust II, sold to investors in a private placement offering $25.0 million of adjustable rate trust preferred securities (the “SBI II Trust Preferred”).  The SBI II Trust Preferred bear interest, adjustable quarterly, at 90-day LIBOR plus 2.85%.  In addition to these adjustable rate securities, SBI Capital Trust II sold $0.8 million of trust common equity to us.  The aggregate proceeds of $25.8 million were used to purchase an equal principal amount of our adjustable rate subordinated debenturesthat bear interest, adjustable quarterly 90-day LIBOR plus 2.85% (the “SBI II Subordinated Debentures”).  The proceeds were available to us to increase capital and for general corporate purposes.  Interest payments on the SBI II Subordinated Debentures are deductible for federal income tax purposes.

In July 2008, our subsidiary, Southwest Capital Trust II, sold to investors in a public offering $34.5 million of 10.50% trust preferred securities (the “OKSBP Trust Preferred”).  In addition to these trust preferred securities, Southwest Capital Trust II sold $1.1 million of trust common equity to us.  The aggregated proceeds of $35.6 million were used to purchase an equal amount of our10.50% subordinated debentures (the “OKSBP Subordinated Debentures”).On September 15, 2013, we redeemed all of the OKSBP Trust Preferred pursuant to the optional redemption provisions provided in the documents governing the OKSBP Trust Preferred.  The OKSBP Trust Preferred were redeemed at the liquidation amount of $25 per trust preferred security plus accrued and unpaid distributions to the redemption date of September 15, 2013; settlement occurred on September 16, 2013.  We also redeemed $1.07 million in common securities issued by Southwest Capital Trust II and related to the OKSBP Trust Preferred.  Following the redemption, our capital levels remained well in excess of the regulatory minimum for well capitalized status.  The redemption was funded with cash on hand.

At December 31, 2013, we had an aggregate of $46.4 million of subordinated debentures outstanding and had an asset of $1.4 million representing our total investment in the common equity issued by the Trusts.  The sole assets of the Trusts are the subordinated debentures and the liabilities of the Trusts of the OKSB Trust Preferred and SBI II Trust Preferred.  We have, through various contractual arrangements, unconditionally guaranteed payment of all obligations of our Trusts with respect to our OKSB Trust Preferred and our SBI II Trust Preferred.

The OKSB Trust Preferred, the OKSB Subordinated Debentures, the SBI II Trust Preferred, and the SBI II Subordinated Debentures, mature at or near the thirtieth anniversary date of their issuance.  However, if certain conditions are met, the OKSB Trust Preferred and the OKSB Subordinated Debentures and the SBI II Trust Preferred and the SBI II Subordinated Debentures may be called at our discretion with thirty days’ notice.

We, OKSB Statutory Trust I, and SBI Capital Trust II believe that, taken together, our obligations under the Trust Preferred Guarantee Agreements, the Amended and Restated Trust Agreements, the Subordinated Debentures, the Indentures and the Agreements as to Expenses and Liabilities, entered into in connection with the offering of the Trust Preferred and the Subordinated Debentures, in the aggregate constitute a full and unconditional guarantee by us of the obligations of OKSB Statutory Trust I and SBI Capital Trust II under the Trust Preferred.

OKSB Statutory Trust I is a Connecticut statutory trust created for the purpose of issuing the OKSB Trust Preferred and purchasing the OKSB Subordinated Debentures, which are its sole assets.  We own all of the 619 outstanding common securities of OKSB Statutory Trust I; the liquidation value is $1,000 per share.

SBI Capital Trust II is a Delaware statutory trust created for the purpose of issuing the SBI II Trust Preferred and purchasing the SBI II Subordinated Debentures, which are its sole assets.  We own all of the 774 outstanding common securities of SBI Capital Trust II; the liquidation value is $1,000 per share.

Southwest Capital Trust II was a Delaware statutory trust created for the purpose of issuing the OKSBP Trust Preferred and purchasing the OKSBP Subordinated Debentures, which are its sole assets. All trust assets were redeemed on September 15, 2013. 

Each of the Trust Preferred issuances meets the regulatory criteria for Tier I capital, subject to Federal Reserve guidelines that limit the amount of the Trust Preferred and cumulative perpetual preferred stock to an aggregate of 25% of Tier I capital.  At December 31, 2013, $45.0 million of the Trust Preferred was included in Tier I capital.

We de-consolidate our investments in OKSB Statutory Trust I and SBI Capital Trust II (the “Trusts”) in this Annual Report and all future reports.  Due to this required de-consolidation, the trust preferred securities are not presented on the consolidated statements of financial condition and the subordinated debentures are presented on the consolidated statements of financial condition as a separate liability category.

In July 2012, we paid all previously deferred dividends on our three issues of outstanding debentures and dividends on the related trust preferred securities.  Payments of deferred and arrears interest and dividends were completed in July 2012, and all payments are now current.  In July 2011, we suspended payments of interest on our three issues of outstanding debentures effective August 1, 2011 and dividends on the related trust preferred securities.

The terms of the debentures allow us to defer payments of interest for up to 20 consecutive quarterly periods without default or penalty.  These terms also allow us to resume payments at the end of any deferral period, or to extend the deferral up to the maximum 20 quarters in total.  No deferral can extend past the maturity date of the debenture.

