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Southwest Bancorp, Inc. Reports Another Quarter of Solid Results for Third Quarter 2015 and Announces Quarterly Dividend

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STILLWATER, Okla., Oct. 20, 2015 (GLOBE NEWSWIRE) -- Southwest Bancorp, Inc. (NASDAQ: OKSB), ("Southwest"), today reported net income for the third quarter of 2015 of $4.1 million, or $0.22 per diluted share, compared to $5.3 million, or $0.27 per diluted share, for the third quarter of 2014, which included a negative (credit) provision for loan losses of $2.9 million. Net income for the nine months ended September 30, 2015 totaled $12.8 million, or $0.68 per diluted share, compared to $15.1 million, or $0.77 per diluted share, for the nine months ended September 30, 2014. Included in the prior year's results was a pre-tax net gain on sale of bank branches of $4.4 million and a negative (credit) provision for loan losses of $4.2 million, versus a negative (credit) provision for loan losses of $3.0 million for the first nine months of 2015.

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Southwest also announced that its board of directors has approved a quarterly cash dividend of $0.06 per share payable November 13, 2015 to shareholders of record as of October 30, 2015.

Mark Funke, President and CEO, stated, "The third quarter was a busy and successful quarter for Bank SNB.  We received regulatory approval to acquire First Commercial Bancshares, Inc. and completed the acquisition in early October.  This expands our presence in the Oklahoma City metro area with five additional branches, increasing our total to ten. It also adds Colorado to our geographic footprint with three branches in Denver and one in Colorado Springs. 

"The financial results for the third quarter reflect solid earnings, improved efficiency, and strong loan growth. Our efforts produced several highlights:

  • Received regulatory approval to acquire Edmond-based First Commercial Bancshares, Inc. ("FCBI") and closed the merger on October 9, 2015.
  • Loan growth was $98.7 million, or 7%, for the third quarter and $148.1 million, or 11%, for the first nine months of 2015. We have had seven consecutive quarters of loan growth.
  • The quarterly net interest margin improved to 3.34% at September 30, 2015 compared to 3.31% at June 30, 2015. 
  • The quarterly efficiency ratio improved to 68.25% for the third quarter, reflecting management's commitment to improved operating performance.

"Our financial results and the strong loan growth for the third quarter reflect the excellent work of our banking associates. We will continue to focus our company on producing consistent, conservative, and sustainable earnings through the expansion of our revenue base while prudently managing our expenses."

Southwest's share repurchase program, approved in August of 2014, authorized the repurchase of up to 5.0% or 990,000 shares of its outstanding common stock, par value $1.00 per share.  As of September 30, 2015, Southwest had repurchased 867,310 shares for a total of $14.3 million.  During the third quarter of 2015, no shares were repurchased due to trade restrictions pursuant to the pending acquisition of FCBI. On August 14, 2015, this share repurchase plan expired.  On February 24, 2015, Southwest's board of directors authorized a second share repurchase program of up to another 5.0% of its outstanding common stock, or approximately 950,000 shares, which became effective on August 14, 2015, immediately following the expiration of the 2014 program.

Financial Overview

Condition:  As of September 30, 2015, total assets were $2.1 billion, an increase of $28.3 million from June 30, 2015.  As of September 30, 2015, total loans were $1.5 billion and investment securities were $388.5 million, an increase of $98.7 million and an increase of $15.3 million from the prior quarter end, respectively.  Consequently, cash and cash equivalents at September 30, 2015 were $68.6 million, down $88.0 million from June 30, 2015. 

At September 30, 2015, the allowance for loan losses was $26.6 million, an increase of $0.4 million when compared to June 30, 2015 and a decrease of $4.3 million when compared to September 30, 2014.  The allowance for loan losses to portfolio loans was 1.73% as of September 30, 2015, compared to 1.82% as of June 30, 2015 and 2.27% as of September 30, 2014.  The allowance for loan losses to nonperforming loans was 176.38% as of September 30, 2015, compared to 295.03% as of June 30, 2015 and 205.29% as of September 30, 2014.   

Nonperforming loans were $15.1 million at September 30, 2015, an increase of $6.2 million from June 30, 2015, and remained relatively flat from September 30, 2014.  Other real estate at September 30, 2015 was $2.3 million, a decrease of $0.1 million from June 30, 2015, and a decrease of $1.2 million when compared to September 30, 2014.  Nonperforming assets were $17.4 million, or 1.12% of portfolio loans and other real estate, as of September 30, 2015, compared to $11.3 million, or 0.78% of portfolio loans and other real estate, as of June 30, 2015, and $18.5 million, or 1.36% of portfolio loans and other real estate, as of September 30, 2014.

Total core funding, which includes all non-brokered deposits and sweep repurchase agreements, comprised 89% and 92% of total funding as of September 30, 2015 and June 30, 2015, respectively.  Wholesale funding, including Federal Home Loan Bank borrowings, federal funds purchased, and brokered deposits, accounted for 11% and 8% of total funding at September 30, 2015 and June 30, 2015, respectively.  See Table 7 for details on core funding and non-brokered deposits, which are non-GAAP financial measures.

The capital ratios of Southwest and Bank SNB as of September 30, 2015 exceeded the criteria for regulatory classification as "well-capitalized".  Southwest's total regulatory capital was $344.1 million, for a total risk-based capital ratio of 18.21%, Common Equity Tier 1 capital was $275.4 million, for a Common Equity Tier 1 ratio of 14.57%, and Tier 1 capital was $320.4 million, for a Tier 1 risk-based capital ratio of 16.95%.  Bank SNB had total regulatory capital of $296.9 million, for a total risk-based capital ratio of 15.77% and Common Equity Tier 1 and Tier 1 capital of $273.2 million, for a Common Equity Tier 1 and Tier 1 ratio of 14.51%.  Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators.

