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Southwest Bancorp, Inc. Reports 2012 Annual Results

Southwest Bancorp, Inc. Logo

STILLWATER, Okla., Jan. 23, 2013 (GLOBE NEWSWIRE) -- Southwest Bancorp, Inc. (Nasdaq:OKSB) (Nasdaq:OKSBP), ("Southwest"), today reported net income for the year ended December 31, 2012 of $16.2 million, compared to a loss of ($68.3) million for the year ended December 31, 2011. Net income available to common shareholders for the year ended December 31, 2012 totaled $12.4 million, or $0.64 per diluted share, compared to a net loss available to common shareholders of ($72.5) million, or ($3.73) per diluted share, for the year ended December 31, 2011.

Southwest reported net income for the fourth quarter of 2012 of $1.0 million, compared to a loss of ($58.3) million for the fourth quarter of 2011. Net income available to common shareholders was $1.0 million, or $0.05 per diluted share for the fourth quarter of 2012, compared to a net loss available to common shareholders of ($59.3) million, or ($3.05) per diluted share for the fourth quarter of 2011.

Mark Funke, President and Chief Executive Officer, stated, "Many positive changes took place in 2012. We experienced significant improvement in our balance sheet strength and capital position following the bulk asset sale which was completed in fourth quarter of 2011. We restored all interest payments on our trust preferred capital. We repurchased all of the $70 million Series B preferred securities issued to the Department of Treasury under the Treasury's Capital Purchase Program. We strengthened our relationship with banking regulators and returned the company to profitability. We also added key management personnel in various areas.

"The slow economic conditions and uncertain regulatory and political environment presented challenges to us as well as to our customers in 2012. Despite these challenges, we are pleased to report net income of $16.2 million. This past year was focused on restructuring and repositioning the company for 2013 and beyond. While income for the fourth quarter was less than anticipated, we are aggressively identifying potential problem loans and assets and establishing appropriate reserves and values. For the year, common shareholders' equity increased to $246.1 million, an increase of 5.5%."

During the fourth quarter of 2012, Southwest identified a miscalculation in the valuation analysis on the goodwill of its Kansas market segment. The correction of the formula resulted in the identification of a noncash impairment of $5.6 million of goodwill at year-end 2010. The financial statements for the year ended December 31, 2010 will be restated along with the financial statements for 2011 and the 2012 quarterly financial statements through September.

The impact of the impairment reduced net income for 2010 by $5.6 million, from $17.0 million to $11.4 million. Total assets and shareholders' equity at December 31, 2010 are reduced by $5.6 million to end at $2.8 billion and $372.2 million, respectively. The effect of the correction is reflected in 2011 and 2012 financial information included with this earnings release for the quarter-ended December 31, 2012.

Southwest Chief Financial Officer, Joe Shockley, stated, "This correction is a result of a diligent accounting review and another milestone in repositioning Southwest for 2013 and beyond. This did not impact net income for 2011 or 2012, nor will it affect earnings going forward. While shareholders' equity is reduced by $5.6 million, regulatory capital is not reduced as goodwill is deducted when computing regulatory capital. Therefore, Southwest and its subsidiary bank, Bank of Kansas, remained well-capitalized throughout the period the miscalculation existed. The financial statements of Stillwater National Bank, Southwest's largest subsidiary bank, were not affected."

Financial Overview

Condition: At December 31, 2012, total assets were $2.1 billion, down $255.0 million, or 11%, from December 31, 2011, and total loans were $1.4 billion, down $384.8 million, or 22%, from December 31, 2011. The decline in loans was due in part to the change in our lending focus away from larger average size loans and a refocus to our primary markets.

Investment securities increased $101.8 million, or 37%, to $377.1 million as of December 31, 2012, from $275.4 million as of December 31, 2011. The increase is primarily the result of the decline in total loans reduced by the company allowing higher cost of funds to mature. The investment portfolio is managed to provide safety, liquidity, and collateral for public funds and borrowings. The investment portfolio continues to be managed in compliance with the current investment policy, including interest rate and liquidity risk stress testing, and the average duration of the portfolio not exceeding four years.

At December 31, 2012, the noncovered allowance for loan losses was $46.5 million, an increase of 5% from December 31, 2011. The noncovered allowance for loan losses to noncovered portfolio loans was 3.52% as of December 31, 2012 compared to 2.62% as of December 31, 2011. The noncovered allowance for loan losses to noncovered nonperforming loans was 121.10% as of December 31, 2012, compared to 162.21% as of September 30, 2012.

Nonperforming assets were $49.7 million, or 3.73% of portfolio loans and other real estate, as of December 31, 2012, an increase of $8.1 million (20%) from $41.6 million, or 2.88% of portfolio loans and other real estate, as of September 30, 2012. The increase in nonperforming assets during the fourth quarter is attributable to placing $12.5 million in loans on nonaccrual, primarily commercial healthcare loans located out of market, and a $2.9 million increase in loans ninety days past due, offset in part by the receipt of $3.2 million in resolutions and payments on nonperforming loans, the recognition of impairments in other real estate assets of $2.8 million, the receipt of $0.8 million from sales of other real estate, and charge-offs of $0.7 million in nonperforming loans.

Total core funding, which includes all non-brokered deposits and sweep repurchase agreements, comprised 98% of total funding as of December 31, 2012, compared to 94% at December 31, 2011. Core funding by segment is as follows as of December 31, 2012 and December 31, 2011, respectively: $1,290.8 million and $1,426.2 million in Oklahoma banking, $167.0 million and $156.2 million in Texas banking, $269.3 million and $273.6 million in Kansas banking, and $14.5 million and $3.9 million in the secondary market and other operations segments. Wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 2% of total funding at December 31, 2012, compared to 6% at December 31, 2011. Please see Table 7 for details on core funding and non-brokered deposits, which are non-GAAP financial measures.

The capital ratios of Southwest and each of its banking subsidiaries, as of December 31, 2012, met the criteria for regulatory classification as "well-capitalized". Southwest's total regulatory capital was $340.0 million, for a total risk-based capital ratio of 21.56%, and Tier 1 capital was $319.7 million, for a Tier 1 risk-based capital ratio of 20.280%. Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $182.3 million. Stillwater National Bank, Southwest's principal banking subsidiary, had total regulatory capital of $269.3 million, for a total risk-based capital ratio of 19.55%, and Tier 1 capital of $236.7 million, for a Tier 1 risk-based capital ratio of 17.18%. Stillwater National Bank exceeded the minimum to be classified as "well-capitalized" by $131.5 million. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators.

