Thursday, October 20, 2011 3:35:04 PM
Southwest Bancorp Inc. Reports Third Quarter 2011 ResultsFont
6:00 AM ET 10/20/11 | GlobeNewswire
Southwest Bancorp, Inc. (Nasdaq:OKSB) (Nasdaq:OKSBP) ("Southwest") today reported a net loss available to common shareholders of $10.6 million, or $0.54 per diluted share for the third quarter of 2011, compared to net income available to common shareholders of $2.8 million, or $0.15 per diluted share for the third quarter of 2010, and to a net loss available to common shareholders of $4.0 million, or $0.21 per diluted share for the second quarter of 2011. The net loss available to common shareholders for the nine months ended September 30, 2011 was $13.2 million, or $0.68 per diluted share, compared to net income available to common shareholders for the nine months ended September 30, 2010 of $9.5 million, or $0.55 per diluted share.
Rick Green, President and CEO, stated, "Our losses were primarily the result of significantly increased provisions for loan losses and other problem loan related costs. These increases are generally due to continued weakness in the economy and commercial real estate values in particular.
"We continue to focus on the identification and resolution of problem and potential problem credits, and we have taken important additional steps this year to improve our lending, banking, and credit functions. In July 2011, we named a new Chief Banking Officer who is responsible for the lending, deposit, and treasury services and a new Chief Credit Officer who has authority over the credit and work-out functions. Both of these new positions report directly to me. We have bolstered our credit analysis and work-out staff with additional experienced and aggressive officers.
"However, we are not satisfied with the pace of our resolution of problem and potential problem assets. Accordingly, we have undertaken a disciplined analysis of all alternatives available to accelerate the resolution process in the near-term. That analysis is continuing, while our enhanced work-out process proceeds.
"Our goals are vital and simple to state. They are to:
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-- "Promptly identify and resolve problem and potential problem assets, until we achieve and maintain acceptable levels; -- "Focus on being a thriving, commercial bank serving our healthy, core markets in Oklahoma, Texas, and Kansas; -- "Return to sustained profitability; -- "Resume dividends on our trust preferred securities, preferred stock, and common stock; and -- "Produce reliable and attractive returns for our shareholders."
Third Quarter 2011 Key Notes
Loans and Credit Quality:
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-- Noncovered loans decreased by $332.9 million, or 14%, from year-end and $414.1 million, or 17%, from September 30, 2010. This decrease included a reduction of the commercial real estate mortgage and construction concentration to $1.5 billion, or 75%, of noncovered loans at September 30, 2011. Healthcare credits at quarter-end totaled $624.1 million, or 31%, of noncovered loans, including $387.9 million of healthcare related commercial real estate mortgage and construction loans. -- Noncovered loans segmented by the market of the collateral location were as follows: $845.5 million in Texas, $770.3 million in Oklahoma, $252.3 million in Kansas, and $166.8 million in out of market states. The out of market loans consists of thirty-four states in the following categories: $100.4 million in commercial real estate, $39.3 million in construction & development, $21.1 million in commercial & industrial, $3.6 million in residential real estate, and $2.4 million in consumer. -- Nonperforming assets increased to $203.5 million and 9.86% of noncovered portfolio loans and other real estate from $190.1 million and 8.66% of noncovered portfolio loans and other real estate at June 30, 2011 and from $144.8 million and 6.11% of noncovered portfolio loans and other real estate at December 31, 2010. In the first nine months of 2011 the migration of nonperforming assets consisted of: $154.1 million placed on nonaccrual, $14.4 million returned to accrual status, $47.6 million charged-off, $2.4 million of other real estate fair value impairments, $48.9 million transferred from nonperforming loans to other real estate, $18.0 million received in resolutions and payments on nonperforming loans, and $13.1 million received from sales of other real estate. Nonperforming healthcare assets were $15.7 million, or 8%, of total nonperforming assets. -- Nonperforming loans consisted of $68.6 million in construction & development, $56.2 million in commercial real estate, $6.1 million in commercial & industrial, $1.7 million in residential real estate, and $0.1 million in consumer. Nonperforming loans by location were as follows: $95.2 million in Texas, $14.9 million in Oklahoma, $14.6 million in out of market states, and $8.0 million in Kansas. -- Other real estate consisted of $38.9 million in construction & development, $24.4 million in commercial real estate, and $7.5 million in residential real estate. Other real estate by location was as follows: $35.3 million in Texas, $14.4 million in out of market states, $12.4 million in Kansas, and $8.7 million in Oklahoma. -- Impaired loans had a carrying value of $204.5 million versus an unpaid principal value of $230.6 million. Impaired loans with a specific allowance allocation had a carrying value of $115.5 million versus an unpaid principal value of $125.0 million. -- The allowance for loan losses was 3.25% of noncovered portfolio loans, compared to 2.80% at year-end 2010 and 3.00% at September 30, 2010. The allowance on specifically allocated impaired loans was 14.41% of carrying value and 13.31% of unpaid principal. -- Quarterly net charge-offs totaled $14.5 million and consisted of $7.2 million in construction & development, $5.7 million in commercial real estate, $1.5 million in commercial & industrial, and $0.1 million in residential real estate & consumer. The net charge-offs were in the following locations: $7.4 million in Texas, $5.7 million in out of market states, $1.0 million in Oklahoma, and $0.4 million in Kansas. -- Potential problem loans were $276.7 million, up $43.6 million, or 19%, from year-end, and $39.9 million, or 17%, from September 30, 2010. These loans consisted of $162.7 million in commercial real estate, $75.9 million in construction & development, $37.0 million in commercial & industrial, and $1.1 million in residential real estate. Potential problem loans by location were as follows: $164.0 million in Texas, $54.3 million in Oklahoma, $43.9 million in out of market states, and $14.5 million in Kansas.
Capital Position and Liquidity:
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-- As of September 30, 2011, Southwest and each of its banking subsidiaries met the criteria for regulatory classification as "well-capitalized". Southwest's total regulatory capital was $461.9 million, for a total risk-based capital ratio of 20.81%, and Tier 1 capital was $433.6 million, for a Tier 1 risk-based capital ratio of 19.54%. Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $240.0 million. Stillwater National Bank, Southwest's principal banking subsidiary, had total regulatory capital of $383.8 million, for a total risk-based capital ratio of 19.14%, and Tier 1 capital of $343.2 million, for a Tier 1 risk-based capital ratio of 17.12%. Stillwater National Bank exceeded the minimum to be classified as "well-capitalized" by $133.2 million. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators. Stillwater National Bank's leverage and total risk-based capital ratios also substantially exceeded the individual minimum ratios agreed to with the Comptroller of the Currency of 8.50% and 12.50%. -- In July, we determined to defer future payments of interest on our debentures and dividends on related trust preferred securities and to defer payments of dividends on our Series B Preferred Securities issued under the U.S. Treasury Department's Capital Purchase Program. The terms of our debentures and trust preferred securities allow us to increase or decrease the deferral period without default or penalty. -- As of September 30, 2011, the holding company has $29.2 million in cash.
Financial Overview
Condition: Total assets were $2.6 billion and total loans were $2.1 billion at September 30, 2011, a decrease of 9% and 14%, respectively, from December 31, 2010.
At September 30, 2011 the allowance for loan losses was $64.7 million, a decrease of 11% and 1% from September 30, 2010 and December 31, 2010, respectively.
Total core funding, which includes all non-brokered time deposits and sweep repurchase agreements, comprised 91% of total funding, compared to 90% at June 30, 2011 and 86% at December 31, 2010. Wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 9% of total funding compared to 10% at June 30, 2011 and 14% at December 31, 2010. Please see Table 7 for details on these non-GAAP financial measures.
Year-to-date Results:
Summary: The net loss available to common shareholders was $13.2 million as of September 30, 2011, compared to net income available to common shareholders of $9.5 million as of September 30, 2010. The $22.7 million decrease in our net income available to common shareholders from 2010 is the result of a $25.5 million increase in the provision for loan losses, a $5.9 million decrease in net interest income, a $4.0 million decrease in noninterest income, and a $1.5 million increase in noninterest expense, offset in part by a $14.3 million decrease in income tax expense.
On June 28, 2011, Southwest entered into a settlement agreement with the Oklahoma State Tax Commission (the "Commission") with respect to certain claims by the Commission. Southwest had previously recorded reserves against these claims. As a result of the settlement agreement, Southwest paid the sum of $4.8 million to the Commission and recorded a gain of $2.6 million, net of tax effect, upon reversal of excess reserves. The year-to-date calculated effective tax rate is 41.80% and results in a tax benefit; however, when the discreet items are excluded, the effective tax rate year-to-date is 38.90%, also resulting in a tax benefit. Discreet items include the reversal of excess tax reserves in the second quarter and the provision to return adjustment in the third quarter.
Net Interest Income: Net interest income totaled $74.4 million for the first nine months of 2011, compared to $80.4 million for the first nine months of 2010, a decrease of $5.9 million, or 7%. Year-to-date net interest margin was 3.78%, compared to 3.63% in 2010. Included in 2011 year-to-date net interest income was a net reduction of $0.4 million resulting from interest reversals on nonaccrual loans offset by the year-to-date adjustments of the discount accretion on loans and the loss share receivable. Included in 2010 year-to-date net interest income was $0.5 million of net recoveries from the resolution of nonperforming loans and additional discount accretion on loans and loss share receivable, offset in part by interest reversals on nonaccrual loans. The net effects of these adjustments on net interest margin were a 2 basis point decrease and a 3 basis point increase, respectively.
Provision for Loan Losses and Net Charge Offs: The provision for loan losses totaled $53.8 million for the first nine months of 2011, compared to $28.3 million for the first nine months of 2010. Net charge-offs totaled $54.3 million, or 3.24% (annualized) of average portfolio loans year-to-date as of September 30, 2011, compared to $18.3 million, or 0.95% (annualized) of average portfolio loans for the same period in the prior year.
As of September 30, 2011, sixteen relationships accounted for $45.5 million in charge-offs, of which $26.1 million were on six out of market relationships. At September 30, 2011, total out of market commercial real estate and construction loans was $139.7 million, of which $51.0 million were internally rated substandard or doubtful.
Noninterest Income: Noninterest income totaled $10.4 million for the first nine months of 2011, compared to $14.5 million for the first nine months of 2010. The decrease in noninterest income was primarily the result of a $2.6 million decline in gain on investment securities, a $1.0 million decline in gain on sale of loans, mainly from declined student loan sales, and a $0.3 million decline in other noninterest income.
Noninterest Expense: Noninterest expense totaled $48.3 million for the first nine months of 2011, compared to $46.8 million for the first nine months of 2010. The increase consists of a $3.5 million increase in other real estate expense and a $1.6 million increase in provision for unfunded loan commitments due to increased loss ratios, offset in part by a $1.8 million decrease in other general and administrative expense, primarily from the settlement of Oklahoma state tax claims for less than the amount accrued, a $1.5 million decrease in FDIC and other insurance expense, and a $0.3 million decrease in occupancy expense.
Third Quarter Results:
Summary: For the third quarter of 2011, Southwest incurred a net loss available to common shareholders of $10.6 million, compared to net income available to common shareholders of $2.8 million in the third quarter of 2010 and a net loss available to common shareholders of $4.0 million in the second quarter of 2011. The decrease from the third quarter of 2010 was the result of a $12.6 million increase in the provision for loan losses, a $2.7 million decrease in noninterest income, a $2.4 million decrease in net interest income, and a $2.3 million increase in noninterest expense, offset in part by a $6.7 million decrease in income taxes. The decrease from the second quarter of 2011 was the result of a $4.5 million increase in the provision for loan losses, a $2.7 million increase in noninterest expense, and a $1.0 million decrease in net interest income, offset in part by a $1.6 million decrease in income taxes.
For the third quarter of 2011, the calculated effective tax rate is 35.23% and results in a tax benefit; however, when discreet items are excluded, the effective tax rate for the third quarter is 36.94%, also resulting in a tax benefit. Discreet items included the provision to return adjustment in the third quarter.
Net Interest Income: Net interest income totaled $24.0 million for the third quarter of 2011, compared to $26.5 million for the third quarter of 2010, a decrease of $2.4 million, or 9%, and $25.0 million for the second quarter of 2011, a decrease of $1.0 million, or 4%. Net interest margin was 3.77% for the third quarter of 2011, compared to 3.63% for the third quarter of 2010 and 3.79% for the second quarter of 2011. Included in the net interest margins were net reductions of $0.3 million, $0.3 million, and $0.2 million, respectively for each quarter, resulting from interest reversals on nonaccrual loans offset by the quarterly adjustments of the discount accretion on loans and the loss share receivable. The net effects of these adjustments on the net interest margins were a 5 basis point decrease, a 5 basis point decrease, and a 3 basis point decrease for each quarter, respectively.
Provision for Loan Losses and Net Charge-Offs: The provision for loan losses totaled $24.6 million for the third quarter of 2011, compared to $12.0 million for the third quarter of 2010 and $20.1 million for the second quarter of 2011. Net charge-offs totaled $14.5 million, or 2.70% (annualized) of average portfolio loans for the third quarter of 2011, compared to $6.6 million, or 1.05% (annualized) of average portfolio loans for the third quarter of 2010 and $26.9 million, or 4.76% (annualized) of average portfolio loans for the second quarter of 2011.
