-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LgE+Szu2S4a3N9VXpZG6419nd+6gM0UbslsaH8qZzQIBgz2cqhzl94TUvQThVQ4U 3J046vNU34sUn47LerEBTw== 0000928385-96-001034.txt : 19960823 0000928385-96-001034.hdr.sgml : 19960823 ACCESSION NUMBER: 0000928385-96-001034 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960808 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWEST BANCORP INC CENTRAL INDEX KEY: 0000914374 STANDARD INDUSTRIAL CLASSIFICATION: 6035 IRS NUMBER: 731136584 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-23064 FILM NUMBER: 96605665 BUSINESS ADDRESS: STREET 1: PO BOX 1988 CITY: STILLWATER STATE: OK ZIP: 74076 BUSINESS PHONE: 4053722230 MAIL ADDRESS: STREET 1: PO BOX 1988 CITY: STILLWATER STATE: OK ZIP: 74076 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________ FORM 10-Q [ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 0-23064 SOUTHWEST BANCORP, INC. (Exact name of registrant as specified in its charter) Oklahoma #73-1136584 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 608 South Main Street 74074 Stillwater, Oklahoma (Zip Code) (Address of principal executive office) Registrant's telephone number, including area code: (405) 372-2230 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 twelve 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 ninety days. [ x ] YES [ ] NO APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 3,761,202 --------- 1 SOUTHWEST BANCORP, INC. INDEX TO FORM 10-Q Page No. PART I. FINANCIAL INFORMATION ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Consolidated Statements of Financial Condition at June 30, 1996 and December 31, 1995 3 Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 1996 and 1995 4 Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 1996 and 1995 5 Notes to Unaudited Consolidated Financial Statements 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7 PART II. OTHER INFORMATION 12 SIGNATURES 13 2 SOUTHWEST BANCORP, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except share date)
June 30, December 31, 1996 1995 ----------- ----------- Assets Cash and due from banks $ 28,691 $ 20,789 Federal funds sold 10,600 -- ----------- ----------- Cash and cash equivalents 39,291 20,789 Investment securities: Held to maturity, approximate fair value of $81,157 (1996) and $75,202 (1995) 81,583 74,644 Available for sale, approximate fair value 60,666 73,044 Loans receivable, net of allowance for loan losses of $6,513 (1996) and $5,813 (1995) 572,289 526,175 Accrued interest receivable 7,404 7,117 Premises and equipment, net 7,818 6,224 Other real estate 118 195 Other assets 3,500 2,190 Intangibles, net 693 757 ----------- ----------- Total assets $773,362 $711,135 =========== =========== Liabilities & shareholders' equity Deposits: Noninterest-bearing demand $ 81,935 $ 78,308 Interest-bearing demand 39,714 33,762 Time, money market and savings 582,045 522,317 ----------- ----------- Total deposits 703,694 634,387 Income taxes payable 103 271 Accrued interest payable 4,216 4,266 Other liabilities 3,187 11,854 ----------- ----------- Total liabilities 711,200 650,778 Commitments and contingencies Shareholders' equity: Serial preferred stock - Series A, 9.20% Redeemable, Cumulative Preferred Stock; $1 par value; 1,000,000 shares authorized; liquidation value $17,250,000; 690,000 shares issued and outstanding 690 690 Series B, $1 par value; 1,000,000 shares authorized; none issued -- -- Common stock - $1 par value; 10,000,000 shares authorized; issued and outstanding 3,759,492 (1996) and 3,755,228 (1995) 3,759 3,755 Capital surplus 24,245 24,171 Retained earnings 33,718 31,129 Unrealized gain/(loss) on investment securities available for sale, net of tax (250) 612 ----------- ----------- Total shareholders' equity 62,162 60,357 ----------- ----------- Total liabilities & shareholders' equity $773,362 $711,135 =========== ===========
SOUTHWEST BANCORP, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share data)
For the three months For the six months ended June 30, ended June 30, 1996 1995 1996 1995 -------- -------- -------- -------- Interest income: Interest and fees on loans $13,271 $11,155 $26,103 $21,120 Investment securities: U.S. Government and Agency obligations 1,651 1,569 3,291 3,188 State and political subdivisions 146 117 286 224 Mortgage-backed securities 391 378 781 757 Other securities 19 12 32 26 Federal funds sold 144 317 218 413 -------- -------- -------- -------- Total interest income 15,622 13,548 30,711 25,728 Interest expense: Interest-bearing demand 206 181 409 377 Time, money market and savings 7,550 7,180 14,875 13,033 Other borrowed money 13 13 71 207 -------- -------- -------- -------- Total interest expense 7,769 7,374 15,355 13,617 -------- -------- -------- -------- Net interest income 7,853 6,174 15,356 12,111 Provision for loan losses 775 375 1,650 750 -------- -------- -------- -------- Net interest income after provision for loan losses 7,078 5,799 13,706 11,361 Other income: Service charges and fees 720 658 1,428 1,254 Credit cards 233 199 440 414 Other noninterest income 101 78 218 192 Gain/(loss) on sales of loans receivable 375 144 823 333 Gain/(loss) on sale of investment securities 49 - 171 (8) -------- -------- -------- -------- Total other income 1,478 1,079 3,080 2,185 Other expenses: Salaries and employee benefits 3,006 2,434 5,834 4,708 Occupancy 866 757 1,625 1,459 FDIC and other insurance 153 330 285 655 Credit cards 60 144 164 273 Other real estate owned, net 1 4 1 (16) General and administrative 1,379 1,258 2,775 2,480 -------- -------- -------- -------- Total other expenses 5,465 4,927 10,684 9,559 -------- -------- -------- -------- Income before taxes 3,091 1,951 6,102 3,987 Taxes on income 1,115 687 2,194 1,388 -------- -------- -------- -------- Net income $ 1,976 $ 1,264 $ 3,908 $ 2,599 ======== ======== ======== ======== Net income available to common shareholders $ 1,579 $ 1,264 $ 3,114 $ 2,599 ======== ======== ======== ======== Earnings per common share $0.42 $0.34 $0.83 $0.70 ======== ======== ======== ======== Weighted average common shares outstanding 3,759,198 3,755,228 3,758,029 3,755,228 ========= ========= ========= =========
SOUTHWEST BANCORP, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
For the six months ended June 30, 1996 1995 ----------- ----------- Operating activities: Net income $ 3,908 $ 2,599 Adjustments to reconcile net income to net cash provided from/(used in) operating activities: Provision for loan losses 1,650 750 Depreciation and amortization expense 584 482 Amortization of premiums and accretion of discount on securities, net 122 146 Amortization of intangibles 64 87 (Gain)/loss on sales of securities (171) 8 (Gain)/loss on sales of loans receivable (823) (333) (Gain)/loss on sales of premises and equipment (10) 3 (Gain)/loss on other real estate owned, net (2) (26) Proceeds from sales of residential mortgage loans 26,837 9,871 Residential mortgage loans originated for resale (36,045) (14,555) Changes in assets and liabilities: Accrued interest receivable (287) (304) Income taxes payable (168) (193) Accrued interest payable (50) 1,552 Other (9,439) (14,145) ----------- ----------- Net cash provided from/(used in) operating activities (13,830) (14,058) ----------- ----------- Investing activities: Proceeds from sales of held to maturity securities -- 5,993 Proceeds from sales of available for sale securities -- -- Proceeds from principal repayments, redemptions and maturities of: Held to maturity securities 14,824 8,012 Available for sale securities 17,377 1,331 Purchases of held to maturity securities (21,848) (3,939) Purchases of available for sale securities (6,303) (1,006) Loans originated and principal repayments, net (54,968) (77,665) Proceeds from sales of guaranteed student loans 17,235 16,164 Purchases of premises and equipment (2,191) (1,271) Proceeds from sales of premises and equipment 24 16 Proceeds from sales of other real estate 79 94 ----------- ----------- Net cash provided from/(used in) investing activities (35,771) (52,271) ----------- ----------- Financing activities: Net increase in deposits 69,307 94,186 Net proceeds from issuance of common stock 78 -- Net proceeds from issuance of preferred stock -- -- Common stock dividends paid (488) (638) Preferred stock dividends paid (794) -- ----------- ----------- Net cash provided from/(used in) financing activities 68,103 93,548 ----------- ----------- Net increase/(decrease) in cash and cash equivalents 18,502 27,219 Cash and cash equivalents, Beginning of period 20,789 16,394 ----------- ----------- End of period $39,291 $43,613 =========== ===========