Year-to-date Results:

Summary: Net income available to common shareholders was $12.4 million as of December 31, 2012, compared to a net loss available to common shareholders of ($72.5) million as of December 31, 2011. The $85.0 million increase in our net income available to common shareholders from 2011 is the result of a $129.0 million decrease in the provision for loan losses, a $26.9 million decrease in noninterest expense, a $1.9 million increase in noninterest income, and the $0.5 million decrease in the yield on preferred stock due to the repurchase during the year, offset by a $19.8 million decrease in net interest income and a $53.5 million increase in income tax expense.

Net Interest Income: Net interest income totaled $76.6 million for 2012, compared to $96.3 million for 2011, a decrease of $19.8 million, or 21%. Lower loan volume was the primary cause of this decrease. Year-to-date net interest margin was 3.64%, compared to 3.74% for 2011.

Provision for Loan Losses and Net Charge-offs: The provision for loan losses is the amount that is required to maintain the allowance for losses at an appropriate level based upon the inherent risks in the loan portfolio after the effects of net charge-offs for the period. The provision for loan losses totaled $3.1 million for 2012, compared to $132.1 million for 2011. Net charge-offs totaled $1.1 million, or 0.07% (annualized) of average portfolio loans as of December 31, 2012, compared to $152.6 million, or 7.01% (annualized) of average portfolio loans as of December 31, 2011. Excluding the impact of the fourth quarter of 2011 sale of nonperforming assets, the provision for loan losses and net charge-offs would have been approximately $57.2 million and $64.0 million, respectively.

Noninterest Income: Noninterest income totaled $15.9 million for 2012, compared to $14.0 million for 2011. The increase in noninterest income was the result of a $1.5 million increase in gains on sale of loans, which consists primarily of mortgage loans, a $0.8 million increase in the gains on sale of investment securities, and a $0.1 million increase in other noninterest income, offset by a $0.5 million decline in service charges and fees.

Noninterest Expense: Noninterest expense totaled $63.3 million for 2012, compared to $90.2 million for 2011. The decrease primarily consists of a $24.3 million decrease in other real estate expense, of which $23.6 million was the fair value adjustment for the assets sold in the fourth quarter of 2011, a $1.3 million decrease in FDIC and other insurance expense, a $1.3 million decrease in general and administrative expense, primarily from the 2011 settlement of Oklahoma state tax claims for less than the amount accrued, and a $0.2 million decrease in occupancy expense, offset in part by a $0.3 million increase in the provision for unfunded loan commitments.

Income Tax: Income tax expense totaled $9.8 million for 2012, compared to a benefit of $43.7 million for 2011. The income tax expense (benefit) fluctuates in relation to pre-tax income (loss) levels. The year-to-date effective tax rate was 37.91% as of December 31, 2012.

Fourth Quarter Results:

Summary: For the fourth quarter of 2012, net income available to common shareholders was $1.0 million, compared to a net loss available to common shareholders of ($59.3) million for the fourth quarter of 2011. The $60.3 million increase in our net income available to common shareholders from fourth quarter 2011 is the result of a $75.2 million decrease in the provision for loan losses, a $24.3 million decrease in noninterest expense, a $1.3 million increase in noninterest income, and the $1.1 million decrease in yield on preferred stock due to the repurchase during the year, offset in part by a $36.9 million increase in income tax expense and a $4.6 million decrease in net interest income.

Net Interest Income: Net interest income totaled $17.3 million for the fourth quarter of 2012, compared to $21.9 million for the fourth quarter of 2011, a decrease of $4.6 million, or 21%, and to $18.7 million for the third quarter of 2012, a decrease of $1.4 million, or 7%. Noncovered loans declined $110.9 million, or 8%, from September 30, 2012 primarily due to commercial real estate loans that paid off due to the year-end sales of properties and certain commercial real estate and construction loans that moved to permanent long-term financing in the secondary market. Net interest margin was 3.41% for the fourth quarter of 2012, compared to 3.62% for the fourth quarter of 2011 and 3.59% for the third quarter of 2012.

Provision for Loan Losses and Net Charge-offs: The provision for loan losses is the amount that is required to maintain the allowance for losses at an appropriate level based upon the inherent risks in the loan portfolio after the effects of net charge-offs or net recoveries for the period. The provision for loan losses of $3.1 million was recorded for the fourth quarter of 2012, compared to a provision for loan losses of $78.3 million for fourth quarter of 2011 and a negative provision of $1.7 million for the third quarter of 2012. For the fourth quarter of 2012, net charge-offs totaled $0.1 million, or 0.03% (annualized) of average portfolio loans, compared to net charge-offs of $98.3 million, or 19.78% (annualized) of average portfolio loans for the fourth quarter of 2011 and net recoveries of $1.6 million, or (0.42%) (annualized) of average portfolio loans for the third quarter of 2012. Excluding the impact of the fourth quarter 2011 sale of nonperforming assets, the provision for loans losses and net charge-offs would have been approximately $3.4 million and $9.7 million, respectively.

Noninterest Income: Noninterest income totaled $4.9 million for the fourth quarter of 2012, compared to $3.6 million for the fourth quarter of 2011 and $4.0 million for the third quarter of 2012. The increase in noninterest income from the fourth quarter of 2011 is primarily the result of a $0.8 million increase in gains on sale of investment securities and a $0.3 million increase in gains on sales of loans, which consist primarily of mortgage loans. The increase in noninterest income from the third quarter of 2012 is primarily the result of the $0.8 million gains on sales of investment securities.

Noninterest Expense: Noninterest expense totaled $17.7 million for the fourth quarter of 2012, compared to $41.9 million for the fourth quarter of 2011 and $14.6 million for the third quarter of 2012.

The $24.3 million decrease from fourth quarter of 2011 consists primarily of a $23.5 million decrease in other real estate expense, which includes the loss on assets sold during the fourth quarter of 2011 of $23.6 million, a $1.0 million decrease in general and administrative expense, which is primarily the result of decreased loan collection costs and legal fees, and a $0.3 million decrease in FDIC and other insurance expense, offset in part by a $0.3 million increase in personnel expense and a $0.3 million increase in the provision for unfunded loan commitments.

The $3.0 million increase from third quarter of 2012 consists of a $1.6 million increase in other real estate expense due to the fourth quarter fair value write-down of properties, a $0.6 million increase in personnel expense due to accrued bonus expense, a $0.5 million increase in general and administrative expense, which is primarily the result of fourth quarter write-down of an investment carried at cost, and a $0.4 million increase in the provision for unfunded loan commitments.

