EX-99.1 2 y63519exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1
(OUTHWEST BANCORP, INC. LOGO)
     
 
  For additional information:
 
       Rick Green
 
       President & CEO
 
       Kerby E. Crowell
 
       EVP & CFO
For Immediate Release
       (405) 372-2230
Southwest Bancorp Reports Earnings
     July 21, 2008, Stillwater, Oklahoma . . . . Southwest Bancorp, Inc. (NASDAQ Global Select Market—OKSB), (“Southwest”), today reported net income of $4.2 million, or $0.28 per diluted share for the second quarter 2008, compared to $6.8 million, or $0.47 per diluted share for the second quarter of 2007. Net income for the six months ended June 30, 2008 was $9.4 million, or $0.64 per diluted share, compared to $11.3 million, or $0.77 per diluted share, for the prior year. At June 30, 2008, total assets were $2.8 billion.
     Rick Green, President and Chief Executive Officer, stated, “Our strategic vision includes growth from existing and additional offices in Oklahoma and in carefully selected markets in Texas and other states with emphasis on healthcare and health professionals, businesses and their managers and owners, commercial and commercial real estate borrowers, careful expansion of our community banking operations, and increases in stable funding sources at reasonable cost.
     “Our strategy continued to produce loan growth through the second quarter. Our portfolio loans grew $236.3 million, up 11%, from year-end 2007, led by increases in healthcare and other commercial real estate lending and commercial lending in Oklahoma and Texas. Texas portfolio loans grew $97.8 million, or 13%, and Oklahoma portfolio loans grew $89.9 million, or 10%, from year-end 2007. Construction loans decreased by $58.2 million, or 8%, from year-end 2007.”
     As shown below, the positive earnings effect of our loan growth continued to be offset by the significant margin squeeze that began last year. For the first six months of 2008, the net interest margin of 3.41% was down 94 basis points from the first six months of 2007. As a result, net interest income declined $1.2 million, or 3%.
                         
    Net Effects of Growth and Margin Squeeze:  
    First Half 2008 vs. First Half 2007  
    Change in Net Interest Income Due to Changes in:  
(Dollars in thousands)   Volume     Rate     Total  
Total interest income
   $ 17,872     $ (20,548 )   $ (2,676 )
Total interest expense
     9,260       (10,698 )     (1,438 )
 
                  
Net interest income
   $ 8,612     $ (9,850 )   $ (1,238 )
 
                  
     A portion of our net loan growth was the result of a reduction in the customary levels of early payoffs of commercial real estate and commercial loans during the first quarter, which we believe reflected a decrease in competition for refinancings from conduits and other non-depository lenders, and, as anticipated, unscheduled payoffs returned to more traditional levels during the second quarter. We expect unscheduled payoffs to remain closer to the traditional levels for the remainder of the year. We increased our provision for loan losses by $1.4 million, or 37%, during the first six months of 2008 compared to the first six months of 2007, which, along with the effects of lower net charge offs this year to date, produced an increase in the allowance for loan losses of $1.8 million, or 6%, from year-end 2007.
     The validity of our strategic decision not to rely on any significant amounts of residential mortgages and not to make subprime loans was reinforced by recent market events. Subprime lending has never been a part of our strategy, one to four family mortgages are less than 5% of our portfolio, and one to four family residential construction loans are less than 4% of our portfolio.

 

 

     
 
