STILLWATER, Okla., Aug. 6 /PRNewswire-FirstCall/ -- Southwest Bancorp, Inc. (NASDAQ:OKSB), ("Southwest"), today reported net income available to common shareholders of $4.9 million, or $0.33 per diluted share for the second quarter 2009, compared to $4.2 million, or $0.28 per diluted share for the second quarter of 2008. Net income available to common shareholders for the six months ended June 30, 2009 was $5.2 million, or $0.35 per diluted share, compared to $9.4 million, or $0.64 per diluted shares, for the prior year. At June 30, 2009, total assets were $3.0 billion. The second quarter results reflect $3.3 million in other income recorded on an FDIC-assisted acquisition in Kansas and $1.9 million in interest income recorded upon our successful resolution of a large problem credit. (Logo: http://www.newscom.com/cgi-bin/prnh/20011127/SOUTHWESTLOGO) Rick Green, Southwest Bancorp's President and Chief Executive Officer, stated, "An important element of our strategic vision calls for careful expansion of community banking operations in Kansas, Oklahoma, and Texas. In 2007, we acquired Bank of Kansas, headquartered in the Hutchinson market. This year, Bank of Kansas acquired assets and assumed liabilities of First National Bank of Anthony ("FNBA"), Anthony, Kansas, in an FDIC-assisted transaction with loss sharing. The loss sharing agreement requires the FDIC to cover 80% of any net losses on covered loans and related assets up to $35.0 million, and 95% of net losses above $35.0 million. In June, we recorded a one-time pre-tax gain of $3.3 million as a result of fair value accounting for the transaction using outside valuations of the acquired assets and assumed deposits. We anticipate that this transaction will be accretive to future earnings, but we cannot estimate the timing or amount of this accretion. "The new Kansas acquisition gives Bank of Kansas six additional community banking offices in Kansas, $117.1 million in loans and $135.0 million in deposits The acquired loans include our current estimate of $33.1 million loss share receivable from the FDIC. "In the first half of 2009, we increased portfolio loans (excluding FNBA portfolio loans) by $95.9 million, up 4%, from year-end 2008, and increased our core deposits (total deposits less time deposits of $100,000 or more and brokered deposits) by $67.1 million, up 5% (excluding FNBA core deposits). At June 30, 2009, our shareholders' equity totaled $305.4 million, up $3.2 million, or 1%, from year-end 2008, and our capital ratios exceeded the levels for regulatory classification as "well-capitalized". "Nonperforming assets (excluding FNBA nonperforming assets) were essentially unchanged from March 31, 2009 at $88.2 million." Please review the following "Financial Overview" and the accompanying tables for important additional information regarding our results and plans. Financial Overview Condition: Total assets were $3.0 billion at June 30, 2009, an increase of 6% from December 31, 2008. At June 30, 2009 total loans were $2.7 billion, an increase of 7% from December 31, 2008. At June 30, 2009, the allowance for loan losses was $51.8 million, up 65% from June 30, 2008 and up 30% from year-end 2008; and represented 1.91% of portfolio loans versus 1.32% at June 30, 2008 and 1.59% at December 31, 2008. The methodology used to determine the appropriate amount of the allowance for loan losses at a particular time includes consideration of risk factors related to Southwest and to our markets, including regular assessments of national and local economic conditions and trends. For the six months ended June 30, 2009, the provision for loan losses increased by $12.9 million, or 238%, over the provision for the comparable period ended June 30, 2008. Nonperforming assets to portfolio loans and other real estate owned were 3.83% at June 30, 2009 compared to 1.45% at June 30, 2008 and 2.80% at December 31, 2008. A breakdown of portfolio loans and nonperforming assets by type are shown in the following table: Percentage of total Percentage of (dollars in Portfolio portfolio Nonperforming nonperforming thousands) loans loans assets assets ----- ----- ------ ------ Real estate construction $739,433 27.34% $42,977 41.40% Commercial real estate 1,223,496 45.24 30,253 29.14 Commercial 569,336 21.06 11,022 10.62 Other real estate owned - - 8,941 8.61 Residential real estate mortgages 126,887 4.69 10,320 9.94 Other consumer loans 45,174 1.67 307 0.29 ------ ---- --- ---- Total $2,704,326 100.00% $103,820 100.00% Included above are $15.6 million of nonperforming assets acquired from FNBA, which are subject to protection under the existing loss share agreements. Nonaccrual loans, which are the majority of nonperforming assets, were $82.8 million as of June 30, 2009, an increase of $9.4 million from March 31, 2009 and $23.5 million from December 31, 2008. These loans are carried at their estimated collectible amounts and no longer accrue interest. Loans 90 days or more past due, another component of nonperforming assets, increased $1.5 million from March 31, 2009 and increased $7.4 million from December 31, 2008. These loans are deemed to have sufficient collateral and are in the process of being collected. Performing loans considered potential problem loans, which are not included in the past due, nonaccrual, or restructured categories, but for which known information about possible credit problems cause management to be uncertain as to the continued ability of the borrowers to comply with the present loan repayment terms in future periods, amounted to approximately $184.1 million at June 30, 2009, an increase of $50.2 million from March 31, 2009 and $52.5 million from December 31, 2008. Included are $6.0 million of potential problem loans acquired from FNBA, which are subject to protection under the existing loss share agreements. These loans are subject to continuing management attention and are considered by management in determining the level of the allowance for loan losses. Total deposits were $2.5 billion at June 30, 2009, up $272.2 million from December 31, 2008. At June 30, 2009, wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 17% of total funding compared to 24% at December 31, 2008. At June 30, 2009 Southwest exceeded all applicable regulatory capital requirements, having a total risk-based capital ratio of 13.92%, a Tier 1 risk-based capital ratio of 12.67%, and a leverage ratio of 12.70%. Southwest and each of its banking subsidiaries met the criteria for regulatory classification as "well-capitalized". Southwest's capital exceeded the minimum to be classified as "well-capitalized" by $115.5 million. Southwest's ratio of tangible common equity to tangible assets was 7.65% as June 30, 2009. (The tangible common equity ratio is a non-GAAP measure used by Southwest and analysts based on shareholders' equity as defined by generally accepted accounting principles minus goodwill and equity that does not benefit common shareholders such as preferred equity and equity provided by the U.S. Treasury's Capital Purchase Program. See table 6.) Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators. Year-to-date Results: Summary: The decrease in our net income available to common shareholders from 2008 is the result of a $12.9 million increase in the provision for loan losses, a $2.3 million increase in FDIC insurance and other insurance expense, and $2.1 million in dividends on the preferred stock that we issued in December 2008, offset in part by a $4.0 million decrease in personnel costs, a $1.5 million decrease in general and administrative expenses, a $1.5 million decrease in income tax expense, a $3.1 million increase in other noninterest income, a $1.7 million increase in gain on sale of investment securities, and a $1.4 million increase in net interest income. Net Interest Income: Net interest income totaled $45.5 million for the first six month of 2009 compared to $44.1 million for the first six months of 2008. Year-to-date net interest margin was 3.20% compared to 3.42% in 2008. Included in the second quarter net interest income is a one-time recovery of $1.9 million in interest from the successful resolution of a nonperforming loan. Net interest margin would have been 13 basis points lower without this recovery. Provision for Loan Losses: The provision for loan losses totaled $18.4 million for the first six months of 2009 compared to $5.4 million for the first six months of 2008. Net charge offs totaled $6.4 million, or 0.51% (annualized) of average portfolio loans, year-to-date as of June 30, 2009, compared to $3.7 million, or 0.32% (annualized) of average portfolio loans, for the same period in the prior year. Noninterest Income: For the first six months of 2009, noninterest income totaled $13.7 million compared to $8.6 million for 2008. The increase in noninterest income from 2008 was the result of a $1.7 million increase in gain on sale of investment securities and a $3.1 million increase in other noninterest income, which includes the $3.3 million gain on acquisition. Noninterest Expense: For the first six months of 2009, noninterest expense totaled $29.3 million compared to $32.2 million for 2008. The decrease consists mainly of a $4.0 million decrease in personnel expense, a $1.1 million decrease in other general and administrative expenses, and a $458,000 decrease in provision for unfunded loan commitments, offset in part by a $2.3 million increase in FDIC and other insurance expense and a $460,000 increase in occupancy expense. The efficiency ratio improved to 49.45% for the first six months of 2009 from 60.95% for the first six months of 2008. Second Quarter Results: Summary: The $748,000 increase in our net income available to common shareholders compared to the second quarter of 2008 was the result of a $3.3 million increase in noninterest income, a $2.2 million increase in net interest income and a $1.6 million decrease in noninterest expenses, offset in party by a $4.3 million increase in the provision for loan losses, a $1.0 million increase in income tax expense, and $1.0 million in quarterly dividends on the preferred stock that we issued in December 2008. Net Interest Income: Net interest income totaled $24.5 million for the second quarter of 2009 compared to $22.3 million for the second quarter of 2008. Net interest margin was 3.41% for the second quarter of 2009 compared to 3.38% for the second quarter of 2008. Included in quarterly net interest income is a one-time recovery of $1.9 million in interest as a nonperforming loan was resolved. Net interest margin would have been 26 basis points lower without this recovery. Provision for Loan Losses: The provision for loan losses totaled $7.5 million for the second quarter of 2009 compared to $3.2 million for the second quarter of 2008. Net charge offs totaled $2.0 million, or 0.31% (annualized) of average portfolio loans for the second quarter of 2009, compared to $1.8 million, or 0.31% (annualized) of average portfolio loans, for the second quarter of 2008. Noninterest Income: Noninterest income totaled $7.3 million for the second quarter of 2009 compared to $4.0 million for