For the third quarter of 2011, eight relationships accounted for $12.9 million in charge-offs, of which $5.5 million were on four out of market relationships.
Noninterest Income: Noninterest income totaled $3.6 million for the third quarter of 2011, compared to $6.3 million for the third quarter of 2010 and $3.6 million for the second quarter of 2011. The decrease in noninterest income from the third quarter of 2010 was primarily the result of a $2.6 million decrease in gain on investment securities.
Noninterest Expense: Noninterest expense totaled $17.7 million for the third quarter of 2011, compared to $15.4 million for the third quarter of 2010 and $15.0 million for the second quarter of 2011. The increase from third quarter 2010 consisted of a $1.2 million increase in other real estate expense and a $0.6 million increase in provision for unfunded loan commitments, a $0.6 million increase in other general and administrative expense, and a $0.5 million increase in personnel expense, offset in part by a $0.5 million decrease in FDIC and other insurance expense. The increase from second quarter 2011 consisted of a $3.1 million increase in other general and administrative expense, primarily from the second quarter settlement of Oklahoma state tax claims for less than the amount accrued, and a $0.8 million increase in personnel expense, offset in part by a $1.2 million decrease in other real estate expense.
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(R). We were organized in 1981 as the holding company for Stillwater National, which was chartered in 1894. At September 30, 2011 we had total assets of $2.6 billion, deposits of $2.0 billion, and shareholders' equity of $367.0 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 September 30, 2011, approximately $624.1 million, or 31%, 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. We do not focus on one-to-four family residential development loans or "spec" residential property credits. Additionally, subprime residential lending has never been a part of our business strategy, and our exposure to subprime mortgage loans and subprime lenders is minimal. One-to-four family mortgages account for less than 5% of total noncovered loans. As of September 30, 2011 approximately $1.5 billion, or 75%, of our noncovered loans were commercial real estate mortgage and construction loans, including $387.9 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
Forward-Looking Statements
This earnings 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, collateral values and the amount and timing of loan payoffs; liquidity, contractual obligations, off-balance sheet risk, and market or 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 timing of future changes in interest rates, market behavior, and other economic conditions; future laws, 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 our 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 September 30, 2011 through the date its financial statements are filed with the Securities and Exchange Commission. The September 30, 2011 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.
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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
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SOUTHWEST BANCORP, INC. Table 1 UNAUDITED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share) Third Quarter Second Quarter -------------------------------- ------------------------------ --------------------- QUARTERLY HIGHLIGHTS % % 2011 2010 Change 2011 Change ---------- ---------- ------ ---------- --------- Operations Net interest income $ 24,025 $ 26,452 (9)% $ 24,985 (4)% Provision for loan losses 24,626 11,988 105 20,140 22 Noninterest income 3,589 6,335 (43) 3,604 -- Noninterest expense 17,693 15,418 15 14,980 18 Income (loss) before taxes (14,705) 5,381 (373) (6,531) 125 Taxes on income (5,180) 1,508 (444) (3,561) 45 Net income (loss) (9,525) 3,873 (346) (2,970) 221 Net income (loss) available to common shareholders (10,589) 2,825 (475) (4,027) 163 Diluted earnings per share (0.54) 0.15 (460) (0.21) 157 Balance Sheet Total assets 2,572,492 2,905,275 (11) 2,660,495 (3) Loans held for sale 39,902 34,868 14 37,204 7 Noncovered portfolio loans 1,933,694 2,412,796 (20) 2,156,096 (10) Covered portfolio loans 41,209 60,558 (32) 46,153 (11) Total deposits 2,022,253 2,345,648 (14) 2,094,236 (3) Total shareholders' equity 367,024 376,576 (3) 376,930 (3) Book value per common share 15.37 15.93 (4) 15.89 (3) Key Ratios Net interest margin 3.77% 3.63% 3.79% Efficiency ratio 64.07 47.02 52.40 Total capital to risk-weighted assets 20.81 18.45 20.20 Nonperforming loans to portfolio loans - noncovered 6.66 5.62 7.01 Shareholders' equity to total assets 14.27 12.96 14.17 Tangible common equity to tangible assets* 11.38 10.43 11.38 Return on average assets (annualized) (1.43) 0.52 (0.43) Return on average common equity (annualized) (13.42) 3.57 (5.11) Return on average tangible common equity (annualized)** (13.72) 3.65 (5.22) --------------------------------------------------------------------------------------- YEAR-TO-DATE HIGHLIGHTS Nine Month ------------------------------ % 2011 2010 Change ---------- ---------- ------ Operations Net interest income $ 74,431 $ 80,361 (7)% Provision for loan losses 53,816 28,295 90 Noninterest income 10,442 14,475 (28) Noninterest expense 48,298 46,822 3 Income (loss) before taxes (17,241) 19,719 (187) Taxes on income (7,207) 7,063 (202) Net income (loss) (10,034) 12,656 (179) Net income (loss) available to common shareholders (13,208) 9,520 (239) Diluted earnings per share (0.68) 0.55 (224) Balance Sheet Total assets 2,572,492 2,905,275 (11) Loans held for sale 39,902 34,868 14 Noncovered portfolio loans 1,933,694 2,412,796 (20) Covered portfolio loans 41,209 60,558 (32) Total deposits 2,022,253 2,345,648 (14) Total shareholders' equity 367,024 376,576 (3) Book value per common share 15.37 15.93 (4) Key Ratios Net interest margin 3.78% 3.63% Efficiency ratio (GAAP-based) 56.91 49.37 Total capital to risk-weighted assets 20.81 18.45 Nonperforming loans to portfolio loans - noncovered 6.66 5.62 Shareholders' equity to total assets 14.27 12.96 Tangible common equity to tangible assets* 11.38 10.43 Return on average assets (0.49) 0.56 Return on average common equity (5.61) 4.47 Return on average tangible common equity** (5.74) 4.58 --------------------------------------------------------------------------------------- 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.
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SOUTHWEST BANCORP, INC. Table 2 UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except per share) September, December September, 30 31, 30 2011 2010 2010 ----------- ----------- ----------- Assets Cash and due from banks $ 27,501 $ 26,478 $ 22,851 Interest-bearing deposits 89,099 41,018 66,607 ----------- ----------- ----------- Cash and cash equivalents 116,600 67,496 89,458 Securities held to maturity (fair values of $15,805, $14,029, $9,185, respectively) 15,398 14,304 9,093 Securities available for sale (amortized cost of $247,094, $246,649, $226,323, respectively) 254,201 248,221 231,751 Loans held for sale 39,902 35,194 34,868 Noncovered loans receivable 1,993,694 2,331,293 2,412,796 Less: Allowance for loan losses (64,698) (65,229) (72,418) ----------- ----------- ----------- Net noncovered loans receivable 1,928,996 2,266,064 2,340,378 Covered loans receivable (includes loss share: $10,976, $14,370, and $17,922, respectively) 41,209 53,628 60,558 ----------- ----------- ----------- Net loans receivable 1,970,205 2,319,692 2,400,936 Accrued interest receivable 8,035 8,590 9,663 Income tax receivable 12,509 -- -- Premises and equipment, net 22,706 23,772 25,075 Noncovered other real estate 70,785 37,722 35,723 Covered other real estate 5,350 4,187 4,448 Goodwill 6,811 6,811 6,811 Other intangible assets, net 4,966 5,371 5,358 Other assets 45,024 49,181 52,091 ----------- ----------- ----------- Total assets $ 2,572,492 $ 2,820,541 $ 2,905,275 =========== =========== =========== Liabilities Deposits: Noninterest-bearing demand $ 388,365 $ 377,182 $ 329,655 Interest-bearing demand 98,270 92,584 86,153 Money market accounts 461,546 495,253 518,422 Savings accounts 31,319 26,665 25,556 Time deposits of $100,000 or more 551,914 694,565 795,303 Other time deposits 490,839 566,479 590,559 ----------- ----------- ----------- Total deposits 2,022,253 2,252,728 2,345,648 Accrued interest payable 2,507 1,577 2,457 Income tax payable -- 2,878 6,603 Other liabilities 12,162 8,981 9,522 Other borrowings 86,583 94,602 82,506 Subordinated debentures 81,963 81,963 81,963 ----------- ----------- ----------- Total liabilities 2,205,468 2,442,729 2,528,699 Shareholders' equity Serial preferred stock; 2,000,000 shares authorized; 70,000 shares issued and outstanding 68,268 67,724 67,548 Common stock -- $1 par value; 40,000,000 shares authorized; 19,441,577, 19,421,900, 19,395,675 shares issued and outstanding, respectively 19,442 19,422 19,396 Additional paid-in capital 98,981 98,894 98,750 Retained earnings 177,584 190,793 187,535 Accumulated other comprehensive income 2,749 979 3,347 ----------- ----------- ----------- Total shareholders' equity 367,024 377,812 376,576 ----------- ----------- ----------- Total liabilities and shareholders' equity $ 2,572,492 $ 2,820,541 $ 2,905,275 =========== =========== ===========
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SOUTHWEST BANCORP, INC. Table 3 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share) For the three months For the nine months ended September 30, ended September 30, -------------------- --------------------- 2011 2010 2011 2010 ---------- -------- ---------- --------- Interest income Loans $ 27,873 $ 32,824 $ 87,890 $ 101,087 Investment securities 1,779 2,079 5,389 6,424 Other interest-earning assets 131 180 401 610 ---------- -------- ---------- --------- Total interest income 29,783 35,083 93,680 108,121 Interest expense Interest-bearing deposits 3,811 6,802 13,475 22,347 Other borrowings 469 524 1,460 1,565 Subordinated debentures 1,478 1,305 4,314 3,848 ---------- -------- ---------- --------- Total interest expense 5,758 8,631 19,249 27,760 ---------- -------- ---------- --------- Net interest income 24,025 26,452 74,431 80,361 Provision for loan losses 24,626 11,988 53,816 28,295 ---------- -------- ---------- --------- Net interest income (loss) after provision for loan losses (601) 14,464 20,615 52,066 Noninterest income Service charges and fees 3,117 2,994 9,226 9,260 Gain on sales of loans 426 653 1,021 2,054 Gain on investment securities -- 2,605 -- 2,646 Other noninterest income 46 83 195 515 ---------- -------- ---------- --------- Total noninterest income 3,589 6,335 10,442 14,475 Noninterest expense Salaries and employee benefits 7,734 7,183 22,223 22,400 Occupancy 2,694 2,835 8,201 8,454 FDIC and other insurance 824 1,347 3,004 4,455 Other real estate, net 1,445 228 4,483 963 General and administrative 4,996 3,825 10,387 10,550 ---------- -------- ---------- --------- Total noninterest expense 17,693 15,418 48,298 46,822 ---------- -------- ---------- --------- Income (loss) before taxes (14,705) 5,381 (17,241) 19,719 Taxes on income (5,180) 1,508 (7,207) 7,063 ---------- -------- ---------- --------- Net income (loss) $ (9,525) $ 3,873 $ (10,034) $ 12,656 ========== ======== ========== ========= Net income (loss) available to common shareholders $ (10,589) $ 2,825 $ (13,208) $ 9,520 ========== ======== ========== ========= Basic earnings per common share $ (0.54) $ 0.15 $ (0.68) $ 0.55 Diluted earnings per common share (0.54) 0.15 (0.68) 0.55 Common dividends declared per share -- -- -- --
