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Southwest Bancorp, Inc. Reports Results for First Quarter 2016 and Announces Quarterly Dividend

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STILLWATER, Okla., April 20, 2016 (GLOBE NEWSWIRE) -- Southwest Bancorp, Inc. (NASDAQ: OKSB), ("Southwest"), today reported net income for the first quarter of 2016 of $1.9 million, or $0.10 per diluted share, compared to $4.5 million, or $0.24 per diluted share, for the first quarter of 2015.  The decrease in first quarter net income was due to a $4.4 million loan loss provision primarily driven by the impact of low energy prices combined with deterioration in a few general business credits.

Southwest announced that its board of directors has approved a quarterly cash dividend of $0.08 per share payable May 13, 2016 to shareholders of record as of April 29, 2016.

Mark Funke, President and CEO, stated, "We continued to have strong loan production during the first quarter, but the net growth was reduced by expected payoffs on real estate loans.  As energy prices remain low, we identified certain energy related exposure along with deterioration in a few general business credits that caused us to increase our loan loss reserve.  Here are several highlights to take from this quarter.

  • Total loans grew to $1.78 billion, a slight increase over year-end 2015 and a 24% increase compared to the first quarter of 2015.  We funded $108.8 million in new loans during the first quarter of 2016 making this quarter our ninth consecutive quarter of loan growth.
  • The quarterly net interest margin improved to 3.54% at March 31, 2016 compared to 3.48% at December 31, 2015.
  • Pre-tax, pre-provision income was $7.3 million for the first quarter, an increase of 10% from $6.6 million in the fourth quarter of 2015 and an increase of 35% from $5.4 million in the first quarter of 2015.
  • On February 23, 2016 our board of directors authorized a third consecutive share repurchase program of up to another 5.0%, or approximately 967,000 shares, which became effective during the first quarter upon the completion of the repurchase of all of the shares under the prior program.  During the first quarter of 2016, Southwest purchased 803,546 shares for a total of $12.7 million, and since August 2014, Southwest has repurchased 1,925,104 shares for a total of $31.4 million.

"Although the quarter was less than we expected, we will continue to focus our company on producing consistent, conservative, and sustainable earnings through the expansion of our revenue base while prudently managing risk and expenses."

Financial Overview

Condition:  As of March 31, 2016, total assets were $2.4 billion, an increase of $3.8 million, when compared to December 31, 2015. As of March 31, 2016, total loans were $1.8 billion, an increase of $2.5 million from the prior quarter end. As of March 31, 2016, investment securities were $423.0 million, an increase of $10.9 million from the prior quarter end. Cash and cash equivalents at March 31, 2016 were $67.4 million, down $10.8 million from December 31, 2015. 

At March 31, 2016, the allowance for loan losses was $27.2 million, an increase of $1.1 million when compared to December 31, 2015 and a decrease of $0.1 million when compared to March 31, 2015.  The allowance for loan losses to portfolio loans was 1.53% as of March 31, 2016, up from 1.47% as of December 31, 2015, and down from 1.91% as of March 31, 2015.  The allowance for loan losses to nonperforming loans was 122.012% as of March 31, 2016, compared to 128.23% as of December 31, 2015 and 297.78% as of March 31, 2015.  The total allowance for loan losses combined with the purchase discount on acquired loans represents 1.96% of gross loans as of March 31, 2016, compared to 1.94% as of December 31, 2015.    

Nonperforming loans were $22.3 million at March 31, 2016, an increase of $2.0 million from December 31, 2015, and an increase of $13.1 million from March 31, 2015.  Other real estate at March 31, 2016 was $2.3 million, which is flat from December 31, 2015, and March 31, 2015.  Nonperforming assets were $24.5 million, or 1.38% of portfolio loans and other real estate, as of March 31, 2016, compared to $22.6 million, or 1.28% of portfolio loans and other real estate, as of December 31, 2015, and $11.4 million, or 0.80% of portfolio loans and other real estate, as of March 31, 2015.