Income Tax: Income tax expense totaled $0.4 million for the fourth quarter of 2012, compared to a benefit of $36.5 million for the fourth quarter of 2011. The income tax expense (benefit) fluctuates in relation to pre-tax income (loss) levels. The fourth quarter 2012 effective tax rate was 31.45%.

Southwest Bancorp and Subsidiaries

Southwest is the bank holding company for Stillwater National Bank and Trust Company ("Stillwater National") and Bank of Kansas. Through its subsidiaries, Southwest offers commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services from offices in Oklahoma, Texas, and Kansas, and on the Internet, through SNB DirectBanker®. We were organized in 1981 as the holding company for Stillwater National, which was chartered in 1894. At December 31, 2012, we had total assets of $2.1 billion, deposits of $1.7 billion, and shareholders' equity of $246.1 million.

Our area of expertise focuses on the special financial needs of healthcare and health professionals, businesses and their managers and owners, and commercial and commercial real estate borrowers. We established a strategic focus on healthcare lending in 1974. We provide credit and other services, such as deposits, cash management, and document imaging for physicians and other healthcare practitioners to start or develop their practices and finance the development and purchase of medical offices, clinics, surgical care centers, hospitals, and similar facilities. As of December 31, 2012, approximately $502.2 million, or 37%, of our noncovered loans were loans to individuals and businesses in the healthcare industry. We conduct regular market reviews of our current and potential healthcare lending and the appropriate concentrations within healthcare based upon economic and regulatory conditions.

We also focus on commercial real estate mortgage and construction credits. As of December 31, 2012, approximately $1.0 billion, or 74%, of our noncovered loans were commercial real estate mortgage and construction loans, including $344.0 million of loans to individuals and businesses in the healthcare industry.

Southwest's common stock is traded on the NASDAQ Global Select Market under the symbol OKSB. Southwest's public trust preferred securities are traded on the NASDAQ Global Select Market under the symbol OKSBP.

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

Caution About Forward-Looking Statements

We make forward-looking statements in this news release that are subject to risks and uncertainties. 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 Southwest's 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;
  • 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 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 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 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 Southwest's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2012. 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 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 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 December 31, 2012 through the date its financial statements are filed with the Securities and Exchange Commission. The December 31, 2012 financial statements included in this release will be adjusted if necessary to properly reflect the impact of subsequent events on estimates used to prepare those statements.

