Southwest Bancorp, Inc. Reports 2012 Annual Results

STILLWATER, Okla., Jan. 23, 2013 (GLOBE NEWSWIRE) -- Southwest Bancorp, Inc. (Nasdaq:OKSB) (Nasdaq:OKSBP), ("Southwest"), today reported net income for the year ended December 31, 2012 of $16.2 million, compared to a loss of ($68.3) million for the year ended December 31, 2011. Net income available to common shareholders for the year ended December 31, 2012 totaled $12.4 million, or $0.64 per diluted share, compared to a net loss available to common shareholders of ($72.5) million, or ($3.73) per diluted share, for the year ended December 31, 2011.

Southwest reported net income for the fourth quarter of 2012 of $1.0 million, compared to a loss of ($58.3) million for the fourth quarter of 2011. Net income available to common shareholders was $1.0 million, or $0.05 per diluted share for the fourth quarter of 2012, compared to a net loss available to common shareholders of ($59.3) million, or ($3.05) per diluted share for the fourth quarter of 2011.

Mark Funke, President and Chief Executive Officer, stated, "Many positive changes took place in 2012. We experienced significant improvement in our balance sheet strength and capital position following the bulk asset sale which was completed in fourth quarter of 2011. We restored all interest payments on our trust preferred capital. We repurchased all of the $70 million Series B preferred securities issued to the Department of Treasury under the Treasury's Capital Purchase Program. We strengthened our relationship with banking regulators and returned the company to profitability. We also added key management personnel in various areas.

"The slow economic conditions and uncertain regulatory and political environment presented challenges to us as well as to our customers in 2012. Despite these challenges, we are pleased to report net income of $16.2 million. This past year was focused on restructuring and repositioning the company for 2013 and beyond. While income for the fourth quarter was less than anticipated, we are aggressively identifying potential problem loans and assets and establishing appropriate reserves and values. For the year, common shareholders' equity increased to $246.1 million, an increase of 5.5%."

During the fourth quarter of 2012, Southwest identified a miscalculation in the valuation analysis on the goodwill of its Kansas market segment. The correction of the formula resulted in the identification of a noncash impairment of $5.6 million of goodwill at year-end 2010. The financial statements for the year ended December 31, 2010 will be restated along with the financial statements for 2011 and the 2012 quarterly financial statements through September.

The impact of the impairment reduced net income for 2010 by $5.6 million, from $17.0 million to $11.4 million. Total assets and shareholders' equity at December 31, 2010 are reduced by $5.6 million to end at $2.8 billion and $372.2 million, respectively. The effect of the correction is reflected in 2011 and 2012 financial information included with this earnings release for the quarter-ended December 31, 2012.

Southwest Chief Financial Officer, Joe Shockley, stated, "This correction is a result of a diligent accounting review and another milestone in repositioning Southwest for 2013 and beyond. This did not impact net income for 2011 or 2012, nor will it affect earnings going forward. While shareholders' equity is reduced by $5.6 million, regulatory capital is not reduced as goodwill is deducted when computing regulatory capital. Therefore, Southwest and its subsidiary bank, Bank of Kansas, remained well-capitalized throughout the period the miscalculation existed. The financial statements of Stillwater National Bank, Southwest's largest subsidiary bank, were not affected."

Financial Overview

Condition: At December 31, 2012, total assets were $2.1 billion, down $255.0 million, or 11%, from December 31, 2011, and total loans were $1.4 billion, down $384.8 million, or 22%, from December 31, 2011. The decline in loans was due in part to the change in our lending focus away from larger average size loans and a refocus to our primary markets.  

Investment securities increased $101.8 million, or 37%, to $377.1 million as of December 31, 2012, from $275.4 million as of December 31, 2011. The increase is primarily the result of the decline in total loans reduced by the company allowing higher cost of funds to mature. The investment portfolio is managed to provide safety, liquidity, and collateral for public funds and borrowings. The investment portfolio continues to be managed in compliance with the current investment policy, including interest rate and liquidity risk stress testing, and the average duration of the portfolio not exceeding four years.

At December 31, 2012, the noncovered allowance for loan losses was $46.5 million, an increase of 5% from December 31, 2011. The noncovered allowance for loan losses to noncovered portfolio loans was 3.52% as of December 31, 2012 compared to 2.62% as of December 31, 2011. The noncovered allowance for loan losses to noncovered nonperforming loans was 121.10% as of December 31, 2012, compared to 162.21% as of September 30, 2012.

Nonperforming assets were $49.7 million, or 3.73% of portfolio loans and other real estate, as of December 31, 2012, an increase of $8.1 million (20%) from $41.6 million, or 2.88% of portfolio loans and other real estate, as of September 30, 2012. The increase in nonperforming assets during the fourth quarter is attributable to placing $12.5 million in loans on nonaccrual, primarily commercial healthcare loans located out of market, and a $2.9 million increase in loans ninety days past due, offset in part by the receipt of $3.2 million in resolutions and payments on nonperforming loans, the recognition of impairments in other real estate assets of $2.8 million, the receipt of $0.8 million from sales of other real estate, and charge-offs of $0.7 million in nonperforming loans.

Total core funding, which includes all non-brokered deposits and sweep repurchase agreements, comprised 98% of total funding as of December 31, 2012, compared to 94% at December 31, 2011. Core funding by segment is as follows as of December 31, 2012 and December 31, 2011, respectively: $1,290.8 million and $1,426.2 million in Oklahoma banking, $167.0 million and $156.2 million in Texas banking, $269.3 million and $273.6 million in Kansas banking, and $14.5 million and $3.9 million in the secondary market and other operations segments. Wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 2% of total funding at December 31, 2012, compared to 6% at December 31, 2011. Please see Table 7 for details on core funding and non-brokered deposits, which are non-GAAP financial measures.

The capital ratios of Southwest and each of its banking subsidiaries, as of December 31, 2012, met the criteria for regulatory classification as "well-capitalized". Southwest's total regulatory capital was $340.0 million, for a total risk-based capital ratio of 21.56%, and Tier 1 capital was $319.7 million, for a Tier 1 risk-based capital ratio of 20.280%. Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $182.3 million. Stillwater National Bank, Southwest's principal banking subsidiary, had total regulatory capital of $269.3 million, for a total risk-based capital ratio of 19.55%, and Tier 1 capital of $236.7 million, for a Tier 1 risk-based capital ratio of 17.18%. Stillwater National Bank exceeded the minimum to be classified as "well-capitalized" by $131.5 million. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators.

Year-to-date Results:

Summary: Net income available to common shareholders was $12.4 million as of December 31, 2012, compared to a net loss available to common shareholders of ($72.5) million as of December 31, 2011. The $85.0 million increase in our net income available to common shareholders from 2011 is the result of a $129.0 million decrease in the provision for loan losses, a $26.9 million decrease in noninterest expense, a $1.9 million increase in noninterest income, and the $0.5 million decrease in the yield on preferred stock due to the repurchase during the year, offset by a $19.8 million decrease in net interest income and a $53.5 million increase in income tax expense.

