Southwest Bancorp, Inc. Reports First Quarter 2013 Results

STILLWATER, Okla., April 24, 2013 (GLOBE NEWSWIRE) -- Southwest Bancorp, Inc. (Nasdaq:OKSB) (Nasdaq:OKSBP), ("Southwest"), today reported net income available to common shareholders for the first quarter of 2013 of $2.4 million, or $0.12 per diluted share, compared to $1.0 million, or $0.05 per diluted share, for the fourth quarter of 2012.   

Mark Funke, President and CEO, stated, "We are reporting another quarter of earnings with $2.4 million in net income for the quarter, an increase from the $1.0 million in the fourth quarter of 2012. 

"2013 will continue to be a positive rebuilding year for Southwest. During the first quarter several new talented bankers were added into key commercial lending, treasury management, and mortgage positions, building a base for future revenue generation and more diversification in the loan portfolio. We worked to identify weakness in certain segments of the loan portfolio and other real estate and took aggressive actions to address these issues. Improved asset quality and building a base of consistent, conservative, and sustainable earnings growth will remain key focus points in 2013. Southwest remains significantly well capitalized allowing us to focus on long term improvements in our company while continuing to serve and support our communities and loyal customer base."

Financial Overview

Unless otherwise indicated, the following discussion excludes "covered" assets, which are subject to loss sharing agreements with the FDIC. For information on covered versus noncovered assets, please see the accompanying unaudited financial statement and tables.

Condition:   At March 31, 2013, total assets were $2.1 billion, down $30.6 million, or 1%, from December 31, 2012, and total loans were $1.3 billion, down $51.5 million, or 4%, from December 31, 2012, primarily in commercial real estate loans.    

Investment securities decreased $11.5 million, or 3%, to $365.6 million as of March 31, 2013, from $377.1 million as of December 31, 2012. 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 March 31, 2013, the allowance for loan losses was $42.6 million, a decrease of 8% from December 31, 2012. The allowance for loan losses to portfolio loans was 3.29% as of March 31, 2013 compared to 3.52% as of December 31, 2012. The allowance for loan losses to nonperforming loans was 131.78% as of March 31, 2013, compared to 121.10% as of December 31, 2012.

Nonperforming assets were $41.8 million, or 3.20% of portfolio loans and other real estate, as of March 31, 2013, a decrease of $7.9 million (16%) from $49.7 million, or 3.73% of portfolio loans and other real estate, as of December 31, 2012. The decrease in nonperforming assets during the first quarter is attributable to charge-offs of $4.6 million in nonperforming loans, primarily related to one commercial healthcare loan located out of market, $3.9 million in resolutions and payments on nonperforming loans, a $3.3 million decrease in loans ninety days past due, the return to accrual status of $2.6 million in nonaccrual loans, the recognition of impairments in other real estate assets of $1.4 million, and the receipt of $0.5 million from sales of other real estate, offset by placing $8.4 million in loans on nonaccrual. Subsequent to the end of the first quarter, Southwest was successful in the sale of an other real estate property. The commercial real estate property was included in first quarter other real estate in our Texas market at a value of $7.2 million and this sale will generate a pre-tax gain on sale of $1.7 million, which will be reflected in second quarter earnings.

Total core funding, which includes all non-brokered deposits and sweep repurchase agreements, comprised 98% of total funding as of March 31, 2013 and December 31, 2012. Wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 2% of total funding at March 31, 2013 and December 31, 2012. Please see Table 6 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 March 31, 2013, exceeded the criteria for regulatory classification as "well-capitalized". Southwest's total regulatory capital was $343.6 million, for a total risk-based capital ratio of 23.54%, and Tier 1 capital was $324.7 million, for a Tier 1 risk-based capital ratio of 22.25%. Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $197.6 million. Stillwater National Bank, Southwest's principal banking subsidiary, had total regulatory capital of $273.4 million, for a total risk-based capital ratio of 21.43%, and Tier 1 capital of $242.1 million, for a Tier 1 risk-based capital ratio of 18.98%. Stillwater National Bank exceeded the minimum to be classified as "well-capitalized" by $145.8 million. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators.