Financial Tables
Unaudited Financial Highlights Table 1
Unaudited Consolidated Statements of Financial Condition Table 2
Unaudited Consolidated Statements of Operations Table 3
Unaudited Average Balances, Yields, and Rates-Quarterly Table 4
Unaudited Average Balances, Yields, and Rates-Year-to-Date Table 5
Unaudited Quarterly Summary Loan Data Table 6
Unaudited Quarterly Summary Financial Data Table 7
Unaudited Quarterly Supplemental Analytical Data Table 8
SOUTHWEST BANCORP, INC. Table 1
UNAUDITED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share)
Fourth Quarter Third Quarter
QUARTERLY HIGHLIGHTS % %
2012 2011 Change 2012 Change
Operations
Net interest income $ 17,285 $ 21,901 (21)% $ 18,682 (7)%
Provision for loan losses 3,085 78,285 (96) (1,726) (279)
Noninterest income 4,871 3,576 36 3,950 23
Noninterest expense 17,653 41,903 (58) 14,591 21
Income (loss) before taxes 1,418 (94,711) (101) 9,767 (85)
Taxes on income 446 (36,450) (101) 3,880 (89)
Net income (loss) 972 (58,261) (102) 5,887 (83)
Net income (loss) available to common shareholders 972 (59,340) (102) 4,344 (78)
Diluted earnings per share 0.05 (3.05) (102) 0.22 (77)
Balance Sheet
Total assets 2,122,255 2,377,276 (11) 2,151,153 (1)
Loans held for sale 31,682 38,695 (18) 34,749 (9)
Noncovered portfolio loans 1,321,346 1,687,178 (22) 1,429,165 (8)
Covered portfolio loans 25,707 37,615 (32) 28,197 (9)
Total deposits 1,709,578 1,921,382 (11) 1,743,673 (2)
Total shareholders' equity 246,056 301,589 (18) 244,821 1
Book value per common share 12.60 11.99 5 12.59 0
Key Ratios
Net interest margin 3.41% 3.62% 3.59%
Efficiency ratio 79.68 164.47 64.47
Total capital to risk-weighted assets 21.56 20.78 20.64
Nonperforming loans to portfolio loans - noncovered 2.91 0.80 1.88
Shareholders' equity to total assets 11.59 12.69 11.38
Tangible common equity to tangible assets* 11.54 9.76 11.33
Return on average assets (annualized) 0.18 (8.98) 1.06
Return on average common equity (annualized) 1.56 (81.01) 7.11
Return on average tangible common equity (annualized)** 1.56 (81.35) 7.15
YEAR-TO-DATE HIGHLIGHTS Twelve Months
%
2012 2011 Change
Operations
Net interest income $ 76,563 $ 96,332 (21)%
Provision for loan losses 3,107 132,101 (98)
Noninterest income 15,936 14,018 14
Noninterest expense 63,322 90,201 (30)
Income (loss) before taxes 26,070 (111,952) (123)
Taxes on income 9,883 (43,657) (123)
Net income (loss) 16,187 (68,295) (124)
Net income (loss) available to common shareholders 12,446 (72,548) (117)
Diluted earnings per share 0.64 (3.73) (117)
Balance Sheet
Total assets 2,122,255 2,377,276 (11)
Loans held for sale 31,682 38,695 (18)
Noncovered portfolio loans 1,321,346 1,687,178 (22)
Covered portfolio loans 25,707 37,615 (32)
Total deposits 1,709,578 1,921,382 (11)
Total shareholders' equity 246,056 301,589 (18)
Book value per common share 12.60 11.99 5
Key Ratios
Net interest margin 3.64 % 3.74 %
Efficiency ratio (GAAP-based) 68.46 81.74
Total capital to risk-weighted assets 21.56 20.78
Nonperforming loans to portfolio loans - noncovered 2.91 0.80
Shareholders' equity to total assets 11.59 12.69
Tangible common equity to tangible assets* 11.54 9.76
Return on average assets 0.72 (2.54)
Return on average common equity 5.14 (23.83)
Return on average tangible common equity** 5.16 (23.93)
Balance sheet amounts and ratios are as of period end unless otherwise noted.
* This is a Non-GAAP financial measure. Please see Table 8 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)
December 31, December 31,
2012 2011
Assets
Cash and due from banks $ 45,045 $ 30,247
Interest-bearing deposits 243,034 199,642
Cash and cash equivalents 288,079 229,889
Securities held to maturity (fair values of $13,659 and $15,885, respectively) 12,797 15,252
Securities available for sale (amortized cost of $358,317 and $253,869, respectively) 364,315 260,100
Loans held for sale 31,682 38,695
Noncovered loans receivable 1,321,346 1,687,178
Less: Allowance for loan losses (46,494) (44,233)
Net noncovered loans receivable 1,274,852 1,642,945
Covered loans receivable (includes loss share: $6,714 and $10,073, respectively) 25,707 37,615
Less: Allowance for loan losses (224) (451)
Net covered loans receivable 25,483 37,164
Net loans receivable 1,300,335 1,680,109
Accrued interest receivable 6,365 7,176
Income tax receivable 24,525 28,666
Premises and equipment, net 21,691 22,700
Noncovered other real estate 11,315 19,844
Covered other real estate 3,643 4,529
Goodwill 1,214 1,214
Other intangible assets, net 4,864 4,857
Other assets 51,430 64,245
Total assets $ 2,122,255 $ 2,377,276
Liabilities
Deposits:
Noninterest-bearing demand $ 424,008 $ 400,985
Interest-bearing demand 112,012 105,905
Money market accounts 423,417 423,181
Savings accounts 37,693 33,406
Time deposits of $100,000 or more 351,273 487,907
Other time deposits 361,175 469,998
Total deposits 1,709,578 1,921,382
Accrued interest payable 1,116 3,689
Other liabilities 13,180 12,174
Other borrowings 70,362 56,479
Subordinated debentures 81,963 81,963
Total liabilities 1,876,199 2,075,687
Shareholders' equity
Serial preferred stock -- $1,000 par value; 2,000,000 shares authorized; 0 and 70,000 shares issued and outstanding, respectively -- 68,455
Common stock -- $1 par value; 40,000,000 shares authorized; 19,529,721 and 19,444,213 shares issued and outstanding, respectively 19,530 19,444
Additional paid-in capital 99,705 98,932
Retained earnings 125,093 112,647
Accumulated other comprehensive income 1,728 2,111
Total shareholders' equity 246,056 301,589
Total liabilities and shareholders' equity $ 2,122,255 $ 2,377,276
