STILLWATER, Okla., April 22, 2014 (GLOBE NEWSWIRE) -- Southwest Bancorp, Inc. (Nasdaq:OKSB), ("Southwest"), today reported net income for the first quarter of 2014 of $3.7 million, or $0.19 per diluted share, compared to $2.4 million, or $0.12 per diluted share, for the first quarter of 2013.
Southwest also announced that its board of directors has approved a quarterly cash dividend of $0.04 per share payable May 16, 2014 to shareholders of record as of May 2, 2014.
Mark Funke, President and CEO, stated, "Our bank reported good earnings and strong loan growth for the first quarter of 2014. Noncovered loans grew by $50.6 million during the first quarter. Our asset quality continued to strengthen as evidenced by the improvement in the ratio of nonperforming loans to portfolio loans from 1.49% in the fourth quarter of 2013 to 1.16% in the first quarter of 2014 and a reduction in potential problem loans by $7.9 million, or 8% during this period. This improvement, even with our strong loan growth, still led to a negative loan loss provision of $1.0 million.
"As a result of our positive performance and strong capital position, our board of directors approved the continuation of a quarterly dividend of $0.04 per share. The previously announced sale of three of our Kansas branches is expected to be completed in the second quarter.
"These positive results and actions reflect the good work of our associates at Bank SNB and a growing customer base. We will continue to focus our company on future growth through the expansion of our revenue base while prudently managing our expenses. We are encouraged by the momentum we have within the company."
Financial Overview
Unless otherwise indicated, the following discussion excludes "covered" assets, which are subject to loss sharing agreements with the FDIC.
Condition: During the quarter ended March 31, 2014, total assets of $2.0 billion increased $30.6 million from December 31, 2013. Total loans (including noncovered and covered) of $1.3 billion increased $49.2 million from December 31, 2013 and total investment securities of $387.0 million decreased $4.9 million from December 31, 2013. Liquidity remains strong as cash and cash equivalents at March 31, 2014 were $266.6 million, with $241.6 million in overnight funds.
At March 31, 2014, the allowance for loan losses was $34.9 million, a decrease of $7.7 million when compared to a year ago and a decrease of $1.7 million when compared to December 31, 2013. The allowance for loan losses to portfolio loans was 2.69% as of March 31, 2014, compared to 3.29% as of March 31, 2013 and 2.93% as of December 31, 2013. The allowance for loan losses to nonperforming loans was 231.83% as of March 31, 2014, compared to 131.78% as of March 31, 2013 and 196.67% as of December 31, 2013.
Nonperforming loans decreased by $17.3 million in a year over year comparison and by $3.6 million during the quarter. Other real estate at March 31, 2014 was $2.6 million, a decrease of $6.9 million from March 31, 2013, and an increase of $2.0 million when compared to December 31. Nonperforming assets were $17.6 million, or 1.35% of portfolio loans and other real estate, as of March 31, 2014, compared to $41.8 million, or 3.20% of portfolio loans and other real estate, as of March 31, 2013, and $19.2 million, or 1.53% of portfolio loans and other real estate, as of December 31, 2013.
Total core funding, which includes all non-brokered deposits and sweep repurchase agreements, comprised 98% of total funding as of March 31, 2014 and December 31, 2013. Wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 2% of total funding at March 31, 2014 and December 31, 2013. See Table 6 for details on core funding and non-brokered deposits, which are non-GAAP financial measures.
The capital ratios of Southwest and Bank SNB, National Association, ("Bank SNB"), Southwest's banking subsidiary, as of March 31, 2014, exceeded the criteria for regulatory classification as "well-capitalized". Southwest's total regulatory capital was $319.5 million, for a total risk-based capital ratio of 21.29%, and Tier 1 capital was $299.9 million, for a Tier 1 risk-based capital ratio of 19.98%. Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $169.4 million. Bank SNB had total regulatory capital of $273.4 million, for a total risk-based capital ratio of 18.30%, and Tier 1 capital of $254.4 million, for a Tier 1 risk-based capital ratio of 17.03%. Bank SNB exceeded the minimum to be classified as "well-capitalized" by $124.0 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 2014, net income was $3.7 million, compared to $2.4 million for the first quarter of 2013 and $6.8 million for the fourth quarter of 2013.
The $1.3 million increase in our net income compared to the first quarter of 2013 was primarily due to the $1.5 million decrease in the provision for loan losses, resulting from improved asset quality and loan recoveries. Net interest income increased $0.4 million compared to the first quarter of 2013 primarily driven by a reduction in interest expense due to the redemption of the 10.5% Trust Preferred Securities in third quarter of 2013. Noninterest income decreased $0.5 million compared to the first quarter of 2013 primarily due to decreased gains on sales of mortgage loans. Noninterest expense decreased $0.3 million compared to the first quarter of 2013 primarily due to reduced other real estate expense.
The $3.1 million decrease in net income compared to the fourth quarter of 2013 was primarily due to higher recoveries in the previous quarter resulting in a $5.5 million reduction in the negative provision for loan losses. Net interest income decreased from the fourth quarter of 2013 by $0.6 million due to lower average loan volumes during the first quarter of 2014. Noninterest expense was down $1.0 million primarily due in part to reduced general and administrative expenses associated with the charter consolidation and rebranding of our banking subsidiary in the fourth quarter of 2013.