As of March 31, 2016, total deposits were $1.9 billion, an increase of $11.1 million, when compared to December 31, 2015. Total core funding, which includes all non-brokered deposits and sweep repurchase agreements, comprised 87% and 88% of total funding as of March 31, 2016 and December 31, 2015, respectively.  Wholesale funding, including Federal Home Loan Bank borrowings, federal funds purchased, and brokered deposits, accounted for 13% and 12% of total funding at March 31, 2016 and December 31, 2015, respectively.  See Table 6 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 March 31, 2016 exceeded the criteria for regulatory classification as "well-capitalized".  Southwest's total regulatory capital was $343.3 million, for a total risk-based capital ratio of 15.39%, Common Equity Tier 1 capital was $270.6 million, for a Common Equity Tier 1 ratio of 12.13%, and Tier 1 capital was $315.3 million, for a Tier 1 risk-based capital ratio of 14.14%.  Bank SNB had total regulatory capital of $321.4 million, for a total risk-based capital ratio of 14.46% and Common Equity Tier 1 and Tier 1 capital of $293.5 million, for a Common Equity Tier 1 and Tier 1 ratio of 13.21%.  Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators.

First Quarter Results:

Summary:  For the first quarter of 2016, net income was $1.9 million, compared to $4.6 million for the fourth quarter of 2015 and $4.5 million for the first quarter of 2015.  Pre-tax, pre-provision income for the first quarter of 2016 was $7.3 million, compared to $6.6 million for the fourth quarter of 2015 and $5.4 million for the first quarter of 2015.

The $2.7 million decrease in net income compared to the fourth quarter of 2015 was primarily due to a $4.4 million provision for loan losses versus a negative provision for loan losses of $0.6 million in the prior quarter.  The decrease in net income also includes a $0.8 million decrease in noninterest income, offset in part by a $0.3 million increase in net interest income, a $1.1 million decrease in noninterest expense, and a $1.6 million decrease in income taxes.

The $2.7 million decrease in our net income compared to the first quarter of 2015 was again primarily due to a $4.4 million provision for loan losses versus a negative provision of loan losses of $1.9 million in first quarter 2015.  The decrease in net income also includes a $2.9 million increase in noninterest expense, offset in part by a $4.2 million increase in net interest income, a $0.6 million increase in noninterest income, and a $1.7 million decrease in income taxes. The increase in noninterest expense, net interest income, and noninterest income are due in part to the First Commercial Bancshares, Inc. acquisition that occurred in the fourth quarter of 2015.

Net Interest Income:  Net interest income totaled $19.8 million for the first quarter of 2016, compared to $19.5 million for the fourth quarter of 2015 and $15.6 million for the first quarter of 2015.  Net interest margin was 3.54% for the first quarter of 2016, compared to 3.48% for the fourth quarter of 2015 and 3.25% for the first quarter of 2015. Included in interest income for both the first quarter of 2016 and the fourth quarter of 2015 was $0.3 million of accelerated discount accretion, respectively.  The net effect of these adjustments on the net interest margin was a 5 basis point increase, respectively for each quarter. Loans (including loans held for sale) for the first quarter of 2016 increased $2.5 million when compared to December 31, 2015, and $343.6 million when compared to March 31, 2015. Loans acquired in the fourth quarter of 2015 were $202.4 million.

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 loan 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 $4.4 million for the first quarter of 2016, compared to a negative provision of $0.6 million for the fourth quarter of 2015, and a negative provision of $1.9 million for the first quarter of 2015. The first quarter 2016 provision was driven primarily by the impact of low energy prices combined with deterioration in a few general business credits.  During the first quarter of 2016, net charge-offs totaled $3.3 million, or 0.75% (annualized) of average portfolio loans, compared to net recoveries of $0.1 million, or (0.02%) (annualized) of average portfolio loans for the fourth quarter of 2015 and net recoveries of $0.7 million, or (0.20%) (annualized) of average portfolio loans for the first quarter of 2015. 

Noninterest Income:  Noninterest income totaled $3.4 million for the first quarter of 2016, compared to $4.2 million for the fourth quarter of 2015 and $2.8 million for the first quarter of 2015. 

The $0.8 million decrease from the fourth quarter of 2015 is the result of a $0.1 million decrease in service charges and fees, a $0.2 million decrease in the gain on sales of mortgage loans, which is due to a valuation adjustment on mortgage servicing rights, and a $0.5 million decrease in other noninterest income, primarily due to customer risk management interest rate swap income, offset in part by a $0.1 million gain recognized on the sale of investment securities during the quarter.