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,
2012 2011 2012 2011
Interest income
Loans $ 19,021 $ 25,333 $ 84,602 $ 113,223
Investment securities 1,796 1,584 7,814 6,973
Other interest-earning assets 191 148 755 549
Total interest income 21,008 27,065 93,171 120,745
Interest expense
Interest-bearing deposits 2,014 3,318 9,703 16,793
Other borrowings 224 339 895 1,799
Subordinated debentures 1,485 1,507 6,010 5,821
Total interest expense 3,723 5,164 16,608 24,413
Net interest income 17,285 21,901 76,563 96,332
Provision for loan losses 3,085 78,285 3,107 132,101
Net interest income (loss) after provision for loan losses 14,200 (56,384) 73,456 (35,769)
Noninterest income ��
Service charges and fees 2,971 2,849 11,559 12,075
Gain on sales of loans 910 637 3,133 1,658
Gain on investment securities 802 -- 837 --
Other noninterest income 188 90 407 285
Total noninterest income 4,871 3,576 15,936 14,018
Noninterest expense
Salaries and employee benefits 7,956 7,657 29,919 29,880
Occupancy 2,672 2,614 10,581 10,815
FDIC and other insurance 510 858 2,531 3,862
Other real estate, net 2,867 26,369 6,565 30,852
General and administrative 3,648 4,405 13,726 14,792
Total noninterest expense 17,653 41,903 63,322 90,201
Income (loss) before taxes 1,418 (94,711) 26,070 (111,952)
Taxes on income 446 (36,450) 9,883 (43,657)
Net income (loss) $ 972 $ (58,261) $ 16,187 $ (68,295)
Net income (loss) available to common shareholders $ 972 $ (59,340) $ 12,446 $ (72,548)
Basic earnings per common share $ 0.05 $ (3.05) $ 0.64 $ (3.73)
Diluted earnings per common share 0.05 (3.05) 0.64 (3.73)
Common dividends declared per share -- -- -- --
SOUTHWEST BANCORP, INC. Table 4
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - QUARTERLY
(Dollars in thousands)
For the three months ended December 31,
2012 2011
Average Average Average Average
Balance Interest Yield/Rate Balance Interest Yield/Rate
Assets
Noncovered loans $ 1,424,512 $ 18,427 5.15% $ 1,973,320 $ 24,473 4.92%
Covered loans 25,860 594 9.14 39,010 860 8.75
Investment securities 380,531 1,796 1.88 264,011 1,584 2.38
Other interest-earning assets 185,136 191 0.41 123,532 148 0.48
Total interest-earning assets 2,016,039 21,008 4.15 2,399,873 27,065 4.47
Other assets 125,027 173,307
Total assets $ 2,141,066 $ 2,573,180
Liabilities and Shareholders' Equity
Interest-bearing demand deposits $ 105,854 $ 41 0.15% $ 98,167 $ 53 0.21%
Money market accounts 398,143 327 0.33 471,059 388 0.33
Savings accounts 37,242 14 0.15 32,032 12 0.15
Time deposits 747,579 1,632 0.87 994,519 2,865 1.14
Total interest-bearing deposits 1,288,818 2,014 0.62 1,595,777 3,318 0.82
Other borrowings 67,709 224 1.32 70,952 339 1.90
Subordinated debentures 81,963 1,485 7.25 81,963 1,507 7.35
Total interest-bearing liabilities 1,438,490 3,723 1.03 1,748,692 5,164 1.17
Noninterest-bearing demand deposits 419,086 400,435
Other liabilities 34,990 65,093
Shareholders' equity 248,500 358,960
Total liabilities and shareholders' equity $ 2,141,066 $ 2,573,180
Net interest income and spread $ 17,285 3.12% $ 21,901 3.30%
Net interest margin (1) 3.41% 3.62%
Average interest-earning assets to average interest-bearing liabilities 140.15% 137.24%
(1) Net interest margin = annualized net interest income / average interest-earning assets
SOUTHWEST BANCORP, INC. Table 5
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - YEAR-TO-DATE
(Dollars in thousands)
For the twelve months ended December 31,
2012 2011
Average Average Average Average
Balance Interest Yield/Rate Balance Interest Yield/Rate
Assets
Noncovered loans $ 1,536,494 $ 82,288 5.36% $ 2,168,458 $ 109,839 5.07%
Covered loans 30,824 2,314 7.51 45,449 3,384 7.45
Investment securities 350,021 7,814 2.23 264,006 6,973 2.64
Other interest-earning assets 187,478 755 0.40 96,753 549 0.57
Total interest-earning assets 2,104,817 93,171 4.43 2,574,666 120,745 4.69
Other assets 138,929 115,819
Total assets $ 2,243,746 $ 2,690,485
Liabilities and Shareholders' Equity
Interest-bearing demand deposits $ 114,974 $ 219 0.19% $ 108,808 $ 382 0.35%
Money market accounts 381,292 1,077 0.28 483,373 2,154 0.45
Savings accounts 35,741 53 0.15 29,862 49 0.16
Time deposits 842,979 8,354 0.99 1,117,483 14,208 1.27
Total interest-bearing deposits 1,374,986 9,703 0.71 1,739,526 16,793 0.97
Other borrowings 61,822 895 1.45 84,738 1,799 2.12
Subordinated debentures 81,963 6,010 7.33 81,963 5,821 7.10
Total interest-bearing liabilities 1,518,771 16,608 1.09 1,906,227 24,413 1.28
Noninterest-bearing demand deposits 396,091 377,780
Other liabilities 45,368 33,991
Shareholders' equity 283,516 372,487
Total liabilities and shareholders' equity $ 2,243,746 $ 2,690,485
Net interest income and spread $ 76,563 3.34% $ 96,332 3.41%
Net interest margin (1) 3.64% 3.74%
Average interest-earning assets to average interest-bearing liabilities 138.59% 135.07%
(1) Net interest margin = annualized net interest income / average interest-earning assets
SOUTHWEST BANCORP, INC. Table 6
UNAUDITED QUARTERLY SUMMARY LOAN DATA
(Dollars in thousands, except per share)
2012 2011
Dec. 31 Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
LOAN COMPOSITION
Noncovered:
Real estate mortgage:
Commercial $ 870,977 $ 898,453 $ 931,239 $ 996,486 $ 1,028,561 $ 1,169,010 $ 1,262,753 $ 1,302,164
One-to-four family residential 70,952 74,081 74,390 76,287 80,375 85,272 87,407 87,286
Real estate construction
Commercial 130,753 206,342 211,098 222,678 227,098 348,053 372,576 403,635
One-to-four family residential 3,656 3,438 4,184 3,814 4,987 25,527 26,400 26,758