First Quarter Results:

Summary:  For the first quarter of 2013, net income available to common shareholders was $2.4 million, compared to $4.1 million for the first quarter of 2012, and $1.0 million for the fourth quarter of 2012. The $1.7 million decrease in our net income available to common shareholders from the first quarter of 2012 is the result of a $5.2 million decrease in net interest income, offset in part by a $1.3 million decrease in income tax expense, a $1.2 million decrease in the provision for loan losses, and the $1.1 million decrease primarily in dividends on preferred stock due to the repurchase during 2012. The increase in net income available to common shareholders from the fourth quarter of 2012 is the result of a $3.3 million decrease in noninterest expense and a $2.6 million decrease in the provision for loan losses, offset in part by a $1.7 million decrease in net interest income, a $1.4 million increase in income taxes, and a $1.3 million decrease in noninterest income. 

Net Interest Income:  Net interest income totaled $15.6 million for the first quarter of 2013, compared to $20.8 million for the first quarter of 2012, a decrease of $5.2 million, or 25%, and to $17.3 million for the fourth quarter of 2012, a decrease of $1.7 million, or 10%. Noncovered loans declined $49.4 million, or 4%, from December 31, 2012 primarily due to commercial real estate loans. Net interest margin was 3.16% for the first quarter of 2013, compared to 3.82% for the first quarter of 2012 and 3.41% for the fourth quarter of 2012. The decrease is primarily the result of the reduction in loans.

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 $0.5 million was recorded for the first quarter of 2013, compared to a provision for loan losses of $1.7 million for first quarter of 2012 and a provision for loan losses of $3.1 million for the fourth quarter of 2012. For the first quarter of 2013, net charge-offs totaled $4.4 million, or 1.32% (annualized) of average portfolio loans, compared to net charge-offs of $1.3 million, or 0.32% (annualized) of average portfolio loans for the first quarter of 2012, and net charge-offs of $0.1 million, or 0.03% (annualized) of average portfolio loans for the fourth quarter of 2012. 

Noninterest Income:  Noninterest income totaled $3.5 million for the first quarter of 2013, compared to $3.5 million for the first quarter of 2012, and $4.9 million for the fourth quarter of 2012. The decrease in noninterest income from the fourth quarter of 2012 is the result of a decline of $0.8 million in gain on sales of investment securities, a decline of $0.3 million in service charges and fees, a $0.1 million decline in gain on sale of loans, and a $0.1 million decline in other noninterest income.

Noninterest Expense:  Noninterest expense totaled $14.4 million for the first quarter of 2013, compared to $14.3 million for the first quarter of 2012 and $17.7 million for the fourth quarter of 2012. 

The $3.3 million decrease from fourth quarter of 2012 consists primarily of a $2.5 million decrease in other real estate expense, which included a $1.4 million write-down of other real estate properties during the first quarter of 2013 partially offset by gains on sales of several properties. Also included in the decline between linked quarters is a $0.6 million decrease in general and administrative expense, which is primarily the result of decreased consulting fees, accounting fees, and miscellaneous expenses, a $0.2 million decrease in provision for unfunded loan commitments, and a $0.1 million decrease in occupancy expense, offset in part by a $0.2 million increase in personnel expense.

Income Tax:  Income tax expense totaled $1.9 million for the first quarter of 2013, compared to $3.1 million for the first quarter of 2012 and $0.4 million for the fourth quarter of 2012. The income tax expense fluctuates in relation to pre-tax income levels. The first quarter 2013 effective tax rate was 43.88%, due to a $0.3 million reserve for tax credits.  

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, commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services are offered from offices in Oklahoma, Texas, and Kansas. Stillwater National was chartered in 1894 and Southwest was organized in 1981 as the holding company. At March 31, 2013, Southwest had total assets of $2.1 billion, deposits of $1.7 billion, and shareholders' equity of $250.5 million.

Southwest's 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. The strategic focus on healthcare lending was established in 1974. Southwest and its subsidiaries 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 March 31, 2013, approximately $474.8 million, or 36%, of noncovered loans were loans to individuals and businesses in the healthcare industry. Regular market reviews are conducted of current and potential healthcare lending business and the appropriate concentrations within healthcare based upon economic and regulatory conditions.

