10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 10-Q

__________________

[ x ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

OR

[   ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-34110

SOUTHWEST BANCORP, INC.

(Exact name of registrant as specified in its charter)

Oklahoma	73-1136584
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
608 South Main Street, Stillwater, Oklahoma	74074
(Address of principal executive office)	(Zip Code)

Registrant’s telephone number, including area code: (405) 742-1800

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

[ x ] YES[    ] NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[  x ] YES[    ] NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer,”“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [  ] Accelerated Filer [ x ] Non-Accelerated Filer [  ]Smaller reporting company [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[    ] YES[ x ] NO

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of August7, 2015, the issuer has  19,033,860  shares of its Common Stock, par value $1.00, outstanding.

1

SOUTHWEST BANCORP, INC.

INDEX TO FORM 10-Q

9
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Financial Condition	4
Unaudited Consolidated Statements of Operations	5
Unaudited Consolidated Statements of Comprehensive Income	6
Unaudited Consolidated Statements of Cash Flows	7
Unaudited Consolidated Statements of Shareholders’ Equity	8
Notes to Unaudited Consolidated Financial Statements	9
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS	29
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	44
ITEM 4. CONTROLS AND PROCEDURES	46
PART II. OTHER INFORMATION	47
ITEM 1. LEGAL PROCEEDINGS	47
ITEM 1A. RISK FACTORS	47
ITEM 6. EXHIBITS	47
SIGNATURES	48

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Southwest Bancorp, Inc. (“we”, “our”, “us”, “Southwest”) makes forward-looking statements in this Form 10-Q and documents incorporated by reference into it that are subject to risks and uncertainties.  Forward-looking statements often use words such as “anticipate”, “target”, “outlook”, “forecast”, “will”, “should”, “expect”, “estimate”, “intend”, “plan”, “goal”,
“believe”, or other words with similar meanings.  Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time, many of which are beyond our control.  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 our 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; 

· Expectations regarding our stock repurchase program;

· Expectations regarding dividends;

· Expectations regarding acquisitions and divestitures;

· Expectations regarding integration of acquired operations;

· Assessments of loan quality, probable loan losses or negative provisions, 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 effective tax rates or the expiration of favorable tax provisions; 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, our 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 the “Risk Factors” contained in our Annual Report on  Form 10-K for the year ended December 31, 2014. 

The cautionary statements in this Form 10-Q and any documents incorporated by reference herein 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 Form 10-Q, 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. 

Management’s discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the accompanying notes. 

3

SOUTHWEST BANCORP, INC.

Consolidated Statementsof Financial Condition

	June 30,		December 31,
	2015		2014
(Dollars in thousands)	(unaudited)
Assets:
Cash and due from banks	$	22,923	$	19,705
Interest-bearing deposits		133,765		121,231
Cash and cash equivalents		156,688		140,936
Securities held to maturity (fair values of $11,818 and $12,880, respectively)		11,364		12,362
Securities available for sale (amortized cost of $360,609 and $352,275, respectively)		361,896		353,231
Loans held for sale		6,687		1,485
Loans receivable		1,442,743		1,398,506
Less:  Allowance for loan losses		(26,219)		(28,452)
Net loans receivable		1,416,524		1,370,054
Accrued interest receivable		4,281		4,723
Non-hedge derivative asset		701		787
Premises and equipment, net		18,251		18,588
Other real estate		2,393		3,097
Goodwill		1,214		1,214
Other intangible assets, net		3,923		3,927
Bank owned life insurance		20,110		-
Other assets		27,549		31,630
Total assets	$	2,031,581	$	1,942,034
Liabilities:
Deposits:
Noninterest-bearing demand	$	515,156	$	496,128
Interest-bearing demand		131,547		122,342
Money market accounts		496,178		461,679
Savings accounts		35,647		32,795
Time deposits of $100,000 or more		233,105		198,952
Other time deposits		212,813		222,103
Total deposits		1,624,446		1,533,999
Accrued interest payable		774		769
Non-hedge derivative liability		701		787
Other liabilities		9,747		9,920
Other borrowings		75,839		79,380
Subordinated debentures		46,393		46,393
Total liabilities		1,757,900		1,671,248
Shareholders' equity:
Common stock - $1 par value; 40,000,000 shares authorized;
19,900,855 and 19,810,877 shares issued, respectively		19,901		19,811
Additional paid in capital		101,518		101,245
Retained earnings		166,837		160,427
Accumulated other comprehensive loss		(233)		(395)
Treasury stock, at cost; 867,310 and 617,818 shares, respectively		(14,342)		(10,302)
Total shareholders' equity		273,681		270,786
Total liabilities & shareholders' equity	$	2,031,581	$	1,942,034
The accompanying notes are an integral part of these statements.

4

SOUTHWEST BANCORP, INC.

Unaudited Consolidated Statements of Operations

	For the three months				For the six months
	ended June 30,				ended June 30,
(Dollars in thousands, except earnings per share data)	2015		2014		2015		2014
Interest income:
Interest and fees on loans	$	15,839	$	16,343	$	31,409	$	32,118
Investment securities:
U.S. Government and agency obligations		381		337		717		764
Mortgage-backed securities		660		937		1,378		1,826
State and political subdivisions		287		294		576		590
Other securities		-		60		6		98
Other interest-earning assets		288		314		593		689
Total interest income		17,455		18,285		34,679		36,085
Interest expense:
Interest-bearing demand		30		40		63		80
Money market accounts		183		136		365		282
Savings accounts		9		11		17		22
Time deposits of $100,000 or more		170		338		408		787
Other time deposits		470		406		844		785
Other borrowings		241		223		468		448
Subordinated debentures		561		557		1,113		1,106
Total interest expense		1,664		1,711		3,278		3,510
Net interest income		15,791		16,574		31,401		32,575
Provision (credit) for loan losses		(1,136)		(355)		(3,023)		(1,341)
Net interest income after provision (credit)  for loan losses		16,927		16,929		34,424		33,916
Noninterest income:
Service charges and fees		2,450		2,608		4,878		5,204
Gain on sale of bank branches, net		-		4,378		-		4,378
Gain on sales of  mortgage loans, net		621		463		969		687
Gain on sales/calls of investment securities, net		138		629		143		764
Other noninterest income		200		168		259		238
Total noninterest income		3,409		8,246		6,249		11,271
Noninterest expense:
Salaries and employee benefits		8,289		8,472		16,203		16,598
Occupancy		2,201		2,253		4,485		4,537
Data processing		410		530		856		1,015
FDIC and other insurance		316		314		628		711
Other real estate, net		112		511		133		579
General and administrative		2,654		3,252		4,759		5,999
Total noninterest expense		13,982		15,332		27,064		29,439
Income before taxes		6,354		9,843		13,609		15,748
Taxes on income		2,193		3,691		4,913		5,905
Net income	$	4,161	$	6,152	$	8,696	$	9,843
Basic earnings per common share	$	0.22	$	0.31	$	0.46	$	0.50
Diluted earnings per common share		0.22		0.31		0.46		0.50
Common dividends declared per share		0.06		0.04		0.12		0.08
The accompanying notes are an integral part of these statements.

5

SOUTHWEST BANCORP, INC.

Unaudited Consolidated Statements of Comprehensive Income

	For the three months				For the six months
	ended June 30,				ended June 30,
(Dollars in thousands)	2015		2014		2015		2014
Net income	$	4,161	$	6,152	$	8,696	$	9,843
Other comprehensive income:
Unrealized holding gain (loss) on available for sale securities		(1,375)		2,761		474		5,290
Reclassification adjustment for net gains arising during the period		(138)		(629)		(143)		(764)
Change in fair value of derivative used for cash flow hedge		(10)		(32)		(84)		70
Other comprehensive income (loss), before tax		(1,523)		2,100		247		4,596
Tax benefit (expense) related to items of other comprehensive
income		617		(812)		(85)		(1,778)
Other comprehensive income (loss), net of tax		(906)		1,288		162		2,818
Comprehensive income	$	3,255	$	7,440	$	8,858	$	12,661
The accompanying notes are an integral part of these statements.

6

SOUTHWEST BANCORP, INC.

Unaudited Consolidated Statements of Cash Flows

	For the six months
	ended June 30,
(Dollars in thousands)	2015		2014
Operating activities:
Net income	$	8,696	$	9,843
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for loan losses		(3,023)		(1,341)
Adjustment to other real estate		63		320
Deferred tax expense		1,286		5,609
Asset depreciation		1,172		1,301
Securities premium amortization, net of discount accretion		1,394		1,341
Amortization of intangibles		480		393
Restricted stock amortization expense		656		430
Net gain on sales/calls of investment securities		(143)		(764)
Net gain on sales of mortgage loans		(969)		(687)
Net (gain) loss on sales of premises/equipment		(13)		37
Net (gain) loss on sales of other real estate		(59)		18
Net gain from sale of bank branches		-		(4,378)
Proceeds from sales of held for sale loans		44,913		35,711
Held for sale loans originated for resale		(49,214)		(38,709)
Net changes in assets and liabilities:
Accrued interest receivable		442		398
Other assets		1,806		(1,687)
Accrued interest payable		5		(73)
Other liabilities		(241)		1,080
Net cash provided by operating activities		7,251		8,842
Investing activities:
Proceeds from principal repayments, calls and maturities:
Held to maturity securities		940		1,000
Available for sale securities		50,586		45,343
Redemptions of other investments		-		885
Purchases of available for sale securities		(60,255)		(34,833)
Purchases of bank owned life insurance		(20,110)		-
Loans originated, net of principal repayments		(43,689)		(109,347)
Cash outflows from sale of bank branches, net		-		(94,806)
Purchases of premises and equipment		(888)		(1,034)
Proceeds from sales of premises and equipment		66		39
Proceeds from sales of other real estate		900		251
Net cash used in investing activities		(72,450)		(192,502)
Financing activities:
Net increase in deposits		90,447		10,344
Net increase (decrease) in other borrowings		(3,541)		10,128
Net proceeds from issuance of common stock		363		75
Purchases of treasury stock		(4,040)		-
Common stock dividends paid		(2,277)		(1,571)
Preferred stock dividends paid		(1)		(1)
Net cash provided by financing activities		80,951		18,975
Net increase (decrease) in cash and cash equivalents		15,752		(164,685)
Cash and cash equivalents:
Beginning of period		140,936		279,839
End of period	$	156,688	$	115,154
The accompanying notes are an integral part of these statements.

7

SOUTHWEST BANCORP, INC.

Unaudited Consolidated Statements of Shareholders’ Equity

								Accumulated
				Additional				Other				Total
	Common Stock			Paid in		Retained		Comprehensive			Treasury	Shareholders'
(Dollars in thousands)	Shares	Amount		Capital		Earnings		Gain/(Loss)			Stock	Equity
Balance, December 31, 2013	19,732,926	$	19,733	$	99,937	$	142,528	$	(3,011)	$	-	$	259,187
Dividends declared:
Preferred	-		-		-		(1)		-		-		(1)
Common, $0.08 per share,	-		-		-		(1,581)		-		-		(1,581)
Common stock issued	59,343		59		1,010		-		-		-		1,069
Net common stock issued under
employee plans and related tax expense	854		1		15		-		-		-		16
Other comprehensive income, net of tax	-		-		-		-		2,818		-		2,818
Net income	-		-		-		9,843		-		-		9,843
Balance, June 30, 2014	19,793,123	$	19,793	$	100,962	$	150,789	$	(193)	$	-	$	271,351
Balance, December 31, 2014	19,193,059	$	19,811	$	101,245	$	160,427	$	(395)	$	(10,302)	$	270,786
Dividends declared:
Preferred	-		-		-		(1)		-		-		(1)
Common, $0.12 per share,	-		-		-		(2,285)		-		-		(2,285)
Common stock issued	88,937		89		256		-		-		-		345
Net common stock issued under
employee plans and related tax expense	1,041		1		17		-		-		-		18
Other comprehensive income, net of tax	-		-		-		-		162		-		162
Treasury shares purchased	(249,492)		-		-		-		-		(4,040)		(4,040)
Net income	-		-		-		8,696		-		-		8,696
Balance, June 30, 2015	19,033,545	$	19,901	$	101,518	$	166,837	$	(233)	$	(14,342)	$	273,681
The accompanying notes are an integral part of these statements.

8

SOUTHWEST BANCORP, INC.

Notes to Unaudited Consolidated Financial Statements

NOTE1:  SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations, shareholders’ equity, cash flows, and comprehensive income in conformity with accounting principles generally accepted in the United States.  However, the unaudited consolidated financial statements include all adjustments which, in the opinion of management, are necessary for a fair presentation.  Those adjustments consist of normal recurring adjustments.  The results of operations for the three and six months endedJune 30, 2015, and the cash flows for the six months ended June 30, 2015, should not be considered indicative of the results to be expected for the full year.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Southwest Bancorp, Inc. Annual Report on Form 10-K for the year ended December 31, 2014.

The accompanying unaudited consolidated financial statements include the accounts of Southwest Bancorp, Inc. (“we”, “our”, “us”, “Southwest”), Bank SNB, an Oklahoma state banking corporation (“Bank SNB”), our banking subsidiary,  SNB Capital Corporation, a lending and loan workout subsidiary, and the consolidatedsubsidiaries of Bank SNB, including SNB Real Estate Holdings, Inc.  All significant intercompany transactions and balances have been eliminated in consolidation.

In accordance with Accounting Standards Codification (“ASC”) 855, Subsequent Events,  we have evaluated subsequent events for potential recognition and disclosure through the date the consolidated financial statements included in this Quarterly Report on Form 10-Q were issued. 

NOTE 2:  INVESTMENT SECURITIES

A summary of the amortized cost and fair values of investment securities at June 30, 2015 and December 31, 2014 follows:

	Amortized		Gross Unrealized				Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
At June 30, 2015
Held to Maturity:
Obligations of state and political subdivisions	$	11,364	$	460	$	(6)	$	11,818
Total	$	11,364	$	460	$	(6)	$	11,818
Available for Sale:
Federal agency securities	$	83,508	$	474	$	(269)	$	83,713
Obligations of state and political subdivisions		32,546		524		(123)		32,947
Residential mortgage-backed securities		202,438		1,350		(809)		202,979
Asset-backed securities		9,624		10		(21)		9,613
Other securities		32,493		258		(107)		32,644
Total	$	360,609	$	2,616	$	(1,329)	$	361,896
At December 31, 2014
Held to Maturity:
Obligations of state and political subdivisions	$	12,362	$	528	$	(10)	$	12,880
Total	$	12,362	$	528	$	(10)	$	12,880
Available for Sale:
Federal agency securities	$	99,959	$	359	$	(772)	$	99,546
Obligations of state and political subdivisions		32,760		519		(140)		33,139
Residential mortgage-backed securities		177,391		1,686		(850)		178,227
Asset-backed securities		9,608		-		(60)		9,548
Other securities		32,557		240		(26)		32,771
Total	$	352,275	$	2,804	$	(1,848)	$	353,231

9

Residential mortgage-backed securities consist of agency securities underwritten and guaranteed by Government National Mortgage Association, Federal Home Loan Mortgage Corporation, and Federal National Mortgage Association.Other securities consist of corporate stock.

Securities with limited marketability, such as Federal Reserve Bank stock, Federal Home Loan Bank (“FHLB”) stock, and certain other investments, are carried at cost and included in other assets on the consolidated statements of financial condition.  Total investments carried at cost were $7.9 million at June 30, 2015 andDecember 31, 2014.  There are no identified events or changes in circumstances that may have a significant adverse effect on the investments carried at cost.

A comparison of the amortized cost and approximate fair value of our investment securities by maturity date at June 30, 2015 follows:

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
One year or less	$	14,014	$	14,114	$	-	$	-
More than one year through five years		229,893		230,710		8,017		8,189
More than five years through ten years		75,395		75,457		3,347		3,629
More than ten years		41,307		41,615		-		-
Total	$	360,609	$	361,896	$	11,364	$	11,818

The foregoing analysis assumes that our residential mortgage-backed securities mature during the period in which they are estimated to prepay.  No other prepayment or repricing assumptions have been applied to our investment securities for this analysis.

Gain or loss on sale of investments is based upon the specific identification method.  There was a$0.1million gain on sales of securities for the six months ended June 30, 2015which resulted from residual payments related to the sale of a private equity investmentduring the fourth quarter of 2014. There was a $0.8 million gain on sales of securities for thesix months endedJune 30, 2014, which was the result of the sale of a stock investment that was acquired in a prior year repossession.

The following table shows securities with gross unrealized losses and their fair values by the length of time that the individual securities had been in a continuous unrealized loss position at June 30, 2015 and December 31, 2014.  Securities whose market values exceed cost are excluded from this table.   

10

				Continuous Unrealized
		Amortized cost of		Loss Existing for:				Fair value of
	Number of	securities with		Less Than		More Than		securities with
(Dollars in thousands)	Securities	unrealized losses		12 Months		12 Months		unrealized losses
At June 30, 2015
Held to Maturity:
Obligations of state and political subdivisions	1	$	1,698	$	(6)	$	-	$	1,692
	1	$	1,698	$	(6)	$	-	$	1,692
Available for Sale:
Federal agency securities	7	$	32,900	$	(47)	$	(221)	$	32,632
Obligations of state and political subdivisions	7		9,102		(43)		(81)		8,978
Residential mortgage-backed securities	46		105,680		(326)		(483)		104,871
Asset-backed securities	2		5,671		(21)		-		5,650
Other securities	4		6,978		(37)		(70)		6,871
Total	66	$	160,331	$	(474)	$	(855)	$	159,002
At December 31, 2014
Held to Maturity:
Obligations of state and political subdivisions	1	$	1,718	$	(10)	$	-	$	1,708
	1	$	1,718	$	(10)	$	-	$	1,708
Available for Sale:
Federal agency securities	13	$	60,578	$	(37)	$	(735)	$	59,806
Obligations of state and political subdivisions	8		10,076		-		(140)		9,936
Residential mortgage-backed securities	40		65,223		(110)		(740)		64,373
Asset-backed securities	3		9,608		(19)		(41)		9,548
Other securities	2		9,571		(3)		(23)		9,545
Total	66	$	155,056	$	(169)	$	(1,679)	$	153,208

We evaluate all securities on an individual basis for other-than-temporary impairment on at least a quarterly basis.  Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for an anticipated recovery in fair value.

We have the ability and intent to hold the securities classified as held to maturity until they mature, at which time we expect to receive full value for the securities.  Furthermore, as of June 30, 2015, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is not likely that we will have to sell any such securities before a recovery of cost.  The declines in fair value were attributable to recent increases in market interest rates over the yields available at the time the underlying securities were purchased or increases in spreads over market interest rates.  Management does not believe any of the securities are impaired due to credit quality.  Accordingly, as of June 30, 2015, management believes the impairment of these investments is not deemed to be other-than-temporary.

As required by law, available for sale investment securities are pledged to secure public and trust deposits, sweep agreements, and borrowings from the FHLB.  Securities with an amortized cost of $212.3 million and $218.5 million were pledged to meet such requirements at June 30, 2015 and December 31, 2014, respectively.  Any amount over-pledged can be released at any time.

11

NOTE 3: LOANS AND ALLOWANCE FOR LOAN LOSSES

We extend commercial and consumer credit primarily to customers in the states of Oklahoma, Texas, and Kansas.  Our commercial lending operations are concentrated in Oklahoma City, Tulsa, Dallas, Wichita,and other metropolitan markets in Oklahoma, Texas,  and Kansas.  As a result, the collectability of our loan portfolio can be affected by changes in the economic conditions in those states and markets.  Please see Note 9: Operating Segments for more detail regarding loans by market.  At June 30, 2015 and December 31, 2014, substantially all of ourloans were collateralized with real estate, inventory, accounts receivable, and/or other assets or were guaranteed by agencies of the United States government.

Our loan classifications were as follows: 

(Dollars in thousands)	At June 30, 2015		At December 31, 2014
Real estate mortgage:
Commercial	$	759,406	$	752,971
One-to-four family residential		85,338		77,531
Real estate construction:
Commercial		186,140		186,659
One-to-four family residential		13,107		10,464
Commercial		384,788		350,410
Installment and consumer:
Guaranteed student loans		-		37
Other		20,651		21,919
		1,449,430		1,399,991
Less: Allowance for loan losses		(26,219)		(28,452)
Total loans, net		1,423,211		1,371,539
Less: Loans held for sale (included above)		(6,687)		(1,485)
Net loans receivable	$	1,416,524	$	1,370,054

Concentrations of Credit.  AtJune 30, 2015,$485.7 million, or 34%, and  $422.3 million, or 29%, of ourloans consisted of loans to individuals and businesses in the real estate and healthcare industries, respectively.  We do not have any other concentrations of loans to individuals or businesses involved in a single industry totaling 10% or more of total loans. 

Loans Held for Sale.  We had loans which were held for sale of $6.7 million and $1.5 million at June 30, 2015 and December 31, 2014, respectively.  The loans currently classified as held for sale, primarily residential mortgage loans,are carried at the lower of cost or market value.  A substantial portion of our one-to-four family residential loans and loan servicing rights are sold to one buyer.  These mortgage loans are generally sold within a one-month period from loan closing at amounts determined by the investor commitment based upon the pricing of the loan.  These loans are available for sale in the secondary market.  

Loan Servicing.  We earn fees for servicing real estate mortgages and other loans owned by others.  The fees are generally calculated on the outstanding principal balance of the loans serviced and are recorded as noninterest income when earned.  The unpaid principal balance of real estate mortgage loans serviced for others totaled $416.0 million and $410.3 million at June 30, 2015 and December 31, 2014, respectively.  Loan servicing rights are capitalized based on estimated fair value at the point of origination.  The servicing rights are amortized over the period of estimated net servicing income.   

Acquired Loans.  On June 19, 2009, Bank SNB entered into purchase and assumption agreements with the Federal Deposit Insurance Corporation (“FDIC”) to acquire substantially all loans as well as certain other related assets of First National Bank of Anthony, Anthony, Kansas in an FDIC-assisted transaction.  Bank SNB and the FDIC entered into loss sharing agreements that provided Bank SNB with significant protection against credit losses from loans and related assets acquired in the transaction (also known as acquired, covered, or discounted loans).  Under these agreements, for a period of ten years for 1-4 family real estate loans and for a period of five years for other loans, the FDIC was required to reimburse Bank SNB for 80% of net losses up to $35.0 million on covered assets, primarily acquired loans and other real estate, and for 95% of any net losses above $35.0 million.  Bank SNB services the covered assets.  On April 10, 2015, Bank SNB entered into an agreement with the FDIC to terminate these loss sharing agreements with the FDIC. All future recoveries, charge-offs, and expenses related to these covered assets are now recognized entirely by Bank SNB.

Due to the immateriality of the remaining balance of loans that were covered under the loss sharing agreements with the FDIC, covered and noncovered loans have been combined for reporting purposes. Prior period numbers have also been adjusted to reflect this change. This adjustment has no financial statement impact.

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Loans that were covered under the loss sharing agreements with the FDIC are reported in loans.  The acquired loans were initially recorded at fair value (as determined by the present value of expected future cash flows) with no allowance for loan losses.  Subsequent decreases in expected cash flows are recognized as impairments.  Valuation allowances on these loans reflect only losses incurred after the acquisition.   

Changes in the carrying amounts and accretable yields for loans that were acquired under the loss sharing agreements with the FDIC were as follows for the three and six months endedJune 30, 2015 and June 30, 2014.

	For the three months ended June 30,
	2015					2014
			Carrying				Carrying
	Accretable		amount		Accretable		amount
(Dollars in thousands)	Yield		of loans		Yield		of loans
Balance at beginning of period	$	419	$	4,310	$	1,503	$	15,053
Payments received		-		(208)		-		(6,766)
Net charge-offs		-		-		(5)		(367)
Net reclassifications to / from nonaccretable amount		240		-		-		-
Accretion		(198)		442		(638)		-
Balance at end of period	$	461	$	4,544	$	860	$	7,920

	For the six months ended June 30,
	2015				2014
			Carrying				Carrying
	Accretable		amount		Accretable		amount
(Dollars in thousands)	Yield		of loans		Yield		of loans
Balance at beginning of period	$	540	$	4,971	$	1,597	$	16,427
Payments received		-		(869)		-		(8,099)
Net charge-offs		-		-		(9)		(408)
Net reclassifications to / from nonaccretable amount		240		-		-		-
Accretion		(319)		442		(728)		-
Balance at end of period	$	461	$	4,544	$	860	$	7,920

Nonperforming / Past Due Loans.  We identify past due loans based on contractual terms on a loan-by-loan basis and generally place loans, except for consumer loans, on nonaccrual when any portion of the principal or interest is ninety  days past due and collateral is insufficient to discharge the debt in full.  Interest accrual may also be discontinued earlier if, in management’s opinion, collection is unlikely.  Generally, past due consumer installment loans are not placed on nonaccrual but are charged-off when they are four months past due.  Accrued interest is written off when a loan is placed on nonaccrual status.  Subsequent interest income is recorded when cash receipts are received from the borrower and collectability of the principal amount is reasonably assured.   

Under generally accepted accounting principles and instructions to reports of condition and income of banking regulators, a nonaccrual loan may be returned to accrual status:  (i) when none of its principal and interest is due and unpaid, repayment is expected, and there has been a sustained period (at least six months) of repayment performance; (ii) when the loan is well-secured, there is a sustained period of performance and repayment within a reasonable period is reasonably assured; or (iii) when the loan otherwise becomes well-secured and in the process of collection. Loans that have been restructured because of weakened financial positions of the borrowers also may be returned to accrual status if repayment is reasonably assured under the revised terms and there has been a sustained period of repayment performance.

Management strives to carefully monitor credit quality and to identify loans that may become nonperforming.  At any time, however, there are loans included in the portfolio that will result in losses to usthat have not been identified as nonperforming or potential problem loans.  Because the loan portfolio contains a significant number of commercial (including energy banking credits) and commercial real estate loans with relatively large balances, the unexpected deterioration of one or a few such loans may cause a significant increase in nonperforming assets and may lead to a material increase in charge-offs and the provision for loan losses in future periods.

The following table shows the recorded investment in loans on nonaccrual status. 

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(Dollars in thousands)	At June 30, 2015		At December 31, 2014
Real estate mortgage:
Commercial	$	2,141	$	2,195
One-to-four family residential		1,216		1,100
Real estate construction:
Commercial		416		73
Commercial		5,114		5,907
Other consumer		-		1
Total nonaccrual loans	$	8,887	$	9,276

During the first six months of 2015,  an immaterial amount of interest income was received on nonaccruing loans.  If interest on all nonaccrual loans had been accrued for the six months ended June 30, 2015, additional interest income of $0.3 million would have been recorded.

The following table shows an age analysis of past due loans at June 30, 2015 and December 31, 2014. 

			90 days and								Recorded loans
	30-89 days		greater		Total past				Total		> 90 days and
(Dollars in thousands)	past due		past due		due		Current		loans		accruing
At June 30, 2015
Real estate mortgage:
Commercial	$	567	$	2,141	$	2,708	$	756,698	$	759,406	$	-
One-to-four family residential		121		1,216		1,337		84,001		85,338		-
Real estate construction:
Commercial		-		416		416		185,724		186,140		-
One-to-four family residential		-		-		-		13,107		13,107		-
Commercial		241		5,114		5,355		379,433		384,788		-
Other		88		-		88		20,563		20,651		-
Total	$	1,017	$	8,887	$	9,904	$	1,439,526		1,449,430	$	-
At December 31, 2014
Real estate mortgage:
Commercial	$	4,053	$	2,195	$	6,248	$	746,723	$	752,971	$	-
One-to-four family residential		122		1,100		1,222		76,309		77,531		-
Real estate construction:
Commercial		2,177		73		2,250		184,409		186,659		-
One-to-four family residential		-		-		-		10,464		10,464		-
Commercial		1,159		6,044		7,203		343,207		350,410		137
Other		162		1		163		21,793		21,956		-
Total	$	7,673	$	9,413	$	17,086	$	1,382,905		1,399,991	$	137

Impaired Loans.  A loan is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Each loan deemed to be impaired (loans on nonaccrual status and greater than $100,000,  and all troubled debt restructurings) is evaluated on an individual basis using the discounted present value of expected cash flows based on the loan’s initial effective interest rate, the fair value of collateral, or the market value of the loan.  Smaller balance and homogeneous loans, including mortgage and consumer loans, are collectively evaluated for impairment.     

Interest payments on impaired loans are applied to principal until collectability of the principal amount is reasonably assured, and, at that time, interest is recognized on a cash basis.  Impaired loans, or portions thereof, are charged-off when deemed uncollectible. 

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Impaired loans are shown in the following table: 

	With No Specific Allowance				With A Specific Allowance
			Unpaid				Unpaid
	Recorded		Principal		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Investment		Balance		Allowance
At June 30, 2015
Commercial real estate	$	10,684	$	12,940	$	11,317	$	11,317	$	1,875
One-to-four family residential		1,229		1,792		-		-		-
Real estate construction		416		416		-		-		-
Commercial		2,146		2,571		3,739		9,852		1,660
Other		-		-		-		-		-
Total	$	14,475	$	17,719	$	15,056	$	21,169	$	3,535
At December 31, 2014
Commercial real estate	$	12,382	$	14,752	$	11,497	$	11,556	$	2,047
One-to-four family residential		1,115		1,833		-		-		-
Real estate construction		73		104		-		-		-
Commercial		2,624		2,887		4,315		10,673		1,822
Other		1		2		-		-		-
Total	$	16,195	$	19,578	$	15,812		22,229	$	3,869

The average recorded investment of loans classified as impaired and the interest income recognized on those loans for the six months ended June  30, 2015 andJune 30, 2014 are shown in the following table:  

	As of and for the six months ended June 30,
	2015				2014
	Average				Average
	Recorded		Interest		Recorded		Interest
(Dollars in thousands)	Investment		Income		Investment		Income
Commercial real estate	$	23,862	$	473	$	43,104	$	663
One-to-four family residential		1,777		1		3,649		1
Real estate construction		376		-		251		-
Commercial		6,080		20		9,693		42
Other		1		-		69		-
Total	$	32,096	$	494	$	56,766	$	706

Troubled Debt Restructurings.  Our loan portfolio also includes certain loans that have been modified in troubled debt restructurings, where economic concessions have been granted to borrowers who have experienced financial difficulties.  These concessions typically result from loss mitigation activities and can include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions.  Troubled debt restructurings are classified as impaired at the time of restructuring and are then further classified as nonperforming, potential problem, or performing restructured, as applicable.  Loans modified in troubled debt restructurings may be returned to performing status after considering the borrowers’ sustained repayment for a reasonable period of at least six months. 