the second quarter of 2008. The increase was primarily the result of a $3.3 million gain recognized on the FDIC-assisted acquisition. Noninterest Expense: Noninterest expense totaled $14.7 million for the second quarter of 2009, a $1.6 million decrease from the second quarter 2008. The decrease consists mainly of a $2.0 million decrease in personnel expense, a $1.2 million decrease in other general and administrative expenses, and a $403,000 decrease in provision for unfunded loan commitments, offset in part by a $1.8 million increase in FDIC and other insurance expense. The efficiency ratio for the second quarter of 2009 improved to 46.32% from 62.23% for the second quarter of 2008. Southwest Bancorp and Subsidiaries Southwest Bancorp is the financial holding company for Stillwater National Bank and Trust Company, Bank of Kansas, SNB Capital Corporation, Healthcare Strategic Support, Inc., and Business Consulting Group, Inc. Through its subsidiaries, Southwest offers commercial and consumer lending, deposit, and investment services, and specialized cash management, consulting, and other financial services from offices in Oklahoma City, Edmond, Stillwater, Tulsa, and Chickasha, Oklahoma; Austin, Dallas, Houston and San Antonio, Texas; and Anthony, Harper, Hutchinson, Mayfield, Olathe, Overland Park, South Hutchinson, and Wichita, Kansas, and on the Internet, through SNB DirectBanker . Southwest focuses on converting its strategic vision into long-term shareholder value. Our vision includes a commercial banking model and a community banking model focused on more traditional banking operations in Texas, Oklahoma, and Kansas. Southwest's strategic growth goals include prudent growth from existing and additional commercial banking offices in carefully selected markets and continued careful expansion of community banking operations. We plan to reduce the percentage of commercial real estate loans to total portfolio loans in view of current economic conditions. Our plan focuses on reductions in particular subcategories of commercial real estate loans that are identified in our regular real estate market reviews. In general, and with some exceptions regarding locations and particular types of facilities, we do not intend to decrease healthcare related commercial or mortgage lending or commercial mortgage lending on owner-occupied properties that otherwise meet our underwriting criteria. Southwest's common stock is traded on the NASDAQ Global Select Market under the symbol OKSB. Southwest's trust preferred securities are traded on the NASDAQ Global Select Market under the symbol OKSBP. Forward-Looking Statements This Press Release includes forward-looking statements that are subject to risks and uncertainties. These forward-looking statements include: statements of Southwest's goals, intentions, and expectations; estimates of risks and of future costs and benefits; expectations regarding future financial performance of Southwest and its operating segments; assessments of loan quality, probable loan losses, and the amount and timing of loan payoffs; liquidity, contractual obligations, off-balance sheet risk and market risk 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 time of future changes in interest rates, market behavior, and other economic conditions; future laws and regulations and accounting principles; and a variety of other matters. Because of these uncertainties, the actual future results may be materially different from the results indicated by these forward-looking statements. In addition, Southwest's past growth and performance do not necessarily indicate its future results. Financial Tables Unaudited Financial Highlights Table 1 Unaudited Consolidated Statements of Financial Condition Table 2 Unaudited Consolidated Statements of Operations Table 3 Unaudited Average Balances, Yields, and Rates-Quarterly Table 4 Unaudited Average Balances, Yields, and Rates-Year-to-date Table 5 Unaudited Summary Financial Data by Quarter-2009 and 2008 Table 6 Unaudited Supplemental Analytical Data by Quarter-2009 and 2008 Table 7 SOUTHWEST BANCORP, INC. Table 1 UNAUDITED FINANCIAL HIGHLIGHTS (Dollars in thousands except per share) Second Quarter First Quarter QUARTERLY ----------------------------------------------------- HIGHLIGHTS % % 2009 2008 Change 2009 Change ---- ---- -------- ---- -------- Operations Net interest income $24,456 $22,284 10% $21,038 16% Provision for loan losses 7,477 3,190 134 10,882 (31) Noninterest income 7,261 3,959 83 6,477 12 Noninterest expense 14,690 16,332 (10) 14,599 1 Income before taxes 9,550 6,721 42 2,034 370 Taxes on income 3,605 2,559 41 705 411 Net income 5,945 4,162 43 1,329 347 Net income available to common shareholders 4,910 4,162 18 296 1,559 Diluted earnings per share 0.33 0.28 18 0.02 1,550 Balance Sheet Total assets 3,038,985 2,773,013 10 2,928,133 4 Loans held for sale 26,006 62,892 (59) 76,404 (66) Portfolio loans 2,704,326 2,381,893 14 2,526,293 7 Total deposits 2,452,295 2,211,001 11 2,330,089 5 Total shareholders' equity 305,416 224,949 36 300,406 2 Book value per share 16.30 15.49 5 16.01 2 Key Ratios Net interest margin 3.41% 3.38% 3.00% Efficiency ratio (GAAP- based) 46.32 62.23 53.06 Total capital to risk- weighted assets 13.92 10.65 14.11 Nonperforming loans to portfolio loans 3.51 1.35 3.32 Shareholders' equity to total assets 10.05 8.11 10.26 Tangible common equity to tangible assets 7.65 7.88 7.76 Return on average assets (annualized) 0.81 0.62 0.18 Return on average equity (annualized) 7.82 7.38 1.77 YEAR-TO-DATE HIGHLIGHTS Six Months --------------- % 