Third Quarter Results:

Summary:  For the third quarter of 2015, net income was $4.1 million, compared to $4.2 million for the second quarter of 2015 and $5.3 million for the third quarter of 2014. 

The $0.04 million decrease in net income compared to the second quarter of 2015 was primarily due to a small loan provision for loan losses versus a negative provision for loan losses in the previous quarter of $1.1 million, a $0.1 million increase in noninterest expense, and an increase in taxes of $0.1 million, offset in part by a $0.7 million increase in net interest income and a $0.6 million increase of noninterest income.

The $1.2 million decrease in our net income compared to the third quarter of 2014 was primarily the result of a small loan provision for loan losses versus a negative provision for loan losses in the previous quarter of $2.9 million and a $0.7 million increase in noninterest expense, offset in part by a $0.7 million increase in net interest income, a $0.9 million increase in noninterest income, and a $0.9 million decrease in taxes.

Net Interest Income:  Net interest income totaled $16.5 million for the third quarter of 2015, compared to $15.8 million for the second quarter of 2015 and the third quarter of 2014.  Net interest margin was 3.34% for the third quarter of 2015, compared to 3.31% for the second quarter of 2015 and 3.44% for the third quarter of 2014. Loans (including loans held for sale) for the third quarter of 2015 increased $98.7 million, or 7%, when compared to June 30, 2015, and $180.7 million, or 13%, when compared to September 30, 2014.

Provision (Credit) for Loan Losses and Net Charge-offs:  The provision for loan losses is the amount that is required to maintain the allowance for losses at an appropriate level based upon the inherent risks in the loan portfolio after the effects of net charge-offs or net recoveries for the period.  The provision for loan losses was a provision of $0.02 million for the third quarter of 2015, compared to a negative provision of $1.1 million for the second quarter of 2015, and a negative provision of $2.9 million for the third quarter of 2014. The $98.7 million loan growth in the third quarter of 2015 accounts for $1.3 million of the excess provision for loan losses. During the third quarter of 2015, net recoveries totaled $0.4 million, or (0.09%) (annualized) of average portfolio loans, compared to net recoveries of $0.1 million, or (0.03%) (annualized) of average portfolio loans for the second quarter of 2015 and net recoveries of $0.7 million, or (0.21%) (annualized) of average portfolio loans for the third quarter of 2014. 

Noninterest Income:  Noninterest income totaled $4.0 million for the third quarter of 2015, compared to $3.4 million for the second quarter of 2015 and $3.1 million for the third quarter of 2014. 

The $0.6 million increase from the second quarter of 2015 is primarily the result of a $0.8 million increase in other noninterest income, primarily from customer risk management interest rate swap income, offset in part by a $0.1 million decrease in gain on sale of mortgage loans, and a $0.1 million decrease in gain on sale of securities. 

The $0.9 million increase from the third quarter of 2014 is primarily the result of a $0.2 million increase in the gain on sale of mortgage loans and a $0.8 million increase in other noninterest income, primarily from customer risk management interest rate swap income and interest income on bank owned life insurance, offset in part by a $0.1 million decrease in service charges and fees.

Noninterest Expense:  Noninterest expense totaled $14.1 million for the third quarter of 2015, compared to $14.0 million for the second quarter of 2015 and $13.4 million for the third quarter of 2014. 

The $0.1 million increase in noninterest expense from the second quarter of 2015 was primarily due to a $0.1 million increase in each personnel expense, occupancy expense, and data processing, offset in part by a $0.1 million decrease in other real estate, and a $0.1 million decrease in general and administrative expense primarily related to the decrease in provision for unfunded loan commitments, and also included $0.3 million in FCBI acquisition expenses and $0.1 million in swap fee consulting expense, offset in part by the reversal of a prior accrual of a contingent liability.

The $0.7 million increase in noninterest expense from the third quarter of 2014 consisted of a $0.6 million increase in personnel expense, a $0.1 million increase in data processing, a $0.2 million increase in other real estate, and a $0.3 million increase in the provision for unfunded loan commitments, offset in part by a $0.6 million decrease in general and administrative expense, which includes primarily legal, accounting, and marketing expenses.

Income Tax:  Income tax expense totaled $2.3 million for the third quarter of 2015, compared to $2.2 million for the second quarter of 2015 and $3.2 million for the third quarter of 2014.  The income tax expense fluctuates in relation to pre-tax income levels.  The third quarter of 2015 effective tax rate was 35.84%, compared to 34.51% for the second quarter of 2015 and 37.49% for the third quarter of 2014. The decline in the effective tax rate includes the impact of an increase in tax exempt income, as a percentage of pre-tax income.

Year-to-date Results:

Summary:  Net income was $12.8 million for the nine months ended September 30, 2015, compared to $15.1 million for the nine months ended September 30, 2014.  The $2.3 million decrease in net income from 2014 is the result of a $0.5 million decrease in net interest income, a $1.2 million decrease in the negative provision for loan losses, and a $4.1 million decrease in noninterest income, which is primarily the pre-tax net gain of $4.4 million on the sales of community bank branches in the second quarter of 2014, offset in part by a $1.7 million decrease in noninterest expense, primarily due to decreased general and administrative expense and other real estate expenses, and a $1.8 million decrease in income tax.

Net Interest Income:  Net interest income totaled $47.9 million for the first nine months of 2015, compared to $48.4 million for the first nine months of 2014, a decrease of $0.5 million.  Year-to-date net interest margin was 3.30%, compared to 3.43% for 2014. Included in interest income for the first nine months of 2014 was $0.8 million due to accelerated discount accretion attributable to the sale of loans covered by a loss share agreement and $0.6 million due to the interest recognition resulting from loans returning to accrual status.  The net effect of these adjustments on the net interest margin was a 9 basis point increase for the first nine months of 2014.  With the rate environment remaining low, earning assets are repricing at lower rates.

