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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - January 19, 1999
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SOUTHWEST BANCORPORATION OF TEXAS, INC.
(Name of Registrant as specified in its charter)
TEXAS 000-22007 76-0519693
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation or organization) Identification No.)
4400 POST OAK PARKWAY
HOUSTON, TEXAS 77027
(713) 235-8800
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
N/A
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
The purpose of this Form 8-K Current Report is to file as an exhibit, a
copy of the news release dated January 19, 1999 of the Company announcing the
Company's operating results for the quarter and year ended December 31, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits
99.1 - News Release dated January 19, 1999, announcing the
Company's operating results for the quarter and year ended
December 31, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SOUTHWEST BANCORPORATION OF TEXAS, INC.
Date: January 20, 1999 By: /s/ R. JOHN McWHORTER
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R. John McWhorter
Senior Vice President and Controller
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FOR IMMEDIATE RELEASE CONTACT: Jane Powell
(713) 974-9300
SOUTHWEST BANCORPORATION OF TEXAS REPORTS
ANNUAL OPERATING EPS UP 19%
HOUSTON (January 19, 1999) -- Southwest Bancorporation of Texas, Inc.
(NASDAQ: SWBT) had a fourth quarter net income of $6.0 million or $0.25 per
diluted share compared to $5.1 million or $0.21 per diluted share for the
same period in 1997. Net income per share was up 18 percent on a net income
increase of 18 percent.
"Nineteen ninety-eight was another great year for Southwest Bank.
Average loans grew $281 million or 33 percent; average deposits were up $342
million or 29 percent; and non-interest income increased 49 percent. Most
importantly, we continued to move market share due to the outstanding service we
provide our customers," according to Paul B. Murphy, Jr., president.
For the twelve months ended December 31, 1998, net income increased 24
percent to $22.5 million from $18.1 million (excluding 1997 merger related
expenses) for the same period in 1997. Earnings per diluted share increased 19
percent to $0.93 for the year ended December 31, 1998 from $0.78 (excluding 1997
merger related expenses) for the same period in 1997. These changes resulted in
a return on average assets (ROA) of 1.19 percent and return on average common
shareholders' equity (ROE) of 17.46 percent for the year ended December 31,
1998, compared with an ROA and ROE (both excluding 1997 merger related expenses)
of 1.24 percent and 17.75 percent, respectively in 1997.
For the three months ended December 31, 1998, ROA was 1.15 percent, and
ROE was 17.02 percent. During the same time period in 1997 the ROA and ROE were
1.20 percent and 17.99 percent, respectively.
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FINANCIAL HIGHLIGHTS
Net interest income for the quarter increased $3.8 million or 21
percent, to $21.7 million. This increase is primarily attributable to a 22
percent growth in average earning assets which was partially offset by a four
basis point decrease in the net interest margin to 4.52 percent.
Non-interest income increased 55 percent for the quarter due primarily
to significant increases from gains on sales of securities, up $235,000, and a
$390,000 increase, or 24 percent, in service charges on deposit accounts.
Additionally, non-interest income reflects $550,000 of fee income from factoring
resulting from an acquisition in the first quarter of 1998.
Non-interest expenses increased $3.9 million to $15.7 million for the
three months ended December 31, 1998, an increase of 33 percent. This increase
was due primarily to expenses related to maintaining the company's growth such
as additional staff, occupancy expense and depreciation on new technology
throughout the organization. The efficiency ratio for the twelve months ended
December 31, 1998 was 59.97 percent compared to 60.06 percent (57.32 percent
excluding merger related expenses) for the same period in 1997.
Total assets at December 31, 1998, were $2.21 billion, an increase of
$398 million or 22 percent, up from $1.81 billion at December 31, 1997. Deposits
experienced similar growth, increasing to $1.73 billion at December 31, 1998, up
from $1.51 billion at December 31, 1997, an increase of $217 million or 14
percent. This increase was driven primarily by commercial accounts moving to
SWBT due to its reputation as a technology and customer service leader,
according to Murphy.
Loans at December 31, 1998 were $1.34 billion, an increase of
$353 million or 36 percent, up from $986.2 million on December 31, 1997.
Consistent with the company's historically strong rate of growth, this increase
is the result of the company's style of relationship banking featuring
professional, attentive and responsive service to customers' needs. At December
31, 1998, non-performing assets (nonaccrual loans, accruing loans 90 days or
more past due and ORE) to total
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loans and other real estate stood at 0.21 percent while net charge offs to
average loans for the year ended December 31, 1998 were 0.08 percent.
According to Murphy, "the slowdowns in the energy industry caused by
declining oil and gas prices will materially affect the oil and gas sector of
the Houston economy and present some challenges in 1999. The bank's loan
portfolio is diverse, with approximately 11 percent oil and gas related.
Other major sectors of the Houston economy continue to reflect an overall
healthy environment."
Southwest Bancorporation of Texas, with $2.21 billion in assets, is the
largest independent bank-holding company headquartered in Houston. It is a
one-bank holding company, which focuses on private and middle-market
relationship banking. The bank has 17 full-service branches located throughout
the Houston metropolitan area and is scheduled to open an additional branch in
North Houston during the first quarter of 1999.