Commercial 240,498 244,018 263,085 273,324 346,266 367,241 404,229 416,392
Installment and consumer:
Guaranteed student loans 4,680 4,872 5,153 5,276 5,396 5,547 5,600 5,700
Other 31,512 32,710 33,555 31,766 33,190 32,946 34,335 36,493
Total noncovered loans, including held for sale 1,353,028 1,463,914 1,522,704 1,609,631 1,725,873 2,033,596 2,193,300 2,278,428
Less allowance for loan losses (46,494) (43,607) (43,807) (45,023) (44,233) (64,698) (54,575) (61,285)
Total noncovered loans, net $ 1,306,534 $ 1,420,307 $ 1,478,897 $ 1,564,608 $ 1,681,640 $ 1,968,898 $ 2,138,725 $ 2,217,143
Covered:
Real estate mortgage:
Commercial $ 18,298 $ 20,664 $ 21,472 $ 22,607 $ 23,686 $ 23,201 $ 26,976 $ 28,929
One-to-four family residential 4,881 5,059 5,432 5,766 7,072 7,378 8,113 8,192
Real estate construction
Commercial 382 419 1,627 2,344 3,746 5,987 6,001 6,144
One-to-four family residential -- -- -- -- -- -- 172 281
Commercial 2,037 1,937 2,033 2,401 2,841 4,286 4,461 5,021
Installment and consumer: 109 118 148 196 270 357 430 550
Total covered loans 25,707 28,197 30,712 33,314 37,615 41,209 46,153 49,117
Less allowance for loan losses (224) (138) (91) (60) (451) -- -- --
Total covered loans, net $ 25,483 $ 28,059 $ 30,621 $ 33,254 $ 37,164 $ 41,209 $ 46,153 $ 49,117
LOANS BY SEGMENT
Oklahoma banking $ 536,855 $ 564,734 $ 597,506 $ 642,700 $ 688,592 $ 770,306 $ 834,189 $ 838,006
Texas banking 491,442 554,367 596,262 636,540 665,010 845,485 911,134 953,123
Kansas banking 184,330 202,262 198,404 202,050 238,468 252,302 260,431 272,685
Out of market 134,426 135,999 137,248 122,890 132,723 166,810 196,495 226,383
Subtotal 1,347,053 1,457,362 1,529,420 1,604,180 1,724,793 2,034,903 2,202,249 2,290,197
Secondary market 31,682 34,749 23,996 38,765 38,695 39,902 37,204 37,348
Total loans $ 1,378,735 $ 1,492,111 $ 1,553,416 $ 1,642,945 $ 1,763,488 $ 2,074,805 $ 2,239,453 $ 2,327,545
NONPERFORMING LOANS BY TYPE
Construction & development $ 3,355 $ 3,436 $ 3,608 $ 3,768 $ 3,877 $ 68,554 $ 73,487 $ 68,183
Commercial real estate 18,337 20,576 4,932 6,821 4,667 56,234 60,857 47,986
Commercial 15,232 1,791 10,878 2,209 3,374 6,080 15,224 16,633
One-to-four family residential 1,310 949 1,125 1,508 1,491 1,706 1,457 2,634
Consumer 160 131 176 118 140 152 153 27
Total nonperforming loans - noncovered $ 38,394 $ 26,883 $ 20,719 $ 14,424 $ 13,549 $ 132,726 $ 151,178 $ 135,463
NONPERFORMING LOANS BY SEGMENT
Oklahoma banking $ 3,738 $ 5,198 $ 2,305 $ 2,864 $ 3,699 $ 14,932 $ 18,870 $ 13,443
Texas banking 17,876 15,342 11,526 2,258 83 95,191 91,449 87,122
Kansas banking 4,716 5,681 6,214 8,617 9,070 7,976 9,725 7,924
Out of market 12,064 662 674 685 697 14,627 31,134 26,974
Total nonperforming loans - noncovered $ 38,394 $ 26,883 $ 20,719 $ 14,424 $ 13,549 $ 132,726 $ 151,178 $ 135,463
OTHER REAL ESTATE BY TYPE
Construction & development $ 215 $ 445 $ 2,585 $ 3,542 $ 3,542 $ 38,927 $ 12,588 $ 6,304
Commercial real estate 11,003 14,130 14,129 14,854 15,464 24,364 16,300 23,890
One-to-four family residential 97 108 549 933 838 7,494 10,068 10,873
Total other real estate - noncovered $ 11,315 $ 14,683 $ 17,263 $ 19,329 $ 19,844 $ 70,785 $ 38,956 $ 41,067
OTHER REAL ESTATE BY SEGMENT
Oklahoma banking $ 3,393 $ 6,178 $ 6,178 $ 6,273 $ 6,178 $ 8,709 $ 2,613 $ 4,616
Texas banking 7,227 7,227 9,162 9,846 9,846 35,270 17,398 18,652
Kansas banking 695 1,278 1,923 3,210 3,210 12,390 14,539 12,848
Out of market -- -- -- -- 610 14,416 4,406 4,951
Total other real estate - noncovered $ 11,315 $ 14,683 $ 17,263 $ 19,329 $ 19,844 $ 70,785 $ 38,956 $ 41,067
POTENTIAL PROBLEM LOANS BY TYPE
Construction & development $ 22,077 $ 22,565 $ 25,563 $ 33,907 $ 43,607 $ 75,867 $ 111,032 $ 111,204
Commercial real estate 58,549 53,725 71,537 67,654 55,873 162,692 140,079 85,833
Commercial 12,526 9,305 12,753 23,506 32,477 37,027 38,850 19,940
One-to-four family residential 1,147 1,157 1,230 1,253 1,082 1,108 1,210 429
Consumer 62 -- -- -- -- -- -- --
Total potential problem loans - noncovered $ 94,361 $ 86,752 $ 111,083 $ 126,320 $ 133,039 $ 276,694 $ 291,171 $ 217,406
POTENTIAL PROBLEM LOANS BY SEGMENT
Oklahoma banking $ 18,773 $ 27,415 $ 37,320 $ 32,761 $ 27,481 $ 54,310 $ 42,565 $ 30,678
Texas banking 49,489 43,472 58,021 78,961 83,035 163,973 183,486 114,506
Kansas banking 4,573 3,286 3,118 1,893 836 14,530 11,289 19,472
Out of market 21,526 12,579 12,624 12,705 21,687 43,881 53,831 52,750
Total potential problem loans - noncovered $ 94,361 $ 86,752 $ 111,083 $ 126,320 $ 133,039 $ 276,694 $ 291,171 $ 217,406
Continued
SOUTHWEST BANCORP, INC. Table 6
UNAUDITED QUARTERLY SUMMARY LOAN DATA Continued
(Dollars in thousands, except per share)
2012 2011
Dec. 31 Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
OUT OF MARKET LOANS
Net balance out of market loans:
Arizona $ 40,326 $ 41,255 $ 39,449 $ 34,749 $ 26,372 $ 35,978 $ 49,977 $ 57,657
Iowa 22,826 22,958 23,022 23,130 26,494 26,626 26,695 26,759
Ohio 10,438 11,182 11,502 12,650 12,741 9,367 9,568 9,963
California 9,791 9,684 9,922 10,252 10,530 10,737 9,814 9,984
Kentucky 8,691 7,517 9,455 517 488 490 492 494
South Carolina 7,244 7,283 7,320 -- -- -- -- --
Tennessee 6,204 6,232 6,310 6,368 6,427 6,484 6,550 6,606
Florida 6,254 6,204 6,240 6,269 6,421 6,374 10,582 7,600
Louisiana 4,651 4,968 4,974 4,931 5,336 5,644 5,963 8,018
New Mexico 3,696 3,696 3,714 3,715 15,215 21,019 21,092 28,226
Other 14,305 15,020 15,340 20,309 22,699 44,091 55,762 71,076
Total out of market loans $ 134,426 $ 135,999 $ 137,248 $ 122,890 $ 132,723 $ 166,810 $ 196,495 $ 226,383
Nonperforming out of market loans:
