Operating Segments

3 Months Ended

Mar. 31, 2014

Operating Segments [Abstract]

Operating Segments

NOTE 8: OPERATING SEGMENTS  

We operate five principal segments:  Oklahoma Banking, Texas Banking, Kansas Banking, Mortgage Banking, and Other Operations.  The Oklahoma Banking segment, the Texas Banking segment, and the Kansas Banking segment provide deposit and lending services.  The Mortgage Banking segment consists of residential mortgage lending services to customers.  Prior to the fourth quarter of 2013, the Mortgage Banking segment only included all loans available for sale in the secondary market.  During the fourth quarter of 2013, 1-4 family mortgages were added to the available for sale loans in the Mortgage Banking segment. This adjustment would have had an immaterial impact on interest income for the first quarter of 2013.  Other Operations includes our funds management unit and corporate investments.

The primary purpose of the funds management unit is to manage our overall internal liquidity needs and interest rate risk.  Each segment borrows funds from or provides funds to the funds management unit as needed to support its operations.  The value of funds provided to and the cost of funds borrowed from the funds management unit by each segment are internally priced at rates that approximate market rates for funds with similar duration.  The yield used in the funds transfer pricing curve is a blend of rates based on the volume usage of retail and brokered certificates of deposit and FHLB advances.    

The accounting policies of each reportable segment are the same as ours.  Expenses for consolidated back-office operations are allocated to operating segments based on estimated uses of those services.  General overhead expenses such as executive administration, accounting, and audit are allocated based on the direct expense and/or deposit and loan volumes of the operating segment.  Income tax expense for the operating segments is calculated at statutory rates.  The Other Operations segment records the tax expense or benefit necessary to reconcile to the consolidated financial statements.  The following table summarizes financial results by operating segment:

For the three months ended March 31, 2014
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	8,829	$	4,632	$	2,380	$	147	$	13	$	16,001
Provision for loan losses		1,976		(3,932)		999		(29)		-		(986)
Noninterest income		1,700		296		481		417		131		3,025
Noninterest expenses		7,059		3,228		2,628		523		669		14,107
Income (loss) before taxes		1,494		5,632		(766)		70		(525)		5,905
Taxes on income		560		2,112		(287)		26		(197)		2,214
Net income (loss)	$	934	$	3,520	$	(479)	$	44	$	(328)	$	3,691
* Includes externally generated revenue of $0.2 million, primarily from investing services, and an internally generated loss of $0.1 million from the funds management unit
Fixed asset expenditures	$	143	$	20	$	21	$	-	$	$ 373	$	557
Total loans at period end		754,698		372,018		170,720		22,686		-		1,320,122
Total assets at period end		757,592		370,382		177,111		25,804		681,164		2,012,053
Total deposits at period end		1,110,199		229,383		246,998		5,622		13,704		1,605,906

For the three months ended March 31, 2013
	Oklahoma		Texas		Kansas		Mortgage		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Banking		Operations*		Company
Net interest income	$	8,259	$	5,015	$	2,486	$	136	$	(290)	$	15,606
Provision for loan losses		870		(294)		(77)		(1)		-		498
Noninterest income		1,767		387		465		714		204		3,537
Noninterest expenses		7,371		2,607		2,895		562		953		14,388
Income (loss) before taxes		1,785		3,089		133		289		(1,039)		4,257
Taxes on income		783		1,355		59		127		(456)		1,868
Net income (loss)	$	1,002	$	1,734	$	74	$	162	$	(583)	$	2,389
* Includes externally generated loss of $0.2 million, primarily from investing services, and an internally generated revenue of $0.1 million from the funds management unit
Fixed asset expenditures	$	12	$	-	$	-	$	-	$	$ 331	$	343
Total loans at period end		628,748		495,815		195,355		7,297		-		1,327,215
Total assets at period end		644,066		492,657		200,781		9,924		744,266		2,091,694
Total deposits at period end		1,210,995		186,378		266,345		3,569		10,381		1,677,668