5 SOUTHWEST BANCORP, INC. Notes to Unaudited Consolidated Financial Statements NOTE 1: GENERAL The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, changes in shareholders' equity, and cash flows in conformity with generally accepted accounting principles. However, the financial statements include all adjustments (consisting only of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Southwest Bancorp, Inc. Annual Report on Form 10-K for the year ended December 31, 1995. NOTE 2: PRINCIPLES OF CONSOLIDATION The accompanying unaudited consolidated financial statements include the accounts of Southwest Bancorp, Inc. (the Company) and its wholly owned subsidiary, The Stillwater National Bank and Trust Company (the Bank). All significant intercompany transactions and balances have been eliminated in consolidation. NOTE 3: RECENTLY ADOPTED ACCOUNTING STANDARDS The Company adopted Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which establishes accounting standards for such assets, on January 1, 1996. Also on that date, the Company adopted SFAS No. 122, Accounting for Mortgage Servicing Rights, which amends the accounting for the rights to service mortgage loans, however acquired, and requires the Company to recognize as separate assets those rights to service mortgage loans for others. SFAS No. 122 also requires the Company to evaluate whether amounts capitalized as mortgage servicing rights are impaired. Adoption of SFAS Nos. 121 and 122 did not have a material impact on the Company's consolidated financial position or results of operations. In October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123 establishes a fair value method and disclosure standards for stock-based employee compensation arrangements, such as stock purchase plans and stock options. SFAS No. 123 became effective January 1, 1996. SFAS No. 123 requires expanded disclosures of stock-based compensation arrangements with employees and encourages, but does not require, compensation cost to be measured based on the fair value of the equity instrument awarded. Companies are permitted, however, to continue to apply Accounting Principles Board Opinion (APB) No. 25, which recognizes compensation cost based on the intrinsic value of the equity instrument awarded. The Company will continue to apply APB No. 25 to its stock-based compensation awards to employees and will disclose the required pro forma effect on net income and earnings per share in the 1996 year-end financial statements. 6 SOUTHWEST BANCORP, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL CONDITION The Company's total assets increased by $62.3 million, or 9%, from $711.1 million at December 31, 1995 to $773.4 million at June 30, 1996. Loans were $578.8 million at June 30, 1996, an increase of $46.8 million, or 9%, compared to December 31, 1995. The Company experienced its most significant increases in the categories of commercial loans, which increased by $21.9 million, or 12%, real estate construction loans, which increased by $14.0 million, or 42%, residential mortgages, which increased by $10.0 million, or 23%, and commercial mortgages, which increased by $5.2 million, or 3%. These increases were offset by a $5.5 million, or 8% reduction in government- guaranteed student loans. At June 30, 1996, the allowance for loan losses was $6.5 million, or 1.13% of total loans, compared to $5.8 million, or 1.09% of total loans, at December 31, 1995. Investment securities were $142.2 at June 30, 1996, a reduction of $5.4 million, or 4%, compared to December 31, 1995. The Company's deposits increased by $69.3 million, or 11%, from $634.4 million at December 31, 1995 to $703.7 million at June 30, 1996. This increase occurred primarily in time deposits. Shareholders' equity increased by $1.8 million, or 3%, due primarily to first and second quarter earnings, net of dividends declared on common and preferred stock. RESULTS OF OPERATIONS FOR THE SIX MONTH PERIODS ENDED JUNE 30, 1996 AND 1995 Net Income Net income for the first six months of 1996 was $3.9 million, a $1.3 million, or 50%, increase from the $2.6 million earned during the same period in 1995. Earnings per common share for the first six months of 1996 were $0.83, after the deduction of preferred stock dividends, compared to $0.70 for the first six months of 1995. Average common shares outstanding were 3,758,029 and 3,755,228, respectively. The Company issued 690,000 shares of Series A, 9.20% Cumulative Preferred Stock in the third quarter of 1995. Net interest income increased $3.2 million, or 27%, for the first six months of 1996 compared to the same period in 1995. This increase in net interest income, as well as an $895,000, or 41%, increase in other income, offset a $1.1 million, or 12%, increase in other expenses, a $900,000, or 120%, increase in provision for loan loss and an $806,000, or 58%, increase in taxes. For the first six months of 1996, the return on average total equity was 12.85% and the return on average common equity was 14.27% compared to the 13.33% return on average equity for the first six months of 1995. Net Interest Income Net interest income increased to $15.3 million for the first six months of 1996 from $12.1 million for the same period in 1995 as continued growth in the loan portfolio enabled the Company to post a $5.0 million increase in interest income that exceeded the $1.7 million increase in interest expense during the period. Yields on the Company's interest-earning assets increased by 13 basis points, and the rates paid on the Company's interest-bearing liabilities declined by 8 basis points, resulting in an increase in the interest rate 7 spread to 3.57% for the six months ended June 30, 1996 from 3.36% for the six months ended June 30, 1995. The ratio of average interest-earning assets to average interest-bearing liabilities increased to 119.07% for the first six months of 1996 from 115.84% for the first six months of 1995. This percentage increase was, in part, the result of the use of proceeds from the Company's July 1995 Preferred stock issuance to fund interest-earning assets. Total interest income for the first six months of 1996 was $30.7 million, up 19% from $25.7 million during the same period in 1995. The principal factors providing greater interest income were the $99.0 million, or 22%, increase in the volume of average loans outstanding and the increase in yields earned on loans and investment securities. The Company's loan yields increased to 9.59% for the first six months of 1996 from 9.50% in 1995. During the same period, the Company's yield on investment securities declined to 6.11% from 6.25% as a result of calls of relatively high-yielding Agency securities. Total interest expense for the first six months of 1996 was $15.4 million, an increase of 13% from $13.6 million for the same period in 1995. The increase in total interest expense can be attributed to an increase in average interest- bearing liabilities of $72.3 million, or 14%. During the same period, the rates paid on average interest-bearing liabilities declined to 5.25% from 5.33%. Other Income Other income increased by $895,000 for the first six months of 1996 compared to the first six months of 1995 primarily due to increased gains on sales of loans receivable and investment securities. The increase in gains on sales of loans receivable reflected higher sales of student loans and mortgage loans. Sales of student loans during the first six months of 1996 were $17.2 million compared to $16.2 million for the same period in 1995. Sales of mortgage loans increased to $26.8 million for the first six months of 1996 compared to $9.9 million for the same period in 1995. The gain on sales of investment securities occurred when $4.6 million in Agency securities classified as "held to maturity" and $11.2 million in Agency securities classified as "available for sale", originally purchased at a discount, were called prior to their stated maturity date. Other Expenses The Company's other expenses increased $1.1 million for the first six months of 1996 compared to the first six months of 1995. This increase was primarily the result of an increase in salaries and employee benefits, which increased $1.1 million as a result of a 15% increase in staffing. The increase in staffing is related to the expansion of the Company's asset and deposit bases. In addition, occupancy expense increased $166,000 and general and administrative expense increased $295,000 compared to 1995. These increases were offset by a $370,000 reduction in FDIC and other insurance expense. The increase in occupancy expense was due primarily to the leasing of additional office space and the depreciation on furniture and equipment purchased to furnish those new offices. The reduction in FDIC and other insurance for the six month periods ended June 30, 1996 and 1995 was due to a reduction in premiums, beginning July 1, 1995, as the Bank Insurance Fund (BIF), of which the Bank is a member, achieved its statutory reserve ratio. If certain legislation currently being considered by Congress is enacted, the Bank will be required to pay a special assessment to the FDIC with respect to deposits it acquired from a savings association in 1991. It is not known whether this legislation will be enacted or what the amount