Provision (Credit) for Loan Losses and Net Charge-offs:  The provision for loan losses is the amount of expense that is required to maintain the allowance for losses at an appropriate level based upon the inherent risks in the loan portfolio after the effects of net charge-offs or net recoveries for the period.  The provision for loan losses was a credit (or negative) of $3.0 million for the first nine months of 2015, compared to a negative provision of $4.2 million for the first nine months of 2014. Net recoveries totaled $1.1 million, or (0.11%) (annualized) of average portfolio loans year-to-date as of September 30, 2015, compared to net charge-offs of $1.5 million, or 0.15% (annualized) of average portfolio loans for the same period in 2014.  

Noninterest Income:  Noninterest income totaled $10.3 million for the first nine months of 2015, compared to $14.4 million for the first nine months of 2014.  The decrease consists of a $0.4 million decrease in service charges and fees, the $4.4 million recognized as the pre-tax net gain on the sales of the community bank branches in the second quarter of 2014, and a $0.6 million decrease in the gain on sale of investment securities, due to the gain on the sale of a stock investment that was acquired in a prior year repossession in 2014, offset in part by a $0.5 million increase in gains on sales of mortgage loans and a $0.8 million increase in other noninterest income, which includes customer risk management interest rate swap income and interest income on bank owned life insurance. 

Noninterest Expense:  Noninterest expense totaled $41.1 million for the first nine months of 2015, compared to $42.8 million for the first nine months of 2014.  The decrease consists of a $0.2 million decrease in other real estate expense and a $1.7 million decrease in other general and administrative expenses, which primarily includes legal, marketing, travel, consulting, and is offset by $0.5 million in FCBI acquisition expenses. These decreases are offset in part by a $0.2 million increase in employee benefit expenses and a $0.1 million increase in the provision for unfunded loan commitments.

Income Tax:  Income tax expense totaled $7.2 million for the first nine months of 2015, compared to $9.1 million for the first nine months of 2014.  The income tax expense fluctuates in relation to pre-tax income levels.  The year-to-date effective tax rate was 36.02% as of September 30, 2015, compared to 37.50% as of September 30, 2014. The decline in the effective tax rate includes the impact of an increase in tax exempt income, as a percentage of pre-tax income.

Conference Call

Southwest will host a conference call to review these results on Wednesday, October 21, 2015 at 9:30 a.m. Eastern Time (8:30 a.m. Central Time).  Investors, news media, and others may pre-register for the call using the following link to receive a special dial-in number and PIN:  http://dpregister.com/10073037.  Telephone participants who are unable to pre-register may access the call by telephone at 866-218-2402 (toll-free) or 412-902-4190 (international).  Participants are encouraged to dial into the call approximately 10 minutes prior to the start time.  The call and corresponding presentation slides will be webcast live on Southwest's website at www.oksb.com or http://services.choruscall.com/links/oksb151021.html.  An audio replay will be available one hour after the call at 877-344-7529 (toll-free) or 412-317-0088 (international), conference number 10073037.  Telephone replay access will be available until 9:00 a.m. Eastern Time on November 21, 2015.

Southwest Bancorp and Subsidiaries

Southwest is the holding company for Bank SNB, an Oklahoma state banking corporation ("Bank SNB").  Bank SNB offers commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services from offices in Oklahoma, Texas, Kansas, and Colorado.  Bank SNB was chartered in 1894 and Southwest was organized in 1981 as the holding company.  At September 30, 2015, Southwest had total assets of approximately $2.1 billion, deposits of $1.6 billion, and shareholders' equity of $277.3 million.

Southwest's area of expertise focuses on the special financial needs of healthcare and health professionals, businesses and their managers and owners, commercial lending, energy banking, and commercial real estate borrowers.  The strategic focus on healthcare lending was established in 1974.  Southwest and its banking subsidiary provide credit and other remittance services, such as deposits, cash management, and document imaging for physicians and other healthcare practitioners to start or develop their practices and finance the development and purchase of medical offices, clinics, surgical care centers, hospitals, and similar facilities.  As of September 30, 2015, approximately $429.5 million, or 28%, of loans were loans to individuals and businesses in the healthcare industry.  Regular market reviews are conducted of (i) current and potential healthcare lending business, and (ii) the appropriate concentrations within healthcare based upon economic and regulatory conditions.

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

Caution About Forward-Looking Statements

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

These forward-looking statements include: 

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

These forward-looking statements are subject to significant uncertainties because they are based upon: the amount and timing of future changes in interest rates, market behavior, and other economic conditions; future laws, regulations, and accounting principles; changes in regulatory standards and examination policies, and a variety of other matters. These other matters include, among other things, the direct and indirect effects of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators.  Because of these uncertainties, the actual future results may be materially different from the results indicated by these forward-looking statements. In addition, Southwest's past growth and performance do not necessarily indicate future results.  For other factors, risks, and uncertainties that could cause actual results to differ materially from estimates and projections contained in forward-looking statements, please read Southwest's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2014.  You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors".

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

Southwest is required under generally accepted accounting principles to evaluate subsequent events and their impact, if any, on its financial statements as of September 30, 2015 through the date its financial statements are filed with the Securities and Exchange Commission.  The September 30, 2015 financial statements included in this release will be adjusted if necessary to properly reflect the impact of subsequent events on estimates used to prepare those statements. 