When we modify loans in a troubled debt restructuring, an evaluation of any possible impairment is performed similar to the evaluation done with respect to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or use of the current fair value of the collateral, less selling costs for collateral dependent loans.  If it is determined that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs, and unamortized premium or discount), an impairment is recognized through an allowance estimate or a charge-off to the allowance. 

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Troubled debt restructured loans outstanding as of June 30, 2015 and December 31, 2014were as follows: 

	At June 30, 2015				At December 31, 2014
(Dollars in thousands)	Accruing		Nonaccrual		Accruing		Nonaccrual
Commercial real estate	$	19,861	$	967	$	21,685	$	1,082
One-to-four family residential		13		54		14		62
Commercial		771		340		1,032		655
Total	$	20,645	$	1,361	$	22,731	$	1,799

At June 30, 2015 and December 31, 2014,  we had no significant commitments to lend additional funds to debtors whose loan terms have been modified in a  troubled debt restructuring. 

Loans modified as troubled debt restructurings that occurred during thethree and six months endedJune 30, 2015and June 30, 2014 are shown in the following table:     

	For the three months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Modifications		Investment		Modifications		Investment
Commercial		-	$	-		2	$	9,684
Total		-	$	-		2	$	9,684

	For the six months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Modifications		Investment		Modifications		Investment
Commercial real estate		-	$	-		2	$	9,684
Commercial		-		-		3		229
Total		-	$	-		5	$	9,913

The modifications of loans identified as troubled debt restructurings primarily related to payment reductions, payment extensions, and/or reductions in the interest rate.  The financial impact of troubled debt restructurings is not significant.

The following table presents the recorded investment and the number of loans modified as a troubled debt restructuring that subsequently defaulted during the three and six months ended June 30, 2015 and June 30, 2014.  Default, for this purpose, is deemed to occur when a loan is 90 days or more past due or transferred to nonaccrual and is within twelve months of restructuring.

	For the three months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial		-	$	-		1	$	205
Total		-	$	-		1	$	205

	For the six months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial		-	$	-		1	$	205
Total		-	$	-		1	$	205

Credit Quality Indicators.  To assess the credit quality of loans, we categorize loans into risk categories based on relevant information about the ability of the borrowers to service their debts such as current financial information, historical payment

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experience, credit documentation, public information, and current economic trends, among other factors.  This analysis is performed on a quarterly basis.  We use the following definitions for risk ratings:   

Special mention – Loans classified as special mention have potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for these loans or of the institution’s credit position at some future date. 

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligors or of the collateral pledged, if any.  Loans so classified have one or more well-defined weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.  These loans are considered potential problem or nonperforming loans depending on the accrual status of the loans.    

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.  These loans are considered nonperforming. 

Loans not meeting the criteria above that are analyzed as part of the above described process are considered to be pass rated loans.  As of June 30, 2015 and December 31, 2014, based on the most recent analysis performed as of those dates, the risk category of loans by class was as follows: 

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At June 30, 2015
Grade:
Pass	$	707,216	$	84,016	$	198,607	$	353,823	$	20,521	$	1,364,183
Special Mention		30,073		22		221		11,430		130		41,876
Substandard		22,117		1,300		419		14,854		-		38,690
Doubtful		-		-		-		4,681		-		4,681
Total	$	759,406	$	85,338	$	199,247	$	384,788	$	20,651	$	1,449,430
At December 31, 2014
Grade:
Pass	$	690,791	$	76,322	$	194,670	$	331,594	$	21,849	$	1,315,226
Special Mention		34,287		22		420		7,144		106		41,979
Substandard		27,594		1,154		2,033		6,725		1		37,507
Doubtful		299		33		-		4,947		-		5,279
Total	$	752,971	$	77,531	$	197,123	$	350,410	$	21,956	$	1,399,991

Allowance for Loan Losses.  The allowance for loan losses is a reserve established through the provision for loan losses charged to operations.  Loan amounts which are determined to be uncollectible are charged against this allowance, and recoveries, if any, are added to the allowance.  The appropriate amount of the allowance is based on periodic review and evaluation of the loan portfolio and quarterly assessments of the probable losses inherent in the loan portfolio.  The amount of the loan loss provision for a period is based solely upon the amount needed to cause the allowance to reach the level deemed appropriate after the effects of net charge-offs for the period. 

Management believes the level of the allowance is appropriate to absorb probable losses inherent in the loan portfolio.  The allowance for loan losses is determined in accordance with regulatory guidelines and generally accepted accounting principles and is comprised of two primary components, specific and general.  There is no one factor, or group of factors, that produces the amount of an appropriate allowance for loan losses, as the methodology for assessing the allowance for loan losses makes use of evaluations of individual impaired loans along with other factors and analysis of loan categories.  This assessment is highly qualitative and relies upon judgments and estimates by management.

The specific allowance is recorded based on the result of an evaluation consistent with ASC 310.10.35, Receivables: Subsequent Measurement, for each impaired loan.  Collateral dependent loans are evaluated for impairment based upon the fair value of the collateral.  The amount and level of the impairment allowance is ultimately determined by management’s estimate of the amount of expected future cash flows or, if the loan is collateral dependent, on the value of collateral, which may vary from period to period depending on changes in the financial condition of the borrower or changes in the estimated value of the collateral.  Charge-offs against the allowance for impaired loans are made when and to the extent loans are

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deemed uncollectible.  Any portion of a collateral dependent impaired loan in excess of the fair value of the collateral that is determined to be uncollectible is charged off.  

The general component of the allowance is calculated based on ASC 450, Contingencies.  Loans not evaluated for specific allowance are segmented into loan pools by type of loan.  The non-owner occupied commercial real estate pool is further segmented by the market in which the loan collateral is located.  Our primary markets are Oklahoma, Texas, and Kansas, and loans secured by real estate in those states are included in the “in-market” pool, with the remaining loans being includedin the “out-of-market” pool.  Estimated allowances are based on historical loss trends with adjustments factored in based on qualitative risk factors both internal and external to us.  The historical loss trend is determined by loan pool and segmentation and is based on the actual loss history experienced by us over the most recent three years.  The qualitative risk factors include, but are not limited to, economic and business conditions, changes in lending staff, lending policies and procedures, quality of loan review, changes in the nature and volume of the portfolios, loss and recovery trends, asset quality trends, and legal and regulatory considerations.

Independent appraisals on real estate collateral securing loans are obtained at origination.  New appraisals are obtained periodically and following discovery of factors that may significantly affect the value of the collateral.  Appraisals typically are received within 30 days of request.  Results of appraisals on nonperforming and potential problem loans are reviewed promptly upon receipt and considered in the determination of the allowance for loan losses.  We are not aware of any significant time lapses in the process that have resulted, or would result in, a significant delay in determination of a credit weakness, the identification of a loan as nonperforming, or the measurement of an impairment.

The following tables show the balance in the allowance for loan losses and the recorded investment in loans for the dates indicated by portfolio classification disaggregated on the basis of impairment evaluation method.   

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At June 30, 2015
Balance at beginning of period	$	13,678	$	712	$	4,159	$	9,614	$	289	$	28,452
Loans charged-off		(116)		(20)		(21)		(343)		(56)		(556)
Recoveries		151		443		31		583		138		1,346
Provision for loan losses		(448)		(557)		(509)		(1,313)		(196)		(3,023)
Balance at end of period	$	13,265	$	578	$	3,660	$	8,541	$	175	$	26,219
Allowance for loan losses ending balance:
Individually evaluated for impairment	$	1,875	$	-	$	-	$	1,660	$	-	$	3,535
Collectively evaluated for impairment		11,390		578		3,660		6,881		175		22,684
Acquired with deteriorated credit quality		-		-		-		-		-		-
Total ending allowance balance	$	13,265	$	578	$	3,660	$	8,541	$	175	$	26,219
Loans receivable ending balance:
Individually evaluated for impairment	$	20,886	$	404	$	416	$	5,885	$	-	$	27,591
Collectively evaluated for impairment		735,587		83,438		198,738		378,881		20,651		1,417,295
Acquired with deteriorated credit quality		2,933		1,496		93		22		-		4,544
Total ending loans balance	$	759,406	$	85,338	$	199,247	$	384,788	$	20,651	$	1,449,430

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	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At June 30, 2014
Balance at beginning of period	$	18,854	$	850	$	5,523	$	10,985	$	451	$	36,663
Loans charged-off		(683)		(126)		(655)		(3,514)		(405)		(5,383)
Recoveries		2,343		146		-		595		60		3,144
Provision for loan losses		(3,538)		(238)		418		1,742		275		(1,341)
Balance at end of period	$	16,976	$	632	$	5,286	$	9,808	$	381	$	33,083
Allowance for loan losses ending balances:
Individually evaluated for impairment	$	3,598	$	-	$	-	$	2,625	$	-	$	6,223
Collectively evaluated for impairment		13,378		632		5,286		7,183		381		26,860
Acquired with deteriorated credit quality		-		-		-		-		-		-
Total ending allowance balance	$	16,976	$	632	$	5,286	$	9,808	$	381	$	33,083
Loans receivable ending balance:
Individually evaluated for impairment	$	42,588	$	387	$	82	$	8,873	$	119	$	52,049
Collectively evaluated for impairment		720,559		77,284		175,132		291,242		27,514		1,291,731
Acquired with deteriorated credit quality		5,874		1,871		126		48		1		7,920
Total ending loans balance	$	769,021	$	79,542	$	175,340	$	300,163	$	27,634	$	1,351,700

NOTE 4:  FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  In estimating fair value, we utilize valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach.  Such valuation techniques are consistently applied.  Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability.

ASC 820, Fair Value Measurements and Disclosure,  establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The fair value hierarchy is as follows:

Level 1Quoted prices in active markets for identical instruments.

Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. 

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 

The estimated fair value amounts have been determined by us using available market information and appropriate valuation methodologies.  However, considerable judgment is required to interpret market data to develop the estimates of fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amount we could realize in a current market exchange.  The use of different market assumptions and/or estimation methodologies could have a material effect on our estimated fair value amounts.  There were no significant changes in valuation methods used to estimate fair value during the six months ended June 30, 2015.

A description of the valuation methodologies used for instruments measured at fair value on a recurring basis is as follows:

Available for sale securities – The fair value of U.S. Government and federal agency securities, equity securities, and residential mortgage-backed securities is estimated based on quoted market prices or dealer quotes.  The fair value of other investments such as obligations of state and political subdivisions is estimated based on quoted market prices.  We obtain fair value measurements from an independent pricing service.  The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and bond’s terms and conditions, among other things.  We

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review the prices supplied by our independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices.

Derivative instruments – We utilize an interest rate swap agreement to convert one of our variable-rate subordinated debentures to a fixed rate.  This has been designated as a cash flow hedge.We also offer an interest rate swap program that permits qualified customers to manage interest rate risk on variable rate loans with Bank SNB. Derivative contracts are executed between our customers and Bank SNB. Offsetting contracts are executed by Bank SNB and approved counterparties. The counterparty contracts are identical to customer contracts, except for a fixed pricing spread or fee paid to us. The fair value of the interest rate swap agreements are obtained from dealer quotes.

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014.

			Fair Value Measurement at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
At June 30, 2015
Available for sale securities:
Federal agency securities	$	83,713	$	-	$	83,713	$	-
Obligations of state and political subdivisions		32,947		-		32,947		-
Residential mortgage-backed securities		202,979		-		202,979		-
Asset-backed securities		9,613		-		9,613		-
Other securities		32,644		139		32,505		-
Derivative asset		701		-		701		-
Derivative liability		(2,371)		-		(2,371)		-
Total	$	360,226	$	139	$	360,087	$	-
At December 31, 2014
Available for sale securities:
Federal agency securities	$	99,546		-		99,546		-
Obligations of state and political subdivisions		33,139		-		33,139		-
Residential mortgage-backed securities		178,227		-		178,227		-
Asset-backed securities		9,548		-		9,548		-
Other securities		32,771		142		32,629		-
Derivative asset		787		-		787		-
Derivative liability		(2,373)		-		(2,373)		-
Total	$	351,645	$	142	$	351,503	$	-

Certain financial assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).  These assets are recorded at the lower of cost or fair value.  Valuation methodologies for assets measured on a nonrecurring basis are as follows:

Impaired loans – Certain impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from collateral.  Collateral values are estimated using inputs based on third-party appraisals.  Certain other impaired loans are analyzed and reported through a specific valuation allowance based upon the net present value of cash flows. 

Loans held for sale  –Real estate mortgage loans held for sale are carried at the lower of cost or market, which is determined on an individual loan basis.  The fair value of loans held for sale is based on existing investor commitments.

Other real estate – Other real estate fair value is based on third-party appraisals for significant properties less the estimated costs to sell the asset. 

Mortgage loan servicing rights – There is no active trading market for loan servicing rights.  The fair value of loan servicing rights is estimated by calculating the present value of net servicing revenue over the anticipated life of each loan.  A

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cash flow model is used to determine fair value.  Key assumptions and estimates, including projected prepayment speeds and assumed servicing costs, earnings on escrow deposits, ancillary income, and discount rates, used by this model are based on current market sources.  A separate third party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults, and other relevant factors.  The prepayment model is updated for changes in market conditions.

Core deposit premiums – Except for the 2014 branch sales, the fair value of core deposit premiums are based on third-party appraisals.

Goodwill – Fair value of goodwill is based on the fair value of each of our reporting units to which goodwill is allocated compared with their respective carrying value. 

Assets that were measured at fair value on a nonrecurring basis as of June 30, 2015 and December 31, 2014 are summarized below.   

			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
At June 30, 2015
Impaired loans at fair value :
Commercial real estate	$	11,739	$	-	$	-	$	11,739
One-to-four family residential		-		-		-		-
Real estate construction		390		-		-		390
Commercial		4,875		-		-		4,875
Loans held for sale:
One-to-four family residential		6,065		-		6,065		-
Government guaranteed commercial real estate		622		-		622		-
Other loans held for sale		-		-		-		-
Mortgage loan servicing rights		3,630		-		3,630		-
Other real estate		2,393		-		-		2,393
Total	$	29,714	$	-	$	10,317	$	19,397
At December 31, 2014
Impaired loans at fair value :
Commercial real estate	$	11,762	$	-	$	-	$	11,762
Commercial		5,722		-		-		5,722
Loans held for sale:
One-to-four family residential		763		-		763		-
Government guaranteed commercial real estate		705		-		705		-
Other loans held for sale		17		-		17		-
Other real estate		3,097		-		-		3,097
Total	$	22,066	$	-	$	1,485	$	20,581

As of June  30, 2015, impaired loans measured at fair value with a carrying amount of $20.6 million were written down to a fair value of $17.0 million, resulting in a life-to-date impairment of $3.6 million.  As of December 31, 2014, impaired loans measured at fair value with a carrying amount of $21.9 million were written down to the fair value of $17.5 million at December 31, 2014, resulting in a life-to-date impairment charge of $4.4 million.

As of June 30, 2015 and December 31, 2014, other real estate assets were written down to their fair values, resulting in an impairment charge of $0.1 million and $0.6 million,  respectively, which was included in noninterest expense.

As of June 30, 2015 and December 31, 2014, mortgage servicing rights were written down to their fair values, resulting in an impairment charge of $0.1 million and $0, respectively, which was included in noninterest expense.

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No impairment of core deposit premiums or goodwill  were recognized during the periods ending June 30, 2015 or December 31, 2014.

ASC 825, Financial Instruments,  requires an entity to provide disclosures about fair value of financial instruments, including those that are not measured and reported at fair value on a recurring or nonrecurring basis.   The methodologies used in estimating the fair value of financial instruments that are measured on a recurring or nonrecurring basis are discussed above.  The methodologies for the other financial instruments are discussed below:

Cash and cash equivalents – For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value.

Securities held to maturity – The investment securities held to maturity are carried at cost.  The fair value of the held to maturity securities is estimated based on quoted market prices or dealer quotes.

Loans, net of allowance – Fair values are estimated for certain homogenous categories of loans adjusted for differences in loan characteristics.  Our loans have been aggregated by categories consisting of commercial, real estate, and other consumer.  The fair value of loans is estimated by discounting the cash flows using risks inherent in the loan category and interest rates currently offered for loans with similar terms and credit risks.

Accrued interest receivable – The carrying amount is a reasonable estimate of fair value for accrued interest receivable.

Investments included in other assets – The estimated fair value of investments included in other assets, which primarily consists of investments carried at cost, approximates their carrying values.

Deposits – The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the statement of financial condition date.  The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.

Accrued interest payable and other liabilities – The estimated fair value of accrued interest payable and other liabilities, which primarily includes trade accounts payable, approximates their carrying values.

Other borrowings – Included in other borrowings are FHLB advances and securities sold under agreements to repurchase.  The fair value for fixed rate FHLB advances is based upon discounted cash flow analysis using interest rates currently being offered for similar instruments.  The fair values of other borrowings are the amounts payable at the statement of financial condition date, as the carrying amount is a reasonable estimate of fair value due to the short-term maturity rates. 

Subordinated debentures – Our twosubordinated debentures have floating rates that reset quarterly. The fair value of the floating rate subordinated debentures approximates carrying value at June 30, 2015. 

The carrying values and estimated fair values of our financial instruments segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value were as follows:

	At June 30, 2015				At December 31, 2014
	Carrying		Fair		Carrying		Fair
(Dollars in thousands)	Values		Values		Values		Values
Financial assets:
Level 2 inputs:
Cash and cash equivalents	$	156,688	$	156,688	$	140,936	$	140,936
Securities held to maturity		11,364		11,818		12,362		12,880
Accrued interest receivable		4,281		4,281		4,723		4,723
Investments included in other assets		7,949		7,949		7,949		7,949
Level 3 inputs:
Total loans, net of allowance		1,423,211		1,353,264		1,371,539		1,303,047
Financial liabilities:
Level 2 inputs:
Deposits		1,624,446		1,534,880		1,533,999		1,450,540
Accrued interest payable		774		774		769		769
Other liabilities		8,077		8,077		8,334		8,334
Other borrowings		75,839		77,622		79,380		81,544
Subordinated debentures		46,393		46,393		46,393		46,393

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NOTE 5: DERIVATIVE INSTRUMENTS

We utilize derivatives instruments to manage exposure to various types of interest rate risk for us and our customers within our policy guidelines. All derivative instruments are carried at fair value and credit risk is considered in determining fair value.

Derivative contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms.  Institutional counterparties must have an investment grade credit rating and be approved by our asset/liability management committee.  Our credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty.  Access to collateral in the event of default is reasonably assured. Therefore, credit exposure may be reduced by the amount of collateral pledged by the counterparty.

Customer Risk Management Interest Rate Swaps

Our qualified customers have the opportunity to participate in our interest rate swap program for the purpose of managing interest rate risk on their variable rate loans with us.  If we enter into such agreements with customers, then offsetting agreements are executed between us and approved dealer counterparties to minimize our market risk from changes in interest rates.  The counterparty contracts are identical to customer contracts, except for a fixed pricing spread or fee paid to us by the dealer counterparty.  These interest rate swaps carry varying degrees of credit, interest rate and market or liquidity risks.  The fair value of derivative instruments are recognized as either assets or liabilities in the consolidated statements of financial condition. 

We have entered into three customer interest rate swap agreements that effectively convert the loan interest rate from floating rate based on LIBOR to a fixed rate for the customer.  As of June  30, 2015, these loans had an outstanding balance of  $33.9 million.  We have entered into offsetting agreements with dealer counterparties.  The following table summarizes the fair values of derivative contracts recorded as “non-hedge derivative assets” and “non-hedge derivative liabilities” in the consolidated statements of financial condition.

	As of June 30, 2015				At December 31, 2014
(Dollars in thousands)	Notional		Fair Value		Notional		Fair Value
Non-hedge derivative assets	$	33,935	$	701	$	34,322	$	787
Non-hedge derivative liabilities		33,935		701		34,322		787

The marginrates to us in connection with these instruments are2.97%,  2.87%, and 2.30%over the one-month LIBOR.  There was $0.4 million of collateral required to be posted by us as of June  30, 2015 to dealer counterparties. We posted a security to cover the collateral required. These interest rate swaps are not designated as hedging instruments.

Interest Rate Swap

We have an interest rate swap agreement with a total notional amount of $25.0 million.  The interest rate swap contract was designated as a hedging instrument in cash flow hedges with the objective of protecting the overall cash flow from our quarterly interest payments on the SBI Capital Trust II preferred securities throughout the seven year period beginning February 11, 2011 and ending April 7, 2018 from the risk of variability of those payments resulting from changes in the three-month London Interbank Offered Rate (“LIBOR”).  Under the swap, we pay a fixed interest rate of 6.15% and receive a variable interest rate of three-month LIBOR plus a margin of 2.85% on a total notional amount of $25.0 million, with quarterly settlements.  The rate received by us as of June 30, 2015 was 3.13%. 

The estimated fair value of the interest rate swap contract outstanding as of June 30, 2015 and December 31, 2014 resulted in a pre-tax loss of $1.7 million and $1.6 million, respectively, and was included in other liabilities in the consolidated statements of financial condition.  We obtained the counterparty valuation to validate the interest rate derivative contract as of June 30, 2015 and December 31, 2014.   

The effective portion of our gain or loss due to changes in the fair value of the interest rate swap contract, a $51,000 lossand a $42,000gain for the six months ended June 30, 2015 and June 30, 2014, respectively, is included in other comprehensive income, net of tax, while the ineffective portion (indicated by the excess of the cumulative change in the fair value of the derivative over that which is necessary to offset the cumulative change in expected future cash flows on the hedge transaction) is included in other noninterest income or other noninterest expense.  No ineffectiveness related to the interest rate derivative was recognized during either reporting period.   

Net cash outflows as a result of the interest rate swap contract were $0.4 million forboth the six months ended June 30, 2015 and June 30, 2014and were included in interest expense on subordinated debentures.   

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The fair value of cash and securities posted as collateral by us related to the interest rate swap contract was $2.1 million at June 30, 2015 and December 31, 2014.

There are no credit-risk-related contingent features associated with our derivative contract. 

NOTE 6: TAXES ON INCOME

Net deferred tax assets totaled $12.7 million at June 30, 2015 and $14.1 million at December 31, 2014.  Net deferred tax assets are included in other assets and no valuation allowance is considerednecessary.

We or one of our subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  We are no longer subject to U.S. federal or state tax examinations for years before 2011. 

NOTE 7: SHAREHOLDERS’ EQUITY

Stock Repurchase Program

On August 14, 2014, our Board of Directors (the “Board”) authorized the repurchase of up to 5.0%, or 990,000 shares, of ourcommon stock.  The share repurchases are expected to be made primarily on the open market from time to time until August  14, 2015.  Repurchases under the program are available at the discretion of management based upon market, business, legal, and other factors. During the second quarter of 2015, we repurchased no shares due to trade restrictions resulting from our pending acquisition of First Commercial Bancshares, Inc.As of June  30, 2015, we had repurchased 867,310 shares for a total of $14.3 million.

On February 24, 2015, ourBoard authorized a second share repurchase program of up to another 5.0%, or approximately 950,000 shares, of our common stock, effective upon the earlier of (i) the date we complete the repurchase of all of the shares we are authorized to repurchase under the current program, or (ii) August 14, 2015.

NOTE 8: EARNINGS PER SHARE

Earnings per common share is computed using the two-class method prescribed by ASC 260, Earnings Per Share.  Using the two-class method, basic earnings per common share is computed based upon net income divided by the weighted average number of common shares outstanding during each period, which excludes outstanding unvested restricted stock.  Diluted earnings per share is computed using the weighted average number of common shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. 

The following table shows the computation of basic and diluted earnings per common share:

	For the three months				For the six months
	ended June 30,				ended June 30,
(Dollars in thousands, except earnings per share data)	2015		2014		2015		2014
Numerator:
Net income	$	4,161	$	6,152	$	8,696	$	9,843
Earnings allocated to participating securities		(73)		(80)		(143)		(119)
Numerator for basic earnings per common share	$	4,088	$	6,072	$	8,553	$	9,724
Effect of reallocating undistributed earnings
of participating securities		73		80		143		119
Numerator for diluted earnings per common share	$	4,161	$	6,152	$	8,696	$	9,843
Denominator:
Denominator for basic earnings per common share		18,666,853		19,520,967		18,714,088		19,524,859
Dilutive effect of stock compensation		197,124		143,867		172,332		130,767
Denominator for diluted earnings per common share		18,863,977		19,664,834		18,886,420		19,655,626
Earnings per common share:
Basic	$	0.22	$	0.31	$	0.46	$	0.50
Diluted	$	0.22	$	0.31	$	0.46	$	0.50

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NOTE 9: OPERATING SEGMENTS  

We operate four principal segments:  Oklahoma Banking, Texas Banking, Kansas Banking, and Other Operations.  The Oklahoma Banking segment provides deposit and lending services and consists of residential mortgage lending services to customers. The Texas Banking segment and the Kansas Banking segment provide deposit and lending services.Other Operations includes our funds management unit and corporate investments.  Prior to the first quarter of 2015,  we disclosed a Mortgage Banking segment, which included 1-4 family mortgages and the available for sale loans.For segment reporting, the Mortgage Banking segment has been combined with and into the Oklahoma Banking segment due to those loans being managed from that location.Prior period numbers have also been adjusted to reflect this change. This adjustment has no financial statement impact.

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 June 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	9,299	$	4,793	$	1,731	$	(32)	$	15,791
Provision (credit) for loan losses		(689)		(283)		(165)		1		(1,136)
Noninterest income		2,386		278		329		416		3,409
Noninterest expenses		7,698		3,793		1,606		885		13,982
Income (loss) before taxes		4,676		1,561		619		(502)		6,354
Taxes on income (loss)		1,609		531		216		(163)		2,193
Net income (loss)	$	3,067	$	1,030	$	403	$	(339)	$	4,161

For the three months ended June 30, 2014
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	9,497	$	4,457	$	3,075	$	(455)	$	16,574
Provision (credit) for loan losses		(1,464)		1,449		(340)		-		(355)
Noninterest income		2,332		243		420		5,251		8,246
Noninterest expenses		7,871		3,232		2,658		1,571		15,332
Income before taxes		5,422		19		1,177		3,225		9,843
Taxes on income		2,034		7		441		1,209		3,691
Net income	$	3,388	$	12	$	736	$	2,016	$	6,152

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For the six months ended June 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	19,034	$	10,013	$	3,194	$	(840)	$	31,401
Provision (credit) for loan losses		(1,922)		(533)		(568)		-		(3,023)
Noninterest income		4,425		587		631		606		6,249
Noninterest expenses		15,043		7,228		3,215		1,578		27,064
Income (loss) before taxes		10,338		3,905		1,178		(1,812)		13,609
Taxes on income (loss)		3,732		1,410		425		(654)		4,913
Net income (loss)	$	6,606	$	2,495	$	753	$	(1,158)	$	8,696
* Includes externally generated revenue of $0.7 million, primarily from investing services, and an internally generated loss of $1.0 million from the funds management unit.
Total loans at period end	$	810,368	$	493,047	$	146,015	$	-	$	1,449,430
Total assets at period end		824,073		491,442		147,302		568,764		2,031,581
Total deposits at period end		1,134,020		226,498		126,671		137,257		1,624,446

For the six months ended June 30, 2014
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	18,473	$	9,089	$	5,455	$	(442)	$	32,575
Provision (credit) for loan losses		483		(2,483)		659		-		(1,341)
Noninterest income		4,449		539		901		5,382		11,271
Noninterest expenses		15,452		6,460		5,286		2,241		29,439
Income before taxes		6,987		5,651		411		2,699		15,748
Taxes on income		2,620		2,119		154		1,012		5,905
Net income	$	4,367	$	3,532	$	257	$	1,687	$	9,843
* Includes externally generated revenue of $0.5 million, primarily from investing services, and an internally generated revenue of $4.4 million from the funds management unit.
Total loans at period end	$	798,065	$	408,385	$	145,247	$	3	$	1,351,700
Total assets at period end		807,002		405,524		147,644		524,988		1,885,158
Total deposits at period end		1,086,659		206,031		111,615		59,550		1,463,855

NOTE 10:  COMMITMENTS AND CONTINGENCIES

Other Agreements

On May 27, 2015, we entered into an Agreement and Plan of Reorganization (the “Agreement”)with First Commercial Bancshares, Inc. (“Bancshares”), an Oklahoma corporation, and First Commercial Bank, an Oklahoma banking corporation and a wholly‑owned subsidiary of Bancshares, pursuant to which Bancshares will merge with and into us (the “Merger”).

Under the terms of the Agreement, at the effective time of the Merger all outstanding shares of Bancshares common stock will be converted into the right to receive an aggregate merger consideration of $41.7 million,51% of which will be payable in shares of our common stock, representing an aggregate 1,214,087 shares of our common stock, plus cash in lieu of any fractional shares, and 49% of which will be payable in cash in an aggregate amount equal to $20.4 million, subject to certain conditions and potential adjustments as described in the Agreement.  The closing of the Merger is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the shareholders of Bancshares.  The closing of the Merger is expected to occur during the fourth quarter of 2015, although delays could occur.

The Agreement also provides that, following the Merger and subject to regulatory approvals, we will cause First Commercial Bank to be merged with and into Bank SNB.

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Customer Risk Management Interest Rate Swap

On September  9, 2014, we entered into an agreement to provide one of our commercial borrowers a customer interest rate swap that effectively converts the loan interest rate from  a floating rate based on LIBOR to a fixed rate for the customer.As of June  30, 2015, the floating rate loan had an outstanding balance of $16.5  million.  The option to execute the swap is conditional on compliance with the loan and swap agreements, and will be subject to the terms of the International Swaps and Derivatives Association Master Agreement.  The fixed pay amount will be based on the market rates at the time of execution, and it is our intention to simultaneously execute an offsetting trade with an approvedswap dealer counterparty with identical terms. 