of the special assessment will be if it is enacted. Provision for Loan Losses The Company makes provisions for loan losses in amounts deemed necessary to maintain the allowance for loan losses at an appropriate level. The adequacy of the allowance for loan losses is determined by management based upon a number of factors including, among others, analytical reviews of loan loss experience in relationship to outstanding loans and commitments; unfunded loan commitments; problem 8 and nonperforming loans and other loans presenting credit concerns; trends in loan growth, portfolio composition and quality; use of appraisals to estimate the value of collateral; and management's judgment with respect to current and expected economic conditions and their impact on the existing loan portfolio. Changes in the allowance may occur because of changing economic conditions, and economic prospects or the financial position of borrowers. Based upon this review, management established an allowance of $6.5 million, or 1.13% of total loans, at June 30, 1996 compared to an allowance of $5.8 million, or 1.09% of total loans at December 31, 1995. During the first six months of 1996 and 1995, the provisions for loan losses were $1.7 million and $750,000, respectively. The larger provision for loan losses during the first six months of 1996 was due to the need for greater general reserves in light of the increase in the size of the loan portfolio and higher historical charge-off ratios. Taxes on Income The Company's income tax expense for the first six months of 1996 and 1995 was $2.2 million and $1.4 million, respectively. The Company's income tax expense for the second quarters of 1996 and 1995 was $1.1 million and $687,000, respectively. The Company's effective tax rates have been lower than the 34% Federal and 6% State statutory rates primarily because of tax-exempt income on municipal obligations and loans. FOR THE THREE MONTH PERIODS ENDED JUNE 30, 1996 AND 1995 Net Income Net income for the second quarter of 1996 was $2.0 million, a $712,000, or 56%, increase from the $1.3 million earned during the same period in 1995. Earnings per common share for the second quarter of 1996 were $0.42, after the deduction of preferred stock dividends, compared to $0.34 for the second quarter of 1995. Average common shares outstanding were 3,759,198 and 3,755,228, respectively. The Company issued 690,000 shares of Series A, 9.20% Cumulative Preferred Stock in the third quarter of 1995. Net interest income increased $1.7 million, or 27%, for the second quarter of 1996 compared to the same period in 1995. This increase in net interest income, as well as a $399,000, or 37%, increase in other income, offset a $538,000, or 11%, increase in other expenses, a $400,000, or 107%, increase in provision for loan loss and a $428,000, or 62%, increase in taxes. For the second quarter of 1996, the return on average total equity was 12.92% and the return on average common equity was 14.16% compared to the 12.63% return on average equity for the second quarter of 1995. Net Interest Income Net interest income increased to $7.9 million for the second quarter of 1996 from $6.2 million for the same period in 1995 as continued growth in the loan portfolio enabled the Company to post a $2.1 million increase in interest income that exceeded the $395,000 increase in interest expense during the period. Yields on the Company's interest-earning assets increased by 2 basis points, and the rates paid on the Company's interest-bearing liabilities declined by 34 basis points, resulting in an increase in the interest rate spread to 3.63% for the second quarter of 1996 from 3.27% for the second quarter of 1995. The ratio of average interest-earning assets to average interest-bearing liabilities increased to 118.39% for the second quarter of 1996 from 115.50% for the second quarter of 1995. This percentage increase was, in part, the result of the use of proceeds from the Company's July 1995 Preferred stock issuance to fund interest-earning assets. Total interest income for the second quarter of 1996 was $15.6 million, up 15% from $13.5 million during the same period in 1995. The principal factor providing greater interest income was the $92.3 million, or 20%, increase in the volume of average loans outstanding. The Company's loan yields declined to 9.64% for the second quarter of 1996 from 9.70% in 1995. During the same period, the Company's yield on 9 investment securities declined to 6.09% from 6.22% as a result of calls of relatively high-yielding Agency securities. Total interest expense for the second quarter of 1996 was $7.8 million, an increase of 5% from $7.4 million for the same period in 1995. The increase in total interest expense can be attributed to an increase in average interest- bearing liabilities of $66.7 million, or 13%. During the same period, the rates paid on average interest-bearing liabilities declined to 5.21% from 5.55%. Other Income Other income increased by $399,000 for the second quarter of 1996 compared to the second quarter of 1995 primarily due to increased gains on sales of loans receivable. The increase in gains on sales of loans receivable reflected higher sales of student loans and mortgage loans. Sales of student loans during the second quarter of 1996 were $4.8 million compared to $4.6 million for the same period in 1995. Sales of mortgage loans increased to $18.4 million for the second quarter of 1996 compared to $6.4 million for the same period in 1995. Other Expenses The Company's other expenses increased $538,000 for the second quarter of 1996 compared to the second quarter of 1995. This increase was primarily the result of an increase in salaries and employee benefits, which increased $572,000 as a result of a 15% increase in staffing. The increase in staffing is related to the expansion of the Company's asset and deposit bases. In addition, occupancy expense increased $109,000 and general and administrative expense increased $121,000 compared to 1995. These increases were offset by a $177,000 reduction in FDIC and other insurance expense. The increase in occupancy expense was due primarily to the leasing of additional office space and the depreciation on furniture and equipment purchased to furnish those new offices. The reduction in FDIC and other insurance for the three month periods ended June 30, 1996 and 1995 was due to a reduction in premiums, beginning July 1, 1995, as the Bank Insurance Fund (BIF), of which the Bank is a member, achieved its statutory reserve ratio. If certain legislation currently being considered by Congress is enacted, the Bank will be required to pay a special assessment to the FDIC with respect to deposits it acquired from a savings association in 1991. It is not known whether this legislation will be enacted. 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 residential mortgage loans. The Company's portfolio of government-guaranteed student loans and SBA loans are also readily salable. Additional sources of liquidity, including cash flow from the repayment of loans, are also considered in determining whether liquidity is satisfactory. Liquidity is also achieved through growth of core 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 and operate the organization. Core deposits, defined as demand deposits, interest-bearing transaction accounts, savings deposits and certificates of deposit less than $100,000 were 84% and 87% of total deposits at June 30, 1996 and 1995, respectively. The Company uses various forms of short-term borrowings for cash management and liquidity purposes on a limited basis. These forms of borrowings include federal funds purchases and borrowings from the Federal Reserve Bank. The Bank has approved federal funds purchase lines with three other banks. The Bank also carries interest-bearing demand notes issued by the Bank to the U.S. Treasury as a participant in the Treasury Tax and Loan note program. In addition, the Bank has available a $20.0 million line of credit from the Student Loan Marketing Association (SLMA). Borrowings under the SLMA line would be 10 secured by student loans. During the first quarters of 1996 and 1995, no category of borrowings averaged more than 30% of ending shareholders' equity. During the first six months of 1996, cash and cash equivalents increased by $18.5 million. The increase was the result of cash generated from financing activities (primarily increased deposits) of $68.1 million offset by $13.8 million in cash used in operating activities and $35.8 million in cash used in investing activities. Cash and cash equivalents, during the first six months of 1995, increased by $27.2 million. The increase was the result of cash generated from financing activities (primarily increased deposits) of $93.5 million offset by $14.0 million in cash used in operating activities and $52.3 million in cash used in investing activities. CAPITAL RESOURCES Bank holding companies are