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Premises And Equipment (Premises And Equipment) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Premises And Equipment [Abstract]
Land	$ 6,057	$ 6,059
Buildings and improvements	21,751	18,237
Furniture, fixtures, and equipment	27,268	30,911
Construction/Remodeling in progress	1,159	129
Total premises and equipment, gross	56,235	55,336
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	(35,402)	(33,645)
Total premises and equipment, net	$ 20,833	$ 21,691

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Taxes on Income (Temporary Differences That Give Rise to the Deferred Tax Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Deferred tax assets:
Provision for loan losses	$ 15,072	$ 19,246
Net operating loss carryforward	5,065	12,674
Tax credit carryforward	3,443	3,070
Write-down on other real estate		1,669
Nonaccrual loan interest	539	527
Deferred compensation & profit sharing accrual	173	551
Investments	468	457
Section 597 gain - FNBA FDIC assisted acquistion	1,214	(119)
Accrued Expenses	812
Other	43	(51)
Total deferred tax assets	26,829	38,024
Deferred tax liabilities:
Accumulated depreciation	(2,476)	(2,835)
Amortizable assets	(614)	(749)
Dividend - Equity vs. Cost Method	(316)	(492)
Prepaid expenses	(188)	(254)
FHLB stock dividends	(192)	(220)
Stock-based compensation	(6)	(216)
Total deferred tax liabilities	(3,792)	(4,766)
Deferred taxes (payable) receivable on investment securities available for sale	1,900	(1,075)
Net deferred tax assets	$ 24,937	$ 32,183

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Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)	12 Months Ended	24 Months Ended				24 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Oklahoma Banking [Member]	Dec. 31, 2013 Texas Banking [Member]	Dec. 31, 2013 Core Deposits [Member]	Dec. 31, 2013 Servicing Contracts [Member]	Dec. 31, 2012 Servicing Contracts [Member]
Goodwill impairment		$ 0
Goodwill	1,214,000	1,214,000	1,214,000	200,000	1,000,000
Amortization						$ 500,000	$ 800,000	$ 700,000
Weighted average amortization period for Core Deposit Intangibles	10 years

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Premises And Equipment (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended			24 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013
Premises And Equipment [Abstract]
Depreciation of premises and equipment			$ 2.6	$ 2.5
Total rental expense	$ 2.6	$ 2.5	$ 2.6

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Related Party Transactions (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Related Party Transactions [Abstract]
Related party indebtedness	$ 3.2	$ 3.7
New loans and advances on existing loans	9.4
Related party loan repayments	9.9
Related party deposits	1.7	2.4
Related party savings and interest-bearing transaction accounts	17.0	12.3
Related party time certificates of deposit	$ 0.7	$ 0.8

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Measurements [Abstract]

Summary Of Financial Assets Measured At Fair Value On A Recurring Basis

			Fair Value Measurement at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
At December 31, 2013
Loans held for sale:
Student loans	$	-	$	-	$	-	$	-
One-to-four family residential		2,235		-		2,235		-
Government guaranteed commercial real estate		769		-		769		-
Other loans held for sale		56		-		56		-
Available for sale securities:
Federal agency securities		120,773		-		120,773		-
Obligations of state and political subdivisions		32,636		-		32,636		-
Residential mortgage-backed securities		183,170		-		183,170		-
Asset-backed securities		9,482				9,482
Other securities		36,418		151		36,267		-
Derivative instrument		(1,967)		-		(1,967)		-
Total	$	383,572	$	151	$	383,421	$	-
At December 31, 2012
Loans held for sale:
Student loans	$	4,680	$	-	$	4,680	$	-
One-to-four family residential		5,112		-		5,112		-
Government guaranteed commercial real estate		21,794		-		21,794		-
Other loans held for sale		96		-		96		-
Available for sale securities:
Federal agency securities		115,614		-		115,614		-
Obligations of state and political subdivisions		35,558		-		35,558		-
Residential mortgage-backed securities		203,675		-		203,675		-
Asset-backed securities		7,671				7,671
Other securities		1,797		111		1,686		-
Derivative instrument		(3,195)		-		(3,195)		-
Total	$	392,802	$	111	$	392,691	$	-

Asset Measured At Fair Value On A Nonrecurring Basis

			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Gains
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)		(Losses)
At December 31, 2013
Noncovered impaired loans at fair value :
Commercial real estate	$	20,423	$	-	$	20,423	$	-	$	3,075
One-to-four family residential		-		-		-		-		-
Real estate construction		2,636		-		2,636		-		(18)
Commercial		9,176		-		9,176		-		(2,989)
Other consumer		46		-		46		-		35
Noncovered other real estate		560		-		560		-		(1,520)
Covered other real estate		2,094		-		2,094		-		(702)
Mortgage loan servicing rights		3,492		-		-		3,492		-
Total	$	38,427	$	-	$	34,935	$	3,492	$	(2,119)
At December 31, 2012
Noncovered impaired loans at fair value :
Commercial real estate	$	33,137	$	-	$	33,137	$	-	$	(6,674)
One-to-four family residential		23		-		23		-		(7)
Real estate construction		232		-		232		-		3,532
Commercial		13,473		-		13,473		-		(6,637)
Other consumer		81		-		81		-		31
Noncovered other real estate		11,315		-		11,315		-		(3,998)
Covered other real estate		3,643		-		3,643		-		(180)
Mortgage loan servicing rights		2,321		-		-		2,321		(465)
Total	$	64,225	$	-	$	61,904	$	2,321	$	(14,398)

Carrying Values And Estimated Fair Values Of Financial Instruments Segregated By The Level Of The Valuation Inputs

	At December 31, 2013				At December 31, 2012
	Carrying		Fair		Carrying		Fair
(Dollars in thousands)	Values		Values		Values		Values
Financial assets:
Level 2 inputs:
Cash and cash equivalents	$	279,839	$	279,839	$	288,079	$	288,079
Securities held to maturity		11,720		12,115		12,797		13,659
Accrued interest receivable		5,335		5,335		6,365		6,365
Investments included in other assets		8,140		8,140		8,531		8,531
Level 3 inputs:
Total loans, net of allowance		1,234,240		1,190,869		1,332,017		1,301,942
Financial liabilities:
Level 2 inputs:
Deposits		1,584,086		1,486,939		1,709,578		1,666,653
Accrued interest payable		832		832		1,116		1,116
Other liabilities		8,248		8,248		9,985		9,985
Derivative instrument		1,967		1,967		3,195		3,195
Other borrowings		80,632		83,593		70,362		74,057
Subordinated debentures		46,393		46,393		81,963		82,998