The $0.6 million increase from the first quarter of 2015 is primarily the result of a $0.1 million increase in service charges and fees, a $0.1 million increase in the gain on sales of mortgage loans, a $0.1 million increase in gain on sale of investment securities, and a $0.3 million increase in other noninterest income, primarily income on bank owned life insurance.

Noninterest Expense:  Noninterest expense totaled $16.0 million for the first quarter of 2016, compared to $17.1 million for the fourth quarter of 2015 and $13.1 million for the first quarter of 2015. 

The $1.1 million decrease in noninterest expense from the fourth quarter of 2015 was primarily due to a $0.9 million decrease in personnel expense and a $0.4 million decrease in data processing, offset in part by a $0.1 million increase in occupancy and a $0.1 million increase in general and administrative expense, which includes a $0.4 million increase in the provision for unfunded loan commitments offset by $0.1 million decrease in legal fees, 0.1 million decrease in marketing expense, and a $0.1 million decrease in professional fees.

The $2.9 million increase in noninterest expense from the first quarter of 2015 consisted of a $1.4 million increase in personnel expense, a $0.4 million increase in occupancy, a $0.1 million increase in FDIC and other insurance, and a $1.0 million increase in general and administrative expense, which includes a $0.4 million increase in the provision for unfunded loan commitments, a $0.2 million increase in business development expenses, a $0.1 million increase in intangible amortization expense.

Income Tax:  Income tax expense totaled $1.0 million for the first quarter of 2016, compared to $2.6 million for the fourth quarter of 2015 and $2.7 million for the first quarter of 2015.  The income tax expense fluctuates in relation to pre-tax income levels.  The first quarter of 2016 effective tax rate was 35.19%, compared to 35.96% for the fourth quarter of 2015 and 37.50% for the first quarter of 2015. 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, April 20, 2016 at 11:00 a.m. Eastern Time (10:00 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/10083475.  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/oksb160420.  An audio replay will be available one hour after the call at 877-344-7529 (toll-free) or 412-317-0088 (international), conference number 10083475.  Telephone replay access will be available until 9:00 a.m. Eastern Time on May 20, 2016.

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 March 31, 2016, Southwest had total assets of approximately $2.4 billion, deposits of $1.9 billion, and shareholders' equity of $285.7 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 March 31, 2016, approximately $427.2 million, or 24%, 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, 2015.  You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors".

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

Southwest is required under generally accepted accounting principles to evaluate subsequent events and their impact, if any, on its financial statements as of March 31, 2016 through the date its financial statements are filed with the Securities and Exchange Commission.  The March 31, 2016 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 Quarterly Summary Loan DataTable 5
Unaudited Quarterly Summary Financial DataTable 6
Unaudited Quarterly Supplemental Analytical DataTable 7


SOUTHWEST BANCORP, INC.            Table 1
UNAUDITED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share)             
              
  First Quarter Fourth Quarter
QUARTERLY HIGHLIGHTS 2016 2015 % Change 2015 % Change
Operations             
Net interest income $ 19,840  $ 15,610   27% $ 19,520   2%
Provision (credit) for loan losses   4,375    (1,887)  (332)   (566)  (873)
Noninterest income   3,415    2,840   20    4,179   (18)
Noninterest expense   15,996    13,082   22    17,099   (6)
Income before taxes   2,884    7,255   (60)   7,166   (60)
Taxes on income   1,015    2,720   (63)   2,577   (61)
Net income   1,869    4,535   (59)   4,589   (59)
Diluted earnings per share   0.10    0.24   (60)   0.23   (58)
Balance Sheet             
Total assets   2,360,819    2,003,079   18    2,357,022   0 
Loans held for sale   1,803    9,106   (80)   7,453   (76)
Portfolio loans   1,780,081    1,429,139   25    1,771,976   0 
Total deposits   1,895,248    1,616,454   17    1,884,105   1 
Total shareholders' equity   285,661    271,444   5    296,098   (4)
Book value per common share   14.81    14.26   4    14.80   0 
Key Ratios             
Net interest margin   3.54%   3.25%     3.48%  
Efficiency ratio   68.41    70.47      71.49   
Total capital to risk-weighted assets   15.39    19.36      16.79   
Nonperforming loans to portfolio loans   1.25    0.64      1.15   
Shareholders' equity to total assets   12.10    13.55      12.56   
Tangible common equity to tangible assets*   11.49    13.50      11.95   
Return on average assets (annualized)   0.32    0.92      0.78   
Return on average common equity (annualized)   2.56    6.78      6.14   
Return on average tangible common equity (annualized)**   2.71    6.81      6.46   
                    