required to maintain capital ratios in accordance with guidelines adopted by the Federal Reserve Board (FRB). The guidelines are commonly known as Risk-Based Capital Guidelines. On June 30, 1996, the Company exceeded all applicable capital requirements, having a total risk-based capital ratio of 12.17%, a Tier I risk-based capital ratio of 10.80%, and a leverage ratio of 8.12%. As of June 30, 1996, the Bank also met the criteria for classification as a "well-capitalized" institution under the prompt corrective action rules promulgated under the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). Designation as a well- capitalized institution under these regulations does not constitute a recommendation or endorsement of the Company or the Bank by Federal bank regulators. The Company declared a dividend of $.07 per common share payable on July 1, 1996 to shareholders of record as of June 19, 1996. In July 1996, the Company declared a dividend of $.575 per preferred share payable on September 3, 1996 to shareholders of record as of August 19, 1996. EFFECTS OF INFLATION The consolidated financial statements and related consolidated financial data presented herein have been prepared in accordance with generally accepted accounting principles and practices within the banking industry which require the measurement of financial position and operating results in terms of historical dollars without considering the changes 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. 11 PART II - OTHER INFORMATION Item 1. Legal proceedings None Item 2. Changes in securities None Item 3. Defaults upon senior securities None Item 4. Submission of matters to a vote of security holders At the Company's annual shareholders' meeting, held on April 25, 1996, the shareholders of the Company elected Robert L. McCormick, Jr., J. Berry Harrison, Erd M. Johnson, and James B. Wise, M.D. as Directors with terms expiring at the 1999 annual shareholders' meeting. The shareholder vote in the election of each director was 3,081,404 for and 23,823 withheld. Other Directors continuing in office are George M. Berry, Paul C. Wise, Joyce P. Berry, Joe Berry Cannon, Robert B. Rodgers, Thomas D. Berry, W. Haskell Cudd, David P. Lambert, Linford R. Pitts, and Lee Wise. Also at the annual shareholders' meeting, the shareholders of the Company approved an amendment to the Company's Certificate of Incorporation to increase the authorized shares of capital stock from 7,000,000 to 12,000,000, consisting of 10,000,000 shares of common stock, par value $1.00 per share ("Common Stock"), and an aggregate of 2,000,000 shares of serial preferred stock, par value $1.00 per share. The shareholder vote in this matter was 2,742,797 for, 28,189 against, 19,454 abstaining, and 314,787 broker non- votes. Item 5. Other information None Item 6. Exhibits and reports on Form 8-K (a) Exhibits. The following is a list of Exhibits filed as part -------- of this Quarterly Report on Form 10-Q: No. Exhibit --- ------- 3.1 Amended and Restated Certificate of Incorporation of Southwest Bancorp, Inc. 27 Financial Data Schedule. (b) Reports on Form 8-K. No reports on Form 8-K were filed ------------------- during for the quarter which this Quarterly Report on Form 10-Q is filed. 12 SIGNATURES Pursuant to the requirements 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. (Registrant) By:/s/ Robert L. McCormick, Jr. July 31, 1996 ------------------------------------- -------------------------- Robert L. McCormick, Jr. Date President (Principal Executive Officer) By:/s/ Kerby E. Crowell July 31, 1996 ---------------------------------- -------------------------- Kerby E. Crowell Date Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 13 INDEX TO EXHIBITS Number Description 3.1 Amended and Restated Certificate of Incorporation of Southwest Bancorp., Inc. 27 Financial Data Schedule. EX-3.1 2 EXHIBIT 3.1 EX-3.1 Exhibit 3.1 Amended and Restated Certificate of Incorporation of Southwest Bancorp., Inc. AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF SOUTHWEST BANCORP, INC. TO THE SECRETARY OF STATE OF THE STATE OF OKLAHOMA: The original certificate of incorporation of Southwest Bancorp, Inc. was filed with the Secretary of State on March 19, 1981. ARTICLE I Name The name of the corporation is Southwest Bancorp, Inc. (herein, the "Corporation"). ARTICLE II Registered Office The address of the Corporation's registered office in the State of Oklahoma is 608 South Main Street, in the City of Stillwater, Payne County, Oklahoma. The name of the Corporation's registered agent at such address is Robert L. McCormick, Jr. ARTICLE III Powers The purposes for which the Corporation is organized are to exercise all powers of a bank holding company registered with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended, and to engage in any and all activities allowed for such a bank holding company under federal law and the Laws of the State of Oklahoma. The Corporation shall have all the powers of a corporation organized under the Oklahoma General Corporation Act. ARTICLE IV Term The Corporation is to have perpetual existence. ARTICLE V Capital Stock The aggregate number of shares of all classes of capital stock which the Corporation has authority to issue is 12,000,000 of which 10,000,000 are to be shares of common stock, $1.00 par value per share, of which 1,000,000 are to be shares of serial preferred stock, $1.00 par value per share, and of which 1,000,000 shall be Class B serial preferred stock, $1.00 par value per share. 1 The shares may be issued by the Corporation from time to time as approved by the board of directors of the Corporation without the approval of the shareholders except as otherwise provided in this Article V or the rules of a national securities exchange or association, if applicable. The consideration for the issuance of the shares shall be paid to or received by the Corporation in full before their issuance and shall not be less than the par value per share. The consideration for the issuance of the shares shall be cash, services rendered, personal property (tangible or intangible), real property, leases of real property or any combination of the foregoing. In the absence of actual fraud in the transaction, the judgment of the board of directors as to the value of such consideration shall be conclusive. Upon payment of such consideration such shares shall be deemed to be fully paid and nonassessable. In the case of a stock dividend, the part of the surplus of the Corporation which is transferred to stated capital upon the issuance of shares as a stock dividend shall be deemed to be the consideration for their issuance. A description of the different classes and series (if any) of the Corporation's capital stock, and a statement of the relative powers, designations, preferences and rights of the shares of each class and series (if any) of capital stock, and the qualifications, limitations or restrictions thereof, are as follows: A. Common Stock. Except as provided in this Certificate of Incorporation, ------------ the holders of the common stock shall exclusively possess all voting power. Each holder of shares of common stock shall be entitled to one vote for each share held by such holders. Whenever there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class of stock having preference over the common stock as to the payment of dividends, the full amount of dividends and sinking fund or retirement fund or other retirement payments, if any, to which such holders are respectively entitled in preference to the common stock, then dividends may be paid on the common stock, and on any class or series of stock entitled to participate therewith as to dividends, out of any assets legally available for the payment of dividends, but only when and as declared by the board of directors of the Corporation. In the event of any liquidation, dissolution or winding up of the Corporation, after there shall have been paid, or declared and set aside for payment, to the holders of the outstanding shares of any class having preference over the common stock in any such event, the full preferential amounts to which they are respectively entitled, the holders of the common stock and of any class or series of stock entitled to participate therewith, in whole or in part, as to distribution of assets shall be entitled, after payment or provision for payment of all debts and liabilities of the Corporation, to receive the remaining assets of the Corporation available for distribution, in cash or in kind. Each share of common stock shall have the same relative powers, preferences and rights as, and shall be identical in all respects with, all the other shares of common stock of the Corporation. B. Serial Preferred Stock. Except as provided in this Certificate of ---------------------- Incorporation, the board of directors of the Corporation is authorized, by resolution or resolutions from time to time adopted, to provide