EX-99 2 y29619exv99.htm EX-99: PRESS RELEASE EX-99
 

Exhibit 99
(SOUTHWEST BANCORP,INC LOGO)
         
    For additional information:
 
      Rick Green
 
      President & CEO
 
      Kerby E. Crowell
 
      EVP &CFO
For Immediate Release
      (405) 372-2230
Southwest Bancorp Preliminary Results: 4th Quarter Net Income Up 41%; Twelve Months Net Income Up 24%
     January 26, 2007, Stillwater, Oklahoma . . . . Southwest Bancorp, Inc. (Nasdaq National Market—OKSB), (“Southwest”), today reported preliminary net income for the fourth quarter of 2006 of $6.5 million, a 41% increase from the $4.6 million reported for the fourth quarter of 2005. Diluted earnings per share were $0.44 compared to $0.31 per share for the 2005 period, an increase of 42%. Net income for the twelve months of 2006 was $26.0 million, a 24% increase from the $21.0 million reported for the twelve months of 2005. Diluted earnings per share were $1.79 compared to $1.55 per share for the 2005 period, an increase of 15%. The results described in this release are preliminary due to the ongoing investigation of cash shortages relating to ATMs owned by a subsidiary of Stillwater National. See “Contingency” below. Southwest expects to issue final results prior to filing the Annual Report on Form 10-K.
     Rick Green, President and Chief Executive Officer, stated, “Our 2006 performance is a result of our long-range strategies for growth and market expansion. Portfolio loan growth from our Texas and Kansas operations drove our net income increase. The total $250 million (19%) growth in portfolio loans more than offset the decreases in student lending, and helped produce higher net interest margins and income for the quarter and twelve months. At December 31, 2006 our Texas and Kansas operations accounted for $690 million, (43%) of total portfolio loans.”
Highlights (Preliminary)
         
•
  Fourth quarter net income:   $6.5 million, a 41% increase from fourth quarter 2005
 
        
•
  Annual net income:   $26.0 million, a 24% increase from the twelve months of 2005
 
        
•
  Portfolio loans:   $1.6 billion, a 19% increase from year-end 2005
 
        
•
  Return on average equity:   13.06% for the fourth quarter 2006
 
        
 
      13.99% for the year 2006
 
        
•
  GAAP-based efficiency ratio:   55.28% for the fourth quarter 2006
 
        
 
      51.67% for the year 2006
(Please see Financial Tables 1 through 7 for additional financial information.)
Preliminary Results of Operations
     The $1.9 million, or 41% increase in quarterly net income was the result of a $2.3 million (11%) increase in net interest income, and a $1.8 million (41%) decrease in provision for loan losses and an $814,000 (18%) decrease in income taxes, offset in part by a $573,000 (12%) decrease in noninterest income and a $2.5 million (19%) increase in noninterest expense. The $2.3 million increase in net interest income for the quarter was primarily the result of increased loan yields and a $91.8 million increase in average loan volume offset in part by higher rates on interest bearing deposits. Although the provision for loan losses decreased, the allowance for loan losses increased to 1.52% of total loans at quarter end, up from 1.37% at December 31, 2005. The decrease in other income was mainly the

 

 

NASDAQ: OKSB
Southwest Bancorp Preliminary Results: 4th Quarter Net Income Up 41%; Twelve Months Net Income Up 24%
result of substantially lower gains on the sale of student and other loans. The quarterly efficiency ratio was a favorable 55% level.
     The $5.0 million, or 24% increase in net income for the twelve months was the result of a $7.7 million (9%) increase in net interest income and a $4.2 million (27%) decrease in the provision for loan losses, offset in part by a slight decrease in noninterest income, a $4.8 million (9%) increase in noninterest expense and a $1.6 million (11%) increase in income taxes.
Financial Condition
     At December 31, 2006, total assets were $2.2 billion, a $71.0 million, or 3% increase from year-end 2005. Shareholders’ equity at December 31, 2006 totaled $197.5 million, a $27.1 million, or 16%, increase from December 31, 2005. Core deposits grew by $68.1 million, or 6%, for the year. Consistent with our earlier disclosures, student lending balances have decreased from year-end 2005 and are expected to continue to decrease.
     Portfolio loans increased by $250.3 million, or 19% during the twelve months of 2006. Portfolio loans exclude loans held for sale. Southwest’s growth in portfolio loans more than offset the expected reduction in loans held for sale, almost all of which are student loans.
     Southwest’s Texas and Kansas offices were responsible for $171.2 million (68%) of the annual growth in total portfolio loans. At December 31, 2006, Southwest’s seven Texas and two Kansas offices accounted for $689.9 million in loans, or 43% of total portfolio loans, up from 38% at year-end 2005. Southwest expects to open additional offices in Texas and Kansas in the months ahead.
     At December 31, 2006, the allowance for loan losses was $27.3 million, an increase of $3.5 million, or 15%, from the allowance for loan losses at year-end 2005. This change is due to increased allowances on impaired loans and growth in performing commercial and commercial real estate loans, offset in part by reductions in the allowance related to potential problem loans. At December 31, 2006, the allowance for loan losses was 1.52% of total loans, compared to 1.37% at year-end 2005. The unallocated allowance at December 31, 2006 was $2.4 million, or 9% of the total allowance. Management believes the amount of the allowance is appropriate, given its systematic methodology for calculating the allowance. Changes in the amount of the allowance resulted from the application of that methodology, which is designed to estimate inherent losses on total loans in the portfolio, including those on nonperforming loans.
     At December 31, 2006, the reserve for unfunded loan commitments was $1.9 million, an increase of $38,000, or 2%, from year-end 2005 due to an increase in commitments, partially offset by a substantial decrease in the reserve on commitments related to potential problem loans.
     Other real estate at December 31, 2006, was $1.9 million, a reduction of $5.3 million, or 74% decrease from year-end 2005. Total nonperforming assets at December 31, 2006, were $31.2 million, an increase of $515,000, or 2% from year-end 2005.
     Nonaccrual loans totaled $26.7 million at December 31, 2006, compared to $22.1 million at December 31, 2005. Total nonperforming loans of $29.4 million increased $5.8 million, or 24% from year-end 2005, and represented 1.64% of total loans, compared to 1.36% of total loans at year-end 2005. The increase in nonperforming loans is due primarily to two relationships. At December 31, 2006, $1.6 million, or 6%, of loans classified as nonperforming were guaranteed by United States agencies or U.S. government sponsored entities.
     Performing loans considered potential problem loans, loans which are not included in the past due, nonaccrual, or restructured categories, but for which known information about possible credit problems cause management to be uncertain as to the ability of the borrowers to comply with the present loan repayment terms, amounted to approximately $50.6 million at December 31, 2006, compared to $62.2 million at December 31, 2005, a 19% decrease. This decrease was primarily the result of one credit for which full payment was received this quarter.
Contingency
     Cash Source Inc. (“CSI”), a subsidiary of Stillwater National Bank and Trust Company (“Stillwater National”), owns ATMs in third party locations, such as convenience stores. Stillwater National provides the cash for those ATMs. The assets and operations of CSI are not material to Stillwater National or Southwest. In December 2006, an armored transportation company failed to deliver to Stillwater National approximately $1.3 million in cash then