Net Interest Income: Net interest income totaled $16.0 million for the first quarter of 2014, compared to $15.6 million for the first quarter of 2013, an increase of $0.4 million, or 3%, and to $16.6 million for the fourth quarter of 2013, a decrease of $0.6 million, or 4%. Net interest margin was 3.33% for the first quarter of 2014, compared to 3.16% for the first quarter of 2013 and 3.42% for the fourth quarter of 2013. Included in interest income for the first quarter of 2014 was $0.6 million due to interest recognition resulting from loans returning to accrual status, and included in interest income for the fourth quarter of 2013 was $0.9 million due to the recognition of interest from the recovery of a nonperforming loan. The net effects of these adjustments on the net interest margin were a 12 basis point increase in the first quarter of 2014 and a 19 basis point increase in the fourth quarter of 2013. Noncovered loans (including loans held for sale) increased $1.5 million, or less than 1%, when compared to March 31, 2013, and $50.6 million, or 4%, when compared to December 31, 2013.
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 was a negative provision (or credit) of $1.0 million for the first quarter of 2014, compared to a provision of $0.5 million for the first quarter of 2013 and a negative provision of $6.5 million for the fourth quarter of 2013. During the first quarter of 2014, charge-offs totaled $3.4 million and recoveries totaled $2.6 million. Therefore, the first quarter of 2014 net charge-offs totaled $0.8 million, or 0.24% (annualized) of average portfolio loans, compared to net charge-offs of $4.4 million, or 1.32% (annualized) of average portfolio loans for the first quarter of 2013 and net recoveries of $3.1 million, or (0.96%) (annualized) of average portfolio loans for the fourth quarter of 2013.
Noninterest Income: Noninterest income totaled $3.0 million for the first quarter of 2014, compared to $3.5 million for the first quarter of 2013 and to $3.1 million for the fourth quarter of 2013. The $0.5 million decrease from first quarter 2013 included a $0.6 million decrease in gain on sales of mortgage loans, offset by a $0.1 million gain on investment securities due to the sale of an investment that was carried at cost. The decrease from fourth quarter of 2013 included a $0.2 million decrease in gain on sale of mortgage loans, offset by a $0.1 million gain on investment securities due to the sale of an investment that was carried at cost.
Noninterest Expense: Noninterest expense totaled $14.1 million for the first quarter of 2014, compared to $14.4 million for the first quarter of 2013 and to $15.1 million for the fourth quarter of 2013. The $0.3 million decrease in noninterest expense from first quarter of 2013 primarily consisted of a $0.3 million decrease in other real estate expense due to decreased expenses and write-downs as a result of fewer other real estate properties. The $1.0 million decrease in noninterest expense from fourth quarter of 2013 consisted of a $0.7 million decrease in general and administrative expense, due to reduced expenses associated with the charter consolidation and rebranding of our subsidiary bank in the fourth quarter of 2013, and a $0.3 million decrease in other real estate expenses.
Income Tax: Income tax expense totaled $2.2 million for the first quarter of 2014, compared to $1.9 million for the first quarter of 2013 and to $4.3 million for the fourth quarter of 2013. The income tax expense fluctuates in relation to pre-tax income levels. The first quarter of 2014 effective tax rate was 37.49%.
Conference Call
Southwest will host a conference call to review these results on Wednesday, April 23, 2014 at 9:30 a.m. Eastern Time (8:30 a.m. Central Time). Investors, news media, and others may access the call by telephone at 888-317-6016 (toll-free) or 412-317-6016 (international). Participants are encouraged to dial into the call approximately 10 minutes prior to the start time. The call and corresponding presentation slides will be webcast live on Southwest's website at www.oksb.com or http://services.choruscall.com/links/oksb140423.html. An audio replay will be available one hour after the call at 877-344-7529 (toll-free) or 412-317-0088 (international), conference number 10043805. Telephone replay access will be available until 9:00 a.m. Eastern Time on May 21, 2014.
Southwest Bancorp and Subsidiaries
Southwest is the bank holding company for Bank SNB, National Association ("Bank SNB"). Bank SNB offers commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services from offices in Oklahoma, Texas, and Kansas. Bank SNB was chartered in 1894 and Southwest was organized in 1981 as the holding company. At March 31, 2014, Southwest had total assets of $2.0 billion, deposits of $1.6 billion, and shareholders' equity of $264.6 million.
Southwest's area of expertise focuses on the special financial needs of healthcare and health professionals, businesses and their managers and owners, commercial lending, energy banking, and commercial real estate borrowers. The strategic focus on healthcare lending was established in 1974. Southwest and its banking subsidiary 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, 2014, approximately $420.3 million, or 32%, of noncovered loans were loans to individuals and businesses in the healthcare industry. Regular market reviews are conducted of (i) current and potential healthcare lending business, and (ii) the appropriate concentrations within healthcare based upon economic and regulatory conditions.
Southwest's common stock is traded on the NASDAQ Global Select Market under the symbol OKSB.
