UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the quarter ended June 30, 1995 Commission file number 0-12047
UNITED OKLAHOMA BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 73-09696432
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
4600 S.E. 29th Street
Del City, Oklahoma 73115
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code(405)677-8711
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
[X] Yes No[ ]
As of August 9, 1995, 2,532,237 shares of the registrant's
common stock, par value $1.00 per share, were outstanding.
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
UNITED OKLAHOMA BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except earnings per share)
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Six months ended Three months ended
June 30, June 30,
1995 1994 1995 1994
(Unaudited) (Unaudited)
Interest income:
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Interest and fees on loans $ 1,962 1,578 987 804
Interest on federal funds sold 99 37 50 17
Interest on securities 873 856 439 439
Total interest income 2,934 2,471 1476 1260
Interest expense:
Interest on deposits 1,257 838 648 424
Interest on long-term debt - 6 - -
Total interest expense 1,257 844 648 424
Net interest income 1,677 1,627 828 836
Provision for loan losses 149 30 76 30
Net interest income after provision
for loan losses 1,528 1,597 752 806
Non-interest income:
Service charges on deposits 381 348 193 178
Other service charges and fees, net 117 75 73 29
Securities gains - 72 - -
Total non-interest income 498 495 266 207
Non-interest expense:
Salaries and employee benefits 920 851 457 427
Occupancy expense, net 105 130 52 62
Other real estate owned 9 89 9 1
Other 539 553 257 273
Total non-interest expense 1,573 1,623 775 763
Income before income taxes 453 469 243 250
Income tax expense 101 106 60 55
Net income $ 352 363 183 195
Earnings per share** $0.06 0.06 0.03 0.04
Average outstanding common shares 2,532 2,644 2,532 2,644
**Earnings per share is calculated on year-to-date net income less the
unpaid year-to-date preferred stock dividends. Preferred stock dividends
accrue at $98,000 per quarter. See the Consolidated Balance Sheet,
Stockholder Equity section for the number of authorized shares
outstanding and total cumulated unpaid dividends.
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UNITED OKLAHOMA BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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June 30, December 31,
1995 1994
(In thousands)
ASSETS
Cash and due from banks $ 3,335 2,440
Federal funds sold 2,515 -
Securities
Held to maturity 24,110 23,451
Available for sale 7,089 7,137
Loans 41,013 41,974
Unearned discounts (6) (14)
Allowance for loan losses (569) (559)
Loans, net 40,438 41,401
Property and equipment, net 3,955 4,051
Other real estate 171 180
Accrued interest receivable 574 612
Accounts receivable 85 90
Other assets 266 358
$82,538 79,720
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Interest bearing $58,305 56,178
Non-interest bearing 15,076 13,469
Total deposits 73,381 69,647
Securities sold under repurchase agreement - 1,500
Deferred taxes 1,182 1,199
Other liabilities 605 425
Total liabilities 75,168 72,771
Commitments and contingencies - -
Stockholders'equity:
Preferred stock, 9% cumulative, nonvoting
$30 par value, redeemable at the Company's
option at par plus cumulative unpaid
dividends. Cumulative unpaid preferred
dividends amount to $3,822,580 or $26.33
per share at June 30, 1995. Authorized
150,000 shares; issued and outstanding
145,199 shares in 1995 and 1994 4,356 4,356
Class B preferred stock, $1 par value.
Authorized 500,000 shares;
none issued or outstanding - -
Common stock, $1 par value. Authorized
10,000,000 shares; issued 2,805,385
in 1995 and 1994 2,805 2,805
Additional paid-in capital 7,358 7,358
Accumulated deficit (5,963) (6,315)
Net unrealized holding loss on investment
securities available for sale,net of
deferred taxes (89) (158)
8,467 8,046
Less cost of common stock held in Treasury
(273,148 shares in 1995 and 1994) (1,097) (1,097)
Net stockholders'equity 7,370 6,949
$ 82,538 79,720
/TABLE
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UNITED OKLAHOMA BANKSHARES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
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June 30, December 31,
1994 1995
(In thousands)
Preferred stock:
Balance at beginning and end of year $ 4,356 4,356
Common stock:
Balance at beginning and end of year 2,805 2,805
Additional paid-in capital:
Balance at beginning and end of year 7,358 7,358
Accumulated deficit:
Balance at beginning of year (6,315) (7,144)
Net income 352 829
Balance at end of year (5,963) (6,315)
Net unrealized holding gain (loss) on
investment securities available for sale:
Balance at beginning of year (158) -
Implementation of change in accounting
for investment securities,
net of deferred taxes - 170
Change in net unrealized holding gain
(loss) on investment securities
available for sale, net of deferred taxes 69 (328)
Balance at end of year (89) (158)
Treasury stock:
Balance at beginning and end of year (1,097) (1,086)
Purchase stock - (11)
Balance at end of year (1,097) (1,097)
Net stockholders' equity $ 7,370 6,949
