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Southwest Bancorp, Inc. Reports First Quarter 2013 Results

Southwest Bancorp, Inc. Logo

STILLWATER, Okla., April 24, 2013 (GLOBE NEWSWIRE) -- Southwest Bancorp, Inc. (Nasdaq:OKSB) (Nasdaq:OKSBP), ("Southwest"), today reported net income available to common shareholders for the first quarter of 2013 of $2.4 million, or $0.12 per diluted share, compared to $1.0 million, or $0.05 per diluted share, for the fourth quarter of 2012.

Mark Funke, President and CEO, stated, "We are reporting another quarter of earnings with $2.4 million in net income for the quarter, an increase from the $1.0 million in the fourth quarter of 2012.

"2013 will continue to be a positive rebuilding year for Southwest. During the first quarter several new talented bankers were added into key commercial lending, treasury management, and mortgage positions, building a base for future revenue generation and more diversification in the loan portfolio. We worked to identify weakness in certain segments of the loan portfolio and other real estate and took aggressive actions to address these issues. Improved asset quality and building a base of consistent, conservative, and sustainable earnings growth will remain key focus points in 2013. Southwest remains significantly well capitalized allowing us to focus on long term improvements in our company while continuing to serve and support our communities and loyal customer base."

Financial Overview

Unless otherwise indicated, the following discussion excludes "covered" assets, which are subject to loss sharing agreements with the FDIC. For information on covered versus noncovered assets, please see the accompanying unaudited financial statement and tables.

Condition: At March 31, 2013, total assets were $2.1 billion, down $30.6 million, or 1%, from December 31, 2012, and total loans were $1.3 billion, down $51.5 million, or 4%, from December 31, 2012, primarily in commercial real estate loans.

Investment securities decreased $11.5 million, or 3%, to $365.6 million as of March 31, 2013, from $377.1 million as of December 31, 2012. 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 March 31, 2013, the allowance for loan losses was $42.6 million, a decrease of 8% from December 31, 2012. The allowance for loan losses to portfolio loans was 3.29% as of March 31, 2013 compared to 3.52% as of December 31, 2012. The allowance for loan losses to nonperforming loans was 131.78% as of March 31, 2013, compared to 121.10% as of December 31, 2012.

Nonperforming assets were $41.8 million, or 3.20% of portfolio loans and other real estate, as of March 31, 2013, a decrease of $7.9 million (16%) from $49.7 million, or 3.73% of portfolio loans and other real estate, as of December 31, 2012. The decrease in nonperforming assets during the first quarter is attributable to charge-offs of $4.6 million in nonperforming loans, primarily related to one commercial healthcare loan located out of market, $3.9 million in resolutions and payments on nonperforming loans, a $3.3 million decrease in loans ninety days past due, the return to accrual status of $2.6 million in nonaccrual loans, the recognition of impairments in other real estate assets of $1.4 million, and the receipt of $0.5 million from sales of other real estate, offset by placing $8.4 million in loans on nonaccrual. Subsequent to the end of the first quarter, Southwest was successful in the sale of an other real estate property. The commercial real estate property was included in first quarter other real estate in our Texas market at a value of $7.2 million and this sale will generate a pre-tax gain on sale of $1.7 million, which will be reflected in second quarter earnings.

Total core funding, which includes all non-brokered deposits and sweep repurchase agreements, comprised 98% of total funding as of March 31, 2013 and December 31, 2012. Wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 2% of total funding at March 31, 2013 and December 31, 2012. Please see Table 6 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 March 31, 2013, exceeded the criteria for regulatory classification as "well-capitalized". Southwest's total regulatory capital was $343.6 million, for a total risk-based capital ratio of 23.54%, and Tier 1 capital was $324.7 million, for a Tier 1 risk-based capital ratio of 22.25%. Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $197.6 million. Stillwater National Bank, Southwest's principal banking subsidiary, had total regulatory capital of $273.4 million, for a total risk-based capital ratio of 21.43%, and Tier 1 capital of $242.1 million, for a Tier 1 risk-based capital ratio of 18.98%. Stillwater National Bank exceeded the minimum to be classified as "well-capitalized" by $145.8 million. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators.