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

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

Financial Tables 
Unaudited Financial HighlightsTable 1
Unaudited Consolidated Statements of Financial ConditionTable 2
Unaudited Consolidated Statements of OperationsTable 3
Unaudited Average Balances, Yields, and Rates-Quarterly Table 4
Unaudited Average Balances, Yields, and Rates-Year-to-dateTable 5
Unaudited Quarterly Summary Loan DataTable 6
Unaudited Quarterly Summary Financial DataTable 7
Unaudited Quarterly Supplemental Analytical DataTable 8

 

              
SOUTHWEST BANCORP, INC.            Table 1
UNAUDITED FINANCIAL HIGHLIGHTS             
(Dollars in thousands, except per share)             
              
  Third QuarterSecond Quarter  Third Quarter
QUARTERLY HIGHLIGHTS 2015 % Change 2014 % Change
Operations             
Net interest income $ 16,496  $ 15,791   4% $ 15,837   4%
Provision (credit) for loan losses   23    (1,136)  (102)   (2,897)  (101)
Noninterest income   4,029    3,409   18    3,084   31 
Noninterest expense   14,077    13,982   1    13,358   5 
Income before taxes   6,425    6,354   1    8,460   (24)
Taxes on income   2,303    2,193   5    3,172   (27)
Net income   4,122    4,161   (1)   5,288   (22)
Diluted earnings per share   0.22    0.22   -    0.27   (19)
Balance Sheet             
Total assets   2,059,899    2,031,581   1    1,900,948   8 
Loans held for sale   7,024    6,687   5    4,368   61 
Portfolio loans   1,541,070    1,442,743   7    1,363,020   13 
Total deposits   1,626,250    1,624,446   0    1,494,946   9 
Total shareholders' equity   277,344    273,681   1    271,966   2 
Book value per common share   14.57    14.38   1    13.90   5 
Key Ratios             
Net interest margin   3.34%   3.31%     3.44%  
Efficiency ratio   68.25    72.43      70.60   
Total capital to risk-weighted assets   18.21    19.09      21.34   
Nonperforming loans to portfolio loans   0.98    0.62      1.10   
Shareholders' equity to total assets   13.46    13.47      14.31   
Tangible common equity to tangible assets*   13.40    13.40      14.23   
Return on average assets (annualized)   0.81    0.85      1.12   
Return on average common equity (annualized)   5.94    6.11      7.69   
Return on average tangible common equity (annualized)**   5.97    6.14      7.72   
              
  Nine Months     
YEAR-TO-DATE  HIGHLIGHTS 2015 2014 % Change     
Operations             
Net interest income $ 47,897  $ 48,412   (1)%     
Provision (credit) for loan losses   (3,000)   (4,238)  (29)     
Noninterest income   10,278    14,355   (28)     
Noninterest expense   41,141    42,797   (4)     
Income before taxes   20,034    24,208   (17)     
Taxes on income   7,216    9,077   (21)     
Net income   12,818    15,131   (15)     
Net income available to common shareholders   12,818    15,131   (15)     
Diluted earnings per share   0.68    0.77   (12)     
Balance Sheet             
Total assets   2,059,899    1,900,948   8      
Loans held for sale   7,024    4,368   61      
Portfolio loans   1,541,070    1,363,020   13      
Total deposits   1,626,250    1,494,946   9      
Total shareholders' equity   277,344    271,966   2      
Book value per common share   14.57    13.90   5      
Key Ratios             
Net interest margin   3.30%   3.43%       
Efficiency ratio   70.33    68.18        
Total capital to risk-weighted assets   18.21    21.34        
Nonperforming loans to portfolio loans   0.98    1.10        
Shareholders' equity to total assets   13.46    14.31        
Tangible common equity to tangible assets*   13.40    14.23        
Return on average assets (annualized)   0.86    1.04        
Return on average common equity (annualized)   6.27    7.54        
Return on average tangible common equity (annualized)**   6.31    7.62        
                  
Balance sheet amounts and ratios are as of period end unless otherwise noted.
* This is a Non-GAAP financial measure.  Please see Table 8 for a reconciliation to the most directly comparable GAAP based measure.
** This is a Non-GAAP financial measure.
Please see accompanying tables for additional financial information.


SOUTHWEST BANCORP, INC.       Table 2
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION        
(Dollars in thousands)        
         
 September 30,  December 31, September 30,
 2015 2014 2014
Assets        
Cash and due from banks$ 25,198  $ 19,705  $ 18,498 
Interest-bearing deposits  43,447    121,231    111,605 
Cash and cash equivalents  68,645    140,936    130,103 
Securities held to maturity (fair values of $13,462, $12,880 and $11,265, respectively)  12,954    12,362    10,663 
Securities available for sale (amortized cost of $373,219, $352,275 and $359,042, respectively)  375,589    353,231    359,944 
Loans held for sale  7,024    1,485    4,368 
Loans receivable (includes loss share of $0 in all periods)  1,541,070    1,398,506    1,363,020 
Less: Allowance for loan losses  (26,593)   (28,452)   (30,917)
Net loans receivable  1,514,477    1,370,054    1,332,103 
Accrued interest receivable  4,872    4,723    4,952 
Non-hedge derivative asset  2,344    787    166 
Premises and equipment, net  18,180    18,588    18,986 
Other real estate  2,274    3,097    3,448 
Goodwill  1,214    1,214    1,214 
Other intangible assets, net  3,973    3,927    3,866 
Other assets  48,353    31,630    31,135 
Total assets$ 2,059,899  $ 1,942,034  $ 1,900,948 
         
Liabilities        
Deposits:        
Noninterest-bearing demand$ 526,159  $ 496,128  $ 445,148 
Interest-bearing demand  114,877    122,342    104,807 
Money market accounts  502,028    461,679    477,614 
Savings accounts  36,163    32,795    33,398 
Time deposits of $100,000 or more  238,318    198,952    203,090 
Other time deposits  208,705    222,103    230,889 
Total deposits  1,626,250    1,533,999    1,494,946 
Accrued interest payable  778    769    771 
Non-hedge derivative liability  2,344    787    166 
Other liabilities  9,989    9,920    10,822 
Other borrowings  96,801    79,380    75,884 
Subordinated debentures  46,393    46,393    46,393 
Total liabilities   1,782,555    1,671,248    1,628,982 
         