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SOUTHWEST BANCORP, INC. Table 4 UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - QUARTERLY (Dollars in thousands) For the three months ended September 30, -------------------------------------------------------------------- 2011 2010 --------------------------------- --------------------------------- Average Average Average Average Balance Interest Yield/Rate Balance Interest Yield/Rate ----------- -------- ---------- ----------- -------- ---------- Assets Noncovered loans $ 2,127,291 $ 27,160 5.07% $ 2,477,413 $ 31,791 5.09% Covered loans 44,018 713 6.43 65,999 1,033 6.21 Investment securities 269,143 1,779 2.62 246,838 2,079 3.34 Other interest-earning assets 87,649 131 99,500 180 ----------- -------- 0.59 ----------- -------- 0.72 Total interest-earning assets 2,528,101 29,783 4.67 2,889,750 35,083 4.82 Other assets 121,115 76,570 ----------- ----------- Total assets $ 2,649,216 $ 2,966,320 =========== =========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $ 111,805 $ 102 0.36% $ 93,481 $ 111 0.47% Money market accounts 480,817 507 0.42 515,754 976 0.75 Savings accounts 30,467 11 0.14 25,306 15 0.24 Time deposits 1,065,019 3,191 1,428,247 5,700 ----------- -------- 1.19 ----------- -------- 1.58 Total interest-bearing deposits 1,688,108 3,811 0.93 2,062,788 6,802 1.31 Other borrowings 89,964 469 2.07 93,136 524 2.23 Subordinated debentures 81,963 1,478 81,963 1,305 ----------- -------- 7.21 ----------- -------- 6.37 Total interest-bearing liabilities 1,860,035 5,758 1.23 8,631 1.53 -------- ---------- 2,237,887 -------- ---------- Noninterest-bearing demand deposits 375,465 330,321 Other liabilities 32,447 16,960 Shareholders' equity 381,269 381,152 ----------- ----------- Total liabilities and shareholders' equity $ 2,649,216 $ 2,966,320 =========== =========== Net interest income and spread $ 24,025 3.44% $ 26,452 3.29% ======== ========== ======== ========== Net interest margin (1) 3.77% 3.63% ========== ========== Average interest-earning assets to average interest-bearing liabilities 135.92% 129.13% =========== =========== (1) Net interest margin = annualized net interest income / average interest-earning assets
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SOUTHWEST BANCORP, INC. Table 5 UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - YEAR-TO-DATE (Dollars in thousands) For the nine months ended September 30, -------------------------------------------------------------------- 2011 2010 --------------------------------- --------------------------------- Average Average Average Average Balance Interest Yield/Rate Balance Interest Yield/Rate ----------- -------- ---------- ----------- -------- ---------- Assets Noncovered loans $ 2,234,219 $ 85,366 5.11% $ 2,533,490 $ 97,381 5.14% Covered loans 47,619 2,524 7.09 72,676 3,706 6.82 Investment securities 264,004 5,389 2.73 242,629 6,424 3.54 Other interest-earning assets 87,729 401 114,629 610 ----------- -------- 0.61 ----------- -------- 0.71 Total interest-earning assets 2,633,571 93,680 4.76 2,963,424 108,121 4.88 Other assets 102,042 74,199 ----------- ----------- Total assets $ 2,735,613 $ 3,037,623 =========== =========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $ 112,394 $ 329 0.39% $ 102,843 $ 383 0.50% Money market accounts 487,522 1,766 0.48 508,742 3,026 0.80 Savings accounts 29,131 37 0.17 25,515 47 0.25 Time deposits 1,158,922 11,343 1,534,135 18,891 ----------- -------- 1.31 ----------- -------- 1.65 Total interest-bearing deposits 1,787,969 13,475 1.05 2,171,235 22,347 1.38 Other borrowings 89,384 1,460 2.18 96,099 1,565 2.18 Subordinated debentures 81,963 4,314 81,963 3,848 ----------- -------- 7.02 ----------- -------- 6.26 Total interest-bearing liabilities 1,959,316 19,249 1.31 27,760 1.58 -------- ---------- 2,349,297 -------- ---------- Noninterest-bearing demand deposits 370,145 318,609 Other liabilities 23,510 17,629 Shareholders' equity 382,642 352,088 ----------- ----------- Total liabilities and shareholders' equity $ 2,735,613 $ 3,037,623 =========== =========== Net interest income and spread $ 74,431 3.45% $ 80,361 3.30% ======== ========== ======== ========== Net interest margin (1) 3.78% 3.63% ========== ========== Average interest-earning assets to average interest-bearing liabilities 134.41% 126.14% =========== =========== (1) Net interest margin = annualized net interest income / average interest-earning assets
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SOUTHWEST BANCORP, INC. Table 6 UNAUDITED QUARTERLY SUMMARY LOAN DATA (Dollars in thousands, except per share) ----------------------------------------------------------------------------------------- 2011 2010 ------------------------------------- -------------------------------------------------- Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31 ----------- ----------- ----------- ----------- ----------- ----------- ----------- LOAN COMPOSITION Noncovered: --------------------------- Real estate mortgage: Commercial $ 1,169,010 $ 1,262,753 $ 1,302,164 $ 1,310,464 $ 1,271,278 $ 1,251,709 $ 1,230,009 One-to-four family residential 85,272 87,407 87,286 89,800 109,980 106,814 111,185 Real estate construction Commercial 348,053 372,576 403,635 441,265 527,773 589,590 630,472 One-to-four family residential 25,527 26,400 26,758 27,429 30,527 35,129 34,996 Commercial 367,241 404,229 416,392 452,626 463,132 471,004 487,074 Installment and consumer: Guaranteed student loans 5,547 5,600 5,700 5,843 5,960 7,389 10,199 Other 32,946 34,335 36,493 39,060 39,014 39,328 38,048 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total noncovered loans, including held for sale 2,033,596 2,193,300 2,278,428 2,366,487 2,447,664 2,500,963 2,541,983 Less allowance for loan losses (64,698) (54,575) (61,285) (65,229) (72,418) (67,055) (65,168) ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total noncovered loans, net $ 1,968,898 $ 2,138,725 $ 2,217,143 $ 2,301,258 $ 2,375,246 $ 2,433,908 $ 2,476,815 =========== =========== =========== =========== =========== =========== =========== Covered: --------------------------- Real estate mortgage: Commercial $ 23,201 $ 26,976 $ 28,929 $ 30,997 $ 33,428 $ 36,107 $ 37,487 One-to-four family residential 7,378 8,113 8,192 9,122 10,071 10,277 10,843 Real estate construction Commercial 5,987 6,001 6,144 6,840 7,464 8,190 11,173 One-to-four family residential -- 172 281 439 1,823 3,853 5,273 Commercial 4,286 4,461 5,021 5,554 6,816 8,487 10,807 Installment and consumer: 357 430 550 676 956 1,092 1,326 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total covered loans $ 41,209 $ 46,153 $ 49,117 $ 53,628 $ 60,558 $ 68,006 $ 76,909 =========== =========== =========== =========== =========== =========== =========== LOANS BY SEGMENT Oklahoma banking $ 770,306 $ 834,189 $ 838,006 $ 871,393 $ 890,598 $ 914,004 $ 926,870 Texas banking 845,485 911,134 953,123 982,845 1,024,863 1,041,228 1,063,511 Kansas banking 252,302 260,431 272,685 289,642 309,240 329,157 342,596 Out of market 166,810 196,495 226,383 241,041 248,653 258,965 260,329 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Subtotal 2,034,903 2,202,249 2,290,197 2,384,921 2,473,354 2,543,354 2,593,306 Secondary market 39,902 37,204 37,348 35,194 34,868 25,615 25,586 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total loans $ 2,074,805 $ 2,239,453 $ 2,327,545 $ 2,420,115 $ 2,508,222 $ 2,568,969 $ 2,618,892 =========== =========== =========== =========== =========== =========== =========== NONPERFORMING LOANS BY TYPE Construction & development $ 68,554 $ 73,487 $ 68,183 $ 67,571 $ 88,590 $ 75,079 $ 54,648 Commercial real estate 56,234 60,857 47,986 30,510 34,448 25,413 28,520 Commercial 6,080 15,224 16,633 6,977 6,180 2,614 4,100 One-to-four family residential 1,706 1,457 2,634 1,984 6,401 8,843 10,552 Consumer 152 153 27 41 42 255 42 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming loans - noncovered $ 132,726 $ 151,178 $ 135,463 $ 107,083 $ 135,661 $ 112,204 $ 97,862 =========== =========== =========== =========== =========== =========== =========== NONPERFORMING LOANS BY SEGMENT Oklahoma banking $ 14,932 $ 18,870 $ 13,443 $ 9,726 $ 9,937 $ 6,041 $ 7,638 Texas banking 95,191 91,449 87,122 55,431 74,581 48,873 41,303 Kansas banking 7,976 9,725 7,924 6,923 14,126 18,593 15,603 Out of market 14,627 31,134 26,974 35,003 37,017 38,697 33,318 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming loans - noncovered $ 132,726 $ 151,178 $ 135,463 $ 107,083 $ 135,661 $ 112,204 $ 97,862 =========== =========== =========== =========== =========== =========== =========== OTHER REAL ESTATE BY TYPE Construction & development $ 38,927 $ 12,588 $ 6,304 $ 5,579 $ 9,349 $ 1,625 $ 1,441 Commercial real estate 24,364 16,300 23,890 20,750 19,053 19,444 12,320 One-to-four family residential 7,494 10,068 10,873 11,393 7,321 6,565 5,048 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total other real estate - noncovered $ 70,785 $ 38,956 $ 41,067 $ 37,722 $ 35,723 $ 27,634 $ 18,809 =========== =========== =========== =========== =========== =========== =========== OTHER REAL ESTATE BY SEGMENT Oklahoma banking $ 8,709 $ 2,613 $ 4,616 $ 4,814 $ 4,108 $ 3,547 $ 3,665 Texas banking 35,270 17,398 18,652 15,810 14,651 10,352 4,376 Kansas banking 12,390 14,539 12,848 13,182 12,218 8,989 9,198 Out of market 14,416 4,406 4,951 3,916 4,746 4,746 1,570 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total other real estate - noncovered $ 70,785 $ 38,956 $ 41,067 $ 37,722 $ 35,723 $ 27,634 $ 18,809 =========== =========== =========== =========== =========== =========== =========== POTENTIAL PROBLEM LOANS BY TYPE Construction & development $ 75,867 $ 111,032 $ 111,204 $ 94,765 $ 111,401 $ 101,455 $ 132,546 Commercial real estate 162,692 140,079 85,833 101,629 97,694 107,538 111,989 Commercial 37,027 38,850 19,940 36,142 27,119 32,843 30,582 One-to-four family residential 1,108 1,210 429 589 608 354 764 Consumer -- -- -- 15 22 27 31 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total potential problem loans - noncovered $ 276,694 $ 291,171 $ 217,406 $ 233,140 $ 236,844 $ 242,217 $ 275,912 =========== =========== =========== =========== =========== =========== =========== POTENTIAL PROBLEM LOANS BY SEGMENT Oklahoma banking $ 54,310 $ 42,565 $ 30,678 $ 36,170 $ 58,230 $ 47,686 $ 47,147 Texas banking 163,973 183,486 114,506 144,357 116,049 145,684 168,717 Kansas banking 14,530 11,289 19,472 20,232 19,737 1,754 5,175 Out of market 43,881 53,831 52,750 32,381 42,828 47,093 54,873 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total potential problem loans - noncovered $ 276,694 $ 291,171 $ 217,406 $ 233,140 $ 236,844 $ 242,217 $ 275,912 =========== =========== =========== =========== =========== =========== =========== Continued SOUTHWEST BANCORP, INC. Table 6 UNAUDITED QUARTERLY SUMMARY LOAN DATA Continued (Dollars in thousands, except per share) ----------------------------------------------------------------------------------------- 2011 2010 ------------------------------------- -------------------------------------------------- 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 $ 35,978 $ 49,977 $ 57,657 $ 65,615 $ 68,887 $ 65,770 $ 66,428 Iowa 26,626 26,695 26,759 26,836 28,953 25,035 25,108 Colorado 23,234 24,187 28,422 28,619 30,160 31,509 32,793 New Mexico 21,019 21,092 28,226 28,710 29,188 29,514 29,732 California 10,737 9,814 9,984 9,906 10,169 10,554 10,560 Ohio 9,367 9,568 9,963 10,420 10,666 10,786 10,293 Tennessee 6,484 6,550 6,606 6,784 6,837 6,898 6,967 Florida 6,374 10,582 7,600 7,627 7,622 7,531 7,635 Louisiana 5,644 5,963 8,018 8,651 9,223 9,788 10,354 Alabama 4,306 4,443 4,479 4,520 5,027 5,065 5,100 Other (24 states included) 17,041 27,624 38,669 43,353 41,921 56,515 55,359 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total out of market loans $ 166,810 $ 196,495 $ 226,383 $ 241,041 $ 248,653 $ 258,965 $ 260,329 =========== =========== =========== =========== =========== =========== =========== Nonperforming out of market loans: --------------------------- Arizona $ 8,441 $ 16,745 $ 10,316 $ 17,061 $ 19,145 $ 19,576 $ 11,834 Colorado 746 4,909 880 1,235 1,239 1,255 521 New Mexico 5,135 5,135 11,827 11,827 11,827 11,827 11,827 Tennessee -- -- -- 30 32 33 35 Florida 305 1,479 1,479 1,479 1,479 1,486 1,486 Alabama -- 157 172 192 192 195 195 Other (24 states included) -- 2,709 2,300 3,179 3,103 4,325 7,420 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming out of market loans $ 14,627 $ 31,134 $ 26,974 $ 35,003 $ 37,017 $ 38,697 $ 33,318 =========== =========== =========== =========== =========== =========== =========== Potential problem out of market loans: --------------------------- Arizona $ 10,287 $ 14,865 $ 25,242 $ 14,986 $ 15,608 $ 10,648 $ 18,428 Iowa -- -- -- -- -- 9,100 9,100 Colorado 17,034 13,500 17,933 