First Quarter Results:

Summary: For the first quarter of 2013, net income available to common shareholders was $2.4 million, compared to $4.1 million for the first quarter of 2012, and $1.0 million for the fourth quarter of 2012. The $1.7 million decrease in our net income available to common shareholders from the first quarter of 2012 is the result of a $5.2 million decrease in net interest income, offset in part by a $1.3 million decrease in income tax expense, a $1.2 million decrease in the provision for loan losses, and the $1.1 million decrease primarily in dividends on preferred stock due to the repurchase during 2012. The increase in net income available to common shareholders from the fourth quarter of 2012 is the result of a $3.3 million decrease in noninterest expense and a $2.6 million decrease in the provision for loan losses, offset in part by a $1.7 million decrease in net interest income, a $1.4 million increase in income taxes, and a $1.3 million decrease in noninterest income.

Net Interest Income: Net interest income totaled $15.6 million for the first quarter of 2013, compared to $20.8 million for the first quarter of 2012, a decrease of $5.2 million, or 25%, and to $17.3 million for the fourth quarter of 2012, a decrease of $1.7 million, or 10%. Noncovered loans declined $49.4 million, or 4%, from December 31, 2012 primarily due to commercial real estate loans. Net interest margin was 3.16% for the first quarter of 2013, compared to 3.82% for the first quarter of 2012 and 3.41% for the fourth quarter of 2012. The decrease is primarily the result of the reduction in loans.

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 $0.5 million was recorded for the first quarter of 2013, compared to a provision for loan losses of $1.7 million for first quarter of 2012 and a provision for loan losses of $3.1 million for the fourth quarter of 2012. For the first quarter of 2013, net charge-offs totaled $4.4 million, or 1.32% (annualized) of average portfolio loans, compared to net charge-offs of $1.3 million, or 0.32% (annualized) of average portfolio loans for the first quarter of 2012, and net charge-offs of $0.1 million, or 0.03% (annualized) of average portfolio loans for the fourth quarter of 2012.

Noninterest Income: Noninterest income totaled $3.5 million for the first quarter of 2013, compared to $3.5 million for the first quarter of 2012, and $4.9 million for the fourth quarter of 2012. The decrease in noninterest income from the fourth quarter of 2012 is the result of a decline of $0.8 million in gain on sales of investment securities, a decline of $0.3 million in service charges and fees, a $0.1 million decline in gain on sale of loans, and a $0.1 million decline in other noninterest income.

Noninterest Expense: Noninterest expense totaled $14.4 million for the first quarter of 2013, compared to $14.3 million for the first quarter of 2012 and $17.7 million for the fourth quarter of 2012.

The $3.3 million decrease from fourth quarter of 2012 consists primarily of a $2.5 million decrease in other real estate expense, which included a $1.4 million write-down of other real estate properties during the first quarter of 2013 partially offset by gains on sales of several properties. Also included in the decline between linked quarters is a $0.6 million decrease in general and administrative expense, which is primarily the result of decreased consulting fees, accounting fees, and miscellaneous expenses, a $0.2 million decrease in provision for unfunded loan commitments, and a $0.1 million decrease in occupancy expense, offset in part by a $0.2 million increase in personnel expense.

Income Tax: Income tax expense totaled $1.9 million for the first quarter of 2013, compared to $3.1 million for the first quarter of 2012 and $0.4 million for the fourth quarter of 2012. The income tax expense fluctuates in relation to pre-tax income levels. The first quarter 2013 effective tax rate was 43.88%, due to a $0.3 million reserve for tax credits.

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, commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services are offered from offices in Oklahoma, Texas, and Kansas. Stillwater National was chartered in 1894 and Southwest was organized in 1981 as the holding company. At March 31, 2013, Southwest had total assets of $2.1 billion, deposits of $1.7 billion, and shareholders' equity of $250.5 million.