  NASDAQ: OKSB
 
Southwest Bancorp Reports Earnings
   
Capital Raising
     Earlier this year, we determined that raising additional long-term capital was in the best interests of our shareholders. We decided to do so by issuing securities other than common stock, in view of the market conditions for financial stocks. Accordingly, in early July, we sold $34.5 million in trust preferred securities in a public offering. Proceeds from the sale will be used to increase our regulatory capital, to fund our loan growth, and for other corporate purposes.
     Please see the following discussion and financial tables and the disclosures under the heading “Forward-Looking Statements” on page 3.
Financial Overview
     Condition: Total assets were $2.8 billion at June 30, 2008, an increase of 8% from $2.6 billion at December 31, 2007. At June 30, 2008 total loans were $2.4 billion, versus $2.2 billion at December 31, 2007. Non-performing assets to total assets were 1.25% at June 30, 2008 compared to 1.17% at June 30, 2007 and 1.26% at December 31, 2007. Of total non-performing assets, 35.9% are commercial loans, 31.0% are commercial real estate loans, 21.8% are real estate construction loans, 7.3% is other real estate owned, 3.2% are residential real estate mortgages, and other consumer loans are less than 1%. The allowance for loan losses as a percentage of portfolio loans was 1.32% at June 30, 2008, versus 1.59% at June 30, 2007 and 1.38% at December 31, 2007.
     Total deposits were $2.2 billion at June 30, 2008, up $152.4 million from December 31, 2007. On June 30, 2008, Southwest exceeded all applicable regulatory capital requirements and each of its banking subsidiaries met the criteria for regulatory classification as “well-capitalized”. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank or thrift regulators.
     Year-to-date Results: Net interest income totaled $44.1 million for the first six months of 2008, compared to $45.4 million for the first six months of 2007. Year-to-date net interest margin was 3.41% for 2008 compared to 4.35% in 2007. The decrease in net interest income and net interest margin is the result of Southwest’s interest rate sensitivity position and the margin squeeze produced by governmental actions and market conditions. This margin squeeze offset significant positive effects on net interest income from our continued loan growth. Yields on earning assets decreased by 179 basis points over the prior year while our cost of funds decreased by 113 basis points.
     The provision for loan losses for the first six months of 2008 was $5.4 million, compared to $4.0 million for the first six months of 2007. Net charge offs totaled $3.7 million, or .31% (annualized) of portfolio loans, year-to-date as of June 30, 2008 versus net charge offs of $3.2 million, or .37% (annualized) of portfolio loans for the same period in the prior year.
     For the first six months of 2008, noninterest income totaled $8.6 million, compared to $8.7 million for 2007. The slight decrease in noninterest income from 2007 was mainly the result of a $565,000 decrease in gain on sale of loans and a $223,000 decrease in the gain on sale of investment securities, offset in part by a $728,000 increase in service charges.
     For the first six months of 2008, noninterest expense was $32.2 million versus $31.6 million in 2007. The increase from 2007 in noninterest expense consists mainly of a $1.6 million increase in personnel expense, a $711,000 increase in FDIC and other insurance, a $317,000 increase in other real estate, and a $269,000 increase in occupancy expense offset in part by a $2.4 million decrease in general and administrative expenses, which reflects last year’s $2.5 million ATM-related write-off.
     The efficiency ratio was 60.95% for the first six months of 2008, up from 58.49% in 2007. The year over year increase in the efficiency ratio was due to the combined effect of the increase in Southwest’s operating expenses, without commensurate increase in net interest income which was constrained by a lower net interest margin.
     Second Quarter Results: Net interest income totaled $22.3 million for the second quarter of 2008, compared to $22.6 million for the second quarter of 2007. Net interest margin was 3.38% for the second quarter of 2008, 4.36% for the second quarter of 2007, and 3.45% for the first quarter of 2008. Yield on earning assets decreased by 214 basis points from the second quarter 2007, while rates paid on interest bearing liabilities decreased by only 152 basis points.
     The provision for loan losses totaled $3.2 million for the second quarter of 2008, compared to $2.1 million for the second quarter of 2007. Net charge offs totaled $1.8 million, or 0.30% (annualized) of portfolio loans at June 30, 2008, compared to $1.8 million, or 0.40% (annualized) of portfolio loans at June 30, 2007.

2

 

     
 
  NASDAQ: OKSB
 
Southwest Bancorp Reports Earnings
   
     Noninterest income totaled $4.0 million for the second quarter of 2008, compared to $5.4 million for the same quarter of 2007. The decrease in noninterest income from 2007 was mainly the result of a $1.9 million decrease in gain on investment securities, due to the $1.9 million pre-tax gain on the sale of an investment that occurred in the second quarter of 2007, offset in part by increases in service charges and fee income of $506,000.
     Noninterest expense increased $1.5 million from the second quarter 2007 to the second quarter of 2008 to $16.3 million. The increase consists of a $498,000 increase in salaries and employee benefits, a $381,000 increase in FDIC and other insurance, a $238,000 increase in other real estate expense, a $214,000 increase in occupancy expense, and a $193,000 increase in general and administrative expenses, which includes the provision for unfunded loan commitments.
     The efficiency ratio for the second quarter of 2008 increased to 62.23%, from 52.82% for the second quarter of 2007.
     Certain Legal Matters: As previously disclosed, in December 2006, an armored transportation company failed to deliver to Stillwater National Bank and Trust (“Stillwater National”) cash due to it from certain ATMs owned by one of its subsidiaries, Cash Source, Inc. (“CSI”). In the first quarter of 2007, Southwest recorded a write-off of the $2.5 million receivable. The financial statements also reflect related legal expenses incurred by Southwest of $193,000 during the first six months of 2008 and approximately $785,000 during the year 2007 of which $500,000 was incurred in the first six months of 2007. Southwest filed its proof of loss with the insurer on August 6, 2007, which the insurer denied in April 2008. Stillwater National and CSI are considering their response to the insurer’s denial.
     Stillwater National and other Visa USA member banks are obligated to share in costs resulting from litigation against Visa USA, including the costs of the November 9, 2007, settlement of an antitrust lawsuit brought by American Express and potential costs of certain other pending litigation. In the fourth quarter of 2007, Southwest recorded approximately $713,000 as its estimated share of the settlement and other pending litigation expenses relating to these obligations. In March 2008, VISA completed an initial public offering. This transaction allowed VISA to place part of the cash proceeds into an escrow which will be utilized to pay litigation and settlement expenses. Southwest’s portion of this escrow is approximately $566,000 which is reflected in the first quarter 2008 financial statements as a reduction to general and administrative expense and the related payable established in the fourth quarter 2007. These amounts are an estimate and further adjustments may be required.
Southwest Bancorp and Subsidiaries
     Southwest Bancorp is the financial holding company for Stillwater National, Bank of Kansas (“SNB Kansas”), SNB Bank of Wichita (“SNB Wichita”), Healthcare Strategic Support, Inc., and Business Consulting Group, Inc. Through its subsidiaries, Southwest offers commercial and consumer lending, deposit, and investment services, and specialized cash management, consulting, and other financial services from offices in Oklahoma City, Stillwater, Tulsa, and Chickasha, Oklahoma; Austin, Dallas, Houston and San Antonio, Texas; and Hutchinson, Kansas City, and Wichita, Kansas, and on the Internet, through SNB DirectBanker®.
     Southwest focuses on converting its strategic vision into long-term shareholder value. Our vision includes an established niche banking model focused on healthcare and commercial real estate financial services in Texas, Oklahoma, and Kansas and a community banking model focused on more traditional banking operations in those states. Southwest’s strategic growth goals include growth from existing and additional offices in carefully selected markets in Texas and other states with concentrations of healthcare and health professionals, businesses, and their managers and owners, and commercial and commercial real estate borrowers, and careful expansion of community banking operations.
     Southwest’s common stock is traded on the NASDAQ Global Select Market under the symbol OKSB.
Forward-Looking Statements
     This Press Release includes forward-looking statements, such as: statements of Southwest’s goals, intentions, and expectations; estimates of risks and of future costs and benefits; assessments of the amount and timing of loan growth, performing and problem loan payoffs and loan losses; off-balance sheet risk and market risk; and statements of Southwest’s ability to achieve financial and other goals. These forward-looking statements are subject to significant uncertainties because they are based upon: future interest rates, market behavior, the effects on general