Balance sheet amounts and ratios are as of period end unless otherwise noted.
* This is a Non-GAAP financial measure.  Please see Table 7 for a reconciliation to the most directly comparable GAAP based measure.
** This is a Non-GAAP financial measure.
Please see accompanying tables for additional financial information.


SOUTHWEST BANCORP, INC.      Table 2
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)        
         
 March 31,  December 31, March 31,  
 2016 2015 2015 
Assets         
Cash and due from banks$ 27,102  $ 24,971  $ 20,510  
Interest-bearing deposits  40,251    53,158    133,886  
Cash and cash equivalents  67,353    78,129    154,396  
Securities held to maturity (fair values of $12,248, $12,282, and $11,921 respectively)  11,757    11,797    11,393  
Securities available for sale (amortized cost of $409,093, $401,136 and $363,352, respectively)  411,273    400,331    366,152  
Loans held for sale  1,803    7,453    9,106  
Loans receivable  1,780,081    1,771,975    1,429,139  
Less: Allowance for loan losses  (27,168)   (26,106)   (27,250) 
Net loans receivable  1,752,913    1,745,869    1,401,889  
Accrued interest receivable  5,838    5,767    4,974  
Non-hedge derivative asset  4,307    1,793    1,273  
Premises and equipment, net  23,533    23,819    18,437  
Other real estate  2,274    2,274    2,255  
Goodwill  13,467    13,467    1,214  
Other intangible assets, net  6,145    6,615    3,866  
Other assets  60,156    59,708    28,124  
Total assets$ 2,360,819  $ 2,357,022  $ 2,003,079  
          
Liabilities         
Deposits:         
Noninterest-bearing demand$ 552,499  $ 596,494  $ 506,952  
Interest-bearing demand  168,210    151,015    140,659  
Money market accounts  540,323    534,357    488,569  
Savings accounts  56,235    56,333    34,413  
Time deposits of $100,000 or more  348,783    311,538    227,426  
Other time deposits  229,198    234,368    218,435  
Total deposits  1,895,248    1,884,105    1,616,454  
Accrued interest payable  894    867    770  
Non-hedge derivative liability  4,307    1,793    1,273  
Other liabilities  10,553    11,684    8,167  
Other borrowings  117,763    110,927    58,578  
Subordinated debentures  46,393    51,548    46,393  
Total liabilities  2,075,158    2,060,924    1,731,635  
          
Shareholders' equity         
Common stock - $1 par value; 40,000,000 shares authorized;         
21,225,034, 21,138,028 and 19,900,350 shares issued, respectively  21,225    21,138    19,900  
Additional paid-in capital  122,070    121,966    101,395  
Retained earnings  173,496    173,210    163,818  
Accumulated other comprehensive income (loss)  546    (1,290)   673  
Treasury stock, at cost, 1,939,989, 1,131,226 and 867,310 shares, respectively  (31,676)   (18,926)   (14,342) 
Total shareholders' equity  285,661    296,098    271,444  
Total liabilities and shareholders' equity$ 2,360,819  $ 2,357,022  $ 2,003,079  


SOUTHWEST BANCORP, INC.       Table 3
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS     
(Dollars in thousands)        
         
 For the three months ended
 March 31,  December 31, March 31,
 2016 2015 2015
Interest income        
Loans$20,030 $ 19,725  $ 15,570 
Investment securities 1,965   1,813    1,553 
Other interest-earning assets 53   46    101 
Total interest income 22,048   21,584    17,224 
         
Interest expense        
Interest-bearing deposits 1,307   1,196    835 
Other borrowings 309   261    227 
Subordinated debentures 592   607    552 
Total interest expense 2,208   2,064    1,614 
         
