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 September 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 October 31, 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>
Nine months ended Three months ended
September 30, September 30,
1996 1995 1996 1995
(Unaudited) (Unaudited)
Interest income:
<S> <C> <C> <C> <C>
Interest and fees on loans $ 3,499 3,020 1,157 1,058
Interest on federal funds sold 127 115 36 16
Interest on securities 1,202 1,319 401 446
Total interest income 4,828 4,454 1,594 1,520
Interest expense:
Interest on deposits 1,843 1,900 600 643
Interest on long-term debt - - - -
Total interest expense 1,843 1,900 600 643
Net interest income 2,985 2,554 994 877
Provision for loan losses 384 234 30 85
Net interest income after provision
for loan losses 2,601 2,320 964 792
Non-interest income:
Service charges on deposits 600 590 206 209
Other service charges and fees, net 215 186 93 69
Securities gains - - - -
Total non-interest income 815 776 299 278
Non-interest expense:
Salaries and employee benefits 1,506 1,368 482 448
Occupancy expense, net 176 189 61 84
Other real estate owned 2 (17) - (26)
Other 706 769 157 230
Total non-interest expense 2,390 2,309 700 736
Income before income taxes 1,026 787 563 334
Income tax expense 288 193 193 92
Net income $ 738 594 370 242
Earnings per share** $0.18 0.12 0.11 0.06
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)
<TABLE>
<S> <C> <C>
September 30, December 31,
1996 1995
(In thousands)
ASSETS
Cash and due from banks $ 4,144 2,584
Federal funds sold 1,625 6,300
Investment securities 26,416 28,800
Loans 47,162 44,144
Unearned discounts - (2)
Allowance for loan losses (752) (538)
Loans, net 46,410 43,604
Property and equipment, net 4,156 3,880
Other real estate 47 63
Accrued interest receivable 507 589
Accounts receivable 86 93
Other assets 123 158
$83,514 86,071
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Interest bearing $56,566 60,975
Non-interest bearing 16,587 15,295
Total deposits 73,153 76,270
Securities sold under repurchase agreement - -
Deferred taxes 1,170 1,209
Other liabilities 754 769
Total liabilities 75,077 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 $4,312,450 or $29.70
per share at September 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 (4,802) (5,540)
Net unrealized holding loss on investment
securities available for sale,net of
deferred taxes (183) (59)
9,534 8,920
Less cost of common stock held in Treasury
(273,148 shares in 1996 and 1995) (1,097) (1,097)
Net stockholders'equity 8,437 7,823
$ 83,514 86,071
/TABLE
<PAGE>
UNITED OKLAHOMA BANKSHARES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<S> <C> <C>
September 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 738 775
Balance at end of year (4,802) (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 (124) 99
Balance at end of year (183) (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 $ 8,437 7,823
</TABLE>
<PAGE>
UNITED OKLAHOMA BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Nine months ended
September 30
1996 1995
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 738 594
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 314 312
Provision for loan losses 384 234
Provision for market decline-other real estate 2 6
Amortization of intangibles - 111
Amortization of premium, accretion of
discounts, net 68 60
Gain on sale of securities - -
(Increase) decrease in interest payable (191) 238
(Increase) decrease in interest receivable 82 47
Decrease in other assets 56 68
Decrease in deferred income taxes (39) (40)
(Decrease) increase in other liabilities 176 88
Total adjustments 852 1,124
Net cash provided by operating activities 1,590 1,718
Cash flows from investing activities:
Proceeds from principal payments on mortgage
backed securities 1,804 1,195
Proceeds from maturities of securities 1,960 525
Purchase of securities (1,572) (1,534)
Net decrease in loans (3,190) 466
Capital expenditures (590) (156)
Net cash used in investing activities (1,588) 496
Cash flows from financing activities:
Net (decrease) increase in interest bearing and non-
interest bearing demand deposits, savings
and certificates of deposit (3,117) 2,090
Repayment of short-term debt - (1,500)
Net cash provided by financing activities (3,117) 590
Net (decrease) increase in cash and cash eq (3,117) 2,804
Cash and cash equivalents at beginning of period 8,884 2,440
Cash and cash equivalents at end of period $ 5,769 5,244
Supplemental disclosure of noncash investing
activities:
Net unrealized holding loss on investment securites
available for sale, net of deferred tax $ (183) (67)
</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 September 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 third quarter of 1996 was approximately
$370,000, compared to $242,000 for the third quarter of 1995.
