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 March 31, 1997 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 May 6, 1997, 2,532,237 shares of the registrant's
common stock, par value $1.00 per share, were outstanding.
1
<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>
Three months ended
March 31,
1997 1996
(Unaudited)
Interest income:
<S> <C> <C>
Interest and fees on loans $ 1,315 1,172
Interest on federal funds sold 16 49
Interest on securities 348 403
Total interest income 1,679 1,624
Interest expense:
Interest on deposits 586 632
Interest on long-term debt 42 -
Total interest expense 628 632
Net interest income 1,051 992
Provision for loan losses 75 84
Net interest income after provision
for loan losses 976 908
Non-interest income:
Service charges on deposits 204 191
Other service charges and fees, net 51 56
Securities gains - -
Total non-interest income 255 247
Non-interest expense:
Salaries and employee benefits 502 555
Occupancy expense, net 81 57
Other real estate owned - 2
Other 303 185
Total non-interest expense 886 799
Income before income taxes 345 356
Income tax expense 88 97
Net income $ 257 259
Earnings per share** $0.06 0.06
Average outstanding common shares 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>
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UNITED OKLAHOMA BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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<S> <C> <C>
March 31, December 31,
1997 1996
(In thousands)
ASSETS
Cash and due from banks $ 4,089 3,070
Federal funds sold 2,200 -
Investment securities 22,109 25,720
Loans 55,783 51,183
Unearned discounts - (2)
Allowance for loan losses (1,020) (908)
Loans, net 54,763 50,273
Property and equipment, net 4,016 4,077
Other real estate 50 47
Accrued interest receivable 541 594
Accounts receivable 71 80
Other assets 399 190
$88,238 84,051
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Interest bearing $57,278 57,506
Non-interest bearing 15,178 15,614
Total deposits 72,456 73,120
Deferred taxes 1,215 1,218
Other liabilities 589 890
Total liabilities 79,260 75,228
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 $4,508,460 or $31.05
per share at March 31, 1997. Authorized
150,000 shares; issued and outstanding
145,199 shares in 1997 and 1996 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 1997 and 1996 2,805 2,805
Additional paid-in capital 7,358 7,358
Accumulated deficit (4,348) (4,605)
Net unrealized holding loss on investment
securities available for sale,net of
deferred taxes (96) 6
10,075 9,920
Less cost of common stock held in Treasury
(273,148 shares in 1997 and 1996) (1,097) (1,097)
Net stockholders'equity 8,978 8,823
$ 88,238 84,051
</TABLE>
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UNITED OKLAHOMA BANKSHARES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
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<S> <C> <C>
March 31, December 31,
1997 1996
(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 (4,605) (5,540)
Net income 257 935
Balance at end of year (4,348) (4,605)
Net unrealized holding gain (loss) on
investment securities available for sale:
Balance at beginning of year 6 (59)
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 (102) 65
Balance at end of year (96) 6
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 $ 8,978 8,823
</TABLE>
4
<PAGE>
UNITED OKLAHOMA BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Three months ended
March 31,
1997 1996
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 257 259
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 118 106
Provision for loan losses 75 84
Provision for market decline-other real estate - 2
Amortization of intangibles - -
Amortization of premium, accretion of
discounts, net 16 22
Gain on sale of securities 48 -
Increase (decrease) in interest payable (105) (178)
(Increase) decrease in interest receivable 53 (23)
(Increase) decrease in other assets (203) (84)
Decrease in deferred income taxes (3) 86
(Decrease) increase in other liabilities (196) (196)
Total adjustments (197) (181)
Net cash provided by operating activities 60 78
Cash flows from investing activities:
Proceeds from principal payments on mortgage
backed securities 374 294
Proceeds from maturities or sales of securities 3,106 -
Purchase of securities - -
Net (increase) decrease in loans (4,600) (4,338)
Capital expenditures (57) (158)
Net cash used in investing activities (1,177) (4,202)
Cash flows from financing activities:
Net increase in interest bearing and non-
interest bearing demand deposits, savings
and certificates of deposit (664) 386
Long-term debt 5,000 -
Net cash provided by financing activities 4,336 386
Net increase in cash and cash equivalents 3,219 (3,738)
Cash and cash equivalents at beginning of period 3,070 8,884
Cash and cash equivalents at end of period $ 6,289 5,146
Supplemental disclosure of noncash investing
activities:
Net unrealized holding loss on investment securites
available for sale, net of deferred tax $ (96) (163)
</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 March 31, 1997
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 first quarter of 1997 was approximately
$257,000, compared to $259,000 for the first quarter of 1996.
