STILLWATER, Okla., Jan. 28 /PRNewswire-FirstCall/ -- Southwest Bancorp, Inc. , ("Southwest"), today reported net income available to common shareholders of $2.5 million, or $0.17 per diluted share for the fourth quarter 2009, compared to $3.0 million, or $0.20 per diluted share for the fourth quarter of 2008. Net income available to common shareholders for the year ended December 31, 2009 was $8.8 million, or $0.60 per diluted share, compared to $14.7 million, or $1.00 per diluted share for the year ended December 31, 2008. At December 31, 2009, total assets were $3.1 billion.
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Rick Green, Southwest Bancorp's President and Chief Executive Officer, stated, "Southwest's 2009 results demonstrate our ability to maintain top line revenue, effectively manage noninterest expenses, and take steps to control risk."
Southwest's nonperforming assets increased significantly during the year as the economy in general, and commercial real estate values in particular, continued to show weakness. We recorded provisions for losses that were over $22 million greater than our net charge offs for the year. At December 31, 2009, the allowance for loan losses of $62.4 million was 2.46% of portfolio loans, excluding loans covered by FDIC loss sharing agreements. Each of our nonaccrual loans is valued on an individual basis using primarily the fair value of collateral or estimated future cash flows, with a specific allowance recorded based on the result.
On January 27, 2010, our principal banking subsidiary, Stillwater National Bank and Trust Company ("Stillwater National") entered into a formal agreement with the United States Comptroller of the Currency ("OCC") relating to its levels of commercial real estate lending and problem assets. The OCC is the primary regulator for national banks. Additional information regarding this agreement is included later in this release under the heading "Regulatory Matters."
The economy continues to show weakness. In 2010 our goals are to work diligently to identify and resolve problem credits, reduce our commercial lending concentrations, and comply with our agreement with the OCC while continuing to produce consistent net interest income.
Southwest and its bank subsidiaries have maintained capital levels that significantly exceed the minimums for regulatory "well capitalized" status. At December 31, 2009, our total regulatory capital was $413.4 million for a total risk-based capital ratio of 14.55%, and Tier 1 capital was $377.4 million for a Tier 1 risk-based capital ratio of 13.28%.
2009 Results
Net interest income growth and expense control made it possible for us to generate $8.8 million in net income for our common shareholders in 2009, while increasing the allowance for loan losses by $22.6 million.
Significant developments during the year include: -- Improved net interest income; -- Provide additional allowance and provision for loan losses; -- Increased regulatory capital; -- Increase in nonperforming assets; -- Greater use of core funding; -- Decreased personnel costs and overall noninterest expenses; and -- Acquired First National Bank of Anthony, ("FNBA"), Anthony, Kansas in an FDIC-assisted transaction during the second quarter. Financial Overview
Condition: Total assets were $3.1 billion at December 31, 2009, an increase of 8% from December 31, 2008. At December 31, 2009 total loans were $2.7 billion, which includes $85.4 million of loans acquired from FNBA in the second quarter.
At December 31, 2009, the allowance for loan losses was $62.4 million, up 57% from year-end 2008 and represented 2.46% of noncovered portfolio loans versus 1.59% at December 31, 2008. The methodology used to determine the appropriate amount of the allowance for loan losses at a particular time includes consideration of risk factors related to Southwest and to our markets, including regular assessments of national and local economic conditions and trends. For the year ended December 31, 2009, the provision for loan losses increased by $20.2 million, or 106%, over the provision for the year ended December 31, 2008. The provision for loan losses exceeded net charge-offs by $4.6 million for the fourth quarter and $22.6 million for the year.
In the second quarter of 2009, Bank of Kansas, a subsidiary of Southwest, acquired assets and assumed liabilities of FNBA in an FDIC-assisted transaction with loss sharing. The loss sharing agreement requires the FDIC to cover 80% of any net losses on covered loans and related assets up to $35.0 million, and 95% of net losses above $35.0 million. (Assets subject to these agreements are referred to as "covered".)
Excluding covered assets, nonperforming assets increased to $124.6 million and 4.87% of portfolio loans and other real estate owned as of December 31, 2009 from $111.7 million and 4.33% of portfolio loans and other real estate owned as of September 30, 2009 and from $70.1 million and 2.80% of portfolio loans and other real estate owned at December 31, 2008. A breakdown of noncovered portfolio loans and noncovered nonperforming assets by type is shown in the following table:
Percentage of Percentage of total Noncovered total Noncovered noncovered portfolio noncovered nonperforming nonperforming (dollars in loans portfolio loans assets assets thousands) ----- --------------- ------ ------ Real estate construction $659,187 25.96% $57,586 46.21% Commercial real estate 1,212,409 47.75 28,451 22.83 Commercial 519,146 20.44 10,422 8.36 Residential real estate mortgages 109,002 4.29 9,463 7.59 Other consumer loans 39,550 1.56 275 0.22 Other real estate owned - - 18,432 14.79 --- --- ------ ----- Total $2,539,294 100.00% $124,629 100.00% ========== ====== ======== ======
Excluding covered loans, nonaccrual loans were $105.9 million as of December 31, 2009, an increase of $11.2 million from September 30, 2009 and $46.6 million from December 31, 2008. These loans are carried at their estimated collectible amounts and no longer accrue interest. Noncovered loans 90 days or more past due, another component of nonperforming assets, were $310,000 as of December 31, 2009 and decreased $10.3 million from September 30, 2009 and $4.4 million from December 31, 2008. These loans are deemed to have sufficient collateral and are in the process of collection.
Performing loans considered potential problem loans, which are not included in the past due or nonaccrual categories but for which known information about possible credit problems cause management to be uncertain as to the continued ability of the borrowers to comply with the present loan repayment terms in future periods, amounted to $267.3 million at December 31, 2009, an increase of $7.8 million from September 30, 2009 and $135.8 million from December 31, 2008. Potential problem loans are subject to continuing management attention and are considered by management in determining the level of the allowance for loan losses.
Southwest's core business is lending. Our primary lending activity is for commercial real estate occupied by businesses and lending to health care professions for start up medical and dental practices, office buildings, surgery centers, hospitals, and facilities for retirement and long-term care. Our loan portfolio includes commercial construction loans and commercial loans secured by completed projects. Real estate construction and commercial real estate represents the majority of our problem assets in each of our markets.
During 2008 and 2009, we continued to evaluate the appropriate limits on types of lending based upon regular studies of commercial real estate and healthcare markets. In 2010, we plan to reduce the percentage of commercial real estate and commercial real estate construction loans to total portfolio loans in view of current economic conditions. Our plan focus is on reductions in particular subcategories of commercial real estate loans that are identified in our regular real estate market reviews. In general, and with some exceptions regarding locations and particular types of facilities, we do not intend to decrease healthcare related commercial or mortgage lending or commercial mortgage lending on owner-occupied properties that otherwise meet our underwriting criteria. These changes have significant effects on loan growth. Year-over-year, outstanding portfolio loans increased by $130.2 million, or 5%, however, the growth was driven by the acquisition of $117.1 million of loans in the FNBA transaction and significant advances on commitments made in 2008. We expect to see our loans decrease in 2010 as a result of our plans and soft demand in our markets.