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Loans And Allowance For Loan Losses (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to individuals and businesses	$ 417.4
Cumulative net losses	35.0
Percentage of loans to individuals and businesses	33.00%
Loans held for sale	3.1	31.7
Period to sell loans from the date of closing	1 month
Accrued additional interest income	1.2	1.2	5.7
Cumulative charge-offs against noncovered nonaccrual loans	8.2	8.3
Interest income recognized on troubled debt restructurings	2.4	1.9	3.3
Troubled debt restructuring Period	12 months
Real Estate Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal of mortgage loans serviced for others	390.7	343.4
Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Cumulative net losses	$ 35.0

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Capital Requirements and Regulatory Matters

12 Months Ended

Dec. 31, 2013

Capital Requirements And Regulatory Matters [Abstract]

Capital Requirements And Regulatory Matters

Note 14:  Capital Requirements and Regulatory Matters

We and Bank SNB are subject to various regulatory capital requirements administered by the federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our andBank SNB’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we and Bank SNB must meet specific capital guidelines that involve quantitative measures of our and Bank SNB’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  Our and Bank SNB’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.  Quantitative measures established by regulation to ensure capital adequacy require us and Bank SNB to maintain minimum amounts of Total and Tier I Capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I Capital (as defined) to average assets (as defined). 

Management believes that, as of December 31, 2013, we and Bank SNB met all capital adequacy requirements and that as of December 31, 2012, we, Stillwater National, and Bank of Kansas met all capital adequacy requirements.

As of December 31, 2013, Bank SNB was categorized as well-capitalized under the regulatory framework for prompt corrective action.  As of December 31, 2012, Stillwater National and Bank of Kansas were categorized as well-capitalized under the regulatory framework for prompt corrective action.  To be categorized as well-capitalized, the Bank must maintain minimum Total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the following table.

A summary of actual capital amounts and ratios as of December 31, 2013 are presented below.

					To Be Well Capitalized
					Under Prompt Corrective				For Capital
	Actual				Action Provisions				Adequacy Purposes
(Dollars in thousands)	Amount		Ratio			Amount	Ratio			Amount	Ratio
As of December 31, 2013:
Total Capital (to risk-weighted assets)
Southwest	$	310,867	21.59	%	$	N/A	N/A	%	$	115,194	8.00	%
Bank SNB		284,388	19.83			143,413	10.00			114,730	8.00
Tier I Capital (to risk-weighted assets)
Southwest		292,051	20.28			N/A	N/A			57,597	4.00
Bank SNB		266,132	18.56			86,048	6.00			57,365	4.00
Tier I Leverage (to average assets)
Southwest		292,051	14.86			N/A	N/A			78,597	4.00
Bank SNB		266,132	13.62			97,719	5.00			78,175	4.00

A summary of actual capital amounts and ratios of Stillwater National and Bank of Kansas as of December 31, 2012 are presented below.

					To Be Well Capitalized
					Under Prompt Corrective				For Capital
	Actual				Action Provisions				Adequacy Purposes
(Dollars in thousands)	Amount		Ratio			Amount	Ratio			Amount	Ratio
As of December 31, 2012:
Total Capital (to risk-weighted assets)
Southwest	$	339,964	21.56	%	$	N/A	N/A	%	$	126,122	8.00	%
Stillwater National		269,323	19.55			137,793	10.00			110,234	8.00
Bank of Kansas		33,356	18.37			18,161	10.00			14,529	8.00
Tier I Capital (to risk-weighted assets)
Southwest		319,665	20.28			N/A	N/A			63,061	4.00
Stillwater National		236,705	17.18			82,676	6.00			55,117	4.00
Bank of Kansas		31,064	17.10			10,896	6.00			7,264	4.00
Tier I Leverage (to average assets)
Southwest		319,665	15.01			N/A	N/A			85,201	4.00
Stillwater National		236,705	13.14			90,088	5.00			72,070	4.00
Bank of Kansas		31,064	10.02			15,506	5.00			12,405	4.00

The approval of the OCC is required if the total of all dividends declared by Bank SNB in any calendar year exceeds the total of its net profits of that year combined with its retained net profits of the preceding two years.  In addition, Bank SNB may not pay a dividend if, after paying the dividend, Bank SNB would be undercapitalized.  For the year ended December 31, 2013,  Bank SNBdeclared $19.5 million in dividends. For the year ended December 31, 2012, Bank SNB declared $65.0 million in dividends, and no dividends were declared by Bank SNB for the year ended December 31, 2011.  

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Parent Company Condensed Financial Information

12 Months Ended

Dec. 31, 2013

Parent Company Condensed Financial Information [Abstract]

Parent Company Condensed Financial Information

Note 19:  Parent Company Condensed Financial Information 

Following are the condensed financial statements of Southwest Bancorp, Inc. (“Parent Company only”) for the periods indicated:

	At December 31,
(Dollars in thousands)	2013		2012
Statements of Financial Condition
Assets:
Cash and cash equivalents	$	12,039	$	18,245
Investment in subsidiary banks		273,849		293,573
Investments in other subsidiaries		8,284		9,355
Investment securities, available for sale		3,161		2,462
Other assets		10,909		8,391
Total	$	308,242	$	332,026
Liabilities:
Subordinated debentures		46,393		81,963
Other liabilities		2,660		4,007
Shareholders' Equity:
Common stock and related accounts		259,189		246,056
Total	$	308,242	$	332,026

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Statements of Operations
Income:
Cash dividends from subsidiaries	$	19,625	$	70,175	$	160
Noninterest income		333		595		774
Investment income		243		340		31
Other operating income		-		-		45
Total income		20,201		71,110		1,010
Expense:
Interest on subordinated debentures		4,168		5,463		5,306
Noninterest expense		1,808		3,187		2,107
Total expense		5,976		8,650		7,413
Total income (loss) before taxes and equity in
undistributed income of subsidiaries		14,225		62,460		(6,403)
Taxes on income		(2,027)		(2,900)		(2,563)
Income (loss) before equity in undistributed
income of subsidiaries		16,252		65,360		(3,840)
Equity in undistributed income (loss) of subsidiaries		1,183		(49,173)		(64,455)
Net income (loss)	$	17,435	$	16,187	$	(68,295)