Net interest income 19,840   19,520    15,610 
         
Provision (credit) for loan losses 4,375   (566)   (1,887)
         
Net interest income after provision for loan losses 15,465   20,086    17,497 
         
Noninterest income        
Service charges and fees 2,549   2,676    2,428 
Gain on sales of mortgage loans 401   645    348 
Gain on sale/call of investment securities, net 126   -    5 
Other noninterest income 339   858    59 
Total noninterest income 3,415   4,179    2,840 
         
Noninterest expense        
Salaries and employee benefits 9,342   10,273    7,914 
Occupancy 2,671   2,586    2,284 
Data processing 470   847    446 
FDIC and other insurance 368   384    312 
Other real estate, net 13   8    21 
General and administrative 3,132   3,001    2,105 
Total noninterest expense 15,996   17,099    13,082 
Income before taxes 2,884   7,166    7,255 
Taxes on income 1,015   2,577    2,720 
Net income$1,869 $ 4,589  $ 4,535 
         
Basic earnings per common share$0.10 $ 0.23  $ 0.24 
Diluted earnings per common share 0.10   0.23    0.24 
Common dividends declared per share 0.08   0.06    0.06 


SOUTHWEST BANCORP, INC.             Table 4
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY
(Dollars in thousands)              
               
  For the three months ended
 March 31, 2016 December 31, 2015 March 31, 2015
 Average Average Average Average Average Average
 Balance Yield/Rate Balance Yield/Rate Balance Yield/Rate
Assets              
Loans$ 1,788,992   4.50% $ 1,744,374   4.49% $ 1,419,137   4.45%
Investment securities  412,307   1.92    413,701   1.74    367,877   1.71 
Other interest-earning assets  51,031   0.42    64,562   0.28    158,940   0.26 
Total interest-earning assets  2,252,330   3.94    2,222,637   3.85    1,945,954   3.59 
Other assets  107,874      101,003      49,460   
Total assets$ 2,360,204    $ 2,323,640    $ 1,995,414   
               
Liabilities and Shareholders' Equity              
Interest-bearing demand deposits$ 160,638   0.16% $ 137,154   0.15% $ 138,895   0.10%
Money market accounts  542,800   0.24    541,976   0.18    484,639   0.15 
Savings accounts  55,834   0.14    53,603   0.13    33,350   0.10 
Time deposits  564,213   0.65    548,145   0.63    434,409   0.57 
Total interest-bearing deposits  1,323,485   0.40    1,280,878   0.37    1,091,293   0.31 
Other borrowings  117,171   1.06    80,343   1.29    72,307   1.27 
Subordinated debentures  48,546   4.88    51,044   4.76    46,393   4.76 
Total interest-bearing liabilities  1,489,202   0.60    1,412,265   0.58    1,209,993   0.54 
               
Noninterest-bearing demand deposits  563,022      594,537      503,275   
Other liabilities  14,769      20,149      10,918   
Shareholders' equity  293,211      296,689      271,228   
Total liabilities and shareholders' equity$ 2,360,204    $ 2,323,640    $ 1,995,414   
               
Net interest income and spread    3.34%     3.27%     3.05%
Net interest margin (1)    3.54%     3.48%     3.25%
Average interest-earning assets              
to average interest-bearing liabilities  151.24%     157.38%     160.82%  
               
(1) Net interest margin = annualized net interest income / average interest-earning assets          


SOUTHWEST BANCORP, INC.             Table 5
UNAUDITED QUARTERLY SUMMARY LOAN DATA
(Dollars in thousands)              
               