At December 31, 2009, Southwest exceeded all applicable regulatory capital requirements. Southwest and each of its banking subsidiaries met the criteria for regulatory classification as "well-capitalized". Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $129.3 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: The $5.8 million decrease in our net income available to common shareholders from 2008 is the result of a $20.2 million increase in the provision for loan losses, a $3.5 million increase in FDIC insurance and other insurance expense, and a $3.9 million increase in dividends on the preferred stock that we issued in December 2008, offset in part by a $4.0 million decrease in personnel costs, a $1.8 million decrease in general and administrative expenses, a $1.9 million decrease in income tax expense, a $9.0 million increase in net interest income, a $2.8 million increase in other noninterest income, and a $2.0 million increase in gain on sale of investment securities.
Net Interest Income: Net interest income totaled $98.7 million for 2009, compared to $89.7 million for 2008. Net interest margin was 3.38% compared to 3.36% in 2008. Included in the second quarter net interest income is a one-time recovery of $1.9 million in interest from the successful resolution of a nonperforming loan. Net interest margin would have been 6 basis points lower without this recovery. Included in the fourth quarter net interest income is recognition of discount income due to prepayment and collection of loans acquired in the FNBA transaction in excess of the recorded value at the date of the acquisition. This increased net margin by 3 basis points.
Provision for Loan Losses and Net Charge Offs: The provision for loan losses totaled $39.2 million for 2009, compared to $19.0 million for 2008. Noncovered net charge offs totaled $16.8 million, or 0.64% of average noncovered portfolio loans for 2009, compared to $8.8 million, or 0.37% of average noncovered portfolio loans for 2008.
Noninterest Income: For 2009, noninterest income totaled $21.9 million, compared to $16.1 million for 2008. The increase in noninterest income was primarily the result of a $2.0 million increase in gain on sale of investment securities and a $2.8 million increase in other noninterest income, which includes the $3.3 million gain on the FNBA acquisition that occurred in the second quarter.
Noninterest Expense: For 2009, noninterest expense totaled $60.9 million, compared to $62.5 million for 2008. The decrease primarily consists of a $4.0 million reduction in personnel expense, a $940,000 decrease in other general and administrative expenses, and an $865,000 decrease in provision for unfunded loan commitments, offset in part by a $3.5 million increase in FDIC and other insurance expense and a $765,000 increase in occupancy expense.
Efficiency Ratio: The efficiency ratio improved to 50.45% for 2009 from 59.03% for 2008.
Fourth Quarter Results:
Summary: The $448,000 decrease in our net income available to common shareholders compared to the fourth quarter of 2008 was the result of a $3.9 million increase in the provision for loan losses, a $2.2 million increase in noninterest expense, and a $797,000 increase in quarterly dividends on the preferred stock that we issued in December 2008, offset in part by a $5.4 million increase in net interest income and a $1.1 million increase in noninterest income.
Net Interest Income: Net interest income totaled $27.8 million for the fourth quarter of 2009, compared to $22.4 million for the fourth quarter of 2008. Net interest margin was 3.71% for the fourth quarter of 2009, compared to 3.22% for the fourth quarter of 2008. Included in net interest income is recognition of discount income due to prepayment and collection of loans acquired in the FNBA transaction in excess of the recorded value at the date of acquisition. This increased net margin by 12 basis points.
Provision for Loan Losses: The provision for loan losses totaled $10.6 million for the fourth quarter of 2009, compared to $6.7 million for the fourth quarter of 2008. Noncovered net charge offs totaled $6.2 million, or 0.95% (annualized) of average noncovered portfolio loans for the fourth quarter of 2009, compared to $2.7 million, or 0.44% (annualized) of average noncovered portfolio loans, for the fourth quarter of 2008.
Noninterest Income: Noninterest income totaled $4.5 million for the fourth quarter of 2009, compared to $3.4 million for the fourth quarter of 2008. The increase is the result of a $387,000 increase in service charges and fees, a $313,000 increase in the gain on sale of loans, and a $299,000 increase in the gain on sale of securities.
Noninterest Expense: Noninterest expense totaled $16.0 million for the fourth quarter of 2009, a $2.2 million increase from the fourth quarter of 2008. The increase primarily consists of a $960,000 increase in personnel expense, a $747,000 increase in other general and administrative expenses, and a $456,000 increase in FDIC and other insurance expense.
Efficiency Ratio: The efficiency ratio for the fourth quarter of 2009 improved to 49.69% from 53.37% for the fourth quarter of 2008.
New Business Opportunity
There is strong demand for rural healthcare facilities, focusing on areas and cities with populations of less than 100,000. Southwest is providing funding for three new hospitals now under construction in rural areas of three different states, under a United States Department of Agriculture ("USDA") program that provides a USDA guarantee upon completion of each project. We see this important new business opportunity evolving to position our company with a recurring source of new revenue as our population grows older, lives longer, and prefers staying in their home communities for life.
Southwest Bancorp and Subsidiaries
Southwest is the financial holding company for Stillwater National Bank and Trust Company, Bank of Kansas, SNB Capital Corporation, Healthcare Strategic Support, Inc., and Business Consulting Group, Inc. Through its subsidiaries, Southwest offers commercial and consumer lending, deposit, and investment services, and specialized cash management, consulting, and other financial services from offices in Oklahoma, Texas, and Kansas, and on the Internet, through SNB DirectBanker®.
Southwest focuses on converting its strategic vision into long-term shareholder value. Our vision includes a commercial banking model and a community banking model focused on more traditional banking operations in our three-state market. We operate seven offices in Texas, eleven offices in Oklahoma, and nine offices in Kansas. At December 31, 2009, our Texas segment accounted for $1.1 billion, or 40% of total portfolio loans, followed by $933.2 million, or 36%, from our Oklahoma segment, $359.6 million, or 14%, from our Kansas segment, and $277.5 million, or 11%, from our other states segment.
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.
Regulatory Matters
Under the terms of the January 27, 2010, Agreement with the OCC, Stillwater National is required, to submit written plans to the OCC and to take required actions relating to the following items:
-- Establishing and ensuring compliance with a plan to reduce credit risk and improve loan portfolio management; -- Eliminating credit weaknesses in nonperforming and potential problem loans; -- On-going review and grading of the Stillwater National's loan portfolio; -- Improving the Stillwater National's position regarding nonperforming and potential problem loans and other real estate owned; -- Improving loan portfolio concentration risk management; and -- Establishing and operating a loan workout department.
In addition, Stillwater National is required to prepare a three-year capital plan; and to obtain OCC approval before increasing its use of brokered deposits or declaring dividends.
