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, 1996 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 14, 1996, 2,532,237 shares of the registrant's
common stock, par value $1.00 per share, were outstanding.
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
UNITED OKLAHOMA BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except earnings per share)
<TABLE>
Six months ended Three months ended
June 30, June 30,
1996 1995 1996 1995
(Unaudited) (Unaudited)
Interest income:
<S> <C> <C> <C> <C>
Interest and fees on loans $ 2,342 1,962 1,170 987
Interest on federal funds sold 91 99 42 50
Interest on securities 801 873 398 439
Total interest income 3,234 2,934 1,610 1,476
Interest expense:
Interest on deposits 1,243 1,257 611 648
Interest on long-term debt - - - -
Total interest expense 1,243 1,257 611 648
Net interest income 1,991 1,677 992 828
Provision for loan losses 354 149 270 76
Net interest income after provision
for loan losses 1,637 1.528 729 752
Non-interest income:
Service charges on deposits 394 381 203 193
Other service charges and fees, net 122 117 66 73
Securities gains - - - -
Total non-interest income 516 498 269 266
Non-interest expense:
Salaries and employee benefits 1,024 920 469 457
Occupancy expense, net 115 105 58 52
Other real estate owned 2 9 - 9
Other 549 539 364 257
Total non-interest expense 1,690 1,573 891 775
Income before income taxes 463 453 107 243
Income tax expense 95 101 (2) 60
Net income $ 368 352 109 183
Earnings per share** $0.07 0.06 0.01 0.03
Average outstanding common shares 2,532 2,532 2,532 2,532
**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.
</TABLE>
<PAGE>
UNITED OKLAHOMA BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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<S> <C> <C>
June 30, December 31,
1996 1995
(In thousands)
ASSETS
Cash and due from banks $ 3,427 2,584
Federal funds sold 2,875 6,300
Investment securities 27,820 28,800
Loans 48,181 44,144
Unearned discounts - (2)
Allowance for loan losses (872) (538)
Loans, net 47,309 43,604
Property and equipment, net 3,775 3,880
Other real estate 47 63
Accrued interest receivable 612 589
Accounts receivable 91 93
Other assets 319 158
$86,275 86,071
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Interest bearing $58,803 60,975
Non-interest bearing 17,829 15,295
Total deposits 76,632 76,270
Securities sold under repurchase agreement - -
Deferred taxes 1,170 1,209
Other liabilities 453 769
Total liabilities 78,255 78,248
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 $4,214,620 or $29.03
per share at June 30, 1996. Authorized
150,000 shares; issued and outstanding
145,199 shares in 1996 and 1995 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 1996 and 1995 2,805 2,805
Additional paid-in capital 7,358 7,358
Accumulated deficit (5,172) (5,540)
Net unrealized holding loss on investment
securities available for sale,net of
deferred taxes (230) (59)
9,117 8,920
Less cost of common stock held in Treasury
(273,148 shares in 1996 and 1995) (1,097) (1,097)
Net stockholders'equity 8,020 7,823
$ 86,275 86,071
/TABLE
<PAGE>
UNITED OKLAHOMA BANKSHARES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
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<S> <C> <C>
June 30, December 31,
1996 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 (5,540) (6,315)
Net income 368 775
Balance at end of year (5,172) (5,540)
Net unrealized holding gain (loss) on
investment securities available for sale:
Balance at beginning of year (59) (158)
Implementation of change in accounting
for investment securities,
net of deferred taxes - -
Change in net unrealized holding gain
(loss) on investment securities
available for sale, net of deferred taxes (171) 99
Balance at end of year (230) (59)
Treasury stock:
Balance at beginning and end of year (1,097) (1,097)
Purchase stock - -
Balance at end of year (1,097) (1,097)
Net stockholders' equity $ 8,020 7,823
</TABLE>
<PAGE>
UNITED OKLAHOMA BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Six months ended
June 30
1996 1995
(In thousands)
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Cash flows from operating activities:
Net Income $ 368 352
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 209 206
Provision for loan losses 354 149
Provision for market decline-other real estate 2 9
Amortization of intangibles - 74
Amortization of premium, accretion of
discounts, net 47 38
Gain on sale of securities - -
(Increase) decrease in interest payable (162) 142
(Increase) decrease in interest receivable (23) 38
Decrease in other assets (141) 23
Decrease in deferred income taxes (39) (17)
(Decrease) increase in other liabilities (329) (7)
Total adjustments (82) 655
Net cash provided by operating activities 286 1,007
Cash flows from investing activities:
Proceeds from principal payments on mortgage
backed securities 1,443 764
Proceeds from maturities of securities - 235
Purchase of securities (510) (1,534)
Net decrease in loans (4,059) 814
Capital expenditures (104) (110)
Net cash used in investing activities (3,230) 169
Cash flows from financing activities:
Net increase in interest bearing and non-
interest bearing demand deposits, savings
and certificates of deposit 362 3,734
Repayment of short-term debt - (1,500)
Net cash provided by financing activities 362 2,234
Net increase in cash and cash equivalents (2,582) 3,410
Cash and cash equivalents at beginning of period 8,884 2,440
Cash and cash equivalents at end of period $ 6,302 5,850
Supplemental disclosure of noncash investing
activities:
Net unrealized holding loss on investment securites
available for sale, net of deferred tax $ 230 89
</TABLE>
<PAGE>
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, 1996
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 1996 was approximately
$109,000, compared to $183,000 for the second quarter of 1995.