2009 2008 Change ---- ---- -------- Operations Net interest income $45,494 $44,117 3% Provision for loan losses 18,359 5,426 238 Noninterest income 13,738 8,647 59 Noninterest expense 29,289 32,162 (9) Income before taxes 11,584 15,176 (24) Taxes on income 4,310 5,806 (26) Net income 7,274 9,370 (22) Net income available to common shareholders 5,206 9,370 (44) Diluted earnings per share 0.35 0.64 (45) Balance Sheet Total assets 3,038,985 2,773,013 10 Loans held for sale 26,006 62,892 (59) Portfolio loans 2,704,326 2,381,893 14 Total deposits 2,452,295 2,211,001 11 Total shareholders' equity 305,416 224,949 36 Book value per share 16.30 15.49 5 Key Ratios Net interest margin 3.20% 3.42% Efficiency ratio (GAAP-based) 49.45 60.95 Total capital to risk-weighted assets 13.92 10.65 Nonperforming loans to portfolio loans 3.51 1.35 Shareholders' equity to total assets 10.05 8.11 Tangible common equity to tangible assets 7.65 7.88 Return on average assets (annualized) 0.50 0.71 Return on average equity (annualized) 4.81 8.39 ------------------------------------- Balance sheet amounts are as of period end unless otherwise noted. Please see accompanying tables for additional financial information. SOUTHWEST BANCORP, INC. Table 2 UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except per share) June 30, December 31, June 30, 2009 2008 2008 ---- ---- ---- Assets Cash and due from banks $33,724 $27,287 $51,462 Federal funds sold 809 - - --- - - Cash and cash equivalents 34,533 27,287 51,462 Investment securities: Held to maturity. Fair value: $6,834 $7,293, $8,282 6,795 7,343 8,340 Available for sale. Amortized cost: $214,944 $233,293, $210,721 216,293 238,037 208,640 Other investments, at cost 19,989 18,786 17,449 Loans held for sale 26,006 56,941 62,892 Loans receivable (1) 2,704,326 2,494,506 2,381,893 Less: Allowance for loan losses (51,753) (39,773) (31,341) ------- ------- ------- Net loans receivable 2,652,573 2,454,733 2,350,552 Accrued interest receivable 10,753 11,512 12,624 Premises and equipment, net 24,743 24,580 23,607 Other real estate owned (2) 8,941 6,092 2,523 Goodwill 6,811 7,071 7,071 Other intangible assets, net 5,974 3,764 4,157 Other assets 25,574 23,616 23,696 ------ ------ ------ Total assets $3,038,985 $2,879,762 $2,773,013 ========== ========== ========== Liabilities and shareholders' equity Deposits: Noninterest-bearing demand $291,014 $261,940 $299,699 Interest-bearing demand 94,060 76,027 81,415 Money market accounts 483,162 454,250 548,099 Savings accounts 25,660 14,135 13,809 Time deposits of $100,000 or more 905,202 802,244 740,174 Other time deposits 653,197 571,526 527,805 ------- ------- ------- Total deposits 2,452,295 2,180,122 2,211,001 Accrued interest payable 5,953 7,018 9,680 Income tax payable 5,752 3,651 3,924 Other liabilities 11,238 9,667 11,452 Other borrowings 176,368 295,138 265,614 Subordinated debentures 81,963 81,963 46,393 ------ ------ ------ Total liabilities 2,733,569 2,577,559 2,548,064 Shareholders' equity Preferred stock, Series B -$1,000 par value; 1,250,000 shares authorized; 70,000 shares issued 66,710 66,392 - Common stock - $1 par value; 20,000,000 shares authorized; 14,658,042 shares issued 14,658 14,658 14,658 Paid in capital 48,387 49,101 45,818 Retained earnings 175,089 170,579 168,099 Accumulated other comprehensive income (loss) 853 2,921 (1,256) Treasury stock, at cost, 15,602, 80,383, 131,566 shares (281) (1,448) (2,370) ---- ------ ------ Total shareholders' equity 305,416 302,203 224,949 ------- ------- ------- Total liabilities and shareholders' equity $3,038,985 $2,879,762 $2,773,013 ========== ========== ========== (1) Includes $80.8 million which is subject to FDIC support through the loss share agreement which provides for 80% recovery of net losses up to $35.0 million and 95% recovery for net losses exceeding this amount. (2) Includes $3.3 million which is subject to FDIC support through the loss share agreement as discussed in (1). SOUTHWEST BANCORP, INC. Table 3 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands except per share) For the three For the six months months ended June 30, ended June 30, ---------------- ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Interest income Loans $36,009 $37,485 $69,277 $78,095 Investment securities 2,079 2,426 4,591 4,762 Other interest- earning assets 3 20 9 48 --- --- --- --- Total interest income 38,091 39,931 73,877 82,905 Interest expense Interest- bearing deposits 11,072 15,107 23,132 33,361 Other borrowings 1,180 1,887 2,464 3,916 Subordinated debentures 1,383 653 2,787 1,511 ----- --- ----- ----- Total interest expense 13,635 17,647 28,383 38,788 ------ ------ ------ ------ Net interest income 24,456 22,284 45,494 44,117 Provision for loan losses 7,477 3,190 18,359 5,426 ----- ----- ------ ----- Net interest income after provision for loan losses 16,979 19,094 27,135 38,691 Noninterest income Service charges and fees 2,817 2,812 5,417 5,269 Gain on acquisition 3,281 - 3,281 - Gain on sales of loans 926 603 1,644 1,443 Gain (loss) on investment securities (9) 3 2,912 1,248 Other noninterest income 246 541 484 687 --- --- --- --- Total noninterest income 7,261 3,959 13,738 8,647 Noninterest expense Salaries and employee benefits 6,887 8,856 14,126 18,078 Occupancy 2,789 2,602 5,520 5,060 FDIC and other insurance 2,319 521 3,310 974 Other real estate, net 103 197 1 207 General and administrative 2,592 4,156 6,332 7,843 ----- ----- ----- ----- Total noninterest expenses 14,690 16,332 29,289 32,162 ------ ------ ------ ------ Income before taxes 9,550 6,721 11,584 