Legal Action

On March 18, 2011, an action entitled Ubaldi, et al. v SLM Corporation (“Sallie Mae”), et al., Case No. 3:11-cv-01320 EDL (the “Ubaldi Case”) was filed in the U.S. District Court for the Northern District of California as a putative class action with respect to certain loans that the plaintiffs claim were made by Sallie Mae.   The loans in question were made by various banks, including Bank SNB, and sold to Sallie Mae.  Plaintiffs claim that Sallie Mae entered into arrangements with chartered banks in order to evade California law and that Sallie Mae is the de facto lender on the loans in question and, as the lender on such loan, Sallie Mae charged interest and late fees that violates California usury law and the California Business and Professions Code. Sallie Mae has denied all claims asserted against it and has stated that it intends to vigorously defend the action.  On March 26, 2014, the Court denied the plaintiffs’ request to certify the class; however, the Court permitted the plaintiffs to amend the filing to redefine the class. Plaintiffs filed a renewed motion on June 23, 2014. On December 19, 2014, the Court issued a decision on the renewed motion, certifying a class with respect to claims of improper late fees, but denying class certification with respect to plaintiffs’ usury claims.   Plaintiffs thereafter filed a motion seeking leave to amend their complaint to add additional parties, which Sallie Mae opposed, and, on March 24, 2015, the Court denied the plaintiffs’ motion. On June 5, 2015, the law firm Cohen Milstein Sellers & Toll based in Washington, D.C. entered its appearance as co-counsel on behalf of plaintiffs.

Bank SNB is not specifically named in the action.  However, in the first quarter of 2014, Sallie Mae provided Bank SNB with a notice of claims that have been asserted against Sallie Mae in the Ubaldi Case (the “Notice”).  Sallie Mae asserts in the Notice that Bank SNB may have indemnification and/or repurchase obligations pursuant to the ExportSS Agreement dated July 1, 2002 between Sallie Mae and Bank SNB, pursuant to which the loans in question were made by Bank SNB.  Bank SNB has substantial defenses with respect to any claim for indemnification or repurchase ultimately made by Sallie Mae, if any, and intends to vigorously defend against any such claims.

Due to the uncertainty regarding (i) the size and scope of the class, (ii) whether a class will ultimately be certified, (iii) the particular class members, (iv) the interest rate on loans made by Bank SNB charged to particular class members, (v) the late fees charged to particular class members, (vi) the time period that will ultimately be at issue if a class is certified in the Ubaldi Case, (vii) the theories, if any, under which the plaintiffs might prevail, (viii) whether Sallie Mae will make a claim against us for indemnification or repurchase, and (ix) the likelihood that Sallie Mae would prevail if it makes such a claim, we cannot estimate the amount or the range of losses that may arise as a result of the Ubaldi Case.

In the normal course of business, we are at all times subject to various pending and threatened legal actions.  The relief or damages sought in some of these actions may be substantial.  After reviewing pending and threatened actions with counsel, management currently does not expect that the outcome of such actions will have a material adverse effect on our financial position; however, we are not able to predict whether the outcome of such actions may or may not have a material adverse effect on results of operations in a particular future period as the timing and amount of any resolution of such actions and relationship to the future results of operations are not known.

NOTE 11:  NEW AUTHORITATIVE ACCOUNTING GUIDANCE

In January 2015, FASB issued Accounting Standard Update No. 2015-01,  Income Statement—Extraordinary and Unusual Items: Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items; (“ASU 2015-01”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have an impact on the financial statements.

In February 2015, FASB issued Accounting Standard Update No. 2015-02,  Consolidation: Amendments to the Consolidation Analysis; (“ASU 2015-02”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

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In April 2015, FASB issued Accounting Standard Update No. 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs; (“ASU 2015-03”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In April 2015, FASB issued Accounting Standard Update No. 2015-04, Compensation—Retirement Benefits: Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets; (“ASU 2015-04”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In April 2015, FASB issued Accounting Standard Update No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement; (“ASU 2015-05”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In April 2015, FASB issued Accounting Standard Update No. 2015-06, Earnings Per Share: Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions; (“ASU 2015-06”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In May 2015, FASB issued Accounting Standard Update No. 2015-07, Fair Value Measurement: Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share; (“ASU 2015-07”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In May 2015, FASB issued Accounting Standard Update No. 2015-08, Business Combinations: Pushdown Accounting, Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115; (“ASU 2015-08”). The ASU does not require new recurring disclosures. The guidance becomes effective upon issuance, and it is not expected to have a material impact on the financial statements.

In May 2015, FASB issued Accounting Standard Update No. 2015-09, Financial Services—Insurance: Disclosures about Short-Duration Contracts; (“ASU 2015-09”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In June 2015, FASB issued Accounting Standard Update No. 2015-10, Technical Corrections and Improvements; (“ASU 2015-10”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016 for transition guidance and upon issuance for all other, and it is not expected to have a material impact on the financial statements.

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SOUTHWEST BANCORP, INC.

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EXECUTIVE SUMMARY

Southwest Bancorp, Inc. (“we”, “our”, “us”, or “Southwest”) is a financial holding company for Bank SNB, which has been providing banking services since 1894. Through Bank SNB, we have twenty-three full-service banking offices located primarily along the heavily populated areas on the I-35 corridor through Texas, Oklahoma, and Kansas.  We focus on providing customers with exceptional service and meeting all of their banking needs by offering a wide variety of commercial and consumer banking services, including commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services and products.  At June 30, 2015 we had total assets of $2.0 billion, deposits of $1.6 billion, and shareholders’ equity of $273.7 million.

Our share repurchase program, approved in August of 2014, authorized the repurchase of up to 5.0%, or 990,000 shares of our outstanding common stock, par value $1.00 per share.  As of June 30, 2015, we had repurchased 867,310 shares for a total of $14.3 million.  During the second quarter of 2015, no shares were repurchased due to trade restrictions resulting from our pending acquisition of First Commercial Bancshares, Inc. (“Bancshares”). On February 24, 2015, our board of directors approved a second share repurchase program authorizing the repurchase of up to another 5.0%, or approximately 950,000 shares, effective upon the earlier of (i) the date we complete the repurchase of all of the shares we are authorized to repurchase under the current program, or (ii) August 14, 2015.

On May 27, 2015, we entered into an Agreement and Plan of Reorganization (the “Agreement”) with Bancshares, an Oklahoma corporation, and First Commercial Bank, an Oklahoma banking corporation and a wholly‑owned subsidiary of Bancshares, pursuant to which Bancshares will merge with and into us (the “Merger”).  The closing of the Merger is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the shareholders of Bancshares.  The closing of the Merger is expected to occur during the fourth quarter of 2015, although delays could occur.  The Agreement also provides that, following the Merger and subject to regulatory approvals, we will cause First Commercial Bank to be merged with and into Bank SNB. This will allow us to grow our presence in the Oklahoma City metro area with five additional branches, increasing our total to ten. It will also expand our geographic footprint to Colorado with three branches in Denver and one in Colorado Springs.

On, May 18, 2015, we opened our second branch location in San Antonio, Texas.  The new San Antonio location provides needed space and a stronger profile for our growing business opportunities in that market.

On April 10, 2015, Bank SNB entered into an agreement with the FDIC to terminate the loss sharing agreements from its FDIC-assisted acquisition.  Bank SNB initially entered the agreements when it acquired the assets of First National Bank of Anthony from the FDIC in June 2009.  All future recoveries, charge-offs, and expenses related to these covered assets are now recognized entirely by Bank SNB.

In January 2015, our Fort Worth, Texas branch formally opened. We have already seen positive production in the Fort Worth market that is expected to produce good growth as our new team builds momentum. 

Our business operations are conducted through four operating segments that include Oklahoma Banking, Texas Banking, Kansas Banking, and Other Operations. At June 30, 2015, the Oklahoma Banking segment accounted for $810.4 million in loans, the Texas Banking segment accounted for $493.0 million in loans, and the Kansas Banking segment accounted for $146.0 million in loans.  Please see “Financial Condition:  Loans” below for additional information.   For additional information on our operating segments, please see “Note 9: Operating Segments” in the Notes to Unaudited Consolidated Financial Statements. 

Our common stock is traded on the NASDAQ Global Select Market under the symbol OKSB.  We focus on converting our strategic vision into long-term shareholder value. 

INDUSTRY FOCUS

Our area of expertise focuses on the special financial needs of: (i) healthcare and health professionals; (ii) commercial real estate borrowers, businesses and their managers and owners; (iii) commercial lending; (iv) and energy banking. The healthcare and real estate industries make up the majority of our loan and deposit portfolios.We conduct regular reviews of

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our current and potential healthcare and real estate lending and the appropriate concentrations within those industries based upon economic and regulatory conditions. 

As of June 30, 2015,  $485.7 million, or 34%, of our loans were real estate industry loans. Despite the potential headwinds of the economic environment regarding low energy prices, we expect the real estate recovery to remain stable in 2015, as the market continues to progress further through the economic and real estate cycles.Job growth, solid corporate profits, and recovery in the housing market are all positives for the real estate industry.Conversely,uncertainty over government regulation and fiscal/monetary policy, and a concern about the rising cost of debt capital are all industry risk factors.

Our tactical focus on healthcare lending was established in 1974. We provide credit and other remittance 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 June 30, 2015,  $422.3 million, or 29%, of our loans were loans to individuals and businesses in the healthcare industry.

As of June  30, 2015, approximately 6% of our loan portfolio was concentrated in energy banking.  Our exposure continues to be focused with good companies that are generally well capitalized and have staying power for the long term.  While many of our customers have hedges in place through 2016, if oil prices remain at these low levels for an extended period, we could experience weaker energy loan demand and increased losses within our energy portfolio. Furthermore, a prolonged period of low oil prices could have a negative impact on the economies of energy-dominant states such as Oklahoma and Texas.  As a result, a prolonged period of low oil prices could have an adverse effect on our business, financial condition and results of operation.

FINANCIAL CONDITION

Investment Securities

The following table shows the composition of the investment portfolio at the dates indicated:

	June 30,		December 31,
(Dollars in thousands)	2015		2014		$ Change		% Change
Federal agency securities	$	83,713	$	99,546	$	(15,833)	(15.91)	%
Obligations of state and political subdivisions		44,311		45,501		(1,190)	(2.62)
Residential mortgage-backed securities		202,979		178,227		24,752	13.89
Asset-backed securities		9,613		9,548		65	0.68
Other securities		32,644		32,771		(127)	(0.39)
Total	$	373,260	$	365,593	$	7,667	2.10	%

Loans

Total loans, including loans held for sale, were $1.4 billion at June 30, 2015.  The following table shows the composition of the loan portfolio at the dates indicated:

(Dollars in thousands)	June 30, 2015		December 31, 2014		$ Change		% Change
Real estate mortgage
Commercial	$	759,406	$	752,971	$	6,435	0.85	%
One-to-four family residential		85,338		77,531		7,807	10.07
Real estate construction
Commercial		186,140		186,659		(519)	(0.28)
One-to-four family residential		13,107		10,464		2,643	25.26
Commercial		384,788		350,410		34,378	9.81
Installment and consumer
Guaranteed student loans		-		37		(37)	(100.00)
Other		20,651		21,919		(1,268)	(5.78)
Total loans	$	1,449,430	$	1,399,991	$	49,439	3.53	%

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The composition of loans held for sale and a  reconciliation to total loans is shown in the following table: 

	June 30,		December 31,
(Dollars in thousands)	2015		2014		$ Change		% Change
Loans held for sale:
One-to-four family residential	$	6,065	$	763	$	5,302	694.89	%
Government guaranteed commercial real estate		622		705		(83)	(11.77)
Other loans held for sale		-		17		(17)	(100.00)
Total loans held for sale		6,687		1,485		5,202	350.30
Portfolio loans		1,442,743		1,398,506		44,237	3.16
Total  loans	$	1,449,430	$	1,399,991	$	49,439	3.53	%

Allowance for Loan Losses

Management determines the appropriate level of the allowance for loan losses using an established methodology.  (See “Note 3:  Loans and Allowance for Loan Losses” in the Notes to Unaudited Consolidated Financial Statements.)  Management believes the amount of the allowance is appropriate, based on our analysis. 

The allowance for loan losses on loans is comprised of two components. We consider all non-accrual loans and troubled debt restructuring loans to be impaired loans. However, all troubled debt restructuring loans and non-accrual loans greater than or equal to $100,000 are evaluated on an individual basis using the discounted present value of expected cash flows, the fair value of collateral, or the market value of the loan, and a specific allowance is recorded based upon the result. Collateral dependent loans are evaluated for impairment based upon the fair value of the collateral.  Any portion of a collateral dependent impaired loan in excess of the fair value of the collateral that is determined to be uncollectible is charged off. 

The allowance on all other loans (including non-accrual loans less than $100,000) is determined by use of historical loss ratios adjusted for qualitative internal and external risk factors, segmented into loan pools by type of loan and market area. 

The composition of the allowance for loan losses, at the dates indicated, is shown in the following table: 

	As of June 30, 2015						As of December 31, 2014
(Dollars in thousands)	Loan Balance		Allowance		Allowance %		Loan Balance		Allowance		Allowance %
Nonaccrual	$	8,887	$	1,808	20.3	%	$	9,276	$	1,984	21.4	%
Performing TDR		20,645		1,728	8.4			22,731		1,884	8.3
All other excluding loans held for sale		1,413,211		22,683	1.6			1,366,499		24,584	1.8
Total	$	1,442,743	$	26,219	1.8	%	$	1,398,506	$	28,452	2.0	%

The decrease in the allowance for nonaccrual loans was the result of current period charge-offs related to nonperforming loans and amortizing principal payments.  The decrease in the allowance relating to the other loans resulted from the consideration of improving portfolio loss trends and qualitative factors including management’s assessment of economic risk, asset quality trends, levels of potential problem loans, and loan concentrations in commercial real estate mortgage and construction loans.

The amount of the loan loss provision, or negative provision, for a period is based solely upon the amount needed to cause the allowance to reach the level deemed appropriate, after the effects of net charge-offs (recoveries) for the period.  Net charge-offs (recoveries) for the first six months of 2015 were $ (0.8) million, an improvement of $3.0 million from the $2.2 million recorded for the first six months of 2014.  The provision for loan losses for the first six months of 2015 was a negative (or credit) of $3.0 million, representing an increase of $1.7 million from the negative provision of $1.3 million recorded for the first six months of 2014.  The increase in the negative provision is due to the improvement in the overall quality of the loan portfolio combined with the lower average of historical net charge-offs.

Nonperforming Loans / Nonperforming Assets 

At June 30, 2015, the allowance for loan losses was 295.03% of nonperforming loans, compared to 302.26% of nonperforming loans, at December 31, 2014.  Nonaccrual loans, which comprise the majority of nonperforming loans, were $8.9 million as of June 30, 2015,  a decrease of $0.4 million, or 4%, from December 31, 2014.  We have taken cumulative net charge-offs related to these nonaccrual loans of $5.8 million as of June 30, 2015.  Nonaccrual loans at June 30, 2015 were comprised of 35 relationships and were primarily concentrated in commercial and industrial (58%) and commercial real

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estate (24%).  All nonaccrual loans are considered impaired and are carried at their estimated collectible amounts.  These loans are believed to have sufficient collateral and are in the process of being collected. 

(Dollars in thousands)	June 30, 2015			December 31, 2014
Nonaccrual loans:
Commercial real estate	$	2,141		$	2,195
One-to-four family residential		1,216			1,100
Real estate construction		416			73
Commercial		5,114			5,907
Other consumer		-			1
Total nonaccrual loans		8,887			9,276
Past due 90 days or more:
Commercial		-			137
Total past due 90 days or more		-			137
Total nonperforming loans		8,887			9,413
Other real estate		2,393			3,097
Total nonperforming assets	$	11,280		$	12,510
Nonperforming assets to portfolio loans receivable and
other real estate		0.78	%		0.89	%
Nonperforming loans to portfolio loans receivable		0.62			0.67
Allowance for loan losses to nonperforming loans		295.03			302.26
Government-guaranteed portion of nonperforming loans	$	-		$	895

At  June 30, 2015,  nine credit relationships represented 82% of nonperforming loans.  These were all commercial, commercial real estate lending, or one-to-four family residentialrelationships and had an aggregate principal balance of $7.3 million and related impairment reserves of $1.8 million.  Cumulative net charge-offs for these nine relationships were $5.5 million as of June 30, 2015. 

Performing loans considered potential problem loans (loans which are not included in the past due or nonaccrual categories but for which known information about possible credit problems causes management to be uncertain as to the ability of the borrowers to comply with the present loan repayment terms) amounted to approximately $35.0 million at June 30, 2015, compared to $34.0 million at December 31, 2014.  Substantially all of these loans were performing in accordance with their present terms at June 30, 2015.  Loans may be monitored by management and reported as potential problem loans for an extended period of time during which management continues to be uncertain as to the ability of certain borrowers to comply with the present loan repayment terms. 

At June 30, 2015, other real estate was $2.4 million, down from $3.1 million at December 31, 2014 due to property sales.   During the first six months of 2015, there wasone sale of other real estate property, which had a principal value of $0.8 million,  and resulted in a net gain of $0.1 million.  In order to adjust the properties to their fair value, there weretotal other real estate write-downs of $0.1million during the first six months of 2015 compared to $0.6 million for the year endedDecember 31, 2014.

At June 30, 2015, the reserve for unfunded loan commitments was $2.3 million, a $0.1 million, or 5%, decrease from the amount at December 31, 2014.  Management believes the amount of the reserve is appropriate and is included in other liabilities on the consolidated statements of financial condition.  The decreaseis related primarily to continued improvement in asset quality and a corresponding decline in historical loss ratios used to calculate the reserve.

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Deposits and Other Borrowings

Our deposits were $1.6 billion at June 30, 2015 and $1.5 billion atDecember 31, 2014.  The following table shows the composition of deposits at the dates indicated:

	June 30,		December 31,
(Dollars in thousands)	2015		2014		$ Change		% Change
Noninterest-bearing demand	$	515,156	$	496,128	$	19,028	3.84	%
Interest-bearing demand		131,547		122,342		9,205	7.52
Money market accounts		496,178		461,679		34,499	7.47
Savings accounts		35,647		32,795		2,852	8.70
Time deposits of $100,000 or more		233,105		198,952		34,153	17.17
Other time deposits		212,813		222,103		(9,290)	(4.18)
Total deposits	$	1,624,446	$	1,533,999	$	90,447	5.90	%

We participate in the Certificate of Deposit Account Registry Service (“CDARS”) and CDARS deposits totaled $7.7 million at June 30, 2015 and $3.4 million at December 31, 2014.

Other borrowings, which includes short-term federal funds purchased, FHLB borrowings, and repurchase agreements, decreased $3.5 million, or 4%, to $75.8 million during the first six months of 2015.  The decrease primarily reflects the timing of repurchase agreements for the period.   

Wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 8% of total funding at June  30, 2015.  See further discussion under the “Liquidity” section below.

Shareholders’ Equity

Shareholders’ equity increased  $2.9 million, primarily due to net income of $8.7 million combined with an increase of $0.2 million in other comprehensive income, and partially offset by $4.0 million in stock repurchases and $2.3 million in common stock dividends, for the first six months of 2015.  At June  30, 2015, the accumulated other comprehensive loss on available for sale investment securities and derivative instruments (net of tax) was $0.2 million, an improvement from a loss of  $0.4 million at December 31, 2014.

At June 30, 2015, we and Bank SNB continued to exceed all applicable regulatory capital requirements.  See “Capital Requirements” on page 42.

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RESULTS OF OPERATIONS

FOR THE THREE MONTH PERIODS ENDED JUNE 30, 2015 and 2014

Net income for the second quarter of 2015 of $4.2 million represented a decrease of $2.0 million from the $6.2 million net income recorded for the second quarter of 2014.  Diluted earnings per share were $0.22 for the second quarter of 2015, compared to $0.31 for the second quarter of 2014.  The decrease in quarterly net income was primarily the result of a$4.8 million pre-tax decrease in noninterest income, which is primarily the $4.4 million net gain on the sales of the community bank branches in the second quarter of 2014 and a $0.8 million decrease in net interest income. These decreases are offset in part bya $1.3 million decrease in noninterest expense, a $0.7 million increase in the negative provision for loan losses, and a $1.5 million decrease in taxes.

Provisions for loan losses are booked in the amounts necessary to maintain the allowance for loan losses at an appropriate level at period end after net charge-offs for the period.  (See “Note 3:  Loans and Allowance for Loan Losses” in the Notes to Unaudited Consolidated Financial Statements and “Provision for Loan Losses” on page41.)

Net Interest Income

	For the three months
	ended June 30,
(Dollars in thousands)	2015		2014		$ Change		% Change
Interest income:
Loans	$	15,839	$	16,343	$	(504)	(3.08)	%
Investment securities:
U.S. government and agency obligations		381		337		44	13.06
Mortgage-backed securities		660		937		(277)	(29.56)
State and political subdivisions		287		294		(7)	(2.38)
Other securities		-		60		(60)	100.00
Other interest-earning assets		288		314		(26)	8.28
Total interest income		17,455		18,285		(830)	(4.54)
Interest expense:
Interest-bearing demand deposits		30		40		(10)	(25.00)
Money market accounts		183		136		47	34.56
Savings accounts		9		11		(2)	(18.18)
Time deposits of $100,000 or more		170		338		(168)	(49.70)
Other time deposits		470		406		64	15.76
Other borrowings		241		223		18	8.07
Subordinated debentures		561		557		4	0.72
Total interest expense		1,664		1,711		(47)	(2.75)
Net interest income	$	15,791	$	16,574	$	(783)	(4.72)	%

Net interest income is the difference between the interest income we earn on our loans, investments, and other interest-earning assets and the interest paid on interest-bearing liabilities, such as deposits and borrowings.  Net interest income is affected by changes in market interest rates because rates on different types of assets and liabilities may react differently and at different times to changes in market interest rates.  When interest-earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could reduce net interest income.  Similarly, when interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a period, an increase of market rates of interest could reduce net interest income. On the other hand, when interest-earning assets mature or reprice more quickly than interest-bearingliabilities, rising interest rates could increase net interest income and when interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a period, a decrease of market rates of interest could increase net interest income.

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AVERAGE BALANCES, YIELDS AND RATES

The following table shows average interest-earning assets and interest-bearing liabilities and the average yields and rates on them for the periods indicated.

	For the three months ended June 30,
	2015						2014
	Average				Average		Average				Average
(Dollars in thousands)	Balance		Interest		Yield/Rate		Balance		Interest		Yield/Rate
Assets
Loans (1) (2)	$	1,439,050	$	15,839	4.41	%	$	1,331,126	$	16,343	4.92	%
Investment securities (2)		369,677		1,328	1.44			384,395		1,628	1.70
Other interest-earning assets		103,943		288	1.11			183,378		314	0.69
Total interest-earning assets		1,912,670		17,455	3.66			1,898,899		18,285	3.86
Other assets		58,267						49,829
Total assets	$	1,970,937					$	1,948,728
Liabilities and shareholders' equity
Interest-bearing demand deposits	$	137,781	$	30	0.09	%	$	130,232	$	40	0.12	%
Money market accounts		473,993		183	0.15			421,001		136	0.13
Savings accounts		34,702		9	0.10			43,124		11	0.10
Time deposits		448,175		640	0.57			493,805		744	0.60
Total interest-bearing deposits		1,094,651		862	0.32			1,088,162		931	0.34
Other borrowings		60,568		241	1.60			85,682		223	1.04
Subordinated debentures		46,393		561	4.84			46,393		557	4.80
Total interest-bearing liabilities		1,201,612		1,664	0.56			1,220,237		1,711	0.56
Noninterest-bearing demand deposits		485,984						449,364
Other liabilities		10,005						10,751
Shareholders' equity		273,336						268,376
Total liabilities and shareholders' equity	$	1,970,937					$	1,948,728
Net interest income and interest rate spread			$	15,791	3.10	%			$	16,574	3.30	%
Net interest margin (3)					3.31	%					3.50	%
Ratio of average interest-earning assets
to average interest-bearing liabilities		159.18%						155.62%
(1) Average balances include nonaccrual loans.  Fees included in interest income on loans receivable are not considered material.
(2) Interest on tax-exempt loans and securities is not shown on a tax-equivalent basis because it is not considered material.
(3) Net interest margin = annualized net interest income / average interest-earning assets

Compared to the second quarter of 2014, the second quarter 2015 yields on our interest-earning assets decreased20  basis points, while the rates paid on our interest-bearing liabilitiesremained stable, resulting in a decrease in the interest rate spread from 3.30% to 3.10%. This reduction was the result ofreduced accelerated discount accretion, resulting primarily from the branch sale that occurred in the second quarter of 2014,offset by loan growth when comparing balances to the three months ended June 30, 2014.With the rate environment remaining low, loans and other earning assets are repricing at lower rates.During the quarterly periods ended June 30, 2015 and June 30, 2014, annualized net interest margin was 3.31% and 3.50%, respectively, and for the same periods, the ratio of average interest-earning assets to average interest-bearing liabilities was159.18%  and 155.62%, respectively. Included in interest income for the second quarter of 2014 was $0.8 million due to accelerated discount accretion attributable to the sale of loans covered by a loss sharing agreement. The net effect of these additional incomes on the net interest margin was a 16 basis point increase in the second quarter of 2014.

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RATE VOLUME TABLE

The following table analyzes changes in our interest income and interest expense for the periods indicated.  For each category of interest-earning asset and interest-bearing liability, information is provided on changes attributable to:  (i) changes in volume (changes in volume multiplied by the prior period’s rate); and (ii) changes in rates (changes in rate multiplied by the prior period’s volume).  Changes in rate-volume (changes in rate multiplied by the changes in volume) are allocated between changes in rate and changes in volume in proportion to the relative contribution of each.

With the rate environment remaining low in the short to mid-term, earning assets and interest bearing liabilities are repricing at lower rates.  The decrease in net interest income isprimarily the result of lower interest income from loans and securities, partially offset by lower interest expense on deposits.

	For the three months ended June 30,
	2015 vs. 2014
	Increase		Due to Change
	Or		In Average:
(Dollars in thousands)	(Decrease)		Volume		Rate
Interest earned on:
Loans receivable (1)	$	(504)	$	1,265	$	(1,769)
Investment securities (1)		(300)		(60)		(240)
Other interest-earning assets		(26)		(171)		145
Total interest income		(830)		1,034		(1,864)
Interest paid on:
Interest-bearing demand		(10)		2		(12)
Money market accounts		47		18		29
Savings accounts		(2)		(2)		0
Time deposits		(104)		(77)		(27)
Other borrowings		18		(78)		96
Subordinated debentures		4		-		4
Total interest expense		(47)		(136)		89
Net interest income	$	(783)	$	1,170	$	(1,953)
(1) Interest on tax-exempt loans and securities is not shown on a tax-equivalent basis because it is not considered material.

Noninterest Income

	For the three months
	ended June 30,
(Dollars in thousands)	2015		2014		$ Change		% Change
Noninterest income:
Other service charges and fees	$	2,450	$	2,608	$	(158)	(6.06)	%
Other noninterest income		200		168		32	19.05
Gain on sale of branches, net		-		4,378		(4,378)	(100.00)
Gain on sale/call of investment securities		138		629		(491)	(78.06)
Gain on sales of mortgage loans:
One-to-four family residential		621		463		158	34.13
Total noninterest income	$	3,409	$	8,246	$	(4,837)	(58.66)	%

Other servicecharges and fees for the three months ended June 30, 2015 decreased compared to the three months ended June 30, 2014 primarily due to a decrease in direct checking and overdraft chargesrelated to the Kansas branch sales.

Other noninterest income for the three months ended June 30, 2015increased compared to the three months ended June 30, 2014 primarily as a result of bank owned life insurance income. The asset was acquired during the second quarter of 2015.

Gain on sale of branches, net consisted of $4.4 million recognized as the pre-tax gain on disposal of the community bank branches in the second quarter of 2014.

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The gain on sale/call of investment securities for the three months ended June 30, 2015 decreased compared to the three months ended June 30, 2014 $0.5 million due to the sale of a stock investment that was acquired in a prior year repossession in 2014.

Gain on sales of mortgage loans for the three months ended June 30, 2015 as compared to the three months ended June 30, 2014 is primarily a reflection of the activity in residential mortgage lending. The increase relates to an increase in mortgage lending activity during the year.

Noninterest Expense

	For the three months
	ended June 30,
(Dollars in thousands)	2015		2014		$ Change		% Change
Noninterest expense:
Salaries and employee benefits	$	8,289	$	8,472	$	(183)	(2.16)	%
Occupancy		2,201		2,253		(52)	(2.31)
Data processing		410		530		(120)	(22.64)
FDIC and other insurance		316		314		2	0.64
Other real estate (net)		112		511		(399)	(78.08)
Unfunded loan commitment reserve		115		12		103	858.33
Other general and administrative		2,539		3,240		(701)	(21.64)
Total noninterest expense	$	13,982	$	15,332	$	(1,350)	(8.81)	%

The number of full-time equivalent employees increased from 360 at the beginning of the quarter to 361 as of June 30, 2015.  As of June 30, 2014, the number of full-time equivalent employees was 364.  The decrease in personnel expense from the prior year is primarily the result of the decrease in salary and employee benefit expenses related to the Kansas branch sales, offset in part by increased restricted stock expense and loan personnel expense related to amortized unearned expenses.

The decrease in data processing for the three months ended June 30, 2015 as compared to the three months ended June 30, 2014 is the result of a decrease in overall data processing expenses related to the Kansas branch sales and lower volumes.

The decrease in other real estate net expenses for the three months ended June 30, 2015 as compared to the three months ended June 30, 2014 is primarily the result of a decrease in overall other real estate and related property taxes and other write downs.

The unfunded loan commitment reserve expense for the three months ended June 30, 2015increased compared to the three months ended June 30, 2014 primarily as a result of an increase in the level of unfunded commitments related to loans originated during the second quarter of 2015.

