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Southwest Bancorp, Inc. Reports Results for First Quarter 2016 and Announces Quarterly Dividend

STILLWATER, Okla., April 20, 2016 (GLOBE NEWSWIRE) -- Southwest Bancorp, Inc. (NASDAQ:OKSB), (“Southwest”), today reported net income for the first quarter of 2016 of $1.9 million, or $0.10 per diluted share, compared to $4.5 million, or $0.24 per diluted share, for the first quarter of 2015. The decrease in first quarter net income was due to a $4.4 million loan loss provision primarily driven by the impact of low energy prices combined with deterioration in a few general business credits.

Southwest announced that its board of directors has approved a quarterly cash dividend of $0.08 per share payable May 13, 2016 to shareholders of record as of April 29, 2016.

Mark Funke, President and CEO, stated, “We continued to have strong loan production during the first quarter, but the net growth was reduced by expected payoffs on real estate loans. As energy prices remain low, we identified certain energy related exposure along with deterioration in a few general business credits that caused us to increase our loan loss reserve. Here are several highlights to take from this quarter.

  • Total loans grew to $1.78 billion, a slight increase over year-end 2015 and a 24% increase compared to the first quarter of 2015. We funded $108.8 million in new loans during the first quarter of 2016 making this quarter our ninth consecutive quarter of loan growth.
  • The quarterly net interest margin improved to 3.54% at March 31, 2016 compared to 3.48% at December 31, 2015.
  • Pre-tax, pre-provision income was $7.3 million for the first quarter, an increase of 10% from $6.6 million in the fourth quarter of 2015 and an increase of 35% from $5.4 million in the first quarter of 2015.
  • On February 23, 2016 our board of directors authorized a third consecutive share repurchase program of up to another 5.0%, or approximately 967,000 shares, which became effective during the first quarter upon the completion of the repurchase of all of the shares under the prior program. During the first quarter of 2016, Southwest purchased 803,546 shares for a total of $12.7 million, and since August 2014, Southwest has repurchased 1,925,104 shares for a total of $31.4 million.

“Although the quarter was less than we expected, we will continue to focus our company on producing consistent, conservative, and sustainable earnings through the expansion of our revenue base while prudently managing risk and expenses.”

Financial Overview

Condition: As of March 31, 2016, total assets were $2.4 billion, an increase of $3.8 million, when compared to December 31, 2015. As of March 31, 2016, total loans were $1.8 billion, an increase of $2.5 million from the prior quarter end. As of March 31, 2016, investment securities were $423.0 million, an increase of $10.9 million from the prior quarter end. Cash and cash equivalents at March 31, 2016 were $67.4 million, down $10.8 million from December 31, 2015.

At March 31, 2016, the allowance for loan losses was $27.2 million, an increase of $1.1 million when compared to December 31, 2015 and a decrease of $0.1 million when compared to March 31, 2015. The allowance for loan losses to portfolio loans was 1.53% as of March 31, 2016, up from 1.47% as of December 31, 2015, and down from 1.91% as of March 31, 2015. The allowance for loan losses to nonperforming loans was 122.012% as of March 31, 2016, compared to 128.23% as of December 31, 2015 and 297.78% as of March 31, 2015. The total allowance for loan losses combined with the purchase discount on acquired loans represents 1.96% of gross loans as of March 31, 2016, compared to 1.94% as of December 31, 2015.

Nonperforming loans were $22.3 million at March 31, 2016, an increase of $2.0 million from December 31, 2015, and an increase of $13.1 million from March 31, 2015. Other real estate at March 31, 2016 was $2.3 million, which is flat from December 31, 2015, and March 31, 2015. Nonperforming assets were $24.5 million, or 1.38% of portfolio loans and other real estate, as of March 31, 2016, compared to $22.6 million, or 1.28% of portfolio loans and other real estate, as of December 31, 2015, and $11.4 million, or 0.80% of portfolio loans and other real estate, as of March 31, 2015.

As of March 31, 2016, total deposits were $1.9 billion, an increase of $11.1 million, when compared to December 31, 2015. Total core funding, which includes all non-brokered deposits and sweep repurchase agreements, comprised 87% and 88% of total funding as of March 31, 2016 and December 31, 2015, respectively. Wholesale funding, including Federal Home Loan Bank borrowings, federal funds purchased, and brokered deposits, accounted for 13% and 12% of total funding at March 31, 2016 and December 31, 2015, respectively. See Table 6 for details on core funding and non-brokered deposits, which are non-GAAP financial measures.