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, 2013. 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, 2014 through the date its financial statements are filed with the Securities and Exchange Commission. The March 31, 2014 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 | 2014 | 2013 | % Change | 2013 | % Change |
| Operations | |||||
| Net interest income | $ 16,001 | $ 15,606 | 3% | $ 16,637 | (4)% |
| Provision for loan losses | (986) | 498 | 298 | (6,502) | (85) |
| Noninterest income | 3,025 | 3,537 | (14) | 3,068 | (1) |
| Noninterest expense | 14,107 | 14,388 | (2) | 15,065 | (6) |
| Income before taxes | 5,905 | 4,257 | 39 | 11,142 | (47) |
| Taxes on income | 2,214 | 1,868 | 19 | 4,310 | (49) |
| Net income | 3,691 | 2,389 | 54 | 6,832 | (46) |
| Diluted earnings per share | 0.19 | 0.12 | 58 | 0.35 | (46) |
| Balance Sheet | |||||
| Total assets | 2,012,053 | 2,091,694 | (4) | 1,981,423 | 2 |
| Loans held for sale | 5,741 | 7,297 | (21) | 3,060 | 88 |
| Noncovered portfolio loans | 1,299,328 | 1,296,317 | 0 | 1,251,416 | 4 |
| Covered portfolio loans | 15,053 | 23,601 | (36) | 16,427 | (8) |
| Total deposits | 1,605,906 | 1,677,668 | (4) | 1,584,086 | 1 |
| Total shareholders' equity | 264,586 | 250,509 | 6 | 259,187 | 2 |
| Book value per common share | 13.37 | 12.72 | 5 | 13.13 | 2 |
| Key Ratios | |||||
| Net interest margin | 3.33% | 3.16% | 3.42% | ||
| Efficiency ratio | 74.15 | 75.16 | 76.45 | ||
| Total capital to risk-weighted assets | 21.29 | 23.54 | 21.59 | ||
| Nonperforming loans to portfolio loans - noncovered | 1.16 | 2.50 | 1.49 | ||
| Shareholders' equity to total assets | 13.15 | 11.98 | 13.08 | ||
| Tangible common equity to tangible assets* | 13.10 | 11.93 | 13.03 | ||
| Return on average assets (annualized) | 0.75 | 0.46 | 1.37 | ||
| Return on average common equity (annualized) | 5.68 | 3.89 | 10.59 | ||
| Return on average tangible common equity (annualized)** | 5.71 | 3.90 | 10.64 | ||
| 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, | |
| 2014 | 2013 | 2013 | |
| Assets | |||
| Cash and due from banks | $ 24,995 | $ 28,062 | $ 26,677 |
| Interest-bearing deposits | 241,579 | 251,777 | 317,513 |
| Cash and cash equivalents | 266,574 | 279,839 | 344,190 |
| Securities held to maturity (fair values of $11,252, $12,115, and $12,539, respectively) | 10,700 | 11,720 | 11,777 |
| Securities available for sale (amortized cost of $376,837, $385,423, and $348,099, respectively) | 376,287 | 382,479 | 353,828 |
| Loans held for sale | 5,741 | 3,060 | 7,297 |
| Noncovered loans receivable | 1,299,328 | 1,251,416 | 1,296,317 |
| Less: Allowance for loan losses | (34,918) | (36,607) | (42,639) |
| Net noncovered loans receivable | 1,264,410 | 1,214,809 | 1,253,678 |
| Covered loans receivable (includes loss share: $1,139, $1,812, and $5,612, respectively) | 15,053 | 16,427 | 23,601 |
| Less: Allowance for loan losses | (7) | (56) | (214) |
| Net covered loans receivable | 15,046 | 16,371 | 23,387 |
| Net loans receivable | 1,279,456 | 1,231,180 | 1,277,065 |
| Accrued interest receivable | 5,380 | 5,335 | 6,346 |
| Premises and equipment, net | 20,719 | 20,833 | 21,395 |
| Noncovered other real estate | 2,560 | 560 | 9,422 |
| Covered other real estate | 2,094 | 2,094 | 2,243 |
| Goodwill | 1,214 | 1,214 | 1,214 |
| Other intangible assets, net | 4,931 | 4,980 | 4,869 |
| Other assets | 36,397 | 38,129 | 52,048 |
| Total assets | $ 2,012,053 | $ 1,981,423 | $ 2,091,694 |
| Liabilities | |||
| Deposits: | |||
| Noninterest-bearing demand | $ 471,568 | $ 444,796 | $ 416,979 |
| Interest-bearing demand | 132,622 | 120,156 | 125,914 |
| Money market accounts | 440,875 | 439,981 | 437,629 |
| Savings accounts | 47,532 | 41,727 | 39,733 |