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NASDAQ: OKSB
Southwest Bancorp Preliminary Results: 4th Quarter Net Income Up 41%; Twelve Months Net Income Up 24%
due to it from certain CSI ATMs. Since that time, CSI has discovered other cash shortages or discrepancies arising from the same company. Stillwater National is in the process of removing all cash from the other CSI ATMs for which that company provided cash transportation. The total amount of Stillwater National cash that is reported as still in the custody of that armored transportation company does not exceed $2.6 million. This amount is recorded as a receivable and included in other assets on the accompanying Unaudited Consolidated Statements of Financial Condition.
     Stillwater National and CSI have filed legal action for the recovery of their funds, have notified law enforcement and bank regulatory authorities and their insurers, and are in the process of determining the amount and nature of insurance coverage, which may depend upon the reasons for the nonpayment. Southwest cannot yet reasonably estimate the amount of any ultimate loss, if any, that may result from this matter. Therefore, no accrual for potential loss has been reflected in the financial statements included in this release.
     Southwest will promptly report material developments relating to the amount of any loss as required by securities laws and rules of the NASDAQ Stock Market.
Southwest Bancorp and Subsidiaries
     Southwest Bancorp is the financial holding company for Stillwater National, SNB Bank of Wichita (“SNB Wichita”), Healthcare Strategic Support, Inc., and Business Consulting Group, Inc. Through its subsidiaries, Southwest offers commercial and consumer lending, deposit, and investment services, and specialized cash management, consulting, and other financial services from offices in Oklahoma City, Stillwater, Tulsa, and Chickasha, Oklahoma; Austin, Dallas, Houston and San Antonio, Texas; and Kansas City and Wichita, Kansas, and on the Internet, through SNB DirectBanker®.
     Southwest focuses on converting its strategic vision into long-term shareholder value. This vision includes long-term goals for increasing earnings and banking assets from operations in Oklahoma, Texas, and Kansas that specialize in serving medical, professional, business, and commercial real estate customers and from more traditional banking operations, including community banking and student lending. Southwest’s strategic growth goals include growth from existing and additional offices in carefully selected markets in Texas and other states with concentrations of healthcare and health professionals, businesses, and their managers and owners, and commercial and commercial real estate borrowers, and careful expansion of community banking operations.
     Southwest was organized in 1981 as the holding company for Stillwater National, which was chartered in 1894. At December 31, 2006, Southwest had total assets of $2.2 billion, deposits of $1.8 billion, and shareholders’ equity of $197.5 million. Southwest became a public company in late 1993 with assets of approximately $434.0 million. Southwest’s growth to date has been accomplished without significant banking acquisitions.
     Southwest’s banking philosophy is to provide a high level of customer service, a wide range of financial services, and products responsive to customer needs with a focus on serving healthcare and health professionals, businesses and their managers and owners, and commercial and commercial real estate borrowers. This philosophy has led to the development of a line of deposit, lending, and other financial products that respond to professional and commercial customer needs for speed, efficiency, and information, and which complement more traditional banking products. Southwest seeks to build close relationships with businesses, professionals and their principals, and to service their evolving banking needs throughout their business development and professional lives.
     Southwest has developed a highly automated lockbox, imaging, and information service for commercial customers called “SNB Digital Lockbox” and deposit products that automatically sweep excess funds from commercial demand deposit accounts and invest them in interest bearing funds. Other specialized financial services include integrated document imaging and cash management services designed to help our customers in the healthcare industry and other record-intensive enterprises operate more efficiently.
     Southwest’s two management consulting subsidiaries complement its banking services and help differentiate Southwest from competitors. Healthcare Strategic Support, Inc. provides management consulting services for physicians, hospitals, and healthcare groups. Business Consulting Group, Inc. provides marketing, strategic, logistics, and operations consulting for both small and large commercial enterprises.
     Southwest’s common stock is traded on the NASDAQ National Market under the symbol OKSB.