Net Interest Income:  Net interest income totaled $76.6 million for 2012, compared to $96.3 million for 2011, a decrease of $19.8 million, or 21%. Lower loan volume was the primary cause of this decrease. Year-to-date net interest margin was 3.64%, compared to 3.74% for 2011.    

Provision for Loan Losses and Net Charge-offs: The provision for loan losses is the amount that is required to maintain the allowance for losses at an appropriate level based upon the inherent risks in the loan portfolio after the effects of net charge-offs for the period.  The provision for loan losses totaled $3.1 million for 2012, compared to $132.1 million for 2011. Net charge-offs totaled $1.1 million, or 0.07% (annualized) of average portfolio loans as of December 31, 2012, compared to $152.6 million, or 7.01% (annualized) of average portfolio loans as of December 31, 2011. Excluding the impact of the fourth quarter of 2011 sale of nonperforming assets, the provision for loan losses and net charge-offs would have been approximately $57.2 million and $64.0 million, respectively.

Noninterest Income: Noninterest income totaled $15.9 million for 2012, compared to $14.0 million for 2011. The increase in noninterest income was the result of a $1.5 million increase in gains on sale of loans, which consists primarily of mortgage loans, a $0.8 million increase in the gains on sale of investment securities, and a $0.1 million increase in other noninterest income, offset by a $0.5 million decline in service charges and fees.

Noninterest Expense: Noninterest expense totaled $63.3 million for 2012, compared to $90.2 million for 2011.  The decrease primarily consists of a $24.3 million decrease in other real estate expense, of which $23.6 million was the fair value adjustment for the assets sold in the fourth quarter of 2011, a $1.3 million decrease in FDIC and other insurance expense, a $1.3 million decrease in general and administrative expense, primarily from the 2011 settlement of Oklahoma state tax claims for less than the amount accrued, and a $0.2 million decrease in occupancy expense, offset in part by a $0.3 million increase in the provision for unfunded loan commitments.

Income Tax: Income tax expense totaled $9.8 million for 2012, compared to a benefit of $43.7 million for 2011. The income tax expense (benefit) fluctuates in relation to pre-tax income (loss) levels. The year-to-date effective tax rate was 37.91% as of December 31, 2012.      

Fourth Quarter Results:

Summary: For the fourth quarter of 2012, net income available to common shareholders was $1.0 million, compared to a net loss available to common shareholders of ($59.3) million for the fourth quarter of 2011. The $60.3 million increase in our net income available to common shareholders from fourth quarter 2011 is the result of a $75.2 million decrease in the provision for loan losses, a $24.3 million decrease in noninterest expense, a $1.3 million increase in noninterest income, and the $1.1 million decrease in yield on preferred stock due to the repurchase during the year, offset in part by a $36.9 million increase in income tax expense and a $4.6 million decrease in net interest income.

Net Interest Income:  Net interest income totaled $17.3 million for the fourth quarter of 2012, compared to $21.9 million for the fourth quarter of 2011, a decrease of $4.6 million, or 21%, and to $18.7 million for the third quarter of 2012, a decrease of $1.4 million, or 7%. Noncovered loans declined $110.9 million, or 8%, from September 30, 2012 primarily due to commercial real estate loans that paid off due to the year-end sales of properties and certain commercial real estate and construction loans that moved to permanent long-term financing in the secondary market. Net interest margin was 3.41% for the fourth quarter of 2012, compared to 3.62% for the fourth quarter of 2011 and 3.59% for the third quarter of 2012. 

Provision for Loan Losses and Net Charge-offs: The provision for loan losses is the amount that is required to maintain the allowance for losses at an appropriate level based upon the inherent risks in the loan portfolio after the effects of net charge-offs or net recoveries for the period.  The provision for loan losses of $3.1 million was recorded for the fourth quarter of 2012, compared to a provision for loan losses of $78.3 million for fourth quarter of 2011 and a negative provision of $1.7 million for the third quarter of 2012. For the fourth quarter of 2012, net charge-offs totaled $0.1 million, or 0.03% (annualized) of average portfolio loans, compared to net charge-offs of $98.3 million, or 19.78% (annualized) of average portfolio loans for the fourth quarter of 2011 and net recoveries of $1.6 million, or (0.42%) (annualized) of average portfolio loans for the third quarter of 2012.  Excluding the impact of the fourth quarter 2011 sale of nonperforming assets, the provision for loans losses and net charge-offs would have been approximately $3.4 million and $9.7 million, respectively.

Noninterest Income: Noninterest income totaled $4.9 million for the fourth quarter of 2012, compared to $3.6 million for the fourth quarter of 2011 and $4.0 million for the third quarter of 2012. The increase in noninterest income from the fourth quarter of 2011 is primarily the result of a $0.8 million increase in gains on sale of investment securities and a $0.3 million increase in gains on sales of loans, which consist primarily of mortgage loans. The increase in noninterest income from the third quarter of 2012 is primarily the result of the $0.8 million gains on sales of investment securities.

Noninterest Expense: Noninterest expense totaled $17.7 million for the fourth quarter of 2012, compared to $41.9 million for the fourth quarter of 2011 and $14.6 million for the third quarter of 2012.  

The $24.3 million decrease from fourth quarter of 2011 consists primarily of a $23.5 million decrease in other real estate expense, which includes the loss on assets sold during the fourth quarter of 2011 of $23.6 million, a $1.0 million decrease in general and administrative expense, which is primarily the result of decreased loan collection costs and legal fees, and a $0.3 million decrease in FDIC and other insurance expense, offset in part by a $0.3 million increase in personnel expense and a $0.3 million increase in the provision for unfunded loan commitments.

The $3.0 million increase from third quarter of 2012 consists of a $1.6 million increase in other real estate expense due to the fourth quarter fair value write-down of properties, a $0.6 million increase in personnel expense due to accrued bonus expense, a $0.5 million increase in general and administrative expense, which is primarily the result of fourth quarter write-down of an investment carried at cost, and a $0.4 million increase in the provision for unfunded loan commitments.

Income Tax: Income tax expense totaled $0.4 million for the fourth quarter of 2012, compared to a benefit of $36.5 million for the fourth quarter of 2011. The income tax expense (benefit) fluctuates in relation to pre-tax income (loss) levels. The fourth quarter 2012 effective tax rate was 31.45%.  

Southwest Bancorp and Subsidiaries

Southwest is the bank holding company for Stillwater National Bank and Trust Company ("Stillwater National") and Bank of Kansas. Through its subsidiaries, Southwest offers commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services from offices in Oklahoma, Texas, and Kansas, and on the Internet, through SNB DirectBanker®. We were organized in 1981 as the holding company for Stillwater National, which was chartered in 1894. At December 31, 2012, we had total assets of $2.1 billion, deposits of $1.7 billion, and shareholders' equity of $246.1 million.