Shareholders' equity        
Common stock - $1 par value; 40,000,000 shares authorized;        
19,901,336, 19,810,877, and 19,793,623 shares issued, respectively  19,901    19,811    19,794 
Additional paid-in capital  101,611    101,245    100,971 
Retained earnings  169,825    160,427    155,290 
Accumulated other comprehensive income (loss)  372    (395)   (411)
Treasury stock, at cost, 868,617, 617,818 and 223,005 shares, respectively  (14,365)   (10,302)   (3,678)
Total shareholders' equity  277,344    270,786    271,966 
Total liabilities and shareholders' equity$ 2,059,899  $ 1,942,034  $ 1,900,948 


SOUTHWEST BANCORP, INC.             Table 3
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS              
(Dollars in thousands)              
               
 For the three months ended For the nine months
 September 30,  June 30, September 30,  ended September 30,
 2015 2015 2014 2015 2014
Interest income              
Loans$16,510 $ 15,839  $ 15,683  $ 47,919  $ 47,801 
Investment securities 1,443   1,328    1,534    4,120    4,812 
Other interest-earning assets 267   288    274    860    963 
Total interest income 18,220   17,455    17,491    52,899    53,576 
               
Interest expense              
Interest-bearing deposits 905   862    864    2,602    2,820 
Other borrowings 255   241    227    723    675 
Subordinated debentures 564   561    563    1,677    1,669 
Total interest expense 1,724   1,664    1,654    5,002    5,164 
               
Net interest income 16,496   15,791    15,837    47,897    48,412 
               
Provision (credit) for loan losses 23   (1,136)   (2,897)   (3,000)   (4,238)
               
Net interest income after provision for loan losses 16,473   16,927    18,734    50,897    52,650 
               
Noninterest income              
Service charges and fees 2,441   2,450    2,492    7,319    7,696 
Gain on sale of branches, net -   -    -    -    4,378 
Gain on sales of mortgage loans 565   621    382    1,534    1,069 
Gain on sale/call of investment securities, net 19   138    -    162    764 
Other noninterest income 1,004   200    210    1,263    448 
Total noninterest income 4,029   3,409    3,084    10,278    14,355 
               
Noninterest expense              
Salaries and employee benefits 8,374   8,289    7,804    24,577    24,402 
Occupancy 2,288   2,201    2,269    6,773    6,805 
Data processing 475   410    343    1,331    1,359 
FDIC and other insurance 341   316    299    969    1,010 
Other real estate, net 20   112    (220)   153    359 
General and administrative 2,579   2,654    2,863    7,338    8,862 
Total noninterest expense 14,077   13,982    13,358    41,141    42,797 
Income before taxes 6,425   6,354    8,460    20,034    24,208 
Taxes on income 2,303   2,193    3,172    7,216    9,077 
Net income$4,122 $ 4,161  $ 5,288  $ 12,818  $ 15,131 
               
Basic earnings per common share$0.22 $ 0.22  $ 0.27  $ 0.67  $ 0.77 
Diluted earnings per common share 0.22   0.22    0.27    0.68    0.77 
Common dividends declared per share 0.06   0.06    0.04    0.18    0.12 


SOUTHWEST BANCORP, INC.             Table 4
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY              
(Dollars in thousands)              
               
  For the three months ended
 September 30, 2015 June 30, 2015 September 30, 2014
 Average Average Average Average Average Average
 Balance Yield/Rate Balance Yield/Rate Balance Yield/Rate
Assets              
Loans$ 1,473,297   4.45% $ 1,439,050   4.41% $ 1,356,729  4.59%
Investment securities  387,194   1.48    369,677   1.44    378,924  1.61 
Other interest-earning assets  100,011   1.06    103,943   1.11    88,653  1.23 
Total interest-earning assets  1,960,502   3.69    1,912,670   3.66    1,824,306  3.80 
Other assets  65,459      58,267      43,339   
Total assets$ 2,025,961    $ 1,970,937    $ 1,867,645   
               
Liabilities and Shareholders' Equity              
Interest-bearing demand deposits$ 123,829   0.12% $ 137,781   0.09% $ 109,245  0.12%
Money market accounts  497,935   0.17    473,993   0.15    437,632  0.14 
Savings accounts  35,982   0.10    34,702   0.10    32,076  0.10 
Time deposits  446,464   0.57    448,175   0.57    440,317  0.60 
Total interest-bearing deposits  1,104,210   0.33    1,094,651   0.32    1,019,270  0.34 
Other borrowings  76,799   1.32    60,568   1.60    85,423  1.05 
Subordinated debentures  46,393   4.86    46,393   4.84    46,393  4.85 
Total interest-bearing liabilities  1,227,402   0.56    1,201,612   0.56    1,151,086  0.57 
               
Noninterest-bearing demand deposits  511,442      485,984      432,255   
Other liabilities  11,708      10,005      11,442   
Shareholders' equity  275,409      273,336      272,862   
Total liabilities and shareholders' equity$ 2,025,961    $ 1,970,937    $ 1,867,645   
               
Net interest income and spread    3.13%     3.10%    3.23%
Net interest margin (1)    3.34%     3.31%    3.44%
Average interest-earning assets              
to average interest-bearing liabilities  159.73%     159.18%     158.49%  
               
(1) Net interest margin = annualized net interest income / average interest-earning assets                                                                                                


SOUTHWEST BANCORP, INC.          Table 5
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES – YEAR-TO-DATE         
(Dollars in thousands)         
          
 For the nine months ended September 30,
 2015 2014
 Average Average Average Average
 Balance Yield/Rate Balance Yield/Rate
Assets         
Loans$ 1,444,026   4.44% $ 1,322,351   4.83%
Investment securities  374,987   1.47    383,950   1.68 
Other interest-earning assets  120,749   0.95    183,416   0.70 
Total interest-earning assets  1,939,762   3.65    1,889,717   3.79 
Other assets  57,787      47,780   
Total assets$ 1,997,549    $ 1,937,497   
          