15,176 Taxes on income 3,605 2,559 4,310 5,806 ----- ----- ----- ----- Net income $5,945 $4,162 $7,274 $9,370 ====== ====== ====== ====== Net income available to common shareholders $4,910 $4,162 $5,206 $9,370 ====== ====== ====== ====== Basic earnings per common share $0.34 $0.29 $0.36 $0.65 Diluted earnings per common share 0.33 0.28 0.35 0.64 Common dividends declared per share 0.0238 0.0950 0.0476 0.1900 SOUTHWEST BANCORP, INC. Table 4 UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES (Dollars in thousands) For the three months ended June 30, --------------------------- 2009 --------------------------- Average Average Balance Interest Yield/Rate ------- -------- ---------- Assets Loans $2,649,140 $36,009 5.45% Investment securities 225,353 2,079 3.70 Other interest-earning assets 4,321 3 0.28 ----- --- Total interest-earning assets 2,878,814 38,091 5.31 Other assets 67,725 ------ Total assets $2,946,539 ========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $87,036 $150 0.69% Money market accounts 470,506 1,211 1.03 Savings accounts 17,309 14 0.32 Time deposits 1,497,651 9,697 2.60 --------- ----- Total interest-bearing deposits 2,072,502 11,072 2.14 Other borrowings 198,936 1,180 2.38 Subordinated debentures 81,963 1,383 6.75 ------ ----- Total interest-bearing liabilities 2,353,401 13,635 2.32 ------ ---- Noninterest-bearing demand deposits 267,406 Other liabilities 20,827 Shareholders' equity 304,905 ------- Total liabilities and shareholders' equity $2,946,539 ========== Net interest income and spread $24,456 2.99% ======= ==== Net interest margin (1) 3.41% ==== Average interest-earning assets to average interest-bearing liabilities 122.33% ====== For the three months ended June 30, --------------------------- 2008 ----------------------------- Average Average Balance Interest Yield/Rate ------- -------- ---------- Assets Loans $2,414,012 $37,485 6.25% Investment securities 233,101 2,426 4.19 Other interest-earning assets 3,406 20 2.36 ----- --- Total interest-earning assets 2,650,519 39,931 6.06 Other assets 66,385 ------ Total assets $2,716,904 ========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $79,273 $166 0.84% Money market accounts 548,020 3,062 2.25 Savings accounts 13,586 19 0.56 Time deposits 1,230,327 11,860 3.88 --------- ------ Total interest-bearing deposits 1,871,206 15,107 3.25 Other borrowings 284,828 1,887 2.66 Subordinated debentures 46,393 653 5.63 ------ --- Total interest-bearing liabilities 2,202,427 17,647 3.22 ------ ---- Noninterest-bearing demand deposits 267,026 Other liabilities 20,687 Shareholders' equity 226,764 ------- Total liabilities and shareholders' equity $2,716,904 ========== Net interest income and spread $22,284 2.84% ======= ==== Net interest margin (1) 3.38% ==== Average interest-earning assets to average interest-bearing liabilities 120.35% ====== (1) Net interest margin = annualized net interest income / average interest-earning assets SOUTHWEST BANCORP, INC. Table 5 UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES (Dollars in thousands) For the six months ended June 30, ------------------------------ 2009 ------------------------------ Average Average Balance Interest Yield/Rate ------- -------- ---------- Assets Loans $2,622,282 $69,277 5.33% Investment securities 236,862 4,591 3.91 Other interest-earning assets 3,557 9 0.51 ----- --- Total interest-earning assets 2,862,701 73,877 5.20 Other assets 68,333 ------ Total assets $2,931,034 ========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $87,870 $303 0.70% Money market accounts 469,970 2,564 1.10 Savings accounts 16,198 23 0.29 Time deposits 1,470,271 20,242 2.78 --------- ------ Total interest-bearing deposits 2,044,309 23,132 2.28 Other borrowings 217,597 2,464 2.28 Subordinated debentures 81,963 2,787 6.80 ------ ----- Total interest-bearing liabilities 2,343,869 28,383 2.44 ------ ---- Noninterest-bearing demand deposits 261,980 Other liabilities 20,119 Shareholders' equity 305,066 ------- Total liabilities and shareholders' equity $2,931,034 ========== Net interest income and spread $45,494 2.76% ======= ==== Net interest margin (1) 3.20% ==== Average interest-earning assets to average interest-bearing liabilities 122.14% ====== For the six months ended June 30, ------------------------------ 2008 ------------------------------ Average Average Balance Interest Yield/Rate ------- -------- ---------- Assets Loans $2,359,489 $78,095 6.66% Investment securities 236,071 4,762 4.08 Other interest-earning assets 3,084 48 3.13 ----- -- Total interest-earning assets 2,598,644 82,905 6.42 Other assets 68,492 ------ Total assets $2,667,136 ========== Liabilities and Shareholders' Equity Interest-bearing demand deposits $76,003 $307 0.81% Money market accounts 547,027 7,590 2.79 Savings accounts 13,525 41 0.61 Time deposits 1,219,554 25,423 4.19 --------- ------ Total interest-bearing deposits 1,856,109 33,361 3.61 Other borrowings 261,819 3,916 3.01 Subordinated debentures 46,393 1,511 6.51 ------ ----- Total interest-bearing liabilities 2,164,321 38,788 3.60 ------ ---- Noninterest-bearing demand deposits 257,133 Other liabilities 21,181 Shareholders' equity 224,501 ------- Total liabilities and shareholders' equity $2,667,136 ========== Net interest income and spread $44,117 2.82% ======= ==== Net interest margin (1) 3.42% ==== Average interest-earning assets to average interest-bearing liabilities 120.07% ====== (1) Net interest margin = annualized net interest income / average interest-earning assets SOUTHWEST BANCORP, INC. Table 6 UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA (Dollars in thousands except per share) 2009 ------------------------ Jun. 30 Mar. 31 ----------- ----------- OPERATIONS Interest income: Loans $36,009 $33,268 Investment securities 2,079 2,512 Other interest-earning assets 3 6 -- -- Total interest income 38,091 35,786 Interest expense: Interest bearing demand deposits 150 153 Money market accounts 1,211 1,353 Savings accounts 14 9 Time deposits of $100,000 or more 5,552 5,980 Other time deposits 4,145 4,565 ----- ----- Total interest-bearing deposits 11,072 12,060 Other borrowings 1,180 1,284 Subordinated debentures 1,383 1,404 ----- ----- Total interest expense 13,635 14,748 ------ ------ Net interest income 24,456 21,038 Provision for loan losses 7,477 10,882 Noninterest income: Service charges and fees 2,817 2,600 Gain on sales of loans 926 718 Gain (loss) on investment securities (9) 2,921 Other noninterest income 3,527 238 ----- --- Total noninterest income 7,261 6,477 Noninterest expense: Salaries and employee benefits 6,887 7,239 Occupancy 2,789 2,731 FDIC and other insurance 2,319 991 Other real estate, net 103 (102) Provision for unfunded loan commitments (388) 90 Other general and administrative 2,980 3,650 ----- ----- Total noninterest expenses 14,690 14,599 ------ ------ Income before taxes 9,550 2,034 Taxes on income 3,605 705 ----- --- Net income $5,945 $1,329 ====== ====== Net income available to common shareholders $4,910 $296 ====== ==== PER SHARE DATA Basic earnings per common share $0.34 $0.02 Diluted earnings per common share 0.33 0.02 Common dividends declared per share 0.0238 0.0238 Book value per share 16.30 16.01 Tangible book value per share 15.84 15.52 OTHER FINANCIAL DATA Investment securities $243,077 $179,006 Loans held for sale 26,006 76,404 Portfolio loans 2,704,326 2,526,293 Total loans 2,730,332 2,602,697 Total assets 3,038,985 2,928,133 Total deposits 2,452,295 2,330,089 Other borrowings 176,368 193,739 Subordinated debentures 81,963 81,963 Total shareholders' equity 305,416 300,406 Mortgage servicing portfolio 209,425 179,959 2008 ------------------------------------------------- Dec. 31 Sep. 30 Jun. 30 Mar. 31 ----------- ----------- ----------- ----------- OPERATIONS Interest income: Loans $36,183 $38,441 $37,485 $40,610 Investment securities 2,693 2,531 2,426 2,336 Other interest- earning assets 19 22 20 28 -- -- -- -- Total interest income 38,895 40,994 39,931 42,974 Interest expense: Interest bearing demand deposits 130 147 166 141 Money market accounts 2,132 2,898 3,062 4,528 Savings accounts 11 17 19 22 Time deposits of $100,000 or more 6,419 6,879 7,051 7,865 Other time deposits 4,571 4,457 4,809 5,698 ----- ----- ----- ----- Total interest- bearing deposits 13,263 14,398 15,107 18,254 Other borrowings 1,487 1,839 1,887 2,029 Subordinated debentures 1,731 1,569 653 858 ----- ----- --- --- Total interest expense 16,481 17,806 17,647 21,141 ------ ------ ------ ------ Net interest income 22,414 23,188 22,284 21,833 Provision for loan losses 6,698 6,855 3,190 2,236 Noninterest income: Service charges and fees 2,908 2,849 2,812 2,457 Gain on sales of loans 620 601 603 840 Gain (loss) on investment securities (296) (50) 3 1,245 Other noninterest income 197 662 541 146 --- --- --- --- Total noninterest income 3,429 4,062 3,959 4,688 Noninterest expense: Salaries and employee benefits 6,389 8,863 8,856 9,222 Occupancy 2,844 2,968 2,602 2,458 FDIC and other insurance 645 469 521 453 Other real estate, net 31 (92) 197 10 Provision for unfunded loan commitments 385 90 15 145 Other general and administrative 3,499 4,235 4,141 3,542 ----- ----- ----- ----- Total noninterest expenses 13,793 16,533 16,332 15,830 ------ ------ ------ ------ Income before taxes 5,352 3,862 6,721 8,455 Taxes on income 2,127 1,556 2,559 3,247 ----- ----- ----- ----- Net income $3,225 $2,306 $4,162 $5,208 ====== ====== ====== ====== Net income available to common shareholders $2,982 $2,306 $4,162 $5,208 ====== ====== ====== ====== PER SHARE DATA Basic earnings per common share $0.21 $0.16 $0.29 $0.36 Diluted earnings per common share 0.20 0.16 0.28 0.36 Common dividends declared per share 0.0950 0.0950 0.0950 0.0950 Book value per share 16.18 15.56 15.49 15.43 Tangible book value per share 15.69 15.08 15.00 14.95 OTHER FINANCIAL DATA Investment securities $264,166 $241,728 $234,429 $236,059 Loans held for sale 56,941 72,248 62,892 66,364 Portfolio loans 2,494,506 2,440,091 2,381,893 2,287,606 Total loans 2,551,447 2,512,339 2,444,785 2,353,970 Total assets 2,879,762 2,832,371 2,773,013 2,670,580 Total deposits 2,180,122 2,198,719 2,211,001 2,094,927 Other borrowings 295,138 299,118 265,614 282,513 Subordinated debentures 81,963 81,963 46,393 46,393 Total shareholders' equity 302,203 226,123 224,949 224,155 Mortgage servicing portfolio 158,143 153,250 147,672 145,028 Continued SOUTHWEST BANCORP, INC. Table 6 UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA Continued (Dollars in thousands except per share) ------------------------ 2009 ------------------------ Jun. 30 Mar. 31 ----------- ----------- PERFORMANCE RATIOS Return on average assets (annualized) 0.81% 0.18% Return on average common equity (annualized) 8.26 1.77 Return on average tangible equity (annualized) 8.12 1.83 Net interest margin 3.41 3.00 Total dividends declared to net income 20.58 92.00 Effective tax rate 37.75 34.66 Efficiency ratio 46.32 53.06 ASSET QUALITY RATIOS Nonperforming assets to portfolio loans and other real estate owned 3.83% 3.53% Nonperforming loans to portfolio loans 3.51 3.32 Net loan charge-offs to average portfolio loans 