The compliance committee of the Board of Directors of Stillwater National will submit quarterly reports to the OCC setting forth a description of the actions needed to achieve full compliance with the formal agreement, actions taken to comply, and the results and status of these actions.
Stillwater National remains well-capitalized for regulatory purposes with a leverage ratio of 11.37%, a Tier I risk based capital ratio of 12.00%, and a total risk based capital ratio of 13.84%. General regulatory minimums to be well-capitalized are a leverage ratio of 5.00%, a tier I risk based capital ratio of 6.00%, and a total risk based capital ratio of 10.00%.
Southwest has made informal commitments to the Federal Reserve Bank of Kansas City ("FRB") which include providing prior notice of the declaration and payment of dividends on trust preferred securities, preferred stock issued under the Treasury Department's Capital Purchase Program, and common stock, and of planned receipt of dividends from its banking subsidiaries. Southwest also has agreed to submit a capital plan to the FRB and to obtain FRB approval for any additional borrowings at the holding company level. Southwest does not intend to increase its borrowings.
Forward-Looking Statements
This Press Release includes forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include: statements of Southwest's goals, intentions, and expectations; estimates of risks and of future costs and benefits; expectations regarding future financial performance of Southwest and its operating segments; assessments of loan quality, probable loan losses, and the amount and timing of loan payoffs; liquidity, contractual obligations, off-balance sheet risk and interest rate risk; estimates of value of acquired assets, deposits, and other liabilities; 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 time of future changes in interest rates, market behavior, and other economic conditions; future laws and regulations and accounting principles; and a variety of other matters. Because of these uncertainties, the actual future results may be materially different from the results indicated by these forward-looking statements. In addition, Southwest's past growth and performance do not necessarily indicate its future results.
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, 2009 through the date its financial statements are filed with the Securities and Exchange Commission. The December 31, 2009 financial statements will be adjusted as necessary to properly consider 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 Summary Financial Data by Quarter-2009 and 2008.........Table 6 Unaudited Supplemental Analytical Data by Quarter-2009 and 2008...Table 7 SOUTHWEST BANCORP, INC. Table 1 UNAUDITED FINANCIAL HIGHLIGHTS (Dollars in thousands except per share) Fourth Quarter ---------------------------- QUARTERLY HIGHLIGHTS % 2009 2008 Change ---- ---- ------ Operations Net interest income $27,797 $22,414 24% Provision for loan losses 10,640 6,698 59 Noninterest income 4,488 3,429 31 Noninterest expense 16,041 13,793 16 Income before taxes 5,604 5,352 5 Taxes on income 2,030 2,127 (5) Net income 3,574 3,225 11 Net income available to common shareholders 2,534 2,982 (15) Diluted earnings per share 0.17 0.20 (15) Balance Sheet Total assets 3,108,291 2,879,762 8 Loans held for sale 43,134 56,941 (24) Noncovered portfolio loans 2,539,294 2,494,506 2 Covered portfolio loans 85,405 - Total deposits 2,592,730 2,180,122 19 Total shareholders' equity 309,778 302,203 3 Book value per share 16.46 16.18 2 Key Ratios Net interest margin 3.71% 3.22% Efficiency ratio (GAAP-based) 49.69 53.37 Total capital to risk-weighted assets 14.55 14.26 Nonperforming loans to portfolio loans -noncovered 4.18 2.56 Shareholders' equity to total assets 9.97 10.49 Tangible common equity to tangible assets 7.61 7.96 Return on average assets (annualized) 0.46 0.45 Return on average equity (annualized) 4.51 5.11 Third Quarter ------------------ QUARTERLY HIGHLIGHTS % 2009 Change ---- ------ Operations Net interest income $25,400 9% Provision for loan losses 10,177 5 Noninterest income 3,710 21 Noninterest expense 15,528 3 Income before taxes 3,405 65 Taxes on income 1,271 60 Net income 2,134 67 Net income available to common shareholders 1,097 131 Diluted earnings per share 0.07 143 Balance Sheet Total assets 3,029,347 3 Loans held for sale 36,526 18 Noncovered portfolio loans 2,572,111 (1) Covered portfolio loans 103,630 (18) Total deposits 2,473,162 5 Total shareholders' equity 309,118 - Book value per share 16.43 - Key Ratios Net interest margin 3.39% Efficiency ratio (GAAP-based) 53.34 Total capital to risk-weighted assets 14.31 Nonperforming loans to portfolio loans -noncovered 4.09 Shareholders' equity to total assets 10.20 Tangible common equity to tangible assets 7.79 Return on average assets (annualized) 0.28 Return on average equity (annualized) 2.72 YEAR-TO-DATE HIGHLIGHTS Twelve Months ------------------------------ % 2009 2008 Change ---- ---- ------ Operations Net interest income $98,691 $89,719 10% Provision for loan losses 39,176 18,979 106 Noninterest income 21,936 16,138 36 Noninterest expense 60,858 62,488 (3) Income before taxes 20,593 24,390 (16) Taxes on income 7,611 9,489 (20) Net income 12,982 14,901 (13) Net income available to common shareholders 8,837 14,658 (40) Diluted earnings per share 0.60 1.00 (40) Balance Sheet Total assets 3,108,291 2,879,762 8 Loans held for sale 43,134 56,941 (24) Noncovered portfolio loans 2,539,294 2,494,506 2 Covered portfolio loans 85,405 - - Total deposits 2,592,730 2,180,122 19 Total shareholders' equity 309,778 302,203 3 Book value per share 16.46 16.18 2 Key Ratios Net interest margin 3.38% 3.36% Efficiency ratio (GAAP-based) 50.45 59.03 Total capital to risk-weighted assets 14.55 14.26 Nonperforming loans to portfolio loans -noncovered 4.18 2.56 Shareholders' equity to total assets 9.97 10.49 Tangible common equity to tangible assets 7.61 7.96 Return on average assets 0.43 0.54 Return on average equity 4.20 6.40 Balance sheet amounts and ratios are as of period end unless otherwise noted. Please see accompanying tables for additional financial information. SOUTHWEST BANCORP, INC. Table 2 UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except per share) December 31, December 31, 2009 2008 ---- ---- Assets Cash and due from banks $118,847 $27,287 Investment securities: Held to maturity. Fair value: $6,754, $7,293, respectively 6,670 7,343 Available for sale. Amortized cost: $236,199, $233,293, respectively 237,703 238,037 Other investments, at cost 19,066 18,786 Loans held for sale 43,134 56,941 Noncovered loans receivable 2,539,294 2,494,506 Less: Allowance for loan losses (62,413) (39,773) ------------------- ------- ------- Net noncovered loans receivable 2,476,881 2,454,733 Covered loans receivable (includes loss share receivable of $23.9 million) 85,405 - ---------------------- ------ --- Net loans receivable 2,562,286 2,454,733 Accrued interest receivable 10,806 11,512 Premises and equipment, net 26,536 24,580 Noncovered other real estate 18,432 6,092 Covered other real estate 4,748 - Goodwill 6,811 7,071 Other intangible assets, net 5,779 3,764 Other assets 47,473 23,616 ------------ ------ ------ Total assets $3,108,291 $2,879,762 ------------ ---------- ========== Liabilities and shareholders' equity Deposits: Noninterest-bearing demand $324,829 $261,940 Interest-bearing demand 74,201 76,027 Money market accounts 505,521 454,250 Savings accounts 25,730 14,135 Time deposits of $100,000 or more 1,004,439 802,244 Other time deposits 658,010 571,526 ------------------- ------- ------- Total deposits 2,592,730 2,180,122 Accrued interest payable 3,191 7,018 Income tax payable 4,486 3,651 Other liabilities 13,121 9,667 Other borrowings 103,022 295,138 ----------------- ------- ------- Subordinated debentures 81,963 81,963 ----------------------- ------ ------ Total liabilities 2,798,513 2,577,559 Shareholders' equity -------------------- Preferred stock, Series B - $1,000 par value; 1,250,000 shares authorized; 70,000 shares issued 67,037 66,392 Common stock -$1 par value; 20,000,000 shares authorized; 14,750,713 and 14,658,042 shares issued, respectively 14,751 14,658 Paid in capital 49,029 49,101 Retained earnings 178,016 170,579 Accumulated other comprehensive income 945 2,921 Treasury stock, at cost, 0 and 80,383 shares, respectively - (1,448) --------------------- --- ------ Total shareholders' equity 309,778 302,203 ------------------- ------- ------- Total liabilities and shareholders' equity $3,108,291 $2,879,762 --------------------- ========== ========== SOUTHWEST BANCORP, INC. Table 3 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands except per share) For the For the three months twelve months ended December 31, ended December 31, ------------------ ------------------ 2009 2008 2009 2008 ---- ---- ---- ---- Interest income Loans $36,355 $36,183 $141,239 $152,719 Investment securities 2,433 2,693 9,146 9,986 Other interest-earning assets 1 19 14 89 --- --- --- --- Total interest income 38,789 38,895 150,399 162,794 Interest expense Interest-bearing deposits 9,090 13,263 42,319 61,022 Other borrowings 625 1,487 4,049 7,242 Subordinated debentures 1,277 1,731 5,340 4,811 ----- ----- ----- ----- Total interest expense 10,992 16,481 51,708 73,075 ------ ------ ------ ------ Net interest income 27,797 22,414 98,691 89,719 Provision for loan losses 10,640 6,698 39,176 18,979 ------ ----- ------ ------ Net interest income after provision for loan losses 17,157 15,716 59,515 70,740 Noninterest income Service charges and fees 3,295 2,908 11,704 11,026 Gain on acquisition - - 3,281 - Gain on sales of loans 933 620 2,963 2,664 Gain (loss) on investment securities 3 (296) 2,925 902 Other noninterest income 257 197 1,063 1,546 --- --- ----- ----- Total noninterest income 4,488 3,429 21,936 16,138 Noninterest expense Salaries and employee benefits 7,349 6,389 29,299 33,330 Occupancy 3,159 2,844 11,637 10,872 FDIC and other insurance 1,101 645 5,545 2,088 Other real estate, net 39 31 130 146 General and administrative 4,393 3,884 14,247 16,052 ----- ----- ------ ------ Total noninterest expense 16,041 13,793 60,858 62,488 ------ ------ ------ ------ Income before taxes 5,604 5,352 20,593 24,390 Taxes on income 2,030 2,127 7,611 9,489 ----- ----- ----- ----- Net income $3,574 $3,225 $12,982 $14,901 ====== ====== ======= ======= Net income available to common shareholders $2,534 $2,982 $8,837 $14,658 ====== ====== ====== ======= Basic earnings per common share $0.17 $0.21 $0.60 $1.01 Diluted earnings per common share 0.17 0.20 0.60 1.00 Common dividends declared per share 0.0238 0.0950 0.0952 0.3800 SOUTHWEST BANCORP, INC. Table 4 UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES (Dollars in thousands) For the three months ended December 31, --------------------------------------- 2009 --------------------------------- Average Average Balance Interest Yield/Rate ------- -------- ---------- Assets Noncovered loans $2,613,741 $34,881 5.29% Covered loans 91,459 1,474 6.39 Investment securities 264,216 2,433 3.65 Other interest-earning assets 5,624 1 0.07 ----- --- Total interest-earning assets 2,975,040 38,789 5.17 Other assets 74,889 ------ Total assets $3,049,929 ========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $75,614 $66 0.35% Money market accounts 502,247 1,170 0.92 Savings accounts 25,388 16 0.25 Time deposits 1,585,240 7,838 1.96 --------- ----- Total interest-bearing deposits 2,188,489 9,090 1.65 Other borrowings 127,378 625 1.95 Subordinated debentures 81,963 1,277 6.23 ------ ----- Total interest-bearing liabilities 2,397,830 10,992 1.82 ------ ---- Noninterest-bearing demand deposits 316,784 Other liabilities 20,751 Shareholders' equity 314,564 ------- Total liabilities and shareholders' equity $3,049,929 ========== Net interest income and spread $27,797 3.35% ======= ==== Net interest margin (1) 3.71% ==== Average interest- earning assets to average interest- bearing liabilities 124.07% ====== For the three months ended December 31, --------------------------------------- 2008 --------------------------------- Average Average Balance Interest Yield/Rate ------- -------- ---------- Assets Noncovered loans $2,512,425 $36,183 5.73% Covered loans - - - Investment securities 249,846 2,693 4.29 Other interest-earning assets 5,116 19 1.48 ----- --- Total interest-earning assets 2,767,387 38,895 5.59 Other assets 68,822 ------ Total