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UNITED OKLAHOMA BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Six months ended
June 30
1995 1994
(In thousands)
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Cash flows from operating activities:
Net Income $ 352 363
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 206 185
Provision for loan losses 149 30
Provision for market decline-other real estate 9 82
Amortization of intangibles 74 74
Amortization of premium, accretion of
discounts, net 38 69
Gain on sale of securities - (72)
(Increase) decrease in interest payable 142 (32)
(Increase) decrease in interest receivable 38 (27)
Decrease in other assets 23 367
Decrease in deferred income taxes (17) (89)
(Decrease) increase in other liabilities (7) 35
Total adjustments 655 622
Net cash provided by operating activities 1,007 985
Cash flows from investing activities:
Proceeds from principal payments on mortgage
backed securities 764 2,083
Proceeds from maturities of securities 235 2,017
Purchase of securities (1,534) (7,498)
Net decrease in loans 814 2,182
Capital expenditures (110) (96)
Net cash provided by (used in) investing activities 169 (1,312)
Cash flows from financing activities:
Net increase in interest bearing and non-
interest bearing demand deposits, savings
and certificates of deposit 3,734 1,767
Repayment of long-term debt - (450)
Repayment of securities sold under repurchase (1,500) -
Net cash provided by financing activities 2,234 1,317
Net increase in cash and cash equivalents 3,410 990
Cash and cash equivalents at beginning of period 2,440 2,367
Cash and cash equivalents at end of period $ 5,850 3,357
Supplemental disclosure of noncash investing
activities:
Net unrealized holding loss on investment securites
available for sale, net of deferred tax $ 89 -
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United Oklahoma Bankshares, Inc. and Subsidiaries
Notes to Consolidated Quarterly Financial Information
(Unaudited)
1. Summary of Significant Accounting Policies
The accounting and reporting policies of United Oklahoma
Bankshares, Inc. (the "Company") and its subsidiaries conform to
generally accepted accounting principles and practices within the
banking industry. The following represent the more significant of
those policies and practices.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of the
Company and its subsidiaries, all wholly owned, after elimination
of all significant intercompany accounts and transactions.
Securities
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" (Statement 115), at January 1,
1994. Under Statement 115, the Company classified its debt and
marketable equity securities in one of three categories: trading,
available for sale, or held to maturity. Trading securities are
bought and held principally for the purpose of selling them in the
near term. No investment securities within the portfolio are
considered trading. Held to maturity securities are those
securities for which the Company has the ability and intent to
hold until maturity. All other securities not included in held to
maturity are classified as available for sale.
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial
Condition and Operating Results
Results of Operations-Quarter Ended June 30, 1995
The following discussion and analysis is designed to provide a
better understanding of the significant factors related to the
Company's results of operations, financial condition, liquidity
and capital resources (including its subsidiary bank, United Bank
(UB) and its non-bank subsidiaries). Management is unaware of any
trends, events or uncertainties that will have or that are
reasonably likely to have a material effect on the Company's
operations.
Overview
Net income for the second quarter of 1995 was approximately
$183,000, compared to $195,000 for the second quarter of 1994.
The before tax income for the second quarter of 1995 was $243,000
compared to $250,000 for the second quarter of 1994. Earnings per
share reflected income of $0.06 at June 30, 1995 compared to
income of $0.06 per share at June 30, 1994. Earnings per share is
calculated on year-to date net income less the unpaid year-to date
preferred stock dividends. Unpaid preferred stock dividends
accrue at $98,000 per quarter.
Net Interest Income
Net interest income was $1,677,000 for the six months ended June
30, 1995 compared to $1,627,000 for the same period in 1994,
representing an increase of $50,000 or 3%. The volume of average
earning assets increased $4,545,000 while average interest bearing
liabilities increased $1,692,000 between June 30, 1994 and 1995.
The yield on average earning assets increased 85 basis points from
June 30, 1994 to June 30, 1995 while the rate paid on average
interest bearing liabilities increased 132 basis points during the
same time period resulting in a decrease in the spread between the
yield on earning assets and rate paid on interest bearing
liabilities of 47 basis points.
Allowance for Loan Losses
The allowance for loan losses was approximately $569,000 at June
30, 1995 compared to $559,000 at December 31, 1994 and $565,000 at
June 30, 1994. As a percentage of loans, the allowance for loan
losses was 1.39%, 1.33% and 1.62% at June 30, 1995, December 31
and June 30, 1994 respectively.