# # #
Media Contact: Investor Contact:
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Jane Powell John McWhorter, SVP/Controller
Powell Public Relations Southwest Bank of Texas
(713) 974-9300 (713) 235-8808
[email protected] [email protected]
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SOUTHWEST BANCORPORATION OF TEXAS, INC.
CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
4Q-98 4Q-97 % CHANGE YTD 98 YTD 97 % CHANGE
---------- ---------- -------- ---------- ---------- --------
PERIOD END BALANCES ($ in 000's except per share info)
<S> <C> <C> <C> <C> <C> <C>
Investment securities $ 647,462 $ 555,398 16.6%
Total loans 1,339,158 986,150 35.8%
Securities purchased under resale agreements 25,000 122,000 -79.5%
Fed funds sold and other earning assets 2,535 10,616 -76.1%
---------- ----------
TOTAL EARNING ASSETS 2,014,155 1,674,164 20.3%
---------- ----------
Allowance for loan losses (13,281) (10,335) 28.5%
Cash and due from banks 119,916 104,363 14.9%
Other assets 84,731 39,412 115.0%
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TOTAL ASSETS $2,205,521 $1,807,604 22.0%
---------- ----------
---------- ----------
Noninterest-bearing demand deposits $ 539,922 $ 492,843 9.6%
Interest-bearing demand deposits 65,933 58,915 11.9%
Savings deposits 723,321 595,455 21.5%
Time deposits 400,210 365,128 9.6%
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Total deposits 1,729,386 1,512,341 14.4%
Fed funds purchased and other interest-bearing liabilities 320,084 173,075 84.9%
Other liabilities 12,317 7,353 67.5%
Shareholders' equity 143,734 114,835 25.2%
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TOTAL LIABILITIES AND EQUITY $2,205,521 $1,807,604 22.0%
---------- ----------
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INCOME STATEMENT DATA
Interest and fees on loans $ 27,057 $ 21,902 23.5% $ 101,200 $ 78,509 28.9%
Interest on securities 9,228 7,171 28.7% 32,804 24,908 31.7%
Interest on fed funds sold and other earning assets 657 2,116 -69.0% 5,140 5,515 -6.8%
---------- ---------- ---------- ----------
TOTAL INTEREST INCOME 36,942 31,189 18.4% 139,144 108,932 27.7%
---------- ---------- ---------- ----------
Interest on deposits 12,477 11,359 9.8% 48,675 38,421 26.7%
Interest on fed funds purchased and other borrowings 2,811 1,995 40.9% 10,175 7,308 39.2%
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TOTAL INTEREST EXPENSE 15,288 13,354 14.5% 58,850 45,729 28.7%
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NET INTEREST INCOME 21,654 17,835 21.4% 80,294 63,203 27.0%
Provision for loan losses 1,200 1,150 4.3% 3,900 3,886 0.4%
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NET INTEREST INCOME AFTER PROVISION 20,454 16,685 22.6% 76,394 59,317 28.8%
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Service charges on deposit accounts 2,039 1,649 23.7% 7,708 6,025 27.9%
Other fee income 1,822 1,012 80.0% 6,745 3,535 90.8%
Other income 424 250 69.6% 885 515 71.8%
Gains on sales of securities 247 12 1958.3% 463 498 -7.0%
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TOTAL NONINTEREST INCOME 4,532 2,923 55.0% 15,801 10,573 49.4%
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Salaries and benefits 9,539 7,115 34.1% 34,900 24,950 39.9%
Net occupancy expenses 2,365 1,857 27.4% 8,963 6,814 31.5%
Merger-related expenses and other - - 0.0% 67 2,011 -96.7%
Other expenses 3,820 2,860 33.6% 13,417 10,238 31.1%
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TOTAL NONINTEREST EXPENSES 15,724 11,832 32.9% 57,347 44,013 30.3%
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INCOME BEFORE INCOME TAXES 9,262 7,776 19.1% 34,848 25,877 34.7%
Provision for income taxes 3,297 2,721 21.2% 12,378 9,072 36.4%
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Net income before bank preferred stock dividend 5,965 5,055 18.0% 22,470 16,805 33.7%
Bank preferred stock dividend - - 0.0% - 36 -100.0%
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NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS (1) $ 5,965 $ 5,055 18.0% $ 22,470 $ 16,769 34.0%
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BASIC EARNINGS PER COMMON SHARE $ 0.26 $ 0.23 13.0% $ 0.97 $ 0.77 27.1%
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DILUTED EARNINGS PER COMMON SHARE $ 0.25 $ 0.21 18.0% $ 0.93 $ 0.72 28.5%
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PERIOD END # OF SHARES OUTSTANDING 23,353 22,371 4.4% 23,353 22,371 4.4%
WEIGHTED AVG # OF SHARES OUTSTANDING (INCL CSE'S) 24,273 23,688 2.5% 24,230 23,243 4.2%
</TABLE>
(1) Excluding merger-related expenses, net income available to common
shareholders would have been $18,066 or $0.78 per diluted common share for
the twelve months ended December 31, 1997.