assets $2,836,209 ========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $76,359 $130 0.68% Money market accounts 513,095 2,132 1.65 Savings accounts 14,375 11 0.30 Time deposits 1,300,295 10,990 3.36 --------- ------ Total interest-bearing deposits 1,904,124 13,263 2.77 Other borrowings 297,155 1,487 1.99 Subordinated debentures 81,963 1,731 8.45 ------ ----- Total interest-bearing liabilities 2,283,242 16,481 2.87 ------ ---- Noninterest-bearing demand deposits 279,268 Other liabilities 22,693 Shareholders' equity 251,006 ------- Total liabilities and shareholders' equity $2,836,209 ========== Net interest income and spread $22,414 2.72% ======= ==== Net interest margin (1) 3.22% ==== Average interest- earning assets to average interest- bearing liabilities 121.20% ====== (1) Net interest margin = annualized net interest income / average interest-earning assets SOUTHWEST BANCORP, INC. Table 5 UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES (Dollars in thousands) For the twelve months ended December 31, ---------------------------------------- 2009 -------------------------------- Average Average Balance Interest Yield/Rate ------- -------- ---------- Assets Loans (2) $2,667,771 $141,239 5.29% Investment securities 245,456 9,146 3.73 Other interest-earning assets 5,813 14 0.24 ----- --- Total interest-earning assets 2,919,040 150,399 5.15 Other assets 68,430 ------ Total assets $2,987,470 ========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $83,813 $476 0.57% Money market accounts 485,383 4,954 1.02 Savings accounts 21,010 78 0.37 Time deposits 1,518,638 36,811 2.42 --------- ------ Total interest-bearing deposits 2,108,844 42,319 2.01 Other borrowings 181,682 4,049 2.23 Subordinated debentures 81,963 5,340 6.52 ------ ----- Total interest-bearing liabilities 2,372,489 51,708 2.18 --------- ------ ---- Noninterest-bearing demand deposits 285,184 Other liabilities 20,845 Shareholders' equity 308,952 ------- Total liabilities and shareholders' equity $2,987,470 ========== Net interest income and spread $98,691 2.97% ======= ==== Net interest margin (1) 3.38% ==== Average interest-earning assets to average interest-bearing liabilities 123.04% ====== For the twelve months ended December 31, ---------------------------------------- 2008 -------------------------------- Average Average Balance Interest Yield/Rate ------- -------- ---------- Assets Loans (2) $2,429,129 $152,719 6.29% Investment securities 238,653 9,986 4.18 Other interest-earning assets 3,854 89 2.31 ----- --- Total interest-earning assets 2,671,636 162,794 6.09 Other assets 71,263 ------ Total assets $2,742,899 ========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $75,950 $584 0.77% Money market accounts 538,148 12,620 2.35 Savings accounts 13,930 69 0.50 Time deposits 1,253,057 47,749 3.81 --------- ------ Total interest-bearing deposits 1,881,085 61,022 3.24 Other borrowings 274,106 7,242 2.64 Subordinated debentures 64,064 4,811 7.51 ------ ----- Total interest-bearing liabilities 2,219,255 73,075 3.29 --------- ------ ---- Noninterest-bearing demand deposits 268,770 Other liabilities 22,043 Shareholders' equity 232,831 ------- Total liabilities and shareholders' equity $2,742,899 ========== Net interest income and spread $89,719 2.80% ======= ==== Net interest margin (1) 3.36% ==== Average interest-earning assets to average interest-bearing liabilities 120.38% ====== (1) Net interest margin = net interest income / average interest-earning assets. (2) Information regarding noncovered and covered loans for the period shown is not readily available. SOUTHWEST BANCORP, INC. Table 6 UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA (Dollars in thousands except per share) 2009 ------------------------------------------- Dec. 31 Sep. 30 Jun. 30 Mar. 31 ------- ------- ------- ------- OPERATIONS Interest income: Loans $36,355 $35,607 $36,009 $33,268 Investment securities 2,433 2,122 2,079 2,512 Other interest- earning assets 1 4 3 6 --- --- --- --- Total interest income 38,789 37,733 38,091 35,786 Interest expense: Interest bearing demand deposits 66 107 150 153 Money market accounts 1,170 1,220 1,211 1,353 Savings accounts 16 39 14 9 Time deposits of $100,000 or more 4,340 4,822 5,552 5,980 Other time deposits 3,498 3,909 4,145 4,565 ----- ----- ----- ----- Total interest- bearing deposits 9,090 10,097 11,072 12,060 Other borrowings 625 960 1,180 1,284 Subordinated debentures 1,277 1,276 1,383 1,404 ----- ----- ----- ----- Total interest expense 10,992 12,333 13,635 14,748 ------ ------ ------ ------ Net interest income 27,797 25,400 24,456 21,038 Provision for loan losses 10,640 10,177 7,477 10,882 Noninterest income: Service charges and fees 3,295 2,992 2,817 2,600 Gain on sales of loans 933 386 926 718 Gain (loss) on investment securities 3 10 (9) 2,921 Other noninterest income 257 322 3,527 238 --- --- ----- --- Total noninterest income 4,488 3,710 7,261 6,477 Noninterest expense: Salaries and employee benefits 7,349 7,824 6,887 7,239 Occupancy 3,159 2,958 2,789 2,731 FDIC and other insurance 1,101 1,134 2,319 991 Other real estate, net 39 90 103 (102) Provision for unfunded loan commitments 147 (79) (388) 90 Other general and administrative 4,246 3,601 2,980 3,650 ----- ----- ----- ----- Total noninterest expenses 16,041 15,528 14,690 14,599 ------ ------ ------ ------ Income before taxes 5,604 3,405 9,550 2,034 Taxes on income 2,030 1,271 3,605 705 ----- ----- ----- --- Net income $3,574 $2,134 $5,945 $1,329 ====== ====== ====== ====== Net income available to common shareholders $2,534 $1,097 $4,910 $296 ====== ====== ====== ==== PER SHARE DATA Basic earnings per common share $0.17 $0.07 $0.34 $0.02 Diluted earnings per common share 0.17 0.07 0.33 0.02 Common dividends declared per share 0.0238 0.0238 0.0238 0.0238 Book value per share 16.46 16.43 16.30 16.01 Tangible book value per share 15.99 15.96 15.84 15.52 COMMON STOCK Shares issued 14,750,713 14,748,223 14,658,042 14,658,042 Less treasury shares - - (15,602) (49,930) --- --- ------- ------- Outstanding shares 14,750,713 14,748,223 14,642,440 14,608,112 ========== ========== ========== ========== OTHER FINANCIAL DATA Investment securities $263,439 $258,790 $243,077 $179,006 Loans held for sale 43,134 