Additionally, Southwest also focuses on commercial real estate mortgage and construction lending. As of March 31, 2013, approximately $1.0 billion, or 74%, of noncovered loans were commercial real estate mortgage and construction loans, including $328.4 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.

Caution About Forward-Looking Statements

Southwest makes forward-looking statements in this news release that are subject to risks and uncertainties. These statements are intended 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 Southwest's future financial performance and the financial performance of its operating segments;
  • Expectations regarding regulatory actions;
  • Expectations regarding Southwest's 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 Southwest's 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 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 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. Southwest does not intend, and undertakes 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 March 31, 2013 through the date its financial statements are filed with the Securities and Exchange Commission. The March 31, 2013 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 Quarterly Summary Loan Data Table 5
Unaudited Quarterly Summary Financial Data Table 6
Unaudited Quarterly Supplemental Analytical Data Table 7
 SOUTHWEST BANCORP, INC.           Table 1 
 UNAUDITED FINANCIAL HIGHLIGHTS           
 (Dollars in thousands, except per share)           
   First Quarter   Fourth Quarter 
 QUARTERLY HIGHLIGHTS       %     % 
  2013 2012  Change  2012  Change 
 Operations           
 Net interest income   $15,606  $20,849  (25)%  $17,285  (10)%
 Provision for loan losses   498  1,716  (71)  3,085  (84)
 Noninterest income   3,537  3,514  1  4,871  (27)
 Noninterest expense   14,388  14,309  1  17,653  (18)
 Income before taxes   4,257  8,338  (49)  1,418  200
 Taxes on income   1,868  3,127  (40)  446  319
 Net income   2,389  5,211  (54)  972  146
 Net income available to common shareholders   2,389  4,119  (42)  972  146
 Diluted earnings per share   0.12  0.21  (43)  0.05  140
 Balance Sheet           
 Total assets   2,091,694  2,268,264  (8)  2,122,255  (1)
 Loans held for sale   7,297  38,765  (81)  31,682  (77)
 Noncovered portfolio loans   1,296,317  1,570,866  (17)  1,321,346  (2)
 Covered portfolio loans   23,601  33,314  (29)  25,707  (8)
 Total deposits   1,677,668  1,806,780  (7)  1,709,578  (2)
 Total shareholders' equity   250,509  306,046  (18)  246,056  2
 Book value per common share   12.72  12.21  4  12.60  1
 Key Ratios           
 Net interest margin  3.16% 3.82%   3.41%  
 Efficiency ratio   75.16  58.73    79.68  
 Total capital to risk-weighted assets   23.54  22.49    21.56  
 Nonperforming loans to portfolio loans - noncovered   2.50  0.92    2.91  
 Shareholders' equity to total assets   11.98  13.71    11.59  
 Tangible common equity to tangible assets*   11.93  10.42    11.54  
 Return on average assets (annualized)   0.46  0.89    0.18  
 Return on average common equity (annualized)   3.89  7.00    1.56  
 Return on average tangible common equity (annualized)**   3.90  7.03    1.56  
           
 Balance sheet amounts and ratios are as of period end unless otherwise noted. 
 * This is a Non-GAAP financial measure. Please see Table 7 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)      
       
   March 31,   December 31,   March 31, 
  2013 2012 2012
Assets      
Cash and due from banks $26,677 45,045 24,458
Interest-bearing deposits 317,513 243,034 167,005
Cash and cash equivalents 344,190 288,079 191,463
Securities held to maturity (fair values of $12,539, $13,659, and $13,564, respectively) 11,777 12,797 12,981
Securities available for sale (amortized cost of $348,099, $358,317, and $314,534, respectively) 353,828 364,315 320,879
Loans held for sale 7,297 31,682 38,765
Noncovered loans receivable 1,296,317 1,321,346 1,570,866
Less: Allowance for loan losses (42,639) (46,494) (45,023)
Net noncovered loans receivable 1,253,678 1,274,852 1,525,843
Covered loans receivable (includes loss share: $5,612, $6,714, and $8,638, respectively) 23,601 25,707 33,314
Less: Allowance for loan losses (214) (224) (60)
Net covered loans receivable 23,387 25,483 33,254
Net loans receivable 1,277,065 1,300,335 1,559,097
Accrued interest receivable 6,346 6,365 7,408
Income tax receivable 1,665 24,525 24,544
Premises and equipment, net 21,395 21,691 22,587
Noncovered other real estate 9,422 11,315 19,329
Covered other real estate 2,243 3,643 4,694
Goodwill 1,214 1,214 1,214
Other intangible assets, net 4,869 4,864 4,858
Other assets 50,383 51,430 60,445
Total assets $2,091,694 $2,122,255 $2,268,264
       