The capital ratios of Southwest and Bank SNB as of March 31, 2016 exceeded the criteria for regulatory classification as “well-capitalized”. Southwest’s total regulatory capital was $343.3 million, for a total risk-based capital ratio of 15.39%, Common Equity Tier 1 capital was $270.6 million, for a Common Equity Tier 1 ratio of 12.13%, and Tier 1 capital was $315.3 million, for a Tier 1 risk-based capital ratio of 14.14%. Bank SNB had total regulatory capital of $321.4 million, for a total risk-based capital ratio of 14.46% and Common Equity Tier 1 and Tier 1 capital of $293.5 million, for a Common Equity Tier 1 and Tier 1 ratio of 13.21%. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators.

First Quarter Results:

Summary: For the first quarter of 2016, net income was $1.9 million, compared to $4.6 million for the fourth quarter of 2015 and $4.5 million for the first quarter of 2015. Pre-tax, pre-provision income for the first quarter of 2016 was $7.3 million, compared to $6.6 million for the fourth quarter of 2015 and $5.4 million for the first quarter of 2015.

The $2.7 million decrease in net income compared to the fourth quarter of 2015 was primarily due to a $4.4 million provision for loan losses versus a negative provision for loan losses of $0.6 million in the prior quarter. The decrease in net income also includes a $0.8 million decrease in noninterest income, offset in part by a $0.3 million increase in net interest income, a $1.1 million decrease in noninterest expense, and a $1.6 million decrease in income taxes.

The $2.7 million decrease in our net income compared to the first quarter of 2015 was again primarily due to a $4.4 million provision for loan losses versus a negative provision of loan losses of $1.9 million in first quarter 2015. The decrease in net income also includes a $2.9 million increase in noninterest expense, offset in part by a $4.2 million increase in net interest income, a $0.6 million increase in noninterest income, and a $1.7 million decrease in income taxes. The increase in noninterest expense, net interest income, and noninterest income are due in part to the First Commercial Bancshares, Inc. acquisition that occurred in the fourth quarter of 2015.

Net Interest Income: Net interest income totaled $19.8 million for the first quarter of 2016, compared to $19.5 million for the fourth quarter of 2015 and $15.6 million for the first quarter of 2015. Net interest margin was 3.54% for the first quarter of 2016, compared to 3.48% for the fourth quarter of 2015 and 3.25% for the first quarter of 2015. Included in interest income for both the first quarter of 2016 and the fourth quarter of 2015 was $0.3 million of accelerated discount accretion, respectively. The net effect of these adjustments on the net interest margin was a 5 basis point increase, respectively for each quarter. Loans (including loans held for sale) for the first quarter of 2016 increased $2.5 million when compared to December 31, 2015, and $343.6 million when compared to March 31, 2015. Loans acquired in the fourth quarter of 2015 were $202.4 million.

Provision (Credit) for Loan Losses and Net Charge-offs: The provision for loan losses is the amount that is required to maintain the allowance for loan losses at an appropriate level based upon the inherent risks in the loan portfolio after the effects of net charge-offs or net recoveries for the period. The provision for loan losses was a provision of $4.4 million for the first quarter of 2016, compared to a negative provision of $0.6 million for the fourth quarter of 2015, and a negative provision of $1.9 million for the first quarter of 2015. The first quarter 2016 provision was driven primarily by the impact of low energy prices combined with deterioration in a few general business credits. During the first quarter of 2016, net charge-offs totaled $3.3 million, or 0.75% (annualized) of average portfolio loans, compared to net recoveries of $0.1 million, or (0.02%) (annualized) of average portfolio loans for the fourth quarter of 2015 and net recoveries of $0.7 million, or (0.20%) (annualized) of average portfolio loans for the first quarter of 2015.

Noninterest Income: Noninterest income totaled $3.4 million for the first quarter of 2016, compared to $4.2 million for the fourth quarter of 2015 and $2.8 million for the first quarter of 2015.

The $0.8 million decrease from the fourth quarter of 2015 is the result of a $0.1 million decrease in service charges and fees, a $0.2 million decrease in the gain on sales of mortgage loans, which is due to a valuation adjustment on mortgage servicing rights, and a $0.5 million decrease in other noninterest income, primarily due to customer risk management interest rate swap income, offset in part by a $0.1 million gain recognized on the sale of investment securities during the quarter.

The $0.6 million increase from the first quarter of 2015 is primarily the result of a $0.1 million increase in service charges and fees, a $0.1 million increase in the gain on sales of mortgage loans, a $0.1 million increase in gain on sale of investment securities, and a $0.3 million increase in other noninterest income, primarily income on bank owned life insurance.