17,395 17,395 17,395 17,395 New Mexico 11,589 11,635 -- -- -- -- -- California 593 9,423 9,575 -- 9,825 9,950 9,950 Florida 108 116 -- -- -- -- -- Alabama 4,270 4,292 -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total potential problem out of market loans $ 43,881 $ 53,831 $ 52,750 $ 32,381 $ 42,828 $ 47,093 $ 54,873 =========== =========== =========== =========== =========== =========== =========== ALLOWANCE ACTIVITY Balance, beginning of period $ 54,575 $ 61,285 $ 65,229 $ 72,418 $ 67,055 $ 65,168 $ 62,413 Charge offs 16,067 27,562 13,392 14,720 7,006 6,168 6,545 Recoveries 1,564 712 398 266 381 279 769 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net charge offs 14,503 26,850 12,994 14,454 6,625 5,889 5,776 Provision for loan losses 24,626 20,140 9,050 7,265 11,988 7,776 8,531 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Balance, end of period $ 64,698 $ 54,575 $ 61,285 $ 65,229 $ 72,418 $ 67,055 $ 65,168 =========== =========== =========== =========== =========== =========== =========== NET CHARGE OFFS BY TYPE Construction & development $ 7,177 $ 10,847 $ 1,012 $ 11,613 $ 1,641 $ 4,126 $ 2,920 Commercial real estate 5,702 7,593 7,290 1,351 1,582 515 919 Commercial 1,469 7,999 4,337 1,214 1,318 1,081 1,148 One-to-four family residential 55 165 58 149 1,589 119 558 Consumer 100 246 297 127 495 48 231 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total net charge offs by type $ 14,503 $ 26,850 $ 12,994 $ 14,454 $ 6,625 $ 5,889 $ 5,776 =========== =========== =========== =========== =========== =========== =========== NET CHARGE OFFS BY SEGMENT Oklahoma banking $ 1,058 $ 1,442 $ 1,593 $ 1,616 $ 1,960 $ 371 $ 1,815 Texas banking 7,386 9,163 4,502 10,485 2,219 4,726 3,734 Kansas banking 361 1,791 372 64 823 482 1,077 Out of market 5,698 14,454 6,527 2,289 1,623 310 (850) ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total net charge offs by segment $ 14,503 $ 26,850 $ 12,994 $ 14,454 $ 6,625 $ 5,889 $ 5,776 =========== =========== =========== =========== =========== =========== =========== SOUTHWEST BANCORP, INC. Table 7 UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA (Dollars in thousands, except per share) ----------------------------------------------------------------------------------------- 2011 2010 ------------------------------------- -------------------------------------------------- Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31 ----------- ----------- ----------- ----------- ----------- ----------- ----------- NET INCOME (LOSS) BY SEGMENT Oklahoma banking $ 7 $ 5,290 $ 3,435 $ 4,205 $ 3,399 $ 4,387 $ 2,857 Texas banking (6,455) 1,575 1,079 4,001 (1,801) 757 1,685 Kansas banking (612) 971 131 293 (306) 940 (322) Out of market (1,947) (9,039) (924) (3,674) 494 (477) 1,750 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Subtotal (9,007) (1,203) 3,721 4,825 1,786 5,607 5,970 Secondary market 90 127 (13) 444 173 83 310 Other operations (608) (1,894) (1,247) (961) 1,914 (1,279) (1,908) ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net income (loss) $ (9,525) $ (2,970) $ 2,461 $ 4,308 $ 3,873 $ 4,411 $ 4,372 =========== =========== =========== =========== =========== =========== =========== PER SHARE DATA Basic earnings per common share $ (0.54) $ (0.21) $ 0.07 $ 0.17 $ 0.15 $ 0.19 $ 0.23 Diluted earnings per common share (0.54) (0.21) 0.07 0.17 0.15 0.19 0.23 Book value per common share 15.37 15.89 16.02 15.97 15.93 15.88 16.79 Tangible book value per share* 15.02 15.54 15.67 15.62 15.58 15.53 16.33 COMMON STOCK Shares issued and outstanding 19,441,577 19,439,167 19,438,290 19,421,900 19,395,675 19,388,797 14,779,711 OTHER FINANCIAL DATA Investment securities $ 269,599 $ 268,153 $ 258,436 $ 262,525 $ 240,844 $ 247,108 $ 241,693 Loans held for sale 39,902 37,204 37,348 35,194 34,868 25,615 25,586 Noncovered portfolio loans 1,993,694 2,156,096 2,241,080 2,331,293 2,412,796 2,475,348 2,516,397 Total noncovered loans 2,033,596 2,193,300 2,278,428 2,366,487 2,447,664 2,500,963 2,541,983 Covered portfolio loans 41,209 46,153 49,117 53,628 60,558 68,006 76,909 Total assets 2,572,492 2,660,495 2,779,028 2,820,541 2,905,275 3,010,835 3,074,923 Total deposits 2,022,253 2,094,236 2,218,571 2,252,728 2,345,648 2,444,939 2,554,165 Other borrowings 86,583 96,682 85,332 94,602 82,506 93,036 103,620 Subordinated debentures 81,963 81,963 81,963 81,963 81,963 81,963 81,963 Total shareholders' equity 367,024 376,930 379,350 377,812 376,576 375,319 315,341 Mortgage servicing portfolio 285,886 283,083 281,271 278,146 261,266 249,632 241,224 INTANGIBLE ASSET DATA Goodwill $ 6,811 $ 6,811 $ 6,811 $ 6,811 $ 6,811 $ 6,811 $ 6,811 Core deposit intangible 3,155 3,285 3,420 3,557 3,693 3,830 3,967 Mortgage servicing rights 1,808 1,781 1,718 1,810 1,661 1,589 1,603 Nonmortgage servicing rights 3 3 3 4 4 5 5 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total intangible assets $ 11,777 $ 11,880 $ 11,952 $ 12,182 $ 12,169 $ 12,235 $ 12,386 =========== =========== =========== =========== =========== =========== =========== Intangible amortization expense $ 226 $ 222 $ 361 $ 402 $ 392 $ 350 $ 359 ----------- ----------- ----------- ----------- ----------- ----------- ----------- DEPOSIT COMPOSITION Non-interest bearing demand $ 388,365 $ 389,027 $ 369,013 $ 377,182 $ 329,655 $ 326,721 $ 317,896 Interest-bearing demand 98,270 124,346 112,731 92,584 86,153 102,218 119,757 Money market accounts 461,546 465,269 486,770 495,253 518,422 510,549 506,659 Savings accounts 31,319 29,586 28,440 26,665 25,556 25,321 25,871 Time deposits of $100,000 or more 551,914 570,116 669,817 694,565 795,303 861,110 944,871 Other time deposits 490,839 515,892 551,800 566,479 590,559 619,020 639,111 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total deposits** $ 2,022,253 $ 2,094,236 $ 2,218,571 $ 2,252,728 $ 2,345,648 $ 2,444,939 $ 2,554,165 =========== =========== =========== =========== =========== =========== =========== OFFICES AND EMPLOYEES FTE Employees 437 437 424 432 440 447 455 Branches 23 23 23 23 23 23 24 Loan production offices 2 2 2 2 2 2 2 Assets per employee $ 5,887 $ 6,088 $ 6,554 $ 6,529 $ 6,603 $ 6,736 $ 6,758 --------------------------- *This is a Non-GAAP based financial measure. **Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures) Total deposits $ 2,022,253 $ 2,094,236 $ 2,218,571 $ 2,252,728 $ 2,345,648 $ 2,444,939 $ 2,554,165 Less: Brokered time deposits 46,838 52,407 122,124 145,240 226,238 279,027 359,571 Other brokered deposits 105,483 105,392 112,033 117,532 129,096 126,643 124,969 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Non-brokered deposits $ 1,869,932 $ 1,936,437 $ 1,984,414 $ 1,989,956 $ 1,990,314 $ 2,039,269 $ 2,069,625 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Plus: Sweep repurchase agreements 40,305 30,636 27,214 26,492 22,211 22,700 33,192 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Core funding $ 1,910,237 $ 1,967,073 $ 2,011,628 $ 2,016,448 $ 2,012,525 $ 2,061,969 $ 2,102,817 =========== =========== =========== =========== =========== =========== =========== 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) ----------------------------------------------------------------------------------------- 2011 2010 ------------------------------------- -------------------------------------------------- Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31 ----------- ----------- ----------- ----------- ----------- ----------- ----------- PERFORMANCE RATIOS Return on average assets (annualized) (1.43)% (0.43)% 0.35% 0.59% 0.52% 0.58% 0.57% Return on average common equity (annualized) (13.42) (5.11) 1.81 4.11 3.57 4.64 5.42 Return on average tangible common equity (annualized)* (13.72) (5.22) 1.85 4.21 3.65 4.75 5.58 Net interest margin (annualized) 3.77 3.79 3.78 3.82 3.63 3.65 3.59 Total dividends declared to net income (9.24) (29.46) 35.56 20.31 22.59 19.84 20.02 Effective tax rate 35.23 54.53 38.40 38.31 28.02 38.29 39.19 Efficiency ratio 64.07 52.40 54.50 54.13 47.02 51.97 49.25 NONPERFORMING ASSETS Noncovered: --------------------------- Nonaccrual loans $ 132,268 $ 151,135 $ 134,934 $ 106,566 $ 135,209 $ 111,871 $ 97,858 90 days past due and accruing 458 43 529 517 452 333 4 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming loans 132,726 151,178 135,463 107,083 135,661 112,204 97,862 Other real estate 70,785 38,956 41,067 37,722 35,723 27,634 18,809 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming assets $ 203,511 $ 190,134 $ 176,530 $ 144,805 $ 171,384 $ 139,838 $ 116,671 =========== =========== =========== =========== =========== =========== =========== Performing restructured $ 1,026 $ 3,191 $ 2,166 $ 2,177 $ 5,334 $ 5,525 $ 5,650 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Potential problem loans $ 276,694 $ 291,171 $ 217,406 $ 233,140 $ 236,844 $ 242,217 $ 275,912 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Covered: --------------------------- Nonaccrual loans $ 7,065 $ 9,800 $ 9,809 $ 10,806 $ 7,906 $ 14,504 $ 16,192 90 days past due and accruing 610 -- -- -- 1,871 130 356 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming loans 7,675 9,800 9,809 10,806 9,777 14,634 16,548 Other real estate 5,350 3,806 4,016 4,187 4,448 4,352 4,489 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming assets $ 13,025 $ 13,606 $ 13,825 $ 14,993 $ 14,225 $ 18,986 $ 21,037 =========== =========== =========== =========== =========== =========== =========== Potential problem loans $ 2,015 $ 2,731 $ 3,444 $ 3,495 $ 6,413 $ 6,184 $ 6,620 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ASSET QUALITY RATIOS Net loan charge-offs to average portfolio loans (annualized) 2.70% 4.76% 2.25% 2.35% 1.05% 0.92% 0.90% Noncovered: --------------------------- Nonperforming assets to portfolio loans and other real estate 9.86% 8.66% 7.74% 6.11% 7.00% 5.59% 4.60% Nonperforming loans to portfolio loans 6.66 7.01 6.04 4.59 5.62 4.53 3.89 Allowance for loan losses to portfolio loans 3.25 2.53 2.73 2.80 3.00 2.71 2.59 Allowance for loan losses to nonperforming loans 48.75 36.10 45.24 60.91 53.38 59.76 66.59 Covered: --------------------------- Nonperforming assets to portfolio loans and other real estate 27.98% 27.23% 26.02% 25.93% 21.88% 26.24% 25.84% Nonperforming loans to portfolio loans 18.62 21.23 19.97 20.15 16.14 21.52 21.52 CAPITAL RATIOS Average total shareholders' equity to average assets 14.39% 13.98% 13.57% 13.24% 12.85% 11.78% 10.18% Leverage ratio 16.47 16.25 15.95 15.55 14.96 14.48 12.32 Tier 1 capital to risk-weighted assets 19.54 18.93 18.49 17.78 17.17 16.50 14.00 Total capital to risk-weighted assets 20.81 20.20 19.77 19.06 18.45 17.78 15.28 Tangible common equity to tangible assets*** 11.38 11.38 10.99 10.78 10.43 10.02 7.87 REGULATORY CAPITAL DATA Tier I capital $ 433,628 $ 444,106 $ 447,803 $ 445,966 $ 442,188 $ 438,973 $ 381,280 Total capital 461,929 473,950 478,713 477,930 475,040 472,971 415,955 Total risk adjusted assets 2,219,271 2,346,596 2,421,752 2,507,867 2,574,746 2,659,886 2,722,628 Average total assets 2,633,000 2,733,561 2,807,518 2,867,114 2,955,779 3,032,328 3,094,756 --------------------------- *This is a Non-GAAP based financial measure. ***Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure) Total shareholders' equity $ 367,024 $ 376,930 $ 379,350 $ 377,812 $ 376,576 $ 375,319 $ 315,341 Less: Goodwill 6,811 6,811 6,811 6,811 6,811 6,811 6,811 Preferred stock 68,268 68,084 67,902 67,724 67,548 67,375 67,205 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Tangible common equity $ 291,945 $ 302,035 $ 304,637 $ 303,277 $ 302,217 $ 301,133 $ 241,325 =========== =========== =========== =========== =========== =========== =========== Total assets $ 2,572,492 $ 2,660,495 $ 2,779,028 $ 2,820,541 $ 2,905,275 $ 3,010,835 $ 3,074,923 Less goodwill 6,811 6,811 6,811 6,811 6,811 6,811 6,811 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Tangible assets $ 2,565,681 $ 2,653,684 $ 2,772,217 $ 2,813,730 $ 2,898,464 $ 3,004,024 $ 3,068,112 =========== =========== =========== =========== =========== =========== =========== Tangible common equity to tangible assets 11.38% 11.38% 10.99% 10.78% 10.43% 10.02% 7.87% Balance sheet amounts and ratios are as of period end unless otherwise noted.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Southwest Bancorp, Inc.