 2016 2015
 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
LOAN COMPOSITION              
Real estate mortgage:              
Commercial$ 878,822  $ 938,462  $ 869,250  $ 759,406  $ 759,676 
One-to-four family residential  158,078    161,958    95,906    85,338    86,343 
Real estate construction:              
Commercial  156,454    129,070    126,407    186,140    192,052 
One-to-four family residential  24,202    21,337    12,866    13,107    12,586 
Commercial  543,822    507,173    423,480    384,788    366,282 
Installment and consumer:              
Other  20,506    21,429    20,185    20,651    21,306 
Total loans, including held for sale  1,781,884    1,779,429    1,548,094    1,449,430    1,438,245 
Less allowance for loan losses  (27,168)   (26,106)   (26,593)   (26,219)   (27,250)
Total loans, net$ 1,754,716  $ 1,753,323  $ 1,521,501  $ 1,423,211  $ 1,410,995 
LOANS BY SEGMENT              
Oklahoma banking****$ 1,060,482  $ 1,048,473  $ 832,282  $ 810,367  $ 814,949 
Texas banking  560,421    580,476    563,010    493,047    478,005 
Kansas banking  160,981    150,480    152,802    146,016    145,291 
Total loans$ 1,781,884  $ 1,779,429  $ 1,548,094  $ 1,449,430  $ 1,438,245 
NONPERFORMING LOANS BY TYPE              
Construction & development$ 1,444  $ 1,010  $ 391  $ 416  $ 392 
Commercial real estate  3,830    3,992    1,795    2,141    2,247 
Commercial  13,461    13,491    11,727    5,114    5,447 
One-to-four family residential  3,448    1,777    1,016    1,216    1,065 
Consumer  84    88    148    -    - 
Total nonperforming loans$ 22,267  $ 20,358  $ 15,077  $ 8,887  $ 9,151 
NONPERFORMING LOANS BY SEGMENT              
Oklahoma banking****$ 7,978  $ 6,948  $ 2,846  $ 1,670  $ 2,244 
Texas banking  13,521    12,450    11,025    5,353    5,264 
Kansas banking  768    960    1,206    1,864    1,643 
Total nonperforming loans$ 22,267  $ 20,358  $ 15,077  $ 8,887  $ 9,151 
OTHER REAL ESTATE BY TYPE              
Construction & development$ 2,060  $ 2,060  $ 2,025  $ 2,035  $ 2,035 
Commercial real estate  214    214    249    358    220 
Total other real estate$ 2,274  $ 2,274  $ 2,274  $ 2,393  $ 2,255 
OTHER REAL ESTATE BY SEGMENT              
Oklahoma banking****$ 274  $ 274  $ 200  $ 200  $ - 
Texas banking  2,000    2,000    2,025    2,000    2,000 
Kansas banking  -    -    49    193    255 
Total other real estate$ 2,274  $ 2,274  $ 2,274  $ 2,393  $ 2,255 
               
****Due to immateriality, Colorado banking is included within Oklahoma banking.
Continued              


SOUTHWEST BANCORP, INC.             Table 5
UNAUDITED QUARTERLY SUMMARY LOAN DATA     Continued
(Dollars in thousands)              
               
 2016 2015
 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
POTENTIAL PROBLEM LOANS BY TYPE              
Construction & development$ -  $ -  $ -  $ -  $ 201 
Commercial real estate  36,216    26,981    22,362    20,375    24,672 
Commercial  29,931    9,879    7,366    14,519    14,016 
One-to-four family residential  2,275    2,285    79    80    81 
Consumer  38    10    -    -    - 
Total potential problem loans$ 68,460  $ 39,155  $ 29,807  $ 34,974  $ 38,970 
POTENTIAL PROBLEM LOANS BY SEGMENT              
Oklahoma banking****$ 46,102  $ 32,970  $ 23,597  $ 23,231  $ 26,713 
Texas banking  18,801    4,165    4,086    9,180    9,541 
Kansas banking  3,557    2,020    2,124    2,563    2,716 
Total potential problem loans$ 68,460  $ 39,155  $ 29,807  $ 34,974  $ 38,970 
ALLOWANCE ACTIVITY              
Balance, beginning of period$ 26,106  $ 26,593  $ 26,219  $ 27,250  $ 28,452 
Charge offs  3,725    569    226    325    230 
Recoveries  412    648    577    430    915 
Net charge offs (recoveries)  3,313    (79)   (351)   (105)   (685)
Provision (credit) for loan losses  4,375    (566)   23    (1,136)   (1,887)
Balance, end of period$ 27,168  $ 26,106  $ 26,593  $ 26,219  $ 27,250 
NET CHARGE OFFS BY TYPE              
Construction & development$ -  $ -  $ (16) $ (15) $ 5 
Commercial real estate  (187)   219    24    82    (118)
Commercial  3,408    (286)   (325)   (52)   (188)
One-to-four family residential  41    (48)   (68)   (91)   (331)
Consumer  51    36    34    (29)   (53)
Total net charge offs (recoveries) by type$ 3,313  $ (79) $ (351) $ (105) $ (685)
NET CHARGE OFFS BY SEGMENT              
Oklahoma banking****$ 458  $ 288  $ (86) $ 25  $ (309)
Texas banking  952    (415)   (103)   (72)   (114)
Kansas banking  1,903    48    (162)   (58)   (262)
Total net charge offs (recoveries) by segment$ 3,313  $ (79) $ (351) $ (105) $ (685)
               
