Operating Segments

12 Months Ended

Dec. 31, 2016

Operating Segments [Abstract]

Operating Segments

Note 20:  Operating Segments

We operatefour 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 size and the management structure, Colorado Banking is included within Oklahoma Banking. 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 fourth 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 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. 

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.  There were no significant changes in 2016 due to funds transfer pricing, capital assignments, or expense allocations.

The following table summarizes financial results by operating segment: 

For the year ended December 31, 2016
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income	$	50,590	$	22,697	$	6,694	$	(538)	$	79,443
Provision for loan losses		2,007		973		1,786		3		4,769
Noninterest income		11,576		1,273		1,202		2,034		16,085
Noninterest expenses		40,083		13,734		5,275		4,154		63,246
Income (loss) before taxes		20,076		9,263		835		(2,661)		27,513
Taxes on income		7,157		3,303		298		(949)		9,809
Net income (loss)	$	12,919	$	5,960	$	537	$	(1,712)	$	17,704
* Includes externally generated revenue of $3.0 million, primarily from investing services, and an internally generated loss of $1.5 million from the funds management unit.
Total loans at period end	$	1,095,930	$	636,643	$	144,559	$	-	$	1,877,132
Total assets at period end		1,138,969		633,328		143,558		559,537		2,475,392
Total goodwill at period end		12,525		1,020		-		-		13,545
Total deposits at period end		1,330,176		195,603		147,823		272,416		1,946,018

For the year ended December 31, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income	$	42,019	$	21,168	$	6,277	$	(2,047)	$	67,417
Provision (credit) for loan losses		(2,068)		(632)		(868)		2		(3,566)
Noninterest income		10,134		1,485		1,473		1,365		14,457
Noninterest expenses		33,136		14,324		6,152		4,628		58,240
Income (loss) before taxes		21,085		8,961		2,466		(5,312)		27,200
Taxes on income		7,591		3,227		888		(1,913)		9,793
Net income (loss)	$	13,494	$	5,734	$	1,578	$	(3,399)	$	17,407
* Includes externally generated revenue of $2.1 million, primarily from investing services, and an internally generated loss of $2.8 million from the funds management unit.
Total loans at period end	$	1,048,473	$	580,476	$	150,480	$	-	$	1,779,429
Total assets at period end		1,098,735		578,749		149,847		529,691		2,357,022
Total goodwill at period end		12,447		1,020		-		-		13,467
Total deposits at period end		1,374,227		209,146		119,313		181,419		1,884,105

For the year ended December 31, 2014
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income	$	38,846	$	19,187	$	9,469	$	(2,498)	$	65,004
Provision (credit) for loan losses		(2,561)		(3,640)		(425)		2		(6,624)
Noninterest income		9,030		1,594		1,576		6,731		18,931
Noninterest expenses		31,363		13,387		8,616		3,546		56,912
Income before taxes		19,074		11,034		2,854		685		33,647
Taxes on income		7,152		4,138		1,070		257		12,617
Net income	$	11,922	$	6,896	$	1,784	$	428	$	21,030
* Includes externally generated revenue of $7.6 million, primarily from investing services, and an internally generated loss of $3.3 million from the funds management unit.
Total loans at period end	$	793,262	$	460,680	$	146,043	$	6	$	1,399,991
Total assets at period end		805,704		458,489		147,256		530,585		1,942,034
Total goodwill at period end		194		1,020		-		-		1,214
Total deposits at period end		1,113,477		224,634		110,901		84,987		1,533,999