Our area of expertise focuses on the special financial needs of healthcare and health professionals, businesses and their managers and owners, and commercial and commercial real estate borrowers. We established a strategic focus on healthcare lending in 1974. We provide credit and other services, such as deposits, cash management, and document imaging for physicians and other healthcare practitioners to start or develop their practices and finance the development and purchase of medical offices, clinics, surgical care centers, hospitals, and similar facilities. As of December 31, 2012, approximately $502.2 million, or 37%, of our noncovered loans were loans to individuals and businesses in the healthcare industry. We conduct regular market reviews of our current and potential healthcare lending and the appropriate concentrations within healthcare based upon economic and regulatory conditions.

We also focus on commercial real estate mortgage and construction credits. As of December 31, 2012, approximately $1.0 billion, or 74%, of our noncovered loans were commercial real estate mortgage and construction loans, including $344.0 million of loans to individuals and businesses in the healthcare industry. 

Southwest's common stock is traded on the NASDAQ Global Select Market under the symbol OKSB. Southwest's public trust preferred securities are traded on the NASDAQ Global Select Market under the symbol OKSBP.

The Southwest Bancorp, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8074

Caution About Forward-Looking Statements

We make forward-looking statements in this news release that are subject to risks and uncertainties. We intend these statements to be covered by the safe harbor provision for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include: 
  • Statements of Southwest's goals, intentions, and expectations;
  • Estimates of risks and of future costs and benefits;
  • Expectations regarding our future financial performance and the financial performance of our operating segments;
  • Expectations regarding regulatory actions;
  • Expectations regarding our ability to utilize tax loss benefits;
  • Assessments of loan quality, probable loan losses, and the amount and timing of loan payoffs;
  • Estimates of the value of assets held for sale or available for sale; and
  • Statements of our ability to achieve financial and other goals.

These forward-looking statements are subject to significant uncertainties because they are based upon: the amount and timing of future changes in interest rates, market behavior, and other economic conditions; future laws, regulations, and accounting principles; changes in regulatory standards and examination policies, and a variety of other matters. These other matters include, among other things, the direct and indirect effects of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators. 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 our future results. For other factors, risks, and uncertainties that could cause actual results to differ materially from estimates and projections contained in forward-looking statements, please read Southwest's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2012. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors".

The cautionary statements in this release also identify important factors and possible events that involve risk and uncertainties that could cause our actual results to differ materially from those contained in the forward-looking statements. These forward-looking statements speak only as of the date on which the statements were made. We do not intend, and undertake no obligation, to update or revise any forward-looking statements contained in this release, whether as a result of differences in actual results, changes in assumptions, or changes in other factors affecting such statements, except as required by law.

Southwest is required under generally accepted accounting principles to evaluate subsequent events and their impact, if any, on its financial statements as of December 31, 2012 through the date its financial statements are filed with the Securities and Exchange Commission. The December 31, 2012 financial statements included in this release will be adjusted if necessary to properly reflect the impact of subsequent events on estimates used to prepare those statements. 
 
Financial Tables
   
Unaudited Financial Highlights Table 1
   
Unaudited Consolidated Statements of Financial Condition Table 2
   
Unaudited Consolidated Statements of Operations Table 3
   
Unaudited Average Balances, Yields, and Rates-Quarterly Table 4
   
Unaudited Average Balances, Yields, and Rates-Year-to-Date Table 5
   
Unaudited Quarterly Summary Loan Data  Table 6
   
Unaudited Quarterly Summary Financial Data  Table 7
   
Unaudited Quarterly Supplemental Analytical Data  Table 8
           
           
SOUTHWEST BANCORP, INC.           Table 1 
UNAUDITED FINANCIAL HIGHLIGHTS           
(Dollars in thousands, except per share)           
   Fourth Quarter   Third Quarter 
QUARTERLY HIGHLIGHTS       %     % 
  2012 2011  Change  2012  Change 
Operations           
Net interest income  $ 17,285 $ 21,901  (21)% $ 18,682  (7)%
Provision for loan losses   3,085  78,285  (96)  (1,726)  (279)
Noninterest income   4,871  3,576  36  3,950  23
Noninterest expense   17,653  41,903  (58)  14,591  21
Income (loss) before taxes   1,418  (94,711)  (101)  9,767  (85)
Taxes on income   446  (36,450)  (101)  3,880  (89)
Net income (loss)   972  (58,261)  (102)  5,887  (83)
Net income (loss) available to common shareholders   972  (59,340)  (102)  4,344  (78)
Diluted earnings per share   0.05  (3.05)  (102)  0.22  (77)
Balance Sheet           
Total assets   2,122,255  2,377,276  (11)  2,151,153  (1)
Loans held for sale   31,682  38,695  (18)  34,749  (9)
Noncovered portfolio loans   1,321,346  1,687,178  (22)  1,429,165  (8)
Covered portfolio loans   25,707  37,615  (32)  28,197  (9)
Total deposits   1,709,578  1,921,382  (11)  1,743,673  (2)
Total shareholders' equity   246,056  301,589  (18)  244,821  1
Book value per common share   12.60  11.99  5  12.59  0
Key Ratios           
Net interest margin  3.41% 3.62%   3.59%  
Efficiency ratio   79.68  164.47    64.47  
Total capital to risk-weighted assets   21.56  20.78    20.64  
Nonperforming loans to portfolio loans - noncovered   2.91  0.80    1.88  
Shareholders' equity to total assets   11.59  12.69    11.38  
Tangible common equity to tangible assets*   11.54  9.76    11.33  
Return on average assets (annualized)   0.18  (8.98)    1.06  
Return on average common equity (annualized)   1.56  (81.01)    7.11  
Return on average tangible common equity (annualized)**   1.56  (81.35)    7.15  
 
YEAR-TO-DATE HIGHLIGHTS   Twelve Months     
       %     
  2012 2011  Change     
Operations           
Net interest income  $ 76,563 $ 96,332  (21)%    
Provision for loan losses   3,107  132,101  (98)    
Noninterest income   15,936  14,018  14    
Noninterest expense   63,322  90,201  (30)    
Income (loss) before taxes   26,070  (111,952)  (123)    
Taxes on income   9,883  (43,657)  (123)    
Net income (loss)   16,187  (68,295)  (124)    
Net income (loss) available to common shareholders   12,446  (72,548)  (117)    
Diluted earnings per share   0.64  (3.73)  (117)    
Balance Sheet           
Total assets   2,122,255  2,377,276  (11)    
Loans held for sale   31,682  38,695  (18)    
Noncovered portfolio loans   1,321,346  1,687,178  (22)    
Covered portfolio loans   25,707  37,615  (32)    
Total deposits   1,709,578  1,921,382  (11)    
Total shareholders' equity   246,056  301,589  (18)    
Book value per common share   12.60  11.99  5    
Key Ratios           
Net interest margin   3.64 %  3.74 %      
Efficiency ratio (GAAP-based)   68.46  81.74      
Total capital to risk-weighted assets   21.56  20.78      
Nonperforming loans to portfolio loans - noncovered   2.91  0.80      
Shareholders' equity to total assets   11.59  12.69      
Tangible common equity to tangible assets*   11.54  9.76      
Return on average assets   0.72  (2.54)      
Return on average common equity   5.14  (23.83)      
Return on average tangible common equity**   5.16  (23.93)      
 
Balance sheet amounts and ratios are as of period end unless otherwise noted. 
* This is a Non-GAAP financial measure. Please see Table 8 for a reconciliation to the most directly comparable GAAP based measure. 
** This is a Non-GAAP financial measure. 
           