| Time deposits of $100,000 or more | 236,035 | 251,185 | 317,270 |
| Other time deposits | 277,274 | 286,241 | 340,143 |
| Total deposits | 1,605,906 | 1,584,086 | 1,677,668 |
| Accrued interest payable | 807 | 832 | 1,064 |
| Other liabilities | 8,669 | 10,293 | 9,618 |
| Other borrowings | 85,692 | 80,632 | 70,872 |
| Subordinated debentures | 46,393 | 46,393 | 81,963 |
| Total liabilities | 1,747,467 | 1,722,236 | 1,841,185 |
| Shareholders' equity | |||
| Common stock -- $1 par value; 40,000,000 shares authorized; | |||
| 19,786,206, 19,732,926, and 19,692,038 shares issued and outstanding, respectively | 19,786 | 19,733 | 19,692 |
| Additional paid-in capital | 100,853 | 99,937 | 101,622 |
| Retained earnings | 145,428 | 142,528 | 127,483 |
| Accumulated other comprehensive income (loss) | (1,481) | (3,011) | 1,712 |
| Total shareholders' equity | 264,586 | 259,187 | 250,509 |
| Total liabilities and shareholders' equity | $ 2,012,053 | $ 1,981,423 | $ 2,091,694 |
| SOUTHWEST BANCORP, INC. | Table 3 | ||
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
| (Dollars in thousands, except per share) | |||
| For the three months ended | |||
| March 31, | December 31, | March 31, | |
| 2014 | 2013 | 2013 | |
| Interest income | |||
| Loans | $ 15,775 | $ 16,499 | $ 17,006 |
| Investment securities | 1,650 | 1,747 | 1,691 |
| Other interest-earning assets | 375 | 332 | 240 |
| Total interest income | 17,800 | 18,578 | 18,937 |
| Interest expense | |||
| Interest-bearing deposits | 1,025 | 1,148 | 1,652 |
| Other borrowings | 225 | 225 | 220 |
| Subordinated debentures | 549 | 568 | 1,459 |
| Total interest expense | 1,799 | 1,941 | 3,331 |
| Net interest income | 16,001 | 16,637 | 15,606 |
| Provision for loan losses | (986) | (6,502) | 498 |
| Net interest income after provision for loan losses | 16,987 | 23,139 | 15,108 |
| Noninterest income | |||
| Service charges and fees | 2,596 | 2,635 | 2,660 |
| Gain on sales of mortgage loans | 224 | 385 | 814 |
| Gain on sale/call of investment securities, net | 135 | -- | -- |
| Other noninterest income | 70 | 48 | 63 |
| Total noninterest income | 3,025 | 3,068 | 3,537 |
| Noninterest expense | |||
| Salaries and employee benefits | 8,126 | 8,057 | 8,136 |
| Occupancy | 2,769 | 2,805 | 2,574 |
| FDIC and other insurance | 397 | 460 | 491 |
| Other real estate, net | 68 | 330 | 353 |
| General and administrative | 2,747 | 3,413 | 2,834 |
| Total noninterest expense | 14,107 | 15,065 | 14,388 |
| Income before taxes | 5,905 | 11,142 | 4,257 |
| Taxes on income | 2,214 | 4,310 | 1,868 |
| Net income | $ 3,691 | $ 6,832 | $ 2,389 |
| Basic earnings per common share | $ 0.19 | $ 0.35 | $ 0.12 |
| Diluted earnings per common share | 0.19 | 0.35 | 0.12 |
| Common dividends declared per share | 0.04 | -- | -- |
| SOUTHWEST BANCORP, INC. | Table 4 | ||||||||
| UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - QUARTERLY | |||||||||
| (Dollars in thousands) | |||||||||
| For the three months ended | |||||||||
| March 31, 2014 | December 31, 2013 | March 31, 2013 | |||||||
| Average | Average | Average | Average | Average | Average | ||||
| Balance | Yield/Rate | Balance | Yield/Rate | Balance | Yield/Rate | ||||
| Assets | |||||||||
| Noncovered loans | $ 1,262,589 | 4.99% | $ 1,270,307 | 5.06% | $ 1,330,578 | 5.03% | |||
| Covered loans | 15,743 | 6.16 | 18,180 | 6.83 | 24,895 | 8.01 | |||
| Investment securities | 388,639 | 1.72 | 390,160 | 1.78 | 380,525 | 1.80 | |||
| Other interest-earning assets | 280,327 | 0.54 | 253,327 | 0.52 | 268,396 | 0.36 | |||
| Total interest-earning assets | 1,947,298 | 3.71 | 1,931,974 | 3.82 | 2,004,394 | 3.83 | |||
| Other assets | 50,247 | 47,369 | 87,592 | ||||||
| Total assets | $ 1,997,545 | $ 1,979,343 | $ 2,091,986 | ||||||