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NASDAQ: OKSB
Southwest Bancorp Preliminary Results: 4th Quarter Net Income Up 41%; Twelve Months Net Income Up 24%
Forward-Looking Statements
     This Press Release includes forward-looking statements, such as: statements of Southwest’s goals, intentions, and expectations; estimates of risks and of future costs and benefits; assessments of the amount and timing of problem loan payoffs and loan losses; off-balance sheet risk and market risk; and statements of Southwest’s ability to achieve financial and other goals. These forward-looking statements are subject to significant uncertainties because they are based upon: future interest rates, market behavior, and other economic conditions; future laws and regulations; and a variety of other matters. Because of these uncertainties, the actual future results may be materially different from the results indicated by these forward-looking statements. In addition, Southwest’s past growth and performance do not necessarily indicate its future results.

4

 

NASDAQ: OKSB
Southwest Bancorp Preliminary Results: 4th Quarter Net Income Up 41%; Twelve Months Net Income Up 24%
Financial Tables
     
Financial Highlights
  Table 1
 
    
Consolidated Statements of Financial Condition
  Table 2
 
    
Consolidated Statements of Operations
  Table 3
 
    
Average Balances, Yields, and Rates-Quarterly
  Table 4
 
    
Average Balances, Yields, and Rates-Year-to-date
  Table 5
 
    
Summary Financial Data by Quarter-2006 and 2005
  Table 6
 
    
Supplemental Analytical Data by Quarter-2006 and 2005
  Table 7

5

 

         
SOUTHWEST BANCORP, INC.       Table 1
UNAUDITED FINANCIAL HIGHLIGHTS        
(Dollars in thousands except per share)        
                                         
    Fourth Quarter   Third Quarter
                    %    
QUARTERLY HIGHLIGHTS   2006   2005   Change   2006   Change
Operations
                                        
Net interest income
   $ 24,039     $ 21,729       11 %   $ 23,696       1 %
Provision for loan losses
     2,567       4,348       (41 )     3,006       (15 )
Other income
     4,344       4,917       (12 )     3,959       10  
Other expense
     15,691       13,220       19       13,910       13  
Income before taxes
     10,125       9,078       12       10,739       (6 )
Taxes on income
     3,672       4,486       (18 )     4,100       (10 )
Net income
     6,453       4,592       41       6,639       (3 )
Diluted earnings per share
     0.44       0.31       42       0.46       (4 )
Balance Sheet
                                        
Total assets
     2,170,628       2,099,639       3       2,157,738       1  
Loans held for sale
     188,464       383,447       (51 )     257,689       (27 )
Portfolio loans
     1,602,726       1,352,433       19       1,541,738       4  
Total deposits
     1,765,611       1,657,820       7       1,740,564       1  
Total shareholders’ equity
     197,510       170,444       16       191,231       3  
Book value per share
     13.87       12.16       14       13.44       3  
Key Ratios
                                        
Net interest margin
     4.47 %     4.22 %             4.47 %        
Efficiency ratio (GAAP-based)
     55.28       49.61               50.30          
Allowance to total loans
     1.52       1.37               1.56          
Nonperforming loans to total loans
     1.64       1.36               1.72          
Shareholders’ equity to total assets
     9.10       8.12               8.86          
Return on average assets
     1.15       0.85               1.20          
Return on average equity
     13.06       10.64               13.94          
                         
    Twelve Months
                    %
YEAR-TO-DATE HIGHLIGHTS   2006   2005   Change
Operations
                        
Net interest income
   $ 92,838     $ 85,106       9 %
Provision for loan losses
     11,565       15,785       (27 )
Other income
     16,776       17,406       (4 )
Other expense
     56,643       51,873       9  
Income before taxes
     41,406       34,854       19  
Taxes on income
     15,409       13,840       11  
Net income
     25,997       21,014       24  
Diluted earnings per share
     1.79       1.55       15  
Balance Sheet
                        
Total assets
     2,170,628       2,099,639       3  
Loans held for sale
     188,464       383,447       (51 )
Portfolio loans
     1,602,726       1,352,433       19  
Total deposits
     1,765,611       1,657,820       7  
Total shareholders’ equity
     197,510       170,444       16  
Book value per share
     13.87       12.16       14  
Key Ratios
                        
Net interest margin
     4.41 %     4.29 %        
Efficiency ratio (GAAP-based)
     51.67       50.60          
Allowance to total loans
     1.52       1.37          
Nonperforming loans to total loans
     1.64       1.36          
Shareholders’ equity to total assets
     9.10       8.12          
Return on average assets
     1.18       1.01          
Return on average equity
     13.99       13.78          
 
Balance sheet amounts are as of period end unless otherwise noted.
Please see accompanying tables for additional financial information.