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Statements of Cash Flows
Operating activities:
Net income	$	17,435	$	16,187	$	(68,295)
Equity in undistributed income of subsidiaries		(1,183)		49,173		64,455
Other, net		(2,341)		(5,437)		499
Net cash provided by (used in) operating activities		13,911		59,923		(3,341)
Investing activities:
Available for sale securities:
Purchases		-		(247)		(724)
Sales / Maturities		32		-		46
Investment in/capital contribution to other subsidiaries		15,000		-		-
Net cash used in investing activities		15,032		(247)		(678)
Financing activities:
Net proceeds from issuance of common stock		2,708		925		278
Proceeds from issuance of subordinated debentures		(35,570)		-		-
Preferred stock dividend		-		(74,330)		(1,751)
Other, net		(2,287)		(76)		-
Net cash provided by (used in) financing activities		(35,149)		(73,481)		(1,473)
Net increase (decrease) in cash and cash equivalents		(6,206)		(13,805)		(5,492)
Cash and cash equivalents,
Beginning of year		18,245		32,050		37,542
End of year	$	12,039	$	18,245	$	32,050

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Parent Company Condensed Financial Information (Statements Of Financial Condition) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash and cash equivalents	$ 279,839	$ 288,079	$ 229,889	$ 67,496
Available-for-sale Securities	382,479	364,315
Other assets	38,129	51,430
Total	1,981,423	2,122,255	2,377,276
Subordinated debentures	46,393	81,963
Other liabilities	10,215	13,180
Common stock and related accounts	19,733	19,530
Total	1,981,423	2,122,255
Parent Company [Member]
Cash and cash equivalents	12,039	18,245	32,050	37,542
Investment in subsidiary banks	273,849	293,573
Investments in other subsidiaries	8,284	9,355
Available-for-sale Securities	3,161	2,462
Other assets	10,909	8,391
Total	308,242	332,026
Subordinated debentures	46,393	81,963
Other liabilities	2,660	4,007
Common stock and related accounts	259,189	246,056
Total	$ 308,242	$ 332,026

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Investment Securities (Summary Of Sales Of Available For Sale Securities) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Investment Securities [Abstract]
Proceeds from sales	$ 2,744	$ 6,588
Gross realized gains	0	45
Gross realized losses	$ 0	$ (10)

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Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2013

Employee Benefits [Abstract]

Schedule Of Stock Option Activity

				Weighted
		Weighted		Average Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual	Value (dollars
	Options	Price		Life (Years)	in thousands)
Outstanding at December 31, 2010	202,215	$	24.00
Granted	-		-
Exercised	-		-
Canceled/expired	(128,401)		23.59
Outstanding at December 31, 2011	73,814	$	24.72
Granted	-		-
Exercised	-		-
Canceled/expired	(68,814)		25.28
Outstanding at December 31, 2012	5,000	$	16.93
Granted	-		-
Exercised	-		-
Canceled/expired	(5,000)		16.93
Outstanding at December 31, 2013	-	$	-	-	-
Total exercisable at December 31, 2011	73,814	$	24.72
Total exercisable at December 31, 2012	5,000	$	16.93
Total exercisable at December 31, 2013	-	$	-		-

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Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Consolidated Statements Of Comprehensive Income [Abstract]
Net income	$ 17,435	$ 16,187	$ (68,295)
Other comprehensive income:
Unrealized holding gain (loss) on available for sale securities	(8,942)	(133)	4,659
Reclassification adjustment for net gains arising during the period		(100)
Change in fair value of derivative used for cash flow hedge	1,228	(361)	(2,834)
Other comprehensive loss, before tax	(7,714)	(594)	1,825
Tax benefit (expense) related to items of other comprehensive income (loss)	2,975	211	(693)
Other comprehensive loss, net of tax	(4,739)	(383)	1,132
Comprehensive income	$ 12,696	$ 15,804	$ (67,163)

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Capital Requirements And Regulatory Agreements (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Bank SNB [Member]
Capital to risk weighted assets per agreement	19.83%
Tier one leverage ratio as per agreement	13.62%
Total risk based capital ratio to be well capitalized	10.00%
Tier 1 risk based capital ratio to be well capitalized	6.00%
Leverage ratio	5.00%
Available amount for dividend payment	$ 19.5	$ 65.0
Stillwater National [Member]
Capital to risk weighted assets per agreement		19.55%
Tier one leverage ratio as per agreement		13.14%
Total risk based capital ratio to be well capitalized		10.00%
Tier 1 risk based capital ratio to be well capitalized		6.00%
Leverage ratio		5.00%
Bank Of Kansas [Member]
Capital to risk weighted assets per agreement		18.37%
Tier one leverage ratio as per agreement		10.02%
Total risk based capital ratio to be well capitalized		10.00%
Tier 1 risk based capital ratio to be well capitalized		6.00%
Leverage ratio		5.00%

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Loans And Allowance For Loan Losses

12 Months Ended

Dec. 31, 2013

Loans And Allowance For Loan Losses [Abstract]

Loans And Allowance For Loan Losses

Note 3:  Loans and Allowance for Loan Losses

We extend commercial and consumer credit primarily to customers in the states of Oklahoma, Texas, and Kansas.  Our commercial lending operations are concentrated in Oklahoma City, Dallas, Tulsa, and other metropolitan markets in Texas, Kansas, and Oklahoma.  As a result, the collectability of our loan portfolio can be affected by changes in the economic conditions in those states and markets.  Please see “Note 18 Operating Segments” for more detail regarding loans by market.  At December 31, 2013 and 2012, substantially all of our loans were collateralized with real estate, inventory, accounts receivable, and/or other assets or were guaranteed by agencies of the United States government. 