| Liabilities and Shareholders' Equity | |||||||||
| Interest-bearing demand deposits | $ 134,760 | 0.12% | $ 111,744 | 0.11% | $ 133,600 | 0.14% | |||
| Money market accounts | 436,763 | 0.14 | 426,090 | 0.17 | 419,635 | 0.23 | |||
| Savings accounts | 44,764 | 0.10 | 41,021 | 0.10 | 38,721 | 0.13 | |||
| Time deposits | 531,071 | 0.63 | 555,762 | 0.66 | 683,159 | 0.81 | |||
| Total interest-bearing deposits | 1,147,358 | 0.36 | 1,134,617 | 0.40 | 1,275,115 | 0.53 | |||
| Other borrowings | 80,806 | 1.13 | 78,933 | 1.13 | 69,728 | 1.28 | |||
| Subordinated debentures | 46,393 | 4.73 | 46,393 | 4.90 | 81,963 | 7.12 | |||
| Total interest-bearing liabilities | 1,274,557 | 0.57 | 1,259,943 | 0.61 | 1,426,806 | 0.95 | |||
| Noninterest-bearing demand deposits | 449,128 | 452,849 | 403,547 | ||||||
| Other liabilities | 10,489 | 10,564 | 12,285 | ||||||
| Shareholders' equity | 263,371 | 255,987 | 249,348 | ||||||
| Total liabilities and shareholders' equity | $ 1,997,545 | $ 1,979,343 | $ 2,091,986 | ||||||
| Net interest income and spread | 3.14% | 3.21% | 2.88% | ||||||
| Net interest margin (1) | 3.33% | 3.42% | 3.16% | ||||||
| Average interest-earning assets | |||||||||
| to average interest-bearing liabilities | 152.78% | 153.34% | 140.48% | ||||||
| (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) | |||||
| 2014 | 2013 | ||||
| Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | |
| LOAN COMPOSITION | |||||
| Real estate mortgage: | |||||
| Commercial | $ 755,680 | $ 740,997 | $ 743,858 | $ 786,686 | $ 819,873 |
| One-to-four family residential | 81,199 | 80,058 | 80,561 | 77,445 | 73,911 |
| Real estate construction: | |||||
| Commercial | 165,820 | 143,650 | 162,995 | 158,907 | 139,462 |
| One-to-four family residential | 6,629 | 4,646 | 4,464 | 5,241 | 5,015 |
| Commercial | 265,394 | 254,087 | 263,598 | 235,667 | 232,224 |
| Installment and consumer: | |||||
| Guaranteed student loans | 4,318 | 4,394 | 4,471 | 4,520 | 4,576 |
| Other | 26,029 | 26,644 | 27,698 | 27,977 | 28,553 |
| Total noncovered loans, including held for sale | 1,305,069 | 1,254,476 | 1,287,645 | 1,296,443 | 1,303,614 |
| Less allowance for loan losses | (34,918) | (36,607) | (40,013) | (40,270) | (42,639) |
| Total noncovered loans, net | $ 1,270,151 | $ 1,217,869 | $ 1,247,632 | $ 1,256,173 | $ 1,260,975 |
| LOANS BY SEGMENT | |||||
| Oklahoma banking | $ 754,698 | $ 681,999 | $ 681,749 | $ 656,356 | $ 628,747 |
| Texas banking | 372,018 | 366,697 | 414,433 | 444,327 | 495,815 |
| Kansas banking | 170,720 | 198,992 | 206,802 | 210,189 | 195,355 |
| Subtotal | 1,297,436 | 1,247,688 | 1,302,984 | 1,310,872 | 1,319,917 |
| Mortgage banking | 22,686 | 23,215 | 3,641 | 7,217 | 7,298 |
| Total loans | $ 1,320,122 | $ 1,270,903 | $ 1,306,625 | $ 1,318,089 | $ 1,327,215 |
| NONPERFORMING LOANS BY TYPE | |||||
| Construction & development | $ 80 | $ 2,721 | $ 5,659 | $ 5,989 | $ 6,409 |
| Commercial real estate | 6,571 | 6,564 | 12,203 | 12,325 | 13,362 |
| Commercial | 7,992 | 8,819 | 10,887 | 10,719 | 11,861 |
| One-to-four family residential | 417 | 456 | 396 | 418 | 651 |
| Consumer | 2 | 53 | 55 | 64 | 73 |
| Total nonperforming loans - noncovered | $ 15,062 | $ 18,613 | $ 29,200 | $ 29,515 | $ 32,356 |
| NONPERFORMING LOANS BY SEGMENT | |||||
| Oklahoma banking | $ 7,056 | $ 5,547 | $ 3,279 | $ 1,678 | $ 2,000 |
| Texas banking | 5,793 | 11,902 | 24,963 | 26,294 | 28,817 |
| Kansas banking | 2,213 | 1,164 | 958 | 1,543 | 1,539 |
| Total nonperforming loans - noncovered | $ 15,062 | $ 18,613 | $ 29,200 | $ 29,515 | $ 32,356 |
| OTHER REAL ESTATE BY TYPE | |||||
| Construction & development | $ 2,000 | $ -- | $ 676 | $ 145 | $ 215 |
| Commercial real estate | 560 | 560 | -- | -- | 9,207 |
| Total other real estate - noncovered | $ 2,560 | $ 560 | $ 676 | $ 145 | $ 9,422 |