CONTACT: Rick Green
President & CEO
Laura Robertson
EVP & CFO
(405) 372-2230
6:00 AM ET 10/20/11 | GlobeNewswire
Southwest Bancorp, Inc. (Nasdaq:OKSB) (Nasdaq:OKSBP) ("Southwest") today reported a net loss available to common shareholders of $10.6 million, or $0.54 per diluted share for the third quarter of 2011, compared to net income available to common shareholders of $2.8 million, or $0.15 per diluted share for the third quarter of 2010, and to a net loss available to common shareholders of $4.0 million, or $0.21 per diluted share for the second quarter of 2011. The net loss available to common shareholders for the nine months ended September 30, 2011 was $13.2 million, or $0.68 per diluted share, compared to net income available to common shareholders for the nine months ended September 30, 2010 of $9.5 million, or $0.55 per diluted share.
Rick Green, President and CEO, stated, "Our losses were primarily the result of significantly increased provisions for loan losses and other problem loan related costs. These increases are generally due to continued weakness in the economy and commercial real estate values in particular.
"We continue to focus on the identification and resolution of problem and potential problem credits, and we have taken important additional steps this year to improve our lending, banking, and credit functions. In July 2011, we named a new Chief Banking Officer who is responsible for the lending, deposit, and treasury services and a new Chief Credit Officer who has authority over the credit and work-out functions. Both of these new positions report directly to me. We have bolstered our credit analysis and work-out staff with additional experienced and aggressive officers.
"However, we are not satisfied with the pace of our resolution of problem and potential problem assets. Accordingly, we have undertaken a disciplined analysis of all alternatives available to accelerate the resolution process in the near-term. That analysis is continuing, while our enhanced work-out process proceeds.
"Our goals are vital and simple to state. They are to:
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-- "Promptly identify and resolve problem and potential problem assets, until we achieve and maintain acceptable levels; -- "Focus on being a thriving, commercial bank serving our healthy, core markets in Oklahoma, Texas, and Kansas; -- "Return to sustained profitability; -- "Resume dividends on our trust preferred securities, preferred stock, and common stock; and -- "Produce reliable and attractive returns for our shareholders."
Third Quarter 2011 Key Notes
Loans and Credit Quality:
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-- Noncovered loans decreased by $332.9 million, or 14%, from year-end and $414.1 million, or 17%, from September 30, 2010. This decrease included a reduction of the commercial real estate mortgage and construction concentration to $1.5 billion, or 75%, of noncovered loans at September 30, 2011. Healthcare credits at quarter-end totaled $624.1 million, or 31%, of noncovered loans, including $387.9 million of healthcare related commercial real estate mortgage and construction loans. -- Noncovered loans segmented by the market of the collateral location were as follows: $845.5 million in Texas, $770.3 million in Oklahoma, $252.3 million in Kansas, and $166.8 million in out of market states. The out of market loans consists of thirty-four states in the following categories: $100.4 million in commercial real estate, $39.3 million in construction & development, $21.1 million in commercial & industrial, $3.6 million in residential real estate, and $2.4 million in consumer. -- Nonperforming assets increased to $203.5 million and 9.86% of noncovered portfolio loans and other real estate from $190.1 million and 8.66% of noncovered portfolio loans and other real estate at June 30, 2011 and from $144.8 million and 6.11% of noncovered portfolio loans and other real estate at December 31, 2010. In the first nine months of 2011 the migration of nonperforming assets consisted of: $154.1 million placed on nonaccrual, $14.4 million returned to accrual status, $47.6 million charged-off, $2.4 million of other real estate fair value impairments, $48.9 million transferred from nonperforming loans to other real estate, $18.0 million received in resolutions and payments on nonperforming loans, and $13.1 million received from sales of other real estate. Nonperforming healthcare assets were $15.7 million, or 8%, of total nonperforming assets. -- Nonperforming loans consisted of $68.6 million in construction & development, $56.2 million in commercial real estate, $6.1 million in commercial & industrial, $1.7 million in residential real estate, and $0.1 million in consumer. Nonperforming loans by location were as follows: $95.2 million in Texas, $14.9 million in Oklahoma, $14.6 million in out of market states, and $8.0 million in Kansas. -- Other real estate consisted of $38.9 million in construction & development, $24.4 million in commercial real estate, and $7.5 million in residential real estate. Other real estate by location was as follows: $35.3 million in Texas, $14.4 million in out of market states, $12.4 million in Kansas, and $8.7 million in Oklahoma. -- Impaired loans had a carrying value of $204.5 million versus an unpaid principal value of $230.6 million. Impaired loans with a specific allowance allocation had a carrying value of $115.5 million versus an unpaid principal value of $125.0 million. -- The allowance for loan losses was 3.25% of noncovered portfolio loans, compared to 2.80% at year-end 2010 and 3.00% at September 30, 2010. The allowance on specifically allocated impaired loans was 14.41% of carrying value and 13.31% of unpaid principal. -- Quarterly net charge-offs totaled $14.5 million and consisted of $7.2 million in construction & development, $5.7 million in commercial real estate, $1.5 million in commercial & industrial, and $0.1 million in residential real estate & consumer. The net charge-offs were in the following locations: $7.4 million in Texas, $5.7 million in out of market states, $1.0 million in Oklahoma, and $0.4 million in Kansas. -- Potential problem loans were $276.7 million, up $43.6 million, or 19%, from year-end, and $39.9 million, or 17%, from September 30, 2010. These loans consisted of $162.7 million in commercial real estate, $75.9 million in construction & development, $37.0 million in commercial & industrial, and $1.1 million in residential real estate. Potential problem loans by location were as follows: $164.0 million in Texas, $54.3 million in Oklahoma, $43.9 million in out of market states, and $14.5 million in Kansas.
Capital Position and Liquidity:
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-- As of September 30, 2011, Southwest and each of its banking subsidiaries met the criteria for regulatory classification as "well-capitalized". Southwest's total regulatory capital was $461.9 million, for a total risk-based capital ratio of 20.81%, and Tier 1 capital was $433.6 million, for a Tier 1 risk-based capital ratio of 19.54%. Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $240.0 million. Stillwater National Bank, Southwest's principal banking subsidiary, had total regulatory capital of $383.8 million, for a total risk-based capital ratio of 19.14%, and Tier 1 capital of $343.2 million, for a Tier 1 risk-based capital ratio of 17.12%. Stillwater National Bank exceeded the minimum to be classified as "well-capitalized" by $133.2 million. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators. Stillwater National Bank's leverage and total risk-based capital ratios also substantially exceeded the individual minimum ratios agreed to with the Comptroller of the Currency of 8.50% and 12.50%. -- In July, we determined to defer future payments of interest on our debentures and dividends on related trust preferred securities and to defer payments of dividends on our Series B Preferred Securities issued under the U.S. Treasury Department's Capital Purchase Program. The terms of our debentures and trust preferred securities allow us to increase or decrease the deferral period without default or penalty. -- As of September 30, 2011, the holding company has $29.2 million in cash.
Financial Overview
Condition: Total assets were $2.6 billion and total loans were $2.1 billion at September 30, 2011, a decrease of 9% and 14%, respectively, from December 31, 2010.
At September 30, 2011 the allowance for loan losses was $64.7 million, a decrease of 11% and 1% from September 30, 2010 and December 31, 2010, respectively.
Total core funding, which includes all non-brokered time deposits and sweep repurchase agreements, comprised 91% of total funding, compared to 90% at June 30, 2011 and 86% at December 31, 2010. Wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 9% of total funding compared to 10% at June 30, 2011 and 14% at December 31, 2010. Please see Table 7 for details on these non-GAAP financial measures.
Year-to-date Results:
Summary: The net loss available to common shareholders was $13.2 million as of September 30, 2011, compared to net income available to common shareholders of $9.5 million as of September 30, 2010. The $22.7 million decrease in our net income available to common shareholders from 2010 is the result of a $25.5 million increase in the provision for loan losses, a $5.9 million decrease in net interest income, a $4.0 million decrease in noninterest income, and a $1.5 million increase in noninterest expense, offset in part by a $14.3 million decrease in income tax expense.
On June 28, 2011, Southwest entered into a settlement agreement with the Oklahoma State Tax Commission (the "Commission") with respect to certain claims by the Commission. Southwest had previously recorded reserves against these claims. As a result of the settlement agreement, Southwest paid the sum of $4.8 million to the Commission and recorded a gain of $2.6 million, net of tax effect, upon reversal of excess reserves. The year-to-date calculated effective tax rate is 41.80% and results in a tax benefit; however, when the discreet items are excluded, the effective tax rate year-to-date is 38.90%, also resulting in a tax benefit. Discreet items include the reversal of excess tax reserves in the second quarter and the provision to return adjustment in the third quarter.
Net Interest Income: Net interest income totaled $74.4 million for the first nine months of 2011, compared to $80.4 million for the first nine months of 2010, a decrease of $5.9 million, or 7%. Year-to-date net interest margin was 3.78%, compared to 3.63% in 2010. Included in 2011 year-to-date net interest income was a net reduction of $0.4 million resulting from interest reversals on nonaccrual loans offset by the year-to-date adjustments of the discount accretion on loans and the loss share receivable. Included in 2010 year-to-date net interest income was $0.5 million of net recoveries from the resolution of nonperforming loans and additional discount accretion on loans and loss share receivable, offset in part by interest reversals on nonaccrual loans. The net effects of these adjustments on net interest margin were a 2 basis point decrease and a 3 basis point increase, respectively.
Provision for Loan Losses and Net Charge Offs: The provision for loan losses totaled $53.8 million for the first nine months of 2011, compared to $28.3 million for the first nine months of 2010. Net charge-offs totaled $54.3 million, or 3.24% (annualized) of average portfolio loans year-to-date as of September 30, 2011, compared to $18.3 million, or 0.95% (annualized) of average portfolio loans for the same period in the prior year.
As of September 30, 2011, sixteen relationships accounted for $45.5 million in charge-offs, of which $26.1 million were on six out of market relationships. At September 30, 2011, total out of market commercial real estate and construction loans was $139.7 million, of which $51.0 million were internally rated substandard or doubtful.
Noninterest Income: Noninterest income totaled $10.4 million for the first nine months of 2011, compared to $14.5 million for the first nine months of 2010. The decrease in noninterest income was primarily the result of a $2.6 million decline in gain on investment securities, a $1.0 million decline in gain on sale of loans, mainly from declined student loan sales, and a $0.3 million decline in other noninterest income.
Noninterest Expense: Noninterest expense totaled $48.3 million for the first nine months of 2011, compared to $46.8 million for the first nine months of 2010. The increase consists of a $3.5 million increase in other real estate expense and a $1.6 million increase in provision for unfunded loan commitments due to increased loss ratios, offset in part by a $1.8 million decrease in other general and administrative expense, primarily from the settlement of Oklahoma state tax claims for less than the amount accrued, a $1.5 million decrease in FDIC and other insurance expense, and a $0.3 million decrease in occupancy expense.
Third Quarter Results:
Summary: For the third quarter of 2011, Southwest incurred a net loss available to common shareholders of $10.6 million, compared to net income available to common shareholders of $2.8 million in the third quarter of 2010 and a net loss available to common shareholders of $4.0 million in the second quarter of 2011. The decrease from the third quarter of 2010 was the result of a $12.6 million increase in the provision for loan losses, a $2.7 million decrease in noninterest income, a $2.4 million decrease in net interest income, and a $2.3 million increase in noninterest expense, offset in part by a $6.7 million decrease in income taxes. The decrease from the second quarter of 2011 was the result of a $4.5 million increase in the provision for loan losses, a $2.7 million increase in noninterest expense, and a $1.0 million decrease in net interest income, offset in part by a $1.6 million decrease in income taxes.
For the third quarter of 2011, the calculated effective tax rate is 35.23% and results in a tax benefit; however, when discreet items are excluded, the effective tax rate for the third quarter is 36.94%, also resulting in a tax benefit. Discreet items included the provision to return adjustment in the third quarter.
Net Interest Income: Net interest income totaled $24.0 million for the third quarter of 2011, compared to $26.5 million for the third quarter of 2010, a decrease of $2.4 million, or 9%, and $25.0 million for the second quarter of 2011, a decrease of $1.0 million, or 4%. Net interest margin was 3.77% for the third quarter of 2011, compared to 3.63% for the third quarter of 2010 and 3.79% for the second quarter of 2011. Included in the net interest margins were net reductions of $0.3 million, $0.3 million, and $0.2 million, respectively for each quarter, resulting from interest reversals on nonaccrual loans offset by the quarterly adjustments of the discount accretion on loans and the loss share receivable. The net effects of these adjustments on the net interest margins were a 5 basis point decrease, a 5 basis point decrease, and a 3 basis point decrease for each quarter, respectively.
Provision for Loan Losses and Net Charge-Offs: The provision for loan losses totaled $24.6 million for the third quarter of 2011, compared to $12.0 million for the third quarter of 2010 and $20.1 million for the second quarter of 2011. Net charge-offs totaled $14.5 million, or 2.70% (annualized) of average portfolio loans for the third quarter of 2011, compared to $6.6 million, or 1.05% (annualized) of average portfolio loans for the third quarter of 2010 and $26.9 million, or 4.76% (annualized) of average portfolio loans for the second quarter of 2011.