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SOUTHWEST BANCORP, INC.   Table 2
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION    
(Dollars in thousands, except per share)    
                 
    December 31,     December 31,  
    2006     2005  
Assets
                
Cash and due from banks
   $ 46,618     $ 50,277  
Federal funds sold
     11,000       —  
 
            
Cash and cash equivalents
     57,618       50,277  
Investment securities:
                
Held to maturity. Fair value: $1,621, $1,530
     1,630       1,538  
Available for sale. Amortized cost: $258,742, $262,180
     255,904       256,751  
Federal Reserve and FHLB Stock, at cost
     12,315       9,804  
Loans held for sale
     188,464       383,447  
 
                
Loans receivable
     1,602,726       1,352,433  
Less: Allowance for loan losses
     (27,293 )     (23,812 )
 
            
Net loans receivable
     1,575,433       1,328,621  
Accrued interest receivable
     24,269       14,382  
Premises and equipment, net
     21,818       20,584  
Other real estate owned
     1,873       7,130  
Goodwill
     1,213       194  
Other intangible assets, net
     3,069       1,407  
Other assets
     27,022       25,504  
 
            
Total assets
   $ 2,170,628     $ 2,099,639  
 
            
 
                
Liabilities and shareholders’ equity
                
Deposits:
                
Noninterest-bearing demand
   $ 254,415     $ 224,555  
Interest-bearing demand
     55,396       49,235  
Money market accounts
     371,912       402,709  
Savings accounts
     11,273       8,765  
Time deposits of $100,000 or more
     648,664       608,989  
Other time deposits
     423,951       363,567  
 
            
Total deposits
     1,765,611       1,657,820  
Accrued interest payable
     13,260       8,953  
Income tax payable
     1,136       288  
Other liabilities
     8,624       11,233  
Other borrowings
     138,094       204,508  
Subordinated debentures
     46,393       46,393  
 
            
Total liabilities
     1,973,118       1,929,195  
 
                
Shareholders’ equity
                
Common stock — $1 par value; 20,000,000 shares authorized; 14,658,042 shares issued
     14,658       14,658  
Paid in capital
     45,901       45,672  
Retained earnings
     146,197       124,882  
Accumulated other comprehensive loss
     (1,738 )     (3,325 )
Treasury stock, at cost, 417,535 636,125 shares
     (7,508 )     (11,443 )
 
            
Total shareholders’ equity
     197,510       170,444  
 
            
Total liabilities and shareholders’ equity
   $ 2,170,628     $ 2,099,639  
 
            

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SOUTHWEST BANCORP, INC.   Table 3
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS    
(Dollars in thousands except per share)    
                                 
    For the three months     For the twelve months  
    ended December 31,     ended December 31,  
    2006     2005     2006     2005  
Interest income
                                
Loans
   $ 42,034     $ 34,554     $ 158,873     $ 128,011  
Investment securities
     2,661       2,598       10,722       9,211  
Other interest-earning assets
     28       53       165       122  
 
                        
Total interest income
     44,723       37,205       169,760       137,344  
 
                                
Interest expense
                                
Interest-bearing deposits
     17,117       12,327       63,102       40,782  
Other borrowings
     2,578       2,317       10,023       7,343  
Subordinated debentures
     989       832       3,797       4,113  
 
                        
Total interest expense
     20,684       15,476       76,922       52,238  
 
                        
 
                                
Net interest income
     24,039       21,729       92,838       85,106  
 
                                
Provision for loan losses
     2,567       4,348       11,565       15,785  
 
                                
Other income
                                
Service charges and fees
     2,837       2,788       11,492       10,945  
Gain on sales of loans
     877       1,813       3,438       4,915  
Gain (loss) on investment securities
     525       —       251       —  
Other noninterest income
     105       316       1,595       1,546  
 
                        
Total other income
     4,344       4,917       16,776       17,406  
 
                                
Other expense
                                
Salaries and employee benefits
     8,392       6,561       30,897       25,285  
Occupancy
     2,673       2,522       10,190       9,910  
FDIC and other insurance
     132       126       511       486  
Other real estate, net
     30       201       286       971  
General and administrative
     4,464       3,810       14,759       15,221  
 
                        
Total other expenses
     15,691       13,220       56,643       51,873  
 
                        
Income before taxes
     10,125       9,078       41,406       34,854  
Taxes on income
     3,672       4,486       15,409       13,840  
 
                        
Net income
   $ 6,453     $ 4,592     $ 25,997     $ 21,014  
 
                        
 
                                
Basic earnings per common share
   $ 0.45     $ 0.33     $ 1.84     $ 1.60  
Diluted earnings per common share
     0.44       0.31       1.79       1.55  
Cash dividends declared per share
     0.0825       0.0750       0.3300       0.3000  

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SOUTHWEST BANCORP, INC.   Table 4
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES    
(Dollars in thousands)    
                                                 
    For the three months ended December 31,  
    2006     2005  
    Average             Average     Average             Average  
    Balance     Interest     Yield/Rate     Balance     Interest     Yield/Rate  
Assets
                                                
Loans
   $ 1,861,357     $ 42,034       8.96 %   $ 1,769,527     $ 34,554       7.75 %
Investment securities
     269,819       2,661       3.91       267,468       2,598       3.85  
Other interest-earning assets
     2,089       28       5.32       5,492       53       3.83  
 
                                        
Total interest-earning assets
     2,133,265       44,723       8.32       2,042,487       37,205       7.23  
 
                                        
Other assets
     84,126                       93,588                  
 
                                            
Total assets
   $ 2,217,391                     $ 2,136,075                  
 
                                            
 