****Due to immateriality, Colorado banking is included within Oklahoma banking.


SOUTHWEST BANCORP, INC.             Table 6
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA
(Dollars in thousands, except per share)              
               
 2016 2015
 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
PER SHARE DATA              
Basic earnings per common share$0.10 $0.23 $0.22 $0.22 $0.24
Diluted earnings per common share 0.10  0.23  0.22  0.22  0.24
Common dividends declared per share 0.08  0.06  0.06  0.06  0.06
Book value per common share 14.81  14.80  14.57  14.38  14.26
Tangible book value per share* 13.97  13.98  14.49  14.29  14.17
COMMON STOCK              
Shares issued 21,225,034  21,138,028  19,901,336  19,900,855  19,900,350
Less treasury shares 1,939,989  1,131,226  868,617  867,310  867,310
Outstanding shares 19,285,045  20,006,802  19,032,719  19,033,545  19,033,040
OTHER FINANCIAL DATA              
Investment securities$423,030 $412,128 $388,543 $373,260 $377,545
Loans held for sale 1,803  7,453  7,024  6,687  9,106
Portfolio loans 1,780,081  1,771,975  1,541,070  1,442,743  1,429,139
Total loans 1,781,884  1,779,428  1,548,094  1,449,430  1,438,245
Total assets 2,360,819  2,357,022  2,059,899  2,031,581  2,003,079
Total deposits 1,895,248  1,884,105  1,626,250  1,624,446  1,616,454
Other borrowings 117,763  110,927  96,801  75,839  58,578
Subordinated debentures 46,393  51,548  46,393  46,393  46,393
Total shareholders' equity 285,661  296,098  277,344  273,681  271,444
Mortgage servicing portfolio 434,340  432,318  422,845  415,961  407,903
INTANGIBLE ASSET DATA              
Goodwill$13,467 $13,467 $1,214 $1,214 $1,214
Core deposit intangible 2,734  2,894  342  405  467
Mortgage servicing rights 3,411  3,721  3,631  3,518  3,399
Total intangible assets$19,612 $20,082 $5,187 $5,137 $5,080
Intangible amortization expense$341 $330 $243 $243 $168
DEPOSIT COMPOSITION              
Non-interest bearing demand$552,499 $596,494 $526,159 $515,156 $506,952
Interest-bearing demand 168,210  151,015  114,877  131,547  140,659
Money market accounts 540,323  534,357  502,028  496,178  488,569
Savings accounts 56,235  56,333  36,163  35,647  34,413
Time deposits of $100,000 or more 348,783  311,538  238,318  233,105  227,426
Other time deposits 229,198  234,368  208,705  212,813  218,435
Total deposits**$1,895,248 $1,884,105 $1,626,250 $1,624,446 $1,616,454
OFFICES AND EMPLOYEES              
FTE Employees 411  412  358  361  360
Branches 32  32  23  23  22
Assets per employee$5,744 $5,721 $5,754 $5,628 $5,564
____________________              
*This is a Non-GAAP based financial measure.
**Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures)
Total deposits$1,895,248 $1,884,105 $1,626,250 $1,624,446 $1,616,454
Less:              
Brokered time deposits 55,901  39,797  10,086  7,683  7,694
Other brokered deposits 140,372  135,880  133,025  103,025  83,025
Non-brokered deposits$1,698,975 $1,708,428 $1,483,139 $1,513,738 $1,525,735
Plus:              
 Sweep repurchase agreements 42,763  37,273  50,801  50,839  33,578
Core funding$1,741,738 $1,745,701 $1,533,940 $1,564,577 $1,559,313
               
Balance sheet amounts are as of period end unless otherwise noted.