| OTHER REAL ESTATE BY SEGMENT | |||||
| Oklahoma banking | $ -- | $ -- | $ -- | $ -- | $ 1,980 |
| Texas banking | 2,000 | -- | -- | -- | 7,227 |
| Kansas banking | 560 | 560 | 676 | 145 | 215 |
| Total other real estate - noncovered | $ 2,560 | $ 560 | $ 676 | $ 145 | $ 9,422 |
| Continued | |||||
| SOUTHWEST BANCORP, INC. | Table 5 | ||||
| UNAUDITED QUARTERLY SUMMARY LOAN DATA | Continued | ||||
| (Dollars in thousands) | |||||
| 2014 | 2013 | ||||
| Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | |
| POTENTIAL PROBLEM LOANS BY TYPE | |||||
| Construction & development | $ 22,220 | $ 21,501 | $ 22,222 | $ 20,745 | $ 19,968 |
| Commercial real estate | 62,680 | 68,951 | 62,475 | 62,166 | 60,329 |
| Commercial | 4,807 | 7,107 | 10,028 | 10,136 | 8,220 |
| One-to-four family residential | 481 | 488 | 414 | 1,071 | 1,129 |
| Total potential problem loans - noncovered | $ 90,188 | $ 98,047 | $ 95,139 | $ 94,118 | $ 89,646 |
| POTENTIAL PROBLEM LOANS BY SEGMENT | |||||
| Oklahoma banking | $ 29,208 | $ 29,005 | $ 31,345 | $ 31,495 | $ 32,246 |
| Texas banking | 58,361 | 65,079 | 59,561 | 58,710 | 51,978 |
| Kansas banking | 2,619 | 3,963 | 4,233 | 3,913 | 5,422 |
| Total potential problem loans - noncovered | $ 90,188 | $ 98,047 | $ 95,139 | $ 94,118 | $ 89,646 |
| LOANS OUT OF MARKET | |||||
| Net balance of loans out of market: | |||||
| Iowa | $ 22,178 | $ 22,316 | $ 22,438 | $ 22,537 | $ 22,659 |
| Arizona | 15,348 | 19,458 | 30,516 | 31,564 | 33,017 |
| Colorado | 13,705 | 12,553 | 12,358 | 8,586 | 3,067 |
| North Carolina | 13,494 | 13,070 | 10,161 | 300 | 407 |
| Kentucky | 13,415 | 12,404 | 10,088 | 11,860 | 10,144 |
| California | 8,869 | 9,154 | 9,472 | 9,632 | 10,866 |
| Mississippi | 8,712 | 8,823 | 8,929 | 9,233 | 9,170 |
| Tennessee | 6,684 | 6,048 | 6,136 | 6,171 | 6,246 |
| Ohio | 3,862 | 3,549 | 3,294 | 4,759 | 4,132 |
| Pennsylvania | 2,940 | 3,109 | 3,299 | 3,441 | 44 |
| Other | 6,983 | 12,171 | 24,562 | 27,225 | 28,285 |
| Total loans out of market | $ 116,190 | $ 122,655 | $ 141,253 | $ 135,308 | $ 128,037 |
| Nonperforming loans out of market: | |||||
| Arizona | $ 5,441 | $ 9,302 | $ 11,205 | $ 12,167 | $ 13,419 |
| New Jersey | 1,094 | -- | -- | -- | -- |
| New York | -- | -- | 1,033 | 1,048 | -- |
| Florida | 246 | 252 | 258 | 264 | 270 |
| Colorado | -- | -- | -- | -- | 131 |
| Other | -- | -- | -- | 1 | -- |
| Total nonperforming out of market | $ 6,781 | $ 9,554 | $ 12,496 | $ 13,480 | $ 13,820 |
| Potential problem loans out of market: | |||||
| Iowa | $ 11,490 | $ 11,568 | $ 11,645 | $ 11,719 | $ 11,792 |
| Arizona | 1,167 | -- | -- | -- | -- |
| California | 474 | 482 | 499 | 512 | 524 |
| Florida | 62 | 66 | 71 | 75 | 80 |
| New Jersey | -- | 1,094 | 1,170 | 1,244 | -- |
| Total potential problem loans out of market | $ 13,193 | $ 13,210 | $ 13,385 | $ 13,550 | $ 12,396 |
| Continued | |||||
| SOUTHWEST BANCORP, INC. | Table 5 | ||||
| UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA | Continued | ||||
| (Dollars in thousands) | |||||
| 2014 | 2013 | ||||
| Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | |
| ALLOWANCE ACTIVITY | |||||
| Balance, beginning of period | $ 36,663 | $ 40,081 | $ 40,352 | $ 42,853 | $ 46,718 |
| Charge offs | 3,392 | 2,681 | 600 | 2,072 | 4,651 |
| Recoveries | 2,640 | 5,765 | 658 | 447 | 288 |
| Net charge offs (recoveries) | 752 | (3,084) | (58) | 1,625 | 4,363 |
| Provision for loan losses | (986) | (6,502) | (329) | (876) | 498 |
| Balance, end of period | $ 34,925 | $ 36,663 | $ 40,081 | $ 40,352 | $ 42,853 |
| NET CHARGE OFFS BY TYPE | |||||
| Construction & development | $ 655 | $ (4,845) | $ (20) | $ 111 | $ (19) |
| Commercial real estate | (2,243) | (62) | 274 | 7 | 416 |