3

 

     
 
  NASDAQ: OKSB
 
Southwest Bancorp Reports Earnings
   
economic conditions in our markets of recent subprime and other consumer lending problems, and other economic conditions; future laws and regulations; and a variety of other matters. Because of these uncertainties, the actual future results may be materially different from the results indicated by these forward-looking statements. In addition, Southwest’s past growth and performance do not necessarily indicate its future results.

4

 

     
 
  NASDAQ: OKSB
 
Southwest Bancorp Reports Earnings
   
Financial Tables
         
Financial Highlights
   Table 1
Consolidated Statements of Financial Condition
   Table 2
Consolidated Statements of Operations
   Table 3
Average Balances, Yields, and Rates-Quarterly
   Table 4
Average Balances, Yields, and Rates-Year-to-date
   Table 5
Summary Financial Data by Quarter-2008 and 2007
   Table 6
Supplemental Analytical Data by Quarter-2008 and 2007
   Table 7

5

 

SOUTHWEST BANCORP, INC.
UNAUDITED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share) 		  Table 1
                                         
    Second Quarter     First Quarter  
                    %             %  
QUARTERLY HIGHLIGHTS   2008     2007     Change     2008     Change  
Operations
                                        
Net interest income
   $ 22,284     $ 22,612       (1 )%   $ 21,833       2 %
Provision for loan losses
     3,190       2,107       51       2,236       43  
Noninterest income
     3,959       5,425       (27 )     4,688       (16 )
Noninterest expense
     16,332       14,808       10       15,830       3  
Income before taxes
     6,721       11,122       (40 )     8,455       (21 )
Taxes on income
     2,559       4,281       (40 )     3,247       (21 )
Net income
     4,162       6,841       (39 )     5,208       (20 )
Diluted earnings per share
     0.28       0.47       (40 )     0.36       (22 )
Balance Sheet
                                        
Total assets
     2,773,013       2,196,005       26       2,670,580       4  
Loans held for sale
     62,892       73,011       (14 )     66,364       (5 )
Portfolio loans
     2,381,893       1,769,528       35       2,287,606       4  
Total deposits
     2,211,001       1,823,806       21       2,094,927       6  
Total shareholders’ equity
     224,949       208,185       8       224,155       —  
Book value per share
     15.49       14.53       7       15.43       —  
Key Ratios
                                        
Net interest margin
     3.38 %     4.36 %             3.45 %        
Efficiency ratio (GAAP-based)
     62.23       52.82               59.69          
Nonperforming loans to portfolio loans
     1.35       1.37               1.27          
Shareholders’ equity to total assets
     8.11       9.48               8.39          
Return on average assets
     0.62       1.28               0.80          
Return on average equity
     7.38       13.26               9.43          
                         
    Six Months  
                    %  
YEAR-TO-DATE HIGHLIGHTS   2008     2007     Change  
Operations
                        
Net interest income
   $ 44,117     $ 45,355       (3 )%
Provision for loan losses
     5,426       3,968       37  
Noninterest income
     8,647       8,736       (1 )
Noninterest expense
     32,162       31,639       2  
Income before taxes
     15,176       18,484       (18 )
Taxes on income
     5,806       7,143       (19 )
Net income
     9,370       11,341       (17 )
Diluted earnings per share
     0.64       0.77       (17 )
Balance Sheet
                        
Total assets
     2,773,013       2,196,005       26  
Loans held for sale
     62,892       73,011       (14 )
Portfolio loans
     2,381,893       1,769,528       35  
Total deposits
     2,211,001       1,823,806       21  
Total shareholders’ equity
     224,949       208,185       8  
Book value per share
     15.49       14.53       7  
Key Ratios
                        
Net interest margin
     3.41 %     4.35 %        
Efficiency ratio (GAAP-based)
     60.95       58.49          
Nonperforming loans to portfolio loans
     1.35       1.37          
Shareholders’ equity to total assets
     8.11       9.48          
Return on average assets
     0.71       1.05          
Return on average equity
     8.39       11.19          
 
Balance sheet amounts are as of period end unless otherwise noted.
 
