Operating Segments

9 Months Ended

Sep. 30, 2016

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. Due to its relatively smaller size and our management structure, our Colorado banking operations are included within the Oklahoma Banking segment. The Texas Banking segment and the Kansas Banking segment provide deposit and lending services. 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 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 September 30, 2016
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	12,405	$	5,541	$	1,574	$	285	$	19,805
Provision (credit) for loan losses		1,531		282		(99)		(1)		1,713
Noninterest income		3,515		340		294		406		4,555
Noninterest expenses		10,539		3,616		1,183		818		16,156
Income (loss) before taxes		3,850		1,983		784		(126)		6,491
Taxes on income (loss)		1,322		684		273		(43)		2,236
Net income (loss)	$	2,528	$	1,299	$	511	$	(83)	$	4,255

For the nine months ended September 30, 2016
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	37,682	$	16,747	$	5,040	$	(129)	$	59,340
Provision for loan losses		1,581		2,527		1,987		3		6,098
Noninterest income		8,367		932		912		1,630		11,841
Noninterest expenses		30,378		10,603		3,947		2,492		47,420
Income (loss) before taxes		14,090		4,549		18		(994)		17,663
Taxes on income (loss)		4,888		1,578		6		(345)		6,127
Net income (loss)	$	9,202	$	2,971	$	12	$	(649)	$	11,536
* Includes externally generated revenue of $2.4 million, primarily from investing services, and an internally generated loss of $0.9 million from the funds management unit.
Total loans at period end	$	1,117,716	$	605,682	$	156,714	$	-	$	1,880,112
Total assets at period end		1,161,386		602,028		155,556		549,072		2,468,042
Total deposits at period end		1,319,571		187,234		144,856		296,263		1,947,924

For the three months ended September 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	9,831	$	5,589	$	1,551	$	(475)	$	16,496
Provision (credit) for loan losses		(575)		662		(69)		5		23
Noninterest income		2,776		584		304		365		4,029
Noninterest expenses		8,015		3,646		1,525		891		14,077
Income (loss) before taxes		5,167		1,865		399		(1,006)		6,425
Taxes on income (loss)		1,852		669		143		(361)		2,303
Net income (loss)	$	3,315	$	1,196	$	256	$	(645)	$	4,122

For the nine months ended September 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	28,865	$	15,602	$	4,745	$	(1,315)	$	47,897
Provision (credit) for loan losses		(2,497)		129		(637)		5		(3,000)
Noninterest income		7,201		1,171		935		971		10,278
Noninterest expenses		23,058		10,874		4,740		2,469		41,141
Income (loss) before taxes		15,505		5,770		1,577		(2,818)		20,034
Taxes on income (loss)		5,584		2,079		568		(1,015)		7,216
Net income (loss)	$	9,921	$	3,691	$	1,009	$	(1,803)	$	12,818
* Includes externally generated revenue of $1.4 million, primarily from investing services, and an internally generated loss of $1.7 million from the funds management unit.
Total loans at period end	$	832,282	$	563,010	$	152,802	$	-	$	1,548,094
Total assets at period end		847,436		560,777		152,056		499,630		2,059,899
Total deposits at period end		1,149,489		205,115		122,961		148,685		1,626,250