Southwest's 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. The strategic focus on healthcare lending was established in 1974. Southwest and its subsidiaries 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 March 31, 2013, approximately $474.8 million, or 36%, of noncovered loans were loans to individuals and businesses in the healthcare industry. Regular market reviews are conducted of current and potential healthcare lending business and the appropriate concentrations within healthcare based upon economic and regulatory conditions.

Additionally, Southwest also focuses on commercial real estate mortgage and construction lending. As of March 31, 2013, approximately $1.0 billion, or 74%, of noncovered loans were commercial real estate mortgage and construction loans, including $328.4 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.

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;
  • 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, 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 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, 2013 through the date its financial statements are filed with the Securities and Exchange Commission. The March 31, 2013 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 Quarterly Summary Loan Data Table 5
Unaudited Quarterly Summary Financial Data Table 6
Unaudited Quarterly Supplemental Analytical Data Table 7
SOUTHWEST BANCORP, INC. Table 1
UNAUDITED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share)
First Quarter Fourth Quarter
QUARTERLY HIGHLIGHTS % %
2013 2012 Change 2012 Change
Operations
Net interest income $15,606 $20,849 (25)% $17,285 (10)%
Provision for loan losses 498 1,716 (71) 3,085 (84)
Noninterest income 3,537 3,514 1 4,871 (27)
Noninterest expense 14,388 14,309 1 17,653 (18)
Income before taxes 4,257 8,338 (49) 1,418 200
Taxes on income 1,868 3,127 (40) 446 319
Net income 2,389 5,211 (54) 972 146
Net income available to common shareholders 2,389 4,119 (42) 972 146
Diluted earnings per share 0.12 0.21 (43) 0.05 140
Balance Sheet
Total assets 2,091,694 2,268,264 (8) 2,122,255 (1)
Loans held for sale 7,297 38,765 (81) 31,682 (77)
Noncovered portfolio loans 1,296,317 1,570,866 (17) 1,321,346 (2)
Covered portfolio loans 23,601 33,314 (29) 25,707 (8)
Total deposits 1,677,668 1,806,780 (7) 1,709,578 (2)
Total shareholders' equity 250,509 306,046 (18) 246,056 2
Book value per common share 12.72 12.21 4 12.60 1
Key Ratios
Net interest margin 3.16% 3.82% 3.41%
Efficiency ratio 75.16 58.73 79.68
Total capital to risk-weighted assets 23.54 22.49 21.56
Nonperforming loans to portfolio loans - noncovered 2.50 0.92 2.91
Shareholders' equity to total assets 11.98 13.71 11.59
Tangible common equity to tangible assets* 11.93 10.42 11.54
Return on average assets (annualized) 0.46 0.89 0.18
Return on average common equity (annualized) 3.89 7.00 1.56
Return on average tangible common equity (annualized)** 3.90 7.03 1.56
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,
2013 2012 2012
Assets
Cash and due from banks $26,677 45,045 24,458
Interest-bearing deposits 317,513 243,034 167,005
Cash and cash equivalents 344,190 288,079 191,463
Securities held to maturity (fair values of $12,539, $13,659, and $13,564, respectively) 11,777 12,797 12,981