for the issuance of serial preferred stock in series and to fix and state the powers, designations, preferences and relative, participating, optional or other special rights of the shares of each such series, and the qualifications, limitations or restrictions thereof, including, but not limited to, determination of any of the following: (1) the distinctive serial designation and the number of shares constituting such series; (2) the dividend rates or the amount of dividends to be paid on the shares of such series, whether dividends shall be cumulative and, if so, from which date or dates, the payment date or dates for dividends, and the participating or other special rights, if any, with respect to dividends; (3) the voting powers, full or limited, if any, of the shares of such series; (4) whether the shares of such series shall be redeemable and, if so, the price or prices at which, and the terms and conditions upon which such shares may be redeemed; 2 (5) the amount or amounts payable upon the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation; (6) whether the shares of such series shall be entitled to the benefits of a sinking or retirement fund to be applied to the purchase or redemption of such shares, and, if so entitled, the amount of such fund and the manner of its application, including the price or prices at which such shares may be redeemed or purchased through the application of such funds; (7) whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or any other series of the same or any other class of classes of stock of the Corporation and, if so convertible or exchangeable, the conversion price or prices, or the rate or rates of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange; (8) the subscription or purchase price and form of consideration for which the shares of such series shall be issued; and (9) whether the shares of such series which are redeemed or converted shall have the status of authorized but unissued shares of serial preferred stock and whether such shares may be reissued as shares of the same or any other series of serial preferred stock. Each share of each series of serial preferred stock shall have the same relative powers, preferences and rights as, and shall be identical in all respects with, all the other shares of the Corporation of the same series. C. Class B Serial Preferred Stock. Except as provided in this Certificate ------------------------------ of Incorporation, the board of directors of the Corporation is authorized, by resolution or resolutions from time to time adopted, to provide for the issuance of Class B serial preferred stock in one or more series, and to fix and state the powers, designations, preferences and relative, participating, optional or other special rights of the shares of each series, and the qualifications, limitations and restrictions thereof, including , but not limited to, determination of any of the following: (1) the distinctive serial designation and the number of shares constituting each series; (2) the dividend rates or the amounts of dividends to be paid on the shares of such series, whether dividends shall be cumulative and, if so, from which date or dates, the payment date or dates for dividends, and the participating or other special rights, if any, with respect to dividends; (3) the voting powers, full or limited, if any, of the shares of such series; (4) whether the shares of such series shall be redeemable and, if so, the price or prices at which, and the terms and conditions upon which such shares may be redeemed; (5) the amount or amounts payable upon the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation; (6) whether the shares of such series shall be entitled to the benefits of a sinking or retirement fund to be applied to the purchase or redemption of such shares, and, if so entitled, the amount of such fund and the manner of its application, including the price or prices at which such shares may be redeemed or purchased through the application of such funds; (7) whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or into any other series of the same or any other class or classes of stock of the 3 Corporation and, if so convertible or exchangeable, the conversion price or prices, or the rate or rates of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange; (8) the subscription or purchase price and the form of consideration for which the shares of such series shall be issued; and (9) whether the shares of such series which are redeemed or converted shall have the status of authorized but unissued shares of Class B serial preferred stock and whether such shares may be reissued as shares of the same or any other series of Class B serial preferred stock. Each share of each series of Class B serial preferred stock shall have the same relative powers, preferences and rights as, and shall be identical in all respects with, all of the other shares of the Corporation of the same series. Notwithstanding anything to the contrary contained herein or in any resolution of the board of directors providing for the issuance of any series of Class B serial preferred stock, all shares of Class B serial preferred stock, of any series, shall rank junior in respect of the payment of dividends and payments to be received upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation to all shares of the Corporation's 9.20% Redeemable Cumulative Preferred Stock, Series A, or any class or series of capital stock ranking prior to or on a parity with such 9.20% Redeemable Cumulative Preferred Stock, Series A. Except as may be expressly provided in the resolution of the board of directors providing for the issuance of any series of Class B serial preferred stock, the number of shares of Class B serial preferred stock authorized hereby may be increased or decreased, but not below the number of shares of all series of Class B serial preferred stock outstanding as of the date of such decrease, upon the vote of a majority of the shares of common stock and any other class entitled to vote with the common stock generally in respect of amendments hereof, and without the separate vote or approval of the Class B serial preferred stock, or of any series of Class B serial preferred stock, voting separately as a class. ARTICLE VI Preemptive Rights Holders of the capital stock of the Corporation shall not be entitled to preemptive rights with respect to any shares or other securities of the Corporation which may be issued or any securities convertible into any such shares, including, without limitation, warrants, subscription rights and options to acquire shares. ARTICLE VII Repurchase of Shares The Corporation may from time to time, pursuant to authorization by the board of directors of the Corporation and without action by the shareholders, purchase or otherwise acquire shares of any class, bonds, debentures, notes, scrip, warrants, obligations, evidences of indebtedness, or other securities of the Corporation in such manner, upon such terms, and in such amounts as the board of directors shall determine; subject, however, to such limitations or restrictions, if any, as are contained in the express terms of any class of shares of the Corporation outstanding at the time of the purchase or acquisition in question or as are imposed by law. ARTICLE VIII Meetings of Shareholders; Cumulative Voting 4 A. Notwithstanding any other provision of this Certificate of Incorporation or the bylaws of the Corporation, no action required to be taken or which may be taken at any annual or special meeting of shareholders of the Corporation may be taken without a meeting, and the power of shareholders to consent in writing, without a meeting, to the taking of any action is specifically denied. B. Special meetings of the shareholders of the Corporation for any purpose or purposes may be called at any time by the board of directors of the Corporation, or by a committee of the board of directors which has been duly designated by the board of directors and whose powers and authorities, as provided in a resolution of the board of directors or in the bylaws of the Corporation, include the power and authority to call such meetings, but such special meetings may not be called by any other person or persons. C. There shall be cumulative voting by shareholders of any class or series in the election of directors of the Corporation. At all times each holder of common stock of the Corporation shall be entitle to one(1) vote for each share of such stock standing in his name on the books of the Corporation. At all elections of Directors of the Corporation, the number of votes which (except for this provision) he would then be entitled to cast for the election of Directors with respect to his shares, multiplied by the number of Directors upon whose election he is then entitled to vote, and he may cast all or such votes for a single candidate or may distribute them among some or all of the candidates