Noninterest Expense: Noninterest expense totaled $16.0 million for the first quarter of 2016, compared to $17.1 million for the fourth quarter of 2015 and $13.1 million for the first quarter of 2015.

The $1.1 million decrease in noninterest expense from the fourth quarter of 2015 was primarily due to a $0.9 million decrease in personnel expense and a $0.4 million decrease in data processing, offset in part by a $0.1 million increase in occupancy and a $0.1 million increase in general and administrative expense, which includes a $0.4 million increase in the provision for unfunded loan commitments offset by $0.1 million decrease in legal fees, 0.1 million decrease in marketing expense, and a $0.1 million decrease in professional fees.

The $2.9 million increase in noninterest expense from the first quarter of 2015 consisted of a $1.4 million increase in personnel expense, a $0.4 million increase in occupancy, a $0.1 million increase in FDIC and other insurance, and a $1.0 million increase in general and administrative expense, which includes a $0.4 million increase in the provision for unfunded loan commitments, a $0.2 million increase in business development expenses, a $0.1 million increase in intangible amortization expense.

Income Tax: Income tax expense totaled $1.0 million for the first quarter of 2016, compared to $2.6 million for the fourth quarter of 2015 and $2.7 million for the first quarter of 2015. The income tax expense fluctuates in relation to pre-tax income levels. The first quarter of 2016 effective tax rate was 35.19%, compared to 35.96% for the fourth quarter of 2015 and 37.50% for the first quarter of 2015. The decline in the effective tax rate includes the impact of an increase in tax exempt income, as a percentage of pre-tax income.

Conference Call

Southwest will host a conference call to review these results on Wednesday, April 20, 2016 at 11:00 a.m. Eastern Time (10:00 a.m. Central Time). Investors, news media, and others may pre-register for the call using the following link to receive a special dial-in number and PIN: http://dpregister.com/10083475. Telephone participants who are unable to pre-register may access the call by telephone at 866-218-2402 (toll-free) or 412-902-4190 (international). Participants are encouraged to dial into the call approximately 10 minutes prior to the start time. The call and corresponding presentation slides will be webcast live on Southwest’s website at www.oksb.com or http://services.choruscall.com/links/oksb160420. An audio replay will be available one hour after the call at 877-344-7529 (toll-free) or 412-317-0088 (international), conference number 10083475. Telephone replay access will be available until 9:00 a.m. Eastern Time on May 20, 2016.

Southwest Bancorp and Subsidiaries

Southwest is the holding company for Bank SNB, an Oklahoma state banking corporation (“Bank SNB”). Bank SNB offers commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services from offices in Oklahoma, Texas, Kansas, and Colorado. Bank SNB was chartered in 1894 and Southwest was organized in 1981 as the holding company. At March 31, 2016, Southwest had total assets of approximately $2.4 billion, deposits of $1.9 billion, and shareholders’ equity of $285.7 million.

Southwest’s area of expertise focuses on the special financial needs of healthcare and health professionals, businesses and their managers and owners, commercial lending, energy banking, and commercial real estate borrowers. The strategic focus on healthcare lending was established in 1974. Southwest and its banking subsidiary provide credit and other 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 March 31, 2016, approximately $427.2 million, or 24%, of loans were loans to individuals and businesses in the healthcare industry. Regular market reviews are conducted of (i) current and potential healthcare lending business, and (ii) the appropriate concentrations within healthcare based upon economic and regulatory conditions.

Southwest’s common stock is traded on the NASDAQ Global Select Market under the symbol OKSB.

Caution About Forward-Looking Statements

Southwest makes forward-looking statements in this news release that are subject to risks and uncertainties. These statements are intended to be covered by the safe harbor provision for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include:

  • Statements of Southwest's goals, intentions, and expectations;
  • Estimates of risks and of future costs and benefits;
  • Expectations regarding Southwest’s future financial performance and the financial performance of its operating segments;
  • Expectations regarding regulatory actions;
  • Expectations regarding Southwest’s ability to utilize tax loss benefits;
  • Expectations regarding Southwest’s stock repurchase program;
  • Expectations regarding dividends;
  • Expectations regarding acquisitions and divestitures;
  • Assessments of loan quality, probable loan losses, and the amount and timing of loan payoffs;
  • Estimates of the value of assets held for sale or available for sale; and
  • Statements of Southwest’s ability to achieve financial and other goals.