Our loan classifications were as follows: 

	At December 31, 2013				At December 31, 2012
(Dollars in thousands)	Noncovered		Covered		Noncovered		Covered
Real estate mortgage:
Commercial	$	740,997	$	11,282	$	870,975	$	18,298
One-to-four family residential		80,058		3,930		70,954		4,881
Real estate construction:
Commercial		143,650		198		130,753		382
One-to-four family residential		4,646		-		3,656		-
Commercial		254,087		971		240,498		2,037
Installment and consumer:
Guaranteed student loans		4,394		-		4,680		-
Other		26,644		46		31,512		109
		1,254,476		16,427		1,353,028		25,707
Less: Allowance for loan losses		(36,607)		(56)		(46,494)		(224)
Total loans, net	$	1,217,869	$	16,371	$	1,306,534	$	25,483

Concentrations of Credit.  At December 31, 2013, $417.4 million, or 33%, of our noncovered loans consisted of loans to individuals and businesses in the healthcare industry.  We do not have any other concentrations of loans to individuals or businesses involved in a single industry totaling 10% or more of total loans.

Loans Held for Sale.  We had loans which were held for sale of $3.1 million and $31.7 million at December 31, 2013 and 2012, respectively.  The decline is due to reclassifying the guaranteed student loans and the United States Department of Agriculture (“USDA”)government guaranteed commercial real estate loans back into the loan portfolio and not actively looking to sell these loans.  These loans were reclassified at their respective book value which approximated fair value.  The loans currently classified as held for sale, primarily residential mortgage loans, are carried at the lower of cost or market value.A substantial portion of the one-to-four family residential loans and loan servicing rights, if not retained, are primarily sold to one investor.  These mortgage loans are generally sold within a one-month period from loan closing at amounts determined by the investor commitment based upon the pricing of the loan. 

Loan Servicing.  We earn fees for servicing real estate mortgages and other loans owned by others.  The fees are generally calculated on the outstanding principal balance of the loans serviced and are recorded as noninterest income when earned.  The unpaid principal balance of real estate mortgage loans serviced for others totaled $390.7 million and $343.4 million at December 31, 2013 and 2012, respectively.  Loan servicing rights are capitalized based on estimated fair value at the point of origination.  The servicing rights are amortized over the period of estimated net servicing income.   

Acquired Loans.  Changes in the carrying amounts and accretable yields for ASC 310.30 loans were as follows for the year ended December 31, 2013 and 2012. 

	For the year ended December 31,
	2013				2012
			Carrying				Carrying
	Accretable		amount		Accretable		amount
(Dollars in thousands)	Yield		of loans		Yield		of loans
Balance at beginning of period	$	1,904	$	25,707	$	2,402	$	37,615
Payments received		-		(6,954)		-		(9,960)
Transfers to other real estate / repossessed assets		(36)		(2,110)		27		(2,365)
Net charge-offs		(1)		(468)		(5)		(151)
Net reclassifications to / from nonaccretable amount		235		-		192		-
Accretion		(505)		252		(712)		568
Balance at end of period	$	1,597	$	16,427	$	1,904	$	25,707

Nonperforming / Past Due Loans.  The following table shows the recorded investment in loans on nonaccrual status. 

	At December 31,
	2013				2012
(Dollars in thousands)	Noncovered		Covered		Noncovered		Covered
Real estate mortgage:
Commercial	$	6,564	$	1,202	$	18,337	$	3,087
One-to-four family residential		456		57		563		52
Real estate construction:
Commercial		2,721		-		3,355		130
Commercial		8,769		-		12,761		324
Other consumer		50		-		88		2
Total nonaccrual loans	$	18,560	$	1,259	$	35,104	$	3,595

If interest on nonaccrual loans had been accrued, the interest income as reported in the accompanying consolidated statement of operations would have increased by approximately $1.2 million, $1.2 million, and $5.7 million, for 2013, 2012, and 2011, respectively.

Net cumulative charge-offs against noncovered nonaccrual loans at December 31, 2013 and 2012 were $8.2 million and $8.3 million, respectively.

The following table shows an age analysis of past due loans at the end of the respective reporting period.

			90 days and								Recorded loans
	30-89 days		greater		Total past				Total		> 90 days and
(Dollars in thousands)	past due		past due		due		Current		loans		accruing
At December 31, 2013
Noncovered:
Real estate mortgage:
Commercial	$	3,843	$	6,564	$	10,407	$	730,590	$	740,997	$	-
One-to-four family residential		284		456		740		79,318		80,058		-
Real estate construction:
Commercial		569		2,721		3,290		140,360		143,650		-
One-to-four family residential		-		-		-		4,646		4,646		-
Commercial		1,998		8,819		10,817		243,270		254,087		50
Other		128		53		181		30,857		31,038		3
Total - noncovered		6,822		18,613		25,435		1,229,041		1,254,476		53
Covered:
Real estate mortgage:
Commercial		8		1,202		1,210		10,072		11,282		-
One-to-four family residential		18		57		75		3,855		3,930		-
Real estate construction:
Commercial		-		-		-		198		198		-
Commercial		-		-		-		971		971		-
Other		-		-		-		46		46		-
Total - covered		26		1,259		1,285		15,142		16,427		-
Total	$	6,848	$	19,872	$	26,720	$	1,244,183	$	1,270,903	$	53
At December 31, 2012
Noncovered:
Real estate mortgage:
Commercial	$	23,348	$	18,337	$	41,685	$	829,290	$	870,975	$	-
One-to-four family residential		1,479		1,310		2,789		68,165		70,954		747
Real estate construction:
Commercial		3,501		3,355		6,856		123,897		130,753		-
One-to-four family residential		-		-		-		3,656		3,656		-
Commercial		7,358		15,232		22,590		217,908		240,498		2,471
Other		538		160		698		35,494		36,192		72
Total - noncovered		36,224		38,394		74,618		1,278,410		1,353,028		3,290
Covered:
Real estate mortgage:
Commercial real estate		1,090		3,087		4,177		14,121		18,298		-
One-to-four family residential		-		52		52		4,829		4,881		-
Real estate construction:
Commercial		-		130		130		252		382		-
Commercial		-		324		324		1,713		2,037		-
Other		-		2		2		107		109		-
Total - covered		1,090		3,595		4,685		21,022		25,707		-
Total	$	37,314	$	41,989	$	79,303	$	1,299,432	$	1,378,735	$	3,290

Impaired Loans.  The following table presents loans individually evaluated for impairment by class of loans at the end of the respective reporting period.