The decrease in other general and administrative for the three months ended June 30, 2015 as compared to the three months ended June 30, 2014 is primarily the resultof lowerlegaland marketing expenses.Included in general and administrative expense forJune 30, 2015 are legal and consulting fees related to our pending acquisition of Bancshares of approximately $0.2 million.

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RESULTS OF OPERATIONS

FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2015 and 2014 

Net income for the six months ended June 30, 2015 of $8.7 million represented a decrease of $1.1 million from the $9.8 million net income recorded for the six months ended June 30, 2014.  Diluted earnings per share were $0.46 for the six months ended June 30, 2015, compared to $0.50 for the six months ended June 30, 2014.  The decrease in net income was primarily the result ofa $5.1 million decrease in noninterest income, which was primarily due to the pre-tax net gain of $4.4 million on the sales of community bank branches in the second quarter of 2014, and a $1.2 million decrease in net interest income,offset in part by a $1.7 million increase in the negative provision for loan losses from improved asset quality and a $2.3 million decrease in noninterest expense due to decreased general and administrative, personnel, and other real estate expenses.

Provisions for loan losses are booked in the amounts necessary to maintain the allowance for loan losses at an appropriate level at period end after net charge-offs for the period.  (See “Note 3:  Loans and Allowance for Loan Losses” in the Notes to Unaudited Consolidated Financial Statements and “Provision for Loan Losses” on page 41.)

	For the six months
	ended June 30,
(Dollars in thousands)	2015		2014		$ Change		% Change
Interest income:
Loans	$	31,409	$	32,118	$	(709)	(2.21)	%
Investment securities:
U.S. government and agency obligations		717		764		(47)	(6.15)
Mortgage-backed securities		1,378		1,826		(448)	(24.53)
State and political subdivisions		576		590		(14)	(2.37)
Other securities		6		98		(92)	93.88
Other interest-earning assets		593		689		(96)	13.93
Total interest income		34,679		36,085		(1,406)	(3.90)
Interest expense:
Interest-bearing demand deposits		63		80		(17)	(21.25)
Money market accounts		365		282		83	29.43
Savings accounts		17		22		(5)	(22.73)
Time deposits of $100,000 or more		408		787		(379)	(48.16)
Other time deposits		844		785		59	7.52
Other borrowings		468		448		20	4.46
Subordinated debentures		1,113		1,106		7	0.63
Total interest expense		3,278		3,510		(232)	(6.61)
Net interest income	$	31,401	$	32,575	$	(1,174)	(3.60)	%

Net interest income is the difference between the interest income we earn on our loans, investments, and other interest-earning assets and the interest paid on interest-bearing liabilities, such as deposits and borrowings.  Net interest income is affected by changes in market interest rates because rates on different types of assets and liabilities may react differently and at different times to changes in market interest rates.  When interest-earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could reduce net interest income.  Similarly, when interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a period, an increase of market rates of interest could reduce net interest income. On the other hand, when interest-earning assets mature or reprice more quickly than interest-bearingliabilities, rising interest rates could increase net interest income and when interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a period, a decrease of market rates of interest could increase net interest income.

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AVERAGE BALANCES, YIELDS AND RATES

The following table shows average interest-earning assets and interest-bearing liabilities and the average yields and rates on them for the periods indicated.

	For the six months ended June 30,
(Dollars in thousands)	2015						2014
	Average				Average		Average				Average
	Balance		Interest		Yield/Rate		Balance		Interest		Yield/Rate
Assets
Loans (1) (2)	$	1,429,148	$	31,409	4.43	%	$	1,304,876	$	32,118	4.96	%
Investment securities (2)		368,782		2,677	1.46			386,506		3,278	1.71
Other interest-earning assets		131,290		593	0.91			231,584		689	0.60
Total interest-earning assets		1,929,220		34,679	3.62			1,922,966		36,085	3.78
Other assets		53,888						50,036
Total assets	$	1,983,108					$	1,973,002
Liabilities and shareholders' equity
Interest-bearing demand deposits	$	138,335	$	63	0.09	%	$	132,483	$	80	0.12	%
Money market accounts		479,287		365	0.15			428,839		282	0.13
Savings accounts		34,030		17	0.10			43,939		22	0.10
Time deposits		441,330		1,252	0.57			512,335		1,572	0.62
Total interest-bearing deposits		1,092,982		1,697	0.31			1,117,596		1,956	0.35
Other borrowings		66,405		468	1.42			83,258		448	1.09
Subordinated debentures		46,393		1,113	4.80			46,393		1,106	4.77
Total interest-bearing liabilities		1,205,780		3,278	0.55			1,247,247		3,510	0.57
Noninterest-bearing demand deposits		494,582						449,247
Other liabilities		10,458						10,621
Shareholders' equity		272,288						265,887
Total liabilities and shareholders' equity	$	1,983,108					$	1,973,002
Net interest income and interest rate spread			$	31,401	3.07	%			$	32,575	3.21	%
Net interest margin (3)					3.28	%					3.42	%
Ratio of average interest-earning assets
to average interest-bearing liabilities		160.00%						154.18%
(1) Average balances include nonaccrual loans.  Fees included in interest income on loans receivable are not considered material.
(2) Interest on tax-exempt loans and securities is not shown on a tax-equivalent basis because it is not considered material.
(3) Net interest margin = annualized net interest income / average interest-earning assets

Compared to the six months ended June 30, 2014, the six months ended June 30, 2015 yields on our interest-earning assets decreased 16 basis points, while the rates paid on our interest-bearing liabilitiesdecreased 2 basis points, resulting in a decrease in the interest rate spread from 3.21% to 3.07%. This reduction was the result of reduced accelerated discount accretion, resulting primarily from the branch sale that occurred in the second quarter of 2014, offset by loan growth when comparing balances to the six months ended June 30, 2014. With the rate environment remaining low, loans and other earning assets are repricing at lower rates.During the same periods, annualized net interest margin was 3.28% and 3.42%, respectively, and for the same periods, the ratio of average interest-earning assets to average interest-bearing liabilities increased to 160.00% from  154.18%, respectively. Included in interest income for the first six months of 2014 was $0.8 million due to accelerated discount accretion attributable to the sale of loans covered by a loss sharing agreement and $0.6 million due to the interest recognition resulting from loans returning to accrual status.  The net effect of these adjustments on the net interest margin was a 14 basis point increase for the first six months of 2014.

39

RATE VOLUME TABLE

The following table analyzes changes in our interest income and interest expense for the periods indicated.  For each category of interest-earning asset and interest-bearing liability, information is provided on changes attributable to:  (i) changes in volume (changes in volume multiplied by the prior period’s rate); and (ii) changes in rates (changes in rate multiplied by the prior period’s volume).  Changes in rate-volume (changes in rate multiplied by the changes in volume) are allocated between changes in rate and changes in volume in proportion to the relative contribution of each.

With the rate environment remaining low in the short to mid-term, earning assets and interest bearing liabilities are repricing at lower rates.  The decrease in net interest income is primarily the result of lower interest income from loans and securities, partially offset by lower interest expense on deposits. 

	For the six months ended June 30,
	2015 vs. 2014
	Increase		Due to Change
	Or		In Average:
(Dollars in thousands)	(Decrease)		Volume		Rate
Interest earned on:
Loans receivable (1)	$	(709)	$	2,905	$	(3,614)
Investment securities (1)		(601)		(145)		(456)
Other interest-earning assets		(96)		(369)		273
Total interest income		(1,406)		2,391		(3,797)
Interest paid on:
Interest-bearing demand		(17)		3		(20)
Money market accounts		83		35		48
Savings accounts		(5)		(5)		(0)
Time deposits		(320)		(223)		(97)
Other borrowings		20		(102)		122
Subordinated debentures		7		-		7
Total interest expense		(232)		(291)		59
Net interest income	$	(1,174)	$	2,682	$	(3,856)
(1) Interest on tax-exempt loans and securities is not shown on a tax-equivalent basis, because it is not considered material.

Noninterest Income

	For the six months
	ended June 30,
(Dollars in thousands)	2015		2014		$ Change		% Change
Noninterest income:
Other service charges and fees	$	4,878	$	5,204	$	(326)	(6.26)	%
Other noninterest income		259		238		21	8.82
Gain on sale of branches, net		-		4,378		(4,378)	100.00
Gain on sale/call of investment securities		143		764		(621)	100.00
Gain on sales of mortgage loans:
One-to-four family residential		969		687		282	41.05
Total noninterest income	$	6,249	$	11,271	$	(5,022)	(44.56)	%

Other service charges and fees for the six months ended June 30, 2015 decreased compared to the six months ended June 30, 2014 primarily due to a decrease in direct checking and overdraft chargesrelated to the Kansas branch sales.

Other noninterest incomefor the six months ended June 30, 2015increased compared to the six months ended June 30, 2014primarily as a result of bank owned life insurance income. The asset was acquired during the second quarter of 2015.

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Gain on sale of branches, net consisted of $4.4 million recognized as the pre-tax gain on disposal of the community bank branches in the second quarter of 2014.

The gain on sale/call of investment securities for the six months ended June 30, 2015 decreased $0.6 million compared to the six months ended June 30, 2014 due to the sale of a stock investment that was acquired in a prior year repossession in 2014.

Gain on sales of mortgage loans is for the six months ended June 30, 2015 as compared to the six months ended June 30, 2014 primarily a reflection of the activity in residential mortgage lending. The increase relates to an increase in mortgage lending activity during the year.

Noninterest Expense

	For the six months
	ended June 30,
(Dollars in thousands)	2015		2014		$ Change		% Change
Noninterest expense:
Salaries and employee benefits	$	16,203	$	16,598	$	(395)	(2.38)	%
Occupancy		4,485		4,537		(52)	(1.15)
Data processing		856		1,015		(159)	(15.67)
FDIC and other insurance		628		711		(83)	(11.67)
Other real estate (net)		133		579		(446)	(77.03)
Unfunded loan commitment reserve		(110)		97		(207)	(213.40)
Other general and administrative		4,869		5,902		(1,033)	(17.50)
Total noninterest expense	$	27,064	$	29,439	$	(2,375)	(8.07)	%

The number of full-time equivalent employees decreased from 364 at June 30, 2014 to 361 as of June 30, 2015.  The decrease in personnel expense from the prior year is primarily the result of the decrease in salary and employee benefit expenses related to the Kansas branch sales, offset in part by increased restricted stock expense and loan personnel expense related to amortized unearned expenses.

The decrease in data processingfor the six months ended June 30, 2015 as compared to the six months ended June 30, 2014 is the result of a decrease in overall data processing expenses related to the Kansas branch sales and lower volumes.

Our financial institution subsidiary pays deposit insurance premiums to the FDIC based on assessment rates.  The decrease for the six months ended June 30, 2015 as compared to the six months ended June 30, 2014 is primarily the result of a decrease in the assessment rates, which is due to improvements in asset quality and other factors.   

The decrease in other real estate net expensesfor the six months ended June 30, 2015 as compared to the six months ended June 30, 2014 is primarily the result of a decrease in overall other real estate and related property taxes and other write downs.

The unfunded loan commitment reserve expense decreasedfor the six months ended June 30, 2015 as compared to the six months ended June 30, 2014 primarily as a result of continued improvement in asset quality and the corresponding decline in historical loss ratios used to calculate the reserve. 

The decrease in other general and administrative for the six months ended June 30, 2015 as compared to the six months ended June 30, 2014 is primarily the result of lower legal, marketing, consulting, and supplies expenses.Included in general and administrative expense for June 30, 2015 are legal and consulting fees related to our pending acquisitionof Bancshares of approximately $0.2 million.  

Provisions for Loan Losses

The provision for loan losses is the amount of expense (or credit) 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 recoveries) for the period.  The increase in the negative provision is due to the improvement in the overall quality of the loan portfolio combined with the lower average of historical net charge-offs.(See “Note 3:  Loans and Allowance for Loan Losses” in the Notes to Unaudited Consolidated Financial Statements and “Loans”)

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Taxes on Income

Our income tax expense was $4.9 million for the first six monthsof 2015 compared to $5.9 million for the first six months of 2014,a decreaseof $1.0 million, or 17%.  The decrease in the income tax expense is the result of decreased pretax income and fluctuations in permanent book/tax differences.  The effective tax rate for the first six months of 2015 was 36.10%,  compared to 37.5% as of June 30, 2014. The decline in the effective tax rate includes the impact of an increase in tax exempt income, as a percentage of pre-tax income.   

LIQUIDITY

Liquidity is measured by a financial institution’s ability to raise funds through deposits, borrowed funds, capital, or the sale of highly marketable assets such as available for sale investments.  Additional sources of liquidity, including cash flow from the repayment of loans and the sale of participations in outstanding loans, are also considered in determining whether liquidity is satisfactory.  Liquidity is also achieved through growth of deposits, reductions in liquid assets, and accessibility to capital and money markets.  These funds are used to meet deposit withdrawals, maintain reserve requirements, fund loans, and operate the organization.

Southwest and Bank SNB have available various forms of short-term borrowings for cash management and liquidity purposes.  These forms of borrowings include federal funds purchased, securities sold under agreements to repurchase, and borrowings from the Federal Reserve Bank (“FRB”) and the Federal Home Loan Bank of Topeka (“FHLB”).

Bank SNB has approved federal funds purchase lines totaling $65.0 million with three banks.  There wasnooutstanding balance on these lines at June 30, 2015. Bank SNB is qualified to borrow funds from the FRB through their Borrower-In-Custody (“BIC”) program.  Collateral under this program consists of pledged selected commercial and industrial loans.  Currently the collateral allows Bank SNB to borrow up to $93.3 million.  As of June 30, 2015, no borrowings were made through the BIC program.  In addition, Bank SNB has available a $347.4 million line of credit from the FHLB.  Borrowings under the FHLB lines are secured by investment securities and loans.  At June 30, 2015, Bank SNB’s FHLB line of credit had an outstanding balance of $25.0 million.  (See also “Deposits and Other Borrowings” on page 33

for funds available and “Note 9: Operating Segments” in the Notes to Unaudited Consolidated Financial Statements for a discussion of our funds management unit.) 

Bank SNB sells securities under agreements to repurchase with Bank SNB retaining custody of the collateral.  Collateral consists of U.S. government agency obligations, which are designated as pledged with Bank SNB’s safekeeping agent.  These transactions are for one to four day periods.  Outstanding balances under this program were $50.8 million and $54.4 million as of June 30, 2015 and December 31, 2014, respectively. 

At June 30, 2015, $212.3 million of the total carrying value of investment securities of $352.3 million were pledged as collateral to secure public and trust deposits, sweep agreements, and borrowings from the FHLB.  Any amount over pledged can be released at any time. 

During the first six months of 2015, no category of short-term borrowings had an average balance that exceeded 30% of ending shareholders’ equity. 

During the first six months of 2015, cash and cash equivalents increased by $15.8 million, or 11%, to $156.7 million compared to December 31, 2014.  This increase was the net result of cash provided by financing activities of $81.0 million(primarily from net increases in deposits offset in part by a decrease in other borrowings, purchases of treasury stock, and common stock dividends paid) and cash provided by operating activities of $7.3 million, offset in part by cash used in investing activities of $72.5million (primarily from purchases of available for sale securities, the increase in net loans originated, and the purchase of bank owned life insurance).

CAPITAL REQUIREMENTS

Basel III – United States banking regulators are members of the Basel Committee on Banking Supervision.  This committee issues accords, which include capital guidelines for use by regulators in individual countries, generally referred to as Basel I (1988), Basel II (2004), and Basel III (2011).  U.S. banking agencies published the final proposed rules to implement Basel III in the United States (the “Basel III Capital Rules”), which were effective for us January 1, 2015 (subject to a phase-in period for certain provisions).  The Basel III Capital Rules introduce a comprehensive new regulatory framework for U.S. banking organizations, which is consistent with international standards.  The implementation of Basel III is intended to help ensure that banks of all sizes maintain strong capital positions to keep them viable during times of financial stress and severe economic downturns.

42

The Basel III Capital Rules, among other things, introduce a new capital measure called “Common Equity Tier 1” (“CET1”), specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting specified requirements, define CET1 narrowly by requiring that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital, and expand the scope of the deductions/adjustments as compared to existing regulations.

Under the Basel III Capital Rules, the initial minimum capital ratios that became effective on January 1, 2015 are as follows:

· 4.5% CET1 to risk weighted assets

· 6.0% Tier 1 capital to risk weighted assets

· 8.0% Total capital to risk weighted assets

· 4.0% Tier 1 capital to average quarterly assets

When fully phased in on January 1, 2019, the Basel III Capital Rules will require us to maintain (i) a minimum ratio of CET1 to risk-weighted assets of at least 4.5%, plus a “capital conservation buffer” equal to 2.5% of total risk-weighted assets (the “Capital Buffer”), (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the Capital Buffer, (iii) a minimum ratio of Total capital to risk-weighted assets of at least 8.0%, plus the Capital Buffer and (iv) a minimum leverage ratio of 4%, calculated as the ratio of Tier 1 capital to average quarterly assets.  The Capital Buffer will be tested on a quarterly basis.  Our ability to pay dividends, discretionary bonuses, or repurchase stock will be restricted unless we maintain the Capital Buffer.As of June  30, 2015, we are well-capitalized even if we apply the capital buffer, which does not go into effect until future years.

The Basel III Capital Rules also prescribe a standardized approach for risk weightings that expand the risk-weighting categories from the four Basel I-derived categories to a much larger and more risk-sensitive number of categories, depending on the nature of the assets and resulting in higher risk weights for a variety of asset categories. Specific changes to the rules impacting our determination of risk-weighted assets include, a 150% risk weight instead of a 100% risk weight for certain high volatility commercial real estate acquisition, development and construction loans, and a 150% risk weight to exposures that are 90 days past due.

Banks with under $250 billion in assets are given a one-time, opt-out election under the Basel III Capital Rules to filter from regulatory capital certain accumulated other comprehensive income (“AOCI”) components.  Without this election, a bank must reflect unrealized gains and losses on “available for sale” securities in regulatory capital.  This AOCI opt-out election must be made on a bank’s first regulatory report filed after January 1, 2015. 

In connection with the adoption of the Basel III Capital Rules, we elected to opt-out of the requirement to include most components of accumulated other comprehensive income in regulatory capital. Accordingly, amounts reported as accumulated other comprehensive income/loss related to securities available for sale and effective cash flow hedges do not increase or reduce regulatory capital and are not included in the calculation of risk-based capital and leverage ratios. Regulatory agencies for banks and bank holding companies utilize capital guidelines designed to measure capital and take into consideration the risk inherent in both on-balance sheet and off-balance sheet items.

Capital Ratios  – Financial holding companies are required to maintain capital ratios set by the FRB in its Risk-Based Capital Guidelines.  At June 30, 2015, we exceeded all applicable capital requirements, having a total risk-based capital ratio of 19.09%, a Tier Irisk-based capital ratio of 17.84%, a Tier 1 leverage ratio of 16.12%, and a CET1 ratio of 15.30%.  As of June 30, 2015, Bank SNB met the criteria for classification as “well-capitalized” institutions under the prompt corrective action rules of the Federal Deposit Insurance Act.  Designation as a well-capitalized institution under these regulations does not constitute a recommendation or endorsement of Southwest or Bank SNB by bank regulators.

EFFECTS OF INFLATION

The unaudited consolidated financial statements and related unaudited consolidated financial data presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America and practices within the banking industry which require the measurement of financial position and operating results in terms of historical dollars without considering fluctuations in the relative purchasing power of money over time due to inflation.  Unlike most industrial companies, virtually all the assets and liabilities of a financial institution are monetary in nature.  As a result, interest rates have a more significant impact on a financial institution’s performance than do the effects of general levels of inflation.

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CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES

The accounting and reporting policies followed by Southwest Bancorp, Inc. conform, in all material respects, to U.S. generally accepted accounting principles (“GAAP”) and to general practices within the financial services industry.  The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  While we base our estimates on historical experience, current information, and other factors deemed to be relevant, actual results could differ from those estimates. 

We consider accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial statements.  Accounting policies related to the allowance for loan losses, the valuation of securities, income taxes, goodwill and other intangible assets are considered to be critical, as these policies involve considerable subjective judgment and estimation by management. 

There have been no significant changes in our application of critical accounting policies since December 31, 2014.  

*   *   *   *   *   *   *

44

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our income is largely dependent on our net interest income.  We seek to maximize our net interest margin within an acceptable level of interest rate risk.  Interest rate risk can be defined as the amount of forecasted net interest income that may be gained or lost due to favorable or unfavorable movements in interest rates.  Interest rate risk, or sensitivity, arises when the maturity or repricing characteristics of assets differ significantly from the maturity or repricing characteristics of liabilities.  Net interest income is also affected by changes in the portion of interest-earning assets that are funded by interest-bearing liabilities rather than by other sources of funds such as noninterest-bearing deposits and shareholders’ equity. 

We attempt to manage interest rate risk while enhancing net interest margin by adjusting our asset/liability position.  At times, depending on the level of general interest rates, the relationship between long-term and other interest rates, market conditions, and competitive factors, we may increase our interest rate risk position in order to increase its net interest margin.  We monitor interest rate risk and adjust the composition of our rate-sensitive assets and liabilities in order to limit our exposure to changes in interest rates on net interest income over time.  Our asset/liability committee reviews our interest rate risk position and profitability and recommends adjustments.  Our asset/liability committee also reviews the securities portfolio, formulates investment strategies, and oversees the timing and implementation of transactions.  Notwithstanding our interest rate risk management activities, the actual magnitude, direction, and relationship of future interest rates are uncertain and can have adverse effects on net income and liquidity.

A principal objective of our asset/liability management effort is to balance the various factors that generate interest rate risk, thereby maintaining our interest rate sensitivity within acceptable risk levels.  To measure our interest rate sensitivity position, we utilize a simulation model that facilitates the forecasting of net interest income over the next twelve month period under a variety of interest rate and growth scenarios. 

The earnings simulation model uses numerous assumptions regarding the effect of changes in interest rates on the timing and extent of repricing characteristics, future cash flows, and customer behavior.  These assumptions are inherently uncertain and, as a result, the model cannot precisely estimate net income.  Actual results differ from simulated results due to the timing, magnitude, and frequency of interest rate changes and changes in market conditions, cash flows, and management strategies, among other factors.

The balance sheet is subject to quarterly testing for six alternative interest rate shock possibilities to indicate the inherent interest rate risk.  Average interest rates are shocked by +/- 100, 200, and 300 basis points (“bp”), although we may elect not to use particular scenarios that we determine are impractical in a current rate environment.  It is management’s goal to structure the balance sheet so that net interest earnings at risk over a twelve-month period and the economic value of equity at risk do not exceed policy guidelines at various interest rate shock levels. 

Measures of net interest income at risk produced by simulation analysis are indicators of an institution’s short-term performance in alternative rate environments.  These measures are typically based upon a relatively brief period, usually one year.  They do not necessarily indicate the long-term prospects or economic value of the institution.

Estimated Changes in Net Interest Income

Changes in Interest Rates:	+  300 bp	+200 bp	+100 bp
June 30, 2015	14.46%	8.59%	2.80%
December 31, 2014	11.96%	7.10%	2.31%

When compared to December 31, 2014, net interest income at risk improved in each of the three interest rate scenarios.  The measured changes in net interest income for all scenarios are in compliance with the established policy limits. 

The measures of equity value at risk indicate the ongoing economic value of equity considering the effects of interest rate changes on cash flows, and discounting the cash flows to estimate the present value of assets and liabilities. The difference between these discounted values of the assets and liabilities is the economic value of equity, which, in theory, approximates the fair value of Southwest’s net assets.

Estimated Changes in Economic Value of Equity (EVE)

Changes in Interest Rates:	+300 bp	+200 bp	+100 bp
June 30, 2015	4.25%	2.33%	0.07%
December 31, 2014	2.56%	1.09%	(0.52)%

45

As of June 30, 2015 the economic value of equity measure improved  in  each of the three rising interest rate scenarios when compared to the December 31, 2014 percentages. The measured changes in economic value of equity for all scenarios are in compliance with the established policy limits.

*   *   *   *   *   *   *

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by SEC rules, our management evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2015.  Our Chief Executive Officer and Chief Financial Officer participated in the evaluation.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2015.

Changes in Internal Control over Financial Reporting

No changes occurred during the six months ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

46

PART II:  OTHER INFORMATION

Item 1:  Legal proceedings

On March 18, 2011, an action entitled Ubaldi, et al. v SLM Corporation (“Sallie Mae”), et al., Case No. 3:11-cv-01320 EDL (the “Ubaldi Case”) was filed in the U.S. District Court for the Northern District of California as a putative class action with respect to certain loans that the plaintiffs claim were made by Sallie Mae.   The loans in question were made by various banks, including Bank SNB, and sold to Sallie Mae.  Plaintiffs claim that Sallie Mae entered into arrangements with chartered banks in order to evade California law and that Sallie Mae is the de facto lender on the loans in question and, as the lender on such loan, Sallie Mae charged interest and late fees that violates California usury law and the California Business and Professions Code. Sallie Mae has denied all claims asserted against it and has stated that it intends to vigorously defend the action.  On March 26, 2014, the Court denied the plaintiffs’ request to certify the class; however, the Court permitted the plaintiffs to amend the filing to redefine the class. Plaintiffs filed a renewed motion on June 23, 2014. On December 19, 2014, the Court issued a decision on the renewed motion, certifying a class with respect to claims of improper late fees, but denying class certification with respect to plaintiffs’ usury claims.   Plaintiffs thereafter filed a motion seeking leave to amend their complaint to add additional parties, which Sallie Mae opposed, and, on March 24, 2015, the Court denied the plaintiffs’ motion.  On June 5, 2015, the law firm Cohen Milstein Sellers & Toll based in Washington, D.C. entered its appearance as co-counsel on behalf of plaintiffs.

Bank SNB is not specifically named in the action.  However, in the first quarter of 2014, Sallie Mae provided Bank SNB with a notice of claims that have been asserted against Sallie Mae in the Ubaldi Case (the “Notice”).  Sallie Mae asserts in the Notice that Bank SNB may have indemnification and/or repurchase obligations pursuant to the ExportSS Agreement dated July 1, 2002 between Sallie Mae and Bank SNB, pursuant to which the loans in question were made by Bank SNB.  Bank SNB has substantial defenses with respect to any claim for indemnification or repurchase ultimately made by Sallie Mae, if any, and intends to vigorously defend against any such claims.

In the normal course of business, we are at all times subject to various pending and threatened legal actions.  The relief or damages sought in some of these actions may be substantial.  After reviewing pending and threatened actions with counsel, management currently does not expect that the outcome of such actions will have a material adverse effect on our financial position; however, we are not able to predict whether the outcome of such actions may or may not have a material adverse effect on results of operations in a particular future period as the timing and amount of any resolution of such actions and relationship to the future results of operations are not known.

Item 1A:  Risk Factors 

There were no material changes in risk factors during the first six months of 2015 from those disclosed in our Form 10-K for the year ended December 31, 2014.

Item 2:  Unregistered sales of equity securities and use of proceeds

None

Item 3:  Defaults upon senior securities

None 

Item 4:  Mine Safety Disclosures 

Not Applicable 

Item 5:  Other information

None  

Item 6:  Exhibits 

Exhibit 10.1 Agreement and Plan of Reorganization, dated as of May 27, 2015, by and among Southwest Bancorp, Inc., First Commercial Bancshares, Inc., and First Commercial Bank (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed May 27, 2015)

Exhibit 10.2 First Amendment to Agreement and Plan of Reorganization, dated as of June 23, 2015, by and among Southwest Bancorp, Inc., First Commercial Bancshares, Inc., and First Commercial Bank (incorporated by reference to Exhibit 2.2 to Registration Statement on Form S-4 (File No. 333-205521) )

Exhibit 31(a), (b)   Rule 13a-14(a)/15d-14(a) Certifications

47

Exhibit 32(a), (b)   18 U.S.C. Section 1350 Certifications

Exhibit 101   Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Financial Condition, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SOUTHWEST BANCORP, INC.

(Registrant)

By:  /s/ Mark W. Funke	August 7, 2015
Mark W. Funke President and Chief Executive Officer (Principal Executive Officer)	Date
By:  /s/ Joe T. Shockley, Jr.	August 7, 2015
Joe T. Shockley, Jr. Executive Vice President and Chief Financial Officer (Principal Financial Officer)	Date

48

EX-31.A

Exhibit31(a)

Rule13a-14(a)/15d-14(a) Certifications

I,MarkW.Funke,certifythat:

1.  IhavereviewedthisreportonForm10-QofSouthwestBancorp,Inc.;

2.  Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterial factoromittostatea materialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementswere made,notmisleadingwithrespecttotheperiodcoveredby thisreport;

3.  Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairly present inallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrant asof,and for,theperiodspresentedinthisreport;

4.  Theregistrant’sothercertifying officerandIareresponsibleforestablishingandmaintainingdisclosure controlsand procedures (asdefinedinExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting (asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantandhave:

(a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobe designedunderoursupervision, toensurethatmaterialinformation relatingtotheregistrant,includingits consolidated subsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodin whichthisreportisbeingprepared;

(b)Designedsuchinternalcontrol overfinancialreporting,orcaused suchinternal  controloverfinancialreportingto bedesignedunderoursupervision,toprovidereasonableassuranceregardingthereliabilityoffinancialreporting and the preparation of financial statements for external purposes, in accordance  with  generally accepted accountingprinciples;

(c) Evaluatedtheeffectiveness oftheregistrant’sdisclosurecontrolsandproceduresandpresentedinthisreportour conclusionsabouttheeffectivenessofthedisclosurecontrolsandproceduresasoftheendoftheperiodcovered by thisreportbaseduponsuchevaluation;and

(d)Disclosedin thisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduring theregistrant’smostrecentfiscalquarter(theregistrant’sfourthfiscalquarterinthecase ofanannualreport)that hasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’s internalcontroloverfinancial reporting;and

5.  Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontrol overfinancialreporting,totheregistrant’s auditorsandtheauditcommitteeoftheregistrant’s boardofdirectors(or personsperformingtheequivalentfunction):

(a)  Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancial reportingwhich arereasonablylikely toadverselyaffect theregistrant’sabilitytorecord,process,summarizeand reportfinancialinformation;and

(b)Anyfraud,whetherornotmaterial,thatinvolvesmanagement orotheremployeeswhohaveasignificantrolein theregistrant’sinternalcontroloverfinancialreporting.