as he may see fit. D. Meetings of shareholders may be held within or without the State of Oklahoma, as the bylaws may provide. ARTICLE IX Notice for Nominations and Proposals A. Nominations for the election of directors and proposals for any new business to be taken up at any annual or special meeting of shareholders may be made by the board of directors of the Corporation or by any shareholder of the Corporation entitled to vote generally in the election of directors. In order for a shareholder of the Corporation to make any such nominations and/or proposals, he or she shall give notice thereof in writing, delivered or mailed by first class United States mail, postage prepaid, to the Secretary of the Corporation not less than 30 days nor more than 60 days prior to any such meeting; provided, however, that if less than 40 days' notice of the meeting is given to shareholders, such written notice shall be delivered or mailed, as prescribed, to the Secretary of the Corporation not later than the close of the tenth day following the day on which notice of the meeting was mailed to shareholders. Each such notice given by a shareholder with respect to nominations for the election of directors shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, and (iii) the number of shares of stock of the Corporation which are beneficially owned by each such nominee. In addition, the shareholder making such nomination shall promptly provide any other information reasonably requested by the Corporation. B. Each such notice given by a shareholder to the Secretary with respect to business proposals to bring before a meeting shall set forth in writing as to each matter: (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting; (ii) the name and address, as they appear on the Corporation's books, of the shareholder proposing such business; (iii) the class and number of shares of the Corporation which are beneficially owned by the shareholder; and (iv) any material interest of the shareholder in such business. Notwithstanding anything in this Certificate of Incorporation to the contrary, no business shall be conducted at the meeting except in accordance with the procedures set forth in this Article IX. C. The Chairman of the annual or special meeting of shareholders may, if the facts warrant, determine and declare to such meeting that a nomination or proposal was not made in accordance with the foregoing procedure, and, if he should so determine, he shall so declare to the meeting, and the defective nomination or proposal shall be 5 disregarded and laid over for action at the next succeeding adjourned, special or annual meeting of the shareholders taking place thirty days or more thereafter. This provision shall not require the holding of any adjourned or special meeting of shareholders for the purpose of considering such defective nomination or proposal. ARTICLE X Directors A. Number; Vacancies. The number of directors of the Corporation ----------------- shall be such number, not less than three nor more than twenty-one (exclusive of directors, if any, to be elected by holders of preferred stock of the Corporation, voting separately as a class), as shall be provided from time to time in or in accordance with the bylaws, provided that no decrease in the number of directors shall have the effect of shortening the term of any incumbent director, and provided further that no action shall be taken to decrease or increase the number of directors from time to time unless at least two-thirds of the directors then in office shall concur in said action. Vacancies in the board of directors of the Corporation, however caused, and newly created directorships shall be filled by a vote of two-thirds of the directors then in office, whether or not a quorum, and any director so chosen shall hold office for a term expiring at the annual meeting of shareholders at which the term of the class to which the director has been chosen expires and when the director's successor is elected and qualified. B. Classified Board. The board of directors of the Corporation ---------------- elected at the 1994 annual meeting of stockholders and thereafter shall be divided into three classes of directors which shall be designated Class I, Class II and Class III. The members of each class shall be elected for a term of three years and until their successors are elected and qualified. Such classes shall be as nearly equal in number as the then total number of directors constituting the entire board of directors shall permit, with the terms of office of all members of one class expiring each year. When the number of directors is changed, the board of directors shall determine the class or classes to which the increased or decreased number of directors shall be apportioned; provided that the directors in each class shall be as nearly equal in number as possible; provided, further, that no decrease in the number of directors shall affect the term of any director then in office. At the 1994 annual meeting of shareholders, directors of Class I shall be elected to hold office for a term expiring at the third succeeding annual meeting thereafter. At the 1995 annual meeting of shareholders, directors of Class II shall be elected to hold office for a term expiring at the third succeeding annual meeting thereafter. At the 1996 annual meeting of shareholders, directors of Class III shall be elected to hold office for a term expiring at the third succeeding annual meeting thereafter. Thereafter, at each succeeding annual meeting, directors of each class shall be elected for three year terms. Notwithstanding the foregoing, the director whose term shall expire at any annual meeting shall continue to serve until such time as his successor shall have been duly elected and shall have qualified unless his position on the board of directors shall have been abolished by action taken to reduce the size of the board of directors prior to said meeting. Should the number of directors of the Corporation be reduced, the directorship(s) eliminated shall be allocated among classes as appropriate so that the number of directors in each class is as specified in the immediately preceding paragraph. The board of directors shall designate, by the name of the incumbent(s), the position(s) to be abolished. Notwithstanding the foregoing, no decrease in the number of directors shall have the effect of shortening the term of any incumbent director. Should the number of directors of the Corporation be increased, the additional directorships shall be allocated among classes as appropriate so that the number of directors in each class is as specified in the immediately preceding paragraph. Whenever the holders of any one or more series of preferred stock of the Corporation shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the board of directors shall consist of said directors so elected in addition to the number of directors fixed as provided in this Article X. Notwithstanding the foregoing, and except as otherwise may be required by law, whenever the holders of any one or more series of preferred stock of the Corporation shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the terms of the director or directors elected by such holders shall expire at the next succeeding annual meeting of shareholders. 6 ARTICLE XI Removal of Directors Notwithstanding any other provision of this Certificate of Incorporation or the bylaws of the Corporation, any director or the entire board of directors of the Corporation may be removed at any time, but only for cause and only by the affirmative vote of the holders of at least 80% of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the shareholders called for that purpose. Notwithstanding the foregoing, whenever the holders of any one or more series of preferred stock of the Corporation shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the preceding provisions of this Article XI shall not apply with respect to the director or directors elected by such holders of preferred stock. ARTICLE XII Approval of Certain Transactions The affirmative vote of the holders of not less than eighty percent (80%) of the outstanding shares of voting stock of the Corporation is required to authorize (a) a merger or consolidation of the Corporation with, or (b) a sale, exchange or lease of all or substantially all of the assets of the Corporation to, any person or entity unless approval of any transaction enumerated in clauses (a) or (b) above is recommended by at least a majority of the entire Board of Directors. For purposes of this Article XII, "substantially all of the assets" shall mean assets having a fair market value or book value, whichever is greater, of twenty-five percent (25%) or more of the total assets of the Corporation as reflected on a balance sheet of the Corporation as of a date no earlier than forty-five (45) days prior to any acquisition of such assets. ARTICLE XIII Approval of