Please see accompanying tables for additional financial information.

 

SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share) 		  Table 2
                         
    June 30,     December 31,     June 30,  
    2008     2007     2007  
Assets
                        
Cash and due from banks
   $ 51,462     $ 45,678     $ 34,754  
Investment securities:
                        
Held to maturity. Fair value: $8,282 $5,838 $5,260
     8,340       5,838       5,333  
Available for sale. Amortized cost: $215,940 $238,100 $262,879
     213,859       238,751       261,375  
Federal Reserve and FHLB Stock, at cost
     13,327       13,116       12,719  
Loans held for sale
     62,892       66,275       73,011  
 
                        
Loans receivable
     2,381,893       2,145,557       1,769,528  
Less: Allowance for loan losses
     (31,341 )     (29,584 )     (28,054 )
 
                  
Net loans receivable
     2,350,552       2,115,973       1,741,474  
Accrued interest receivable
     12,624       23,117       19,871  
Premises and equipment, net
     23,607       24,323       21,889  
Other real estate owned
     2,523       2,679       1,508  
Goodwill
     7,071       7,064       1,213  
Other intangible assets, net
     4,157       4,580       2,926  
Other assets
     22,599       16,904       19,932  
 
                  
Total assets
   $ 2,773,013     $ 2,564,298     $ 2,196,005  
 
                  
 
                        
Liabilities and shareholders’ equity
                        
Deposits:
                        
Noninterest-bearing demand
   $ 299,699     $ 257,067     $ 248,285  
Interest-bearing demand
     81,415       63,323       63,758  
Money market accounts
     548,099       541,950       487,096  
Savings accounts
     13,809       13,032       11,017  
Time deposits of $100,000 or more
     740,174       690,985       571,584  
Other time deposits
     527,805       492,222       442,066  
 
                  
Total deposits
     2,211,001       2,058,579       1,823,806  
Accrued interest payable
     9,680       11,441       10,424  
Income tax payable
     3,924       1,766       3,066  
Other liabilities
     11,452       10,154       8,570  
Other borrowings
     265,614       218,356       95,561  
Subordinated debentures
     46,393       46,393       46,393  
 
                  
Total liabilities
     2,548,064       2,346,689       1,987,820  
 
                        
Shareholders’ equity
                        
Common stock — $1 par value; 20,000,000 shares authorized; 14,658,042 shares issued
     14,658       14,658       14,658  
Paid in capital
     45,818       46,478       46,329  
Retained earnings
     168,099       161,482       154,089  
Accumulated other comprehensive income (loss)
     (1,256 )     408       (957 )
Treasury stock, at cost, 131,566 300,833 329,570 shares
     (2,370 )     (5,417 )     (5,934 )
 
                  
Total shareholders’ equity
     224,949       217,609       208,185  
 
                  
Total liabilities and shareholders’ equity
   $ 2,773,013     $ 2,564,298     $ 2,196,005  
 
                  

 

SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share) 		  Table 3
                                 
    For the three months     For the six months  
    ended June 30,     ended June 30,  
    2008     2007     2008     2007  
Interest income
                                
Loans
   $ 37,485     $ 39,578     $ 78,095     $ 79,864  
Investment securities
     2,447       2,876       4,809       5,584  
Other interest-earning assets
     20       115       48       180  
 
                        
Total interest income
     39,952       42,569       82,952       85,628  
 
                                
Interest expense
                                
Interest-bearing deposits
     15,107       17,893       33,361       35,116  
Other borrowings
     1,887       1,089       3,916       3,220  
Subordinated debentures
     674       975       1,558       1,937  
 
                        
Total interest expense
     17,668       19,957       38,835       40,273  
 
                        
 
                                
Net interest income
     22,284       22,612       44,117       45,355  
 
                                
Provision for loan losses
     3,190       2,107       5,426       3,968  
 
                        
 
                                
Net interest income after provision for loan losses
     19,094       20,505       38,691       41,387  
 
                                
Noninterest income
                                
Service charges and fees
     2,812       2,306       5,269       4,541  
Gain on sales of loans
     603       800       1,443       2,008  
Gain on investment securities
     3       1,919       1,248       1,471  
Other noninterest income
     541       400       687       716  
 
                        
Total noninterest income
     3,959       5,425       8,647       8,736  
 
                                
Noninterest expense
                                
Salaries and employee benefits
     8,856       8,358       18,078       16,483  
Occupancy
     2,602       2,388       5,060       4,791  
FDIC and other insurance
     521       140       974       263  
Other real estate, net
     197       (41 )     207       (110 )
General and administrative
     4,156       3,963       7,843       10,212  
 
                        
Total noninterest expenses
     16,332       14,808       32,162       31,639  
 
                        
Income before taxes
     6,721       11,122       15,176       18,484  
Taxes on income
     2,559       4,281       5,806       7,143  
 
                        
Net income
   $ 4,162     $ 6,841     $ 9,370     $ 11,341  
 
                        
 