These forward-looking statements are subject to significant uncertainties because they are based upon: the amount and timing of future changes in interest rates, market behavior, and other economic conditions; future laws, regulations, and accounting principles; changes in regulatory standards and examination policies, and a variety of other matters. These other matters include, among other things, the direct and indirect effects of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators. Because of these uncertainties, the actual future results may be materially different from the results indicated by these forward-looking statements. In addition, Southwest's past growth and performance do not necessarily indicate future results. For other factors, risks, and uncertainties that could cause actual results to differ materially from estimates and projections contained in forward-looking statements, please read Southwest’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2015. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors”.

The cautionary statements in this release also identify important factors and possible events that involve risk and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These forward-looking statements speak only as of the date on which the statements were made. Southwest does not intend, and undertakes no obligation, to update or revise any forward-looking statements contained in this release, whether as a result of differences in actual results, changes in assumptions, or changes in other factors affecting such statements, except as required by law.

Southwest is required under generally accepted accounting principles to evaluate subsequent events and their impact, if any, on its financial statements as of March 31, 2016 through the date its financial statements are filed with the Securities and Exchange Commission. The March 31, 2016 financial statements included in this release will be adjusted if necessary to properly reflect the impact of subsequent events on estimates used to prepare those statements.

The Southwest Bancorp, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=8074

The Bank SNB logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=23106

Financial Tables
Unaudited Financial HighlightsTable 1
Unaudited Consolidated Statements of Financial ConditionTable 2
Unaudited Consolidated Statements of OperationsTable 3
Unaudited Average Balances, Yields, and Rates-Quarterly Table 4
Unaudited Quarterly Summary Loan DataTable 5
Unaudited Quarterly Summary Financial DataTable 6
Unaudited Quarterly Supplemental Analytical DataTable 7


SOUTHWEST BANCORP, INC. Table 1
UNAUDITED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share)
First Quarter Fourth Quarter
QUARTERLY HIGHLIGHTS 2016 2015 % Change 2015 % Change
Operations
Net interest income $ 19,840 $ 15,610 27% $ 19,520 2%
Provision (credit) for loan losses 4,375 (1,887) (332) (566) (873)
Noninterest income 3,415 2,840 20 4,179 (18)
Noninterest expense 15,996 13,082 22 17,099 (6)
Income before taxes 2,884 7,255 (60) 7,166 (60)
Taxes on income 1,015 2,720 (63) 2,577 (61)
Net income 1,869 4,535 (59) 4,589 (59)
Diluted earnings per share 0.10 0.24 (60) 0.23 (58)
Balance Sheet
Total assets 2,360,819 2,003,079 18 2,357,022 0
Loans held for sale 1,803 9,106 (80) 7,453 (76)
Portfolio loans 1,780,081 1,429,139 25 1,771,976 0
Total deposits 1,895,248 1,616,454 17 1,884,105 1
Total shareholders' equity 285,661 271,444 5 296,098 (4)
Book value per common share 14.81 14.26 4 14.80 0
Key Ratios
Net interest margin 3.54% 3.25% 3.48%
Efficiency ratio 68.41 70.47 71.49
Total capital to risk-weighted assets 15.39 19.36 16.79
Nonperforming loans to portfolio loans 1.25 0.64 1.15
Shareholders' equity to total assets 12.10 13.55 12.56
Tangible common equity to tangible assets* 11.49 13.50 11.95
Return on average assets (annualized) 0.32 0.92 0.78
Return on average common equity (annualized) 2.56 6.78 6.14
Return on average tangible common equity (annualized)** 2.71 6.81 6.46
Balance sheet amounts and ratios are as of period end unless otherwise noted.
* This is a Non-GAAP financial measure. Please see Table 7 for a reconciliation to the most directly comparable GAAP based measure.
** This is a Non-GAAP financial measure.
Please see accompanying tables for additional financial information.