Date:  August7,  2015/s/  Mark W.  Funke

Mark W.  Funke

President andChief Executive Officer

(PrincipalExecutiveOfficer)

EX-31.B

Exhibit31(b)

Rule13a-14(a)/15d-14(a) Certifications

I,JoeT.Shockley,Jr.,certifythat:

1.  IhavereviewedthisreportonForm10-QofSouthwestBancorp,Inc.;

2.  Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterial factoromittostatea materialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementswere made,notmisleadingwithrespecttotheperiodcoveredby thisreport;

3.  Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairly present inallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrant asof,and for,theperiodspresentedinthisreport;

4.  Theregistrant’sothercertifying officerandIareresponsibleforestablishingandmaintainingdisclosure controlsand procedures (asdefinedinExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting (asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantandhave:

(a) Designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobe designedunderoursupervision, toensurethatmaterialinformation relatingtotheregistrant,includingits consolidated subsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodin whichthisreportisbeingprepared;

(b)Designedsuchinternalcontrol overfinancialreporting,orcaused suchinternal  controloverfinancialreportingto bedesignedunderoursupervision,toprovidereasonableassuranceregardingthereliabilityoffinancialreporting and the preparation of financial statements for external purposes, in accordance  with  generally accepted accountingprinciples;

(c) Evaluatedtheeffectiveness oftheregistrant’sdisclosurecontrolsandproceduresandpresentedinthisreportour conclusionsabouttheeffectivenessofthedisclosurecontrolsandproceduresasoftheendoftheperiodcovered by thisreportbaseduponsuchevaluation;and

(d)Disclosedin thisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduring theregistrant’smostrecentfiscalquarter(theregistrant’sfourthfiscalquarterinthecase ofanannualreport)that hasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’s internalcontroloverfinancial reporting;and

5.  Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontrol overfinancialreporting,totheregistrant’s auditorsandtheauditcommitteeoftheregistrant’s boardofdirectors(or personsperformingtheequivalentfunction):

(a)  Allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancial reportingwhich arereasonablylikely toadverselyaffect theregistrant’sabilitytorecord,process,summarizeand reportfinancialinformation;and

(b)Anyfraud,whetherornotmaterial,thatinvolvesmanagement orotheremployeeswhohaveasignificantrolein theregistrant’sinternalcontroloverfinancialreporting.

Date: August7, 2015 /s/ JoeT.Shockley, Jr.

JoeT.Shockley,Jr.

ExecutiveVice President, Chief FinancialOfficer

(Principal Financial Officer)

EX-32.A

Exhibit32(a)

18 U.S.C.Section1350Certifications

Iherebycertifypursuantto18U.S.C. §1350,asadoptedpursuantto§906oftheSarbanes-OxleyActof

2002,tothebestofmyknowledgeandbelief,thattheaccompanyingForm10-QofSouthwestBancorp, Inc.(“Southwest”)forthesix monthsendedJune30,2015,fullycomplies withtherequirements ofsection13(a)or15(d)oftheSecurities Exchange Actof1934(15U.S.C.78mor78o(d));andthatthe informationcontainedinthisForm10-Qfairlypresents,inallmaterialrespects,thefinancialcondition andresultsofoperationsofSouthwest.

By:/s/MarkW.FunkeAugust7,2015MarkW.FunkeDate

PresidentandChiefExecutiveOfficer

(PrincipalExecutiveOfficer)

EX-32.B

Exhibit32(b)

18 U.S.C.Section1350Certifications

Iherebycertifypursuantto18U.S.C. §1350,asadoptedpursuantto§906oftheSarbanes-OxleyActof

2002,tothebestofmyknowledgeandbelief,thattheaccompanyingForm10-QofSouthwestBancorp, Inc.(“Southwest”)forthesix monthsendedJune30,2015,fullycomplies withtherequirements ofsection13(a)or15(d)oftheSecurities Exchange Actof1934(15U.S.C.78mor78o(d));andthatthe informationcontainedinthisForm10-Qfairlypresents,inallmaterialrespects,thefinancialcondition andresultsofoperationsofSouthwest.

By:/s/JoeT.Shockley,Jr.August7,2015Joe T.Shockley,Jr.Date

ExecutiveVicePresident,ChiefFinancial

Officer

(PrincipalFinancialOfficer)

XML

Loans And Allowance For Loan Losses (Recorded Investment And The Number Of Loans Modified As Troubled Debt Restructuring Which Subsequently Defaulted) (Details) - Jun. 30, 2014 $ in Thousands	USD ($) contract	USD ($) contract
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	1	1
Recorded Investment	$ 205	$ 205
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts | contract	1	1
Recorded Investment	$ 205	$ 205

XML

Shareholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Treasury Stock Value	$ 14,342	$ 14,342	$ 10,302
2014 Stock Repurchase Program [Member]
Stock Repurchase Program Authorized Percent Of Common Stock	5.00%	5.00%
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	990,000	990,000
Treasury Stock, Shares, Acquired	0	867,310
2015 Stock Repurchase Program [Member]
Stock Repurchase Program Authorized Percent Of Common Stock	5.00%	5.00%
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	950,000	950,000

XML

Derivative Instruments (Details)	6 Months Ended		12 Months Ended
	Jun. 30, 2015 USD ($) item	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Derivative [Line Items]
Interest payment period	7 years
Fixed interest rate	6.15%
Rate received by Southwest	3.13%
Pretax loss related to derivative contracts	$ 1,700,000		$ 1,600,000
Gain or loss due to changes in the fair value of the derivative hedging instrument	51,000	$ 42,000
Net cash flows as a result of the interest rate swap agreement	400,000	$ 400,000
Fair Value Net of Cash Collateral	400,000
Interest Rate Swap on Trust Preferred Securities [Member]
Derivative [Line Items]
Interest rate swap agreement Notional amount	$ 25,000,000
Variable interest rate	2.85%
The fair value of cash and securities posted as collateral	$ 2,100,000		2,100,000
Customer Risk Management Swaps [Member]
Derivative [Line Items]
Number of customer interest rate swap agreements | item	3
Interest rate swap agreement Notional amount	$ 33,900,000
Customer Risk Management Swap 1 [Member]
Derivative [Line Items]
Variable interest rate	2.97%
Customer Risk Management Swap 2 [Member]
Derivative [Line Items]
Variable interest rate	2.87%
Customer Risk Management Swap 3 [Member]
Derivative [Line Items]
Variable interest rate	2.30%
Non-Hedge Derivative Asset [Member]
Derivative [Line Items]
Derivative Asset, Notional Amount	$ 33,935,000		34,322,000
Non-hedge derivative asset, fair value	701,000		787,000
Non-Hedge Derivative Liability [Member]
Derivative [Line Items]
Derivative Liability, Notional Amount	33,935,000		34,322,000
Non-hedge derivative liability, fair value	$ 701,000		$ 787,000

XML

Loans And Allowance For Loan Losses (Recorded Investment In Loans On Nonaccrual Status) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	$ 8,887	$ 9,276
Real Estate Mortgage [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	2,141	2,195
Real Estate Mortgage [Member] | One-To-Four Family Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	1,216	1,100
Real Estate Construction [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	416	73
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	$ 5,114	5,907
Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans		$ 1

XML

Operating Segments (Tables)

6 Months Ended

Jun. 30, 2015

Operating Segments [Abstract]

Financial Results By Operating Segment

For the three months ended June 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	9,299	$	4,793	$	1,731	$	(32)	$	15,791
Provision (credit) for loan losses		(689)		(283)		(165)		1		(1,136)
Noninterest income		2,386		278		329		416		3,409
Noninterest expenses		7,698		3,793		1,606		885		13,982
Income (loss) before taxes		4,676		1,561		619		(502)		6,354
Taxes on income (loss)		1,609		531		216		(163)		2,193
Net income (loss)	$	3,067	$	1,030	$	403	$	(339)	$	4,161

For the three months ended June 30, 2014
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	9,497	$	4,457	$	3,075	$	(455)	$	16,574
Provision (credit) for loan losses		(1,464)		1,449		(340)		-		(355)
Noninterest income		2,332		243		420		5,251		8,246
Noninterest expenses		7,871		3,232		2,658		1,571		15,332
Income before taxes		5,422		19		1,177		3,225		9,843
Taxes on income		2,034		7		441		1,209		3,691
Net income	$	3,388	$	12	$	736	$	2,016	$	6,152

For the six months ended June 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	19,034	$	10,013	$	3,194	$	(840)	$	31,401
Provision (credit) for loan losses		(1,922)		(533)		(568)		-		(3,023)
Noninterest income		4,425		587		631		606		6,249
Noninterest expenses		15,043		7,228		3,215		1,578		27,064
Income (loss) before taxes		10,338		3,905		1,178		(1,812)		13,609
Taxes on income (loss)		3,732		1,410		425		(654)		4,913
Net income (loss)	$	6,606	$	2,495	$	753	$	(1,158)	$	8,696
* Includes externally generated revenue of $0.7 million, primarily from investing services, and an internally generated loss of $1.0 million from the funds management unit.
Total loans at period end	$	810,368	$	493,047	$	146,015	$	-	$	1,449,430
Total assets at period end		824,073		491,442		147,302		568,764		2,031,581
Total deposits at period end		1,134,020		226,498		126,671		137,257		1,624,446

For the six months ended June 30, 2014
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	18,473	$	9,089	$	5,455	$	(442)	$	32,575
Provision (credit) for loan losses		483		(2,483)		659		-		(1,341)
Noninterest income		4,449		539		901		5,382		11,271
Noninterest expenses		15,452		6,460		5,286		2,241		29,439
Income before taxes		6,987		5,651		411		2,699		15,748
Taxes on income		2,620		2,119		154		1,012		5,905
Net income	$	4,367	$	3,532	$	257	$	1,687	$	9,843
* Includes externally generated revenue of $0.5 million, primarily from investing services, and an internally generated revenue of $4.4 million from the funds management unit.
Total loans at period end	$	798,065	$	408,385	$	145,247	$	3	$	1,351,700
Total assets at period end		807,002		405,524		147,644		524,988		1,885,158
Total deposits at period end		1,086,659		206,031		111,615		59,550		1,463,855

XML

Operating Segments (Narrative) (Details)	6 Months Ended
	Jun. 30, 2015 segment
Operating Segments [Abstract]
Number of principal segments	4

XML

Fair Value Measurements (Narrative) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Impaired loans carrying amount	$ 20,600,000	$ 21,900,000
Impaired loans measured at fair value	17,000,000	17,500,000
Impaired loans life to date impairment	3,600,000	4,400,000
Covered And Noncovered [Member]
Finite-Lived Intangible Assets [Line Items]
Impairment charge of other real estate assets	100,000	600,000
Mortgage Servicing Rights (MSR) Impairment (Recovery)	$ 100,000	$ 0

XML

Loans And Allowance For Loan Losses (Troubled Debt Restructured Loans Outstanding) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Modifications [Line Items]
Accruing	$ 20,645	$ 22,731
Nonaccrual	1,361	1,799
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Accruing	19,861	21,685
Nonaccrual	967	1,082
One-To-Four Family Residential [Member]
Financing Receivable, Modifications [Line Items]
Accruing	13	14
Nonaccrual	54	62
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Accruing	771	1,032
Nonaccrual	$ 340	$ 655

XML

Commitments And Contingencies (Narrative) (Details) - Jun. 30, 2015 - USD ($) $ in Millions	Total	Total
Loan Balance of Swap Commitment	$ 16.5	$ 16.5
Loss Contingency, Lawsuit Filing Date		March 18, 2011
Business Acquisition, Percentage of Voting Interests Acquired	51.00%	51.00%
Business Acquisition, Percentage of Cash	49.00%	49.00%
Business Combination, Consideration Transferred	$ 41.7
Payments to Acquire Businesses, Gross	$ 20.4
Common Stock [Member]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	1,214,087

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Taxes On Income (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Taxes On Income [Abstract]
Net deferred tax assets	$ 12.7	$ 14.1

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Summary of Significant Accounting And Reporting Policies

6 Months Ended

Jun. 30, 2015

Significant Accounting And Reporting Policies [Abstract]

Significant Accounting And Reporting Policies

NOTE1:  SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations, shareholders’ equity, cash flows, and comprehensive income in conformity with accounting principles generally accepted in the United States.  However, the unaudited consolidated financial statements include all adjustments which, in the opinion of management, are necessary for a fair presentation.  Those adjustments consist of normal recurring adjustments.  The results of operations for the three and six months endedJune 30, 2015, and the cash flows for the six months ended June 30, 2015, should not be considered indicative of the results to be expected for the full year.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Southwest Bancorp, Inc. Annual Report on Form 10-K for the year ended December 31, 2014.

The accompanying unaudited consolidated financial statements include the accounts of Southwest Bancorp, Inc. (“we”, “our”, “us”, “Southwest”), Bank SNB, an Oklahoma state banking corporation (“Bank SNB”), our banking subsidiary,  SNB Capital Corporation, a lending and loan workout subsidiary, and the consolidated subsidiaries of Bank SNB, including SNB Real Estate Holdings, Inc.  All significant intercompany transactions and balances have been eliminated in consolidation.

In accordance with Accounting Standards Codification (“ASC”) 855, Subsequent Events, we have evaluated subsequent events for potential recognition and disclosure through the date the consolidated financial statements included in this Quarterly Report on Form 10-Q were issued. 

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Fair Value Measurements (Summary Of Financial Assets Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	$ 361,896	$ 353,231
Derivative liability	(701)	(787)
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	701	787
Total Assets at Fair Value on a recurring basis	360,226	351,645
Fair Value, Measurements, Recurring [Member] | Federal Agency Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	83,713	99,546
Fair Value, Measurements, Recurring [Member] | Obligations Of State And Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	32,947	33,139
Fair Value, Measurements, Recurring [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	202,979	178,227
Fair Value, Measurements, Recurring [Member] | Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	9,613	9,548
Fair Value, Measurements, Recurring [Member] | Other Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	32,644	32,771
Fair Value, Measurements, Recurring [Member] | Derivative Instrument [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	(2,371)	(2,373)
Fair Value, Measurements, Recurring [Member] | Level 1 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets at Fair Value on a recurring basis	139	142
Fair Value, Measurements, Recurring [Member] | Level 1 Inputs [Member] | Other Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	139	142
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	701	787
Total Assets at Fair Value on a recurring basis	360,087	351,503
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Federal Agency Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	83,713	99,546
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Obligations Of State And Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	32,947	33,139
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	202,979	178,227
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	9,613	9,548
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Other Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	32,505	32,629
Fair Value, Measurements, Recurring [Member] | Level 2 Inputs [Member] | Derivative Instrument [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	$ (2,371)	$ (2,373)

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Investment Securities (Summary Of Securities With Gross Unrealized Losses And Their Fair Values) (Details) $ in Thousands	Jun. 30, 2015 USD ($) security	Dec. 31, 2014 USD ($) security
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale | security	66	66
Number of Securities, Held to Maturity | security	1	1
Amortized cost of securities with unrealized losses, Available for Sale	$ 160,331	$ 155,056
Amortized cost of securities with unrealized losses, Held to Maturity	1,698	1,718
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(474)	(169)
Continuous Unrealized Loss Existing for Less Than 12 Months, Held to Maturity	(6)	(10)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale	(855)	(1,679)
Fair value of securities with unrealized losses, Available for Sale	159,002	153,208
Fair value of securities with unrealized losses, Held to Maturity	$ 1,692	$ 1,708
Federal Agency Securities [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale | security	7	13
Amortized cost of securities with unrealized losses, Available for Sale	$ 32,900	$ 60,578
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(47)	(37)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale	(221)	(735)
Fair value of securities with unrealized losses, Available for Sale	$ 32,632	$ 59,806
Obligations Of State And Political Subdivisions [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale | security	7	8
Number of Securities, Held to Maturity | security	1	1
Amortized cost of securities with unrealized losses, Available for Sale	$ 9,102	$ 10,076
Amortized cost of securities with unrealized losses, Held to Maturity	1,698	1,718
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(43)
Continuous Unrealized Loss Existing for Less Than 12 Months, Held to Maturity	(6)	(10)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale	(81)	(140)
Fair value of securities with unrealized losses, Available for Sale	8,978	9,936
Fair value of securities with unrealized losses, Held to Maturity	$ 1,692	$ 1,708
Residential Mortgage-Backed Securities [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale | security	46	40
Amortized cost of securities with unrealized losses, Available for Sale	$ 105,680	$ 65,223
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(326)	(110)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale	(483)	(740)
Fair value of securities with unrealized losses, Available for Sale	$ 104,871	$ 64,373
Asset-Backed Securities [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale | security	2	3
Amortized cost of securities with unrealized losses, Available for Sale	$ 5,671	$ 9,608
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(21)	(19)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale		(41)
Fair value of securities with unrealized losses, Available for Sale	$ 5,650	$ 9,548
Other Securities [Member]
Available-for-sale Securities and Held-to-maturity Securities
Number of Securities, Available for Sale | security	4	2
Amortized cost of securities with unrealized losses, Available for Sale	$ 6,978	$ 9,571
Continuous Unrealized Loss Existing for Less Than 12 Months, Available for Sale	(37)	(3)
Continuous Unrealized Loss Existing for More Than 12 Months, Available for Sale	(70)	(23)
Fair value of securities with unrealized losses, Available for Sale	$ 6,871	$ 9,545

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Investment Securities (Amortized Cost And Approximate Fair Value Of Investment Securities By Maturity Date) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Amortized cost and approximate fair value [Abstract]
One year or less, Amortized cost, Available for Sale	$ 14,014
One year or less, Fair Value, Available for Sale	14,114
More than one year through five years, Amortized Cost, Available for Sale	229,893
More than one year through five years, Fair Value, Available for Sale	230,710
More than one year through five years, Amortized Cost, Held to Maturity	8,017
More than one year through five years, Fair Value, Held to Maturity	8,189
More than five years through ten years, Amortized Cost, Available for Sale	75,395
More than five years through ten years, Fair Value, Available for Sale	75,457
More than five years through ten years, Amortized Cost, Held to Maturity	3,347
More than five years through ten years, Fair Value, Held to Maturity	3,629
More than ten years, Amortized Cost, Available for Sale	41,307
More than ten years, Fair Value, Available for Sale	41,615
Total, Amortized Cost, Available for Sale	360,609
Total, Fair Value, Available for Sale	361,896
Held-to-maturity Securities, Total	11,364	$ 12,362
Fair Value, Held to Maturity	$ 11,818	$ 12,880

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Fair Value Measurements (Asset Measured At Fair Value On A Nonrecurring Basis) (Details) - Fair Value Measurements Nonrecurring [Member] - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Noncovered impaired loans at fair value:
Assets fair value, Total	$ 29,714	$ 22,066
Commercial Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	11,739	11,762
One-To-Four Family Residential [Member]
Noncovered impaired loans at fair value:
Loans held for sale	6,065	763
Real Estate Construction [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	390
Commercial [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	4,875	5,722
Other loans held for sale [Member]
Noncovered impaired loans at fair value:
Loans held for sale		17
Government Guaranteed Commercial Real Estate [Member]
Noncovered impaired loans at fair value:
Loans held for sale	622	705
Other Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	2,393	3,097
Mortgage Loan Servicing Rights [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	3,630
Level 2 Inputs [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	10,317	1,485
Level 2 Inputs [Member] | One-To-Four Family Residential [Member]
Noncovered impaired loans at fair value:
Loans held for sale	6,065	763
Level 2 Inputs [Member] | Other loans held for sale [Member]
Noncovered impaired loans at fair value:
Loans held for sale		17
Level 2 Inputs [Member] | Government Guaranteed Commercial Real Estate [Member]
Noncovered impaired loans at fair value:
Loans held for sale	622	705
Level 2 Inputs [Member] | Mortgage Loan Servicing Rights [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	3,630
Level 3 Inputs [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	19,397	20,581
Level 3 Inputs [Member] | Commercial Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	11,739	11,762
Level 3 Inputs [Member] | Real Estate Construction [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	390
Level 3 Inputs [Member] | Commercial [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	4,875	5,722
Level 3 Inputs [Member] | Other Real Estate [Member]
Noncovered impaired loans at fair value:
Assets fair value, Total	$ 2,393	$ 3,097

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Loans And Allowance For Loan Losses (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014	Jun. 19, 2009
Accounts, Notes, Loans and Financing Receivable [Line Items]
Less: Allowance for loan losses, covered			$ (35.0)
Loans held for sale	$ 6.7	$ 1.5
Actual loss period	3 years
Period to sell loans from the date of closing	1 month
Accrued additional interest income	$ 0.3
Troubled debt restructuring default period	90 days
Troubled debt restructuring Period	12 months
Real Estate Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal of mortgage loans serviced for others	$ 416.0	$ 410.3
Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to individuals and businesses	$ 485.7
Percentage of loans to individuals and businesses	34.00%
Healthcare [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans to individuals and businesses	$ 422.3
Percentage of loans to individuals and businesses	29.00%
Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of days for independent appraisals on real estate collateral	30 days
Covered [Member] | Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Reimbursement Ratio			95.00%
Covered [Member] | Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Reimbursement Ratio			80.00%

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Loans And Allowance For Loan Losses (Southwest's Loan Classifications) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	$ 1,449,430	$ 1,399,991
Less: Allowance for loan losses	(26,219)	(28,452)
Total loans, net	1,423,211	1,371,539
Less: Loans held for sale (included above)	(6,687)	(1,485)
Net loans receivable	1,416,524	1,370,054
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	384,788	350,410
Commercial Real Estate [Member] | Real Estate Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	759,406	752,971
Commercial Real Estate [Member] | Real Estate Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	186,140	186,659
One-To-Four Family Residential [Member] | Real Estate Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	85,338	77,531
One-To-Four Family Residential [Member] | Real Estate Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	13,107	10,464
Guaranteed Student Loans [Member] | Installment And Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable		37
Other [Member] | Installment And Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans receivable	$ 20,651	$ 21,919

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Consolidated Statement of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Consolidated Statement Of Shareholders' Equity [Abstract]
Common Stock, Dividends, Per Share, Declared	$ 0.06	$ 0.04	$ 0.12	$ 0.08

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Loans And Allowance For Loan Losses (Changes In The Carrying Amounts And Accretable Yields For ASC 310.30 Loans) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Loans And Allowance For Loan Losses [Abstract]
Balance at beginning of period, Accretable Yield	$ 419	$ 1,503	$ 540	$ 1,597
Net charge-offs, Accretable Yield		(5)		(9)
Net reclassifications to / from nonaccretable amount, Accretable Yield	240		240
Accretion, Accretable yield	(198)	(638)	(319)	(728)
Balance at end of period, Accretable Yield	461	860	461	860
Balance at beginning of period, Carrying amount of loans	4,310	15,053	4,971	16,427
Payments Received, Carrying amount of loans	(208)	(6,766)	(869)	(8,099)
Net charged-offs, Carrying amount of loans		(367)		(408)
Accretion, Carrying amount of loans	442		442
Balance at end of period, Carrying amount of loans	$ 4,544	$ 7,920	$ 4,544	$ 7,920

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Loans And Allowance For Loan Losses (Classification Of Risk Category Of Loans, By Classes) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 1,449,430	$ 1,399,991	$ 1,351,700
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	1,364,183	1,315,226
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	41,876	41,979
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	38,690	37,507
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	4,681	5,279
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	759,406	752,971	769,021
Commercial Real Estate [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	707,216	690,791
Commercial Real Estate [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	30,073	34,287
Commercial Real Estate [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	22,117	27,594
Commercial Real Estate [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable		299
One-To-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	85,338	77,531	79,542
One-To-Four Family Residential [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	84,016	76,322
One-To-Four Family Residential [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	22	22
One-To-Four Family Residential [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	1,300	1,154
One-To-Four Family Residential [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable		33
Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	199,247	197,123	175,340
Real Estate Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	198,607	194,670
Real Estate Construction [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	221	420
Real Estate Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	419	2,033
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	384,788	350,410	300,163
Commercial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	353,823	331,594
Commercial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	11,430	7,144
Commercial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	14,854	6,725
Commercial [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	4,681	4,947
Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	20,651	21,956	$ 27,634
Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	20,521	21,849
Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 130	106
Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans receivable		$ 1

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Consolidated Statements Of Financial Condition - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Assets:
Cash and due from banks	$ 22,923	$ 19,705
Interest-bearing deposits	133,765	121,231
Cash and cash equivalents	156,688	140,936
Securities held to maturity (fair values of $11,818 and $12,880, respectively)	11,364	12,362
Securities available for sale (amortized cost of $360,609 and $352,275, respectively)	361,896	353,231
Loans held for sale	6,687	1,485
Loans receivable	1,442,743	1,398,506
Less: Allowance for loan losses	(26,219)	(28,452)
Net loans receivable	1,416,524	1,370,054
Accrued interest receivable	4,281	4,723
Non-hedge derivative asset	701	787
Premises and equipment, net	18,251	18,588
Other real estate	2,393	3,097
Goodwill	1,214	1,214
Other intangible assets, net	3,923	3,927
Bank owned life insurance	20,110
Other assets	27,549	31,630
Total assets	2,031,581	1,942,034
Deposits:
Noninterest-bearing demand	515,156	496,128
Interest-bearing demand	131,547	122,342
Money market accounts	496,178	461,679
Savings accounts	35,647	32,795
Time deposits of $100,000 or more	233,105	198,952
Other time deposits	212,813	222,103
Total deposits	1,624,446	1,533,999
Accrued interest payable	774	769
Non-hedge derivative liability	701	787
Other liabilities	9,747	9,920
Other borrowings	75,839	79,380
Subordinated debentures	46,393	46,393
Total liabilities	1,757,900	1,671,248
Shareholders' equity:
Common stock - $1 par value; 40,000,000 shares authorized; 19,900,855 and 19,831,877 shares issued, respectively	19,901	19,811
Additional paid in capital	101,518	101,245
Retained earnings	166,837	160,427
Accumulated other comprehensive loss	(233)	(395)
Treasury Stock, at cost; 867,310 and 617,818 shares, respectively	(14,342)	(10,302)
Total shareholders' equity	273,681	270,786
Total liabilities & shareholders' equity	$ 2,031,581	$ 1,942,034

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Fair Value Measurements (Carrying Values And Estimated Fair Values Of Financial Instruments Segregated By The Level Of The Valuation Inputs) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financial Assets:
Held to maturity securities, fair value	$ 11,818	$ 12,880
Accrued interest receivable	4,281	4,723
Derivative Asset, Noncurrent	701	787
Financial Liabilities:
Accrued interest payable	774	769
Derivative instrument	701	787
Other borrowings	75,839	79,380
Carrying Values [Member] | Level 2 Inputs [Member]
Financial Assets:
Cash and cash equivalents	156,688	140,936
Held to maturity securities, fair value	11,364	12,362
Accrued interest receivable	4,281	4,723
Investments included in other assets	7,949	7,949
Financial Liabilities:
Deposits	1,624,446	1,533,999
Accrued interest payable	774	769
Other liabilities	8,077	8,334
Other borrowings	75,839	79,380
Subordinated debentures	46,393	46,393
Carrying Values [Member] | Level 3 Inputs [Member]
Financial Assets:
Total loans, net of allowance	1,423,211	1,371,539
Fair Values [Member] | Level 2 Inputs [Member]
Financial Assets:
Cash and cash equivalents	156,688	140,936
Held to maturity securities, fair value	11,818	12,880
Accrued interest receivable	4,281	4,723
Investments included in other assets	7,949	7,949
Financial Liabilities:
Deposits	1,534,880	1,450,540
Accrued interest payable	774	769
Other liabilities	8,077	8,334
Other borrowings	77,622	81,544
Subordinated debentures	46,393	46,393
Fair Values [Member] | Level 3 Inputs [Member]
Financial Assets:
Total loans, net of allowance	$ 1,353,264	$ 1,303,047

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating activities:
Net income	$ 8,696	$ 9,843
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for loan losses	(3,023)	(1,341)
Adjustments to other real estate	63	320
Deferred tax expense	1,286	5,609
Asset depreciation	1,172	1,301
Securities premium amortization, net of discount accretion	1,394	1,341
Amortization of intangibles	480	393
Restricted stock amortization expense	656	430
Net gain on sales/calls of investment securities	(143)	(764)
Net gain on sales of mortgage loans	(969)	(687)
Net (gain) loss on sales of premises/equipment	(13)	37
Net (gain) loss on sales of other real estate	(59)	18
Net gain from sale of bank branches		(4,378)
Proceeds from sales of held for sale loans	44,913	35,711
Held for sale loans originated for resale	(49,214)	(38,709)
Net changes in assets and liabilities:
Accrued interest receivable	442	398
Other assets	1,806	(1,687)
Accrued interest payable	5	(73)
Other liabilities	(241)	1,080
Net cash provided by operating activities	7,251	8,842
Investing activities:
Held to maturity securities	940	1,000
Available for sale securities	50,586	45,343
Redemptions of other investments		885
Purchases of available for sale securities	(60,255)	(34,833)
Purchases of bank owned life insurance	(20,110)
Loans originated, net of principal repayments	(43,689)	(109,347)
Cash outflows from sale of bank branches, net		(94,806)
Purchases of premises and equipment	(888)	(1,034)
Proceeds from sales of premises and equipment	66	39
Proceeds from sales of other real estate	900	251
Net cash used in investing activities	(72,450)	(192,502)
Financing activities:
Net increase in deposits	90,447	10,344
Net increase (decrease) in other borrowings	(3,541)	10,128
Net proceeds from issuance of common stock	363	75
Purchases of treasury stock	(4,040)
Common stock dividends paid	(2,277)	(1,571)
Preferred stock dividends paid	(1)	(1)
Net cash provided by financing activities	80,951	18,975
Net increase (decrease) in cash and cash equivalents	15,752	(164,685)
Cash and cash equivalents:
Beginning of period	140,936	279,839
End of period	$ 156,688	$ 115,154