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Securities
The Company has designated securities as "Held to maturity"
or "Available for sale". A comparison of recorded value
and market value of securities is as follows (in thousands):
June 30, 1995
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Held to maturity:
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Market value
U. S. Treasury securities $ 1,265 2 (6) 1,261
Mortgage-backed securities 12,587 68 (133) 12,522
State & municipals 10,258 27 (254) 10,031
Total "Held to maturity" $ 24,110 97 (393) 23,814
Available for sale:
U. S. Treasury securities $ 828 8 - 836
Mortgage-backed securities 6,409 - (156) 6,253
Total "Available for sale" $ 7,237 8 (156) 7,089
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Non-performing Assets
Non-performing assets, including other real estate, totalled
$273,000 at June 30, 1995, a decrease of $85,000 from December
31, 1994.
The following table sets forth such loans and other real estate
at the dates indicated.-
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June 30, December 31, June 30,
1995 1994 1994
(Dollars in thousands)
Non-accrual loans 102 178 576
Loans contractually past due 90 days or more - - 39
Total nonperforming loans 102 178 615
Other real estate 171 180 222
Total nonperforming assets 273 358 837
Nonperforming loans to total loans 0.24% 0.43% 1.76%
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<PAGE>
Capital and Liquidity
The Company's primary capital totalled $7,864,000 and $7,361,000
at June 30, 1995 and December 31, 1994, respectively. Equity
capital totalled $7,369,000 and $6,949,000 at June 30, 1995 and
December 31, 1994, respectively. The Company's ratio of primary
capital and equity capital to assets are as follows:
June 30, December 31,
1995 1994
Company's primary capital to asset ratio 9.53% 9.37%
Company's equity capital to asset ratio 8.99 8.89
UB's primary capital totalled $7,830,000 and $7,321,000 at June
30, 1995 and December 31, 1994 respectively. Equity capital
totalled $7,335,000 and $6,909,000 at June 30, 1995 and December
31, 1994 respectively. UB's ratio of primary capital and equity
capital to assets are as follows:
June 30, December 31,
1995 1994
UB's primary capital to asset ratio 9.50% 9.32%
UB's equity capital to asset ratio 8.95 8.84
UB is subject to certain regulatory capital regulations which
require the maintenance of certain levels of capital as a
percentage of risk-adjusted assets. These regulations define
capital as either core capital (Tier 1) or supplementary capital
(Tier 2). Core capital consists primarily of common shareholders'
equity, while supplementary capital is comprised of preferred
stock, certain debt instruments, and a portion of the allowance
for loan losses. At December 31, 1994, the required core capital
is 4.00% and total risk-based capital is 8.00%. UB's core and
total risk-based capital exceed regulatory guidelines at June 30,
1995 and December 31, 1994 respectively, and are as follows:
June 30, December 31,
1995 1994
Tier 1 capital (core) 13.94% 13.05%
Tier 2 capital (total risk-based) 15.03 14.11
<PAGE>
Accounting Standards Adopted
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 114, "Accounting by Creditors
for Impairment of a Loan." The Company adopted this statement in
January 1, 1995. The impact of this statement does not have a
material effect on the Company's consolidated financial
statements.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company and its subsidiaries are not defendants in any
legal proceedings.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Securities Holders
None
Item 5. Other Information
An Information Statement was mailed on June 5, 1995, to the
holders of record of shares of common stock of United Oklahoma
Bankshares, Inc. (United) as of the close of business on May 16,
1995. Pursuant to the terms of a Stock Purchase Agreement, dated
January 16, 1995, between Ameribank Corporation and certain
stockholders of United, Ameribank acquired 702,266 shares of
Common Stock of United, or approximately 27.7% of the issued and
outstanding shares of Common Stock. In addition, Ameribank
acquired 92,790 shares of United's 9% Cumulative Nonvoting
Preferred Stock, which is also nonconvertible, from various
shareholders of United. The 92,790 shares represented
approximately 63.9% of the outstanding shares of such preferred
stock.
As of the closing of the Stock Purchase Agreement the Board of
Directors of United consisted of three (3) members. At such
closing one (1) of the three (3) members of United's Board of
Directors, Mrs. Gladys Tucker, resigned as a director and Mr.
George N. Cook, Jr., a designee of Ameribank, was elected by the
remaining directors of United to fill the vacancy. The other two
(2) directors of United, Willis J. Wheat and J. N. Ainsworth
resigned as directors of United effective ten (10) days after the
filing of the Information Statement with the Securities and
Exchange Commission and transmittal of the Information Statement
to holders of record of United's Common Stock. On the effective
date of the resignation of Messrs. Wheat and Ainsworth as
directors of United, Ameribank's designees, D. Wesley Schubert and
J. Michael Adcock, were elected as members of the Board of
Directors of United by the remaining member of the Board of
Directors of United to fill the two (2) vacancies resulting from
the resignation of Messrs. Wheat and Ainsworth.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
None
b. Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
UNITED OKLAHOMA BANKSHARES, INC.
Registrant
DATE: August 11, 1995
George N. Cook
Chairman of the Board
June A. O'Steen
Principal Accountant