                                                
Liabilities and Shareholders’ Equity
                                                
Interest-bearing demand deposits
   $ 55,633     $ 62       0.44 %   $ 49,069     $ 45       0.36 %
Money market accounts
     363,370       3,979       4.34       416,049       3,526       3.36  
Savings accounts
     10,855       20       0.73       8,945       5       0.22  
Time deposits
     1,069,062       13,056       4.85       975,012       8,751       3.56  
 
                                        
Total interest-bearing deposits
     1,498,920       17,117       4.53       1,449,075       12,327       3.37  
Other borrowings
     208,299       2,578       4.91       231,631       2,317       3.97  
Subordinated debentures
     46,393       989       8.53       46,393       832       7.02  
 
                                        
Total interest-bearing liabilities
     1,753,612       20,684       4.68       1,727,099       15,476       3.56  
 
                                        
 
                                                
Noninterest-bearing demand deposits
     245,254                       219,218                  
Other liabilities
     22,519                       18,509                  
Shareholders’ equity
     196,006                       171,249                  
 
                                            
Total liabilities and shareholders’ equity
   $ 2,217,391                     $ 2,136,075                  
 
                                            
 
                                                
Net interest income and spread
           $ 24,039       3.64 %           $ 21,729       3.67 %
 
                                        
Net interest margin (1)
                     4.47 %                     4.22 %
 
                                            
Average interest-earning assets to average interest-bearing liabilities
     121.65 %                     118.26 %                
 
                                            
 
(1)   Net interest margin = annualized net interest income / average interest-earning assets

9

 

     
SOUTHWEST BANCORP, INC.   Table 5
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES    
(Dollars in thousands)    
                                                 
    For the twelve months ended December 31,  
    2006     2005  
    Average             Average     Average             Average  
    Balance     Interest     Yield/Rate     Balance     Interest     Yield/Rate  
Assets
                                                
Loans
   $ 1,830,996     $ 158,873       8.68 %   $ 1,734,501     $ 128,011       7.38 %
Investment securities
     270,352       10,722       3.97       245,086       9,211       3.76  
Other interest-earning assets
     3,342       165       4.94       3,750       122       3.25  
 
                                        
Total interest-earning assets
     2,104,690       169,760       8.07       1,983,337       137,344       6.92  
 
                                        
Other assets
     90,405                       92,444                  
 
                                            
Total assets
   $ 2,195,095                     $ 2,075,781                  
 
                                            
 
                                                
Liabilities and Shareholders’ Equity
                                                
Interest-bearing demand deposits
   $ 56,984     $ 282       0.49 %   $ 58,243     $ 267       0.46 %
Money market accounts
     384,470       16,020       4.17       392,554       10,727       2.73  
Savings accounts
     9,734       50       0.51       8,631       21       0.24  
Time deposits
     1,046,945       46,750       4.47       973,585       29,767       3.06  
 
                                        
Total interest-bearing deposits
     1,498,133       63,102       4.21       1,433,013       40,782       2.85  
Other borrowings
     214,677       10,023       4.67       209,103       7,343       3.51  
Subordinated debentures
     46,393       3,797       8.18       58,686       4,113       7.01  
 
                                        
Total interest-bearing liabilities
     1,759,203       76,922       4.37       1,700,802       52,238       3.07  
 
                                        
 
                                                
Noninterest-bearing demand deposits
     229,680                       205,498                  
Other liabilities
     20,395                       17,027                  
Shareholders’ equity
     185,817                       152,454                  
 
                                            
Total liabilities and shareholders’ equity
   $ 2,195,095                     $ 2,075,781                  
 
                                            
 
                                                
Net interest income and spread
           $ 92,838       3.70 %           $ 85,106       3.85 %
 
                                        
Net interest margin (1)
                     4.41 %                     4.29 %
 
                                            
Average interest-earning assets to average interest-bearing liabilities
     119.64 %                     116.61 %                
 
                                            
 
(1)   Net interest margin = annualized net interest income / average interest-earning assets

10

 

     
SOUTHWEST BANCORP, INC.   Table 6
UNAUDITED SUMMARY FINANCIAL DATA    
(Dollars in thousands except per share)    
                                                                 
    As of and for the three months ending  
    2006     2005  
    Dec. 31     Sep. 30     Jun. 30     Mar. 31     Dec. 31     Sep. 30     Jun. 30     Mar. 31  
OPERATIONS
                                                                
Interest income:
                                                                
Loans
   $ 42,034     $ 41,074     $ 39,047     $ 36,718     $ 34,554     $ 32,429     $ 31,105     $ 29,923  
Investment securities
     2,661       2,686       2,705       2,670       2,598       2,488       2,122       2,003  
Other interest-earning assets
     28       57       60       20       53       31       18       20  
 
                                                
Total interest income
     44,723       43,817       41,812       39,408       37,205       34,948       33,245       31,946  
Interest expense:
                                                                
Interest bearing demand deposits
     62       79       78       63       45       57       89       76  
Money market accounts
     3,979       4,066       4,227       3,748       3,526       2,914       2,383       1,904  
Savings accounts
     20       19       6       5       5       6       5       5  
Time deposits of $100,000 or more
     8,121       8,106       7,478       6,182       5,673       5,235       4,937       4,132  
Other time deposits
     4,935       4,578       3,943       3,407       3,078       2,638       2,250       1,824  
 