Please see accompanying tables for additional financial information. 
     
     
SOUTHWEST BANCORP, INC.     Table 2 
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION   
(Dollars in thousands)     
     
   December 31,   December 31, 
  2012 2011
Assets     
Cash and due from banks  $ 45,045 $ 30,247
Interest-bearing deposits   243,034  199,642
Cash and cash equivalents   288,079  229,889
Securities held to maturity (fair values of $13,659 and $15,885, respectively)   12,797  15,252
Securities available for sale (amortized cost of $358,317 and $253,869, respectively)   364,315  260,100
Loans held for sale   31,682  38,695
Noncovered loans receivable   1,321,346  1,687,178
Less: Allowance for loan losses   (46,494)  (44,233)
Net noncovered loans receivable   1,274,852  1,642,945
Covered loans receivable (includes loss share: $6,714 and $10,073, respectively)   25,707  37,615
Less: Allowance for loan losses   (224)  (451)
Net covered loans receivable   25,483  37,164
Net loans receivable   1,300,335  1,680,109
Accrued interest receivable   6,365  7,176
Income tax receivable   24,525  28,666
Premises and equipment, net   21,691  22,700
Noncovered other real estate   11,315  19,844
Covered other real estate   3,643  4,529
Goodwill   1,214  1,214
Other intangible assets, net   4,864  4,857
Other assets   51,430  64,245
Total assets  $ 2,122,255 $ 2,377,276
     
Liabilities     
Deposits:     
Noninterest-bearing demand  $ 424,008 $ 400,985
Interest-bearing demand   112,012  105,905
Money market accounts   423,417  423,181
Savings accounts   37,693  33,406
Time deposits of $100,000 or more   351,273  487,907
Other time deposits   361,175  469,998
Total deposits   1,709,578  1,921,382
Accrued interest payable   1,116  3,689
Other liabilities   13,180  12,174
Other borrowings   70,362  56,479
Subordinated debentures   81,963  81,963
Total liabilities   1,876,199  2,075,687
     
Shareholders' equity     
Serial preferred stock -- $1,000 par value; 2,000,000 shares authorized; 0 and 70,000 shares issued and outstanding, respectively   --  68,455
Common stock -- $1 par value; 40,000,000 shares authorized; 19,529,721 and 19,444,213 shares issued and outstanding, respectively   19,530  19,444
Additional paid-in capital   99,705  98,932
Retained earnings   125,093  112,647
Accumulated other comprehensive income   1,728  2,111
Total shareholders' equity   246,056  301,589
Total liabilities and shareholders' equity  $ 2,122,255 $ 2,377,276
         
         
SOUTHWEST BANCORP, INC.         Table 3 
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS     
(Dollars in thousands, except per share)         
         
   For the three months   For the twelve months 
   ended December 31,   ended December 31, 
  2012 2011 2012 2011
Interest income         
Loans  $ 19,021 $ 25,333 $ 84,602 $ 113,223
Investment securities   1,796  1,584  7,814  6,973
Other interest-earning assets   191  148  755  549
Total interest income   21,008  27,065  93,171  120,745
         
Interest expense         
Interest-bearing deposits   2,014  3,318  9,703  16,793
Other borrowings   224  339  895  1,799
Subordinated debentures   1,485  1,507  6,010  5,821
Total interest expense   3,723  5,164  16,608  24,413
         
Net interest income   17,285  21,901  76,563  96,332
         
Provision for loan losses   3,085  78,285  3,107  132,101
         
Net interest income (loss) after provision for loan losses   14,200  (56,384)  73,456  (35,769)
         
Noninterest income         
Service charges and fees   2,971  2,849  11,559  12,075
Gain on sales of loans   910  637  3,133  1,658
Gain on investment securities   802  --  837  --
Other noninterest income   188  90  407  285
Total noninterest income  4,871  3,576  15,936  14,018
         
Noninterest expense         
Salaries and employee benefits   7,956  7,657  29,919  29,880
Occupancy   2,672  2,614  10,581  10,815
FDIC and other insurance   510  858  2,531  3,862
Other real estate, net   2,867  26,369  6,565  30,852
General and administrative   3,648  4,405  13,726  14,792
Total noninterest expense   17,653  41,903  63,322  90,201
Income (loss) before taxes   1,418  (94,711)  26,070  (111,952)
Taxes on income   446  (36,450)  9,883  (43,657)
Net income (loss)  $ 972 $ (58,261) $ 16,187 $ (68,295)
Net income (loss) available to common shareholders  $ 972 $ (59,340) $ 12,446 $ (72,548)
         
Basic earnings per common share  $ 0.05 $ (3.05) $ 0.64 $ (3.73)
Diluted earnings per common share   0.05  (3.05)  0.64  (3.73)
Common dividends declared per share   --  --  --  --
             
             
SOUTHWEST BANCORP, INC.            Table 4
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - QUARTERLY     
(Dollars in thousands)            
             
  For the three months ended December 31,
  2012 2011
  Average   Average Average   Average
  Balance Interest Yield/Rate Balance Interest Yield/Rate
Assets            
Noncovered loans $ 1,424,512 $ 18,427 5.15% $ 1,973,320 $ 24,473 4.92%
Covered loans  25,860  594  9.14  39,010  860  8.75
Investment securities  380,531  1,796  1.88  264,011  1,584  2.38
Other interest-earning assets  185,136  191  0.41  123,532  148  0.48
Total interest-earning assets  2,016,039  21,008  4.15  2,399,873  27,065  4.47
Other assets  125,027      173,307    
Total assets $ 2,141,066     $ 2,573,180    
             
Liabilities and Shareholders' Equity            
Interest-bearing demand deposits $ 105,854 $ 41 0.15% $ 98,167 $ 53 0.21%
Money market accounts  398,143  327  0.33  471,059  388  0.33
Savings accounts  37,242  14  0.15  32,032  12  0.15
Time deposits  747,579  1,632  0.87  994,519  2,865  1.14
Total interest-bearing deposits  1,288,818  2,014  0.62  1,595,777  3,318  0.82
Other borrowings  67,709  224  1.32  70,952  339  1.90
Subordinated debentures  81,963  1,485  7.25  81,963  1,507  7.35
Total interest-bearing liabilities  1,438,490  3,723  1.03  1,748,692  5,164  1.17
             
Noninterest-bearing demand deposits  419,086      400,435    
Other liabilities  34,990      65,093    
Shareholders' equity  248,500      358,960    
Total liabilities and shareholders' equity $ 2,141,066     $ 2,573,180    
             
Net interest income and spread   $ 17,285 3.12%   $ 21,901 3.30%
Net interest margin (1)     3.41%     3.62%
Average interest-earning assets to average interest-bearing liabilities 140.15%     137.24%    
             