SOUTHWEST BANCORP, INC. Table 2
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
March 31, December 31, March 31,
2016 2015 2015
Assets
Cash and due from banks$ 27,102 $ 24,971 $ 20,510
Interest-bearing deposits 40,251 53,158 133,886
Cash and cash equivalents 67,353 78,129 154,396
Securities held to maturity (fair values of $12,248, $12,282, and $11,921 respectively) 11,757 11,797 11,393
Securities available for sale (amortized cost of $409,093, $401,136 and $363,352, respectively) 411,273 400,331 366,152
Loans held for sale 1,803 7,453 9,106
Loans receivable 1,780,081 1,771,975 1,429,139
Less: Allowance for loan losses (27,168) (26,106) (27,250)
Net loans receivable 1,752,913 1,745,869 1,401,889
Accrued interest receivable 5,838 5,767 4,974
Non-hedge derivative asset 4,307 1,793 1,273
Premises and equipment, net 23,533 23,819 18,437
Other real estate 2,274 2,274 2,255
Goodwill 13,467 13,467 1,214
Other intangible assets, net 6,145 6,615 3,866
Other assets 60,156 59,708 28,124
Total assets$ 2,360,819 $ 2,357,022 $ 2,003,079
Liabilities
Deposits:
Noninterest-bearing demand$ 552,499 $ 596,494 $ 506,952
Interest-bearing demand 168,210 151,015 140,659
Money market accounts 540,323 534,357 488,569
Savings accounts 56,235 56,333 34,413
Time deposits of $100,000 or more 348,783 311,538 227,426
Other time deposits 229,198 234,368 218,435
Total deposits 1,895,248 1,884,105 1,616,454
Accrued interest payable 894 867 770
Non-hedge derivative liability 4,307 1,793 1,273
Other liabilities 10,553 11,684 8,167
Other borrowings 117,763 110,927 58,578
Subordinated debentures 46,393 51,548 46,393
Total liabilities 2,075,158 2,060,924 1,731,635
Shareholders' equity
Common stock - $1 par value; 40,000,000 shares authorized;
21,225,034, 21,138,028 and 19,900,350 shares issued, respectively 21,225 21,138 19,900
Additional paid-in capital 122,070 121,966 101,395
Retained earnings 173,496 173,210 163,818
Accumulated other comprehensive income (loss) 546 (1,290) 673
Treasury stock, at cost, 1,939,989, 1,131,226 and 867,310 shares, respectively (31,676) (18,926) (14,342)
Total shareholders' equity 285,661 296,098 271,444
Total liabilities and shareholders' equity$ 2,360,819 $ 2,357,022 $ 2,003,079


SOUTHWEST BANCORP, INC. Table 3
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
For the three months ended
March 31, December 31, March 31,
2016 2015 2015
Interest income
Loans$20,030 $ 19,725 $ 15,570
Investment securities 1,965 1,813 1,553
Other interest-earning assets 53 46 101
Total interest income 22,048 21,584 17,224
Interest expense
Interest-bearing deposits 1,307 1,196 835
Other borrowings 309 261 227
Subordinated debentures 592 607 552
Total interest expense 2,208 2,064 1,614
Net interest income 19,840 19,520 15,610
Provision (credit) for loan losses 4,375 (566) (1,887)
Net interest income after provision for loan losses 15,465 20,086 17,497
Noninterest income
Service charges and fees 2,549 2,676 2,428
Gain on sales of mortgage loans 401 645 348
Gain on sale/call of investment securities, net 126 - 5
Other noninterest income 339 858 59
Total noninterest income 3,415 4,179 2,840
Noninterest expense
Salaries and employee benefits 9,342 10,273 7,914
Occupancy 2,671 2,586 2,284
Data processing 470 847 446
FDIC and other insurance 368 384 312
Other real estate, net 13 8 21
General and administrative 3,132 3,001 2,105
Total noninterest expense 15,996 17,099 13,082
Income before taxes 2,884 7,166 7,255
Taxes on income 1,015 2,577 2,720
Net income$1,869 $ 4,589 $ 4,535
Basic earnings per common share$0.10 $ 0.23 $ 0.24
Diluted earnings per common share 0.10 0.23 0.24
Common dividends declared per share 0.08 0.06 0.06


SOUTHWEST BANCORP, INC. Table 4
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY
(Dollars in thousands)
For the three months ended
March 31, 2016 December 31, 2015 March 31, 2015
Average Average Average Average Average Average
Balance Yield/Rate Balance Yield/Rate Balance Yield/Rate
Assets
Loans$ 1,788,992 4.50% $ 1,744,374 4.49% $ 1,419,137 4.45%
Investment securities 412,307 1.92 413,701 1.74 367,877 1.71
Other interest-earning assets 51,031 0.42 64,562 0.28 158,940 0.26
Total interest-earning assets 2,252,330 3.94 2,222,637 3.85 1,945,954 3.59
Other assets 107,874 101,003 49,460
Total assets$ 2,360,204 $ 2,323,640 $ 1,995,414
Liabilities and Shareholders' Equity
Interest-bearing demand deposits$ 160,638 0.16% $ 137,154 0.15% $ 138,895 0.10%
Money market accounts 542,800 0.24 541,976 0.18 484,639 0.15
Savings accounts 55,834 0.14 53,603 0.13 33,350 0.10
Time deposits 564,213 0.65 548,145 0.63 434,409 0.57
Total interest-bearing deposits 1,323,485 0.40 1,280,878 0.37 1,091,293 0.31
Other borrowings 117,171 1.06 80,343 1.29 72,307 1.27
Subordinated debentures 48,546 4.88 51,044 4.76 46,393 4.76
Total interest-bearing liabilities 1,489,202 0.60 1,412,265 0.58 1,209,993 0.54
Noninterest-bearing demand deposits 563,022 594,537 503,275
Other liabilities 14,769 20,149 10,918
Shareholders' equity 293,211 296,689 271,228
Total liabilities and shareholders' equity$ 2,360,204 $ 2,323,640 $ 1,995,414
Net interest income and spread 3.34% 3.27% 3.05%
Net interest margin (1) 3.54% 3.48% 3.25%
Average interest-earning assets
to average interest-bearing liabilities 151.24% 157.38% 160.82%
(1) Net interest margin = annualized net interest income / average interest-earning assets