                                
Basic earnings per common share
   $ 0.29     $ 0.48     $ 0.65     $ 0.79  
Diluted earnings per common share
     0.28       0.47       0.64       0.77  
Cash dividends declared per share
     0.0950       0.0925       0.1900       0.1850  

 

SOUTHWEST BANCORP, INC.   Table 4
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES    
(Dollars in thousands)    
                                                 
    For the three months ended June 30,  
    2008     2007  
    Average             Average     Average             Average  
    Balance     Interest     Yield/Rate     Balance     Interest     Yield/Rate  
Assets
                                                
Loans
   $ 2,414,012     $ 37,485       6.25 %   $ 1,795,028     $ 39,578       8.84 %
Investment securities
     234,198       2,447       4.20       278,003       2,876       4.15  
Other interest-earning assets
     3,406       20       2.36       9,354       115       4.93  
 
                                        
Total interest-earning assets
     2,651,616       39,952       6.06       2,082,385       42,569       8.20  
Other assets
     65,288                       65,221                  
 
                                        
Total assets
   $ 2,716,904                     $ 2,147,606                  
 
                                            
 
Liabilities and Shareholders’ Equity
                                                
Interest-bearing demand deposits
   $ 79,273     $ 166       0.84 %   $ 63,947     $ 98       0.61 %
Money market accounts
     548,020       3,062       2.25       423,484       4,743       4.49  
Savings accounts
     13,586       19       0.56       10,993       21       0.77  
Time deposits
     1,230,327       11,860       3.88       1,045,334       13,031       5.00  
 
                                        
Total interest-bearing deposits
     1,871,206       15,107       3.25       1,543,758       17,893       4.65  
Other borrowings
     284,828       1,887       2.66       95,143       1,089       4.59  
Subordinated debentures
     46,393       674       5.81       46,393       975       8.41  
 
                                        
Total interest-bearing liabilities
     2,202,427       17,668       3.23       1,685,294       19,957       4.75  
 
                                        
 
Noninterest-bearing demand deposits
     267,026                       236,835                  
Other liabilities
     20,687                       18,483                  
Shareholders’ equity
     226,764                       206,994                  
 
                                            
Total liabilities and shareholders’ equity
   $ 2,716,904                     $ 2,147,606                  
 
                                            
 
Net interest income and spread
           $ 22,284       2.83 %           $ 22,612       3.45 %
 
                                        
Net interest margin (1)
                     3.38 %                     4.36 %
 
                                            
Average interest-earning assets to average interest-bearing liabilities
     120.40 %                     123.56 %                
 
                                            
 
(1)   Net interest margin = annualized net interest income / average interest-earning assets

 

 

SOUTHWEST BANCORP, INC.
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES 		  Table 5
(Dollars in thousands)    
                                                 
    For the six months ended June 30,  
    2008     2007  
    Average             Average     Average             Average  
    Balance     Interest     Yield/Rate     Balance     Interest     Yield/Rate  
Assets
                                                
Loans
   $ 2,359,489     $ 78,095       6.66 %   $ 1,820,792     $ 79,864       8.85 %
Investment securities
     236,071       4,809       4.10       275,780       5,584       4.08  
Other interest-earning assets
     3,084       48       3.13       7,293       180       4.98  
 
                                        
Total interest-earning assets
     2,598,644       82,952       6.42       2,103,865       85,628       8.21  
Other assets
     68,492                       72,737                  
Total assets
   $ 2,667,136                     $ 2,176,602                  
 
                                            
 
                                                
Liabilities and Shareholders’ Equity
                                                
Interest-bearing demand deposits
   $ 76,003     $ 307       0.81 %   $ 62,215     $ 179       0.58 %
Money market accounts
     547,027       7,590       2.79       397,634       8,705       4.41  
Savings accounts
     13,525       41       0.61       11,049       41       0.75  
Time deposits
     1,219,554       25,423       4.19       1,061,794       26,191       4.97  
 
                                        
Total interest-bearing deposits
     1,856,109       33,361       3.61       1,532,692       35,116       4.62  
Other borrowings
     261,819       3,916       3.01       135,107       3,220       4.81  
Subordinated debentures
     46,393       1,558       6.72       46,393       1,937       8.35  
 
                                        
Total interest-bearing liabilities
     2,164,321       38,835       3.61       1,714,192       40,273       4.74  
 
                                        
 
                                                
Noninterest-bearing demand deposits
     257,133                       237,679                  
Other liabilities
     21,181                       20,271                  
Shareholders’ equity
     224,501                       204,460                  
 
                                            
Total liabilities and shareholders’ equity
   $ 2,667,136                     $ 2,176,602                  
 
                                            
 
                                                
Net interest income and spread
           $ 44,117       2.81 %           $ 45,355       3.47 %
 
                                        
Net interest margin (1)
                     3.41 %                     4.35 %
 
                                            
Average interest-earning assets to average interest-bearing liabilities
     120.07 %                     122.73 %                
 
                                            
 
(1)   Net interest margin = annualized net interest income / average interest-earning assets

 

 

SOUTHWEST BANCORP, INC.
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA
(Dollars in thousands except per share) 		  Table 6
                                                 