Liabilities      
Deposits:      
Noninterest-bearing demand  $416,979  $424,008  $395,141
Interest-bearing demand  125,914  112,012  119,759
Money market accounts  437,629  423,417  349,419
Savings accounts  39,733  37,693  34,679
Time deposits of $100,000 or more  317,270  351,273  464,876
Other time deposits  340,143  361,175  442,906
Total deposits  1,677,668  1,709,578  1,806,780
Accrued interest payable  1,064  1,116  5,016
Other liabilities  9,618  13,180  13,320
Other borrowings  70,872  70,362  55,139
Subordinated debentures  81,963  81,963  81,963
Total liabilities   1,841,185  1,876,199  1,962,218
       
Shareholders' equity      
Serial preferred stock -- $1,000 par value; 2,000,000 shares authorized;      
0, 0, and 70,000 shares issued and outstanding, respectively  --  --  68,644
Common stock -- $1 par value; 40,000,000 shares authorized;      
19,692,038, 19,529,705, and 19,445,913 shares issued and outstanding, respectively  19,692  19,530  19,446
Additional paid-in capital  101,622  99,705  98,895
Retained earnings  127,483  125,093  116,765
Accumulated other comprehensive income  1,712  1,728  2,296
Total shareholders' equity  250,509  246,056  306,046
Total liabilities and shareholders' equity  $2,091,694  $2,122,255  $2,268,264
     
 SOUTHWEST BANCORP, INC.     Table 3 
 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS   
 (Dollars in thousands, except per share)     
     
   For the three months 
   ended March 31, 
  2013 2012
 Interest income     
 Loans   $17,006  $23,377
 Investment securities   1,691  1,946
 Other interest-earning assets   240  184
 Total interest income   18,937  25,507
     
 Interest expense     
 Interest-bearing deposits   1,652  2,896
 Other borrowings   220  224
 Subordinated debentures   1,459  1,538
 Total interest expense   3,331  4,658
     
 Net interest income   15,606  20,849
     
 Provision for loan losses   498  1,716
     
 Net interest income after provision for loan losses   15,108  19,133
     
 Noninterest income     
 Service charges and fees   2,660  2,927
 Gain on sales of loans   814  535
 Other noninterest income   63  52
Total noninterest income  3,537  3,514
     
 Noninterest expense     
 Salaries and employee benefits   8,136  7,247
 Occupancy   2,574  2,545
 FDIC and other insurance   491  783
 Other real estate, net   353  372
 General and administrative   2,834  3,362
 Total noninterest expense   14,388  14,309
 Income before taxes   4,257  8,338
 Taxes on income   1,868  3,127
 Net income   $2,389  $5,211
 Net income available to common shareholders   $2,389  $4,119
     
 Basic earnings per common share  $0.12 $0.21
 Diluted earnings per common share  $0.12  0.21
 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
  March 31, 2013 December 31, 2012
  Average   Average Average   Average
  Balance Interest Yield/Rate Balance Interest Yield/Rate
Assets            
Noncovered loans   $1,330,578  $16,514 5.03%  $1,424,512  $18,427 5.15%
Covered loans  24,895  492  8.01  25,860  594  9.14
Investment securities  380,525  1,691  1.80  380,531  1,796  1.88
Other interest-earning assets  268,396  240  0.36  185,136  191  0.41
Total interest-earning assets  2,004,394  18,937  3.83  2,016,039  21,008  4.15
Other assets  87,592      125,027    
Total assets  $2,091,986      $2,141,066    
             