Arizona $ 11,599 $ 250 $ 256 $ 261 $ 267 $ 8,441 $ 16,745 $ 10,316
Florida 275 281 287 293 299 305 1,479 1,479
Colorado -- 131 131 131 131 746 4,909 880
New Mexico -- -- -- -- -- 5,135 5,135 11,827
Alabama -- -- -- -- -- -- 157 172
Other 190 -- -- -- -- -- 2,709 2,300
Total nonperforming out of market loans $ 12,064 $ 662 $ 674 $ 685 $ 697 $ 14,627 $ 31,134 $ 26,974
Potential problem out of market loans:
Iowa $ 11,868 $ 11,941 $ 11,970 $ 12,035 $ -- $ -- $ -- $ --
New Mexico -- -- -- -- 11,542 11,589 11,635 --
Arizona 9,037 -- -- -- 9,463 10,287 14,865 25,242
California 536 548 559 570 578 593 9,423 9,575
Florida 85 90 95 100 104 108 116 --
Colorado -- -- -- -- -- 17,034 13,500 17,933
Alabama -- -- -- -- -- 4,270 4,292 --
Total potential problem out of market loans $ 21,526 $ 12,579 $ 12,624 $ 12,705 $ 21,687 $ 43,881 $ 53,831 $ 52,750
ALLOWANCE ACTIVITY
Balance, beginning of period $ 43,745 $ 43,898 $ 45,083 $ 44,684 $ 64,698 $ 54,575 $ 61,285 $ 65,229
Charge offs 722 2,653 2,229 1,936 99,604 16,067 27,562 13,392
Recoveries 610 4,226 1,012 619 1,305 1,564 712 398
Net charge offs (recoveries) 112 (1,573) 1,217 1,317 98,299 14,503 26,850 12,994
Provision for loan losses 3,085 (1,726) 32 1,716 78,285 24,626 20,140 9,050
Balance, end of period $ 46,718 $ 43,745 $ 43,898 $ 45,083 $ 44,684 $ 64,698 $ 54,575 $ 61,285
NET CHARGE OFFS BY TYPE
Construction & development $ (22) $ (1,823) $ (85) $ (42) $ 41,513 $ 7,177 $ 10,847 $ 1,012
Commercial real estate (18) 2,022 91 14 50,070 5,702 7,593 7,290
Commercial 239 (1,894) 1,228 1,211 6,434 1,469 7,999 4,337
One-to-four family residential (40) 20 (105) 123 1 55 165 58
Consumer (47) 102 88 11 281 100 246 297
Total net charge offs (recoveries) by type $ 112 $ (1,573) $ 1,217 $ 1,317 $ 98,299 $ 14,503 $ 26,850 $ 12,994
NET CHARGE OFFS BY SEGMENT
Oklahoma banking $ (257) $ 7 $ (204) $ 1,070 $ 13,210 $ 1,058 $ 1,442 $ 1,593
Texas banking 305 857 1,139 229 64,370 7,386 9,163 4,502
Kansas banking 68 (2,435) 324 166 8,872 361 1,791 372
Out of market (4) (2) (42) (148) 11,847 5,698 14,454 6,527
Total net charge offs (recoveries) by segment $ 112 $ (1,573) $ 1,217 $ 1,317 $ 98,299 $ 14,503 $ 26,850 $ 12,994
SOUTHWEST BANCORP, INC. Table 7
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA
(Dollars in thousands, except per share)
2012 2011
Dec. 31 Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
NET INCOME (LOSS) BY SEGMENT
Oklahoma banking $ 1,460 $ 2,873 $ 4,497 $ 3,158 $ (5,586) $ 7 $ 5,290 $ 3,435
Texas banking 3,785 2,622 1,435 3,161 (35,435) (6,455) 1,575 1,079
Kansas banking (67) 1,550 (424) 1,239 (7,533) (612) 971 131
Out of market (2,922) (169) 693 (570) (7,857) (1,947) (9,039) (924)
Subtotal 2,256 6,876 6,201 6,988 (56,411) (9,007) (1,203) 3,721
Secondary market 330 330 124 286 144 90 127 (13)
Other operations (1,614) (1,319) (2,208) (2,063) (1,994) (608) (1,894) (1,247)
Net income (loss) $ 972 $ 5,887 $ 4,117 $ 5,211 $ (58,261) $ (9,525) $ (2,970) $ 2,461
PER SHARE DATA
Basic earnings per common share $ 0.05 $ 0.22 $ 0.15 $ 0.21 $ (3.05) $ (0.54) $ (0.21) $ 0.07
Diluted earnings per common share 0.05 0.22 0.15 0.21 (3.05) (0.54) (0.21) 0.07
Book value per common share 12.60 12.59 12.35 12.21 11.99 15.08 15.60 15.73
Tangible book value per share* 12.54 12.53 12.29 12.15 11.93 15.02 15.54 15.67
COMMON STOCK
Shares issued and outstanding 19,529,721 19,448,312 19,447,202 19,445,913 19,444,213 19,441,577 19,439,167 19,438,290
OTHER FINANCIAL DATA
Investment securities $ 377,112 $ 381,499 $ 340,378 $ 333,860 $ 275,352 $ 269,599 $ 268,153 $ 258,436
Loans held for sale 31,682 34,749 23,996 38,765 38,695 39,902 37,204 37,348
Noncovered portfolio loans 1,321,346 1,429,165 1,498,708 1,570,866 1,687,178 1,993,694 2,156,096 2,241,080
Total noncovered loans 1,353,028 1,463,914 1,522,704 1,609,631 1,725,873 2,033,596 2,193,300 2,278,428
Covered portfolio loans 25,707 28,197 30,712 33,314 37,615 41,209 46,153 49,117
Total assets 2,122,255 2,151,153 2,264,123 2,268,264 2,377,276 2,566,895 2,654,898 2,773,431
Total deposits 1,709,578 1,743,673 1,788,379 1,806,780 1,921,382 2,022,253 2,094,236 2,218,571
Other borrowings 70,362 66,694 68,477 55,139 56,479 86,583 96,682 85,332
Subordinated debentures 81,963 81,963 81,963 81,963 81,963 81,963 81,963 81,963
Total shareholders' equity 246,056 244,821 309,003 306,046 301,589 361,427 371,333 373,753
Mortgage servicing portfolio 343,397 329,184 305,465 301,378 295,492 285,886 283,083 281,271
INTANGIBLE ASSET DATA
Goodwill $ 1,214 $ 1,214 $ 1,214 $ 1,214 $ 1,214 $ 1,214 $ 1,214 $ 1,214
Core deposit intangible 2,543 2,664 2,785 2,906 3,030 3,155 3,285 3,420
Mortgage servicing rights 2,321 2,122 1,975 1,952 1,825 1,808 1,781 1,718
Nonmortgage servicing rights -- -- -- -- 2 3 3 3
Total intangible assets $ 6,078 $ 6,000 $ 5,974 $ 6,072 $ 6,071 $ 6,180 $ 6,283 $ 6,355
Intangible amortization expense $ 283 $ 283 $ 282 $ 296 $ 252 $ 226 $ 222 $ 361
DEPOSIT COMPOSITION
Non-interest bearing demand $ 424,008 $ 429,407 $ 421,083 $ 395,141 $ 400,985 $ 388,365 $ 389,027 $ 369,013
Interest-bearing demand 112,012 113,677 119,929 119,759 105,905 98,270 124,346 112,731
Money market accounts 423,417 385,296 361,839 349,419 423,181 461,546 465,269 486,770
Savings accounts 37,693 36,461 35,610 34,679 33,406 31,319 29,586 28,440
Time deposits of $100,000 or more 351,273 389,969 431,317 464,876 487,907 551,914 570,116 669,817
Other time deposits 361,175 388,863 418,601 442,906 469,998 490,839 515,892 551,800
Total deposits** $ 1,709,578 $ 1,743,673 $ 1,788,379 $ 1,806,780 $ 1,921,382 $ 2,022,253 $ 2,094,236 $ 2,218,571
OFFICES AND EMPLOYEES
FTE Employees 422 429 430 435 435 437 437 424