                                                
Total interest-bearing deposits
     17,117       16,848       15,732       13,405       12,327       10,850       9,664       7,941  
Other borrowings
     2,578       2,281       2,275       2,889       2,317       1,904       1,454       1,668  
Subordinated debentures
     989       992       944       872       832       801       1,235       1,245  
 
                                                
Total interest expense
     20,684       20,121       18,951       17,166       15,476       13,555       12,353       10,854  
 
                                                
Net interest income
     24,039       23,696       22,861       22,242       21,729       21,393       20,892       21,092  
Provision for loan losses
     2,567       3,006       3,316       2,676       4,348       4,142       2,986       4,309  
Other income:
                                                                
Service charges and fees
     2,837       2,872       3,009       2,774       2,788       2,894       2,768       2,495  
Gain on sales of loans
     877       616       1,040       905       1,813       1,333       916       853  
Gain (loss) on investment securities
     525       60       (71 )     (263 )     —       —       —       —  
Other noninterest income
     105       411       527       552       316       364       494       372  
 
                                                
Total other income
     4,344       3,959       4,505       3,968       4,917       4,591       4,178       3,720  
Other expense:
                                                                
Salaries and employee benefits
     8,392       7,477       7,788       7,240       6,561       6,173       6,339       6,212  
Occupancy
     2,673       2,520       2,430       2,567       2,522       2,704       2,338       2,346  
FDIC and other insurance
     132       128       124       127       126       124       119       117  
Other real estate, net
     30       122       26       108       201       230       376       164  
General and administrative
     4,464       3,663       3,484       3,148       3,810       3,494       4,612       3,305  
 
                                                
Total other expenses
     15,691       13,910       13,852       13,190       13,220       12,725       13,784       12,144  
 
                                                
Income before taxes
     10,125       10,739       10,198       10,344       9,078       9,117       8,300       8,359  
Taxes on income
     3,672       4,100       3,572       4,065       4,486       3,310       3,071       2,973  
 
                                                
Net income
   $ 6,453     $ 6,639     $ 6,626     $ 6,279     $ 4,592     $ 5,807     $ 5,229     $ 5,386  
 
                                                
PER SHARE DATA
                                                                
Basic earnings per common share
   $ 0.45     $ 0.47     $ 0.46     $ 0.45     $ 0.33     $ 0.41     $ 0.42     $ 0.44  
Diluted earnings per common share
     0.44       0.46       0.45       0.44       0.31       0.41       0.40       0.43  
Cash dividends declared per share
     0.0825       0.0825       0.0825       0.0825       0.0750       0.0750       0.0750       0.0750  
Book value per share
     13.87       13.44       12.89       12.52       12.16       11.92       11.68       10.64  
Tangible book value per share
     13.78       13.37       12.88       12.51       12.14       11.91       11.67       10.62  
Weighted average shares outstanding:
                                                                
Basic earnings per common share
     14,230,015       14,206,947       14,151,442       14,075,998       14,001,209       13,944,877       12,533,323       12,154,300  
Diluted
     14,562,343       14,533,573       14,470,954       14,406,911       14,387,171       14,359,808       12,893,800       12,579,941  
OTHER FINANCIAL DATA
                                                                
Investment securities
   $ 269,849     $ 269,818     $ 269,736     $ 271,858     $ 268,093     $ 268,212     $ 258,749     $ 215,494  
Loans held for sale
     188,464       257,689       318,477       383,164       383,447       381,597       391,074       400,179  
Portfolio loans
     1,602,726       1,541,738       1,457,705       1,391,817       1,352,433       1,319,222       1,306,206       1,273,599  
Total loans
     1,791,190       1,799,427       1,776,182       1,774,981       1,735,880       1,700,819       1,697,280       1,673,778  
Total assets
     2,170,628       2,157,738       2,188,102       2,145,839       2,099,639       2,107,254       2,039,646       1,994,569  
Total deposits
     1,765,611       1,740,564       1,764,774       1,699,212       1,657,820       1,684,905       1,666,478       1,628,934  
Other borrowings
     138,094       157,740       170,904       203,616       204,508       190,571       145,932       147,908  
Subordinated debentures
     46,393       46,393       46,393       46,393       46,393       46,393       46,393       72,180  
Total shareholders’ equity
     197,510       191,231       182,700       176,945       170,444       166,467       162,888       129,734  
Mortgage servicing portfolio
     135,904       131,688       134,414       132,825       133,470       133,035       130,699       126,202  

11

 

     
SOUTHWEST BANCORP, INC.
  Table 6
UNAUDITED SUMMARY FINANCIAL DATA
  Continued
(Dollars in thousands except per share)
    
                                                                 
    As of and for the three months ending  
    2006     2005  
 
   Dec. 31   Sep. 30   Jun. 30   Mar. 31   Dec. 31   Sep. 30   Jun. 30   Mar. 31
 
                                                
PERFORMANCE RATIOS
                                                                
Return on average assets
     1.15 %     1.20 %     1.21 %     1.17 %     0.85 %     1.10 %     1.02 %     1.08 %
Return on average equity
     13.06       13.94       14.59       14.48       10.64       13.81       14.92       16.73  
Net interest margin
     4.47       4.47       4.36       4.34       4.22       4.24       4.28       4.42  
Dividends declared to net income
     18.20       17.68       17.63       18.54       22.90       18.04       19.54       16.97  
Effective tax rate
     36.27       38.18       35.03       39.30       49.42       36.31       37.00       35.57  
Efficiency ratio
     55.28       50.30       50.62       50.32       49.61       48.97       54.98       48.94  
ASSET QUALITY RATIOS
                                                                