Liabilities and Shareholders' Equity         
Interest-bearing demand deposits$ 133,447   0.10% $ 124,652   0.12%
Money market accounts  485,571   0.16    431,802   0.14 
Savings accounts  34,688   0.10    39,941   0.10 
Time deposits  443,060   0.57    488,066   0.61 
Total interest-bearing deposits  1,096,766   0.32    1,084,461   0.35 
Other borrowings  69,908   1.38    83,987   1.07 
Subordinated debentures  46,393   4.82    46,393   4.80 
Total interest-bearing liabilities  1,213,067   0.55    1,214,841   0.57 
          
Noninterest-bearing demand deposits  500,263      443,520   
Other liabilities  10,879      10,898   
Shareholders' equity  273,340      268,238   
Total liabilities and shareholders' equity$ 1,997,549    $ 1,937,497   
          
Net interest income and spread    3.10%     3.22%
Net interest margin (1)    3.30%     3.43%
Average interest-earning assets         
to average interest-bearing liabilities  159.91%     155.55%  
          
(1) Net interest margin = annualized net interest income / average interest-earning assets     


SOUTHWEST BANCORP, INC.                   Table 6
UNAUDITED QUARTERLY SUMMARY LOAN DATA                    
(Dollars in thousands)                    
                     
 2015 2014
  Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
LOAN COMPOSITION                    
Real estate mortgage:                    
Commercial$ 869,250  $ 759,406  $ 759,676  $ 752,971  $ 757,878  $ 769,021  $ 766,178 
One-to-four family residential  95,906    85,338    86,343    77,531    78,985    79,542    84,619 
Real estate construction:                    
Commercial  126,407    186,140    192,052    186,659    166,379    166,981    166,007 
One-to-four family residential  12,866    13,107    12,586    10,464    11,030    8,359    6,629 
Commercial  423,480    384,788    366,282    350,410    330,738    300,163    266,311 
Installment and consumer:                    
Guaranteed student loans  -    -    -    37    127    4,282    4,318 
Other  20,185    20,651    21,306    21,919    22,251    23,352    26,060 
Total loans, including held for sale  1,548,094    1,449,430    1,438,245    1,399,991    1,367,388    1,351,700    1,320,122 
Less allowance for loan losses  (26,593)   (26,219)   (27,250)   (28,452)   (30,917)   (33,083)   (34,925)
Total loans, net$ 1,521,501  $ 1,423,211  $ 1,410,995  $ 1,371,539  $ 1,336,471  $ 1,318,617  $ 1,285,197 
LOANS BY SEGMENT                    
Oklahoma banking$ 832,282  $ 810,367  $ 814,949  $ 793,268  $ 800,201  $ 798,067  $ 777,384 
Texas banking  563,010    493,047    478,005    460,680    424,640    408,385    372,018 
Kansas banking  152,802    146,016    145,291    146,043    142,547    145,248    170,720 
Total loans$ 1,548,094  $ 1,449,430  $ 1,438,245  $ 1,399,991  $ 1,367,388  $ 1,351,700  $ 1,320,122 
NONPERFORMING LOANS BY TYPE                    
Construction & development$ 391  $ 416  $ 392  $ 73  $ 77  $ 82  $ 80 
Commercial real estate  1,795    2,141    2,247    2,195    7,504    7,613    7,541 
Commercial  11,727    5,114    5,447    6,044    6,149    7,484    7,992 
One-to-four family residential  1,016    1,216    1,065    1,100    1,274    1,180    470 
Consumer  148    -    -    1    55    119    2 
Total nonperforming loans$ 15,077  $ 8,887  $ 9,151  $ 9,413  $ 15,059  $ 16,478  $ 16,085 
NONPERFORMING LOANS BY SEGMENT                    
Oklahoma banking$ 2,846  $ 1,670  $ 2,244  $ 1,867  $ 6,410  $ 7,149  $ 7,056 
Texas banking  11,025    5,353    5,264    5,699    5,777    5,636    5,793 
Kansas banking  1,206    1,864    1,643    1,847    2,872    3,693    3,236 
Total nonperforming loans$ 15,077  $ 8,887  $ 9,151  $ 9,413  $ 15,059  $ 16,478  $ 16,085 
OTHER REAL ESTATE BY TYPE                    
Construction & development$ 2,025  $ 2,035  $ 2,035  $ 2,035  $ 2,130  $ 2,130  $ 2,130 
Commercial real estate  249    358    220    1,062    1,318    2,155    2,524 
Total other real estate$ 2,274  $ 2,393  $ 2,255  $ 3,097  $ 3,448  $ 4,285  $ 4,654 
OTHER REAL ESTATE BY SEGMENT                    
Oklahoma banking$ 200  $ 200  $ -  $ -  $ -  $ -  $ - 
Texas banking  2,025    2,000    2,000    2,000    2,000    2,000    2,000 
Kansas banking  49    193    255    1,097    1,448    2,285    2,654 
Total other real estate$ 2,274  $ 2,393  $ 2,255  $ 3,097  $ 3,448  $ 4,285  $ 4,654 
Continued                    


SOUTHWEST BANCORP, INC.                   Table 6
UNAUDITED QUARTERLY SUMMARY LOAN DATA                   Continued
(Dollars in thousands)                    
                     