0.31 0.71 Allowance for loan losses to total loans 1.90 1.78 Allowance for loan losses to portfolio loans 1.91 1.83 Allowance for loan losses to nonperforming loans 54.55 55.12 CAPITAL RATIOS Average total shareholders' equity to average assets 10.35% 10.47% Leverage ratio 12.70 12.72 Tier 1 capital to risk- weighted assets 12.67 12.85 Total capital to risk- weighted assets 13.92 14.11 Tangible common equity to tangible assets* 7.65 7.76 LOANS BY SEGMENT Oklahoma banking $967,981 $949,454 Texas banking 1,037,694 990,135 Kansas banking 412,314 309,774 Other states banking 286,337 276,930 ------- ------- Subtotal 2,704,326 2,526,293 Secondary market 26,006 76,404 Total loans $2,730,332 $2,602,697 ========== ========== NET INCOME BY SEGMENT Oklahoma banking $3,284 $3,210 Texas banking 3,662 1,119 Kansas banking 548 598 Other states banking (78) (1,974) --- ------ Subtotal 7,416 2,953 Secondary market 117 (61) Other operations (1,588) (1,563) ------ ------ Net income $5,945 $1,329 ====== ====== OFFICES AND EMPLOYEES FTE Employees 478 425 ATM's 44 40 Branches 24 18 Loan production offices 3 3 Assets per employee $6,358 $6,890 * Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure) Total shareholders' equity $305,416 $300,406 Less: Goodwill** 6,811 7,071 Preferred stock 66,710 66,549 ------ ------ Tangible common equity $231,895 $226,786 ======== ======== Total assets $3,038,985 $2,928,133 Less goodwill 6,811 7,071 ----- ----- Tangible assets $3,032,174 $2,921,062 ========== ========== Tangible common equity to tangible assets 7.65% 7.76% 2008 -------------------------------------------------- Dec. 31 Sep. 30 Jun. 30 Mar. 31 ----------- ----------- ----------- ----------- PERFORMANCE RATIOS Return on average assets (annualized) 0.45% 0.33% 0.62% 0.80% Return on average common equity (annualized) 5.15 3.97 7.38 9.43 Return on average tangible equity (annualized) 5.79 4.26 7.86 9.94 Net interest margin 3.22 3.39 3.38 3.45 Total dividends declared to net income 50.49 59.85 33.16 26.37 Effective tax rate 39.74 40.29 38.07 38.40 Efficiency ratio 53.37 60.67 62.23 59.69 ASSET QUALITY RATIOS Nonperforming assets to portfolio loans and other real estate owned 2.80% 2.72% 1.45% 1.41% Nonperforming loans to portfolio loans 2.56 2.62 1.35 1.27 Net loan charge-offs to average portfolio loans 0.44 0.39 0.31 0.34 Allowance for loan losses to total loans 1.56 1.43 1.28 1.27 Allowance for loan losses to portfolio loans 1.59 1.47 1.32 1.31 Allowance for loan losses to nonperforming loans 62.16 56.07 97.62 103.49 CAPITAL RATIOS Average total shareholders' equity to average assets 8.85% 8.26% 8.35% 8.49% Leverage ratio 13.06 10.51 9.66 9.91 Tier 1 capital to risk-weighted assets 13.01 10.49 9.40 9.47 Total capital to risk-weighted assets 14.26 11.88 10.65 10.69 Tangible common equity to tangible assets* 7.96 7.75 7.88 8.15 LOANS BY SEGMENT Oklahoma banking $966,243 $962,611 $965,952 $943,331 Texas banking 947,603 892,998 857,160 797,700 Kansas banking 304,855 288,268 277,887 287,339 Other states banking 275,805 296,214 280,894 259,236 ------- ------- ------- ------- Subtotal 2,494,506 2,440,091 2,381,893 2,287,606 Secondary market 56,941 72,248 62,892 66,364 Total loans $2,551,447 $2,512,339 $2,444,785 $2,353,970 ========== ========== ========== ========== NET INCOME BY SEGMENT Oklahoma banking $3,783 $3,295 $2,923 $2,503 Texas banking 2,036 1,332 1,777 2,406 Kansas banking (204) (1,336) (40) 458 Other states banking (89) 848 1,028 969 --- --- ----- --- Subtotal 5,526 4,139 5,688 6,336 Secondary market 139 (149) 40 (174) Other operations (2,440) (1,684) (1,566) (954) ------ ------ ------ ---- Net income $3,225 $2,306 $4,162 $5,208 ====== ====== ====== ====== OFFICES AND EMPLOYEES FTE Employees 442 458 463 467 ATM's 41 41 40 40 Branches 18 18 17 17 Loan production offices 3 3 3 3 Assets per employee $6,515 $6,184 $5,989 $5,719 *Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure) Total shareholders' equity $302,203 $226,123 $224,949 $224,155 Less: Goodwill** 7,071 7,071 7,071 7,071 Preferred stock 66,392 - - - ------ - - - Tangible common equity $228,740 $219,052 $217,878 $217,084 ======== ======== ======== ======== Total assets $2,879,762 $2,832,371 $2,773,013 $2,670,580 Less goodwill 7,071 7,071 7,071 7,071 ----- ----- ----- ----- Tangible assets $2,872,691 $2,825,300 $2,765,942 $2,663,509 ========== ========== ========== ========== Tangible common equity to tangible assets 7.96% 7.75% 7.88% 8.15% ** We discovered an error in the entries recording our 2007 acquisition and corrected it in the current period. This correction did not effect income and does not represent any impairment of goodwill. Balance sheet amounts are as of period end unless otherwise noted. SOUTHWEST BANCORP, INC. Table 7 UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA (Dollars in thousands except per share) 2009 ------------------------ Jun. 30 Mar. 31 ----------- ----------- LOAN COMPOSITION Real estate mortgage: Commercial $1,249,230 $1,098,587 One-to-four family residential 133,957 114,111 Real estate construction Commercial 636,575 640,132 One-to-four family residential 64,939 79,309 Commercial 581,937 558,834 Installment and consumer: Guaranteed student loans 18,477 69,792 Other 45,217 41,932 ------ ------ Total loans, including held for sale 2,730,332 2,602,697 Less allowance for loan losses (51,753) (46,262) ------- ------- Total loans, net $2,678,579 $2,556,435 ========== ========== By statement of condition category: Loans held for sale: Student loans $18,477 $69,792 One-to- four family residential 6,599 5,563 Other 930 1,049 --- ----- Total loans held for sale 26,006 76,404 Portfolio loans 2,704,326 2,526,293 --------- --------- Total loans before allowance $2,730,332 $2,602,697 ========== ========== DEPOSIT COMPOSITION Non-interest bearing demand $291,014 $274,175 Interest-bearing demand 94,060 85,629 Money market accounts 483,162 467,924 Savings accounts 25,660 15,797 Time deposits of $100,000 or more 905,202 849,814 Other time deposits 653,197 636,750 ------- ------- Total deposits $2,452,295 $2,330,089 ========== ========== Brokered deposits under $100,000 $295 $589 NONPERFORMING ASSETS Nonaccrual loans $82,812 $73,383 90 days past due and accruing 12,067 10,552 ------ ------ Total nonperforming loans 94,879 83,935 Other real estate owned 8,941 5,351 ----- ----- Total nonperforming assets $103,820 $89,286 ======== ======= Potential problem loans $184,058 $133,810 ======== ======== ALLOWANCE ACTIVITY Balance, beginning of period $46,262 $39,773 Charge offs 2,975 4,810 Recoveries 989 417 --- --- Net charge offs 1,986 4,393 Provision for loan losses 7,477 10,882 ----- ------ Balance, end of period $51,753 $46,262 ======= ======= REGULATORY CAPITAL DATA Tier I capital $372,713 $369,482 Total capital 409,764 405,613 Total risk adjusted assets 2,942,821 2,875,290 COMMON STOCK Issued 14,658,042 14,658,042 Less treasury shares (15,602) (49,930) ------- ------- Outstanding shares 14,642,440 14,608,112 ========== ========== INTANGIBLE ASSET DATA Goodwill** $6,811 $7,071 Core deposit intangible 4,378 2,498 Mortgage servicing rights 1,589 1,362 Nonmortgage servicing rights 7 8 - - Total intangible assets $12,785 $10,939 ======= ======= Intangible amortization expense $391 $204 ==== ==== 2008 -------------------------------------------------- Dec. 31 Sep. 30 Jun. 30 Mar. 31 ----------- ----------- ----------- ----------- LOAN COMPOSITION Real estate mortgage: Commercial $1,118,828 $1,077,601 $991,679 $846,757 One-to-four family residential 113,665 116,270 118,056 110,938 Real estate construction Commercial 579,795 554,496 583,784 654,039 One-to-four family residential 79,565 79,843 82,972 90,051 Commercial 564,670 574,087 566,830 544,183 Installment and consumer: Guaranteed student loans 54,057 67,610 57,413 63,706 Other 40,867 42,432 44,051 44,296 ------ ------ ------ ------ Total loans, including held for sale 2,551,447 2,512,339 2,444,785 2,353,970 Less allowance for loan losses (39,773) (35,807) (31,341) (29,950) ------- ------- ------- ------- Total loans, net $2,511,674 $2,476,532 $2,413,444 $2,324,020 ========== ========== ========== ========== By statement of condition category: Loans held for sale: Student loans $54,057 $67,610 $57,413 $63,706 One-to-four family residential 1,790 3,500 4,283 1,417 Other 1,094 1,138 1,196 1,241 ----- ----- ----- ----- Total loans held for sale 56,941 72,248 62,892 66,364 Portfolio loans 2,494,506 2,440,091 2,381,893 2,287,606 --------- --------- --------- --------- Total loans before allowance $2,551,447 $2,512,339 $2,444,785 $2,353,970 ========== ========== ========== ========== DEPOSIT COMPOSITION Non-interest bearing demand $261,940 $280,453 $299,699 $248,315 Interest-bearing demand 76,027 70,471 81,415 71,450 Money market accounts 454,250 554,357 548,099 553,850 Savings accounts 14,135 14,452 13,809 13,808 Time deposits of $100,000 or more 802,244 731,773 740,174 690,421 Other time deposits 571,526 547,213 527,805 517,083 ------- ------- ------- ------- Total deposits $2,180,122 $2,198,719 $2,211,001 $2,094,927 ========== ========== ========== ========== Brokered deposits under $100,000 $3,445 $5,235 $10,755 $12,784 NONPERFORMING ASSETS Nonaccrual loans $59,310 $61,557 $30,861 $26,134 90 days past due and accruing 4,673 2,299 1,242 2,807 ----- ----- ----- ----- Total nonperforming loans 63,983 63,856 32,103 28,941 Other real estate owned 6,092 2,685 2,523 3,328 ----- ----- ----- ----- Total nonperforming assets $70,075 $66,541 $34,626 $32,269 ======= ======= ======= ======= Potential problem loans $131,516 $86,070 $71,070 $69,588 ======== ======= ======= ======= ALLOWANCE ACTIVITY Balance, beginning of period $35,807 $31,341 $29,950 $29,584 Charge offs 3,254 2,752 1,892 2,044 Recoveries 522 363 93 174 --- --- -- --- Net charge offs 2,732 2,389 1,799 1,870 Provision for loan losses 6,698 6,855 3,190 2,236 ----- ----- ----- ----- Balance, end of period $39,773 $35,807 $31,341 $29,950 ======= ======= ======= ======= REGULATORY CAPITAL DATA Tier I capital $369,049 $293,141 $261,354 $258,272 Total capital 404,695 332,012 296,166 291,638 Total risk adjusted assets 2,837,473 2,793,843 2,780,538 2,727,853 COMMON STOCK Issued 14,658,042 14,658,042 14,658,042 14,658,042 Less treasury shares (80,383) (129,586) (131,566) (133,605) ------- -------- -------- -------- Outstanding shares 14,577,659 14,528,456 14,526,476 14,524,437 ========== ========== ========== ========== INTANGIBLE ASSET DATA Goodwill** $7,071 $7,071 $7,071 $7,071 Core deposit intangible 2,596 2,693 2,792 2,893 Mortgage servicing rights 1,159 1,417 1,354 1,299 Nonmortgage servicing rights 9 10 11 13 - -- -- -- Total intangible assets $10,835 $11,191 $11,228 $11,276 ======= ======= ======= ======= Intangible amortization expense $214 $212 $215 $257 ==== ==== ==== ==== Balance sheet amounts are as of period end unless otherwise noted. http://www.newscom.com/cgi-bin/prnh/20011127/SOUTHWESTLOGODATASOURCE: Southwest Bancorp, Inc. CONTACT: Rick Green, President & CEO, or Kerby E. Crowell, EVP & CFO, both of -- Southwest Bancorp, Inc., +1-405-372-2230 Web Site: http://www.oksb.com/

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