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Loans And Allowance For Loan Losses (Impaired Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	$ 14,475	$ 16,195
With No Specific Allowance Unpaid Principal Balance	17,719	19,578
With A Specific Allowance Recorded Investment	15,056	15,812
With A Specific Allowance Unpaid Principal Balance	21,169	22,229
With A Specific Allowance Related Allowance	3,535	3,869
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	10,684	12,382
With No Specific Allowance Unpaid Principal Balance	12,940	14,752
With A Specific Allowance Recorded Investment	11,317	11,497
With A Specific Allowance Unpaid Principal Balance	11,317	11,556
With A Specific Allowance Related Allowance	1,875	2,047
One-To-Four Family Residential [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	1,229	1,115
With No Specific Allowance Unpaid Principal Balance	1,792	1,833
Real Estate Construction [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	416	73
With No Specific Allowance Unpaid Principal Balance	416	104
Commercial [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment	2,146	2,624
With No Specific Allowance Unpaid Principal Balance	2,571	2,887
With A Specific Allowance Recorded Investment	3,739	4,315
With A Specific Allowance Unpaid Principal Balance	9,852	10,673
With A Specific Allowance Related Allowance	$ 1,660	1,822
Other [Member]
Financing Receivable, Impaired [Line Items]
With No Specific Allowance Recorded Investment		1
With No Specific Allowance Unpaid Principal Balance		$ 2

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Measurements [Abstract]

Summary Of Financial Assets Measured At Fair Value On A Recurring Basis

			Fair Value Measurement at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
At June 30, 2015
Available for sale securities:
Federal agency securities	$	83,713	$	-	$	83,713	$	-
Obligations of state and political subdivisions		32,947		-		32,947		-
Residential mortgage-backed securities		202,979		-		202,979		-
Asset-backed securities		9,613		-		9,613		-
Other securities		32,644		139		32,505		-
Derivative asset		701		-		701		-
Derivative liability		(2,371)		-		(2,371)		-
Total	$	360,226	$	139	$	360,087	$	-
At December 31, 2014
Available for sale securities:
Federal agency securities	$	99,546		-		99,546		-
Obligations of state and political subdivisions		33,139		-		33,139		-
Residential mortgage-backed securities		178,227		-		178,227		-
Asset-backed securities		9,548		-		9,548		-
Other securities		32,771		142		32,629		-
Derivative asset		787		-		787		-
Derivative liability		(2,373)		-		(2,373)		-
Total	$	351,645	$	142	$	351,503	$	-

Asset Measured At Fair Value On A Nonrecurring Basis

			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
At June 30, 2015
Impaired loans at fair value :
Commercial real estate	$	11,739	$	-	$	-	$	11,739
One-to-four family residential		-		-		-		-
Real estate construction		390		-		-		390
Commercial		4,875		-		-		4,875
Loans held for sale:
One-to-four family residential		6,065		-		6,065		-
Government guaranteed commercial real estate		622		-		622		-
Other loans held for sale		-		-		-		-
Mortgage loan servicing rights		3,630		-		3,630		-
Other real estate		2,393		-		-		2,393
Total	$	29,714	$	-	$	10,317	$	19,397
At December 31, 2014
Impaired loans at fair value :
Commercial real estate	$	11,762	$	-	$	-	$	11,762
Commercial		5,722		-		-		5,722
Loans held for sale:
One-to-four family residential		763		-		763		-
Government guaranteed commercial real estate		705		-		705		-
Other loans held for sale		17		-		17		-
Other real estate		3,097		-		-		3,097
Total	$	22,066	$	-	$	1,485	$	20,581

Carrying Values And Estimated Fair Values Of Financial Instruments Segregated By The Level Of The Valuation Inputs

	At June 30, 2015				At December 31, 2014
	Carrying		Fair		Carrying		Fair
(Dollars in thousands)	Values		Values		Values		Values
Financial assets:
Level 2 inputs:
Cash and cash equivalents	$	156,688	$	156,688	$	140,936	$	140,936
Securities held to maturity		11,364		11,818		12,362		12,880
Accrued interest receivable		4,281		4,281		4,723		4,723
Investments included in other assets		7,949		7,949		7,949		7,949
Level 3 inputs:
Total loans, net of allowance		1,423,211		1,353,264		1,371,539		1,303,047
Financial liabilities:
Level 2 inputs:
Deposits		1,624,446		1,534,880		1,533,999		1,450,540
Accrued interest payable		774		774		769		769
Other liabilities		8,077		8,077		8,334		8,334
Other borrowings		75,839		77,622		79,380		81,544
Subordinated debentures		46,393		46,393		46,393		46,393

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Loans And Allowance For Loan Losses (Average Recorded Investment And Interest Income Recognized On Impaired Loans) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 32,096	$ 56,766
Interest Income	494	706
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	23,862	43,104
Interest Income	473	663
One-To-Four Family Residential [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,777	3,649
Interest Income	1	1
Real Estate Construction [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	376	251
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	6,080	9,693
Interest Income	20	42
Other [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 1	$ 69

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Computation Of Basic And Diluted Earnings Per Common Share

	For the three months				For the six months
	ended June 30,				ended June 30,
(Dollars in thousands, except earnings per share data)	2015		2014		2015		2014
Numerator:
Net income	$	4,161	$	6,152	$	8,696	$	9,843
Earnings allocated to participating securities		(73)		(80)		(143)		(119)
Numerator for basic earnings per common share	$	4,088	$	6,072	$	8,553	$	9,724
Effect of reallocating undistributed earnings
of participating securities		73		80		143		119
Numerator for diluted earnings per common share	$	4,161	$	6,152	$	8,696	$	9,843
Denominator:
Denominator for basic earnings per common share		18,666,853		19,520,967		18,714,088		19,524,859
Dilutive effect of stock compensation		197,124		143,867		172,332		130,767
Denominator for diluted earnings per common share		18,863,977		19,664,834		18,886,420		19,655,626
Earnings per common share:
Basic	$	0.22	$	0.31	$	0.46	$	0.50
Diluted	$	0.22	$	0.31	$	0.46	$	0.50

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Consolidated Statement Of Shareholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Gain/(Loss) [Member]	Treasury Stock [Member]	Total
Beginning balance, Shares at Dec. 31, 2013	19,732,926
Beginning balance at Dec. 31, 2013	$ 19,733	$ 99,937	$ 142,528	$ (3,011)		$ 259,187
Dividends declared:
Preferred			(1)			(1)
Common			(1,581)			(1,581)
Common stock issued	$ 59	1,010				1,069
Common stock issued, shares	59,343
Net common stock issued under employee plans and related tax expense	$ 1	15				16
Net common stock issued under employee plans and related tax expense, shares	854
Other comprehensive income, net of tax				2,818		2,818
Net income			9,843			9,843
Ending balance, Shares at Jun. 30, 2014	19,793,123
Ending balance at Jun. 30, 2014	$ 19,793	100,962	150,789	(193)		271,351
Beginning balance, Shares at Dec. 31, 2014	19,193,059
Beginning balance at Dec. 31, 2014	$ 19,811	101,245	160,427	(395)	$ (10,302)	270,786
Dividends declared:
Preferred			(1)			(1)
Common			(2,285)			(2,285)
Common stock issued	$ 89	256				345
Common stock issued, shares	88,937
Net common stock issued under employee plans and related tax expense	$ 1	17				18
Net common stock issued under employee plans and related tax expense, shares	1,041
Other comprehensive income, net of tax				162		162
Treasury shares purchased					(4,040)	(4,040)
Treasury shares purchased, shares	(249,492)
Net income			8,696			8,696
Ending balance, Shares at Jun. 30, 2015	19,033,545
Ending balance at Jun. 30, 2015	$ 19,901	$ 101,518	$ 166,837	$ (233)	$ (14,342)	$ 273,681

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Consolidated Statements Of Financial Condition (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Consolidated Statements Of Financial Condition [Abstract]
Held to maturity securities, fair value	$ 11,818	$ 12,880
Available for sale securities, amortized cost	$ 360,609	$ 352,275
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	19,900,855	19,810,877
Treasury Stock, Shares	867,310	617,818

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Operating Segments

6 Months Ended

Jun. 30, 2015

Operating Segments [Abstract]

Operating Segments

NOTE 9: OPERATING SEGMENTS  

We operate four principal segments:  Oklahoma Banking, Texas Banking, Kansas Banking, and Other Operations.  The Oklahoma Banking segment provides deposit and lending services and consists of residential mortgage lending services to customers. The Texas Banking segment and the Kansas Banking segment provide deposit and lending services.  Other Operations includes our funds management unit and corporate investments.  Prior to the first quarter of 2015, we disclosed a Mortgage Banking segment, which included 1-4 family mortgages and the available for sale loans.For segment reporting, the Mortgage Banking segment has been combined with and into the Oklahoma Banking segment due to those loans being managed from that location. Prior period numbers have also been adjusted to reflect this change. This adjustment has no financial statement impact.

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 June 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	9,299	$	4,793	$	1,731	$	(32)	$	15,791
Provision (credit) for loan losses		(689)		(283)		(165)		1		(1,136)
Noninterest income		2,386		278		329		416		3,409
Noninterest expenses		7,698		3,793		1,606		885		13,982
Income (loss) before taxes		4,676		1,561		619		(502)		6,354
Taxes on income (loss)		1,609		531		216		(163)		2,193
Net income (loss)	$	3,067	$	1,030	$	403	$	(339)	$	4,161

For the three months ended June 30, 2014
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations		Company
Net interest income (loss)	$	9,497	$	4,457	$	3,075	$	(455)	$	16,574
Provision (credit) for loan losses		(1,464)		1,449		(340)		-		(355)
Noninterest income		2,332		243		420		5,251		8,246
Noninterest expenses		7,871		3,232		2,658		1,571		15,332
Income before taxes		5,422		19		1,177		3,225		9,843
Taxes on income		2,034		7		441		1,209		3,691
Net income	$	3,388	$	12	$	736	$	2,016	$	6,152

For the six months ended June 30, 2015
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	19,034	$	10,013	$	3,194	$	(840)	$	31,401
Provision (credit) for loan losses		(1,922)		(533)		(568)		-		(3,023)
Noninterest income		4,425		587		631		606		6,249
Noninterest expenses		15,043		7,228		3,215		1,578		27,064
Income (loss) before taxes		10,338		3,905		1,178		(1,812)		13,609
Taxes on income (loss)		3,732		1,410		425		(654)		4,913
Net income (loss)	$	6,606	$	2,495	$	753	$	(1,158)	$	8,696
* Includes externally generated revenue of $0.7 million, primarily from investing services, and an internally generated loss of $1.0 million from the funds management unit.
Total loans at period end	$	810,368	$	493,047	$	146,015	$	-	$	1,449,430
Total assets at period end		824,073		491,442		147,302		568,764		2,031,581
Total deposits at period end		1,134,020		226,498		126,671		137,257		1,624,446

For the six months ended June 30, 2014
	Oklahoma		Texas		Kansas		Other		Total
(Dollars in thousands)	Banking		Banking		Banking		Operations*		Company
Net interest income (loss)	$	18,473	$	9,089	$	5,455	$	(442)	$	32,575
Provision (credit) for loan losses		483		(2,483)		659		-		(1,341)
Noninterest income		4,449		539		901		5,382		11,271
Noninterest expenses		15,452		6,460		5,286		2,241		29,439
Income before taxes		6,987		5,651		411		2,699		15,748
Taxes on income		2,620		2,119		154		1,012		5,905
Net income	$	4,367	$	3,532	$	257	$	1,687	$	9,843
* Includes externally generated revenue of $0.5 million, primarily from investing services, and an internally generated revenue of $4.4 million from the funds management unit.
Total loans at period end	$	798,065	$	408,385	$	145,247	$	3	$	1,351,700
Total assets at period end		807,002		405,524		147,644		524,988		1,885,158
Total deposits at period end		1,086,659		206,031		111,615		59,550		1,463,855

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Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 07, 2015
Document And Entity Information [Abstract]
Entity Registrant Name	SOUTHWEST BANCORP INC
Entity Central Index Key	0000914374
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Trading Symbol	oksb
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		19,033,860

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies [Abstract]

Commitments and contingencies

NOTE 10:  COMMITMENTS AND CONTINGENCIES

Other Agreements

On May 27, 2015, we entered into an Agreement and Plan of Reorganization (the “Agreement”) with First Commercial Bancshares, Inc. (“Bancshares”), an Oklahoma corporation, and First Commercial Bank, an Oklahoma banking corporation and a wholly‑owned subsidiary of Bancshares, pursuant to which Bancshares will merge with and into us (the “Merger”).

Under the terms of the Agreement, at the effective time of the Merger all outstanding shares of Bancshares common stock will be converted into the right to receive an aggregate merger consideration of $41.7 million,51% of which will be payable in shares of our common stock, representing an aggregate 1,214,087 shares of our common stock, plus cash in lieu of any fractional shares, and 49% of which will be payable in cash in an aggregate amount equal to $20.4 million, subject to certain conditions and potential adjustments as described in the Agreement.  The closing of the Merger is subject to customary closing conditions, including the receipt of regulatory approvals and approval of the shareholders of Bancshares.  The closing of the Merger is expected to occur during the fourth quarter of 2015, although delays could occur.

The Agreement also provides that, following the Merger and subject to regulatory approvals, we will cause First Commercial Bank to be merged with and into Bank SNB.

Customer Risk Management Interest Rate Swap

On September 9, 2014, we entered into an agreement to provide one of our commercial borrowers a customer interest rate swap that effectively converts the loan interest rate from a floating rate based on LIBOR to a fixed rate for the customer. As of June 30, 2015, the floating rate loan had an outstanding balance of $16.5  million.  The option to execute the swap is conditional on compliance with the loan and swap agreements, and will be subject to the terms of the International Swaps and Derivatives Association Master Agreement.  The fixed pay amount will be based on the market rates at the time of execution, and it is our intention to simultaneously execute an offsetting trade with an approved swap dealer counterparty with identical terms. 

Legal Action

On March 18, 2011, an action entitled Ubaldi, et al. v SLM Corporation (“Sallie Mae”), et al., Case No. 3:11-cv-01320 EDL (the “Ubaldi Case”) was filed in the U.S. District Court for the Northern District of California as a putative class action with respect to certain loans that the plaintiffs claim were made by Sallie Mae.   The loans in question were made by various banks, including Bank SNB, and sold to Sallie Mae.  Plaintiffs claim that Sallie Mae entered into arrangements with chartered banks in order to evade California law and that Sallie Mae is the de facto lender on the loans in question and, as the lender on such loan, Sallie Mae charged interest and late fees that violates California usury law and the California Business and Professions Code. Sallie Mae has denied all claims asserted against it and has stated that it intends to vigorously defend the action.  On March 26, 2014, the Court denied the plaintiffs’ request to certify the class; however, the Court permitted the plaintiffs to amend the filing to redefine the class. Plaintiffs filed a renewed motion on June 23, 2014. On December 19, 2014, the Court issued a decision on the renewed motion, certifying a class with respect to claims of improper late fees, but denying class certification with respect to plaintiffs’ usury claims.   Plaintiffs thereafter filed a motion seeking leave to amend their complaint to add additional parties, which Sallie Mae opposed, and, on March 24, 2015, the Court denied the plaintiffs’ motion. On June 5, 2015, the law firm Cohen Milstein Sellers & Toll based in Washington, D.C. entered its appearance as co-counsel on behalf of plaintiffs.

Bank SNB is not specifically named in the action.  However, in the first quarter of 2014, Sallie Mae provided Bank SNB with a notice of claims that have been asserted against Sallie Mae in the Ubaldi Case (the “Notice”).  Sallie Mae asserts in the Notice that Bank SNB may have indemnification and/or repurchase obligations pursuant to the ExportSS Agreement dated July 1, 2002 between Sallie Mae and Bank SNB, pursuant to which the loans in question were made by Bank SNB.  Bank SNB has substantial defenses with respect to any claim for indemnification or repurchase ultimately made by Sallie Mae, if any, and intends to vigorously defend against any such claims.

Due to the uncertainty regarding (i) the size and scope of the class, (ii) whether a class will ultimately be certified, (iii) the particular class members, (iv) the interest rate on loans made by Bank SNB charged to particular class members, (v) the late fees charged to particular class members, (vi) the time period that will ultimately be at issue if a class is certified in the Ubaldi Case, (vii) the theories, if any, under which the plaintiffs might prevail, (viii) whether Sallie Mae will make a claim against us for indemnification or repurchase, and (ix) the likelihood that Sallie Mae would prevail if it makes such a claim, we cannot estimate the amount or the range of losses that may arise as a result of the Ubaldi Case.

In the normal course of business, we are at all times subject to various pending and threatened legal actions.  The relief or damages sought in some of these actions may be substantial.  After reviewing pending and threatened actions with counsel, management currently does not expect that the outcome of such actions will have a material adverse effect on our financial position; however, we are not able to predict whether the outcome of such actions may or may not have a material adverse effect on results of operations in a particular future period as the timing and amount of any resolution of such actions and relationship to the future results of operations are not known.

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Consolidated Statements Of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Interest income:
Interest and fees on loans	$ 15,839	$ 16,343	$ 31,409	$ 32,118
Investment securities:
U.S. Government and agency obligations	381	337	717	764
Mortgage-backed securities	660	937	1,378	1,826
State and political subdivisions	287	294	576	590
Other securities		60	6	98
Other interest-earning assets	288	314	593	689
Total interest income	17,455	18,285	34,679	36,085
Interest expense:
Interest-bearing demand	30	40	63	80
Money market accounts	183	136	365	282
Savings accounts	9	11	17	22
Time deposits of $100,000 or more	170	338	408	787
Other time deposits	470	406	844	785
Other borrowings	241	223	468	448
Subordinated debentures	561	557	1,113	1,106
Total interest expense	1,664	1,711	3,278	3,510
Net interest income	15,791	16,574	31,401	32,575
Provision (credit) for loan losses	(1,136)	(355)	(3,023)	(1,341)
Net interest income after provision (credit) for loan losses	16,927	16,929	34,424	33,916
Noninterest income:
Service charges and fees	2,450	2,608	4,878	5,204
Gain on sale of bank branches, net		4,378		4,378
Gain on sales of mortgage loans, net	621	463	969	687
Gain on sales/calls of investment securities, net	138	629	143	764
Other noninterest income	200	168	259	238
Total noninterest income	3,409	8,246	6,249	11,271
Noninterest expense:
Salaries and employee benefits	8,289	8,472	16,203	16,598
Occupancy	2,201	2,253	4,485	4,537
Data processing	410	530	856	1,015
FDIC and other insurance	316	314	628	711
Other real estate, net	112	511	133	579
General and administrative	2,654	3,252	4,759	5,999
Total noninterest expense	13,982	15,332	27,064	29,439
Income before taxes	6,354	9,843	13,609	15,748
Taxes on income	2,193	3,691	4,913	5,905
Net income	$ 4,161	$ 6,152	$ 8,696	$ 9,843
Basic earnings per common share	$ 0.22	$ 0.31	$ 0.46	$ 0.50
Diluted earnings per common share	0.22	0.31	0.46	0.50
Common dividends declared per share	$ 0.06	$ 0.04	$ 0.12	$ 0.08

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Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Fair Value Measurements [Abstract]

Fair Value Measurements

NOTE 4:  FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  In estimating fair value, we utilize valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach.  Such valuation techniques are consistently applied.  Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability.

ASC 820, Fair Value Measurements and Disclosure,  establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  The fair value hierarchy is as follows:

Level 1Quoted prices in active markets for identical instruments.

Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. 

Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 

The estimated fair value amounts have been determined by us using available market information and appropriate valuation methodologies.  However, considerable judgment is required to interpret market data to develop the estimates of fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amount we could realize in a current market exchange.  The use of different market assumptions and/or estimation methodologies could have a material effect on our estimated fair value amounts.  There were no significant changes in valuation methods used to estimate fair value during the six months ended June 30, 2015. 

A description of the valuation methodologies used for instruments measured at fair value on a recurring basis is as follows: 

Available for sale securities – The fair value of U.S. Government and federal agency securities, equity securities, and residential mortgage-backed securities is estimated based on quoted market prices or dealer quotes.  The fair value of other investments such as obligations of state and political subdivisions is estimated based on quoted market prices.  We obtain fair value measurements from an independent pricing service.  The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and bond’s terms and conditions, among other things.  We review the prices supplied by our independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. 

Derivative instruments – We utilize an interest rate swap agreement to convert one of our variable-rate subordinated debentures to a fixed rate. This has been designated as a cash flow hedge. We also offer an interest rate swap program that permits qualified customers to manage interest rate risk on variable rate loans with Bank SNB. Derivative contracts are executed between our customers and Bank SNB. Offsetting contracts are executed by Bank SNB and approved counterparties. The counterparty contracts are identical to customer contracts, except for a fixed pricing spread or fee paid to us. The fair value of the interest rate swap agreements are obtained from dealer quotes.

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014. 

			Fair Value Measurement at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
At June 30, 2015
Available for sale securities:
Federal agency securities	$	83,713	$	-	$	83,713	$	-
Obligations of state and political subdivisions		32,947		-		32,947		-
Residential mortgage-backed securities		202,979		-		202,979		-
Asset-backed securities		9,613		-		9,613		-
Other securities		32,644		139		32,505		-
Derivative asset		701		-		701		-
Derivative liability		(2,371)		-		(2,371)		-
Total	$	360,226	$	139	$	360,087	$	-
At December 31, 2014
Available for sale securities:
Federal agency securities	$	99,546		-		99,546		-
Obligations of state and political subdivisions		33,139		-		33,139		-
Residential mortgage-backed securities		178,227		-		178,227		-
Asset-backed securities		9,548		-		9,548		-
Other securities		32,771		142		32,629		-
Derivative asset		787		-		787		-
Derivative liability		(2,373)		-		(2,373)		-
Total	$	351,645	$	142	$	351,503	$	-

Certain financial assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).  These assets are recorded at the lower of cost or fair value.  Valuation methodologies for assets measured on a nonrecurring basis are as follows: 

Impaired loans – Certain impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from collateral.  Collateral values are estimated using inputs based on third-party appraisals.  Certain other impaired loans are analyzed and reported through a specific valuation allowance based upon the net present value of cash flows.   

Loans held for sale  –Real estate mortgage loans held for sale are carried at the lower of cost or market, which is determined on an individual loan basis.  The fair value of loans held for sale is based on existing investor commitments.

Other real estate – Other real estate fair value is based on third-party appraisals for significant properties less the estimated costs to sell the asset.   

Mortgage loan servicing rights – There is no active trading market for loan servicing rights.  The fair value of loan servicing rights is estimated by calculating the present value of net servicing revenue over the anticipated life of each loan.  A cash flow model is used to determine fair value.  Key assumptions and estimates, including projected prepayment speeds and assumed servicing costs, earnings on escrow deposits, ancillary income, and discount rates, used by this model are based on current market sources.  A separate third party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults, and other relevant factors.  The prepayment model is updated for changes in market conditions.

Core deposit premiums – Except for the 2014 branch sales, the fair value of core deposit premiums are based on third-party appraisals.

Goodwill – Fair value of goodwill is based on the fair value of each of our reporting units to which goodwill is allocated compared with their respective carrying value. 

Assets that were measured at fair value on a nonrecurring basis as of June 30, 2015 and December 31, 2014 are summarized below.   

			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(Dollars in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
At June 30, 2015
Impaired loans at fair value :
Commercial real estate	$	11,739	$	-	$	-	$	11,739
One-to-four family residential		-		-		-		-
Real estate construction		390		-		-		390
Commercial		4,875		-		-		4,875
Loans held for sale:
One-to-four family residential		6,065		-		6,065		-
Government guaranteed commercial real estate		622		-		622		-
Other loans held for sale		-		-		-		-
Mortgage loan servicing rights		3,630		-		3,630		-
Other real estate		2,393		-		-		2,393
Total	$	29,714	$	-	$	10,317	$	19,397
At December 31, 2014
Impaired loans at fair value :
Commercial real estate	$	11,762	$	-	$	-	$	11,762
Commercial		5,722		-		-		5,722
Loans held for sale:
One-to-four family residential		763		-		763		-
Government guaranteed commercial real estate		705		-		705		-
Other loans held for sale		17		-		17		-
Other real estate		3,097		-		-		3,097
Total	$	22,066	$	-	$	1,485	$	20,581

As of June 30, 2015, impaired loans measured at fair value with a carrying amount of $20.6 million were written down to a fair value of $17.0 million, resulting in a life-to-date impairment of $3.6 million.  As of December 31, 2014, impaired loans measured at fair value with a carrying amount of $21.9 million were written down to the fair value of $17.5 million at December 31, 2014, resulting in a life-to-date impairment charge of $4.4 million.

As of June 30, 2015 and December 31, 2014, other real estate assets were written down to their fair values, resulting in an impairment charge of $0.1 million and $0.6 million, respectively, which was included in noninterest expense. 

As of June 30, 2015 and December 31, 2014, mortgage servicing rights were written down to their fair values, resulting in an impairment charge of $0.1 million and $0, respectively, which was included in noninterest expense.

No impairment of core deposit premiums or goodwill were recognized during the periods ending June 30, 2015 or December 31, 2014.

ASC 825, Financial Instruments,  requires an entity to provide disclosures about fair value of financial instruments, including those that are not measured and reported at fair value on a recurring or nonrecurring basis.   The methodologies used in estimating the fair value of financial instruments that are measured on a recurring or nonrecurring basis are discussed above.  The methodologies for the other financial instruments are discussed below: 

Cash and cash equivalents – For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value. 

Securities held to maturity – The investment securities held to maturity are carried at cost.  The fair value of the held to maturity securities is estimated based on quoted market prices or dealer quotes. 

Loans, net of allowance – Fair values are estimated for certain homogenous categories of loans adjusted for differences in loan characteristics.  Our loans have been aggregated by categories consisting of commercial, real estate, and other consumer.  The fair value of loans is estimated by discounting the cash flows using risks inherent in the loan category and interest rates currently offered for loans with similar terms and credit risks. 

Accrued interest receivable – The carrying amount is a reasonable estimate of fair value for accrued interest receivable. 

Investments included in other assets – The estimated fair value of investments included in other assets, which primarily consists of investments carried at cost, approximates their carrying values. 

Deposits – The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the statement of financial condition date.  The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. 

Accrued interest payable and other liabilities – The estimated fair value of accrued interest payable and other liabilities, which primarily includes trade accounts payable, approximates their carrying values. 

Other borrowings – Included in other borrowings are FHLB advances and securities sold under agreements to repurchase.  The fair value for fixed rate FHLB advances is based upon discounted cash flow analysis using interest rates currently being offered for similar instruments.  The fair values of other borrowings are the amounts payable at the statement of financial condition date, as the carrying amount is a reasonable estimate of fair value due to the short-term maturity rates.   

Subordinated debentures – Our two subordinated debentures have floating rates that reset quarterly. The fair value of the floating rate subordinated debentures approximates carrying value at June 30, 2015.   

The carrying values and estimated fair values of our financial instruments segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value were as follows:

	At June 30, 2015				At December 31, 2014
	Carrying		Fair		Carrying		Fair
(Dollars in thousands)	Values		Values		Values		Values
Financial assets:
Level 2 inputs:
Cash and cash equivalents	$	156,688	$	156,688	$	140,936	$	140,936
Securities held to maturity		11,364		11,818		12,362		12,880
Accrued interest receivable		4,281		4,281		4,723		4,723
Investments included in other assets		7,949		7,949		7,949		7,949
Level 3 inputs:
Total loans, net of allowance		1,423,211		1,353,264		1,371,539		1,303,047
Financial liabilities:
Level 2 inputs:
Deposits		1,624,446		1,534,880		1,533,999		1,450,540
Accrued interest payable		774		774		769		769
Other liabilities		8,077		8,077		8,334		8,334
Other borrowings		75,839		77,622		79,380		81,544
Subordinated debentures		46,393		46,393		46,393		46,393

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Loans And Allowance For Loan Losses

6 Months Ended

Jun. 30, 2015

Loans And Allowance For Loan Losses [Abstract]

Loans And Allowance For Loan Losses

NOTE 3: LOANS AND ALLOWANCE FOR LOAN LOSSES

We extend commercial and consumer credit primarily to customers in the states of Oklahoma, Texas, and Kansas.  Our commercial lending operations are concentrated in Oklahoma City, Tulsa, Dallas, Wichita,and other metropolitan markets in Oklahoma, Texas, and Kansas.  As a result, the collectability of our loan portfolio can be affected by changes in the economic conditions in those states and markets.  Please see Note 9: Operating Segments for more detail regarding loans by market.  At June 30, 2015 and December 31, 2014, substantially all of ourloans were collateralized with real estate, inventory, accounts receivable, and/or other assets or were guaranteed by agencies of the United States government.

Our loan classifications were as follows: 

(Dollars in thousands)	At June 30, 2015		At December 31, 2014
Real estate mortgage:
Commercial	$	759,406	$	752,971
One-to-four family residential		85,338		77,531
Real estate construction:
Commercial		186,140		186,659
One-to-four family residential		13,107		10,464
Commercial		384,788		350,410
Installment and consumer:
Guaranteed student loans		-		37
Other		20,651		21,919
		1,449,430		1,399,991
Less: Allowance for loan losses		(26,219)		(28,452)
Total loans, net		1,423,211		1,371,539
Less: Loans held for sale (included above)		(6,687)		(1,485)
Net loans receivable	$	1,416,524	$	1,370,054

Concentrations of Credit.  At June 30, 2015, $485.7 million, or 34%, and $422.3 million, or 29%, of ourloans consisted of loans to individuals and businesses in the real estate and healthcare industries, respectively.  We do not have any other concentrations of loans to individuals or businesses involved in a single industry totaling 10% or more of total loans. 

Loans Held for Sale.  We had loans which were held for sale of $6.7 million and $1.5 million at June 30, 2015 and December 31, 2014, respectively.  The loans currently classified as held for sale, primarily residential mortgage loans, are carried at the lower of cost or market value.  A substantial portion of our one-to-four family residential loans and loan servicing rights are sold to one buyer.  These mortgage loans are generally sold within a one-month period from loan closing at amounts determined by the investor commitment based upon the pricing of the loan.  These loans are available for sale in the secondary market.  