Liabilities and Shareholders' Equity            
Interest-bearing demand deposits  $133,600  $45 0.14%  $105,854  $41 0.15%
Money market accounts  419,635  236  0.23  398,143  327  0.33
Savings accounts  38,721  12  0.13  37,242  14  0.15
Time deposits  683,159  1,359  0.81  747,579  1,632  0.87
Total interest-bearing deposits  1,275,115  1,652  0.53  1,288,818  2,014  0.62
Other borrowings  69,728  220  1.28  67,709  224  1.32
Subordinated debentures  81,963  1,459  7.12  81,963  1,485  7.25
Total interest-bearing liabilities  1,426,806  3,331  0.95  1,438,490  3,723  1.03
             
Noninterest-bearing demand deposits  403,547      419,086    
Other liabilities  12,285      34,990    
Shareholders' equity  249,348      248,500    
Total liabilities and shareholders' equity  $2,091,986      $2,141,066    
             
Net interest income and spread    $15,606 2.88%    $17,285 3.12%
Net interest margin (1)     3.16%     3.41%
Average interest-earning assets to average interest-bearing liabilities 140.48%     140.15%    
             
 (1) Net interest margin = annualized net interest income / average interest-earning assets       
     
 SOUTHWEST BANCORP, INC.     Table 5 
UNAUDITED QUARTERLY SUMMARY LOAN DATA          
(Dollars in thousands, except per share)          
  2013 2012
   Mar. 31   Dec. 31   Sep. 30   Jun. 30   Mar. 31 
LOAN COMPOSITION          
Noncovered:          
Real estate mortgage:          
Commercial  $819,873  $870,977  $898,453  $931,239  $996,486
One-to-four family residential  73,911  70,952  74,081  74,390  76,287
Real estate construction:          
Commercial  139,462  130,753  206,342  211,098  222,678
One-to-four family residential  5,015  3,656  3,438  4,184  3,814
Commercial  232,224  240,498  244,018  263,085  273,324
Installment and consumer:          
Guaranteed student loans  4,576  4,680  4,872  5,153  5,276
Other  28,553  31,512  32,710  33,555  31,766
Total noncovered loans, including held for sale  1,303,614  1,353,028  1,463,914  1,522,704  1,609,631
Less allowance for loan losses  (42,639)  (46,494)  (43,607)  (43,807)  (45,023)
Total noncovered loans, net  $1,260,975  $1,306,534  $1,420,307  $1,478,897  $1,564,608
Covered:          
Real estate mortgage:          
Commercial  $16,970  $18,298  $20,664  $21,472  $22,607
One-to-four family residential  4,458  4,881  5,059  5,432  5,766
Real estate construction:          
Commercial  367  382  419  1,627  2,344
Commercial  1,715  2,037  1,937  2,033  2,401
Installment and consumer  91  109  118  148  196
Total covered loans  23,601  25,707  28,197  30,712  33,314
Less allowance for loan losses  (214)  (224)  (138)  (91)  (60)
Total covered loans, net  $23,387  $25,483  $28,059  $30,621  $33,254
LOANS BY SEGMENT          
Oklahoma banking  $628,747  $652,121  $704,916  $751,758  $810,217
Texas banking  495,815  520,481  560,197  588,370  616,455
Kansas banking  195,355  174,451  192,249  189,292  177,508
Subtotal  1,319,917  1,347,053  1,457,362  1,529,420  1,604,180
Secondary market  7,298  31,682  34,749  23,996  38,765
Total loans  $1,327,215  $1,378,735  $1,492,111  $1,553,416  $1,642,945
NONPERFORMING LOANS BY TYPE          
Construction & development  $6,409  $3,355  $3,436  $3,608  $3,768
Commercial real estate  13,362  18,337  20,576  4,932  6,821
Commercial  11,861  15,232  1,791  10,878  2,209
One-to-four family residential  651  1,310  949  1,125  1,508
Consumer  73  160  131  176  118
Total nonperforming loans - noncovered  $32,356  $38,394  $26,883  $20,719  $14,424
NONPERFORMING LOANS BY SEGMENT          
Oklahoma banking  $2,000 $2,956  $4,369  $2,979  $3,550