Business Combinations with Certain Parties The shareholder vote required to approve Business Combinations (as hereinafter defined) shall be as set forth in this section. A. (1) Except as otherwise expressly provided in this Article XIII, the affirmative vote of the holders of (i) at least 80% of the outstanding shares entitled to vote thereon (and, if any class or series of shares is entitled to vote thereon separately, the affirmative vote of the holders of at least 80% of the outstanding shares of each such class or series), and (ii) at least a majority of the outstanding shares entitled to vote thereon, not including shares deemed beneficially owned by a Related Person (as hereinafter defined), shall be required in order to authorize any of the following: (a) any merger or consolidation of the Corporation with or into a Related Person (as hereinafter defined); (b) any sale, lease, exchange, transfer or other disposition, including without limitation, a mortgage, or any other capital device, of all or any Substantial Part (as hereinafter defined) of the assets of the Corporation (including without limitation any voting securities of a subsidiary) or of a subsidiary, to a Related Person; (c) any merger or consolidation of a Related Person with or into the Corporation or a subsidiary of the Corporation; 7 (d) any sale, lease, exchange, transfer or other disposition of all or any Substantial Part of the assets of a Related Person to the Corporation or a subsidiary of the Corporation; (e) the issuance of any securities of the Corporation or a subsidiary of the Corporation to a Related Person; (f) the acquisition by the Corporation or a subsidiary of the Corporation of any securities of a Related Person; (g) any reclassification of the common stock of the Corporation, or any recapitalization involving the common stock of the Corporation; and (h) any agreement, contract or other arrangement providing for any of the transactions described in this Article XIII. (2) Such affirmative vote shall be required notwithstanding any other provision of this Certificate of Incorporation, any provision of law, or any agreement with any regulatory agency or national securities exchange which might otherwise permit a lesser vote or no vote. (3) The term "Business Combination" as used in this Article XIII shall mean any transaction which is referred to in any one or more of subparagraphs A(1)(a) through (h) above. B. The provisions of paragraph A shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by any other provision of this Certificate of Incorporation, any provision of law, or any agreement with any regulatory agency or national securities exchange, if the Business Combination shall have been approved by two-thirds of the Continuing Directors (as hereinafter defined); provided, however, that such approval shall only be effective if obtained at a meeting at which a Continuing Director Quorum (as hereinafter defined) is present. C. For the purposes of this Article XIII the following definitions apply: (1) The term "Related Person" shall mean and include (a) any individual, corporation, partnership or other person or entity which together with its "affiliates" (as that term is defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934), "beneficially owns" (as that term is defined in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934) in the aggregate 10% or more of the outstanding shares of the common stock of the Corporation; and (b) any "affiliate" (as that term is defined in Rule 12b-2 under the Securities Exchange Act of 1934) of any such individual, corporation, partnership or other person or entity. Without limitation, any shares of the common stock of the Corporation which any Related Person has the right to acquire pursuant to any agreement, or upon exercise or conversion rights, warrants or options, or otherwise, shall be deemed "beneficially owned" by such Related Person. (2) The term "Substantial Part" shall mean more than 25 percent of the total assets of the Corporation, as of the end of its most recent fiscal year ending prior to the time the determination is made. (3) The term "Continuing Director" shall mean any member of the board of directors of the Corporation who is unaffiliated with the Related Person and was a member of the board prior to the time that the Related Person became a Related Person, and any successor of a Continuing Director who is unaffiliated with the Related Person and is recommended to succeed a Continuing Director by a majority of Continuing Directors then on the board. 8 (4) The term "Continuing Director Quorum" shall mean two-thirds of the Continuing Directors capable of exercising the powers conferred on them. D. In addition to Sections A, B, and C of this Article XIII, the provisions of Section 1090.3 of the Oklahoma General Corporation Act, as in effect on the date of this Certificate of Incorporation or as hereafter amended, shall apply to any Business Combination in which the Corporation may engage. ARTICLE XIV Evaluation of Business Combinations In connection with the exercise of its judgment in determining what is in the best interests of the Corporation and of the shareholders, when evaluating a Business Combination (as defined in Article XIII) or a tender or exchange offer, the board of directors of the Corporation may, in addition to considering the adequacy of the amount to be paid in connection with any such transaction, consider all of the following factors and any other factors which it deems relevant; (i) the social and economic effects of the transaction on the Corporation and its subsidiaries, employees, depositors, loan and other customers, creditors and other elements of the communities in which the Corporation and its subsidiaries operate or are located; (ii) the business and financial condition and earnings prospects of the acquiring person or entity, including, but not limited to, debt service and other existing financial obligations, financial obligations to be incurred in connection with the acquisition and other likely financial obligations of the acquiring person or entity and the possible effect of such conditions upon the Corporation and its subsidiaries and the other elements of the communities in which the Corporation and its subsidiaries operate or are located; and (iii) the competence, experience, and integrity of the acquiring person or entity and its or their management. ARTICLE XV Indemnification A. Persons. The Corporation shall indemnify, to the extent provided in ------- paragraphs B, D or F: (1) any person who is or was a director, officer, employee, or agent of the Corporation; and (2) any person who serves or served at the Corporation's request as a director, officer, employee, agent, partner or trustee of another corporation, partnership, joint venture, trust or other enterprise. B. Extent -- Derivative Suits. In case of a threatened, pending or -------------------------- completed action or suit by or in the right of the Corporation against a person named in paragraph A by reason of his holding a position named in paragraph A, the Corporation shall indemnify him if he satisfies the standard in paragraph C, for expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of the action or suit. C. Standard -- Derivative Suits. In case of a threatened, pending or ---------------------------- completed action or suit by or in the right of the Corporation, a person named in paragraph A shall be indemnified only if: (1) he is successful on the merits or otherwise; or (2) he acted in good faith in the transaction which is the subject of the action or suit, and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, including, but not limited to, the taking of any and all actions in connection with the Corporation's response to any tender offer or any offer or proposal of another party to engage in a Business Combination (as defined in Article XIII) not approved by the board of directors. However, he shall not be indemnified in respect of any claim, issue or matter as to which he has been adjudged liable to the Corporation unless (and only to 9 the extent that) the court in which the action or suit was brought shall determine, upon application, that despite the adjudication but in view of all the circumstances, he is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. D. Extent -- Nonderivative Suits. In case of a threatened, pending or ----------------------------- completed suit, action or proceeding (whether civil, criminal, administrative or investigative), other than a suit by or in the right of the Corporation, together hereafter referred to as a nonderivative suit, against a person named in paragraph A by reason of his holding a position named in paragraph A, the Corporation shall indemnify him if he satisfies the standard in paragraph E, for amounts actually and reasonably incurred by him in connection with the defense or settlement of the nonderivative suit, including, but