Operating Segments

6 Months Ended

Jun. 30, 2015

Operating Segments [Abstract]

Operating Segments

NOTE 9: OPERATING SEGMENTS  

We operate four principal segments:  Oklahoma Banking, Texas Banking, Kansas Banking, and Other Operations.  The Oklahoma Banking segment provides deposit and lending services and consists of residential mortgage lending services to customers. The Texas Banking segment and the Kansas Banking segment provide deposit and lending services.  Other Operations includes our funds management unit and corporate investments.  Prior to the first quarter of 2015, we disclosed a Mortgage Banking segment, which included 1-4 family mortgages and the available for sale loans.For segment reporting, the Mortgage Banking segment has been combined with and into the Oklahoma Banking segment due to those loans being managed from that location. Prior period numbers have also been adjusted to reflect this change. This adjustment has no financial statement impact.

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 FHLB advances.    

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.  The following table summarizes financial results by operating segment:

For the three months ended June 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	9,299	$	4,793	$	1,731	$	(32)	$	15,791
Provision (credit) for loan losses		(689)		(283)		(165)		1		(1,136)
Noninterest income		2,386		278		329		416		3,409
Noninterest expenses		7,698		3,793		1,606		885		13,982
Income (loss) before taxes		4,676		1,561		619		(502)		6,354
Taxes on income (loss)		1,609		531		216		(163)		2,193
Net income (loss)	$	3,067	$	1,030	$	403	$	(339)	$	4,161

For the three months ended June 30, 2014
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	9,497	$	4,457	$	3,075	$	(455)	$	16,574
Provision (credit) for loan losses		(1,464)		1,449		(340)		-		(355)
Noninterest income		2,332		243		420		5,251		8,246
Noninterest expenses		7,871		3,232		2,658		1,571		15,332
Income before taxes		5,422		19		1,177		3,225		9,843
Taxes on income		2,034		7		441		1,209		3,691
Net income	$	3,388	$	12	$	736	$	2,016	$	6,152

For the six months ended June 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	19,034	$	10,013	$	3,194	$	(840)	$	31,401
Provision (credit) for loan losses		(1,922)		(533)		(568)		-		(3,023)
Noninterest income		4,425		587		631		606		6,249
Noninterest expenses		15,043		7,228		3,215		1,578		27,064
Income (loss) before taxes		10,338		3,905		1,178		(1,812)		13,609
Taxes on income (loss)		3,732		1,410		425		(654)		4,913
Net income (loss)	$	6,606	$	2,495	$	753	$	(1,158)	$	8,696
* Includes externally generated revenue of $0.7 million, primarily from investing services, and an internally generated loss of $1.0 million from the funds management unit.
Total loans at period end	$	810,368	$	493,047	$	146,015	$	-	$	1,449,430
Total assets at period end		824,073		491,442		147,302		568,764		2,031,581
Total deposits at period end		1,134,020		226,498		126,671		137,257		1,624,446

For the six months ended June 30, 2014
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	18,473	$	9,089	$	5,455	$	(442)	$	32,575
Provision (credit) for loan losses		483		(2,483)		659		-		(1,341)
Noninterest income		4,449		539		901		5,382		11,271
Noninterest expenses		15,452		6,460		5,286		2,241		29,439
Income before taxes		6,987		5,651		411		2,699		15,748
Taxes on income		2,620		2,119		154		1,012		5,905
Net income	$	4,367	$	3,532	$	257	$	1,687	$	9,843
* Includes externally generated revenue of $0.5 million, primarily from investing services, and an internally generated revenue of $4.4 million from the funds management unit.
Total loans at period end	$	798,065	$	408,385	$	145,247	$	3	$	1,351,700
Total assets at period end		807,002		405,524		147,644		524,988		1,885,158
Total deposits at period end		1,086,659		206,031		111,615		59,550		1,463,855