 (1) Net interest margin = annualized net interest income / average interest-earning assets       
             
             
SOUTHWEST BANCORP, INC.            Table 5
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - YEAR-TO-DATE     
(Dollars in thousands)            
             
  For the twelve months ended December 31,
  2012 2011
  Average   Average Average   Average
  Balance Interest Yield/Rate Balance Interest Yield/Rate
Assets            
Noncovered loans $ 1,536,494 $ 82,288 5.36% $ 2,168,458 $ 109,839 5.07%
Covered loans  30,824  2,314  7.51  45,449  3,384  7.45
Investment securities  350,021  7,814  2.23  264,006  6,973  2.64
Other interest-earning assets  187,478  755  0.40  96,753  549  0.57
Total interest-earning assets  2,104,817  93,171  4.43  2,574,666  120,745  4.69
Other assets  138,929      115,819    
Total assets $ 2,243,746     $ 2,690,485    
             
Liabilities and Shareholders' Equity            
Interest-bearing demand deposits $ 114,974 $ 219 0.19% $ 108,808 $ 382 0.35%
Money market accounts  381,292  1,077  0.28  483,373  2,154  0.45
Savings accounts  35,741  53  0.15  29,862  49  0.16
Time deposits  842,979  8,354  0.99  1,117,483  14,208  1.27
Total interest-bearing deposits  1,374,986  9,703  0.71  1,739,526  16,793  0.97
Other borrowings  61,822  895  1.45  84,738  1,799  2.12
Subordinated debentures  81,963  6,010  7.33  81,963  5,821  7.10
Total interest-bearing liabilities  1,518,771  16,608  1.09  1,906,227  24,413  1.28
             
Noninterest-bearing demand deposits  396,091      377,780    
Other liabilities  45,368      33,991    
Shareholders' equity  283,516      372,487    
Total liabilities and shareholders' equity $ 2,243,746     $ 2,690,485    
             
Net interest income and spread   $ 76,563 3.34%   $ 96,332 3.41%
Net interest margin (1)     3.64%     3.74%
Average interest-earning assets to average interest-bearing liabilities 138.59%     135.07%    
             
(1) Net interest margin = annualized net interest income / average interest-earning assets       
     
     
SOUTHWEST BANCORP, INC.     Table 6 
UNAUDITED QUARTERLY SUMMARY LOAN DATA               
(Dollars in thousands, except per share)   
  2012 2011
   Dec. 31   Sep. 30   Jun. 30   Mar. 31   Dec. 31   Sep. 30   Jun. 30   Mar. 31 
LOAN COMPOSITION                 
Noncovered:                 
Real estate mortgage:                 
Commercial  $ 870,977 $ 898,453 $ 931,239 $ 996,486 $ 1,028,561 $ 1,169,010 $ 1,262,753 $ 1,302,164
One-to-four family residential   70,952  74,081  74,390  76,287  80,375  85,272  87,407  87,286
Real estate construction                 
Commercial   130,753  206,342  211,098  222,678  227,098  348,053  372,576  403,635
One-to-four family residential   3,656  3,438  4,184  3,814  4,987  25,527  26,400  26,758
Commercial   240,498  244,018  263,085  273,324  346,266  367,241  404,229  416,392
Installment and consumer:                 
Guaranteed student loans   4,680  4,872  5,153  5,276  5,396  5,547  5,600  5,700
Other   31,512  32,710  33,555  31,766  33,190  32,946  34,335  36,493
Total noncovered loans, including held for sale   1,353,028  1,463,914  1,522,704  1,609,631  1,725,873  2,033,596  2,193,300  2,278,428
Less allowance for loan losses   (46,494)  (43,607)  (43,807)  (45,023)  (44,233)  (64,698)  (54,575)  (61,285)
Total noncovered loans, net  $ 1,306,534 $ 1,420,307 $ 1,478,897 $ 1,564,608 $ 1,681,640 $ 1,968,898 $ 2,138,725 $ 2,217,143
Covered:                 
Real estate mortgage:                 
Commercial  $ 18,298 $ 20,664 $ 21,472 $ 22,607 $ 23,686 $ 23,201 $ 26,976 $ 28,929
One-to-four family residential   4,881  5,059  5,432  5,766  7,072  7,378  8,113  8,192
Real estate construction                 
Commercial   382  419  1,627  2,344  3,746  5,987  6,001  6,144
One-to-four family residential   --  --  --  --  --  --  172  281
Commercial   2,037  1,937  2,033  2,401  2,841  4,286  4,461  5,021
Installment and consumer:   109  118  148  196  270  357  430  550
Total covered loans   25,707  28,197  30,712  33,314  37,615  41,209  46,153  49,117
Less allowance for loan losses   (224)  (138)  (91)  (60)  (451)  --  --  --
Total covered loans, net  $ 25,483 $ 28,059 $ 30,621 $ 33,254 $ 37,164 $ 41,209 $ 46,153 $ 49,117
LOANS BY SEGMENT                 
Oklahoma banking  $ 536,855 $ 564,734 $ 597,506 $ 642,700 $ 688,592 $ 770,306 $ 834,189 $ 838,006
Texas banking   491,442  554,367  596,262  636,540  665,010  845,485  911,134  953,123
Kansas banking   184,330  202,262  198,404  202,050  238,468  252,302  260,431  272,685
Out of market   134,426  135,999  137,248  122,890  132,723  166,810  196,495  226,383
Subtotal   1,347,053  1,457,362  1,529,420  1,604,180  1,724,793  2,034,903  2,202,249  2,290,197
Secondary market   31,682  34,749  23,996  38,765  38,695  39,902  37,204  37,348
Total loans  $ 1,378,735 $ 1,492,111 $ 1,553,416 $ 1,642,945 $ 1,763,488 $ 2,074,805 $ 2,239,453 $ 2,327,545
NONPERFORMING LOANS BY TYPE                 
Construction & development  $ 3,355 $ 3,436 $ 3,608 $ 3,768 $ 3,877 $ 68,554 $ 73,487 $ 68,183
Commercial real estate   18,337  20,576  4,932  6,821  4,667  56,234  60,857  47,986
Commercial   15,232  1,791  10,878  2,209  3,374  6,080  15,224  16,633
One-to-four family residential   1,310  949  1,125  1,508  1,491  1,706  1,457  2,634
Consumer   160  131  176  118  140  152  153  27
Total nonperforming loans - noncovered  $ 38,394 $ 26,883 $ 20,719 $ 14,424 $ 13,549 $ 132,726 $ 151,178 $ 135,463
NONPERFORMING LOANS BY SEGMENT                 
Oklahoma banking  $ 3,738 $ 5,198 $ 2,305 $ 2,864 $ 3,699 $ 14,932 $ 18,870 $ 13,443
Texas banking   17,876  15,342  11,526  2,258  83  95,191  91,449  87,122
Kansas banking   4,716  5,681  6,214  8,617  9,070  7,976  9,725  7,924
Out of market   12,064  662  674  685  697  14,627  31,134  26,974
Total nonperforming loans - noncovered  $ 38,394 $ 26,883 $ 20,719 $ 14,424 $ 13,549 $ 132,726 $ 151,178 $ 135,463
OTHER REAL ESTATE BY TYPE                 
Construction & development  $ 215 $ 445 $ 2,585 $ 3,542 $ 3,542 $ 38,927 $ 12,588 $ 6,304
Commercial real estate   11,003  14,130  14,129  14,854  15,464  24,364  16,300  23,890
One-to-four family residential   97  108  549  933  838  7,494  10,068  10,873
Total other real estate - noncovered  $ 11,315 $ 14,683 $ 17,263 $ 19,329 $ 19,844 $ 70,785 $ 38,956 $ 41,067
OTHER REAL ESTATE BY SEGMENT                 
Oklahoma banking  $ 3,393 $ 6,178 $ 6,178 $ 6,273 $ 6,178 $ 8,709 $ 2,613 $ 4,616
Texas banking   7,227  7,227  9,162  9,846  9,846  35,270  17,398  18,652
Kansas banking   695  1,278  1,923  3,210  3,210  12,390  14,539  12,848
Out of market   --  --  --  --  610  14,416  4,406  4,951
Total other real estate - noncovered  $ 11,315 $ 14,683 $ 17,263 $ 19,329 $ 19,844 $ 70,785 $ 38,956 $ 41,067
POTENTIAL PROBLEM LOANS BY TYPE                 
Construction & development  $ 22,077 $ 22,565 $ 25,563 $ 33,907 $ 43,607 $ 75,867 $ 111,032 $ 111,204
Commercial real estate   58,549  53,725  71,537  67,654  55,873  162,692  140,079  85,833
Commercial   12,526  9,305  12,753  23,506  32,477  37,027  38,850  19,940
One-to-four family residential   1,147  1,157  1,230  1,253  1,082  1,108  1,210  429
Consumer   62  --  --  --  --  --  --  --
Total potential problem loans - noncovered  $ 94,361 $ 86,752 $ 111,083 $ 126,320 $ 133,039 $ 276,694 $ 291,171 $ 217,406
POTENTIAL PROBLEM LOANS BY SEGMENT                 
Oklahoma banking  $ 18,773 $ 27,415 $ 37,320 $ 32,761 $ 27,481 $ 54,310 $ 42,565 $ 30,678
Texas banking   49,489  43,472  58,021  78,961  83,035  163,973  183,486  114,506
Kansas banking   4,573  3,286  3,118  1,893  836  14,530  11,289  19,472
Out of market   21,526  12,579  12,624  12,705  21,687  43,881  53,831  52,750
Total potential problem loans - noncovered  $ 94,361 $ 86,752 $ 111,083 $ 126,320 $ 133,039 $ 276,694 $ 291,171 $ 217,406
                 