    2008     2007  
    Jun. 30     Mar. 31     Dec. 31     Sep. 30     Jun. 30     Mar. 31  
OPERATIONS
                                                
Interest income:
                                                
Loans
   $ 37,485     $ 40,610     $ 43,549     $ 42,346     $ 39,578     $ 40,286  
Investment securities
     2,447       2,362       2,742       2,846       2,876       2,708  
Other interest-earning assets
     20       28       35       39       115       65  
 
                                    
Total interest income
     39,952       43,000       46,326       45,231       42,569       43,059  
Interest expense:
                                                
Interest bearing demand deposits
     166       141       94       82       98       81  
Money market accounts
     3,062       4,528       5,370       5,589       4,743       3,962  
Savings accounts
     19       22       22       24       21       20  
Time deposits of $100,000 or more
     7,051       7,865       7,873       7,445       7,781       8,132  
Other time deposits
     4,809       5,698       5,840       5,684       5,250       5,028  
 
                                    
Total interest-bearing deposits
     15,107       18,254       19,199       18,824       17,893       17,223  
Other borrowings
     1,887       2,029       2,620       1,715       1,089       2,131  
Subordinated debentures
     674       884       971       986       975       962  
 
                                    
Total interest expense
     17,668       21,167       22,790       21,525       19,957       20,316  
 
                                    
Net interest income
     22,284       21,833       23,536       23,706       22,612       22,743  
Provision for loan losses
     3,190       2,236       2,464       2,149       2,107       1,861  
Noninterest income:
                                                
Service charges and fees
     2,812       2,457       2,831       2,548       2,306       2,235  
Gain on sales of loans
     603       840       783       548       800       1,208  
Gain (loss) on investment securities
     3       1,245       5       108       1,919       (448 )
Other noninterest income
     541       146       452       422       400       316  
 
                                    
Total noninterest income
     3,959       4,688       4,071       3,626       5,425       3,311  
Noninterest expense:
                                                
Salaries and employee benefits
     8,856       9,222       9,838       8,966       8,358       8,125  
Occupancy
     2,602       2,458       2,540       2,514       2,388       2,403  
FDIC and other insurance
     521       453       225       134       140       123  
Other real estate, net
     197       10       64       (12 )     (41 )     (69 )
Unfunded loan commitment
     15       145       368       675       151       (65 )
Other general and administrative
     4,141       3,542       4,638       3,885       3,812       6,314  
 
                                    
Total noninterest expenses
     16,332       15,830       17,673       16,162       14,808       16,831  
 
                                    
Income before taxes
     6,721       8,455       7,470       9,021       11,122       7,362  
Taxes on income
     2,559       3,247       2,949       3,505       4,281       2,862  
 
                                    
Net income
   $ 4,162     $ 5,208     $ 4,521     $ 5,516     $ 6,841     $ 4,500  
 
                                    
PER SHARE DATA
                                                
Basic earnings per common share
   $ 0.29     $ 0.36     $ 0.32     $ 0.38     $ 0.48     $ 0.32  
Diluted earnings per common share
     0.28       0.36       0.31       0.38       0.47       0.31  
Cash dividends declared per share
     0.0950       0.0950       0.0925       0.0925       0.0925       0.0925  
Book value per share
     15.49       15.43       15.16       14.92       14.53       14.14  
Tangible book value per share
     15.00       14.95       14.66       14.45       14.44       14.05  
Weighted average shares outstanding:
                                                
Basic earnings per common share
     14,526,038       14,413,686       14,353,910       14,335,008       14,299,111       14,263,698  
Diluted
     14,680,262       14,608,190       14,584,878       14,612,732       14,644,863       14,642,913  
OTHER FINANCIAL DATA
                                                
Investment securities
   $ 235,526     $ 237,156     $ 257,705     $ 294,615     $ 279,427     $ 275,499  
Loans held for sale
     62,892       66,364       66,275       78,417       73,011       108,025  
Portfolio loans
     2,381,893       2,287,606       2,145,557       1,933,223       1,769,528       1,667,195  
Total loans
     2,444,785       2,353,970       2,211,832       2,011,640       1,842,539       1,775,220  
Total assets
     2,773,013       2,670,580       2,564,298       2,386,852       2,196,005       2,194,179  
Total deposits
     2,211,001       2,094,927       2,058,579       1,912,719       1,823,806       1,803,181  
Other borrowings
     265,614       282,513       218,356       190,847       95,561       123,212  
Subordinated debentures
     46,393       46,393       46,393       46,393       46,393       46,393  
Total shareholders’ equity
     224,949       224,155       217,609       213,838       208,185       201,777  
Mortgage servicing portfolio
     147,672       145,028       141,680       136,294       134,444       134,259  
Continued
                                                

 

 

     
SOUTHWEST BANCORP, INC.
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA
(Dollars in thousands except per share) 		  Table 6
Continued
                                                 
    2008     2007  
    Jun. 30     Mar. 31     Dec. 31     Sep. 30     Jun. 30     Mar. 31  
PERFORMANCE RATIOS
                                                