Texas banking  28,817  33,756  19,940  14,894  5,703
Kansas banking  1,539  1,682  2,574  2,846  5,171
Total nonperforming loans - noncovered  $32,356  $38,394  $26,883  $20,719  $14,424
OTHER REAL ESTATE BY TYPE          
Construction & development  $215  $215  $445  $2,585  $3,542
Commercial real estate  9,207  11,003  14,130  14,129  14,854
One-to-four family residential  --  97  108  549  933
Total other real estate - noncovered  $9,422  $11,315  $14,683  $17,263  $19,329
OTHER REAL ESTATE BY SEGMENT          
Oklahoma banking  $1,980  $3,393  $6,178  $6,178  $6,273
Texas banking  7,227  7,227  7,227  9,162  9,846
Kansas banking  215  695  1,278  1,923  3,210
Total other real estate - noncovered  $9,422  $11,315  $14,683  $17,263  $19,329
POTENTIAL PROBLEM LOANS BY TYPE          
Construction & development  $19,968  $22,077  $22,565  $25,563  $33,907
Commercial real estate  60,329  58,549  53,725  71,537  67,654
Commercial  8,220  12,526  9,305  12,753  23,506
One-to-four family residential  1,129  1,147  1,157  1,230  1,253
Consumer  --  62  --  --  --
Total potential problem loans - noncovered  89,646  94,361  86,752  111,083  126,320
POTENTIAL PROBLEM LOANS BY SEGMENT          
Oklahoma banking  32,246  30,875  39,606  48,038  44,122
Texas banking  51,978  58,377  43,313  59,368  79,735
Kansas banking  5,422  5,109  3,833  3,677  2,463
Total potential problem loans - noncovered  $89,646  $94,361  $86,752  $111,083  $126,320
LOANS OUT OF MARKET          
Net balance of loans out of market:          
Arizona   $33,017  $40,326  $41,255  $39,449  $34,749
Iowa  22,659  22,826  22,958  23,022  23,130
California  10,866  9,791  9,684  9,922  10,252
Kentucky  10,144  8,691  7,517  9,455  517
Mississippi  9,170  9,239  9,842  --  --
South Carolina  7,205  7,244  7,283  7,320  --
Tennessee  6,246  6,204  6,232  6,310  6,368
Florida  6,333  6,254  6,204  6,240  6,269
Ohio   4,132  10,438  11,182  11,502  12,650
New Mexico  4,129  3,696  3,696  3,714  3,715
Other   14,136  18,956  19,988  20,314  25,240
Total loans out of market  $128,037  $143,665  $145,841  $137,248  $122,890
Nonperforming loans out of market:          
Arizona   $13,419  $11,599  $250  $256  $261
Florida  270  275  281  287  293
Colorado  131  131  131  131  131
Other  --  59  --  --  --
Total nonperforming out of market  $13,820  $12,064  $662  $674  $685
Potential problem loans out of market:          
Iowa  $11,792  $11,868  $11,941  $11,970  $12,035
California  524  536  548  559  570
Florida  80  85  90  95  100
Arizona   --  9,037  --  --  --
Total potential problem out of market  $12,396  $21,526  $12,579  $12,624  $12,705
ALLOWANCE ACTIVITY          
Balance, beginning of period  $46,718  $43,745  $43,898  $45,083  $44,684
Charge offs   4,651  722  2,653  2,229  1,936
Recoveries  288  610  4,226  1,012  619
Net charge offs (recoveries)  4,363  112  (1,573)  1,217  1,317
Provision for loan losses  498  3,085  (1,726)  32  1,716
Balance, end of period  $42,853  $46,718  $43,745  $43,898  $45,083
NET CHARGE OFFS BY TYPE          
Construction & development  $(19)  $(22)  $(1,823) $ (85)  $(42)
Commercial real estate  416  (18)  2,022  91  14
Commercial  3,751  239  (1,894)  1,228  1,211
One-to-four family residential  167  (40)  20  (105)  123
Consumer  48  (47)  102  88  11
Total net charge offs (recoveries) by type  $4,363  $112  $(1,573)  $1,217  $1,317
NET CHARGE OFFS BY SEGMENT          
Oklahoma banking  $589  $(261)  $5  $(247)  $1,150
Texas banking  3,241  305  857  1,139  227
Kansas banking  533  68  (2,435)  325  (60)
Total net charge offs (recoveries) by segment  $4,363  $112  $(1,573)  $1,217  $1,317
     