SOUTHWEST BANCORP, INC.             Table 7
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA
(Dollars in thousands)              
               
 2016 2015
 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31
PERFORMANCE RATIOS              
Return on average assets (annualized)  0.32%   0.78%   0.81%   0.85%   0.92%
Return on average common equity (annualized)  2.56    6.14    5.94    6.11    6.78 
Return on average tangible common equity              
(annualized)*  2.71    6.46    5.97    6.14    6.82 
Net interest margin (annualized)  3.54    3.48    3.34    3.31    3.25 
Total dividends declared to net income  84.66    26.22    27.53    27.45    25.19 
Effective tax rate  35.19    35.96    35.84    34.51    37.49 
Efficiency ratio  68.41    71.49    68.25    72.43    70.47 
NONPERFORMING ASSETS              
Nonaccrual loans$ 22,161  $ 19,858  $ 15,076  $ 8,887  $ 9,151 
90 days past due and accruing  106    500    1    -    - 
Total nonperforming loans  22,267    20,358    15,077    8,887    9,151 
Other real estate  2,274    2,274    2,274    2,393    2,255 
Total nonperforming assets$ 24,541  $ 22,632  $ 17,351  $ 11,280  $ 11,406 
Potential problem loans$ 68,460  $ 39,155  $ 29,807  $ 34,974  $ 38,970 
ASSET QUALITY RATIOS              
Nonperforming assets to portfolio loans and              
other real estate  1.38%   1.28%   1.12%   0.78%   0.80%
Nonperforming loans to portfolio loans  1.25    1.15    0.98    0.62    0.64 
Allowance for loan losses to portfolio loans  1.53    1.47    1.73    1.82    1.91 
Allowance for loan losses to              
nonperforming loans  122.01    128.23    176.38    295.03    297.78 
Net loan charge-offs to average portfolio              
loans (annualized)  0.75    (0.02)   (0.09)   (0.03)   (0.20)
CAPITAL RATIOS              
Average total shareholders' equity to              
average assets  12.42%   12.77%   13.59%   13.87%   13.59%
Leverage ratio  13.45    14.41    15.84    16.12    15.75 
Common equity tier 1 capital  12.13    13.21    14.57    15.30    15.51 
Tier 1 capital to risk-weighted assets  14.14    15.53    16.95    17.84    18.10 
Total capital to risk-weighted assets  15.39    16.79    18.21    19.09    19.36 
Tangible common equity to tangible assets***  11.49    11.95    13.40    13.40    13.48 
REGULATORY CAPITAL DATA              
Common equity tier 1 capital$ 270,564  $ 282,737  $ 275,350  $ 272,048  $ 269,007 
Tier I capital  315,326    332,468    320,350    317,048    314,007 
Total capital  343,287    359,300    344,095    339,412    335,734 
Total risk adjusted assets  2,230,326    2,140,344    1,889,892    1,777,618    1,734,401 
Average total assets  2,344,259    2,307,421    2,022,972    1,966,577    1,993,446 
____________________              
*This is a Non-GAAP based financial measure.
***Calculation of Tangible Common Equity to Tangible Assets (Non-GAAP Financial Measure)
Total shareholders' equity$ 285,661  $ 296,098  $ 277,344  $ 273,681  $ 271,444 
Less goodwill and core deposit intangible  16,201    16,361    1,556    1,619    1,681 
Tangible common equity$ 269,460  $ 279,737  $ 275,788  $ 272,062  $ 269,763 
Total assets$ 2,360,819  $ 2,357,022  $ 2,059,899  $ 2,031,581  $ 2,003,079 
Less goodwill and core deposit intangible  16,201    16,361    1,556    1,619    1,681 
Tangible assets$ 2,344,618  $ 2,340,661  $ 2,058,343  $ 2,029,962  $ 2,001,398 
Total shareholders' equity to total assets  12.10%   12.56%   13.46%   13.47%   13.55%
Tangible common equity to tangible assets  11.49%   11.95%   13.40%   13.40%   13.48%
               
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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