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<TABLE>
<CAPTION>
4Q-98 4Q-97 % CHANGE YTD 98 YTD 97 % CHANGE
---------- ---------- -------- ---------- ---------- --------
NONPERFORMING ASSETS ($ in 000's except per share info)
<S> <C> <C> <C> <C> <C> <C>
Nonaccrual loans $ 1,616 $ 2,724 -40.7%
Accruing loans 90 or more days past due 681 383 77.8%
Restructured loans - - 0.0%
ORE and OLRA 464 546 -15.0%
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Total nonperforming assets $ 2,761 $ 3,653 -24.4%
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CHANGES IN ALLOWANCE FOR LOAN LOSSES
Allowance for loan losses - beginning of period $ 12,142 $ 9,389 29.3% $ 10,335 $ 7,400 39.7%
Provision for loan losses 1,200 1,150 4.3% 3,900 3,886 0.4%
Charge-offs (97) (225) -56.9% (1,087) (1,078) 0.8%
Recoveries 36 21 71.4% 133 127 4.7%
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Allowance for loan losses - end of period $ 13,281 $ 10,335 28.5% $ 13,281 $ 10,335 28.5%
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RATIOS
Return on average assets (2) 1.15% 1.20% 1.19% 1.15%
Return on average common equity (2) 17.02% 17.99% 17.46% 16.46%
Leverage ratio 6.75% 6.70%
Yield on earning assets 7.72% 7.97% 7.91% 8.05%
Cost of funds with demand accounts 3.19% 3.42% 3.36% 3.39%
Net interest margin 4.52% 4.56% 4.57% 4.67%
Efficiency ratio (2) 60.62% 57.03% 59.97% 60.06%
Noninterest expense to average earning assets (2) 3.28% 3.02% 3.26% 3.25%
Nonperforming assets to loans and other real estate 0.21% 0.37%
Net charge-offs (recoveries) to average loans 0.02% 0.09% 0.08% 0.11%
Allowance for loan losses to total loans 0.99% 1.05%
Allowance for loan losses to nonperforming loans 578.19% 332.64%
COMMON STOCK PERFORMANCE
Market value of stock - Close $ 17.875 $ 15.563 $ 17.875 $ 15.563
Market value of stock - High $ 18.500 $ 16.313 $ 21.594 $ 16.313
Market value of stock - Low $ 10.000 $ 13.500 $ 10.000 $ 8.313
Book value of stock $ 6.15 $ 5.13 $ 6.15 $ 5.13
Market/book value of stock 291% 303% 291% 303%
Price/earnings ratio 19 22 19 22
OTHER DATA
EOP Employees - full time equivalent 702 559 25.6%
BALANCE SHEET AVERAGES
Investment securities $ 599,927 $ 458,469 30.9% $ 530,131 $ 400,748 32.3%
Total loans 1,247,340 942,573 32.3% 1,134,656 853,829 32.9%
Securities purchased under resale agreements 31,870 106,427 -70.1% 57,430 57,902 -0.8%
Fed funds sold and other earning assets 20,524 44,848 -54.2% 36,617 41,376 -11.5%
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TOTAL EARNING ASSETS 1,899,661 1,552,317 22.4% 1,758,834 1,353,855 29.9%
---------- ---------- ---------- ----------
Allowance for loan losses (12,690) (9,963) 27.4% (11,704) (8,654) 35.2%
Cash and due from banks 87,227 87,584 -0.4% 86,150 77,326 11.4%
Other assets 78,771 35,910 119.4% 56,795 33,957 67.3%
---------- ---------- ---------- ----------
TOTAL ASSETS $2,052,969 $1,665,848 23.2% $1,890,075 $1,456,484 29.8%
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Noninterest-bearing deposits $ 481,999 $ 413,266 16.6% $ 444,961 $ 357,697 24.4%
Interest-bearing demand deposits 15,185 29,722 -48.9% 20,621 36,768 -43.9%
Savings deposits 761,247 582,352 30.7% 714,637 511,898 39.6%
Time deposits 401,362 366,773 9.4% 365,021 296,416 23.1%
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Total deposits 1,659,793 1,392,113 19.2% 1,545,240 1,202,779 28.5%
Fed funds purchased and other interest-bearing liabilities 241,505 155,162 55.6% 208,288 144,881 43.8%
Other liabilities 12,593 7,096 77.5% 7,852 6,964 12.8%
Shareholders' equity 139,078 111,477 24.8% 128,695 101,860 26.3%
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TOTAL LIABILITIES AND EQUITY $2,052,969 $1,665,848 23.2% $1,890,075 $1,456,484 29.8%
---------- ---------- ---------- ----------
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</TABLE>
(2) Excluding merger-related expenses, ROA, ROE, Efficiency ratio and NIE to
Average Earning Assets would have been 1.24%, 17.75%, 57.32% and 3.10%
respectively for the twelve months ended December 31, 1997.