Continued                 
SOUTHWEST BANCORP, INC.     Table 6 
UNAUDITED QUARTERLY SUMMARY LOAN DATA               Continued 
(Dollars in thousands, except per share)   
  2012 2011
   Dec. 31   Sep. 30   Jun. 30   Mar. 31   Dec. 31   Sep. 30   Jun. 30   Mar. 31 
OUT OF MARKET LOANS                 
Net balance out of market loans:                 
Arizona  $ 40,326 $ 41,255 $ 39,449 $ 34,749 $ 26,372 $ 35,978 $ 49,977 $ 57,657
Iowa   22,826  22,958  23,022  23,130  26,494  26,626  26,695  26,759
Ohio   10,438  11,182  11,502  12,650  12,741  9,367  9,568  9,963
California   9,791  9,684  9,922  10,252  10,530  10,737  9,814  9,984
Kentucky   8,691  7,517  9,455  517  488  490  492  494
South Carolina   7,244  7,283  7,320  --  --  --  --  --
Tennessee   6,204  6,232  6,310  6,368  6,427  6,484  6,550  6,606
Florida   6,254  6,204  6,240  6,269  6,421  6,374  10,582  7,600
Louisiana   4,651  4,968  4,974  4,931  5,336  5,644  5,963  8,018
New Mexico   3,696  3,696  3,714  3,715  15,215  21,019  21,092  28,226
Other   14,305  15,020  15,340  20,309  22,699  44,091  55,762  71,076
Total out of market loans  $ 134,426 $ 135,999 $ 137,248 $ 122,890 $ 132,723 $ 166,810 $ 196,495 $ 226,383
Nonperforming out of market loans:                 
Arizona  $ 11,599 $ 250 $ 256 $ 261 $ 267 $ 8,441 $ 16,745 $ 10,316
Florida   275  281  287  293  299  305  1,479  1,479
Colorado   --  131  131  131  131  746  4,909  880
New Mexico   --  --  --  --  --  5,135  5,135  11,827
Alabama   --  --  --  --  --  --  157  172
Other   190  --  --  --  --  --  2,709  2,300
Total nonperforming out of market loans  $ 12,064 $ 662 $ 674 $ 685 $ 697 $ 14,627 $ 31,134 $ 26,974
Potential problem out of market loans:                 
Iowa  $ 11,868 $ 11,941 $ 11,970 $ 12,035 $ -- $ -- $ -- $ --
New Mexico   --  --  --  --  11,542  11,589  11,635  --
Arizona   9,037  --  --  --  9,463  10,287  14,865  25,242
California   536  548  559  570  578  593  9,423  9,575
Florida   85  90  95  100  104  108  116  --
Colorado   --  --  --  --  --  17,034  13,500  17,933
Alabama   --  --  --  --  --  4,270  4,292  --
Total potential problem out of market loans  $ 21,526 $ 12,579 $ 12,624 $ 12,705 $ 21,687 $ 43,881 $ 53,831 $ 52,750
ALLOWANCE ACTIVITY                 
Balance, beginning of period  $ 43,745 $ 43,898 $ 45,083 $ 44,684 $ 64,698 $ 54,575 $ 61,285 $ 65,229
Charge offs   722  2,653  2,229  1,936  99,604  16,067  27,562  13,392
Recoveries   610  4,226  1,012  619  1,305  1,564  712  398
Net charge offs (recoveries)   112  (1,573)  1,217  1,317  98,299  14,503  26,850  12,994
Provision for loan losses   3,085  (1,726)  32  1,716  78,285  24,626  20,140  9,050
Balance, end of period  $ 46,718 $ 43,745 $ 43,898 $ 45,083 $ 44,684 $ 64,698 $ 54,575 $ 61,285
NET CHARGE OFFS BY TYPE                 
Construction & development  $ (22) $ (1,823) $ (85) $ (42) $ 41,513 $ 7,177 $ 10,847 $ 1,012
Commercial real estate   (18)  2,022  91  14  50,070  5,702  7,593  7,290
Commercial   239  (1,894)  1,228  1,211  6,434  1,469  7,999  4,337
One-to-four family residential   (40)  20  (105)  123  1  55  165  58
Consumer   (47)  102  88  11  281  100  246  297
Total net charge offs (recoveries) by type  $ 112 $ (1,573) $ 1,217 $ 1,317 $ 98,299 $ 14,503 $ 26,850 $ 12,994
NET CHARGE OFFS BY SEGMENT                 
Oklahoma banking  $ (257) $ 7 $ (204) $ 1,070 $ 13,210 $ 1,058 $ 1,442 $ 1,593
Texas banking   305  857  1,139  229  64,370  7,386  9,163  4,502
Kansas banking   68  (2,435)  324  166  8,872  361  1,791  372
Out of market   (4)  (2)  (42)  (148)  11,847  5,698  14,454  6,527
Total net charge offs (recoveries) by segment  $ 112 $ (1,573) $ 1,217 $ 1,317 $ 98,299 $ 14,503 $ 26,850 $ 12,994
     