The before tax income for the third quarter of 1996 was $563,000
compared to $334,000 for the third quarter of 1995. Earnings per
share reflected income of $0.18 at September 30, 1996 compared to
income of $0.12 per share at September 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 $2,985,000 for the nine months ended September
30, 1996 compared to $2,554,000 for the same period in 1995,
representing an increase of $431,000 or 16.9%. The volume of average
earning assets increased $4,892,000 while average interest bearing
liabilities increased $435,000 between September 30, 1995 and 1996.
The yield on average earning assets increased 11 basis points from
September 30, 1995 to September 30, 1996 while the rate paid on average
interest bearing liabilities decreased 15 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 26 basis points.
Allowance for Loan Losses
The allowance for loan losses was approximately $752,000 at September
30, 1996 compared to $538,000 at December 31, 1995 and $511,000 at
September 30, 1995. As a percentage of loans, the allowance for loan
losses was 1.60%, 1.23% and 1.26% at September 30, 1996, December 31
and September 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):
September 30, 1996
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Held to maturity:
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Market value
State & municipals $ 784 21 805
Total "Held to maturity" $ 784 21 805
Available for sale:
U. S. Treasury securities $ 1,093 - (5) 1,088
Mortgage-backed securities 15,797 56 (249) 15,604
State & municipals securities 8,850 34 (65) 8,819
Total "Available for sale" $25,740 90 (319) 25,511
</TABLE>
Non-performing Assets
Non-performing assets, including other real estate, totalled
$237,000 at September 30, 1996, a decrease of $10,000 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>
Sept. 30, December 31, Sept. 30,
1996 1995 1995
(Dollars in thousands)
Non-accrual loans 190 184 270
Loans contractually past due 90 days or more - - -
Total nonperforming loans 190 184 270
Other real estate 47 63 148
Total nonperforming assets 237 247 418
Nonperforming loans to total loans 0.40% 0.42% 0.66%
</TABLE>
<PAGE>
Capital and Liquidity
The Company's primary capital totalled $9,189,000 and $8,361,000
at September 30, 1996 and December 31, 1995, respectively. Equity
capital totalled $8,437,000 and $7,823,000 at September 30, 1996 and
December 31, 1995, respectively. The Company's ratio of primary
capital and equity capital to assets are as follows:
September 30, December 31,
1996 1995
Company's primary capital to asset ratio 10.61% 10.13%
Company's equity capital to asset ratio 9.82 9.54
UB's primary capital totalled $9,162,000 and $8,308,000 at September
30, 1996 and December 31, 1995 respectively. Equity capital
totalled $8,410,000 and $7,770,000 at September 30, 1996 and December
31, 1995 respectively. UB's ratio of primary capital and equity
capital to assets are as follows:
September 30, December 31,
1996 1995
UB's primary capital to asset ratio 10.58% 10.07%
UB's equity capital to asset ratio 9.80 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 September 30,
1996 and December 31, 1995 respectively, and are as follows:
September 30, December 31,
1996 1995
Tier 1 capital (core) 14.97% 14.29%
Tier 2 capital (total risk-based) 16.30 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: November 13, 1996
/s/George N. Cook
Chairman of the Board
/s/ June A. O'Steen
Principal Accountant
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 4144
<INT-BEARING-DEPOSITS> 56566
<FED-FUNDS-SOLD> 1625
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 735
<INVESTMENTS-CARRYING> 784
<INVESTMENTS-MARKET> 805
<LOANS> 47162
<ALLOWANCE> (752)
<TOTAL-ASSETS> 83514
<DEPOSITS> 73153
<SHORT-TERM> 0
<LIABILITIES-OTHER> 754
<LONG-TERM> 0
<COMMON> 2805
0
4356
<OTHER-SE> 1276
<TOTAL-LIABILITIES-AND-EQUITY> 83514
<INTEREST-LOAN> 3499
<INTEREST-INVEST> 1202
<INTEREST-OTHER> 127
<INTEREST-TOTAL> 4828
<INTEREST-DEPOSIT> 1843
<INTEREST-EXPENSE> 1843
<INTEREST-INCOME-NET> 2985
<LOAN-LOSSES> 384
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2390
<INCOME-PRETAX> 1026
<INCOME-PRE-EXTRAORDINARY> 738
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 738
<EPS-PRIMARY> .18
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 237
<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>