 2015 2014
  Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
POTENTIAL PROBLEM LOANS BY TYPE                    
Construction & development$ -  $ -  $ 201  $ 2,004  $ 19,307  $ 18,842  $ 22,220 
Commercial real estate  22,362    20,375    24,672    26,108    40,623    60,559    64,257 
Commercial  7,366    14,519    14,016    5,842    4,090    4,299    4,807 
One-to-four family residential  79    80    81    83    355    475    481 
Total potential problem loans$ 29,807  $ 34,974  $ 38,970  $ 34,037  $ 64,375  $ 84,175  $ 91,765 
POTENTIAL PROBLEM LOANS BY SEGMENT                    
Oklahoma banking$ 23,597  $ 23,231  $ 26,713  $ 24,950  $ 23,895  $ 23,887  $ 29,208 
Texas banking  4,086    9,180    9,541    6,283    38,586    57,044    58,361 
Kansas banking  2,124    2,563    2,716    2,804    1,894    3,244    4,196 
Total potential problem loans$ 29,807  $ 34,974  $ 38,970  $ 34,037  $ 64,375  $ 84,175  $ 91,765 
ALLOWANCE ACTIVITY                    
Balance, beginning of period$ 26,219  $ 27,250  $ 28,452  $ 30,917  $ 33,083  $ 34,925  $ 36,663 
Charge offs  226    325    230    377    1,156    1,991    3,392 
Recoveries  577    430    915    298    1,887    504    2,640 
Net charge offs (recoveries)  (351)   (105)   (685)   79    (731)   1,487    752 
Provision (credit) for loan losses  23    (1,136)   (1,887)   (2,386)   (2,897)   (355)   (986)
Balance, end of period$ 26,593  $ 26,219  $ 27,250  $ 28,452  $ 30,917  $ 33,083  $ 34,925 
NET CHARGE OFFS BY TYPE                    
Construction & development$ (16) $ (15) $ 5  $ -  $ -  $ -  $ 655 
Commercial real estate  24    82    (118)   (34)   (640)   583    (2,243)
Commercial  (325)   (52)   (188)   (45)   22    652    2,267 
One-to-four family residential  (68)   (91)   (331)   84    11    (2)   (18)
Consumer  34    (29)   (53)   74    (124)   254    91 
Total net charge offs (recoveries) by type$ (351) $ (105) $ (685) $ 79  $ (731) $ 1,487  $ 752 
NET CHARGE OFFS BY SEGMENT                    
Oklahoma banking$ (86) $ 25  $ (309) $ 248  $ 67  $ 763  $ 229 
Texas banking  (103)   (72)   (114)   (36)   (611)   244    (1,586)
Kansas banking  (162)   (58)   (262)   (133)   (187)   480    2,109 
Total net charge offs (recoveries) by segment$ (351) $ (105) $ (685) $ 79  $ (731) $ 1,487  $ 752 
                     


SOUTHWEST BANCORP, INC.                   Table 7
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA                    
(Dollars in thousands, except per share)                    
                     
 2015 2014
  Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
PER SHARE DATA                    
Basic earnings per common share$0.22 $0.22 $0.24 $0.30 $0.27 $0.31 $0.19
Diluted earnings per common share 0.22  0.22  0.24  0.30  0.27  0.31  0.19
Common dividends declared per share 0.06  0.06  0.06  0.04  0.04  0.04  0.04
Book value per common share 14.57  14.38  14.26  14.11  13.90  13.71  13.37
Tangible book value per share* 14.49  14.29  14.17  14.02  13.80  13.61  13.21
COMMON STOCK                    
Shares issued 19,901,336  19,900,855  19,900,350  19,810,877  19,793,623  19,793,123  19,786,206
Less treasury shares 868,617  867,310  867,310  617,818  223,005  -  -
Outstanding shares 19,032,719  19,033,545  19,033,040  19,193,059  19,570,618  19,793,123  19,786,206
OTHER FINANCIAL DATA                    
Investment securities$388,543 $373,260 $377,545 $365,593 $370,607 $385,873 $386,987
Loans held for sale 7,024  6,687  9,106  1,485  4,368  6,803  5,741
Portfolio loans 1,541,070  1,442,743  1,429,139  1,398,506  1,363,020  1,344,897  1,314,381
Total loans 1,548,094  1,449,430  1,438,245  1,399,991  1,367,388  1,351,700  1,320,122
Total assets 2,059,899  2,031,581  2,003,079  1,942,034  1,900,948  1,885,158  2,012,053
Total deposits 1,626,250  1,624,446  1,616,454  1,533,999  1,494,946  1,463,855  1,605,906
Other borrowings 96,801  75,839  58,578  79,380  75,884  90,760  85,692
Subordinated debentures 46,393  46,393  46,393  46,393  46,393  46,393  46,393
Total shareholders' equity 277,344  273,681  271,444  270,786  271,966  271,351  264,586
Mortgage servicing portfolio 422,845  415,961  407,903  410,315  401,756  397,339  391,303
INTANGIBLE ASSET DATA                    
Goodwill$1,214 $1,214 $1,214 $1,214 $1,214 $1,214 $1,214
Core deposit intangible 342  405  467  530  597  667  1,925
Mortgage servicing rights 3,631  3,518  3,399  3,397  3,269  3,182  3,006
Total intangible assets$5,187 $5,137 $5,080 $5,141 $5,080 $5,063 $6,145
Intangible amortization expense$243 $243 $168 $193 $195 $210 $183
DEPOSIT COMPOSITION                    
Non-interest bearing demand$526,159 $515,156 $506,952 $496,128 $445,148 $427,431 $471,568
Interest-bearing demand 114,877  131,547  140,659  122,342  104,807  124,712  132,622
Money market accounts 502,028  496,178  488,569  461,679  477,614  430,296  440,875
Savings accounts 36,163  35,647  34,413  32,795  33,398  31,187  47,532
Time deposits of $100,000 or more 238,318  233,105  227,426  198,952  203,090  209,059  236,035
Other time deposits 208,705  212,813  218,435  222,103  230,889  241,170  277,274
Total deposits**$1,626,250 $1,624,446 $1,616,454 $1,533,999 $1,494,946 $1,463,855 $1,605,906
OFFICES AND EMPLOYEES                    
FTE Employees 358  361  360  359  351  364  397
Branches 23  23  22  21  21  21  24
Assets per employee$5,754 $5,628 $5,564 $5,410 $5,416 $5,179 $5,068
                     
*This is a Non-GAAP based financial measure.
**Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures)
Total deposits$1,626,250 $1,624,446 $1,616,454 $1,533,999 $1,494,946 $1,463,855 $1,605,906
Less:                    
Brokered time deposits 10,086  7,683  7,694  3,373  2,952  1,348  1,347
Other brokered deposits 133,025  103,025  83,025  73,425  98,425  48,424  3,424
Non-brokered deposits$1,483,139 $1,513,738 $1,525,735 $1,457,201 $1,393,569 $1,414,083 $1,601,135
Plus:                    
Sweep repurchase agreements 50,801  50,839  33,578  54,380  50,884  65,760  60,692
Core funding$1,533,940 $1,564,577 $1,559,313 $1,511,581 $1,444,453 $1,479,843 $1,661,827
                     
Balance sheet amounts are as of period end unless otherwise noted.