     
SOUTHWEST BANCORP, INC.     Table 7 
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA               
(Dollars in thousands, except per share)   
  2012 2011
   Dec. 31   Sep. 30   Jun. 30   Mar. 31   Dec. 31   Sep. 30   Jun. 30   Mar. 31 
NET INCOME (LOSS) BY SEGMENT                 
Oklahoma banking  $ 1,460 $ 2,873 $ 4,497 $ 3,158 $ (5,586) $ 7 $ 5,290 $ 3,435
Texas banking   3,785  2,622  1,435  3,161  (35,435)  (6,455)  1,575  1,079
Kansas banking   (67)  1,550  (424)  1,239  (7,533)  (612)  971  131
Out of market   (2,922)  (169)  693  (570)  (7,857)  (1,947)  (9,039)  (924)
Subtotal   2,256  6,876  6,201  6,988  (56,411)  (9,007)  (1,203)  3,721
Secondary market   330  330  124  286  144  90  127  (13)
Other operations   (1,614)  (1,319)  (2,208)  (2,063)  (1,994)  (608)  (1,894)  (1,247)
Net income (loss)  $ 972 $ 5,887 $ 4,117 $ 5,211 $ (58,261) $ (9,525) $ (2,970) $ 2,461
PER SHARE DATA                 
Basic earnings per common share  $ 0.05 $ 0.22 $ 0.15 $ 0.21 $ (3.05) $ (0.54) $ (0.21) $ 0.07
Diluted earnings per common share   0.05  0.22  0.15  0.21  (3.05)  (0.54)  (0.21)  0.07
Book value per common share   12.60  12.59  12.35  12.21  11.99  15.08  15.60  15.73
Tangible book value per share*   12.54  12.53  12.29  12.15  11.93  15.02  15.54  15.67
COMMON STOCK                 
Shares issued and outstanding   19,529,721  19,448,312  19,447,202  19,445,913  19,444,213  19,441,577  19,439,167  19,438,290
OTHER FINANCIAL DATA                 
Investment securities  $ 377,112 $ 381,499 $ 340,378 $ 333,860 $ 275,352 $ 269,599 $ 268,153 $ 258,436
Loans held for sale   31,682  34,749  23,996  38,765  38,695  39,902  37,204  37,348
Noncovered portfolio loans   1,321,346  1,429,165  1,498,708  1,570,866  1,687,178  1,993,694  2,156,096  2,241,080
Total noncovered loans   1,353,028  1,463,914  1,522,704  1,609,631  1,725,873  2,033,596  2,193,300  2,278,428
Covered portfolio loans   25,707  28,197  30,712  33,314  37,615  41,209  46,153  49,117
Total assets   2,122,255  2,151,153  2,264,123  2,268,264  2,377,276  2,566,895  2,654,898  2,773,431
Total deposits   1,709,578  1,743,673  1,788,379  1,806,780  1,921,382  2,022,253  2,094,236  2,218,571
Other borrowings   70,362  66,694  68,477  55,139  56,479  86,583  96,682  85,332
Subordinated debentures   81,963  81,963  81,963  81,963  81,963  81,963  81,963  81,963
Total shareholders' equity   246,056  244,821  309,003  306,046  301,589  361,427  371,333  373,753
Mortgage servicing portfolio   343,397  329,184  305,465  301,378  295,492  285,886  283,083  281,271
INTANGIBLE ASSET DATA                 
Goodwill  $ 1,214 $ 1,214 $ 1,214 $ 1,214 $ 1,214 $ 1,214 $ 1,214 $ 1,214
Core deposit intangible   2,543  2,664  2,785  2,906  3,030  3,155  3,285  3,420
Mortgage servicing rights   2,321  2,122  1,975  1,952  1,825  1,808  1,781  1,718
Nonmortgage servicing rights   --  --  --  --  2  3  3  3
Total intangible assets  $ 6,078 $ 6,000 $ 5,974 $ 6,072 $ 6,071 $ 6,180 $ 6,283 $ 6,355
Intangible amortization expense  $ 283 $ 283 $ 282 $ 296 $ 252 $ 226 $ 222 $ 361
DEPOSIT COMPOSITION                 
Non-interest bearing demand  $ 424,008 $ 429,407 $ 421,083 $ 395,141 $ 400,985 $ 388,365 $ 389,027 $ 369,013
Interest-bearing demand   112,012  113,677  119,929  119,759  105,905  98,270  124,346  112,731
Money market accounts   423,417  385,296  361,839  349,419  423,181  461,546  465,269  486,770
Savings accounts   37,693  36,461  35,610  34,679  33,406  31,319  29,586  28,440
Time deposits of $100,000 or more   351,273  389,969  431,317  464,876  487,907  551,914  570,116  669,817
Other time deposits   361,175  388,863  418,601  442,906  469,998  490,839  515,892  551,800
Total deposits**  $ 1,709,578 $ 1,743,673 $ 1,788,379 $ 1,806,780 $ 1,921,382 $ 2,022,253 $ 2,094,236 $ 2,218,571
OFFICES AND EMPLOYEES                 
FTE Employees   422  429  430  435  435  437  437  424
Branches   22  23  23  23  23  23  23  23
Loan production offices   1  2  2  2  2  2  2  2
Assets per employee  $ 5,029 $ 5,014 $ 5,265 $ 5,214 $ 5,465 $ 5,874 $ 6,075 $ 6,541
                 
*This is a Non-GAAP based financial measure.                 
**Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures)           
Total deposits  $ 1,709,578 $ 1,743,673 $ 1,788,379 $ 1,806,780 $ 1,921,382 $ 2,022,253 $ 2,094,236 $ 2,218,571
Less:                 
Brokered time deposits   9,865  10,197  12,238  13,307  14,974  46,838  52,407  122,124
Other brokered deposits   3,421  4,421  4,420  6,529  78,236  105,483  105,392  112,033
Non-brokered deposits  $ 1,696,292 $ 1,729,055 $ 1,771,721 $ 1,786,944 $ 1,828,172 $ 1,869,932 $ 1,936,437 $ 1,984,414
Plus:                 
Sweep repurchase agreements   45,362  41,694  43,477  30,139  31,482  40,305  30,636  27,214
Core funding  $ 1,741,654 $ 1,770,749 $ 1,815,198 $ 1,817,083 $ 1,859,654 $ 1,910,237 $ 1,967,073 $ 2,011,628
                 
Balance sheet amounts are as of period end unless otherwise noted.               
     