Securities available for sale (amortized cost of $348,099, $358,317, and $314,534, respectively) 353,828 364,315 320,879
Loans held for sale 7,297 31,682 38,765
Noncovered loans receivable 1,296,317 1,321,346 1,570,866
Less: Allowance for loan losses (42,639) (46,494) (45,023)
Net noncovered loans receivable 1,253,678 1,274,852 1,525,843
Covered loans receivable (includes loss share: $5,612, $6,714, and $8,638, respectively) 23,601 25,707 33,314
Less: Allowance for loan losses (214) (224) (60)
Net covered loans receivable 23,387 25,483 33,254
Net loans receivable 1,277,065 1,300,335 1,559,097
Accrued interest receivable 6,346 6,365 7,408
Income tax receivable 1,665 24,525 24,544
Premises and equipment, net 21,395 21,691 22,587
Noncovered other real estate 9,422 11,315 19,329
Covered other real estate 2,243 3,643 4,694
Goodwill 1,214 1,214 1,214
Other intangible assets, net 4,869 4,864 4,858
Other assets 50,383 51,430 60,445
Total assets $2,091,694 $2,122,255 $2,268,264
Liabilities
Deposits:
Noninterest-bearing demand $416,979 $424,008 $395,141
Interest-bearing demand 125,914 112,012 119,759
Money market accounts 437,629 423,417 349,419
Savings accounts 39,733 37,693 34,679
Time deposits of $100,000 or more 317,270 351,273 464,876
Other time deposits 340,143 361,175 442,906
Total deposits 1,677,668 1,709,578 1,806,780
Accrued interest payable 1,064 1,116 5,016
Other liabilities 9,618 13,180 13,320
Other borrowings 70,872 70,362 55,139
Subordinated debentures 81,963 81,963 81,963
Total liabilities 1,841,185 1,876,199 1,962,218
Shareholders' equity
Serial preferred stock -- $1,000 par value; 2,000,000 shares authorized;
0, 0, and 70,000 shares issued and outstanding, respectively -- -- 68,644
Common stock -- $1 par value; 40,000,000 shares authorized;
19,692,038, 19,529,705, and 19,445,913 shares issued and outstanding, respectively 19,692 19,530 19,446
Additional paid-in capital 101,622 99,705 98,895
Retained earnings 127,483 125,093 116,765
Accumulated other comprehensive income 1,712 1,728 2,296
Total shareholders' equity 250,509 246,056 306,046
Total liabilities and shareholders' equity $2,091,694 $2,122,255 $2,268,264
SOUTHWEST BANCORP, INC. Table 3
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share)
For the three months
ended March 31,
2013 2012
Interest income
Loans $17,006 $23,377
Investment securities 1,691 1,946
Other interest-earning assets 240 184
Total interest income 18,937 25,507
Interest expense
Interest-bearing deposits 1,652 2,896
Other borrowings 220 224
Subordinated debentures 1,459 1,538
Total interest expense 3,331 4,658
Net interest income 15,606 20,849
Provision for loan losses 498 1,716
Net interest income after provision for loan losses 15,108 19,133
Noninterest income
Service charges and fees 2,660 2,927
Gain on sales of loans 814 535
Other noninterest income 63 52
Total noninterest income 3,537 3,514
Noninterest expense
Salaries and employee benefits 8,136 7,247
Occupancy 2,574 2,545
FDIC and other insurance 491 783
Other real estate, net 353 372
General and administrative 2,834 3,362
Total noninterest expense 14,388 14,309
Income before taxes 4,257 8,338
Taxes on income 1,868 3,127
Net income $2,389 $5,211
Net income available to common shareholders $2,389 $4,119
Basic earnings per common share $0.12 $0.21
Diluted earnings per common share $0.12 0.21