Loan Servicing.  We earn fees for servicing real estate mortgages and other loans owned by others.  The fees are generally calculated on the outstanding principal balance of the loans serviced and are recorded as noninterest income when earned.  The unpaid principal balance of real estate mortgage loans serviced for others totaled $416.0 million and $410.3 million at June 30, 2015 and December 31, 2014, respectively.  Loan servicing rights are capitalized based on estimated fair value at the point of origination.  The servicing rights are amortized over the period of estimated net servicing income.   

Acquired Loans.  On June 19, 2009, Bank SNB entered into purchase and assumption agreements with the Federal Deposit Insurance Corporation (“FDIC”) to acquire substantially all loans as well as certain other related assets of First National Bank of Anthony, Anthony, Kansas in an FDIC-assisted transaction.  Bank SNB and the FDIC entered into loss sharing agreements that provided Bank SNB with significant protection against credit losses from loans and related assets acquired in the transaction (also known as acquired, covered, or discounted loans).  Under these agreements, for a period of ten years for 1-4 family real estate loans and for a period of five years for other loans, the FDIC was required to reimburse Bank SNB for 80% of net losses up to $35.0 million on covered assets, primarily acquired loans and other real estate, and for 95% of any net losses above $35.0 million.  Bank SNB services the covered assets.  On April 10, 2015, Bank SNB entered into an agreement with the FDIC to terminate these loss sharing agreements with the FDIC.  All future recoveries, charge-offs, and expenses related to these covered assets are now recognized entirely by Bank SNB.

Due to the immateriality of the remaining balance of loans that were covered under the loss sharing agreements with the FDIC, covered and noncovered loans have been combined for reporting purposes. Prior period numbers have also been adjusted to reflect this change. This adjustment has no financial statement impact.

Loans that were covered under the loss sharing agreements with the FDIC are reported in loans.  The acquired loans were initially recorded at fair value (as determined by the present value of expected future cash flows) with no allowance for loan losses.  Subsequent decreases in expected cash flows are recognized as impairments.  Valuation allowances on these loans reflect only losses incurred after the acquisition.   

Changes in the carrying amounts and accretable yields for loans that were acquired under the loss sharing agreements with the FDIC were as follows for the three and six months endedJune 30, 2015 and June 30, 2014.

	For the three months ended June 30,
	2015					2014
			Carrying				Carrying
	Accretable		amount		Accretable		amount
(Dollars in thousands)	Yield		of loans		Yield		of loans
Balance at beginning of period	$	419	$	4,310	$	1,503	$	15,053
Payments received		-		(208)		-		(6,766)
Net charge-offs		-		-		(5)		(367)
Net reclassifications to / from nonaccretable amount		240		-		-		-
Accretion		(198)		442		(638)		-
Balance at end of period	$	461	$	4,544	$	860	$	7,920

	For the six months ended June 30,
	2015				2014
			Carrying				Carrying
	Accretable		amount		Accretable		amount
(Dollars in thousands)	Yield		of loans		Yield		of loans
Balance at beginning of period	$	540	$	4,971	$	1,597	$	16,427
Payments received		-		(869)		-		(8,099)
Net charge-offs		-		-		(9)		(408)
Net reclassifications to / from nonaccretable amount		240		-		-		-
Accretion		(319)		442		(728)		-
Balance at end of period	$	461	$	4,544	$	860	$	7,920

Nonperforming / Past Due Loans.  We identify past due loans based on contractual terms on a loan-by-loan basis and generally place loans, except for consumer loans, on nonaccrual when any portion of the principal or interest is ninety  days past due and collateral is insufficient to discharge the debt in full.  Interest accrual may also be discontinued earlier if, in management’s opinion, collection is unlikely.  Generally, past due consumer installment loans are not placed on nonaccrual but are charged-off when they are four months past due.  Accrued interest is written off when a loan is placed on nonaccrual status.  Subsequent interest income is recorded when cash receipts are received from the borrower and collectability of the principal amount is reasonably assured.   

Under generally accepted accounting principles and instructions to reports of condition and income of banking regulators, a nonaccrual loan may be returned to accrual status:  (i) when none of its principal and interest is due and unpaid, repayment is expected, and there has been a sustained period (at least six months) of repayment performance; (ii) when the loan is well-secured, there is a sustained period of performance and repayment within a reasonable period is reasonably assured; or (iii) when the loan otherwise becomes well-secured and in the process of collection. Loans that have been restructured because of weakened financial positions of the borrowers also may be returned to accrual status if repayment is reasonably assured under the revised terms and there has been a sustained period of repayment performance.

Management strives to carefully monitor credit quality and to identify loans that may become nonperforming.  At any time, however, there are loans included in the portfolio that will result in losses to usthat have not been identified as nonperforming or potential problem loans.  Because the loan portfolio contains a significant number of commercial (including energy banking credits) and commercial real estate loans with relatively large balances, the unexpected deterioration of one or a few such loans may cause a significant increase in nonperforming assets and may lead to a material increase in charge-offs and the provision for loan losses in future periods.

The following table shows the recorded investment in loans on nonaccrual status. 

(Dollars in thousands)	At June 30, 2015		At December 31, 2014
Real estate mortgage:
Commercial	$	2,141	$	2,195
One-to-four family residential		1,216		1,100
Real estate construction:
Commercial		416		73
Commercial		5,114		5,907
Other consumer		-		1
Total nonaccrual loans	$	8,887	$	9,276

During the first six months of 2015, an immaterial amount of interest income was received on nonaccruing loans.  If interest on all nonaccrual loans had been accrued for the six months ended June 30, 2015, additional interest income of $0.3 million would have been recorded.

The following table shows an age analysis of past due loans at June 30, 2015 and December 31, 2014. 

			90 days and								Recorded loans
	30-89 days		greater		Total past				Total		> 90 days and
(Dollars in thousands)	past due		past due		due		Current		loans		accruing
At June 30, 2015
Real estate mortgage:
Commercial	$	567	$	2,141	$	2,708	$	756,698	$	759,406	$	-
One-to-four family residential		121		1,216		1,337		84,001		85,338		-
Real estate construction:
Commercial		-		416		416		185,724		186,140		-
One-to-four family residential		-		-		-		13,107		13,107		-
Commercial		241		5,114		5,355		379,433		384,788		-
Other		88		-		88		20,563		20,651		-
Total	$	1,017	$	8,887	$	9,904	$	1,439,526		1,449,430	$	-
At December 31, 2014
Real estate mortgage:
Commercial	$	4,053	$	2,195	$	6,248	$	746,723	$	752,971	$	-
One-to-four family residential		122		1,100		1,222		76,309		77,531		-
Real estate construction:
Commercial		2,177		73		2,250		184,409		186,659		-
One-to-four family residential		-		-		-		10,464		10,464		-
Commercial		1,159		6,044		7,203		343,207		350,410		137
Other		162		1		163		21,793		21,956		-
Total	$	7,673	$	9,413	$	17,086	$	1,382,905		1,399,991	$	137

Impaired Loans.  A loan is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Each loan deemed to be impaired (loans on nonaccrual status and greater than $100,000, and all troubled debt restructurings) is evaluated on an individual basis using the discounted present value of expected cash flows based on the loan’s initial effective interest rate, the fair value of collateral, or the market value of the loan.  Smaller balance and homogeneous loans, including mortgage and consumer loans, are collectively evaluated for impairment.     

Interest payments on impaired loans are applied to principal until collectability of the principal amount is reasonably assured, and, at that time, interest is recognized on a cash basis.  Impaired loans, or portions thereof, are charged-off when deemed uncollectible. 

Impaired loans are shown in the following table: 

	With No Specific Allowance				With A Specific Allowance
			Unpaid				Unpaid
	Recorded		Principal		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Investment		Balance		Allowance
At June 30, 2015
Commercial real estate	$	10,684	$	12,940	$	11,317	$	11,317	$	1,875
One-to-four family residential		1,229		1,792		-		-		-
Real estate construction		416		416		-		-		-
Commercial		2,146		2,571		3,739		9,852		1,660
Other		-		-		-		-		-
Total	$	14,475	$	17,719	$	15,056	$	21,169	$	3,535
At December 31, 2014
Commercial real estate	$	12,382	$	14,752	$	11,497	$	11,556	$	2,047
One-to-four family residential		1,115		1,833		-		-		-
Real estate construction		73		104		-		-		-
Commercial		2,624		2,887		4,315		10,673		1,822
Other		1		2		-		-		-
Total	$	16,195	$	19,578	$	15,812		22,229	$	3,869

The average recorded investment of  loans classified as impaired and the interest income recognized on those loans for the six months ended June 30, 2015 and June 30, 2014 are shown in the following table:  

	As of and for the six months ended June 30,
	2015				2014
	Average				Average
	Recorded		Interest		Recorded		Interest
(Dollars in thousands)	Investment		Income		Investment		Income
Commercial real estate	$	23,862	$	473	$	43,104	$	663
One-to-four family residential		1,777		1		3,649		1
Real estate construction		376		-		251		-
Commercial		6,080		20		9,693		42
Other		1		-		69		-
Total	$	32,096	$	494	$	56,766	$	706

Troubled Debt Restructurings.  Our loan portfolio also includes certain loans that have been modified in troubled debt restructurings, where economic concessions have been granted to borrowers who have experienced financial difficulties.  These concessions typically result from loss mitigation activities and can include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions.  Troubled debt restructurings are classified as impaired at the time of restructuring and are then further classified as nonperforming, potential problem, or performing restructured, as applicable.  Loans modified in troubled debt restructurings may be returned to performing status after considering the borrowers’ sustained repayment for a reasonable period of at least six months. 

When we modify loans in a troubled debt restructuring, an evaluation of any possible impairment is performed similar to the evaluation done with respect to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or use of the current fair value of the collateral, less selling costs for collateral dependent loans.  If it is determined that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs, and unamortized premium or discount), an impairment is recognized through an allowance estimate or a charge-off to the allowance. 

Troubled debt restructured loans outstanding as of June 30, 2015 and December 31, 2014 were as follows: 

	At June 30, 2015				At December 31, 2014
(Dollars in thousands)	Accruing		Nonaccrual		Accruing		Nonaccrual
Commercial real estate	$	19,861	$	967	$	21,685	$	1,082
One-to-four family residential		13		54		14		62
Commercial		771		340		1,032		655
Total	$	20,645	$	1,361	$	22,731	$	1,799

At June 30, 2015 and December 31, 2014, we had no significant commitments to lend additional funds to debtors whose loan terms have been modified in a troubled debt restructuring. 

Loans modified as troubled debt restructurings that occurred during the three and six months endedJune 30, 2015and June 30, 2014 are shown in the following table:   

	For the three months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Modifications		Investment		Modifications		Investment
Commercial		-	$	-		2	$	9,684
Total		-	$	-		2	$	9,684

	For the six months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Modifications		Investment		Modifications		Investment
Commercial real estate		-	$	-		2	$	9,684
Commercial		-		-		3		229
Total		-	$	-		5	$	9,913

The modifications of loans identified as troubled debt restructurings primarily related to payment reductions, payment extensions, and/or reductions in the interest rate.  The financial impact of troubled debt restructurings is not significant.

The following table presents the recorded investment and the number of loans modified as a troubled debt restructuring that subsequently defaulted during the three and six months ended June 30, 2015 and June 30, 2014.  Default, for this purpose, is deemed to occur when a loan is 90 days or more past due or transferred to nonaccrual and is within twelve months of restructuring.

	For the three months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial		-	$	-		1	$	205
Total		-	$	-		1	$	205

	For the six months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial		-	$	-		1	$	205
Total		-	$	-		1	$	205

Credit Quality Indicators.  To assess the credit quality of loans, we categorize loans into risk categories based on relevant information about the ability of the borrowers to service their debts such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors.  This analysis is performed on a quarterly basis.  We use the following definitions for risk ratings:   

Special mention – Loans classified as special mention have potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for these loans or of the institution’s credit position at some future date. 

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligors or of the collateral pledged, if any.  Loans so classified have one or more well-defined weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.  These loans are considered potential problem or nonperforming loans depending on the accrual status of the loans.    

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.  These loans are considered nonperforming. 

Loans not meeting the criteria above that are analyzed as part of the above described process are considered to be pass rated loans.  As of June 30, 2015 and December 31, 2014, based on the most recent analysis performed as of those dates, the risk category of loans by class was as follows: 

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At June 30, 2015
Grade:
Pass	$	707,216	$	84,016	$	198,607	$	353,823	$	20,521	$	1,364,183
Special Mention		30,073		22		221		11,430		130		41,876
Substandard		22,117		1,300		419		14,854		-		38,690
Doubtful		-		-		-		4,681		-		4,681
Total	$	759,406	$	85,338	$	199,247	$	384,788	$	20,651	$	1,449,430
At December 31, 2014
Grade:
Pass	$	690,791	$	76,322	$	194,670	$	331,594	$	21,849	$	1,315,226
Special Mention		34,287		22		420		7,144		106		41,979
Substandard		27,594		1,154		2,033		6,725		1		37,507
Doubtful		299		33		-		4,947		-		5,279
Total	$	752,971	$	77,531	$	197,123	$	350,410	$	21,956	$	1,399,991

Allowance for Loan Losses.  The allowance for loan losses is a reserve established through the provision for loan losses charged to operations.  Loan amounts which are determined to be uncollectible are charged against this allowance, and recoveries, if any, are added to the allowance.  The appropriate amount of the allowance is based on periodic review and evaluation of the loan portfolio and quarterly assessments of the probable losses inherent in the loan portfolio.  The amount of the loan loss provision for a period is based solely upon the amount needed to cause the allowance to reach the level deemed appropriate after the effects of net charge-offs for the period. 

Management believes the level of the allowance is appropriate to absorb probable losses inherent in the loan portfolio.  The allowance for loan losses is determined in accordance with regulatory guidelines and generally accepted accounting principles and is comprised of two primary components, specific and general.  There is no one factor, or group of factors, that produces the amount of an appropriate allowance for loan losses, as the methodology for assessing the allowance for loan losses makes use of evaluations of individual impaired loans along with other factors and analysis of loan categories.  This assessment is highly qualitative and relies upon judgments and estimates by management.

The specific allowance is recorded based on the result of an evaluation consistent with ASC 310.10.35, Receivables: Subsequent Measurement, for each impaired loan.  Collateral dependent loans are evaluated for impairment based upon the fair value of the collateral.  The amount and level of the impairment allowance is ultimately determined by management’s estimate of the amount of expected future cash flows or, if the loan is collateral dependent, on the value of collateral, which may vary from period to period depending on changes in the financial condition of the borrower or changes in the estimated value of the collateral.  Charge-offs against the allowance for impaired loans are made when and to the extent loans are deemed uncollectible.  Any portion of a collateral dependent impaired loan in excess of the fair value of the collateral that is determined to be uncollectible is charged off.  

The general component of the allowance is calculated based on ASC 450, Contingencies.  Loans not evaluated for specific allowance are segmented into loan pools by type of loan.  The non-owner occupied commercial real estate pool is further segmented by the market in which the loan collateral is located.  Our primary markets are Oklahoma, Texas, and Kansas, and loans secured by real estate in those states are included in the “in-market” pool, with the remaining loans being includedin the “out-of-market” pool.  Estimated allowances are based on historical loss trends with adjustments factored in based on qualitative risk factors both internal and external to us.  The historical loss trend is determined by loan pool and segmentation and is based on the actual loss history experienced by us over the most recent three years.  The qualitative risk factors include, but are not limited to, economic and business conditions, changes in lending staff, lending policies and procedures, quality of loan review, changes in the nature and volume of the portfolios, loss and recovery trends, asset quality trends, and legal and regulatory considerations.

Independent appraisals on real estate collateral securing loans are obtained at origination.  New appraisals are obtained periodically and following discovery of factors that may significantly affect the value of the collateral.  Appraisals typically are received within 30 days of request.  Results of appraisals on nonperforming and potential problem loans are reviewed promptly upon receipt and considered in the determination of the allowance for loan losses.  We are not aware of any significant time lapses in the process that have resulted, or would result in, a significant delay in determination of a credit weakness, the identification of a loan as nonperforming, or the measurement of an impairment.

The following tables show the balance in the allowance for loan losses and the recorded investment in loans for the dates indicated by portfolio classification disaggregated on the basis of impairment evaluation method.   

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At June 30, 2015
Balance at beginning of period	$	13,678	$	712	$	4,159	$	9,614	$	289	$	28,452
Loans charged-off		(116)		(20)		(21)		(343)		(56)		(556)
Recoveries		151		443		31		583		138		1,346
Provision for loan losses		(448)		(557)		(509)		(1,313)		(196)		(3,023)
Balance at end of period	$	13,265	$	578	$	3,660	$	8,541	$	175	$	26,219
Allowance for loan losses ending balance:
Individually evaluated for impairment	$	1,875	$	-	$	-	$	1,660	$	-	$	3,535
Collectively evaluated for impairment		11,390		578		3,660		6,881		175		22,684
Acquired with deteriorated credit quality		-		-		-		-		-		-
Total ending allowance balance	$	13,265	$	578	$	3,660	$	8,541	$	175	$	26,219
Loans receivable ending balance:
Individually evaluated for impairment	$	20,886	$	404	$	416	$	5,885	$	-	$	27,591
Collectively evaluated for impairment		735,587		83,438		198,738		378,881		20,651		1,417,295
Acquired with deteriorated credit quality		2,933		1,496		93		22		-		4,544
Total ending loans balance	$	759,406	$	85,338	$	199,247	$	384,788	$	20,651	$	1,449,430

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At June 30, 2014
Balance at beginning of period	$	18,854	$	850	$	5,523	$	10,985	$	451	$	36,663
Loans charged-off		(683)		(126)		(655)		(3,514)		(405)		(5,383)
Recoveries		2,343		146		-		595		60		3,144
Provision for loan losses		(3,538)		(238)		418		1,742		275		(1,341)
Balance at end of period	$	16,976	$	632	$	5,286	$	9,808	$	381	$	33,083
Allowance for loan losses ending balances:
Individually evaluated for impairment	$	3,598	$	-	$	-	$	2,625	$	-	$	6,223
Collectively evaluated for impairment		13,378		632		5,286		7,183		381		26,860
Acquired with deteriorated credit quality		-		-		-		-		-		-
Total ending allowance balance	$	16,976	$	632	$	5,286	$	9,808	$	381	$	33,083
Loans receivable ending balance:
Individually evaluated for impairment	$	42,588	$	387	$	82	$	8,873	$	119	$	52,049
Collectively evaluated for impairment		720,559		77,284		175,132		291,242		27,514		1,291,731
Acquired with deteriorated credit quality		5,874		1,871		126		48		1		7,920
Total ending loans balance	$	769,021	$	79,542	$	175,340	$	300,163	$	27,634	$	1,351,700

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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Derivative Instruments [Abstract]

Non-Hedge Derivative Assets and Liabilities

	As of June 30, 2015				At December 31, 2014
(Dollars in thousands)	Notional		Fair Value		Notional		Fair Value
Non-hedge derivative assets	$	33,935	$	701	$	34,322	$	787
Non-hedge derivative liabilities		33,935		701		34,322		787

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New Authoritative Accounting Guidance

6 Months Ended

Jun. 30, 2015

New Authoritative Accounting Guidance [Abstract]

New Authoritative Accounting Guidance

NOTE 11:  NEW AUTHORITATIVE ACCOUNTING GUIDANCE

In January 2015, FASB issued Accounting Standard Update No. 2015-01,  Income Statement—Extraordinary and Unusual Items: Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items; (“ASU 2015-01”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have an impact on the financial statements.

In February 2015, FASB issued Accounting Standard Update No. 2015-02,  Consolidation: Amendments to the Consolidation Analysis; (“ASU 2015-02”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In April 2015, FASB issued Accounting Standard Update No. 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs; (“ASU 2015-03”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In April 2015, FASB issued Accounting Standard Update No. 2015-04, Compensation—Retirement Benefits: Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets; (“ASU 2015-04”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In April 2015, FASB issued Accounting Standard Update No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement; (“ASU 2015-05”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In April 2015, FASB issued Accounting Standard Update No. 2015-06, Earnings Per Share: Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions; (“ASU 2015-06”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In May 2015, FASB issued Accounting Standard Update No. 2015-07, Fair Value Measurement: Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share; (“ASU 2015-07”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In May 2015, FASB issued Accounting Standard Update No. 2015-08, Business Combinations: Pushdown Accounting, Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115; (“ASU 2015-08”). The ASU does not require new recurring disclosures. The guidance becomes effective upon issuance, and it is not expected to have a material impact on the financial statements.

In May 2015, FASB issued Accounting Standard Update No. 2015-09, Financial Services—Insurance: Disclosures about Short-Duration Contracts; (“ASU 2015-09”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016, and it is not expected to have a material impact on the financial statements.

In June 2015, FASB issued Accounting Standard Update No. 2015-10, Technical Corrections and Improvements; (“ASU 2015-10”). The ASU does not require new recurring disclosures. The guidance becomes effective for us on January 1, 2016 for transition guidance and upon issuance for all other, and it is not expected to have a material impact on the financial statements.

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Shareholders' Equity

6 Months Ended

Jun. 30, 2015

Shareholders' Equity [Abstract]

Shareholders' Equity

NOTE 7: SHAREHOLDERS’ EQUITY

Stock Repurchase Program

On August 14, 2014, our Board of Directors (the “Board”) authorized the repurchase of up to 5.0%, or 990,000 shares, of our common stock. The share repurchases are expected to be made primarily on the open market from time to time until August 14, 2015.  Repurchases under the program are available at the discretion of management based upon market, business, legal, and other factors. During the second quarter of 2015, we repurchased no shares due to trade restrictions resulting from our pending acquisition of First Commercial Bancshares, Inc.  As of June  30, 2015, we had repurchased 867,310 shares for a total of $14.3  million.

On February 24, 2015, our Board authorized a second share repurchase program of up to another 5.0%, or approximately 950,000 shares, of our common stock, effective upon the earlier of (i) the date we complete the repurchase of all of the shares we are authorized to repurchase under the current program, or (ii) August 14, 2015.

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Derivative Instruments

6 Months Ended

Jun. 30, 2015

Derivative Instruments [Abstract]

Derivative Instruments

NOTE 5: DERIVATIVE INSTRUMENTS

We utilize derivatives instruments to manage exposure to various types of interest rate risk for us and our customers within our policy guidelines. All derivative instruments are carried at fair value and credit risk is considered in determining fair value.

Derivative contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms.  Institutional counterparties must have an investment grade credit rating and be approved by our asset/liability management committee.  Our credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty.  Access to collateral in the event of default is reasonably assured. Therefore, credit exposure may be reduced by the amount of collateral pledged by the counterparty.

Customer Risk Management Interest Rate Swaps

Our qualified customers have the opportunity to participate in our interest rate swap program for the purpose of managing interest rate risk on their variable rate loans with us.  If we enter into such agreements with customers, then offsetting agreements are executed between us and approved dealer counterparties to minimize our market risk from changes in interest rates.  The counterparty contracts are identical to customer contracts, except for a fixed pricing spread or fee paid to us by the dealer counterparty.  These interest rate swaps carry varying degrees of credit, interest rate and market or liquidity risks.  The fair value of derivative instruments are recognized as either assets or liabilities in the consolidated statements of financial condition. 

We have entered into threecustomer interest rate swap agreements that effectively convert the loan interest rate from floating rate based on LIBOR to a fixed rate for the customer.  As of June 30, 2015, these loans had an outstanding balance of  $33.9 million.  We have entered into offsetting agreements with dealer counterparties.  The following table summarizes the fair values of derivative contracts recorded as “non-hedge derivative assets” and “non-hedge derivative liabilities” in the consolidated statements of financial condition.

	As of June 30, 2015				At December 31, 2014
(Dollars in thousands)	Notional		Fair Value		Notional		Fair Value
Non-hedge derivative assets	$	33,935	$	701	$	34,322	$	787
Non-hedge derivative liabilities		33,935		701		34,322		787

The marginrates to us in connection with these instruments are 2.97%,2.87%, and 2.30%over the one-month LIBOR.  There was $0.4 million of collateral required to be posted by us as of June 30, 2015 to dealer counterparties. We posted a security to cover the collateral required. These interest rate swaps are not designated as hedging instruments.

Interest Rate Swap

We have an interest rate swap agreement with a total notional amount of $25.0 million.  The interest rate swap contract was designated as a hedging instrument in cash flow hedges with the objective of protecting the overall cash flow from our quarterly interest payments on the SBI Capital Trust II preferred securities throughout the seven year period beginning February 11, 2011 and ending April 7, 2018 from the risk of variability of those payments resulting from changes in the three-month London Interbank Offered Rate (“LIBOR”).  Under the swap, we pay a fixed interest rate of 6.15% and receive a variable interest rate of three-month LIBOR plus a margin of 2.85% on a total notional amount of $25.0 million, with quarterly settlements.  The rate received by us as of June 30, 2015 was 3.13%. 

The estimated fair value of the interest rate swap contract outstanding as of June 30, 2015 and December 31, 2014 resulted in a pre-tax loss of $1.7 million and $1.6 million, respectively, and was included in other liabilities in the consolidated statements of financial condition.  We obtained the counterparty valuation to validate the interest rate derivative contract as of June 30, 2015 and December 31, 2014.   

The effective portion of our gain or loss due to changes in the fair value of the interest rate swap contract, a $51,000 loss and a $42,000gain for the six months ended June 30, 2015 and June 30, 2014, respectively, is included in other comprehensive income, net of tax, while the ineffective portion (indicated by the excess of the cumulative change in the fair value of the derivative over that which is necessary to offset the cumulative change in expected future cash flows on the hedge transaction) is included in other noninterest income or other noninterest expense.  No ineffectiveness related to the interest rate derivative was recognized during either reporting period.   

Net cash outflows as a result of the interest rate swap contract were $0.4 million forboth the six months ended June 30, 2015 and June 30, 2014and were included in interest expense on subordinated debentures.   

The fair value of cash and securities posted as collateral by us related to the interest rate swap contract was $2.1 million at June 30, 2015 and December 31, 2014.

There are no credit-risk-related contingent features associated with our derivative contract. 

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Taxes On Income

6 Months Ended

Jun. 30, 2015

Taxes On Income [Abstract]

Taxes On Income

NOTE 6: TAXES ON INCOME

Net deferred tax assets totaled $12.7 million at June 30, 2015 and $14.1 million at December 31, 2014.  Net deferred tax assets are included in other assets and no valuation allowance is considered necessary.

We or one of our subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  We are no longer subject to U.S. federal or state tax examinations for years before 2011. 

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 8: EARNINGS PER SHARE

Earnings per common share is computed using the two-class method prescribed by ASC 260, Earnings Per Share.  Using the two-class method, basic earnings per common share is computed based upon net income divided by the weighted average number of common shares outstanding during each period, which excludes outstanding unvested restricted stock.  Diluted earnings per share is computed using the weighted average number of common shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. 