SOUTHWEST BANCORP, INC. Table 5
UNAUDITED QUARTERLY SUMMARY LOAN DATA
(Dollars in thousands)
2016 2015
Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
LOAN COMPOSITION
Real estate mortgage:
Commercial$ 878,822 $ 938,462 $ 869,250 $ 759,406 $ 759,676
One-to-four family residential 158,078 161,958 95,906 85,338 86,343
Real estate construction:
Commercial 156,454 129,070 126,407 186,140 192,052
One-to-four family residential 24,202 21,337 12,866 13,107 12,586
Commercial 543,822 507,173 423,480 384,788 366,282
Installment and consumer:
Other 20,506 21,429 20,185 20,651 21,306
Total loans, including held for sale 1,781,884 1,779,429 1,548,094 1,449,430 1,438,245
Less allowance for loan losses (27,168) (26,106) (26,593) (26,219) (27,250)
Total loans, net$ 1,754,716 $ 1,753,323 $ 1,521,501 $ 1,423,211 $ 1,410,995
LOANS BY SEGMENT
Oklahoma banking****$ 1,060,482 $ 1,048,473 $ 832,282 $ 810,367 $ 814,949
Texas banking 560,421 580,476 563,010 493,047 478,005
Kansas banking 160,981 150,480 152,802 146,016 145,291
Total loans$ 1,781,884 $ 1,779,429 $ 1,548,094 $ 1,449,430 $ 1,438,245
NONPERFORMING LOANS BY TYPE
Construction & development$ 1,444 $ 1,010 $ 391 $ 416 $ 392
Commercial real estate 3,830 3,992 1,795 2,141 2,247
Commercial 13,461 13,491 11,727 5,114 5,447
One-to-four family residential 3,448 1,777 1,016 1,216 1,065
Consumer 84 88 148 - -
Total nonperforming loans$ 22,267 $ 20,358 $ 15,077 $ 8,887 $ 9,151
NONPERFORMING LOANS BY SEGMENT
Oklahoma banking****$ 7,978 $ 6,948 $ 2,846 $ 1,670 $ 2,244
Texas banking 13,521 12,450 11,025 5,353 5,264
Kansas banking 768 960 1,206 1,864 1,643
Total nonperforming loans$ 22,267 $ 20,358 $ 15,077 $ 8,887 $ 9,151
OTHER REAL ESTATE BY TYPE
Construction & development$ 2,060 $ 2,060 $ 2,025 $ 2,035 $ 2,035
Commercial real estate 214 214 249 358 220
Total other real estate$ 2,274 $ 2,274 $ 2,274 $ 2,393 $ 2,255
OTHER REAL ESTATE BY SEGMENT
Oklahoma banking****$ 274 $ 274 $ 200 $ 200 $ -
Texas banking 2,000 2,000 2,025 2,000 2,000
Kansas banking - - 49 193 255
Total other real estate$ 2,274 $ 2,274 $ 2,274 $ 2,393 $ 2,255
****Due to immateriality, Colorado banking is included within Oklahoma banking.
Continued