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
March 31, 2013 December 31, 2012
Average Average Average Average
Balance Interest Yield/Rate Balance Interest Yield/Rate
Assets
Noncovered loans $1,330,578 $16,514 5.03% $1,424,512 $18,427 5.15%
Covered loans 24,895 492 8.01 25,860 594 9.14
Investment securities 380,525 1,691 1.80 380,531 1,796 1.88
Other interest-earning assets 268,396 240 0.36 185,136 191 0.41
Total interest-earning assets 2,004,394 18,937 3.83 2,016,039 21,008 4.15
Other assets 87,592 125,027
Total assets $2,091,986 $2,141,066
Liabilities and Shareholders' Equity
Interest-bearing demand deposits $133,600 $45 0.14% $105,854 $41 0.15%
Money market accounts 419,635 236 0.23 398,143 327 0.33
Savings accounts 38,721 12 0.13 37,242 14 0.15
Time deposits 683,159 1,359 0.81 747,579 1,632 0.87
Total interest-bearing deposits 1,275,115 1,652 0.53 1,288,818 2,014 0.62
Other borrowings 69,728 220 1.28 67,709 224 1.32
Subordinated debentures 81,963 1,459 7.12 81,963 1,485 7.25
Total interest-bearing liabilities 1,426,806 3,331 0.95 1,438,490 3,723 1.03
Noninterest-bearing demand deposits 403,547 419,086
Other liabilities 12,285 34,990
Shareholders' equity 249,348 248,500
Total liabilities and shareholders' equity $2,091,986 $2,141,066
Net interest income and spread $15,606 2.88% $17,285 3.12%
Net interest margin (1) 3.16% 3.41%
Average interest-earning assets to average interest-bearing liabilities 140.48% 140.15%
(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, except per share)
2013 2012
Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
LOAN COMPOSITION
Noncovered:
Real estate mortgage:
Commercial $819,873 $870,977 $898,453 $931,239 $996,486
One-to-four family residential 73,911 70,952 74,081 74,390 76,287
Real estate construction:
Commercial 139,462 130,753 206,342 211,098 222,678
One-to-four family residential 5,015 3,656 3,438 4,184 3,814
Commercial 232,224 240,498 244,018 263,085 273,324
Installment and consumer:
Guaranteed student loans 4,576 4,680 4,872 5,153 5,276
Other 28,553 31,512 32,710 33,555 31,766
Total noncovered loans, including held for sale 1,303,614 1,353,028 1,463,914 1,522,704 1,609,631
Less allowance for loan losses (42,639) (46,494) (43,607) (43,807) (45,023)
Total noncovered loans, net $1,260,975 $1,306,534 $1,420,307 $1,478,897 $1,564,608
Covered:
Real estate mortgage:
Commercial $16,970 $18,298 $20,664 $21,472 $22,607
One-to-four family residential 4,458 4,881 5,059 5,432 5,766
Real estate construction:
Commercial 367 382 419 1,627 2,344
Commercial 1,715 2,037 1,937 2,033 2,401
Installment and consumer 91 109 118 148 196
Total covered loans 23,601 25,707 28,197 30,712 33,314
Less allowance for loan losses (214) (224) (138) (91) (60)
Total covered loans, net $23,387 $25,483 $28,059 $30,621 $33,254
LOANS BY SEGMENT
Oklahoma banking $628,747 $652,121 $704,916 $751,758 $810,217
Texas banking 495,815 520,481 560,197 588,370 616,455
Kansas banking 195,355 174,451 192,249 189,292 177,508
Subtotal 1,319,917 1,347,053 1,457,362 1,529,420 1,604,180
Secondary market 7,298 31,682 34,749 23,996 38,765
Total loans $1,327,215 $1,378,735 $1,492,111 $1,553,416 $1,642,945
NONPERFORMING LOANS BY TYPE
Construction & development $6,409 $3,355 $3,436 $3,608 $3,768
Commercial real estate 13,362 18,337 20,576 4,932 6,821
Commercial 11,861 15,232 1,791 10,878 2,209