The before tax income for the first quarter of 1997 was $345,000
compared to $356,000 for the first quarter of 1996. Earnings per
share reflected income of $0.06 at March 31, 1997, compared to
income of $0.06 per share at March 31, 1996. 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 $1,051,000 for the three months ended March
31, 1997 compared to $992,000 for the same period in 1996,
representing an increase of $59,000 or 6%. The volume of average
earning assets increased $1,718,000 while average interest bearing
liabilities increased $772,000 between March 31, 1996 and 1997.
The yield on average earning assets increased 6 basis points from
March 31, 1996 to March 31, 1997 while the rate paid on average
interest bearing liabilities decreased 8 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 14 basis points.
Allowance for Loan Losses
The allowance for loan losses was approximately $1,020,000 at March
31, 1997 compared to $908,000 at December 31, 1996 and $593,000 at
March 31, 1996. As a percentage of loans, the allowance for loan
losses was 1.90%, 1.77% and 1.24% at March 31, 1997, December 31, 1996
and March 31, 1996 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):
March 31, 1997
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<S> <C> <C> <C> <C>
Held to maturity:
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Market value
State & municipals $ 780 17 (1) 796
Total "Held to maturity" $ 780 17 (1) 796
Available for sale:
U. S. Treasury securities $ 1,094 - (10) 1,084
Mortgage-backed securities 14,382 51 (170) 14,263
State & municipals 6,013 22 (54) 5,981
Total "Available for sale" $21,489 73 (234) 21,328
<</TABLE>
Non-performing Assets
Non-performing assets, including other real estate, totalled
$920,000 at March 31, 1997, an increase of $833,000 from December
31, 1996.
The following table sets forth such loans and other real estate
at the dates indicated.-
</TABLE>
<TABLE>
<S> <C> <C> <C>
March 31, December 31, March 31,
1997 1996 1996
(Dollars in thousands)
Non-accrual loans 920 87 117
Loans contractually past due 90 days or more - - -
Total nonperforming loans 920 87 117
Other real estate 50 47 114
Total nonperforming assets 970 134 231
Nonperforming loans to total loans 1.65% 0.17% 0.24%
</TABLE>
<PAGE>
Capital and Liquidity
The Company's primary capital totalled $9,997,000 and $9,731,000
at March 31, 1997 and December 31, 1996, respectively. Equity
capital totalled $8,977,000 and $8,823,000 at March 31, 1997 and
December 31, 1996, respectively. The Company's ratio of primary
capital and equity capital to assets are as follows:
March 31, December 31,
1997 1996
Company's primary capital to asset ratio 11.38% 11.28%
Company's equity capital to asset ratio 10.34 10.34
UB's primary capital totalled $10,007,000 and $9,731,000 at March 31, 1997
and December 31, 1996 respectively. Equity capital
totalled $8,987,000 and $8,823,000 at March 31, 1997 and December
31, 1996 respectively. UB's ratio of primary capital and equity
capital to assets are as follows:
March 31, December 31,
1997 1996
UB's primary capital to asset ratio 11.47% 11.28%
UB's equity capital to asset ratio 10.42 10.33
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. As of December 31, 1996, the required core capital
was 4.00% and total risk-based capital was 8.00%. UB's core and
total risk-based capital exceed regulatory guidelines at March 31,
1997 and December 31, 1996 respectively, and are as follo4ws:
March 31, December 31,
1997 1996
Tier 1 capital (core) 14.13% 14.59%
Tier 2 capital (total risk-based) 15.74 16.09
<PAGE>
Accounting Standards Adopted
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards No. 125, "Accounting for the Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities."
The Company adopted this statement on January 1, 1997.
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
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: May 14, 1997
George N. Cook
Chairman of the Board
June A. O'Steen
Principal Accountant
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 4089
<INT-BEARING-DEPOSITS> 57278
<FED-FUNDS-SOLD> 2200
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 21489
<INVESTMENTS-CARRYING> 21328
<INVESTMENTS-MARKET> 21328
<LOANS> 55783
<ALLOWANCE> (1020)
<TOTAL-ASSETS> 88238
<DEPOSITS> 72456
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1804
<LONG-TERM> 5000
<COMMON> 2805
0
4356
<OTHER-SE> 1817
<TOTAL-LIABILITIES-AND-EQUITY> 88238
<INTEREST-LOAN> 1315
<INTEREST-INVEST> 348
<INTEREST-OTHER> 16
<INTEREST-TOTAL> 1679
<INTEREST-DEPOSIT> 586
<INTEREST-EXPENSE> 42
<INTEREST-INCOME-NET> 1051
<LOAN-LOSSES> 75
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 886
<INCOME-PRETAX> 345
<INCOME-PRE-EXTRAORDINARY> 345
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 257
<EPS-PRIMARY> .06
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 920
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<CHARGE-OFFS> 0
<RECOVERIES> 0
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</TABLE>