Branches 22 23 23 23 23 23 23 23
Loan production offices 1 2 2 2 2 2 2 2
Assets per employee $ 5,029 $ 5,014 $ 5,265 $ 5,214 $ 5,465 $ 5,874 $ 6,075 $ 6,541
*This is a Non-GAAP based financial measure.
**Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures)
Total deposits $ 1,709,578 $ 1,743,673 $ 1,788,379 $ 1,806,780 $ 1,921,382 $ 2,022,253 $ 2,094,236 $ 2,218,571
Less:
Brokered time deposits 9,865 10,197 12,238 13,307 14,974 46,838 52,407 122,124
Other brokered deposits 3,421 4,421 4,420 6,529 78,236 105,483 105,392 112,033
Non-brokered deposits $ 1,696,292 $ 1,729,055 $ 1,771,721 $ 1,786,944 $ 1,828,172 $ 1,869,932 $ 1,936,437 $ 1,984,414
Plus:
Sweep repurchase agreements 45,362 41,694 43,477 30,139 31,482 40,305 30,636 27,214
Core funding $ 1,741,654 $ 1,770,749 $ 1,815,198 $ 1,817,083 $ 1,859,654 $ 1,910,237 $ 1,967,073 $ 2,011,628
Balance sheet amounts are as of period end unless otherwise noted.
SOUTHWEST BANCORP, INC. Table 8
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA
(Dollars in thousands, except per share)
2012 2011
Dec. 31 Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
PERFORMANCE RATIOS
Return on average assets (annualized) 0.18% 1.06% 0.73% 0.89% (8.98)% (1.43)% (0.43)% 0.35%
Return on average common equity (annualized) 1.56 7.11 5.03 7.00 (81.01) (13.66) (5.20) 1.85
Return on average tangible common equity (annualized)* 1.56 7.15 5.06 7.03 (81.35) (13.72) (5.22) 1.85
Net interest margin (annualized) 3.41 3.59 3.71 3.82 3.62 3.77 3.79 3.78
Effective tax rate 31.45 39.73 37.12 37.50 38.49 35.23 54.53 38.40
Efficiency ratio 79.68 64.47 71.82 58.73 164.47 64.07 52.40 54.50
NONPERFORMING ASSETS
Noncovered:
Nonaccrual loans $ 35,104 $ 26,493 $ 20,474 $ 14,324 $ 13,506 $ 132,268 $ 151,135 $ 134,934
90 days past due and accruing 3,290 390 245 100 43 458 43 529
Total nonperforming loans 38,394 26,883 20,719 14,424 13,549 132,726 151,178 135,463
Other real estate 11,315 14,683 17,263 19,329 19,844 70,785 38,956 41,067
Total nonperforming assets $ 49,709 $ 41,566 $ 37,982 $ 33,753 $ 33,393 $ 203,511 $ 190,134 $ 176,530
Performing restructured $ 290 $ 281 $ 328 $ 1,700 $ 1,017 $ 1,026 $ 3,191 $ 2,166
Potential problem loans $ 94,361 $ 86,752 $ 111,083 $ 126,320 $ 133,039 $ 276,694 $ 291,171 $ 217,406
Covered:
Nonaccrual loans $ 3,595 $ 4,809 $ 6,067 $ 7,015 $ 7,128 $ 7,065 $ 9,800 $ 9,809
90 days past due and accruing -- 353 -- -- -- 610 -- --
Total nonperforming loans 3,595 5,162 6,067 7,015 7,128 7,675 9,800 9,809
Other real estate 3,643 4,142 3,825 4,694 4,529 5,350 3,806 4,016
Total nonperforming assets $ 7,238 $ 9,304 $ 9,892 $ 11,709 $ 11,657 $ 13,025 $ 13,606 $ 13,825
Performing restructured $ 2,523 $ 2,548 $ 1,701 $ -- $ -- $ -- $ -- $ --
Potential problem loans $ 3,155 $ 1,621 $ 1,573 $ 553 $ 912 $ 2,015 $ 2,731 $ 3,444
ASSET QUALITY RATIOS
Net loan charge-offs to average portfolio loans (annualized) 0.03 % (0.42)% 0.31% 0.32% 19.78% 2.70% 4.76% 2.25%
Noncovered:
Nonperforming assets to portfolio loans and other real estate 3.73% 2.88% 2.51% 2.12% 1.96% 9.86% 8.66% 7.74%
Nonperforming loans to portfolio loans 2.91 1.88 1.38 0.92 0.80 6.66 7.01 6.04
Allowance for loan losses to portfolio loans 3.52 3.05 2.92 2.87 2.62 3.25 2.53 2.73
Allowance for loan losses to nonperforming loans 121.10 162.21 211.43 312.14 326.47 48.75 36.10 45.24
Covered:
Nonperforming assets to portfolio loans and other real estate 24.66% 28.77% 28.64% 30.81% 27.66% 27.98% 27.23% 26.02%
Nonperforming loans to portfolio loans 13.98 18.31 19.75 21.06 18.95 18.62 21.23 19.97
Allowance for loan losses to portfolio loans 0.87 0.49 0.30 0.18 1.20 -- -- --
Allowance for loan losses to nonperforming loans 6.23 2.67 1.50 0.86 6.33 -- -- --
CAPITAL RATIOS
Average total shareholders' equity to average assets 11.61% 12.31% 13.56% 12.99% 13.95% 14.21% 13.81% 13.40%
Leverage ratio 15.01 14.49 16.84 16.20 14.50 16.47 16.25 15.95
Tier 1 capital to risk-weighted assets 20.28 19.36 22.24 21.21 19.51 19.54 18.93 18.49
Total capital to risk-weighted assets 21.56 20.64 23.52 22.49 20.78 20.81 20.20 19.77
Tangible common equity to tangible assets*** 11.54 11.33 10.56 10.42 9.76 11.38 11.38 10.99
REGULATORY CAPITAL DATA
Tier I capital $ 319,665 $ 317,665 $ 382,263 $ 378,949 $ 371,114 $ 433,627 $ 444,105 $ 447,803
Total capital 339,964 338,739 404,252 401,808 395,292 461,928 473,949 478,713
Total risk adjusted assets 1,576,521 1,641,121 1,719,058 1,786,282 1,902,639 2,219,271 2,346,596 2,421,752
Average total assets 2,130,035 2,192,579 2,269,640 2,339,784 2,558,657 2,632,999 2,733,561 2,807,518
*This is a Non-GAAP based financial measure.
***Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure)
Total shareholders' equity $ 246,056 $ 244,821 $ 309,003 $ 306,046 $ 301,589 $ 361,427 $ 371,333 $ 373,753
Less:
Goodwill 1,214 1,214 1,214 1,214 1,214 1,214 1,214 1,214
Preferred stock -- -- 68,837 68,644 68,455 68,268 68,084 67,902
Tangible common equity $ 244,842 $ 243,607 $ 238,952 $ 236,188 $ 231,920 $ 291,945 $ 302,035 $ 304,637
Total assets $ 2,122,255 $ 2,151,153 $ 2,264,123 $ 2,268,264 $ 2,377,276 $ 2,566,895 $ 2,654,898 $ 2,773,431
Less goodwill 1,214 1,214 1,214 1,214 1,214 1,214 1,214 1,214
Tangible assets $ 2,121,041 $ 2,149,939 $ 2,262,909 $ 2,267,050 $ 2,376,062 $ 2,565,681 $ 2,653,684 $ 2,772,217
Tangible common equity to tangible assets 11.54% 11.33% 10.56% 10.42% 9.76% 11.38% 11.38% 10.99%
Balance sheet amounts and ratios are as of period end unless otherwise noted.

CONTACT: Mark W. Funke President & CEO Joe Shockley EVP & CFO (405) 372-2230

Source:Southwest Bancorp, Inc.