36,526 26,006 76,404 Noncovered portfolio loans 2,539,294 2,572,111 2,587,230 2,526,293 Total noncovered loans 2,582,428 2,608,637 2,613,236 2,602,697 Covered portfolio loans 85,405 103,630 117,096 - Total assets 3,108,291 3,029,347 3,038,985 2,928,133 Total deposits 2,592,730 2,473,162 2,452,295 2,330,089 Other borrowings 103,022 146,449 176,368 193,739 Subordinated debentures 81,963 81,963 81,963 81,963 Total shareholders' equity 309,778 309,118 305,416 300,406 Mortgage servicing portfolio 237,459 223,226 209,425 179,959 INTANGIBLE ASSET DATA Goodwill $6,811 $6,811 $6,811 $7,071 Core deposit intangible 4,104 4,240 4,378 2,498 Mortgage servicing rights 1,670 1,625 1,589 1,362 Nonmortgage servicing rights 5 7 7 8 --- --- --- --- Total intangible assets $12,590 $12,683 $12,785 $10,939 ======= ======= ======= ======= Intangible amortization expense $381 $344 $391 $204 ============= ==== ==== ==== ==== 2008 ------------------------------------------- Dec. 31 Sep. 30 Jun. 30 Mar. 31 ------- ------- ------- ------- OPERATIONS Interest income: Loans $36,183 $38,441 $37,485 $40,610 Investment securities 2,693 2,531 2,426 2,336 Other interest- earning assets 19 22 20 28 --- --- --- --- Total interest income 38,895 40,994 39,931 42,974 Interest expense: Interest bearing demand deposits 130 147 166 141 Money market accounts 2,132 2,898 3,062 4,528 Savings accounts 11 17 19 22 Time deposits of $100,000 or more 6,419 6,879 7,051 7,865 Other time deposits 4,571 4,457 4,809 5,698 ----- ----- ----- ----- Total interest- bearing deposits 13,263 14,398 15,107 18,254 Other borrowings 1,487 1,839 1,887 2,029 Subordinated debentures 1,731 1,569 653 858 ----- ----- --- --- Total interest expense 16,481 17,806 17,647 21,141 ------ ------ ------ ------ Net interest income 22,414 23,188 22,284 21,833 Provision for loan losses 6,698 6,855 3,190 2,236 Noninterest income: Service charges and fees 2,908 2,849 2,812 2,457 Gain on sales of loans 620 601 603 840 Gain (loss) on investment securities (296) (50) 3 1,245 Other noninterest income 197 662 541 146 --- --- --- --- Total noninterest income 3,429 4,062 3,959 4,688 Noninterest expense: Salaries and employee benefits 6,389 8,863 8,856 9,222 Occupancy 2,844 2,968 2,602 2,458 FDIC and other insurance 645 469 521 453 Other real estate, net 31 (92) 197 10 Provision for unfunded loan commitments 385 90 15 145 Other general and administrative 3,499 4,235 4,141 3,542 ----- ----- ----- ----- Total noninterest expenses 13,793 16,533 16,332 15,830 ------ ------ ------ ------ Income before taxes 5,352 3,862 6,721 8,455 Taxes on income 2,127 1,556 2,559 3,247 ----- ----- ----- ----- Net income $3,225 $2,306 $4,162 $5,208 ====== ====== ====== ====== Net income available to common shareholders $2,982 $2,306 $4,162 $5,208 ====== ====== ====== ====== PER SHARE DATA Basic earnings per common share $0.21 $0.16 $0.29 $0.36 Diluted earnings per common share 0.20 0.16 0.28 0.36 Common dividends declared per share 0.0950 0.0950 0.0950 0.0950 Book value per share 16.18 15.56 15.49 15.43 Tangible book value per share 15.69 15.08 15.00 14.95 COMMON STOCK Shares issued 14,658,042 14,658,042 14,658,042 14,658,042 Less treasury shares (80,383) (129,586) (131,566) (133,605) ------- -------- -------- -------- Outstanding shares 14,577,659 14,528,456 14,526,476 14,524,437 ========== ========== ========== ========== OTHER FINANCIAL DATA Investment securities $264,166 $241,728 $234,429 $236,059 Loans held for sale 56,941 72,248 62,892 66,364 Noncovered portfolio loans 2,494,506 2,440,091 2,381,893 2,287,606 Total noncovered loans 2,551,447 2,512,339 2,444,785 2,353,970 Covered portfolio loans - - - - Total assets 2,879,762 2,832,371 2,773,013 2,670,580 Total deposits 2,180,122 2,198,719 2,211,001 2,094,927 Other borrowings 295,138 299,118 265,614 282,513 Subordinated debentures 81,963 81,963 46,393 46,393 Total shareholders' equity 302,203 226,123 224,949 224,155 Mortgage servicing portfolio 158,143 153,250 147,672 145,028 INTANGIBLE ASSET DATA Goodwill $7,071 $7,071 $7,071 $7,071 Core deposit intangible 2,596 2,693 2,792 2,893 Mortgage servicing rights 1,159 1,417 1,354 1,299 Nonmortgage servicing rights 9 10 11 13 --- --- --- --- Total intangible assets $10,835 $11,191 $11,228 $11,276 ======= ======= ======= ======= Intangible amortization expense $214 $212 $215 $257 ============= ==== ==== ==== ==== SOUTHWEST BANCORP, INC. Table 6 UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA CONTINUED (Dollars in thousands except per share) 2009 ------------------------------------------- Dec. 31 Sep. 30 Jun. 30 Mar. 31 ------- ------- ------- ------- LOAN COMPOSITION Noncovered ---------- Real estate mortgage: Commercial $1,212,409 $1,221,739 $1,208,819 $1,098,587 One-to-four family residential 114,614 125,034 116,068 114,111 Real estate construction Commercial 618,078 612,905 622,298 640,132 One-to-four family residential 41,109 39,009 51,292 79,309 Commercial 520,505 538,757 554,734 558,834 Installment and consumer: Guaranteed student loans 36,163 30,949 18,477 69,792 Other 39,550 40,244 41,548 41,932 ------ ------ ------ ------ Total noncovered loans, including held for sale 2,582,428 2,608,637 2,613,236 2,602,697 Less allowance for loan losses (62,413) (57,777) (51,753) (46,262) ------- ------- ------- ------- Total noncovered loans, net $2,520,015 $2,550,860 $2,561,483 $2,556,435 ========== ========== ========== ========== By statement of condition category: Covered ------- Real estate mortgage: Commercial $39,836 $37,820 $40,411 $- One-to-four family residential 12,630 17,246 17,889 - Real estate construction Commercial 12,515 14,178 14,277 - One-to-four family residential 5,324 9,936 13,647 - Commercial 13,412 21,475 27,203 - Installment and consumer: 1,688 2,975 3,669 - ===== ===== ===== === Total covered loans $85,405 $103,630 $117,096 $- ======= ======== ======== === DEPOSIT COMPOSITION Non-interest bearing demand $324,829 $309,767 $291,014 $274,175 Interest-bearing demand 74,201 82,622 94,060 85,629 Money market accounts 505,521 506,196 483,162 467,924 Savings accounts 25,730 25,636 25,660 15,797 Time deposits of $100,000 or more 1,004,439 888,814 905,202 849,814 Other time deposits 658,010 660,127 653,197 636,750 ------- ------- ------- ------- Total