For the third quarter of 2011, eight relationships accounted for $12.9 million in charge-offs, of which $5.5 million were on four out of market relationships.
Noninterest Income: Noninterest income totaled $3.6 million for the third quarter of 2011, compared to $6.3 million for the third quarter of 2010 and $3.6 million for the second quarter of 2011. The decrease in noninterest income from the third quarter of 2010 was primarily the result of a $2.6 million decrease in gain on investment securities.
Noninterest Expense: Noninterest expense totaled $17.7 million for the third quarter of 2011, compared to $15.4 million for the third quarter of 2010 and $15.0 million for the second quarter of 2011. The increase from third quarter 2010 consisted of a $1.2 million increase in other real estate expense and a $0.6 million increase in provision for unfunded loan commitments, a $0.6 million increase in other general and administrative expense, and a $0.5 million increase in personnel expense, offset in part by a $0.5 million decrease in FDIC and other insurance expense. The increase from second quarter 2011 consisted of a $3.1 million increase in other general and administrative expense, primarily from the second quarter settlement of Oklahoma state tax claims for less than the amount accrued, and a $0.8 million increase in personnel expense, offset in part by a $1.2 million decrease in other real estate expense.
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(R). We were organized in 1981 as the holding company for Stillwater National, which was chartered in 1894. At September 30, 2011 we had total assets of $2.6 billion, deposits of $2.0 billion, and shareholders' equity of $367.0 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 September 30, 2011, approximately $624.1 million, or 31%, 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. We do not focus on one-to-four family residential development loans or "spec" residential property credits. Additionally, subprime residential lending has never been a part of our business strategy, and our exposure to subprime mortgage loans and subprime lenders is minimal. One-to-four family mortgages account for less than 5% of total noncovered loans. As of September 30, 2011 approximately $1.5 billion, or 75%, of our noncovered loans were commercial real estate mortgage and construction loans, including $387.9 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
Forward-Looking Statements
This earnings 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, collateral values and the amount and timing of loan payoffs; liquidity, contractual obligations, off-balance sheet risk, and market or 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 timing of future changes in interest rates, market behavior, and other economic conditions; future laws, 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 our 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 September 30, 2011 through the date its financial statements are filed with the Securities and Exchange Commission. The September 30, 2011 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.
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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
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SOUTHWEST BANCORP, INC. Table 1 UNAUDITED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share) Third Quarter Second Quarter -------------------------------- ------------------------------ --------------------- QUARTERLY HIGHLIGHTS % % 2011 2010 Change 2011 Change ---------- ---------- ------ ---------- --------- Operations Net interest income $ 24,025 $ 26,452 (9)% $ 24,985 (4)% Provision for loan losses 24,626 11,988 105 20,140 22 Noninterest income 3,589 6,335 (43) 3,604 -- Noninterest expense 17,693 15,418 15 14,980 18 Income (loss) before taxes (14,705) 5,381 (373) (6,531) 125 Taxes on income (5,180) 1,508 (444) (3,561) 45 Net income (loss) (9,525) 3,873 (346) (2,970) 221 Net income (loss) available to common shareholders (10,589) 2,825 (475) (4,027) 163 Diluted earnings per share (0.54) 0.15 (460) (0.21) 157 Balance Sheet Total assets 2,572,492 2,905,275 (11) 2,660,495 (3) Loans held for sale 39,902 34,868 14 37,204 7 Noncovered portfolio loans 1,933,694 2,412,796 (20) 2,156,096 (10) Covered portfolio loans 41,209 60,558 (32) 46,153 (11) Total deposits 2,022,253 2,345,648 (14) 2,094,236 (3) Total shareholders' equity 367,024 376,576 (3) 376,930 (3) Book value per common share 15.37 15.93 (4) 15.89 (3) Key Ratios Net interest margin 3.77% 3.63% 3.79% Efficiency ratio 64.07 47.02 52.40 Total capital to risk-weighted assets 20.81 18.45 20.20 Nonperforming loans to portfolio loans - noncovered 6.66 5.62 7.01 Shareholders' equity to total assets 14.27 12.96 14.17 Tangible common equity to tangible assets* 11.38 10.43 11.38 Return on average assets (annualized) (1.43) 0.52 (0.43) Return on average common equity (annualized) (13.42) 3.57 (5.11) Return on average tangible common equity (annualized)** (13.72) 3.65 (5.22) --------------------------------------------------------------------------------------- YEAR-TO-DATE HIGHLIGHTS Nine Month ------------------------------ % 2011 2010 Change ---------- ---------- ------ Operations Net interest income $ 74,431 $ 80,361 (7)% Provision for loan losses 53,816 28,295 90 Noninterest income 10,442 14,475 (28) Noninterest expense 48,298 46,822 3 Income (loss) before taxes (17,241) 19,719 (187) Taxes on income (7,207) 7,063 (202) Net income (loss) (10,034) 12,656 (179) Net income (loss) available to common shareholders (13,208) 9,520 (239) Diluted earnings per share (0.68) 0.55 (224) Balance Sheet Total assets 2,572,492 2,905,275 (11) Loans held for sale 39,902 34,868 14 Noncovered portfolio loans 1,933,694 2,412,796 (20) Covered portfolio loans 41,209 60,558 (32) Total deposits 2,022,253 2,345,648 (14) Total shareholders' equity 367,024 376,576 (3) Book value per common share 15.37 15.93 (4) Key Ratios Net interest margin 3.78% 3.63% Efficiency ratio (GAAP-based) 56.91 49.37 Total capital to risk-weighted assets 20.81 18.45 Nonperforming loans to portfolio loans - noncovered 6.66 5.62 Shareholders' equity to total assets 14.27 12.96 Tangible common equity to tangible assets* 11.38 10.43 Return on average assets (0.49) 0.56 Return on average common equity (5.61) 4.47 Return on average tangible common equity** (5.74) 4.58 --------------------------------------------------------------------------------------- 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.
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SOUTHWEST BANCORP, INC. Table 2 UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except per share) September, December September, 30 31, 30 2011 2010 2010 ----------- ----------- ----------- Assets Cash and due from banks $ 27,501 $ 26,478 $ 22,851 Interest-bearing deposits 89,099 41,018 66,607 ----------- ----------- ----------- Cash and cash equivalents 116,600 67,496 89,458 Securities held to maturity (fair values of $15,805, $14,029, $9,185, respectively) 15,398 14,304 9,093 Securities available for sale (amortized cost of $247,094, $246,649, $226,323, respectively) 254,201 248,221 231,751 Loans held for sale 39,902 35,194 34,868 Noncovered loans receivable 1,993,694 2,331,293 2,412,796 Less: Allowance for loan losses (64,698) (65,229) (72,418) ----------- ----------- ----------- Net noncovered loans receivable 1,928,996 2,266,064 2,340,378 Covered loans receivable (includes loss share: $10,976, $14,370, and $17,922, respectively) 41,209 53,628 60,558 ----------- ----------- ----------- Net loans receivable 1,970,205 2,319,692 2,400,936 Accrued interest receivable 8,035 8,590 9,663 Income tax receivable 12,509 -- -- Premises and equipment, net 22,706 23,772 25,075 Noncovered other real estate 70,785 37,722 35,723 Covered other real estate 5,350 4,187 4,448 Goodwill 6,811 6,811 6,811 Other intangible assets, net 4,966 5,371 5,358 Other assets 45,024 49,181 52,091 ----------- ----------- ----------- Total assets $ 2,572,492 $ 2,820,541 $ 2,905,275 =========== =========== =========== Liabilities Deposits: Noninterest-bearing demand $ 388,365 $ 377,182 $ 329,655 Interest-bearing demand 98,270 92,584 86,153 Money market accounts 461,546 495,253 518,422 Savings accounts 31,319 26,665 25,556 Time deposits of $100,000 or more 551,914 694,565 795,303 Other time deposits 490,839 566,479 590,559 ----------- ----------- ----------- Total deposits 2,022,253 2,252,728 2,345,648 Accrued interest payable 2,507 1,577 2,457 Income tax payable -- 2,878 6,603 Other liabilities 12,162 8,981 9,522 Other borrowings 86,583 94,602 82,506 Subordinated debentures 81,963 81,963 81,963 ----------- ----------- ----------- Total liabilities 2,205,468 2,442,729 2,528,699 Shareholders' equity Serial preferred stock; 2,000,000 shares authorized; 70,000 shares issued and outstanding 68,268 67,724 67,548 Common stock -- $1 par value; 40,000,000 shares authorized; 19,441,577, 19,421,900, 19,395,675 shares issued and outstanding, respectively 19,442 19,422 19,396 Additional paid-in capital 98,981 98,894 98,750 Retained earnings 177,584 190,793 187,535 Accumulated other comprehensive income 2,749 979 3,347 ----------- ----------- ----------- Total shareholders' equity 367,024 377,812 376,576 ----------- ----------- ----------- Total liabilities and shareholders' equity $ 2,572,492 $ 2,820,541 $ 2,905,275 =========== =========== ===========
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SOUTHWEST BANCORP, INC. Table 3 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share) For the three months For the nine months ended September 30, ended September 30, -------------------- --------------------- 2011 2010 2011 2010 ---------- -------- ---------- --------- Interest income Loans $ 27,873 $ 32,824 $ 87,890 $ 101,087 Investment securities 1,779 2,079 5,389 6,424 Other interest-earning assets 131 180 401 610 ---------- -------- ---------- --------- Total interest income 29,783 35,083 93,680 108,121 Interest expense Interest-bearing deposits 3,811 6,802 13,475 22,347 Other borrowings 469 524 1,460 1,565 Subordinated debentures 1,478 1,305 4,314 3,848 ---------- -------- ---------- --------- Total interest expense 5,758 8,631 19,249 27,760 ---------- -------- ---------- --------- Net interest income 24,025 26,452 74,431 80,361 Provision for loan losses 24,626 11,988 53,816 28,295 ---------- -------- ---------- --------- Net interest income (loss) after provision for loan losses (601) 14,464 20,615 52,066 Noninterest income Service charges and fees 3,117 2,994 9,226 9,260 Gain on sales of loans 426 653 1,021 2,054 Gain on investment securities -- 2,605 -- 2,646 Other noninterest income 46 83 195 515 ---------- -------- ---------- --------- Total noninterest income 3,589 6,335 10,442 14,475 Noninterest expense Salaries and employee benefits 7,734 7,183 22,223 22,400 Occupancy 2,694 2,835 8,201 8,454 FDIC and other insurance 824 1,347 3,004 4,455 Other real estate, net 1,445 228 4,483 963 General and administrative 4,996 3,825 10,387 10,550 ---------- -------- ---------- --------- Total noninterest expense 17,693 15,418 48,298 46,822 ---------- -------- ---------- --------- Income (loss) before taxes (14,705) 5,381 (17,241) 19,719 Taxes on income (5,180) 1,508 (7,207) 7,063 ---------- -------- ---------- --------- Net income (loss) $ (9,525) $ 3,873 $ (10,034) $ 12,656 ========== ======== ========== ========= Net income (loss) available to common shareholders $ (10,589) $ 2,825 $ (13,208) $ 9,520 ========== ======== ========== ========= Basic earnings per common share $ (0.54) $ 0.15 $ (0.68) $ 0.55 Diluted earnings per common share (0.54) 0.15 (0.68) 0.55 Common dividends declared per share -- -- -- --