not limited to (i) expenses (including attorneys' fees), (ii) amounts paid in settlement, (iii) judgments, and (iv) fines. E. Standard -- Nonderivative Suits. In case of a nonderivative suit, a ------------------------------- person named in paragraph A shall be indemnified if: (1) he is successful on the merits or otherwise; or (2) he acted in good faith in the transaction which is the subject of the nonderivative suit and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, including, but not limited to, the taking of any and all actions in connection with the Corporation's response to any tender offer or any offer or proposal of another party to engage in a Business Combination (as defined in Article XIII) not approved by the board of directors, and, with respect to any criminal action or proceeding, he had no reasonable cause to believe his conduct was unlawful. The termination of a nonderivative suit by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its ---- ---------- equivalent shall not, of itself, create a presumption that the person failed to satisfy the standard of this subparagraph E(2). F. Determination That Standard Has Been Met. A determination that the ---------------------------------------- standard of paragraph C or E has been satisfied may be made by a court. Or, except as stated in subparagraph C(2) (second sentence), the determination may be made by: (1) the board of directors by a majority vote of a quorum consisting of directors of the Corporation who were not parties to the action, suit or proceeding; or (2) independent legal counsel (appointed by a majority of the disinterested directors of the Corporation, whether or not a quorum) in a written opinion; or (3) the shareholders of the Corporation. G. Proration. Anyone making a determination under paragraph F may --------- determine that a person has met the standard as to some matters but not as to others, and may reasonably prorate amounts to be indemnified. H. Advance Payment. The Corporation shall pay in advance any expenses --------------- (including attorneys' fees) which may become subject to indemnification under paragraphs A through G if: (1) the board of directors authorizes the specific payment; and (2) the person receiving the payment undertakes in writing to repay the same if it is ultimately determined that he is not entitled to indemnification by the Corporation under paragraphs A through G. I. Nonexclusive. The indemnification and advance payment of expenses ------------ provided by paragraphs A through H shall not be exclusive of any other rights to which a person may be entitled by law, bylaw, agreement, vote of shareholders or disinterested directors, or otherwise. 10 J. Continuation. The indemnification provided by this Article XV shall be ------------ deemed to be a contract between the Corporation and the persons entitled to indemnification thereunder, and any repeal or modification of this Article XV shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts. The indemnification and advance payment provided by paragraphs A through H shall continue as to a person who has ceased to hold a position named in paragraph A and shall inure to his heirs, executors and administrators. K. Insurance. The Corporation may purchase and maintain insurance on --------- behalf of any person who holds or who has held any position named in paragraph A, against any liability incurred by him in any such position, or arising out of his status as such, whether or not the Corporation would have power to indemnify him against such liability under paragraphs A through H. L. Savings Clause. If this Article XV or any portion hereof shall be -------------- invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director, officer, employee, and agent of the Corporation or person who serves or served at the Corporation's request as a director, officer, employee, agent, partner or trustee of another corporation, partnership, joint venture, trust or other enterprise as to costs, charges, and expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement with respect to any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, including an action by or in the right of the Corporation to the full extent permitted by any applicable portion of this Article XV that shall not have been invalidated and to the full extent permitted by applicable law. ARTICLE XVI Limitations on Directors' Liability A director of the Corporation shall not be personally liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, except: (i) for any breach of the director's duty of loyalty to the Corporation or its shareholders, (ii) for acts or omissions that are not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 1053 or of the Oklahoma General Corporation Act; or (iv) for any transaction from which the director derived an improper personal benefit. If the Oklahoma General Corporation Act is amended after the date of filing of this Certificate of Incorporation to further eliminate or limit the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Oklahoma General Corporation Act, as so amended. Any repeal or modification of the foregoing paragraph by the shareholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE XVII Applicability of Sections 1145 through 1155 of Oklahoma General Corporation Act. The provisions of Sections 1145 through 1155 of the Oklahoma General Corporation Act, as in effect on the date of this Certificate of Incorporation or as hereafter amended, shall not apply to the Corporation as of December 31, 1993 and thereafter. 11 ARTICLE XVIII Amendment of Bylaws In furtherance and not in limitation of the powers conferred by statute, the board of directors of the Corporation is expressly authorized to adopt, repeal, alter, amend and rescind the bylaws of the Corporation by a vote of a majority of the board of directors. Notwithstanding any other provision of this Certificate of Incorporation or the bylaws of the Corporation (and notwithstanding the fact that some lesser percentage may be specified by law), the bylaws shall not be adopted, repealed, altered, amended or rescinded by the shareholders of the Corporation except by the affirmative vote of the holders of not less than 80% of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) cast at a meeting of the shareholders called for that purpose (provided that notice of such proposed adoption, repeal, alteration, amendment or rescission is included in the notice of such meeting), or, as set forth above, by the board of directors. ARTICLE XIX Amendment of Certificate of Incorporation The Corporation reserves the right to repeal, alter, amend or rescind any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by law, and all rights conferred on shareholders herein are granted subject to this reservation. Notwithstanding the foregoing, the provisions set forth in Articles X, XI, XII, XIII, XV, XVI, XVII, XVIII, and this Article XIX may not be repealed, altered, amended or rescinded in any respect unless the same is approved by the affirmative vote of the holders of not less than 80% of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as a single class) cast at a meeting of the shareholders called for that purpose (provided that notice of such proposed adoption, repeal, alteration, amendment or rescission is included in the notice of such meeting), except, with the prior approval of a majority of the Continuing Directors, as defined in Article XIII, the provisions set forth in Article XIII may be repealed, altered, amended or rescinded with the approval of the affirmative vote of the holders of a majority of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors cast at a meeting of the shareholders called for that purpose. ARTICLE XX This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of OKLA. STAT. tit. 18, (S) 1080 (1986) by the Board of Directors without a vote of the shareholders, and only restates and integrates, and does not further amend, the provisions of the Amended and Restated Certificate of Incorporation of Southwest Bancorp., Inc. as up to the time of adoption amended or supplemented. There is no discrepancy between those provisions and the provisions of this Amended and Restated Certificate of Incorporation. Dated this 27th day of June, 1996_/ [SEAL APPEARS HERE] ATTEST: SOUTHWEST BANCORP, INC. /s/ Deborah Labig /s/ Robert L. McCormick, Jr. ___________________ By___________________________________ SECRETARY Robert L. McCormick, Jr., President 12 EX-27 3 EXHIBIT 27
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SOUTHWEST BANCORP'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 28,691 0 10,600 0 60,666 81,583 81,157 578,902 6,513 773,362 703,694 1,500 6,006 0 0 690 3,759 57,713 773,362 26,103 4,390 218 30,711 15,284 15,355 15,356 1,650 171 10,684 6,102 6,102 0 0 3,908 0.83 0.83 8.82 3,180 895 3,467 11,203 5,813 1,257 307 6,513 6,373 0 140
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