Return on average assets (annualized)
     0.62 %     0.80 %     0.72 %     0.96 %     1.28 %     0.83 %
Return on average equity (annualized)
     7.38       9.43       8.24       10.29       13.26       9.04  
Return on average tangible equity (annualized)
     7.86       9.94       8.86       10.88       13.70       9.23  
Net interest margin
     3.38       3.45       3.89       4.25       4.36       4.34  
Dividends declared to net income
     33.16       26.37       29.37       24.04       19.37       29.32  
Effective tax rate
     38.07       38.40       39.48       38.85       38.49       38.88  
Efficiency ratio
     62.23       59.69       64.02       59.13       52.82       64.60  
ASSET QUALITY RATIOS
                                                
Nonperforming assets to portfolio loans and other real estate owned
     1.45 %     1.41 %     1.50 %     1.59 %     1.45 %     1.88 %
Nonperforming loans to portfolio loans
     1.35       1.27       1.38       1.50       1.37       1.77  
Net loan charge-offs to average total loans
     0.30       0.33       0.22       0.39       0.40       0.31  
Allowance for loan losses to total loans
     1.28       1.27       1.34       1.41       1.52       1.56  
Allowance for loan losses to portfolio loans
     1.32       1.31       1.38       1.46       1.59       1.66  
Allowance for loan losses to nonperforming loans
     97.63       103.49       100.04       97.32       115.65       94.18  
CAPITAL RATIOS*
                                                
Average total shareholders’ equity to average assets
     8.42 %     8.49 %     9.21 %     9.36 %     9.39 %     9.15 %
Leverage ratio
     9.66       9.91       10.23       10.92       11.73       11.12  
Tier 1 capital to risk-weighted assets
     9.40       9.47       9.71       10.49       11.84       12.44  
Total capital to risk-weighted assets
     10.65       10.69       10.97       11.76       13.13       13.68  
SEGMENT LOANS**
                                                
Oklahoma banking
   $ 965,952     $ 943,331     $ 876,085     $ 844,859     $ 804,906     $ 766,990  
Texas banking
     857,160       797,700       759,389       644,749       567,236       507,384  
Kansas banking
     277,887       287,339       282,846       251,131       198,228       206,405  
Other states banking
     280,894       259,236       227,237       192,484       199,158       186,416  
 
                                    
Subtotal
     2,381,893       2,287,606       2,145,557       1,933,223       1,769,528       1,667,195  
Secondary market
     62,892       66,364       66,275       78,417       73,011       108,025  
 
                                    
Total loans
   $ 2,444,785     $ 2,353,970     $ 2,211,832     $ 2,011,640     $ 1,842,539     $ 1,775,220  
 
                                    
SEGMENT NET INCOME**
                                                
Oklahoma banking
   $ 2,923     $ 2,503     $ 3,080     $ 3,759     $ 4,820     $ 4,278  
Texas banking
     1,777       2,406       1,701       1,638       1,568       1,643  
Kansas banking
     (40 )     458       82       243       326       208  
Other states banking
     1,028       969       225       768       930       240  
 
                                    
Subtotal
     5,688       6,336       5,088       6,408       7,644       6,369  
Secondary market
     40       (174 )     114       33       197       753  
Other operations
     (1,566 )     (954 )     (681 )     (925 )     (1,000 )     (2,622 )
 
                                    
Total net income
   $ 4,162     $ 5,208     $ 4,521     $ 5,516     $ 6,841     $ 4,500  
 
                                    
OFFICES AND EMPLOYEES
                                                
FTE Employees
     463       467       489       484       457       443  
ATM’s
     40       40       43       43       38       39  
Branches
     17       17       17       17       15       15  
Loan production offices
     3       3       3       3       3       3  
Assets per employee
   $ 5,989     $ 5,719     $ 5,244     $ 4,932     $ 4,805     $ 4,953  
 
Balance sheet amounts are as of period end unless otherwise noted.
 
*   Regulatory capital ratios do not reflect the effects of the issuance of trust preferred securities in July 2008.
 
**   In first quarter 2008, Southwest changed its segment disclosures to report Texas, Kansas and Other states separately. Portfolio loans are allocated based upon the state of the borrower, or the location of the real estate in the case of real estate loans. Loans included in the “Other states banking” segment are portfolio loans attributable to states other than Oklahoma, Texas, or Kansas, and primarily consist of healthcare and commercial real estate credits. These out of state loans are administered by offices in Oklahoma, Texas, or Kansas.

 

 

SOUTHWEST BANCORP, INC.
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA 		  Table 7
(Dollars in thousands except per share)    
                                                 
    2008     2007  
    Jun. 30     Mar. 31     Dec. 31     Sep. 30     Jun. 30     Mar. 31  
LOAN COMPOSITION
                                                
Real estate mortgage:
                                                
Commercial
   $ 991,679     $ 846,757     $ 750,047     $ 608,409     $ 564,813     $ 582,440  
One-to-four family residential
     118,056       110,938       111,085       112,407       90,916       83,312  
Real estate construction
     666,756       744,090       724,929       659,214       617,993       517,199  
Commercial
     566,830       544,183       521,501       517,658       465,588       457,838  
Installment and consumer:
                                                
Guaranteed student loans
     57,413       63,706       61,555       73,810       68,117       101,905  
Other
     44,051       44,296       42,715       40,142       35,112       32,526  
 