deposits* $2,592,730 $2,473,162 $2,452,295 $2,330,089 ========== ========== ========== ========== LOANS BY SEGMENT Oklahoma banking $933,150 $943,982 $967,981 $949,454 Texas banking 1,054,404 1,042,369 1,037,694 990,135 Kansas banking 359,633 400,710 412,314 309,774 Other states banking 277,512 288,680 286,337 276,930 ------- ------- ------- ------- Subtotal 2,624,699 2,675,741 2,704,326 2,526,293 Secondary market 43,134 36,526 26,006 76,404 ------ ------ ------ ------ Total loans $2,667,833 $2,712,267 $2,730,332 $2,602,697 ========== ========== ========== ========== NET INCOME BY SEGMENT Oklahoma banking $3,807 $2,529 $3,284 $3,210 Texas banking 3,591 2,686 3,662 1,119 Kansas banking (2,328) (1,180) 2,405 598 Other states banking 300 57 (78) (1,974) --- --- --- ------ Subtotal 5,370 4,092 9,273 2,953 Secondary market (3) (201) 117 (61) Other operations (1,793) (1,757) (3,445) (1,563) ------ ------ ------ ------ Net income $3,574 $2,134 $5,945 $1,329 ====== ====== ====== ====== OFFICES AND EMPLOYEES FTE Employees 466 471 478 425 ATM's 44 44 44 40 Branches 24 24 24 18 Loan production offices 3 3 3 3 Assets per employee $6,670 $6,432 $6,358 $6,890 *Calculation of Core Deposits and Core Funding (Non-GAAP Financial Measures) Total deposits $2,592,730 $2,473,162 $2,452,295 $2,330,089 Less: Brokered time deposits 329,636 274,870 334,880 374,003 Other time deposits of $100,000 or more 674,903 614,143 570,617 515,463 ------- ------- ------- ------- Core deposits $1,588,191 $1,584,149 $1,546,798 $1,440,623 ---------- ---------- ---------- ---------- Plus: Other time deposits of $100,000 or more 674,903 614,143 570,617 515,463 Sweep repurchase agreements 23,259 26,500 35,708 24,963 ------ ------ ------ ------ Core funding $2,286,353 $2,224,792 $2,153,123 $1,981,049 ========== ========== ========== ========== 2008 ------------------------------------------- Dec. 31 Sep. 30 Jun. 30 Mar. 31 ------- ------- ------- ------- LOAN COMPOSITION Noncovered ---------- Real estate mortgage: Commercial $1,118,828 $1,077,601 $991,679 $846,757 One-to-four family residential 113,665 116,270 118,056 110,938 Real estate construction Commercial 579,795 554,496 583,784 654,039 One-to-four family residential 79,565 79,843 82,972 90,051 Commercial 564,670 574,087 566,830 544,183 Installment and consumer: Guaranteed student loans 54,057 67,610 57,413 63,706 Other 40,867 42,432 44,051 44,296 ------ ------ ------ ------ Total noncovered loans, including held for sale 2,551,447 2,512,339 2,444,785 2,353,970 Less allowance for loan losses (39,773) (35,807) (31,341) (29,950) ------- ------- ------- ------- Total noncovered loans, net $2,511,674 $2,476,532 $2,413,444 $2,324,020 ========== ========== ========== ========== By statement of condition category: Covered ------- Real estate mortgage: Commercial $- $- $- $- One-to-four family residential - - - - Real estate construction Commercial - - - - One-to-four family residential - - - - Commercial - - - - Installment and consumer: - - - - === === === === Total covered loans $- $- $- $- === === === === DEPOSIT COMPOSITION Non-interest bearing demand $261,940 $280,453 $299,699 $248,315 Interest-bearing demand 76,027 70,471 81,415 71,450 Money market accounts 454,250 554,357 548,099 553,850 Savings accounts 14,135 14,452 13,809 13,808 Time deposits of $100,000 or more 802,244 731,773 740,174 690,421 Other time deposits 571,526 547,213 527,805 517,083 ------- ------- ------- ------- Total deposits* $2,180,122 $2,198,719 $2,211,001 $2,094,927 ========== ========== ========== ========== LOANS BY SEGMENT Oklahoma banking $966,243 $962,611 $965,952 $943,331 Texas banking 947,603 892,998 857,160 797,700 Kansas banking 304,855 288,268 277,887 287,339 Other states banking 275,805 296,214 280,894 259,236 ------- ------- ------- ------- Subtotal 2,494,506 2,440,091 2,381,893 2,287,606 Secondary market 56,941 72,248 62,892 66,364 ------ ------ ------ ------ Total loans $2,551,447 $2,512,339 $2,444,785 $2,353,970 ========== ========== ========== ========== NET INCOME BY SEGMENT Oklahoma banking $3,783 $3,295 $2,923 $2,503 Texas banking 2,036 1,332 1,777 2,406 Kansas banking (204) (1,336) (40) 458 Other states banking (89) 848 1,028 969 --- --- ----- --- Subtotal 5,526 4,139 5,688 6,336 Secondary market 139 (149) 40 (174) Other operations (2,440) (1,684) (1,566) (954) ------ ------ ------ ---- Net income $3,225 $2,306 $4,162 $5,208 ====== ====== ====== ====== OFFICES AND EMPLOYEES FTE Employees 442 458 463 467 ATM's 41 41 40 40 Branches 18 18 17 17 Loan production offices 3 3 3 3 Assets per employee $6,515 $6,184 $5,989 $5,719 *Calculation of Core Deposits and Core Funding (Non-GAAP Financial Measures) Total deposits $2,180,122 $2,198,719 $2,211,001 $2,094,927 Less: Brokered time deposits 359,793 338,667 369,580 337,330 Other time deposits of $100,000 or more 445,896 398,337 381,349 365,875 ------- ------- ------- ------- Core deposits $1,374,433 $1,461,715 $1,460,072 $1,391,722 ---------- ---------- ---------- ---------- Plus: Other time deposits of $100,000 or more 445,896 398,337 381,349 365,875 Sweep repurchase agreements 38,034 47,955 41,203 35,087 ------ ------ ------ ------ Core funding $1,858,363 $1,908,007 $1,882,624 $1,792,684 ========== ========== ========== ========== 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) 2009 ------------------------------------------- Dec. 31 Sep. 30 Jun. 30 Mar. 31 ------- ------- ------- ------- PERFORMANCE RATIOS Return on average assets (annualized) 0.46% 0.28% 0.81% 0.18% Return on average common equity (annualized) 4.06 1.78 8.26 1.77 Return on average tangible equity (annualized) 4.78 2.87 8.12 1.83 Net interest margin (annualized) 3.71 3.39 3.41 3.00 Total dividends declared to net income 34.31 57.46 20.58 92.00 Effective tax rate 36.22 37.33 37.75 34.66 Efficiency ratio 49.69 53.34 46.32 53.06 ASSET QUALITY RATIOS Noncovered ---------- Nonperforming assets to portfolio loans and other real estate owned 4.87% 4.33% 3.41% 3.53% Nonperforming loans to portfolio loans 4.18 4.09 3.19 3.32 Net loan charge- offs to average portfolio loans (annualized) 0.95 0.62 0.31 0.71 Allowance for loan losses to portfolio loans 2.46 2.25 2.00 1.83 Allowance for loan losses to nonperforming loans 58.77 54.87 62.64 55.12 Covered ------- Nonperforming assets to portfolio loans and other real estate owned 20.19% 20.55% 12.67% - Nonperforming loans to portfolio loans 15.76 18.56 10.47 - NONPERFORMING ASSETS Noncovered ---------- Nonaccrual loans $105,887 $94,715 $74,205 $73,383 90 days past due and accruing 310 10,578 8,409 10,552 --- ------ ----- ------ Total nonperforming loans 106,197 105,293 82,614 83,935 Other real estate owned 18,432 6,389 6,003 5,351 ------ ----- ----- ----- Total nonperforming assets $124,629 $111,682 $88,617 $89,286 ======== ======== ======= ======= Potential problem loans $258,399 $255,051 $178,081 $133,810 ======== ======== ======== ======== Covered ------- Nonaccrual loans $12,322 $14,686 $8,607 $- 90 days past due and accruing 1,136 4,544 3,658 - ----- ----- ----- --- Total nonperforming loans 13,458 19,230 12,265 - Other real estate owned 4,748 2,598 2,938 - ----- ----- ----- --- Total nonperforming assets $18,206 $21,828 $15,203 $- ======= ======= ======= === Potential problem loans $8,874 $4,421 $5,977 $- ====== ====== ====== === ALLOWANCE ACTIVITY Balance, beginning of period $57,777 $51,753 $46,262 $39,773 Charge offs 6,756 4,372 2,975 4,810 Recoveries 752 219 989 417 --- --- --- --- Net charge offs 6,004 4,153 1,986 4,393 Provision for loan losses 10,640 10,177 7,477 10,882 ------ ------ ----- ------ Balance, end of period $62,413 $57,777 $51,753 $46,262 ======= ======= ======= ======= CAPITAL RATIOS Average total shareholders' equity to average assets 10.31% 10.24% 10.35% 10.47% Leverage ratio 12.42 12.39 12.70 12.72 Tier 1 capital to risk-weighted assets 13.28 13.04 12.67 12.85 Total capital to risk-weighted assets 14.55 14.31 13.92 14.11 Tangible common equity to tangible assets** 7.61 7.79 7.65 7.76 REGULATORY CAPITAL DATA Tier I capital $377,418 $374,805 $372,713 $369,482 Total capital 413,438 411,201 409,764 405,613 Total risk adjusted assets 2,841,476 2,873,558 2,942,821 2,875,290 Average total assets 3,039,014 3,024,885 2,935,189 2,905,653 **Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure) Total shareholders' equity $309,778 $309,118 $305,416 $300,406 Less: Goodwill 6,811 6,811 6,811 7,071 Preferred stock 67,037 66,872 66,710 66,549 ------ ------ ------ ------ Tangible common equity $235,930 $235,435 $231,895 $226,786 ======== ======== ======== ======== Total assets $3,108,291 $3,029,347 $3,038,985 $2,928,133 Less goodwill 6,811 6,811 6,811 7,071 ----- ----- ----- ----- Tangible assets $3,101,480 $3,022,536 $3,032,174 $2,921,062 ========== ========== ========== ========== Tangible common equity to tangible assets 7.61% 7.79% 7.65% 7.76% 2008 ------------------------------------------- Dec. 31 Sep. 30 Jun. 30 Mar. 31 ------- ------- ------- ------- PERFORMANCE RATIOS Return on average assets (annualized) 0.45% 0.33% 0.62% 0.80% Return on average common equity (annualized) 5.15 3.97 7.38 9.43 Return on average tangible equity (annualized) 5.79 4.26 7.86 9.94 Net interest margin (annualized) 3.22 3.39 3.38 3.45 Total dividends declared to net income 50.49 59.85 33.16 26.37 Effective tax rate 39.74 40.29 38.07 38.40 Efficiency ratio 53.37 60.67 62.23 59.69 ASSET QUALITY RATIOS Noncovered ---------- Nonperforming assets to portfolio loans and other real estate owned 2.80% 2.72% 1.45% 1.41% Nonperforming loans to portfolio loans 2.56 2.62 1.35 1.27 Net loan charge- offs to average portfolio loans (annualized) 0.44 0.39 0.31 0.34 Allowance for loan losses to portfolio loans 1.59 1.47 1.32 1.31 Allowance for loan losses to nonperforming loans 62.16 56.07 97.62 103.49 Covered ------- Nonperforming assets to portfolio loans and other real estate owned - - - - Nonperforming loans to portfolio loans - - - - NONPERFORMING ASSETS Noncovered ---------- Nonaccrual loans $59,310 $61,557 $30,861 $26,134 90 days past due and accruing 4,673 2,299 1,242 2,807 ----- ----- ----- ----- Total nonperforming loans 63,983 63,856 32,103 28,941 Other real estate owned 6,092 2,685 2,523 3,328 ----- ----- ----- ----- Total nonperforming assets $70,075 $66,541 $34,626 $32,269 ======= ======= ======= ======= Potential problem loans $131,516 $86,070 $71,070 $69,588 ======== ======= ======= ======= Covered ------- Nonaccrual loans $- $- $- $- 90 days past due and accruing - - - - --- --- --- --- Total nonperforming loans - - - - Other real estate owned - - - - --- --- --- --- Total nonperforming assets $- $- $- $- === === === === Potential problem loans $- $- $- $- === === === === ALLOWANCE ACTIVITY Balance, beginning of period $35,807 $31,341 $29,950 $29,584 Charge offs 3,254 2,752 1,892 2,044 Recoveries 522 363 93 174 --- --- --- --- Net charge offs 2,732 2,389 1,799 1,870 Provision for loan losses 6,698 6,855 3,190 2,236 ----- ----- ----- ----- Balance, end of period $39,773 $35,807 $31,341 $29,950 ======= ======= ======= ======= CAPITAL RATIOS Average total shareholders' equity to average assets 8.85% 8.26% 8.35% 8.49% Leverage ratio 13.06 10.51 9.66 9.91 Tier 1 capital to risk-weighted assets 13.01 10.49 9.40 9.47 Total capital to risk-weighted assets 14.26 11.88 10.65 10.69 Tangible common equity to tangible assets** 7.96 7.75 7.88 8.15 REGULATORY CAPITAL DATA Tier I capital $369,049 $293,141 $261,354 $258,272 Total capital 404,695 332,012 296,166 291,638 Total risk adjusted assets 2,837,473 2,793,843 2,780,538 2,727,853 Average total assets 2,826,464 2,787,979 2,705,244 2,605,963 **Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure) Total shareholders' equity $302,203 $226,123 $224,949 $224,155 Less: Goodwill 7,071 7,071 7,071 7,071 Preferred stock 66,392 - - - ------ --- --- --- Tangible common equity $228,740 $219,052 $217,878 $217,084 ======== ======== ======== ======== Total assets $2,879,762 $2,832,371 $2,773,013 $2,670,580 Less goodwill 7,071 7,071 7,071 7,071 ----- ----- ----- ----- Tangible assets $2,872,691 $2,825,300 $2,765,942 $2,663,509 ========== ========== ========== ========== Tangible common equity to tangible assets 7.96% 7.75% 7.88% 8.15% Balance sheet amounts and ratios are as of period end unless otherwise noted.
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Southwest Bancorp, Inc.
CONTACT: Rick Green, President & CEO, or Kerby E. Crowell, EVP & CFO,
both of Southwest Bancorp, Inc., +1-405-372-2230
Web Site: http://www.oksb.com/