The before tax income for the second quarter of 1996 was $107,000
compared to $243,000 for the second quarter of 1995. Earnings per
share reflected income of $0.07 at June 30, 1996 compared to
income of $0.06 per share at June 30, 1995. 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 $1,991,000 for the six months ended June
30, 1996 compared to $1,677,000 for the same period in 1995,
representing an increase of $314,000 or 19%. The volume of average
earning assets increased $4,415,000 while average interest bearing
liabilities increased $853,000 between June 30, 1995 and 1996.
The yield on average earning assets increased 19 basis points from
June 30, 1995 to June 30, 1996 while the rate paid on average
interest bearing liabilities decreased 10 basis points during the
same time period resulting in a increase in the spread between the
yield on earning assets and rate paid on interest bearing
liabilities of 29 basis points.
Allowance for Loan Losses
The allowance for loan losses was approximately $872,000 at June
30, 1996 compared to $538,000 at December 31, 1995 and $569,000 at
June 30, 1995. As a percentage of loans, the allowance for loan
losses was 1.81%, 1.23% and 1.39% at June 30, 1996, December 31
and June 30, 1995 respectively.
<PAGE>
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, 1996
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Held to maturity:
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Market value
State & municipals $ 786 13 (4) 795
Total "Held to maturity" $ 786 13 (4) 795
Available for sale:
U. S. Treasury securities $ 2,093 4 (20) 2,077
Mortgage-backed securities 16,256 33 (322) 15,967
State & municipals securities 9,066 16 (130) 8,990
Total "Available for sale" $27,415 53 (472) 27,034
</TABLE>
Non-performing Assets
Non-performing assets, including other real estate, totalled
$303,000 at June 30, 1996, an increase of $56,000 from December
31, 1995.
The following table sets forth such loans and other real estate
at the dates indicated.-
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<S> <C> <C> <C>
June 30, December 31, June 30,
1996 1995 1995
(Dollars in thousands)
Non-accrual loans 256 184 102
Loans contractually past due 90 days or more - - -
Total nonperforming loans 256 184 102
Other real estate 47 63 171
Total nonperforming assets 303 247 273
Nonperforming loans to total loans 0.53% 0.42% 0.24%
</TABLE>
<PAGE>
Capital and Liquidity
The Company's primary capital totalled $8,892,000 and $8,361,000
at June 30, 1996 and December 31, 1995, respectively. Equity
capital totalled $8,020,000 and $7,823,000 at June 30, 1996 and
December 31, 1995, respectively. The Company's ratio of primary
capital and equity capital to assets are as follows:
June 30, December 31,
1996 1995
Company's primary capital to asset ratio 10.20% 10.13%
Company's equity capital to asset ratio 9.29 9.54
UB's primary capital totalled $8,834,000 and $8,308,000 at June
30, 1996 and December 31, 1995 respectively. Equity capital
totalled $7,962,000 and $7,770,000 at June 30, 1996 and December
31, 1995 respectively. UB's ratio of primary capital and equity
capital to assets are as follows:
June 30, December 31,
1996 1995
UB's primary capital to asset ratio 10.14% 10.07%
UB's equity capital to asset ratio 9.23 9.48
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,
1996 and December 31, 1995 respectively, and are as follows:
June 30, December 31,
1996 1995
Tier 1 capital (core) 13.86% 14.29%
Tier 2 capital (total risk-based) 15.38 15.28
<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
material 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
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
(1) Exhibit 27-Financial Data Schedule
b. 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 14, 1996
George N. Cook
Chairman of the Board
June A. O'Steen
Principal Accountant
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 3427
<INT-BEARING-DEPOSITS> 58803
<FED-FUNDS-SOLD> 2875
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 735
<INVESTMENTS-CARRYING> 786
<INVESTMENTS-MARKET> 795
<LOANS> 48181
<ALLOWANCE> (872)
<TOTAL-ASSETS> 86275
<DEPOSITS> 76632
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1170
<LONG-TERM> 0
<COMMON> 2805
0
4356
<OTHER-SE> 859
<TOTAL-LIABILITIES-AND-EQUITY> 86275
<INTEREST-LOAN> 2342
<INTEREST-INVEST> 801
<INTEREST-OTHER> 91
<INTEREST-TOTAL> 3234
<INTEREST-DEPOSIT> 1243
<INTEREST-EXPENSE> 1243
<INTEREST-INCOME-NET> 1991
<LOAN-LOSSES> 354
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1690
<INCOME-PRETAX> 463
<INCOME-PRE-EXTRAORDINARY> 463
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 368
<EPS-PRIMARY> .07
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 303
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