                                    
Total loans, including held for sale
     2,444,785       2,353,970       2,211,832       2,011,640       1,842,539       1,775,220  
Less allowance for loan losses
     (31,341 )     (29,950 )     (29,584 )     (28,314 )     (28,054 )     (27,728 )
 
                                    
Total loans, net
   $ 2,413,444     $ 2,324,020     $ 2,182,248     $ 1,983,326     $ 1,814,485     $ 1,747,492  
 
                                    
By statement of condition category:
                                                
Loans held for sale:
                                                
Student loans
   $ 57,413     $ 63,706     $ 61,555     $ 73,810     $ 68,117     $ 101,905  
One-to-four family residential
     4,283       1,417       3,442       3,293       3,382       4,113  
Other
     1,196       1,241       1,278       1,314       1,512       2,007  
 
                                    
Total loans held for sale
     62,892       66,364       66,275       78,417       73,011       108,025  
Portfolio loans
     2,381,893       2,287,606       2,145,557       1,933,223       1,769,528       1,667,195  
 
                                    
Total loans before allowance
   $ 2,444,785     $ 2,353,970     $ 2,211,832     $ 2,011,640     $ 1,842,539     $ 1,775,220  
 
                                    
DEPOSIT COMPOSITION
                                                
Non-interest bearing demand
   $ 299,699     $ 248,315     $ 257,067     $ 261,634     $ 248,285     $ 251,777  
Interest-bearing demand
     81,415       71,450       63,323       63,145       63,758       63,741  
Money market accounts
     548,099       553,850       541,950       505,192       487,096       394,668  
Savings accounts
     13,809       13,808       13,032       14,830       11,017       11,196  
Time deposits of $100,000 or more
     740,174       690,421       690,985       580,850       571,584       646,668  
Other time deposits
     527,805       517,083       492,222       487,068       442,066       435,131  
 
                                    
Total deposits
   $ 2,211,001     $ 2,094,927     $ 2,058,579     $ 1,912,719     $ 1,823,806     $ 1,803,181  
 
                                    
NONPERFORMING ASSETS
                                                
Nonaccrual loans
   $ 30,861     $ 26,134     $ 19,534     $ 26,291     $ 22,633     $ 26,978  
90 days past due and accruing
     1,242       2,807       10,037       2,803       1,625       2,462  
 
                                    
Total nonperforming loans
     32,103       28,941       29,571       29,094       24,258       29,440  
Other real estate owned
     2,523       3,328       2,679       1,654       1,508       1,869  
 
                                    
Total nonperforming assets
   $ 34,626     $ 32,269     $ 32,250     $ 30,748     $ 25,766     $ 31,309  
 
                                    
Potential nonperforming loans
   $ 71,070     $ 69,588     $ 61,633     $ 70,389     $ 69,595     $ 52,335  
 
                                    
ALLOWANCE ACTIVITY
                                                
Balance, beginning of period
   $ 29,950     $ 29,584     $ 28,314     $ 28,054     $ 27,728     $ 27,293  
Charge offs
     1,892       2,044       1,290       2,105       1,875       1,728  
Recoveries
     93       174       96       216       94       302  
 
                                    
Net charge offs
     1,799       1,870       1,194       1,889       1,781       1,426  
Provision for loan losses
     3,190       2,236       2,464       2,149       2,107       1,861  
 
                                    
Balance, end of period
   $ 31,341     $ 29,950     $ 29,584     $ 28,314     $ 28,054     $ 27,728  
 
                                    
REGULATORY CAPITAL DATA*
                                                
Tier I capital
   $ 261,354     $ 258,272     $ 251,980     $ 248,961     $ 251,460     $ 244,862  
Total capital
     296,166       291,638       284,730       279,031       278,799       269,513  
Total risk adjusted assets
     2,780,538       2,727,853       2,595,090       2,374,152       2,123,862       1,967,001  
COMMON STOCK
                                                
Issued
     14,658,042       14,658,042       14,658,042       14,658,042       14,658,042       14,658,042  
Less treasury shares
     (131,566 )     (133,605 )     (300,833 )     (321,991 )     (329,570 )     (385,632 )
 
                                    
Outstanding shares
     14,526,476       14,524,437       14,357,209       14,336,051       14,328,472       14,272,410  
 
                                    
INTANGIBLE ASSET DATA
                                                
Goodwill
   $ 7,071     $ 7,071     $ 7,064     $ 6,742     $ 1,213     $ 1,213  
Core deposit intangible
     2,792       2,893       3,053       2,879       1,466       1,531  
Mortgage servicing rights
     1,354       1,299       1,513       1,440       1,428       1,413  
Nonmortgage servicing rights
     11       13       14       16       32       37  
 
                                    
Total intangible assets
   $ 11,228     $ 11,276     $ 11,644     $ 11,077     $ 4,139     $ 4,194  
 
                                    
Intangible amortization expense
   $ 215     $ 257     $ 159     $ 161     $ 165     $ 162  
 
                                    
 
Balance sheet amounts are as of period end unless otherwise noted.
 
*   Regulatory capital amounts do not reflect the effects of the issuance of trust preferred securities in July 2008.