SOUTHWEST BANCORP, INC. Table 5
UNAUDITED QUARTERLY SUMMARY LOAN DATA Continued
(Dollars in thousands)
2016 2015
Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
POTENTIAL PROBLEM LOANS BY TYPE
Construction & development$ - $ - $ - $ - $ 201
Commercial real estate 36,216 26,981 22,362 20,375 24,672
Commercial 29,931 9,879 7,366 14,519 14,016
One-to-four family residential 2,275 2,285 79 80 81
Consumer 38 10 - - -
Total potential problem loans$ 68,460 $ 39,155 $ 29,807 $ 34,974 $ 38,970
POTENTIAL PROBLEM LOANS BY SEGMENT
Oklahoma banking****$ 46,102 $ 32,970 $ 23,597 $ 23,231 $ 26,713
Texas banking 18,801 4,165 4,086 9,180 9,541
Kansas banking 3,557 2,020 2,124 2,563 2,716
Total potential problem loans$ 68,460 $ 39,155 $ 29,807 $ 34,974 $ 38,970
ALLOWANCE ACTIVITY
Balance, beginning of period$ 26,106 $ 26,593 $ 26,219 $ 27,250 $ 28,452
Charge offs 3,725 569 226 325 230
Recoveries 412 648 577 430 915
Net charge offs (recoveries) 3,313 (79) (351) (105) (685)
Provision (credit) for loan losses 4,375 (566) 23 (1,136) (1,887)
Balance, end of period$ 27,168 $ 26,106 $ 26,593 $ 26,219 $ 27,250
NET CHARGE OFFS BY TYPE
Construction & development$ - $ - $ (16) $ (15) $ 5
Commercial real estate (187) 219 24 82 (118)
Commercial 3,408 (286) (325) (52) (188)
One-to-four family residential 41 (48) (68) (91) (331)
Consumer 51 36 34 (29) (53)
Total net charge offs (recoveries) by type$ 3,313 $ (79) $ (351) $ (105) $ (685)
NET CHARGE OFFS BY SEGMENT
Oklahoma banking****$ 458 $ 288 $ (86) $ 25 $ (309)
Texas banking 952 (415) (103) (72) (114)
Kansas banking 1,903 48 (162) (58) (262)
Total net charge offs (recoveries) by segment$ 3,313 $ (79) $ (351) $ (105) $ (685)
****Due to immateriality, Colorado banking is included within Oklahoma banking.


SOUTHWEST BANCORP, INC. Table 6
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA
(Dollars in thousands, except per share)
2016 2015
Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
PER SHARE DATA
Basic earnings per common share$0.10 $0.23 $0.22 $0.22 $0.24
Diluted earnings per common share 0.10 0.23 0.22 0.22 0.24
Common dividends declared per share 0.08 0.06 0.06 0.06 0.06
Book value per common share 14.81 14.80 14.57 14.38 14.26
Tangible book value per share* 13.97 13.98 14.49 14.29 14.17
COMMON STOCK
Shares issued 21,225,034 21,138,028 19,901,336 19,900,855 19,900,350
Less treasury shares 1,939,989 1,131,226 868,617 867,310 867,310
Outstanding shares 19,285,045 20,006,802 19,032,719 19,033,545 19,033,040
OTHER FINANCIAL DATA
Investment securities$423,030 $412,128 $388,543 $373,260 $377,545
Loans held for sale 1,803 7,453 7,024 6,687 9,106
Portfolio loans 1,780,081 1,771,975 1,541,070 1,442,743 1,429,139
Total loans 1,781,884 1,779,428 1,548,094 1,449,430 1,438,245
Total assets 2,360,819 2,357,022 2,059,899 2,031,581 2,003,079
Total deposits 1,895,248 1,884,105 1,626,250 1,624,446 1,616,454
Other borrowings 117,763 110,927 96,801 75,839 58,578
Subordinated debentures 46,393 51,548 46,393 46,393 46,393
Total shareholders' equity 285,661 296,098 277,344 273,681 271,444
Mortgage servicing portfolio 434,340 432,318 422,845 415,961 407,903
INTANGIBLE ASSET DATA
Goodwill$13,467 $13,467 $1,214 $1,214 $1,214
Core deposit intangible 2,734 2,894 342 405 467
Mortgage servicing rights 3,411 3,721 3,631 3,518 3,399
Total intangible assets$19,612 $20,082 $5,187 $5,137 $5,080
Intangible amortization expense$341 $330 $243 $243 $168
DEPOSIT COMPOSITION
Non-interest bearing demand$552,499 $596,494 $526,159 $515,156 $506,952
Interest-bearing demand 168,210 151,015 114,877 131,547 140,659
Money market accounts 540,323 534,357 502,028 496,178 488,569
Savings accounts 56,235 56,333 36,163 35,647 34,413
Time deposits of $100,000 or more 348,783 311,538 238,318 233,105 227,426
Other time deposits 229,198 234,368 208,705 212,813 218,435
Total deposits**$1,895,248 $1,884,105 $1,626,250 $1,624,446 $1,616,454
OFFICES AND EMPLOYEES
FTE Employees 411 412 358 361 360
Branches 32 32 23 23 22
Assets per employee$5,744 $5,721 $5,754 $5,628 $5,564
____________________
*This is a Non-GAAP based financial measure.
**Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures)
Total deposits$1,895,248 $1,884,105 $1,626,250 $1,624,446 $1,616,454
Less:
Brokered time deposits 55,901 39,797 10,086 7,683 7,694
Other brokered deposits 140,372 135,880 133,025 103,025 83,025
Non-brokered deposits$1,698,975 $1,708,428 $1,483,139 $1,513,738 $1,525,735
Plus:
Sweep repurchase agreements 42,763 37,273 50,801 50,839 33,578
Core funding$1,741,738 $1,745,701 $1,533,940 $1,564,577 $1,559,313
Balance sheet amounts are as of period end unless otherwise noted.