One-to-four family residential 651 1,310 949 1,125 1,508
Consumer 73 160 131 176 118
Total nonperforming loans - noncovered $32,356 $38,394 $26,883 $20,719 $14,424
NONPERFORMING LOANS BY SEGMENT
Oklahoma banking $2,000 $2,956 $4,369 $2,979 $3,550
Texas banking 28,817 33,756 19,940 14,894 5,703
Kansas banking 1,539 1,682 2,574 2,846 5,171
Total nonperforming loans - noncovered $32,356 $38,394 $26,883 $20,719 $14,424
OTHER REAL ESTATE BY TYPE
Construction & development $215 $215 $445 $2,585 $3,542
Commercial real estate 9,207 11,003 14,130 14,129 14,854
One-to-four family residential -- 97 108 549 933
Total other real estate - noncovered $9,422 $11,315 $14,683 $17,263 $19,329
OTHER REAL ESTATE BY SEGMENT
Oklahoma banking $1,980 $3,393 $6,178 $6,178 $6,273
Texas banking 7,227 7,227 7,227 9,162 9,846
Kansas banking 215 695 1,278 1,923 3,210
Total other real estate - noncovered $9,422 $11,315 $14,683 $17,263 $19,329
POTENTIAL PROBLEM LOANS BY TYPE
Construction & development $19,968 $22,077 $22,565 $25,563 $33,907
Commercial real estate 60,329 58,549 53,725 71,537 67,654
Commercial 8,220 12,526 9,305 12,753 23,506
One-to-four family residential 1,129 1,147 1,157 1,230 1,253
Consumer -- 62 -- -- --
Total potential problem loans - noncovered 89,646 94,361 86,752 111,083 126,320
POTENTIAL PROBLEM LOANS BY SEGMENT
Oklahoma banking 32,246 30,875 39,606 48,038 44,122
Texas banking 51,978 58,377 43,313 59,368 79,735
Kansas banking 5,422 5,109 3,833 3,677 2,463
Total potential problem loans - noncovered $89,646 $94,361 $86,752 $111,083 $126,320
LOANS OUT OF MARKET
Net balance of loans out of market:
Arizona $33,017 $40,326 $41,255 $39,449 $34,749
Iowa 22,659 22,826 22,958 23,022 23,130
California 10,866 9,791 9,684 9,922 10,252
Kentucky 10,144 8,691 7,517 9,455 517
Mississippi 9,170 9,239 9,842 -- --
South Carolina 7,205 7,244 7,283 7,320 --
Tennessee 6,246 6,204 6,232 6,310 6,368
Florida 6,333 6,254 6,204 6,240 6,269
Ohio 4,132 10,438 11,182 11,502 12,650
New Mexico 4,129 3,696 3,696 3,714 3,715
Other 14,136 18,956 19,988 20,314 25,240
Total loans out of market $128,037 $143,665 $145,841 $137,248 $122,890
Nonperforming loans out of market:
Arizona $13,419 $11,599 $250 $256 $261
Florida 270 275 281 287 293
Colorado 131 131 131 131 131
Other -- 59 -- -- --
Total nonperforming out of market $13,820 $12,064 $662 $674 $685
Potential problem loans out of market:
Iowa $11,792 $11,868 $11,941 $11,970 $12,035
California 524 536 548 559 570
Florida 80 85 90 95 100
Arizona -- 9,037 -- -- --
Total potential problem out of market $12,396 $21,526 $12,579 $12,624 $12,705
ALLOWANCE ACTIVITY
Balance, beginning of period $46,718 $43,745 $43,898 $45,083 $44,684
Charge offs 4,651 722 2,653 2,229 1,936
Recoveries 288 610 4,226 1,012 619
Net charge offs (recoveries) 4,363 112 (1,573) 1,217 1,317
Provision for loan losses 498 3,085 (1,726) 32 1,716
Balance, end of period $42,853 $46,718 $43,745 $43,898 $45,083
NET CHARGE OFFS BY TYPE
Construction & development $(19) $(22) $(1,823) $ (85) $(42)
Commercial real estate 416 (18) 2,022 91 14
Commercial 3,751 239 (1,894) 1,228 1,211
One-to-four family residential 167 (40) 20 (105) 123
Consumer 48 (47) 102 88 11
Total net charge offs (recoveries) by type $4,363 $112 $(1,573) $1,217 $1,317
NET CHARGE OFFS BY SEGMENT