	With No Specific Allowance				With A Specific Allowance
			Unpaid				Unpaid
	Recorded		Principal		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Investment		Balance		Allowance
At December 31, 2013
Noncovered:
Commercial real estate	$	32,284	$	32,784	$	15,446	$	15,729	$	4,012
One-to-four family residential		456		576		-		-		-
Real estate construction		84		106		2,636		2,762		18
Commercial		1,120		1,254		9,177		14,608		3,863
Other		4		6		46		72		46
Total noncovered	$	33,948	$	34,726	$	27,305	$	33,171	$	7,939
Covered:
Commercial real estate	$	5,793	$	6,760	$	457	$	457	$	3
One-to-four family residential		54		54		42		94		4
Total covered	$	5,847	$	6,814	$	499	$	551	$	7
At December 31, 2012
Noncovered:
Commercial real estate	$	29,425	$	30,340	$	24,630	$	27,397	$	5,094
One-to-four family residential		563		653		7		7		7
Real estate construction		3,970		7,841		232		256		50
Commercial		3,337		6,975		13,422		13,448		6,492
Other		7		8		81		100		81
Total noncovered	$	37,302	$	45,817	$	38,372	$	41,208	$	11,724
Covered:
Commercial real estate	$	4,325	$	5,347	$	2,214	$	3,979	$	22
One-to-four family residential		20		25		52		98		2
Real estate construction		130		308		-		-		-
Commercial		322		1,884		2		3		1
Other		2		4		-		-		-
Total covered	$	4,799	$	7,568	$	2,268	$	4,080	$	25

The following table presents the average recorded investment and interest income recognized on impaired loans for the year ended December 31, 2013, 2012, and 2011.

	As of and for the year ended December 31,
	2013				2012				2011
	Average				Average				Average
	Recorded		Interest		Recorded		Interest		Recorded		Interest
(Dollars in thousands)	Investment		Income		Investment		Income		Investment		Income
Noncovered:
Commercial real estate	$	47,835	$	1,784	$	36,373	$	1,517	$	10,012	$	1,852
One-to-four family residential		362		-		427		8		1,317		8
Real estate construction		2,488		-		4,507		51		8,222		805
Commercial		11,468		87		4,494		137		9,144		746
Other		63		-		104		-		97		-
Total noncovered	$	62,216	$	1,871	$	45,905	$	1,713	$	28,792	$	3,411
Covered:
Commercial real estate	$	15,290	$	328	$	21,110	$	184	$	26,642	$	-
One-to-four family residential		4,283		1		5,627		1		7,926		-
Real estate construction		313		-		1,721		-		6,003		-
Commercial		1,431		-		2,175		-		4,403		-
Other		66		-		158		-		438		-
Total covered	$	21,383	$	329	$	30,791	$	185	$	45,412	$	-

Included in interest income recognized on impaired loans are $2.4 million and  $1.9 million, and $3.3 million,  for December 31, 2013, 2012, and 2011, respectively, in interest on accruing troubled debt restructurings.

Troubled Debt Restructurings.  The loan portfolio also includes certain loans that have been modified in a troubled debt restructuring, where economic concessions have been granted to borrowers who have experienced financial difficulties.  These concessions typically result from loss mitigation activities and can include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions.  Troubled debt restructurings are classified as impaired at the time of restructuring and classified as nonperforming, potential problem, or performing restructured, as applicable.  Loans modified in troubled debt restructurings may be returned to performing status after considering the borrowers’ sustained repayment for a reasonable period of at least six months. 

When we modify loans in a troubled debt restructuring, an evaluation of any possible impairment is performed similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or use of the current fair value of the collateral, less selling costs for collateral dependent loans.  If it is determined that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs, and unamortized premium or discount), an impairment is recognized through an allowance estimate or a charge-off to the allowance.  In periods subsequent to modification, all loans modified in troubled debt restructurings are evaluated, including those that have payment defaults, for possible impairment. 

Troubled debt restructured loans outstanding as of December 31, 2013 and 2012 are as follows: 

	At December 31, 2013				At December 31, 2012
(Dollars in thousands)	Accruing		Nonaccrual		Accruing		Nonaccrual
Commercial real estate	$	44,442	$	4,456	$	39,170	$	2,953
One-to-four family residential		18		162		27		134
Real estate construction		-		-		847		130
Commercial		1,527		648		3,998		351
Consumer		-		46		-		81
Total	$	45,987	$	5,312	$	44,042	$	3,649

At December 31, 2013 and 2012,  we had no significant commitments to lend additional funds to debtors whose loan terms have been modified in troubled debt restructuring.

Loans modified as troubled debt restructurings that occurred during the year ended December 31, 2013 and 2012 are shown in the following tables:  

	For the year ended December 31,
	2013				2012
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Modifications		Investment		Modifications		Investment
Commercial real estate		9	$	4,732		12	$	22,713
One-to-four family residential		1		68		3		110
Real estate construction		-		-		1		847
Commercial		5		784		7		3,328
Consumer		-		-		1		80
Total		15	$	5,584		24	$	27,078

The modifications of loans identified as troubled debt restructurings primarily related to payment extensions and/or reductions in the interest rate.  The financial impact of troubled debt restructurings is not significant.   

The following tables present the recorded investment and the number of loans modified as a troubled debt restructuring which subsequently defaulted forthe year ended December 31, 2013 and 2012.  Default, for this purpose, is deemed to occur when a loan is 90 days or more past due or transferred to nonaccrual and is within twelve months of restructuring.   

	For the year ended December 31,
	2013				2012
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial real estate		1	$	166		-	$	-
Commercial		-		-		3		1,658
Real estate construction		-		-		1		130
Total		1	$	166		4	$	1,788

Credit Quality Indicators.  To assess the credit quality of loans, we categorize loans into risk categories based on relevant information about the ability of the borrowers to service their debts such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.  This analysis is performed on a quarterly basis.  We use the following definitions for risk ratings:   

Special mention – Loans classified as special mention have potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for these loans or of the institution’s credit position at some future date. 