SOUTHWEST BANCORP, INC. Table 7
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA
(Dollars in thousands)
2016 2015
Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
PERFORMANCE RATIOS
Return on average assets (annualized) 0.32% 0.78% 0.81% 0.85% 0.92%
Return on average common equity (annualized) 2.56 6.14 5.94 6.11 6.78
Return on average tangible common equity
(annualized)* 2.71 6.46 5.97 6.14 6.82
Net interest margin (annualized) 3.54 3.48 3.34 3.31 3.25
Total dividends declared to net income 84.66 26.22 27.53 27.45 25.19
Effective tax rate 35.19 35.96 35.84 34.51 37.49
Efficiency ratio 68.41 71.49 68.25 72.43 70.47
NONPERFORMING ASSETS
Nonaccrual loans$ 22,161 $ 19,858 $ 15,076 $ 8,887 $ 9,151
90 days past due and accruing 106 500 1 - -
Total nonperforming loans 22,267 20,358 15,077 8,887 9,151
Other real estate 2,274 2,274 2,274 2,393 2,255
Total nonperforming assets$ 24,541 $ 22,632 $ 17,351 $ 11,280 $ 11,406
Potential problem loans$ 68,460 $ 39,155 $ 29,807 $ 34,974 $ 38,970
ASSET QUALITY RATIOS
Nonperforming assets to portfolio loans and
other real estate 1.38% 1.28% 1.12% 0.78% 0.80%
Nonperforming loans to portfolio loans 1.25 1.15 0.98 0.62 0.64
Allowance for loan losses to portfolio loans 1.53 1.47 1.73 1.82 1.91
Allowance for loan losses to
nonperforming loans 122.01 128.23 176.38 295.03 297.78
Net loan charge-offs to average portfolio
loans (annualized) 0.75 (0.02) (0.09) (0.03) (0.20)
CAPITAL RATIOS
Average total shareholders' equity to
average assets 12.42% 12.77% 13.59% 13.87% 13.59%
Leverage ratio 13.45 14.41 15.84 16.12 15.75
Common equity tier 1 capital 12.13 13.21 14.57 15.30 15.51
Tier 1 capital to risk-weighted assets 14.14 15.53 16.95 17.84 18.10
Total capital to risk-weighted assets 15.39 16.79 18.21 19.09 19.36
Tangible common equity to tangible assets*** 11.49 11.95 13.40 13.40 13.48
REGULATORY CAPITAL DATA
Common equity tier 1 capital$ 270,564 $ 282,737 $ 275,350 $ 272,048 $ 269,007
Tier I capital 315,326 332,468 320,350 317,048 314,007
Total capital 343,287 359,300 344,095 339,412 335,734
Total risk adjusted assets 2,230,326 2,140,344 1,889,892 1,777,618 1,734,401
Average total assets 2,344,259 2,307,421 2,022,972 1,966,577 1,993,446
____________________
*This is a Non-GAAP based financial measure.
***Calculation of Tangible Common Equity to Tangible Assets (Non-GAAP Financial Measure)
Total shareholders' equity$ 285,661 $ 296,098 $ 277,344 $ 273,681 $ 271,444
Less goodwill and core deposit intangible 16,201 16,361 1,556 1,619 1,681
Tangible common equity$ 269,460 $ 279,737 $ 275,788 $ 272,062 $ 269,763
Total assets$ 2,360,819 $ 2,357,022 $ 2,059,899 $ 2,031,581 $ 2,003,079
Less goodwill and core deposit intangible 16,201 16,361 1,556 1,619 1,681
Tangible assets$ 2,344,618 $ 2,340,661 $ 2,058,343 $ 2,029,962 $ 2,001,398
Total shareholders' equity to total assets 12.10% 12.56% 13.46% 13.47% 13.55%
Tangible common equity to tangible assets 11.49% 11.95% 13.40% 13.40% 13.48%
Balance sheet amounts and ratios are as of period end unless otherwise noted.


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

Source:Southwest Bancorp, Inc.