SOUTHWEST BANCORP, INC.                   Table 8
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA                    
(Dollars in thousands)                    
                     
 2015 2014
  Sep. 30  Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
PERFORMANCE RATIOS                    
Return on average assets (annualized)  0.81%   0.85%   0.92%   1.22%   1.12%   1.27%   0.75%
Return on average common equity (annualized)  5.94    6.11    6.78    8.62    7.69    9.19    5.68 
Return on average tangible common equity                    
(annualized)*  5.97    6.14    6.82    8.67    7.74    9.30    5.75 
Net interest margin (annualized)  3.34    3.31    3.25    3.52    3.44    3.50    3.33 
Total dividends declared to net income  27.53    27.45    25.19    12.93    14.88    12.86    21.40 
Effective tax rate  35.84    34.51    37.49    37.50    37.49    37.50    37.49 
Efficiency ratio  68.25    72.43    70.47    68.90    71.39    74.25    73.61 
NONPERFORMING ASSETS                    
Nonaccrual loans$ 15,076  $ 8,887  $ 9,151  $ 9,276  $ 15,059  $ 16,478  $ 16,085 
90 days past due and accruing  1    -    -    137    -    -    - 
Total nonperforming loans  15,077    8,887    9,151    9,413    15,059    16,478    16,085 
Other real estate  2,274    2,393    2,255    3,097    3,448    4,285    4,654 
Total nonperforming assets$ 17,351  $ 11,280  $ 11,406  $ 12,510  $ 18,507  $ 20,763  $ 20,739 
Potential problem loans$ 29,807  $ 34,974  $ 38,970  $ 34,037  $ 64,375  $ 84,175  $ 91,765 
ASSET QUALITY RATIOS                    
Nonperforming assets to portfolio loans and                    
other real estate  1.12%   0.78%   0.80%   0.89%   1.36%   1.54%   1.57%
Nonperforming loans to portfolio loans  0.98    0.62    0.64    0.67    1.10    1.23    1.22 
Allowance for loan losses to portfolio loans  1.73    1.82    1.91    2.03    2.27    2.46    2.66 
Allowance for loan losses to                    
nonperforming loans  176.38    295.03    297.78    302.26    205.29    200.77    217.13 
Net loan charge-offs to average portfolio                    
loans (annualized)  (0.09)   (0.03)   (0.20)   0.02    (0.21)   0.45    0.24 
CAPITAL RATIOS                    
Average total shareholders' equity to                    
average assets  13.59%   13.87%   13.59%   14.19%   14.61%   13.77%   13.18%
Leverage ratio  15.84    16.12    15.75    16.45    16.86    15.95    15.09 
Common equity tier 1 capital  14.57    15.30    15.51    n/a    n/a    n/a    n/a 
Tier 1 capital to risk-weighted assets  16.95    17.84    18.10    19.70    20.05    20.13    19.98 
Total capital to risk-weighted assets  18.21    19.09    19.36    20.96    21.34    21.43    21.29 
Tangible common equity to tangible assets***  13.40    13.40    13.48    13.87    14.23    14.31    13.01 
REGULATORY CAPITAL DATA                    
Common equity tier 1 capital$ 275,350  $ 272,048  $ 269,007  $ n/a  $ n/a  $ n/a  $ n/a 
Tier I capital  320,350    317,048    314,007    314,216    314,120    309,600    299,938 
Total capital  344,095    339,412    335,734    334,348    334,456    329,586    319,516 
Total risk adjusted assets  1,889,892    1,777,618    1,734,401    1,595,032    1,566,996    1,537,903    1,500,957 
Average total assets  2,022,972    1,966,577    1,993,446    1,910,688    1,863,127    1,941,064    1,987,231 
                     
*This is a Non-GAAP based financial measure.
***Calculation of Tangible Common Equity to Tangible Assets (Non-GAAP Financial Measure)
Total shareholders' equity$ 277,344  $ 273,681  $ 271,444  $ 270,786  $ 271,966  $ 271,351  $ 264,586 
Less goodwill and core deposit intangible  1,556    1,619    1,681    1,744    1,811    1,881    3,139 
Tangible common equity$ 275,788  $ 272,062  $ 269,763  $ 269,042  $ 270,155  $ 269,470  $ 261,447 
Total assets$ 2,059,899  $ 2,031,581  $ 2,003,079  $ 1,942,034  $ 1,900,948  $ 1,885,158  $ 2,012,053 
Less goodwill and core deposit intangible  1,556    1,619    1,681    1,744    1,811    1,881    3,139 
Tangible assets$ 2,058,343  $ 2,029,962  $ 2,001,398  $ 1,940,290  $ 1,899,137  $ 1,883,277  $ 2,008,914 
Total shareholders' equity to total assets  13.46%   13.47%   13.55%   13.94%   14.31%   14.39%   13.15%
Tangible common equity to tangible assets  13.40%   13.40%   13.48%   13.87%   14.23%   14.31%   13.01%
                     
Balance sheet amounts and ratios are as of period end unless otherwise noted.


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

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