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligors or of the collateral pledged, if any.  Loans so classified have one or more well-defined weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.  These loans are considered potential problem or nonperforming loans depending on the accrual status of the loans.    

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

Loans not meeting the criteria above that are analyzed as part of the above described process are considered to be pass rated loans.  As of December 31, 2013 and 2012, based on the most recent analysis performed as of those dates, the risk category of loans by class is as follows: 

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2013
Grade:
Pass	$	610,929	$	81,534	$	101,715	$	233,132	$	30,893	$	1,058,203
Special Mention		62,932		1,452		22,576		6,130		141		93,231
Substandard		77,453		944		24,203		11,329		50		113,979
Doubtful		965		58		-		4,467		-		5,490
Total	$	752,279	$	83,988	$	148,494	$	255,058	$	31,084	$	1,270,903
At December 31, 2012
Grade:
Pass	$	718,054	$	71,975	$	83,350	$	208,019	$	35,897	$	1,117,295
Special Mention		88,167		1,901		25,964		7,047		181		123,260
Substandard		80,104		1,923		25,477		26,887		223		134,614
Doubtful		2,948		36		-		582		-		3,566
Total	$	889,273	$	75,835	$	134,791	$	242,535	$	36,301	$	1,378,735

Allowance for Loan Losses.  The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment evaluation method as of December 31, 2013 and 2012.  

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2013
Balance at beginning of period	$	27,223	$	861	$	5,271	$	12,604	$	759	$	46,718
Loans charged-off		(806)		(578)		246		(8,599)		(267)		(10,004)
Recoveries		171		253		4,527		2,049		158		7,158
Provision for loan losses		(7,734)		314		(4,521)		4,931		(199)		(7,209)
Balance at end of period	$	18,854	$	850	$	5,523	$	10,985	$	451	$	36,663
Allowance for loan losses ending balance:
Individually evaluated for impairment	$	4,012	$	-	$	18	$	3,863	$	46	$	7,939
Collectively evaluated for impairment		14,839		797		5,505		7,122		405		28,668
Acquired with deteriorated credit quality		3		53		-		-		-		56
Total ending allowance balance	$	18,854	$	850	$	5,523	$	10,985	$	451	$	36,663
Loans receivable ending balance:
Individually evaluated for impairment	$	47,730	$	456	$	2,720	$	10,297	$	50	$	61,253
Collectively evaluated for impairment		693,267		79,602		145,576		243,790		30,988		1,193,223
Acquired with deteriorated credit quality		11,282		3,930		198		971		46		16,427
Total ending loans balance	$	752,279	$	83,988	$	148,494	$	255,058	$	31,084	$	1,270,903

	Commercial		1-4 Family		Real Estate
	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2012
Balance at beginning of period	$	21,749	$	1,016	$	11,177	$	9,827	$	915	$	44,684
Loans charged-off		(2,167)		(269)		-		(4,455)		(649)		(7,540)
Recoveries		58		271		1,972		3,671		495		6,467
Provision for loan losses		7,583		(157)		(7,878)		3,561		(2)		3,107
Balance at end of period	$	27,223	$	861	$	5,271	$	12,604	$	759	$	46,718
Allowance for loan losses ending balances:
Individually evaluated for impairment	$	5,094	$	7	$	50	$	6,492	$	81	$	11,724
Collectively evaluated for impairment		21,975		785		5,221		6,111		678		34,770
Acquired with deteriorated credit quality		154		69		-		1		-		224
Total ending allowance balance	$	27,223	$	861	$	5,271	$	12,604	$	759	$	46,718
Loans receivable ending balance:
Individually evaluated for impairment	$	54,055	$	570	$	4,202	$	16,759	$	88	$	75,674
Collectively evaluated for impairment		816,920		70,384		130,207		223,739		36,104		1,277,354
Acquired with deteriorated credit quality		18,298		4,881		382		2,037		109		25,707
Total ending loans balance	$	889,273	$	75,835	$	134,791	$	242,535	$	36,301	$	1,378,735

	Commercial		1-4 Family		Real Estate
	Real Estate		Residential		Construction		Commercial		Other		Total
At December 31, 2011
Balance at beginning of period	$	32,508	$	1,597	$	19,605	$	10,605	$	914	$	65,229
Loans charged-off		(71,066)		(346)		(62,070)		(22,103)		(1,040)		(156,625)
Recoveries		411		67		1,521		1,864		116		3,979
Provision for loan losses		59,896		(302)		52,121		19,461		925		132,101
Balance at end of period	$	21,749	$	1,016	$	11,177	$	9,827	$	915	$	44,684
Allowance for loan losses ending balances:
Individually evaluated for impairment	$	411	$	21	$	73	$	349	$	112	$	966
Collectively evaluated for impairment		21,198		981		10,846		9,439		803		43,267
Acquired with deteriorated credit quality		140		14		258		39		-		451
Total ending allowance balance	$	21,749	$	1,016	$	11,177	$	9,827	$	915	$	44,684
Loans receivable ending balance:
Individually evaluated for impairment	$	21,701	$	1,468	$	11,983	$	10,490	$	123	$	45,765
Collectively evaluated for impairment		1,006,860		78,907		220,102		335,776		38,463		1,680,108
Acquired with deteriorated credit quality		23,686		7,072		3,746		2,841		270		37,615
Total ending loans balance	$	1,052,247	$	87,447	$	235,831	$	349,107	$	38,856	$	1,763,488

XML

Loans And Allowance For Loan Losses (Troubled Debt Restructured Loans Outstanding) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Modifications [Line Items]
Accruing	$ 45,987	$ 44,042
Nonaccrual	5,312	3,649
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Accruing	44,442	39,170
Nonaccrual	4,456	2,953
One-To-Four Family Residential [Member]
Financing Receivable, Modifications [Line Items]
Accruing	18	27
Nonaccrual	162	134
Real Estate Construction [Member]
Financing Receivable, Modifications [Line Items]
Accruing		847
Nonaccrual		130
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Accruing	1,527	3,998
Nonaccrual	648	351
Consumer [Member]
Financing Receivable, Modifications [Line Items]
Nonaccrual	$ 46	$ 81