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SOUTHWEST BANCORP, INC. Table 4 UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - QUARTERLY (Dollars in thousands) For the three months ended September 30, -------------------------------------------------------------------- 2011 2010 --------------------------------- --------------------------------- Average Average Average Average Balance Interest Yield/Rate Balance Interest Yield/Rate ----------- -------- ---------- ----------- -------- ---------- Assets Noncovered loans $ 2,127,291 $ 27,160 5.07% $ 2,477,413 $ 31,791 5.09% Covered loans 44,018 713 6.43 65,999 1,033 6.21 Investment securities 269,143 1,779 2.62 246,838 2,079 3.34 Other interest-earning assets 87,649 131 99,500 180 ----------- -------- 0.59 ----------- -------- 0.72 Total interest-earning assets 2,528,101 29,783 4.67 2,889,750 35,083 4.82 Other assets 121,115 76,570 ----------- ----------- Total assets $ 2,649,216 $ 2,966,320 =========== =========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $ 111,805 $ 102 0.36% $ 93,481 $ 111 0.47% Money market accounts 480,817 507 0.42 515,754 976 0.75 Savings accounts 30,467 11 0.14 25,306 15 0.24 Time deposits 1,065,019 3,191 1,428,247 5,700 ----------- -------- 1.19 ----------- -------- 1.58 Total interest-bearing deposits 1,688,108 3,811 0.93 2,062,788 6,802 1.31 Other borrowings 89,964 469 2.07 93,136 524 2.23 Subordinated debentures 81,963 1,478 81,963 1,305 ----------- -------- 7.21 ----------- -------- 6.37 Total interest-bearing liabilities 1,860,035 5,758 1.23 8,631 1.53 -------- ---------- 2,237,887 -------- ---------- Noninterest-bearing demand deposits 375,465 330,321 Other liabilities 32,447 16,960 Shareholders' equity 381,269 381,152 ----------- ----------- Total liabilities and shareholders' equity $ 2,649,216 $ 2,966,320 =========== =========== Net interest income and spread $ 24,025 3.44% $ 26,452 3.29% ======== ========== ======== ========== Net interest margin (1) 3.77% 3.63% ========== ========== Average interest-earning assets to average interest-bearing liabilities 135.92% 129.13% =========== =========== (1) Net interest margin = annualized net interest income / average interest-earning assets
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SOUTHWEST BANCORP, INC. Table 5 UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - YEAR-TO-DATE (Dollars in thousands) For the nine months ended September 30, -------------------------------------------------------------------- 2011 2010 --------------------------------- --------------------------------- Average Average Average Average Balance Interest Yield/Rate Balance Interest Yield/Rate ----------- -------- ---------- ----------- -------- ---------- Assets Noncovered loans $ 2,234,219 $ 85,366 5.11% $ 2,533,490 $ 97,381 5.14% Covered loans 47,619 2,524 7.09 72,676 3,706 6.82 Investment securities 264,004 5,389 2.73 242,629 6,424 3.54 Other interest-earning assets 87,729 401 114,629 610 ----------- -------- 0.61 ----------- -------- 0.71 Total interest-earning assets 2,633,571 93,680 4.76 2,963,424 108,121 4.88 Other assets 102,042 74,199 ----------- ----------- Total assets $ 2,735,613 $ 3,037,623 =========== =========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $ 112,394 $ 329 0.39% $ 102,843 $ 383 0.50% Money market accounts 487,522 1,766 0.48 508,742 3,026 0.80 Savings accounts 29,131 37 0.17 25,515 47 0.25 Time deposits 1,158,922 11,343 1,534,135 18,891 ----------- -------- 1.31 ----------- -------- 1.65 Total interest-bearing deposits 1,787,969 13,475 1.05 2,171,235 22,347 1.38 Other borrowings 89,384 1,460 2.18 96,099 1,565 2.18 Subordinated debentures 81,963 4,314 81,963 3,848 ----------- -------- 7.02 ----------- -------- 6.26 Total interest-bearing liabilities 1,959,316 19,249 1.31 27,760 1.58 -------- ---------- 2,349,297 -------- ---------- Noninterest-bearing demand deposits 370,145 318,609 Other liabilities 23,510 17,629 Shareholders' equity 382,642 352,088 ----------- ----------- Total liabilities and shareholders' equity $ 2,735,613 $ 3,037,623 =========== =========== Net interest income and spread $ 74,431 3.45% $ 80,361 3.30% ======== ========== ======== ========== Net interest margin (1) 3.78% 3.63% ========== ========== Average interest-earning assets to average interest-bearing liabilities 134.41% 126.14% =========== =========== (1) Net interest margin = annualized net interest income / average interest-earning assets
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SOUTHWEST BANCORP, INC. Table 6 UNAUDITED QUARTERLY SUMMARY LOAN DATA (Dollars in thousands, except per share) ----------------------------------------------------------------------------------------- 2011 2010 ------------------------------------- -------------------------------------------------- Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31 ----------- ----------- ----------- ----------- ----------- ----------- ----------- LOAN COMPOSITION Noncovered: --------------------------- Real estate mortgage: Commercial $ 1,169,010 $ 1,262,753 $ 1,302,164 $ 1,310,464 $ 1,271,278 $ 1,251,709 $ 1,230,009 One-to-four family residential 85,272 87,407 87,286 89,800 109,980 106,814 111,185 Real estate construction Commercial 348,053 372,576 403,635 441,265 527,773 589,590 630,472 One-to-four family residential 25,527 26,400 26,758 27,429 30,527 35,129 34,996 Commercial 367,241 404,229 416,392 452,626 463,132 471,004 487,074 Installment and consumer: Guaranteed student loans 5,547 5,600 5,700 5,843 5,960 7,389 10,199 Other 32,946 34,335 36,493 39,060 39,014 39,328 38,048 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total noncovered loans, including held for sale 2,033,596 2,193,300 2,278,428 2,366,487 2,447,664 2,500,963 2,541,983 Less allowance for loan losses (64,698) (54,575) (61,285) (65,229) (72,418) (67,055) (65,168) ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total noncovered loans, net $ 1,968,898 $ 2,138,725 $ 2,217,143 $ 2,301,258 $ 2,375,246 $ 2,433,908 $ 2,476,815 =========== =========== =========== =========== =========== =========== =========== Covered: --------------------------- Real estate mortgage: Commercial $ 23,201 $ 26,976 $ 28,929 $ 30,997 $ 33,428 $ 36,107 $ 37,487 One-to-four family residential 7,378 8,113 8,192 9,122 10,071 10,277 10,843 Real estate construction Commercial 5,987 6,001 6,144 6,840 7,464 8,190 11,173 One-to-four family residential -- 172 281 439 1,823 3,853 5,273 Commercial 4,286 4,461 5,021 5,554 6,816 8,487 10,807 Installment and consumer: 357 430 550 676 956 1,092 1,326 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total covered loans $ 41,209 $ 46,153 $ 49,117 $ 53,628 $ 60,558 $ 68,006 $ 76,909 =========== =========== =========== =========== =========== =========== =========== LOANS BY SEGMENT Oklahoma banking $ 770,306 $ 834,189 $ 838,006 $ 871,393 $ 890,598 $ 914,004 $ 926,870 Texas banking 845,485 911,134 953,123 982,845 1,024,863 1,041,228 1,063,511 Kansas banking 252,302 260,431 272,685 289,642 309,240 329,157 342,596 Out of market 166,810 196,495 226,383 241,041 248,653 258,965 260,329 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Subtotal 2,034,903 2,202,249 2,290,197 2,384,921 2,473,354 2,543,354 2,593,306 Secondary market 39,902 37,204 37,348 35,194 34,868 25,615 25,586 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total loans $ 2,074,805 $ 2,239,453 $ 2,327,545 $ 2,420,115 $ 2,508,222 $ 2,568,969 $ 2,618,892 =========== =========== =========== =========== =========== =========== =========== NONPERFORMING LOANS BY TYPE Construction & development $ 68,554 $ 73,487 $ 68,183 $ 67,571 $ 88,590 $ 75,079 $ 54,648 Commercial real estate 56,234 60,857 47,986 30,510 34,448 25,413 28,520 Commercial 6,080 15,224 16,633 6,977 6,180 2,614 4,100 One-to-four family residential 1,706 1,457 2,634 1,984 6,401 8,843 10,552 Consumer 152 153 27 41 42 255 42 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming loans - noncovered $ 132,726 $ 151,178 $ 135,463 $ 107,083 $ 135,661 $ 112,204 $ 97,862 =========== =========== =========== =========== =========== =========== =========== NONPERFORMING LOANS BY SEGMENT Oklahoma banking $ 14,932 $ 18,870 $ 13,443 $ 9,726 $ 9,937 $ 6,041 $ 7,638 Texas banking 95,191 91,449 87,122 55,431 74,581 48,873 41,303 Kansas banking 7,976 9,725 7,924 6,923 14,126 18,593 15,603 Out of market 14,627 31,134 26,974 35,003 37,017 38,697 33,318 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming loans - noncovered $ 132,726 $ 151,178 $ 135,463 $ 107,083 $ 135,661 $ 112,204 $ 97,862 =========== =========== =========== =========== =========== =========== =========== OTHER REAL ESTATE BY TYPE Construction & development $ 38,927 $ 12,588 $ 6,304 $ 5,579 $ 9,349 $ 1,625 $ 1,441 Commercial real estate 24,364 16,300 23,890 20,750 19,053 19,444 12,320 One-to-four family residential 7,494 10,068 10,873 11,393 7,321 6,565 5,048 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total other real estate - noncovered $ 70,785 $ 38,956 $ 41,067 $ 37,722 $ 35,723 $ 27,634 $ 18,809 =========== =========== =========== =========== =========== =========== =========== OTHER REAL ESTATE BY SEGMENT Oklahoma banking $ 8,709 $ 2,613 $ 4,616 $ 4,814 $ 4,108 $ 3,547 $ 3,665 Texas banking 35,270 17,398 18,652 15,810 14,651 10,352 4,376 Kansas banking 12,390 14,539 12,848 13,182 12,218 8,989 9,198 Out of market 14,416 4,406 4,951 3,916 4,746 4,746 1,570 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total other real estate - noncovered $ 70,785 $ 38,956 $ 41,067 $ 37,722 $ 35,723 $ 27,634 $ 18,809 =========== =========== =========== =========== =========== =========== =========== POTENTIAL PROBLEM LOANS BY TYPE Construction & development $ 75,867 $ 111,032 $ 111,204 $ 94,765 $ 111,401 $ 101,455 $ 132,546 Commercial real estate 162,692 140,079 85,833 101,629 97,694 107,538 111,989 Commercial 37,027 38,850 19,940 36,142 27,119 32,843 30,582 One-to-four family residential 1,108 1,210 429 589 608 354 764 Consumer -- -- -- 15 22 27 31 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total potential problem loans - noncovered $ 276,694 $ 291,171 $ 217,406 $ 233,140 $ 236,844 $ 242,217 $ 275,912 =========== =========== =========== =========== =========== =========== =========== POTENTIAL PROBLEM LOANS BY SEGMENT Oklahoma banking $ 54,310 $ 42,565 $ 30,678 $ 36,170 $ 58,230 $ 47,686 $ 47,147 Texas banking 163,973 183,486 114,506 144,357 116,049 145,684 168,717 Kansas banking 14,530 11,289 19,472 20,232 19,737 1,754 5,175 Out of market 43,881 53,831 52,750 32,381 42,828 47,093 54,873 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total potential problem loans - noncovered $ 276,694 $ 291,171 $ 217,406 $ 233,140 $ 236,844 $ 242,217 $ 275,912 =========== =========== =========== =========== =========== =========== =========== Continued SOUTHWEST BANCORP, INC. Table 6 UNAUDITED QUARTERLY SUMMARY LOAN DATA Continued (Dollars in thousands, except per share) ----------------------------------------------------------------------------------------- 2011 2010 ------------------------------------- -------------------------------------------------- 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 $ 35,978 $ 49,977 $ 57,657 $ 65,615 $ 68,887 $ 65,770 $ 66,428 Iowa 26,626 26,695 26,759 26,836 28,953 25,035 25,108 Colorado 23,234 24,187 28,422 28,619 30,160 31,509 32,793 New Mexico 21,019 21,092 28,226 28,710 29,188 29,514 29,732 California 10,737 9,814 9,984 9,906 10,169 10,554 10,560 Ohio 9,367 9,568 9,963 10,420 10,666 10,786 10,293 Tennessee 6,484 6,550 6,606 6,784 6,837 6,898 6,967 Florida 6,374 10,582 7,600 7,627 7,622 7,531 7,635 Louisiana 5,644 5,963 8,018 8,651 9,223 9,788 10,354 Alabama 4,306 4,443 4,479 4,520 5,027 5,065 5,100 Other (24 states included) 17,041 27,624 38,669 43,353 41,921 56,515 55,359 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total out of market loans $ 166,810 $ 196,495 $ 226,383 $ 241,041 $ 248,653 $ 258,965 $ 260,329 =========== =========== =========== =========== =========== =========== =========== Nonperforming out of market loans: --------------------------- Arizona $ 8,441 $ 16,745 $ 10,316 $ 17,061 $ 19,145 $ 19,576 $ 11,834 Colorado 746 4,909 880 1,235 1,239 1,255 521 New Mexico 5,135 5,135 11,827 11,827 11,827 11,827 11,827 Tennessee -- -- -- 30 32 33 35 Florida 305 1,479 1,479 1,479 1,479 1,486 1,486 Alabama -- 157 172 192 192 195 195 Other (24 states included) -- 2,709 2,300 3,179 3,103 4,325 7,420 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming out of market loans $ 14,627 $ 31,134 $ 26,974 $ 35,003 $ 37,017 $ 38,697 $ 33,318 =========== =========== =========== =========== =========== =========== =========== Potential problem out of market loans: --------------------------- Arizona $ 10,287 $ 14,865 $ 25,242 $ 14,986 $ 15,608 $ 10,648 $ 18,428 Iowa -- -- -- -- -- 9,100 9,100 Colorado 17,034 13,500 17,933 17,395 17,395 17,395 17,395 New Mexico 11,589 11,635 -- -- -- -- -- California 593 9,423 9,575 -- 9,825 9,950 9,950 Florida 108 116 -- -- -- -- -- Alabama 4,270 4,292 -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total potential problem out of market loans $ 43,881 $ 53,831 $ 52,750 $ 32,381 $ 42,828 $ 47,093 $ 54,873 =========== =========== =========== =========== =========== =========== =========== ALLOWANCE ACTIVITY Balance, beginning of period $ 54,575 $ 61,285 $ 65,229 $ 72,418 $ 67,055 $ 65,168 $ 62,413 Charge offs 16,067 27,562 13,392 14,720 7,006 6,168 6,545 Recoveries 1,564 712 398 266 381 279 769 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net charge offs 14,503 26,850 12,994 14,454 6,625 5,889 5,776 Provision for loan losses 24,626 20,140 9,050 7,265 11,988 7,776 8,531 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Balance, end of period $ 64,698 $ 54,575 $ 61,285 $ 65,229 $ 72,418 $ 67,055 $ 65,168 =========== =========== =========== =========== =========== =========== =========== NET CHARGE OFFS BY TYPE Construction & development $ 7,177 $ 10,847 $ 1,012 $ 11,613 $ 1,641 $ 4,126 $ 2,920 Commercial real estate 5,702 7,593 7,290 1,351 1,582 515 919 Commercial 1,469 7,999 4,337 1,214 1,318 1,081 1,148 One-to-four family residential 55 165 58 149 1,589 119 558 Consumer 100 246 297 127 495 48 231 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total net charge offs by type $ 14,503 $ 26,850 $ 12,994 $ 14,454 $ 6,625 $ 5,889 $ 5,776 =========== =========== =========== =========== =========== =========== =========== NET CHARGE OFFS BY SEGMENT Oklahoma banking $ 1,058 $ 1,442 $ 1,593 $ 1,616 $ 1,960 $ 371 $ 1,815 Texas banking 7,386 9,163 4,502 10,485 2,219 4,726 3,734 Kansas banking 361 1,791 372 64 823 482 1,077 Out of market 5,698 14,454 6,527 2,289 1,623 310 (850) ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total net charge offs by segment $ 14,503 $ 26,850 $ 12,994 $ 14,454 $ 6,625 $ 5,889 $ 5,776 =========== =========== =========== =========== =========== =========== =========== SOUTHWEST BANCORP, INC. Table 7 UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA (Dollars in thousands, except per share) ----------------------------------------------------------------------------------------- 2011 2010 ------------------------------------- -------------------------------------------------- Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31 ----------- ----------- ----------- ----------- ----------- ----------- ----------- NET INCOME (LOSS) BY SEGMENT Oklahoma banking $ 7 $ 5,290 $ 3,435 $ 4,205 $ 3,399 $ 4,387 $ 2,857 Texas banking (6,455) 1,575 1,079 4,001 (1,801) 757 1,685 Kansas banking (612) 971 131 293 (306) 940 (322) Out of market (1,947) (9,039) (924) (3,674) 494 (477) 1,750 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Subtotal (9,007) (1,203) 3,721 4,825 1,786 5,607 5,970 Secondary market 90 127 (13) 444 173 83 310 Other operations (608) (1,894) (1,247) (961) 1,914 (1,279) (1,908) ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net income (loss) $ (9,525) $ (2,970) $ 2,461 $ 4,308 $ 3,873 $ 4,411 $ 4,372 =========== =========== =========== =========== =========== =========== =========== PER SHARE DATA Basic earnings per common share $ (0.54) $ (0.21) $ 0.07 $ 0.17 $ 0.15 $ 0.19 $ 0.23 Diluted earnings per common share (0.54) (0.21) 0.07 0.17 0.15 0.19 0.23 Book value per common share 15.37 15.89 16.02 15.97 15.93 15.88 16.79 Tangible book value per share* 15.02 15.54 15.67 15.62 15.58 15.53 16.33 COMMON STOCK Shares issued and outstanding 19,441,577 19,439,167 19,438,290 19,421,900 19,395,675 19,388,797 14,779,711 OTHER FINANCIAL DATA Investment securities $ 269,599 $ 268,153 $ 258,436 $ 262,525 $ 240,844 $ 247,108 $ 241,693 Loans held for sale 39,902 37,204 37,348 35,194 34,868 25,615 25,586 Noncovered portfolio loans 1,993,694 2,156,096 2,241,080 2,331,293 2,412,796 2,475,348 2,516,397 Total noncovered loans 2,033,596 2,193,300 2,278,428 2,366,487 2,447,664 2,500,963 2,541,983 Covered portfolio loans 41,209 46,153 49,117 53,628 60,558 68,006 76,909 Total assets 2,572,492 2,660,495 2,779,028 2,820,541 2,905,275 3,010,835 3,074,923 Total deposits 2,022,253 2,094,236 2,218,571 2,252,728 2,345,648 2,444,939 2,554,165 Other borrowings 86,583 96,682 85,332 94,602 82,506 93,036 103,620 Subordinated debentures 81,963 81,963 81,963 81,963 81,963 81,963 81,963 Total shareholders' equity 367,024 376,930 379,350 377,812 376,576 375,319 315,341 Mortgage servicing portfolio 285,886 283,083 281,271 278,146 261,266 249,632 241,224 INTANGIBLE ASSET DATA Goodwill $ 6,811 $ 6,811 $ 6,811 $ 6,811 $ 6,811 $ 6,811 $ 6,811 Core deposit intangible 3,155 3,285 3,420 3,557 3,693 3,830 3,967 Mortgage servicing rights 1,808 1,781 1,718 1,810 1,661 1,589 1,603 Nonmortgage servicing rights 3 3 3 4 4 5 5 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total intangible assets $ 11,777 $ 11,880 $ 11,952 $ 12,182 $ 12,169 $ 12,235 $ 12,386 =========== =========== =========== =========== =========== =========== =========== Intangible amortization expense $ 226 $ 222 $ 361 $ 402 $ 392 $ 350 $ 359 ----------- ----------- ----------- ----------- ----------- ----------- ----------- DEPOSIT COMPOSITION Non-interest bearing demand $ 388,365 $ 389,027 $ 369,013 $ 377,182 $ 329,655 $ 326,721 $ 317,896 Interest-bearing demand 98,270 124,346 112,731 92,584 86,153 102,218 119,757 Money market accounts 461,546 465,269 486,770 495,253 518,422 510,549 506,659 Savings accounts 31,319 29,586 28,440 26,665 25,556 25,321 25,871 Time deposits of $100,000 or more 551,914 570,116 669,817 694,565 795,303 861,110 944,871 Other time deposits 490,839 515,892 551,800 566,479 590,559 619,020 639,111 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total deposits** $ 2,022,253 $ 2,094,236 $ 2,218,571 $ 2,252,728 $ 2,345,648 $ 2,444,939 $ 2,554,165 =========== =========== =========== =========== =========== =========== =========== OFFICES AND EMPLOYEES FTE Employees 437 437 424 432 440 447 455 Branches 23 23 23 23 23 23 24 Loan production offices 2 2 2 2 2 2 2 Assets per employee $ 5,887 $ 6,088 $ 6,554 $ 6,529 $ 6,603 $ 6,736 $ 6,758 --------------------------- *This is a Non-GAAP based financial measure. **Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures) Total deposits $ 2,022,253 $ 2,094,236 $ 2,218,571 $ 2,252,728 $ 2,345,648 $ 2,444,939 $ 2,554,165 Less: Brokered time deposits 46,838 52,407 122,124 145,240 226,238 279,027 359,571 Other brokered deposits 105,483 105,392 112,033 117,532 129,096 126,643 124,969 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Non-brokered deposits $ 1,869,932 $ 1,936,437 $ 1,984,414 $ 1,989,956 $ 1,990,314 $ 2,039,269 $ 2,069,625 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Plus: Sweep repurchase agreements 40,305 30,636 27,214 26,492 22,211 22,700 33,192 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Core funding $ 1,910,237 $ 1,967,073 $ 2,011,628 $ 2,016,448 $ 2,012,525 $ 2,061,969 $ 2,102,817 =========== =========== =========== =========== =========== =========== =========== 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) ----------------------------------------------------------------------------------------- 2011 2010 ------------------------------------- -------------------------------------------------- Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31 ----------- ----------- ----------- ----------- ----------- ----------- ----------- PERFORMANCE RATIOS Return on average assets (annualized) (1.43)% (0.43)% 0.35% 0.59% 0.52% 0.58% 0.57% Return on average common equity (annualized) (13.42) (5.11) 1.81 4.11 3.57 4.64 5.42 Return on average tangible common equity (annualized)* (13.72) (5.22) 1.85 4.21 3.65 4.75 5.58 Net interest margin (annualized) 3.77 3.79 3.78 3.82 3.63 3.65 3.59 Total dividends declared to net income (9.24) (29.46) 35.56 20.31 22.59 19.84 20.02 Effective tax rate 35.23 54.53 38.40 38.31 28.02 38.29 39.19 Efficiency ratio 64.07 52.40 54.50 54.13 47.02 51.97 49.25 NONPERFORMING ASSETS Noncovered: --------------------------- Nonaccrual loans $ 132,268 $ 151,135 $ 134,934 $ 106,566 $ 135,209 $ 111,871 $ 97,858 90 days past due and accruing 458 43 529 517 452 333 4 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming loans 132,726 151,178 135,463 107,083 135,661 112,204 97,862 Other real estate 70,785 38,956 41,067 37,722 35,723 27,634 18,809 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming assets $ 203,511 $ 190,134 $ 176,530 $ 144,805 $ 171,384 $ 139,838 $ 116,671 =========== =========== =========== =========== =========== =========== =========== Performing restructured $ 1,026 $ 3,191 $ 2,166 $ 2,177 $ 5,334 $ 5,525 $ 5,650 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Potential problem loans $ 276,694 $ 291,171 $ 217,406 $ 233,140 $ 236,844 $ 242,217 $ 275,912 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Covered: --------------------------- Nonaccrual loans $ 7,065 $ 9,800 $ 9,809 $ 10,806 $ 7,906 $ 14,504 $ 16,192 90 days past due and accruing 610 -- -- -- 1,871 130 356 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming loans 7,675 9,800 9,809 10,806 9,777 14,634 16,548 Other real estate 5,350 3,806 4,016 4,187 4,448 4,352 4,489 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total nonperforming assets $ 13,025 $ 13,606 $ 13,825 $ 14,993 $ 14,225 $ 18,986 $ 21,037 =========== =========== =========== =========== =========== =========== =========== Potential problem loans $ 2,015 $ 2,731 $ 3,444 $ 3,495 $ 6,413 $ 6,184 $ 6,620 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ASSET QUALITY RATIOS Net loan charge-offs to average portfolio loans (annualized) 2.70% 4.76% 2.25% 2.35% 1.05% 0.92% 0.90% Noncovered: --------------------------- Nonperforming assets to portfolio loans and other real estate 9.86% 8.66% 7.74% 6.11% 7.00% 5.59% 4.60% Nonperforming loans to portfolio loans 6.66 7.01 6.04 4.59 5.62 4.53 3.89 Allowance for loan losses to portfolio loans 3.25 2.53 2.73 2.80 3.00 2.71 2.59 Allowance for loan losses to nonperforming loans 48.75 36.10 45.24 60.91 53.38 59.76 66.59 Covered: --------------------------- Nonperforming assets to portfolio loans and other real estate 27.98% 27.23% 26.02% 25.93% 21.88% 26.24% 25.84% Nonperforming loans to portfolio loans 18.62 21.23 19.97 20.15 16.14 21.52 21.52 CAPITAL RATIOS Average total shareholders' equity to average assets 14.39% 13.98% 13.57% 13.24% 12.85% 11.78% 10.18% Leverage ratio 16.47 16.25 15.95 15.55 14.96 14.48 12.32 Tier 1 capital to risk-weighted assets 19.54 18.93 18.49 17.78 17.17 16.50 14.00 Total capital to risk-weighted assets 20.81 20.20 19.77 19.06 18.45 17.78 15.28 Tangible common equity to tangible assets*** 11.38 11.38 10.99 10.78 10.43 10.02 7.87 REGULATORY CAPITAL DATA Tier I capital $ 433,628 $ 444,106 $ 447,803 $ 445,966 $ 442,188 $ 438,973 $ 381,280 Total capital 461,929 473,950 478,713 477,930 475,040 472,971 415,955 Total risk adjusted assets 2,219,271 2,346,596 2,421,752 2,507,867 2,574,746 2,659,886 2,722,628 Average total assets 2,633,000 2,733,561 2,807,518 2,867,114 2,955,779 3,032,328 3,094,756 --------------------------- *This is a Non-GAAP based financial measure. ***Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure) Total shareholders' equity $ 367,024 $ 376,930 $ 379,350 $ 377,812 $ 376,576 $ 375,319 $ 315,341 Less: Goodwill 6,811 6,811 6,811 6,811 6,811 6,811 6,811 Preferred stock 68,268 68,084 67,902 67,724 67,548 67,375 67,205 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Tangible common equity $ 291,945 $ 302,035 $ 304,637 $ 303,277 $ 302,217 $ 301,133 $ 241,325 =========== =========== =========== =========== =========== =========== =========== Total assets $ 2,572,492 $ 2,660,495 $ 2,779,028 $ 2,820,541 $ 2,905,275 $ 3,010,835 $ 3,074,923 Less goodwill 6,811 6,811 6,811 6,811 6,811 6,811 6,811 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Tangible assets $ 2,565,681 $ 2,653,684 $ 2,772,217 $ 2,813,730 $ 2,898,464 $ 3,004,024 $ 3,068,112 =========== =========== =========== =========== =========== =========== =========== Tangible common equity to tangible assets 11.38% 11.38% 10.99% 10.78% 10.43% 10.02% 7.87% Balance sheet amounts and ratios are as of period end unless otherwise noted.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Southwest Bancorp, Inc.
CONTACT: Rick Green
President & CEO
Laura Robertson
EVP & CFO
(405) 372-2230
I am by no means an investment adviser or broker, All Posts Are A Matter Of Opinion ONLY. Do You're Own Due Diligence.
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