| Commercial | 2,267 | 1,883 | (169) | 1,085 | 3,751 |
| One-to-four family residential | (18) | (40) | (165) | 363 | 167 |
| Consumer | 91 | (20) | 22 | 59 | 48 |
| Total net charge offs (recoveries) by type | $ 752 | $ (3,084) | $ (58) | $ 1,625 | $ 4,363 |
| NET CHARGE OFFS BY SEGMENT | |||||
| Oklahoma banking | $ 229 | $ (1,294) | $ (203) | $ 200 | $ 589 |
| Texas banking | (1,586) | (2,314) | (80) | 1,356 | 3,241 |
| Kansas banking | 2,109 | 524 | 225 | 69 | 533 |
| Total net charge offs (recoveries) by segment | $ 752 | $ (3,084) | $ (58) | $ 1,625 | $ 4,363 |
| SOUTHWEST BANCORP, INC. | Table 6 | ||||
| UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA | |||||
| (Dollars in thousands, except per share) | |||||
| 2014 | 2013 | ||||
| Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | |
| PER SHARE DATA | |||||
| Basic earnings per common share | $ 0.19 | $ 0.35 | $ 0.19 | $ 0.22 | $ 0.12 |
| Diluted earnings per common share | 0.19 | 0.35 | 0.19 | 0.22 | 0.12 |
| Common dividends declared per share | 0.04 | -- | -- | -- | -- |
| Book value per common share | 13.37 | 13.13 | 12.83 | 12.67 | 12.72 |
| Tangible book value per share* | 13.31 | 13.07 | 12.77 | 12.60 | 12.66 |
| COMMON STOCK | |||||
| Shares issued and outstanding | 19,786,206 | 19,732,926 | 19,703,313 | 19,692,606 | 19,692,038 |
| OTHER FINANCIAL DATA | |||||
| Investment securities | $ 386,987 | $ 394,199 | $ 382,001 | $ 372,403 | $ 365,605 |
| Loans held for sale | 5,741 | 3,060 | 3,641 | 7,217 | 7,297 |
| Noncovered portfolio loans | 1,299,328 | 1,251,416 | 1,284,004 | 1,289,226 | 1,296,317 |
| Total noncovered loans | 1,305,069 | 1,254,476 | 1,287,645 | 1,296,443 | 1,303,614 |
| Covered portfolio loans | 15,053 | 16,427 | 18,980 | 21,646 | 23,601 |
| Total assets | 2,012,053 | 1,981,423 | 1,972,367 | 2,031,962 | 2,091,694 |
| Total deposits | 1,605,906 | 1,584,086 | 1,583,791 | 1,615,961 | 1,677,668 |
| Other borrowings | 85,692 | 80,632 | 78,663 | 74,334 | 70,872 |
| Subordinated debentures | 46,393 | 46,393 | 46,393 | 81,963 | 81,963 |
| Total shareholders' equity | 264,586 | 259,187 | 252,802 | 249,420 | 250,509 |
| Mortgage servicing portfolio | 391,303 | 390,732 | 383,400 | 368,825 | 356,032 |
| INTANGIBLE ASSET DATA | |||||
| Goodwill | $ 1,214 | $ 1,214 | $ 1,214 | $ 1,214 | $ 1,214 |
| Core deposit intangible | 1,925 | 2,058 | 2,185 | 2,306 | 2,424 |
| Mortgage servicing rights | 3,006 | 2,922 | 2,837 | 2,675 | 2,445 |
| Total intangible assets | $ 6,145 | $ 6,194 | $ 6,236 | $ 6,195 | $ 6,083 |
| Intangible amortization expense | $ 183 | $ 278 | $ 314 | $ 313 | $ 410 |
| DEPOSIT COMPOSITION | |||||
| Non-interest bearing demand | $ 471,568 | $ 444,796 | $ 436,904 | $ 412,176 | $ 416,979 |
| Interest-bearing demand | 132,622 | 120,156 | 106,176 | 138,502 | 125,914 |
| Money market accounts | 440,875 | 439,981 | 423,720 | 408,145 | 437,629 |
| Savings accounts | 47,532 | 41,727 | 39,727 | 38,611 | 39,733 |
| Time deposits of $100,000 or more | 236,035 | 251,185 | 270,916 | 295,179 | 317,270 |
| Other time deposits | 277,274 | 286,241 | 306,348 | 323,348 | 340,143 |
| Total deposits** | $ 1,605,906 | $ 1,584,086 | $ 1,583,791 | $ 1,615,961 | $ 1,677,668 |
| OFFICES AND EMPLOYEES | |||||
| FTE Employees | 397 | 402 | 407 | 408 | 412 |
| Branches | 24 | 23 | 23 | 22 | 22 |
| Assets per employee | $ 5,068 | $ 4,929 | $ 4,846 | $ 4,980 | $ 5,077 |
| ____________________ | |||||
| *This is a Non-GAAP based financial measure. | |||||
| **Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures) | |||||
| Total deposits | $ 1,605,906 | $ 1,584,086 | $ 1,583,791 | $ 1,615,961 | $ 1,677,668 |
| Less: | |||||
| Brokered time deposits | 1,347 | 1,347 | 1,343 | 4,904 | 5,760 |
| Other brokered deposits | 3,424 | 3,423 | 3,423 | 3,422 | 3,422 |