Nonperforming assets to total loans and other real estate owned
     1.74 %     1.83 %     1.61 %     1.82 %     1.76 %     2.20 %     1.24 %     1.53 %
Nonperforming loans to total loans
     1.64       1.72       1.49       1.43       1.36       1.64       0.67       0.83  
Net loan charge-offs to average total loans
     0.71       0.28       0.38       0.39       0.55       0.70       0.42       0.86  
Allowance for loan losses to total loans
     1.52       1.56       1.48       1.39       1.37       1.29       1.23       1.17  
Allowance for loan losses to nonperforming loans
     92.97       90.52       99.67       97.80       100.96       78.42       183.10       141.91  
CAPITAL RATIOS
                                                                
Average total shareholders’ equity to average assets
     8.84 %     8.62 %     8.31 %     8.08 %     8.02 %     7.97 %     6.85 %     6.47 %
Leverage ratio
     10.91       10.84       10.58       10.37       10.24       10.24       10.20       8.75  
Tier 1 capital to risk-weighted assets
     12.25       12.53       12.54       12.62       12.95       12.80       12.67       11.03  
Total capital to risk-weighted assets
     13.50       13.80       13.80       13.87       14.21       14.06       13.92       13.89  
SEGMENT LOANS
                                                                
Oklahoma banking
   $ 912,862     $ 889,453     $ 844,047     $ 846,045     $ 836,850     $ 855,858     $ 889,322     $ 877,435  
Texas and Kansas banking
     689,864       652,285       613,658       545,825       518,708       463,837       425,767       399,343  
 
                                                
Subtotal
     1,602,726       1,541,738       1,457,705       1,391,870       1,355,558       1,319,695       1,315,089       1,276,778  
Secondary market
     188,464       257,689       318,477       383,164       380,346       380,970       382,191       396,820  
Other operations
     —       —       —       (53 )     (24 )     154       —       180  
 
                                                
Total loans
   $ 1,791,190     $ 1,799,427     $ 1,776,182     $ 1,774,981     $ 1,735,880     $ 1,700,819     $ 1,697,280     $ 1,673,778  
 
                                                
SEGMENT NET INCOME
                                                                
Oklahoma banking
   $ 3,285     $ 3,086     $ 2,706     $ 2,865     $ 2,339     $ 2,365     $ 2,511     $ 1,604  
Texas and Kansas banking
     845       987       1,146       1,387       537       716       610       530  
 
                                                
Subtotal
     4,130       4,073       3,852       4,252       2,876       3,081       3,121       2,134  
Secondary market
     1,246       1,304       1,673       1,630       1,377       2,063       2,572       3,416  
Other operations
     1,077       1,262       1,101       397       339       663       (464 )     (164 )
 
                                                
Total net income
   $ 6,453     $ 6,639     $ 6,626     $ 6,279     $ 4,592     $ 5,807     $ 5,229     $ 5,386  
 
                                                
OFFICES AND EMPLOYEES
                                                                
FTE Employees
     429       430       409       390       381       371       365       367  
ATM’s
     125       302       296       297       291       292       291       292  
Branches
     15       15       13       13       13       13       13       13  
Loan production offices
     3       3       3       2       3       3       3       3  
Assets per employee
   $ 5,060     $ 5,018     $ 5,350     $ 5,502     $ 5,511     $ 5,680     $ 5,588     $ 5,435  
 
Balance sheet amounts are as of period end unless otherwise noted.

12

 

     
SOUTHWEST BANCORP, INC.
  Table 7
UNAUDITED SUPPLEMENTAL ANALYTICAL DATA
    
(Dollars in thousands except per share)
    
                                                                 
    As of and for the three months ending  
    2006     2005  
    Dec. 31     Sep. 30     Jun. 30     Mar. 31     Dec. 31     Sep. 30     Jun. 30     Mar. 31  
LOAN COMPOSITION
                                                                
Real estate mortgage:
                                                                
Commercial
   $ 609,271     $ 615,495     $ 579,966     $ 573,842     $ 563,074     $ 543,937     $ 525,638     $ 527,137  
One-to-four family residential
     91,441       94,966       97,513       91,007       93,478       93,860       96,211       91,738  
Real estate construction
     453,750       383,751       366,247       302,698       299,344       277,722       274,822       244,491  
Commercial
     424,189       421,173       389,525       401,820       374,101       381,584       392,892       394,772  
Installment and consumer:
                                                                
Guaranteed student loans
     181,458       252,664       312,888       378,372       377,110       375,178       383,585       390,492  
Other
     31,081       31,378       30,043       27,242       28,773       28,538       24,132       25,148  
 
                                                
Total loans, including held for sale
     1,791,190       1,799,427       1,776,182       1,774,981       1,735,880       1,700,819       1,697,280       1,673,778  
Less allowance for loan losses
     (27,293 )     (28,064 )     (26,341 )     (24,760 )     (23,812 )     (21,920 )     (20,841 )     (19,660 )
 
                                                
Total loans, net
   $ 1,763,897     $ 1,771,363     $ 1,749,841     $ 1,750,221     $ 1,712,068     $ 1,678,899     $ 1,676,439     $ 1,654,118  
 