Oklahoma banking $589 $(261) $5 $(247) $1,150
Texas banking 3,241 305 857 1,139 227
Kansas banking 533 68 (2,435) 325 (60)
Total net charge offs (recoveries) by segment $4,363 $112 $(1,573) $1,217 $1,317
SOUTHWEST BANCORP, INC. Table 6
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA
(Dollars in thousands, except per share)
2013 2012
Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
PER SHARE DATA
Basic earnings per common share $0.12 $0.05 $0.22 $0.15 $0.21
Diluted earnings per common share 0.12 0.05 0.22 0.15 0.21
Book value per common share 12.72 12.60 12.59 12.35 12.21
Tangible book value per share* 12.66 12.54 12.53 12.29 12.15
COMMON STOCK
Shares issued and outstanding 19,692,038 19,529,721 19,448,312 19,447,202 19,445,913
OTHER FINANCIAL DATA
Investment securities $365,605 $377,112 $381,499 $340,378 $333,860
Loans held for sale 7,297 31,682 34,749 23,996 38,765
Noncovered portfolio loans 1,296,317 1,321,346 1,429,165 1,498,708 1,570,866
Total noncovered loans 1,303,614 1,353,028 1,463,914 1,522,704 1,609,631
Covered portfolio loans 23,601 25,707 28,197 30,712 33,314
Total assets 2,091,694 2,122,255 2,151,153 2,264,123 2,268,264
Total deposits 1,677,668 1,709,578 1,743,673 1,788,379 1,806,780
Other borrowings 70,872 70,362 66,694 68,477 55,139
Subordinated debentures 81,963 81,963 81,963 81,963 81,963
Total shareholders' equity 250,509 246,056 244,821 309,003 306,046
Mortgage servicing portfolio 356,032 343,397 329,184 305,465 301,378
INTANGIBLE ASSET DATA
Goodwill $1,214 $1,214 $1,214 $1,214 $1,214
Core deposit intangible 2,424 2,543 2,664 2,785 2,906
Mortgage servicing rights 2,445 2,321 2,122 1,975 1,952
Total intangible assets $6,083 $6,078 $6,000 $5,974 $6,072
Intangible amortization expense $410 $283 $283 $282 $296
DEPOSIT COMPOSITION
Non-interest bearing demand $416,979 $424,008 $429,407 $421,083 $395,141
Interest-bearing demand 125,914 112,012 113,677 119,929 119,759
Money market accounts 437,629 423,417 385,296 361,839 349,419
Savings accounts 39,733 37,693 36,461 35,610 34,679
Time deposits of $100,000 or more 317,270 351,273 389,969 431,317 464,876
Other time deposits 340,143 361,175 388,863 418,601 442,906
Total deposits** $1,677,668 $1,709,578 $1,743,673 $1,788,379 $1,806,780
OFFICES AND EMPLOYEES
FTE Employees 412 422 429 430 435
Branches 22 22 23 23 23
Loan production offices 1 1 2 2 2
Assets per employee $5,077 $5,029 $5,014 $5,265 $5,214
____________________
*This is a Non-GAAP based financial measure.
**Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures)
Total deposits $1,677,668 $1,709,578 $1,743,673 $1,788,379 $1,806,780
Less:
Brokered time deposits 5,760 9,865 10,197 12,238 13,307
Other brokered deposits 3,422 3,421 4,421 4,420 6,529
Non-brokered deposits $1,668,486 $1,696,292 $1,729,055 $1,771,721 $1,786,944
Plus:
Sweep repurchase agreements 45,872 45,362 41,694 43,477 30,139
Core funding $1,714,358 $1,741,654 $1,770,749 $1,815,198 $1,817,083
Balance sheet amounts are as of period end unless otherwise noted.
SOUTHWEST BANCORP, INC. Table 7
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA
(Dollars in thousands, except per share)
2013 2012
Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
PERFORMANCE RATIOS
Return on average assets (annualized) 0.46% 0.18% 1.06% 0.73% 0.89%
Return on average common equity (annualized) 3.89 1.56 7.11 5.03 7.00