The following table shows the computation of basic and diluted earnings per common share: 

	For the three months				For the six months
	ended June 30,				ended June 30,
(Dollars in thousands, except earnings per share data)	2015		2014		2015		2014
Numerator:
Net income	$	4,161	$	6,152	$	8,696	$	9,843
Earnings allocated to participating securities		(73)		(80)		(143)		(119)
Numerator for basic earnings per common share	$	4,088	$	6,072	$	8,553	$	9,724
Effect of reallocating undistributed earnings
of participating securities		73		80		143		119
Numerator for diluted earnings per common share	$	4,161	$	6,152	$	8,696	$	9,843
Denominator:
Denominator for basic earnings per common share		18,666,853		19,520,967		18,714,088		19,524,859
Dilutive effect of stock compensation		197,124		143,867		172,332		130,767
Denominator for diluted earnings per common share		18,863,977		19,664,834		18,886,420		19,655,626
Earnings per common share:
Basic	$	0.22	$	0.31	$	0.46	$	0.50
Diluted	$	0.22	$	0.31	$	0.46	$	0.50

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Loans And Allowance For Loan Losses (Age Analysis Of Past Due Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	$ 9,904	$ 17,086
Current	1,439,526	1,382,905
Loans receivable	1,449,430	1,399,991	$ 1,351,700
Recorded loans > 90 days and accruing		137
30 Days To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,017	7,673
90 Days And Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	8,887	9,413
Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	88	163
Current	20,563	21,793
Loans receivable	20,651	21,956
Other [Member] | 30 Days To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	88	162
Other [Member] | 90 Days And Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due		1
Real Estate Mortgage [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	2,708	6,248
Current	756,698	746,723
Loans receivable	759,406	752,971
Real Estate Mortgage [Member] | Commercial Real Estate [Member] | 30 Days To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	567	4,053
Real Estate Mortgage [Member] | Commercial Real Estate [Member] | 90 Days And Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	2,141	2,195
Real Estate Mortgage [Member] | One-To-Four Family Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,337	1,222
Current	84,001	76,309
Loans receivable	85,338	77,531
Real Estate Mortgage [Member] | One-To-Four Family Residential [Member] | 30 Days To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	121	122
Real Estate Mortgage [Member] | One-To-Four Family Residential [Member] | 90 Days And Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,216	1,100
Real Estate Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans receivable	199,247	197,123	175,340
Real Estate Construction [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	416	2,250
Current	185,724	184,409
Loans receivable	186,140	186,659
Real Estate Construction [Member] | Commercial Real Estate [Member] | 30 Days To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due		2,177
Real Estate Construction [Member] | Commercial Real Estate [Member] | 90 Days And Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	416	73
Real Estate Construction [Member] | One-To-Four Family Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	13,107	10,464
Loans receivable	13,107	10,464
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	5,355	7,203
Current	379,433	343,207
Loans receivable	384,788	350,410	$ 300,163
Recorded loans > 90 days and accruing		137
Commercial [Member] | 30 Days To 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	241	1,159
Commercial [Member] | 90 Days And Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	$ 5,114	$ 6,044

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Operating Segments (Financial Results By Operating Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Financial results by operating segment
Net interest income	$ 15,791	$ 16,574	$ 31,401	$ 32,575
Provision (credit) for loan losses	(1,136)	(355)	(3,023)	(1,341)
Noninterest income	3,409	8,246	6,249	11,271
Noninterest expenses	13,982	15,332	27,064	29,439
Income before taxes	6,354	9,843	13,609	15,748
Taxes on income (loss)	2,193	3,691	4,913	5,905
Net income	4,161	6,152	8,696	9,843
Externally generated revenue from investing activities			700	500
Internally generated loss from fund management			1,000	4,400
Total loans at period end	1,449,430	1,351,700	1,449,430	1,351,700
Total assets at period end	2,031,581	1,885,158	2,031,581	1,885,158
Total deposits at period end	1,624,446	1,463,855	1,624,446	1,463,855
Oklahoma Banking [Member] | Operating Segments [Member]
Financial results by operating segment
Net interest income	9,299	9,497	19,034	18,473
Provision (credit) for loan losses	(689)	(1,464)	(1,922)	483
Noninterest income	2,386	2,332	4,425	4,449
Noninterest expenses	7,698	7,871	15,043	15,452
Income before taxes	4,676	5,422	10,338	6,987
Taxes on income (loss)	1,609	2,034	3,732	2,620
Net income	3,067	3,388	6,606	4,367
Total loans at period end	810,368	798,065	810,368	798,065
Total assets at period end	824,073	807,002	824,073	807,002
Total deposits at period end	1,134,020	1,086,659	1,134,020	1,086,659
Texas Banking [Member] | Operating Segments [Member]
Financial results by operating segment
Net interest income	4,793	4,457	10,013	9,089
Provision (credit) for loan losses	(283)	1,449	(533)	(2,483)
Noninterest income	278	243	587	539
Noninterest expenses	3,793	3,232	7,228	6,460
Income before taxes	1,561	19	3,905	5,651
Taxes on income (loss)	531	7	1,410	2,119
Net income	1,030	12	2,495	3,532
Total loans at period end	493,047	408,385	493,047	408,385
Total assets at period end	491,442	405,524	491,442	405,524
Total deposits at period end	226,498	206,031	226,498	206,031
Kansas Banking [Member] | Operating Segments [Member]
Financial results by operating segment
Net interest income	1,731	3,075	3,194	5,455
Provision (credit) for loan losses	(165)	(340)	(568)	659
Noninterest income	329	420	631	901
Noninterest expenses	1,606	2,658	3,215	5,286
Income before taxes	619	1,177	1,178	411
Taxes on income (loss)	216	441	425	154
Net income	403	736	753	257
Total loans at period end	146,015	145,247	146,015	145,247
Total assets at period end	147,302	147,644	147,302	147,644
Total deposits at period end	126,671	111,615	126,671	111,615
Other Operations [Member] | Operating Segments [Member]
Financial results by operating segment
Net interest income	(32)	(455)	(840)	(442)
Provision (credit) for loan losses	1
Noninterest income	416	5,251	606	5,382
Noninterest expenses	885	1,571	1,578	2,241
Income before taxes	(502)	3,225	(1,812)	2,699
Taxes on income (loss)	(163)	1,209	(654)	1,012
Net income	(339)	2,016	(1,158)	1,687
Total loans at period end		3		3
Total assets at period end	568,764	524,988	568,764	524,988
Total deposits at period end	$ 137,257	$ 59,550	$ 137,257	$ 59,550

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Loans And Allowance For Loan Losses (Tables)

6 Months Ended

Jun. 30, 2015

Loans And Allowance For Loan Losses [Abstract]

Southwest's Loan Classifications

(Dollars in thousands)	At June 30, 2015		At December 31, 2014
Real estate mortgage:
Commercial	$	759,406	$	752,971
One-to-four family residential		85,338		77,531
Real estate construction:
Commercial		186,140		186,659
One-to-four family residential		13,107		10,464
Commercial		384,788		350,410
Installment and consumer:
Guaranteed student loans		-		37
Other		20,651		21,919
		1,449,430		1,399,991
Less: Allowance for loan losses		(26,219)		(28,452)
Total loans, net		1,423,211		1,371,539
Less: Loans held for sale (included above)		(6,687)		(1,485)
Net loans receivable	$	1,416,524	$	1,370,054

Changes In The Carrying Amounts And Accretable Yields For ASC 310.30 Loans

	For the three months ended June 30,
	2015					2014
			Carrying				Carrying
	Accretable		amount		Accretable		amount
(Dollars in thousands)	Yield		of loans		Yield		of loans
Balance at beginning of period	$	419	$	4,310	$	1,503	$	15,053
Payments received		-		(208)		-		(6,766)
Net charge-offs		-		-		(5)		(367)
Net reclassifications to / from nonaccretable amount		240		-		-		-
Accretion		(198)		442		(638)		-
Balance at end of period	$	461	$	4,544	$	860	$	7,920

	For the six months ended June 30,
	2015				2014
			Carrying				Carrying
	Accretable		amount		Accretable		amount
(Dollars in thousands)	Yield		of loans		Yield		of loans
Balance at beginning of period	$	540	$	4,971	$	1,597	$	16,427
Payments received		-		(869)		-		(8,099)
Net charge-offs		-		-		(9)		(408)
Net reclassifications to / from nonaccretable amount		240		-		-		-
Accretion		(319)		442		(728)		-
Balance at end of period	$	461	$	4,544	$	860	$	7,920

Recorded Investment In Loans On Nonaccrual Status

(Dollars in thousands)	At June 30, 2015		At December 31, 2014
Real estate mortgage:
Commercial	$	2,141	$	2,195
One-to-four family residential		1,216		1,100
Real estate construction:
Commercial		416		73
Commercial		5,114		5,907
Other consumer		-		1
Total nonaccrual loans	$	8,887	$	9,276

Age Analysis Of Past Due Loans

			90 days and								Recorded loans
	30-89 days		greater		Total past				Total		> 90 days and
(Dollars in thousands)	past due		past due		due		Current		loans		accruing
At June 30, 2015
Real estate mortgage:
Commercial	$	567	$	2,141	$	2,708	$	756,698	$	759,406	$	-
One-to-four family residential		121		1,216		1,337		84,001		85,338		-
Real estate construction:
Commercial		-		416		416		185,724		186,140		-
One-to-four family residential		-		-		-		13,107		13,107		-
Commercial		241		5,114		5,355		379,433		384,788		-
Other		88		-		88		20,563		20,651		-
Total	$	1,017	$	8,887	$	9,904	$	1,439,526		1,449,430	$	-
At December 31, 2014
Real estate mortgage:
Commercial	$	4,053	$	2,195	$	6,248	$	746,723	$	752,971	$	-
One-to-four family residential		122		1,100		1,222		76,309		77,531		-
Real estate construction:
Commercial		2,177		73		2,250		184,409		186,659		-
One-to-four family residential		-		-		-		10,464		10,464		-
Commercial		1,159		6,044		7,203		343,207		350,410		137
Other		162		1		163		21,793		21,956		-
Total	$	7,673	$	9,413	$	17,086	$	1,382,905		1,399,991	$	137

Impaired Loans

	With No Specific Allowance				With A Specific Allowance
			Unpaid				Unpaid
	Recorded		Principal		Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Investment		Balance		Allowance
At June 30, 2015
Commercial real estate	$	10,684	$	12,940	$	11,317	$	11,317	$	1,875
One-to-four family residential		1,229		1,792		-		-		-
Real estate construction		416		416		-		-		-
Commercial		2,146		2,571		3,739		9,852		1,660
Other		-		-		-		-		-
Total	$	14,475	$	17,719	$	15,056	$	21,169	$	3,535
At December 31, 2014
Commercial real estate	$	12,382	$	14,752	$	11,497	$	11,556	$	2,047
One-to-four family residential		1,115		1,833		-		-		-
Real estate construction		73		104		-		-		-
Commercial		2,624		2,887		4,315		10,673		1,822
Other		1		2		-		-		-
Total	$	16,195	$	19,578	$	15,812		22,229	$	3,869

Average Recorded Investment And Interest Income Recognized On Impaired Loans

	As of and for the six months ended June 30,
	2015				2014
	Average				Average
	Recorded		Interest		Recorded		Interest
(Dollars in thousands)	Investment		Income		Investment		Income
Commercial real estate	$	23,862	$	473	$	43,104	$	663
One-to-four family residential		1,777		1		3,649		1
Real estate construction		376		-		251		-
Commercial		6,080		20		9,693		42
Other		1		-		69		-
Total	$	32,096	$	494	$	56,766	$	706

Troubled Debt Restructured Loans Outstanding

	At June 30, 2015				At December 31, 2014
(Dollars in thousands)	Accruing		Nonaccrual		Accruing		Nonaccrual
Commercial real estate	$	19,861	$	967	$	21,685	$	1,082
One-to-four family residential		13		54		14		62
Commercial		771		340		1,032		655
Total	$	20,645	$	1,361	$	22,731	$	1,799

Loans Modified As Troubled Debt Restructurings

	For the three months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Modifications		Investment		Modifications		Investment
Commercial		-	$	-		2	$	9,684
Total		-	$	-		2	$	9,684

	For the six months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Modifications		Investment		Modifications		Investment
Commercial real estate		-	$	-		2	$	9,684
Commercial		-		-		3		229
Total		-	$	-		5	$	9,913

Recorded Investment And The Number Of Loans Modified As Troubled Debt Restructuring Which Subsequently Defaulted

	For the three months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial		-	$	-		1	$	205
Total		-	$	-		1	$	205

	For the six months ended June 30,
	2015				2014
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial		-	$	-		1	$	205
Total		-	$	-		1	$	205

Classification Of Risk Category Of Loans, By Classes

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At June 30, 2015
Grade:
Pass	$	707,216	$	84,016	$	198,607	$	353,823	$	20,521	$	1,364,183
Special Mention		30,073		22		221		11,430		130		41,876
Substandard		22,117		1,300		419		14,854		-		38,690
Doubtful		-		-		-		4,681		-		4,681
Total	$	759,406	$	85,338	$	199,247	$	384,788	$	20,651	$	1,449,430
At December 31, 2014
Grade:
Pass	$	690,791	$	76,322	$	194,670	$	331,594	$	21,849	$	1,315,226
Special Mention		34,287		22		420		7,144		106		41,979
Substandard		27,594		1,154		2,033		6,725		1		37,507
Doubtful		299		33		-		4,947		-		5,279
Total	$	752,971	$	77,531	$	197,123	$	350,410	$	21,956	$	1,399,991

By Balance In The Allowance For Loan Losses And The Recorded Investment In Loans Portfolio Classification Disaggregated On The Basis Of Impairment Evaluation Method

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At June 30, 2015
Balance at beginning of period	$	13,678	$	712	$	4,159	$	9,614	$	289	$	28,452
Loans charged-off		(116)		(20)		(21)		(343)		(56)		(556)
Recoveries		151		443		31		583		138		1,346
Provision for loan losses		(448)		(557)		(509)		(1,313)		(196)		(3,023)
Balance at end of period	$	13,265	$	578	$	3,660	$	8,541	$	175	$	26,219
Allowance for loan losses ending balance:
Individually evaluated for impairment	$	1,875	$	-	$	-	$	1,660	$	-	$	3,535
Collectively evaluated for impairment		11,390		578		3,660		6,881		175		22,684
Acquired with deteriorated credit quality		-		-		-		-		-		-
Total ending allowance balance	$	13,265	$	578	$	3,660	$	8,541	$	175	$	26,219
Loans receivable ending balance:
Individually evaluated for impairment	$	20,886	$	404	$	416	$	5,885	$	-	$	27,591
Collectively evaluated for impairment		735,587		83,438		198,738		378,881		20,651		1,417,295
Acquired with deteriorated credit quality		2,933		1,496		93		22		-		4,544
Total ending loans balance	$	759,406	$	85,338	$	199,247	$	384,788	$	20,651	$	1,449,430

	Commercial		1-4 Family		Real Estate
(Dollars in thousands)	Real Estate		Residential		Construction		Commercial		Other		Total
At June 30, 2014
Balance at beginning of period	$	18,854	$	850	$	5,523	$	10,985	$	451	$	36,663
Loans charged-off		(683)		(126)		(655)		(3,514)		(405)		(5,383)
Recoveries		2,343		146		-		595		60		3,144
Provision for loan losses		(3,538)		(238)		418		1,742		275		(1,341)
Balance at end of period	$	16,976	$	632	$	5,286	$	9,808	$	381	$	33,083
Allowance for loan losses ending balances:
Individually evaluated for impairment	$	3,598	$	-	$	-	$	2,625	$	-	$	6,223
Collectively evaluated for impairment		13,378		632		5,286		7,183		381		26,860
Acquired with deteriorated credit quality		-		-		-		-		-		-
Total ending allowance balance	$	16,976	$	632	$	5,286	$	9,808	$	381	$	33,083
Loans receivable ending balance:
Individually evaluated for impairment	$	42,588	$	387	$	82	$	8,873	$	119	$	52,049
Collectively evaluated for impairment		720,559		77,284		175,132		291,242		27,514		1,291,731
Acquired with deteriorated credit quality		5,874		1,871		126		48		1		7,920
Total ending loans balance	$	769,021	$	79,542	$	175,340	$	300,163	$	27,634	$	1,351,700

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Investment Securities (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Investment Securities [Abstract]
Total investments carried at cost	$ 7,900		$ 7,900		$ 7,900
Gain (Loss) on Sale of Securities, Net	138	$ 629	143	$ 764
Available for sale debt securities amortized cost pledged as collateral	$ 212,300		$ 212,300		$ 218,500

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator:
Net income	$ 4,161	$ 6,152	$ 8,696	$ 9,843
Earnings allocated to participating securities	(73)	(80)	(143)	(119)
Numerator for basic earnings per common share	4,088	6,072	8,553	9,724
Effect of reallocating undistributed earnings of participating securities	73	80	143	119
Numerator for diluted earnings per common share	$ 4,161	$ 6,152	$ 8,696	$ 9,843
Denominator:
Denominator for basic earnings per common share	18,666,853	19,520,967	18,714,088	19,524,859
Effect of dilutive securities:
Stock compensation	197,124	143,867	172,332	130,767
Denominator for diluted earnings per common share	18,863,977	19,664,834	18,886,420	19,655,626
Earnings per common share:
Basic	$ 0.22	$ 0.31	$ 0.46	$ 0.50
Diluted	$ 0.22	$ 0.31	$ 0.46	$ 0.50

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Loans And Allowance For Loan Losses (By Balance In The Allowance For Loan Losses And The Recorded Investment In Loans Portfolio Classification Disaggregated On The Basis Of Impairment Evaluation Method) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period			$ 28,452	$ 36,663
Loans charged-off			(556)	(5,383)
Recoveries			1,346	3,144
Provision (credit) for loan losses	$ (1,136)	$ (355)	(3,023)	(1,341)
Balance at end of period	26,219	33,083	26,219	33,083
Individually evaluated for impairment	3,535	6,223
Collectively evaluated for impairment	22,684	26,860
Acquired with deteriorated credit quality	26,219	33,083	28,452	36,663	$ 28,452
Individually evaluated for impairment	27,591	52,049
Collectively evaluated for impairment	1,417,295	1,291,731
Total ending loans balance	1,449,430	1,351,700			1,399,991
Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	4,544	7,920
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period			13,678	18,854
Loans charged-off			(116)	(683)
Recoveries			151	2,343
Provision (credit) for loan losses			(448)	(3,538)
Balance at end of period	13,265	16,976	13,265	16,976
Individually evaluated for impairment	1,875	3,598
Collectively evaluated for impairment	11,390	13,378
Acquired with deteriorated credit quality	13,265	16,976	13,678	18,854	13,678
Individually evaluated for impairment	20,886	42,588
Collectively evaluated for impairment	735,587	720,559
Total ending loans balance	759,406	769,021			752,971
Commercial Real Estate [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	2,933	5,874
One-To-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period			712	850
Loans charged-off			(20)	(126)
Recoveries			443	146
Provision (credit) for loan losses			(557)	(238)
Balance at end of period	578	632	578	632
Collectively evaluated for impairment	578	632
Acquired with deteriorated credit quality	578	632	712	850	712
Individually evaluated for impairment	404	387
Collectively evaluated for impairment	83,438	77,284
Total ending loans balance	85,338	79,542			77,531
One-To-Four Family Residential [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	1,496	1,871
Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period			4,159	5,523
Loans charged-off			(21)	(655)
Recoveries			31
Provision (credit) for loan losses			(509)	418
Balance at end of period	3,660	5,286	3,660	5,286
Collectively evaluated for impairment	3,660	5,286
Acquired with deteriorated credit quality	3,660	5,286	4,159	5,523	4,159
Individually evaluated for impairment	416	82
Collectively evaluated for impairment	198,738	175,132
Total ending loans balance	199,247	175,340			197,123
Real Estate Construction [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	93	126
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period			9,614	10,985
Loans charged-off			(343)	(3,514)
Recoveries			583	595
Provision (credit) for loan losses			(1,313)	1,742
Balance at end of period	8,541	9,808	8,541	9,808
Individually evaluated for impairment	1,660	2,625
Collectively evaluated for impairment	6,881	7,183
Acquired with deteriorated credit quality	8,541	9,808	9,614	10,985	9,614
Individually evaluated for impairment	5,885	8,873
Collectively evaluated for impairment	378,881	291,242
Total ending loans balance	384,788	300,163			350,410
Commercial [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	22	48
Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Balance at beginning of period			289	451
Loans charged-off			(56)	(405)
Recoveries			138	60
Provision (credit) for loan losses			(196)	275
Balance at end of period	175	381	175	381
Collectively evaluated for impairment	175	381
Acquired with deteriorated credit quality	175	381	$ 289	$ 451	289
Individually evaluated for impairment		119
Collectively evaluated for impairment	20,651	27,514
Total ending loans balance	$ 20,651	27,634			$ 21,956
Other [Member] | Receivables Acquired with Deteriorated Credit Quality [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance		$ 1

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Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Consolidated Statements Of Comprehensive Income [Abstract]
Net income	$ 4,161	$ 6,152	$ 8,696	$ 9,843
Other comprehensive income:
Unrealized holding gain (loss) on available for sale securities	(1,375)	2,761	474	5,290
Reclassification adjustment for net gains arising during the period	(138)	(629)	(143)	(764)
Change in fair value of derivative used for cash flow hedge	(10)	(32)	(84)	70
Other comprehensive income (loss), before tax	(1,523)	2,100	247	4,596
Tax benefit (expense) related to items of other comprehensive income	617	(812)	(85)	(1,778)
Other comprehensive income (loss), net of tax	(906)	1,288	162	2,818
Comprehensive income	$ 3,255	$ 7,440	$ 8,858	$ 12,661

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Investment Securities

6 Months Ended

Jun. 30, 2015

Investment Securities [Abstract]

Investment Securities

NOTE 2:  INVESTMENT SECURITIES

A summary of the amortized cost and fair values of investment securities at June 30, 2015 and December 31, 2014 follows:

	Amortized		Gross Unrealized				Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
At June 30, 2015
Held to Maturity:
Obligations of state and political subdivisions	$	11,364	$	460	$	(6)	$	11,818
Total	$	11,364	$	460	$	(6)	$	11,818
Available for Sale:
Federal agency securities	$	83,508	$	474	$	(269)	$	83,713
Obligations of state and political subdivisions		32,546		524		(123)		32,947
Residential mortgage-backed securities		202,438		1,350		(809)		202,979
Asset-backed securities		9,624		10		(21)		9,613
Other securities		32,493		258		(107)		32,644
Total	$	360,609	$	2,616	$	(1,329)	$	361,896
At December 31, 2014
Held to Maturity:
Obligations of state and political subdivisions	$	12,362	$	528	$	(10)	$	12,880
Total	$	12,362	$	528	$	(10)	$	12,880
Available for Sale:
Federal agency securities	$	99,959	$	359	$	(772)	$	99,546
Obligations of state and political subdivisions		32,760		519		(140)		33,139
Residential mortgage-backed securities		177,391		1,686		(850)		178,227
Asset-backed securities		9,608		-		(60)		9,548
Other securities		32,557		240		(26)		32,771
Total	$	352,275	$	2,804	$	(1,848)	$	353,231

Residential mortgage-backed securities consist of agency securities underwritten and guaranteed by Government National Mortgage Association, Federal Home Loan Mortgage Corporation, and Federal National Mortgage Association. Other securities consist of corporate stock.

Securities with limited marketability, such as Federal Reserve Bank stock, Federal Home Loan Bank (“FHLB”) stock, and certain other investments, are carried at cost and included in other assets on the consolidated statements of financial condition.  Total investments carried at cost were $7.9 million at June 30, 2015 and  December 31, 2014.  There are no identified events or changes in circumstances that may have a significant adverse effect on the investments carried at cost.  

A comparison of the amortized cost and approximate fair value of our investment securities by maturity date at June 30, 2015 follows:

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
One year or less	$	14,014	$	14,114	$	-	$	-
More than one year through five years		229,893		230,710		8,017		8,189
More than five years through ten years		75,395		75,457		3,347		3,629
More than ten years		41,307		41,615		-		-
Total	$	360,609	$	361,896	$	11,364	$	11,818

The foregoing analysis assumes that our residential mortgage-backed securities mature during the period in which they are estimated to prepay.  No other prepayment or repricing assumptions have been applied to our investment securities for this analysis. 

Gain or loss on sale of investments is based upon the specific identification method.  There was a  $0.1million gain on sales of securities for the six months ended June 30, 2015 which resulted from residual payments related to the sale of a private equity investment during the fourth quarter of 2014. There was a $0.8 million gain on sales of securities for the six months ended June 30, 2014, which was the result of the sale of a stock investment that was acquired in a prior year repossession.

The following table shows securities with gross unrealized losses and their fair values by the length of time that the individual securities had been in a continuous unrealized loss position at June 30, 2015 and December 31, 2014.  Securities whose market values exceed cost are excluded from this table.     

				Continuous Unrealized
		Amortized cost of		Loss Existing for:				Fair value of
	Number of	securities with		Less Than		More Than		securities with
(Dollars in thousands)	Securities	unrealized losses		12 Months		12 Months		unrealized losses
At June 30, 2015
Held to Maturity:
Obligations of state and political subdivisions	1	$	1,698	$	(6)	$	-	$	1,692
	1	$	1,698	$	(6)	$	-	$	1,692
Available for Sale:
Federal agency securities	7	$	32,900	$	(47)	$	(221)	$	32,632
Obligations of state and political subdivisions	7		9,102		(43)		(81)		8,978
Residential mortgage-backed securities	46		105,680		(326)		(483)		104,871
Asset-backed securities	2		5,671		(21)		-		5,650
Other securities	4		6,978		(37)		(70)		6,871
Total	66	$	160,331	$	(474)	$	(855)	$	159,002
At December 31, 2014
Held to Maturity:
Obligations of state and political subdivisions	1	$	1,718	$	(10)	$	-	$	1,708
	1	$	1,718	$	(10)	$	-	$	1,708
Available for Sale:
Federal agency securities	13	$	60,578	$	(37)	$	(735)	$	59,806
Obligations of state and political subdivisions	8		10,076		-		(140)		9,936
Residential mortgage-backed securities	40		65,223		(110)		(740)		64,373
Asset-backed securities	3		9,608		(19)		(41)		9,548
Other securities	2		9,571		(3)		(23)		9,545
Total	66	$	155,056	$	(169)	$	(1,679)	$	153,208

We evaluate all securities on an individual basis for other-than-temporary impairment on at least a quarterly basis.  Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for an anticipated recovery in fair value. 

We have the ability and intent to hold the securities classified as held to maturity until they mature, at which time we expect to receive full value for the securities.  Furthermore, as of June 30, 2015, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is not likely that we will have to sell any such securities before a recovery of cost.  The declines in fair value were attributable to recent increases in market interest rates over the yields available at the time the underlying securities were purchased or increases in spreads over market interest rates.  Management does not believe any of the securities are impaired due to credit quality.  Accordingly, as of June 30, 2015, management believes the impairment of these investments is not deemed to be other-than-temporary. 

As required by law, available for sale investment securities are pledged to secure public and trust deposits, sweep agreements, and borrowings from the FHLB.  Securities with an amortized cost of $212.3 million and $218.5 million were pledged to meet such requirements at June 30, 2015 and December 31, 2014, respectively.  Any amount over-pledged can be released at any time.

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Investment Securities (Summary Of Amortized Cost And Fair Values Of Investment Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Held to Maturity	$ 11,364	$ 12,362
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	460	528
Gross Unrealized Losses, Held to Maturity	(6)	(10)
Fair Value, Held to Maturity	11,818	12,880
Amortized Cost, Available for Sale	360,609	352,275
Gross Unrealized Gains, Available for Sale	2,616	2,804
Gross Unrealized Losses, Available for Sale	(1,329)	(1,848)
Available-for-sale Securities	361,896	353,231
Federal Agency Securities [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Available for Sale	83,508	99,959
Gross Unrealized Gains, Available for Sale	474	359
Gross Unrealized Losses, Available for Sale	(269)	(772)
Available-for-sale Securities	83,713	99,546
Obligations Of State And Political Subdivisions [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Held to Maturity	11,364	12,362
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	460	528
Gross Unrealized Losses, Held to Maturity	(6)	(10)
Fair Value, Held to Maturity	11,818	12,880
Amortized Cost, Available for Sale	32,546	32,760
Gross Unrealized Gains, Available for Sale	524	519
Gross Unrealized Losses, Available for Sale	(123)	(140)
Available-for-sale Securities	32,947	33,139
Residential Mortgage-Backed Securities [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Available for Sale	202,438	177,391
Gross Unrealized Gains, Available for Sale	1,350	1,686
Gross Unrealized Losses, Available for Sale	(809)	(850)
Available-for-sale Securities	202,979	178,227
Asset-Backed Securities [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Available for Sale	9,624	9,608
Gross Unrealized Gains, Available for Sale	10
Gross Unrealized Losses, Available for Sale	(21)	(60)
Available-for-sale Securities	9,613	9,548
Other Securities [Member]
Held To Maturity Securities And Available For Sale Securities [Line Items]
Amortized Cost, Available for Sale	32,493	32,557
Gross Unrealized Gains, Available for Sale	258	240
Gross Unrealized Losses, Available for Sale	(107)	(26)
Available-for-sale Securities	$ 32,644	$ 32,771

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Loans And Allowance For Loan Losses (Loans Modified As Troubled Debt Restructurings) (Details) - Jun. 30, 2014 $ in Thousands	USD ($) contract	USD ($) contract
Financing Receivable, Modifications [Line Items]
Number of Modifications | contract	2	5
Recorded Investment	$ 9,684	$ 9,913
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Modifications | contract		2
Recorded Investment		$ 9,684
Commercial [Member]
Financing Receivable, Modifications [Line Items]
Number of Modifications | contract	2	3
Recorded Investment	$ 9,684	$ 229

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2015

Investment Securities [Abstract]

Summary Of Amortized Cost And Fair Values Of Investment Securities

	Amortized		Gross Unrealized				Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
At June 30, 2015
Held to Maturity:
Obligations of state and political subdivisions	$	11,364	$	460	$	(6)	$	11,818
Total	$	11,364	$	460	$	(6)	$	11,818
Available for Sale:
Federal agency securities	$	83,508	$	474	$	(269)	$	83,713
Obligations of state and political subdivisions		32,546		524		(123)		32,947
Residential mortgage-backed securities		202,438		1,350		(809)		202,979
Asset-backed securities		9,624		10		(21)		9,613
Other securities		32,493		258		(107)		32,644
Total	$	360,609	$	2,616	$	(1,329)	$	361,896
At December 31, 2014
Held to Maturity:
Obligations of state and political subdivisions	$	12,362	$	528	$	(10)	$	12,880
Total	$	12,362	$	528	$	(10)	$	12,880
Available for Sale:
Federal agency securities	$	99,959	$	359	$	(772)	$	99,546
Obligations of state and political subdivisions		32,760		519		(140)		33,139
Residential mortgage-backed securities		177,391		1,686		(850)		178,227
Asset-backed securities		9,608		-		(60)		9,548
Other securities		32,557		240		(26)		32,771
Total	$	352,275	$	2,804	$	(1,848)	$	353,231

Amortized Cost And Approximate Fair Value Of Investment Securities By Maturity Date

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
One year or less	$	14,014	$	14,114	$	-	$	-
More than one year through five years		229,893		230,710		8,017		8,189
More than five years through ten years		75,395		75,457		3,347		3,629
More than ten years		41,307		41,615		-		-
Total	$	360,609	$	361,896	$	11,364	$	11,818

Summary Of Securities With Gross Unrealized Losses And Their Fair Values

				Continuous Unrealized
		Amortized cost of		Loss Existing for:				Fair value of
	Number of	securities with		Less Than		More Than		securities with
(Dollars in thousands)	Securities	unrealized losses		12 Months		12 Months		unrealized losses
At June 30, 2015
Held to Maturity:
Obligations of state and political subdivisions	1	$	1,698	$	(6)	$	-	$	1,692
	1	$	1,698	$	(6)	$	-	$	1,692
Available for Sale:
Federal agency securities	7	$	32,900	$	(47)	$	(221)	$	32,632
Obligations of state and political subdivisions	7		9,102		(43)		(81)		8,978
Residential mortgage-backed securities	46		105,680		(326)		(483)		104,871
Asset-backed securities	2		5,671		(21)		-		5,650
Other securities	4		6,978		(37)		(70)		6,871
Total	66	$	160,331	$	(474)	$	(855)	$	159,002
At December 31, 2014
Held to Maturity:
Obligations of state and political subdivisions	1	$	1,718	$	(10)	$	-	$	1,708
	1	$	1,718	$	(10)	$	-	$	1,708
Available for Sale:
Federal agency securities	13	$	60,578	$	(37)	$	(735)	$	59,806
Obligations of state and political subdivisions	8		10,076		-		(140)		9,936
Residential mortgage-backed securities	40		65,223		(110)		(740)		64,373
Asset-backed securities	3		9,608		(19)		(41)		9,548
Other securities	2		9,571		(3)		(23)		9,545
Total	66	$	155,056	$	(169)	$	(1,679)	$	153,208