                                                
By statement of condition category:
                                                                
Loans held for sale:
                                                                
Student loans
   $ 181,458     $ 252,664     $ 312,888     $ 378,372     $ 377,110     $ 375,178     $ 383,585     $ 390,492  
One-to-four family residential
     4,654       2,506       2,583       1,718       3,236       3,521       4,784       3,782  
Other
     2,352       2,519       3,006       3,074       3,101       2,898       2,705       5,905  
 
                                                
Total loans held for sale
     188,464       257,689       318,477       383,164       383,447       381,597       391,074       400,179  
Portfolio loans
     1,602,726       1,541,738       1,457,705       1,391,817       1,352,433       1,319,222       1,306,206       1,273,599  
 
                                                
Total loans before allowance
   $ 1,791,190     $ 1,799,427     $ 1,776,182     $ 1,774,981     $ 1,735,880     $ 1,700,819     $ 1,697,280     $ 1,673,778  
 
                                                
DEPOSIT COMPOSITION
                                                                
Non-interest bearing demand
   $ 254,415     $ 245,335     $ 235,649     $ 229,979     $ 224,555     $ 229,462     $ 221,067     $ 198,821  
Interest-bearing demand
     55,396       58,037       62,114       58,188       49,235       49,927       56,925       65,045  
Money market accounts
     371,912       358,812       383,772       389,688       402,709       410,789       385,516       365,835  
Savings accounts
     11,273       10,931       8,895       9,233       8,765       8,789       8,304       8,602  
Time deposits of $100,000 or more
     648,664       646,849       678,660       637,574       608,989       640,503       665,697       681,927  
Other time deposits
     423,951       420,600       395,684       374,550       363,567       345,435       328,969       308,704  
                 
Total deposits
   $ 1,765,611     $ 1,740,564     $ 1,764,774     $ 1,699,212     $ 1,657,820     $ 1,684,905     $ 1,666,478     $ 1,628,934  
                 
NONPERFORMING ASSETS
                                                                
Nonaccrual loans
   $ 26,735     $ 23,913     $ 23,135     $ 23,555     $ 22,099     $ 23,141     $ 9,955     $ 12,737  
90 days past due and accruing
     2,622       7,090       3,293       1,763       1,486       4,812       1,427       1,117  
 
                                                
Total nonperforming loans
     29,357       31,003       26,428       25,318       23,585       27,953       11,382       13,854  
Other real estate loans
     1,873       1,878       2,143       7,124       7,130       9,610       9,761       11,902  
                 
Total nonperforming assets
   $ 31,230     $ 32,881     $ 28,571     $ 32,442     $ 30,715     $ 37,563     $ 21,143     $ 25,756  
                 
ALLOWANCE ACTIVITY
                                                                
Balance, beginning of period
   $ 28,064     $ 26,341     $ 24,760     $ 23,812     $ 21,920     $ 20,841     $ 19,660     $ 18,991  
Charge offs
     3,643       1,630       1,844       1,808       2,665       3,277       2,220       3,858  
Recoveries
     305       347       109       80       209       214       415       218  
 
                                                
Net charge offs
     3,338       1,283       1,735       1,728       2,456       3,063       1,805       3,640  
Provision for loan losses
     2,567       3,006       3,316       2,676       4,348       4,142       2,986       4,309  
                 
Balance, end of period
   $ 27,293     $ 28,064     $ 26,341     $ 24,760     $ 23,812     $ 21,920     $ 20,841     $ 19,660  
                 
REGULATORY CAPITAL DATA
                                                                
Tier I capital
   $ 241,399     $ 237,421     $ 231,721     $ 225,595     $ 218,587     $ 214,089     $ 209,085     $ 176,397  
Total capital
     266,097       261,521       254,894       248,014       239,759       235,037       229,745       222,289  
Total risk adjusted assets
     1,968,119       1,894,750       1,847,635       1,788,001       1,687,519       1,672,180       1,650,154       1,599,780  
COMMON STOCK
                                                                
Issued
     14,658,042       14,658,042       14,658,042       14,658,042       14,658,042       14,658,042       14,658,042       12,243,042  
Less treasury shares
     (417,535 )     (433,308 )     (484,774 )     (524,867 )     (636,125 )     (693,364 )     (715,056 )     (49,915 )
 
                                                
Outstanding shares
     14,240,507       14,224,734       14,173,268       14,133,175       14,021,917       13,964,678       13,942,986       12,193,127  
 
                                                
INTANGIBLE ASSET DATA
                                                                
Goodwill
   $ 1,213     $ 1,098     $ 194     $ 194     $ 194     $ 194     $ 194     $ 194  
Core deposit intangible
     1,595       1,659       —       —       —       —       —       —  
Mortgage servicing rights
     1,436       1,385       1,351       1,343       1,353       1,311       1,271       1,217  
Nonmortgage servicing rights
     38       25       48       53       54       63       67       72  
           
Total intangible assets
   $ 4,282     $ 4,167     $ 1,593     $ 1,590     $ 1,601     $ 1,568     $ 1,532     $ 1,483  
           
Intangible amortization expense
   $ 493     $ 331     $ 188     $ 93     $ 379     $ 284     $ 193     $ 86  
           
 
Balance sheet amounts are as of period end unless otherwise noted.

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