 SOUTHWEST BANCORP, INC.     Table 6 
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA          
(Dollars in thousands, except per share)          
  2013 2012
   Mar. 31   Dec. 31   Sep. 30   Jun. 30   Mar. 31 
PER SHARE DATA          
Basic earnings per common share  $0.12  $0.05  $0.22  $0.15  $0.21
Diluted earnings per common share  0.12  0.05  0.22  0.15  0.21
Book value per common share  12.72  12.60  12.59  12.35  12.21
Tangible book value per share*  12.66  12.54  12.53  12.29  12.15
COMMON STOCK          
Shares issued and outstanding 19,692,038 19,529,721 19,448,312 19,447,202 19,445,913
OTHER FINANCIAL DATA          
Investment securities  $365,605  $377,112  $381,499  $340,378  $333,860
Loans held for sale  7,297  31,682  34,749  23,996  38,765
Noncovered portfolio loans  1,296,317  1,321,346  1,429,165  1,498,708  1,570,866
Total noncovered loans  1,303,614  1,353,028  1,463,914  1,522,704  1,609,631
Covered portfolio loans  23,601  25,707  28,197  30,712  33,314
Total assets  2,091,694  2,122,255  2,151,153  2,264,123  2,268,264
Total deposits  1,677,668  1,709,578  1,743,673  1,788,379  1,806,780
Other borrowings  70,872  70,362  66,694  68,477  55,139
Subordinated debentures  81,963  81,963  81,963  81,963  81,963
Total shareholders' equity  250,509  246,056  244,821  309,003  306,046
Mortgage servicing portfolio  356,032  343,397  329,184  305,465  301,378
INTANGIBLE ASSET DATA          
Goodwill  $1,214  $1,214  $1,214  $1,214  $1,214
Core deposit intangible  2,424  2,543  2,664  2,785  2,906
Mortgage servicing rights  2,445  2,321  2,122  1,975  1,952
Total intangible assets  $6,083  $6,078  $6,000  $5,974  $6,072
Intangible amortization expense  $410  $283  $283  $282  $296
DEPOSIT COMPOSITION          
Non-interest bearing demand  $416,979  $424,008  $429,407  $421,083  $395,141
Interest-bearing demand  125,914  112,012  113,677  119,929  119,759
Money market accounts  437,629  423,417  385,296  361,839  349,419
Savings accounts  39,733  37,693  36,461  35,610  34,679
Time deposits of $100,000 or more  317,270  351,273  389,969  431,317  464,876
Other time deposits  340,143  361,175  388,863  418,601  442,906
Total deposits**  $1,677,668  $1,709,578  $1,743,673  $1,788,379  $1,806,780
           
OFFICES AND EMPLOYEES          
FTE Employees 412 422 429 430 435
Branches 22 22 23 23 23
Loan production offices 1 1 2 2 2
Assets per employee $5,077 $5,029 $5,014 $5,265 $5,214
____________________          
*This is a Non-GAAP based financial measure.
**Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures)
Total deposits  $1,677,668  $1,709,578  $1,743,673  $1,788,379  $1,806,780
Less:          
Brokered time deposits  5,760  9,865  10,197  12,238  13,307
Other brokered deposits  3,422  3,421  4,421  4,420  6,529
Non-brokered deposits  $1,668,486  $1,696,292  $1,729,055  $1,771,721  $1,786,944
Plus:          
 Sweep repurchase agreements  45,872  45,362  41,694  43,477  30,139
Core funding  $1,714,358  $1,741,654  $1,770,749  $1,815,198  $1,817,083
           
Balance sheet amounts are as of period end unless otherwise noted.
     