     
SOUTHWEST BANCORP, INC.     Table 8 
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA             
(Dollars in thousands, except per share)   
  2012 2011
   Dec. 31   Sep. 30   Jun. 30   Mar. 31   Dec. 31   Sep. 30   Jun. 30   Mar. 31 
PERFORMANCE RATIOS                 
Return on average assets (annualized)  0.18% 1.06% 0.73% 0.89%  (8.98)%  (1.43)%  (0.43)% 0.35%
Return on average common equity (annualized)   1.56  7.11  5.03  7.00  (81.01)  (13.66)  (5.20)  1.85
Return on average tangible common equity (annualized)*   1.56  7.15  5.06  7.03  (81.35)  (13.72)  (5.22)  1.85
Net interest margin (annualized)   3.41  3.59  3.71  3.82  3.62  3.77  3.79  3.78
Effective tax rate   31.45  39.73  37.12  37.50  38.49  35.23  54.53  38.40
Efficiency ratio   79.68  64.47  71.82  58.73  164.47  64.07  52.40  54.50
NONPERFORMING ASSETS                 
Noncovered:                 
Nonaccrual loans  $ 35,104 $ 26,493 $ 20,474 $ 14,324 $ 13,506 $ 132,268 $ 151,135 $ 134,934
90 days past due and accruing   3,290  390  245  100  43  458  43  529
Total nonperforming loans   38,394  26,883  20,719  14,424  13,549  132,726  151,178  135,463
Other real estate   11,315  14,683  17,263  19,329  19,844  70,785  38,956  41,067
Total nonperforming assets  $ 49,709 $ 41,566 $ 37,982 $ 33,753 $ 33,393 $ 203,511 $ 190,134 $ 176,530
Performing restructured  $ 290 $ 281 $ 328 $ 1,700 $ 1,017 $ 1,026 $ 3,191 $ 2,166
Potential problem loans  $ 94,361 $ 86,752 $ 111,083 $ 126,320 $ 133,039 $ 276,694 $ 291,171 $ 217,406
Covered:                 
Nonaccrual loans  $ 3,595 $ 4,809 $ 6,067 $ 7,015 $ 7,128 $ 7,065 $ 9,800 $ 9,809
90 days past due and accruing   --  353  --  --  --  610  --  --
Total nonperforming loans   3,595  5,162  6,067  7,015  7,128  7,675  9,800  9,809
Other real estate   3,643  4,142  3,825  4,694  4,529  5,350  3,806  4,016
Total nonperforming assets  $ 7,238 $ 9,304 $ 9,892 $ 11,709 $ 11,657 $ 13,025 $ 13,606 $ 13,825
Performing restructured  $ 2,523 $ 2,548 $ 1,701 $ -- $ -- $ -- $ -- $ --
Potential problem loans  $ 3,155 $ 1,621 $ 1,573 $ 553 $ 912 $ 2,015 $ 2,731 $ 3,444
ASSET QUALITY RATIOS                 
Net loan charge-offs to average portfolio loans (annualized)   0.03 %  (0.42)% 0.31% 0.32% 19.78% 2.70% 4.76% 2.25%
Noncovered:                 
Nonperforming assets to portfolio loans and other real estate  3.73% 2.88% 2.51% 2.12% 1.96% 9.86% 8.66% 7.74%
Nonperforming loans to portfolio loans   2.91  1.88  1.38  0.92  0.80  6.66  7.01  6.04
Allowance for loan losses to portfolio loans   3.52  3.05  2.92  2.87  2.62  3.25  2.53  2.73
Allowance for loan losses to nonperforming loans   121.10  162.21  211.43  312.14  326.47  48.75  36.10  45.24
Covered:                 
Nonperforming assets to portfolio loans and other real estate  24.66% 28.77% 28.64% 30.81% 27.66% 27.98% 27.23% 26.02%
Nonperforming loans to portfolio loans   13.98  18.31  19.75  21.06  18.95  18.62  21.23  19.97
Allowance for loan losses to portfolio loans   0.87  0.49  0.30  0.18  1.20  --  --  --
Allowance for loan losses to nonperforming loans   6.23  2.67  1.50  0.86  6.33  --  --  --
CAPITAL RATIOS                 
Average total shareholders' equity to average assets  11.61% 12.31% 13.56% 12.99% 13.95% 14.21% 13.81% 13.40%
Leverage ratio   15.01  14.49  16.84  16.20  14.50  16.47  16.25  15.95
Tier 1 capital to risk-weighted assets   20.28  19.36  22.24  21.21  19.51  19.54  18.93  18.49
Total capital to risk-weighted assets   21.56  20.64  23.52  22.49  20.78  20.81  20.20  19.77
Tangible common equity to tangible assets***   11.54  11.33  10.56  10.42  9.76  11.38  11.38  10.99
REGULATORY CAPITAL DATA                 
Tier I capital  $ 319,665 $ 317,665 $ 382,263 $ 378,949 $ 371,114 $ 433,627 $ 444,105 $ 447,803
Total capital   339,964  338,739  404,252  401,808  395,292  461,928  473,949  478,713
Total risk adjusted assets   1,576,521  1,641,121  1,719,058  1,786,282  1,902,639  2,219,271  2,346,596  2,421,752
Average total assets   2,130,035  2,192,579  2,269,640  2,339,784  2,558,657  2,632,999  2,733,561  2,807,518
                 
*This is a Non-GAAP based financial measure.                 
***Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure)             
Total shareholders' equity  $ 246,056 $ 244,821 $ 309,003 $ 306,046 $ 301,589 $ 361,427 $ 371,333 $ 373,753
Less:                 
Goodwill   1,214  1,214  1,214  1,214  1,214  1,214  1,214  1,214
Preferred stock   --  --  68,837  68,644  68,455  68,268  68,084  67,902
Tangible common equity  $ 244,842 $ 243,607 $ 238,952 $ 236,188 $ 231,920 $ 291,945 $ 302,035 $ 304,637
Total assets  $ 2,122,255 $ 2,151,153 $ 2,264,123 $ 2,268,264 $ 2,377,276 $ 2,566,895 $ 2,654,898 $ 2,773,431
Less goodwill   1,214  1,214  1,214  1,214  1,214  1,214  1,214  1,214
Tangible assets  $ 2,121,041 $ 2,149,939 $ 2,262,909 $ 2,267,050 $ 2,376,062 $ 2,565,681 $ 2,653,684 $ 2,772,217
Tangible common equity to tangible assets  11.54% 11.33% 10.56% 10.42% 9.76% 11.38% 11.38% 10.99%
                 
Balance sheet amounts and ratios are as of period end unless otherwise noted.             
CONTACT: Mark W. Funke         President & CEO         Joe Shockley         EVP & CFO         (405) 372-2230

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