Return on average tangible common equity (annualized)* 3.90 1.56 7.15 5.06 7.03
Net interest margin (annualized) 3.16 3.41 3.59 3.71 3.82
Effective tax rate 43.88 31.45 39.73 37.12 37.50
Efficiency ratio 75.16 79.68 64.47 71.82 58.73
NONPERFORMING ASSETS
Noncovered:
Nonaccrual loans $ 32,356 $ 35,104 $ 26,493 $ 20,474 $ 14,324
90 days past due and accruing -- 3,290 390 245 100
Total nonperforming loans 32,356 38,394 26,883 20,719 14,424
Other real estate 9,422 11,315 14,683 17,263 19,329
Total nonperforming assets $ 41,778 $ 49,709 $ 41,566 $ 37,982 $ 33,753
Performing restructured $ 512 $ 290 $ 281 $ 328 $ 1,700
Potential problem loans $ 89,646 $ 94,361 $ 86,752 $111,083 $126,320
Covered:
Nonaccrual loans $ 2,873 $ 3,595 $ 4,809 $ 6,067 $ 7,015
90 days past due and accruing -- -- 353 -- --
Total nonperforming loans 2,873 3,595 5,162 6,067 7,015
Other real estate 2,243 3,643 4,142 3,825 4,694
Total nonperforming assets $ 5,116 $ 7,238 $ 9,304 $ 9,892 $ 11,709
Performing restructured $ 1,854 $ 2,523 $ 2,548 $ 1,701 $ --
Potential problem loans $ 3,986 $ 3,155 $ 1,621 $ 1,573 $ 553
ASSET QUALITY RATIOS
Net loan charge-offs to average portfolio
loans (annualized) 1.32% 0.03% (0.42)% 0.31% 0.32%
Noncovered:
Nonperforming assets to portfolio loans and other real estate 3.20% 3.73% 2.88% 2.51% 2.12%
Nonperforming loans to portfolio loans 2.50 2.91 1.88 1.38 0.92
Allowance for loan losses to portfolio loans 3.29 3.52 3.05 2.92 2.87
Allowance for loan losses to nonperforming loans 131.78 121.10 162.21 211.43 312.14
Covered:
Nonperforming assets to portfolio loans and other real estate 19.80% 24.66% 28.77% 28.64% 30.81%
Nonperforming loans to portfolio loans 12.17 13.98 18.31 19.75 21.06
Allowance for loan losses to portfolio loans 0.91 0.87 0.49 0.30 0.18
Allowance for loan losses to nonperforming loans 7.45 6.23 2.67 1.50 0.86
CAPITAL RATIOS
Average total shareholders' equity to average assets 11.92% 11.61% 12.31% 13.56% 12.99%
Leverage ratio 15.59 15.01 14.49 16.84 16.20
Tier 1 capital to risk-weighted assets 22.25 20.28 19.36 22.24 21.21
Total capital to risk-weighted assets 23.54 21.56 20.64 23.52 22.49
Tangible common equity to tangible assets*** 11.93 11.54 11.33 10.56 10.42
REGULATORY CAPITAL DATA
Tier I capital $ 324,659 $ 319,665 $317,665 $ 382,263 $ 378,949
Total capital 343,562 339,964 338,739 404,252 401,808
Total risk adjusted assets 1,459,465 1,576,521 1,641,121 1,719,058 1,786,282
Average total assets 2,082,789 2,130,035 2,192,579 2,269,640 2,339,784
____________________
*This is a Non-GAAP based financial measure.
***Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure)
Total shareholders' equity $ 250,509 $ 246,056 $ 244,821 $ 309,003 $ 306,046
Less:
Goodwill 1,214 1,214 1,214 1,214 1,214
Preferred stock -- -- -- 68,837 68,644
Tangible common equity $ 249,295 $ 244,842 $ 243,607 $ 238,952 $ 236,188
Total assets $ 2,091,694 $ 2,122,255 $ 2,151,153 $ 2,264,123 $ 2,268,264
Less goodwill 1,214 1,214 1,214 1,214 1,214
Tangible assets $ 2,090,480 $ 2,121,041 $ 2,149,939 $ 2,262,909 $ 2,267,050
Tangible common equity to tangible assets 11.93% 11.54% 11.33% 10.56% 10.42%
Balance sheet amounts and ratios are as of period end unless otherwise noted.


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

Source:Southwest Bancorp, Inc.