 SOUTHWEST BANCORP, INC.     Table 7 
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA        
(Dollars in thousands, except per share)          
  2013 2012
   Mar. 31   Dec. 31   Sep. 30   Jun. 30   Mar. 31 
PERFORMANCE RATIOS          
Return on average assets (annualized) 0.46% 0.18% 1.06% 0.73% 0.89%
Return on average common equity (annualized)  3.89  1.56  7.11  5.03  7.00
Return on average tangible common equity (annualized)*  3.90  1.56  7.15  5.06  7.03
Net interest margin (annualized)  3.16  3.41  3.59  3.71  3.82
Effective tax rate  43.88  31.45  39.73  37.12  37.50
Efficiency ratio  75.16  79.68  64.47  71.82  58.73
NONPERFORMING ASSETS          
Noncovered:          
Nonaccrual loans $ 32,356  $ 35,104  $ 26,493  $ 20,474  $ 14,324
90 days past due and accruing   --  3,290  390  245  100
Total nonperforming loans  32,356  38,394  26,883  20,719  14,424
Other real estate  9,422  11,315  14,683  17,263  19,329
Total nonperforming assets  $ 41,778 $ 49,709  $ 41,566  $ 37,982  $ 33,753
Performing restructured  $ 512  $ 290  $ 281  $ 328  $ 1,700
Potential problem loans  $ 89,646  $ 94,361  $ 86,752  $111,083  $126,320
Covered:          
Nonaccrual loans  $ 2,873  $ 3,595  $ 4,809  $ 6,067  $ 7,015
90 days past due and accruing   --  --  353  --  --
Total nonperforming loans  2,873  3,595  5,162  6,067  7,015
Other real estate  2,243  3,643  4,142  3,825  4,694
Total nonperforming assets  $ 5,116  $ 7,238  $ 9,304  $ 9,892  $ 11,709
Performing restructured  $ 1,854  $ 2,523  $ 2,548  $ 1,701  $ --
Potential problem loans  $ 3,986  $ 3,155  $ 1,621  $ 1,573  $ 553
ASSET QUALITY RATIOS          
Net loan charge-offs to average portfolio          
loans (annualized) 1.32% 0.03%  (0.42)% 0.31% 0.32%
Noncovered:          
Nonperforming assets to portfolio loans and other real estate 3.20% 3.73% 2.88% 2.51% 2.12%
Nonperforming loans to portfolio loans  2.50  2.91  1.88  1.38  0.92
Allowance for loan losses to portfolio loans  3.29  3.52  3.05  2.92  2.87
Allowance for loan losses to nonperforming loans  131.78  121.10  162.21  211.43  312.14
Covered:          
Nonperforming assets to portfolio loans and other real estate 19.80% 24.66% 28.77% 28.64% 30.81%
Nonperforming loans to portfolio loans  12.17  13.98  18.31  19.75  21.06
Allowance for loan losses to portfolio loans  0.91  0.87  0.49  0.30  0.18
Allowance for loan losses to nonperforming loans  7.45  6.23  2.67  1.50  0.86
CAPITAL RATIOS          
Average total shareholders' equity to average assets 11.92% 11.61% 12.31% 13.56% 12.99%
Leverage ratio  15.59  15.01  14.49  16.84  16.20
Tier 1 capital to risk-weighted assets  22.25  20.28  19.36  22.24  21.21
Total capital to risk-weighted assets  23.54  21.56  20.64  23.52  22.49
Tangible common equity to tangible assets***  11.93  11.54  11.33  10.56  10.42
REGULATORY CAPITAL DATA          
Tier I capital $ 324,659 $ 319,665 $317,665 $ 382,263 $ 378,949
Total capital 343,562 339,964 338,739 404,252 401,808
Total risk adjusted assets 1,459,465 1,576,521 1,641,121 1,719,058 1,786,282
Average total assets 2,082,789 2,130,035 2,192,579 2,269,640 2,339,784
____________________          
*This is a Non-GAAP based financial measure.
***Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure)
Total shareholders' equity  $ 250,509  $ 246,056  $ 244,821  $ 309,003  $ 306,046
Less:          
Goodwill  1,214  1,214  1,214  1,214  1,214
Preferred stock  --  --  --  68,837  68,644
Tangible common equity  $ 249,295  $ 244,842  $ 243,607  $ 238,952  $ 236,188
Total assets  $ 2,091,694  $ 2,122,255  $ 2,151,153  $ 2,264,123  $ 2,268,264
Less goodwill  1,214  1,214  1,214  1,214  1,214
Tangible assets  $ 2,090,480  $ 2,121,041  $ 2,149,939  $ 2,262,909  $ 2,267,050
Tangible common equity to tangible assets 11.93% 11.54% 11.33% 10.56% 10.42%
           
Balance sheet amounts and ratios are as of period end unless otherwise noted.

 
CONTACT: Mark W. Funke         President & CEO         Joe T. Shockley, Jr.         EVP & CFO         (405) 372-2230

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