XML

Taxes On Income (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Effective Income Tax Rate, Continuing Operations	38.20%	37.90%	(39.00%)
Effective tax rate	38.20%	37.90%	(39.00%)
Operating loss carryforward period	20 years
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax	$ 2,500,000
Alternative minimum tax credit carryforward	2,500,000
Net deferred tax assets	24,937,000	32,183,000
Cumulative pretax loss position period	3 years
Nonrecurring sale of nonperforming assets		101,000,000
Internal Revenue Service (IRS) [Member]
Federal net operating loss carryforward	10,700,000
Operating Loss Carryforward Expiration Date	2031
State and Local Jurisdiction [Member]
Federal net operating loss carryforward	53,100,000
Operating Loss Carryforward Expiration Date	2031
State And Local Jurisdiction Second Expiration [Member]
Federal net operating loss carryforward	$ 600,000
Operating Loss Carryforward Expiration Date	2021

XML

Fair Value Measurements (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Private equity investment Southwest's proportionate share of the net asset value	$ 2.4	$ 1.7
Impairment charges of mortgage loan servicing rights		0.5
Noncovered [Member]
Finite-Lived Intangible Assets [Line Items]
Noncovered impaired loans carrying amount	45.5	61.0
Noncovered impaired loans measured at fair value	32.3	46.9
Noncovered impaired loans life to date impairment	27.3	14.1
Provision for loan losses	0.1	9.8
Impairment charge of other real estate assets	1.5	4.0
Covered [Member]
Finite-Lived Intangible Assets [Line Items]
Impairment charge of other real estate assets	$ 0.7	$ 0.2

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Subsequent Events

12 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

Note 20:  Subsequent Events

On January 16, 2014 we announced the execution of agreements to sell branch banks in Anthony, Harper and Overland Park, Kansas. Bank branches in Anthony and Harper, Kansas, with $123 million in combined total deposits,will be purchased by BancCentral, National Association, in Alva, Oklahoma. The Overland Park branch, with $11 million in deposits, will be purchased by Fidelity Bank, in Wichita, Kansas.  The transactions are expected to be completed during the second quarter of 2014, subject to regulatory approvals and other customary terms and conditions.  The banking offices will continue to be staffed by the current employees of each market.

XML

Operating Segments (Narrative) (Details)	12 Months Ended
	Dec. 31, 2013 segment
Operating Segments [Abstract]
Number of principal segments	5

XML

Taxes On Income (Tables)

12 Months Ended

Dec. 31, 2013

Taxes On Income [Abstract]

Components of taxes on income

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Current tax (benefit) expense:
Federal	$	462	$	712	$	(18,319)
State		74		232		(4,875)
Deferred tax expense (benefit):
Federal		9,362		8,145		(18,375)
State		858		794		(2,088)
Taxes on income	$	10,756	$	9,883	$	(43,657)

Reconciliation from the expected tax exense (benefit) to consolidated effective income tax expense (benefit)

	For the Year Ended December 31,
(Dollars in thousands)	2013		2012		2011
Computed tax (benefit) expense at statutory rates	$	9,867	$	9,124	$	(39,183)
Increase (decrease) in income taxes resulting from:
Benefit of income not subject to U.S. Federal income tax		(213)		(213)		(165)
Expenses not deductible for U.S. Federal income tax		96		150		124
State income taxes, net of Federal income tax benefit		749		476		(3,755)
Reversal of FIN 48 reserve		-		-		(953)
State payment or refund from prior periods (federally tax affected)		-		50		-
Tax credit recapture		76		-		-
Other		181		296		275
Taxes on income	$	10,756	$	9,883	$	(43,657)

Temporary differences that give rise to the deferred tax assets

		At December 31,
(Dollars in thousands)		2013		2012
Deferred tax assets:
	Provision for loan losses	$	15,072	$	19,246
	Net operating loss carryforward		5,065		12,674
	Tax credit carryforward		3,443		3,070
	Write-downs on other real estate		-		1,669
	Nonaccrual loan interest		539		527
	Deferred compensation & profit sharing accrual		173		551
	Investments		468		457
	Section 597 gain - FDIC-assisted acquisition		1,214		(119)
	Accrued Expenses		812		-
	Other		43		(51)
Total deferred tax assets			26,829		38,024
Deferred tax liabilities:
	Accumulated depreciation		(2,476)		(2,835)
	Amortizable assets		(614)		(749)
	Dividend - Equity vs. Cost Method		(316)		(492)
	Prepaid expenses		(188)		(254)
	FHLB stock dividends		(192)		(220)
	Stock-based compensation		(6)		(216)
Total deferred tax liabilities			(3,792)		(4,766)
	Deferred taxes (payable) receivable on investment
	securities available for sale		1,900		(1,075)
Net deferred tax asset		$	24,937	$	32,183

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Earnings Per Share

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Note 13:  Earnings per Common Share

The following table shows the computation of basic and diluted earnings per common share: 

(Dollars in thousands, except earnings per share data)	2013		2012		2011
Numerator:
Net income (loss)	$	17,435	$	16,187	$	(68,295)
Preferred dividend		-		(2,196)		(3,522)
Warrant amortization		-		(1,545)		(731)
Net income (loss) available to common shareholders		17,435		12,446		(72,548)
Earnings allocated to participating securities		(139)		-		-
Numerator for basic earnings per common share	$	17,296	$	12,446	$	(72,548)
Effect of reallocating undistributed earnings
of participating securities		139		-		-
Numerator for diluted earnings per common share	$	17,435	$	12,446	$	(72,548)
Denominator:
Denominator for basic earnings per common share		19,516,776		19,374,098		19,414,231
Dilutive effect of stock compensation		87,469		-		-
Denominator for diluted earnings per common share		19,604,245		19,374,098		19,414,231
Earnings per common share:
Basic	$	0.89	$	0.64	$	(3.73)
Diluted	$	0.89	$	0.64	$	(3.73)