| Non-brokered deposits | $ 1,601,135 | $ 1,579,316 | $ 1,579,025 | $ 1,607,635 | $ 1,668,486 |
| Plus: | |||||
| Sweep repurchase agreements | 60,692 | 55,631 | 53,663 | 49,334 | 45,872 |
| Core funding | $ 1,661,827 | $ 1,634,947 | $ 1,632,688 | $ 1,656,969 | $ 1,714,358 |
| Balance sheet amounts are as of period end unless otherwise noted. | |||||
| SOUTHWEST BANCORP, INC. | Table 7 | ||||
| UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA | |||||
| (Dollars in thousands) | |||||
| 2014 | 2013 | ||||
| Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | |
| PERFORMANCE RATIOS | |||||
| Return on average assets (annualized) | 0.75% | 1.37% | 0.75% | 0.87% | 0.46% |
| Return on average common equity (annualized) | 5.68 | 10.59 | 5.99 | 7.00 | 3.89 |
| Return on average tangible common equity (annualized)* | 5.71 | 10.64 | 6.02 | 7.03 | 3.90 |
| Net interest margin (annualized) | 3.33 | 3.42 | 3.11 | 3.07 | 3.16 |
| Total dividends declared to net income | 21.40 | -- | -- | -- | -- |
| Effective tax rate | 37.49 | 38.68 | 38.01 | 33.74 | 43.88 |
| Efficiency ratio | 74.15 | 76.45 | 69.18 | 68.93 | 75.16 |
| NONPERFORMING ASSETS | |||||
| Nonaccrual loans | $ 15,062 | $ 18,560 | $ 29,198 | $ 29,513 | $ 32,356 |
| 90 days past due and accruing | -- | 53 | 2 | 2 | -- |
| Total nonperforming loans - noncovered | 15,062 | 18,613 | 29,200 | 29,515 | 32,356 |
| Other real estate | 2,560 | 560 | 676 | 145 | 9,422 |
| Total nonperforming assets - noncovered | $ 17,622 | $ 19,173 | $ 29,876 | $ 29,660 | $ 41,778 |
| Potential problem loans - noncovered | $ 90,188 | $ 98,047 | $ 95,139 | $ 94,118 | $ 89,646 |
| ASSET QUALITY RATIOS | |||||
| Net loan charge-offs to average portfolio loans (annualized) | 0.24% | (0.96)% | (0.02)% | 0.50% | 1.32% |
| Noncovered: | |||||
| Nonperforming assets to portfolio loans and other real estate | 1.35% | 1.53% | 2.33% | 2.30% | 3.20% |
| Nonperforming loans to portfolio loans | 1.16 | 1.49 | 2.27 | 2.29 | 2.50 |
| Allowance for loan losses to portfolio loans | 2.69 | 2.93 | 3.12 | 3.12 | 3.29 |
| Allowance for loan losses to nonperforming loans | 231.83 | 196.67 | 137.03 | 136.44 | 131.78 |
| CAPITAL RATIOS | |||||
| Average total shareholders' equity to average assets | 13.18% | 12.93% | 12.53% | 12.41% | 11.92% |
| Leverage ratio | 15.09 | 14.86 | 14.78 | 16.10 | 15.59 |
| Tier 1 capital to risk-weighted assets | 19.98 | 20.28 | 20.21 | 22.48 | 22.25 |
| Total capital to risk-weighted assets | 21.29 | 21.59 | 21.52 | 23.78 | 23.54 |
| Tangible common equity to tangible assets*** | 13.10 | 13.03 | 12.76 | 12.22 | 11.93 |
| REGULATORY CAPITAL DATA | |||||
| Tier I capital | $ 299,938 | $ 292,051 | $ 296,488 | $ 326,831 | $ 324,659 |
| Total capital | 319,516 | 310,867 | 315,570 | 345,717 | 343,562 |
| Total risk adjusted assets | 1,500,957 | 1,439,934 | 1,466,672 | 1,453,878 | 1,459,465 |
| Average total assets | 1,987,232 | 1,964,920 | 2,006,525 | 2,030,064 | 2,082,789 |
| ____________________ | |||||
| *This is a Non-GAAP based financial measure. | |||||
| ***Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure) | |||||
| Total shareholders' equity | $ 264,586 | $ 259,187 | $ 252,802 | $ 249,420 | $ 250,509 |
| Less goodwill | 1,214 | 1,214 | 1,214 | 1,214 | 1,214 |
| Tangible common equity | $ 263,372 | $ 257,973 | $ 251,588 | $ 248,206 | $ 249,295 |
| Total assets | $ 2,012,053 | $ 1,981,423 | $ 1,972,367 | $ 2,031,962 | $ 2,091,694 |
| Less goodwill | 1,214 | 1,214 | 1,214 | 1,214 | 1,214 |
| Tangible assets | $ 2,010,839 | $ 1,980,209 | $ 1,971,153 | $ 2,030,748 | $ 2,090,480 |
| Tangible common equity to tangible assets | 13.10% | 13.03% | 12.76% | 12.22% | 11.93% |
| Balance sheet amounts and ratios are as of period end unless otherwise noted. | |||||