SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1994
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file Number 0-12709
LIBERTY BANCORP, INC.
(Exact Name of Registrant as specified in its charter)
Oklahoma 73-1218204
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
100 North Broadway
Oklahoma City, OK 73102
(Address of principal executive offices)
(Zip Code)
(405) 231-6000
(Registrant's telephone number, including area code)
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.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of August 15, 1994
----- -----------------------------------
Common Stock 9,487,305
LIBERTY BANCORP, INC.
SECOND QUARTER REPORT 1994
Contents
--------
Financial Highlights
Financial Review
Selected Statistical Information
Consolidated Financial Statements
Notes to Consolidated Financial
Statements
Other Information
Signatures
<TABLE>
Financial Highlights Liberty Bancorp, Inc.
<CAPTION>
- - ----------------------------------------------------------------------------------------------------
June 30 Six Months Ended Three Months Ended
(In thousands, except per share data) 1994 1993 1994 1993
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
For the First Quarter
Total Revenues $ 96,347 $ 90,747 $ 49,082 $ 44,905
Net Interest Income 38,346 36,029 19,110 17,810
Provision for Loan Losses _ (7,654) _ (2,737)
Trust Fees 8,170 7,818 4,010 3,846
Mortgage Banking Income 3,390 3,665 1,625 1,987
Other Noninterest Income 18,200 16,021 9,318 7,920
Noninterest Expense 56,229 55,490 28,004 27,097
Cumulative Effect of Change in Accounting
Principle _ 14,255 _ _
Net Income 10,109 26,842 5,157 5,144
Per Share Data _ Primary and Fully-diluted
Income Before Cumulative Effect of Change in
Accounting Principle 1.03 1.30 .53 .53
Net Income 1.03 2.78 .53 .53
Cash Dividends Declared .30 .10 .15 .10
- - ----------------------------------------------- ------------- ------------ ------------- -----------
At June 30
Loans $1,076,327 $ 796,140 $1,076,327 $ 796,140
Earning Assets 2,207,272 2,075,139 2,207,272 2,075,139
Assets 2,661,836 2,549,121 2,661,836 2,549,121
Deposits 2,144,149 1,966,074 2,144,149 1,966,074
Total Shareholders' Investment 225,299 212,911 225,299 212,911
Book Value per Common Share 23.76 22.47 23.76 22.47
- - ----------------------------------------------- ------------- ------------ ------------- -----------
Average Year-to-Date Balances
Earning Assets $2,195,433 $2,003,402 $2,188,645 $1,993,239
Assets 2,586,804 2,378,623 2,575,695 2,372,900
Deposits 2,106,393 1,904,154 2,096,525 1,892,325
Total Shareholders' Investment 227,083 200,070 225,172 211,390
- - ----------------------------------------------- ------------- ------------ ------------- -----------
Ratios
Capital Ratios
Leverage 8.24 % 8.52 % 8.24 % 8.52 %
Risk-based 15.23 18.31 15.23 18.31
Average Shareholders' Investment as a % of
Average Total Assets 8.78 8.41 8.74 8.91
Average Earning Assets as a % of Average
Total Assets 84.87 84.23 84.97 84.00
Rate of Return, Before Cumulative Effect of
Change in Accounting Principle, on
Average Earning Assets .93 1.27 .95 1.04
Average Total Assets .79 1.07 .80 .87
Average Total Shareholders' Investment 8.98 12.69 9.19 9.76
Rate of Return on
Average Earning Assets .93 2.70 .95 1.04
Average Total Assets .79 2.28 .80 .87
Average Total Shareholders' Investment 8.98 27.05 9.19 9.76
Dividend Payout Ratio 29.13 3.60 28.30 18.87
Operating Efficiency Ratio 81.70 85.84 81.09 84.66
Provision for Loan Losses as %
of Average Loans _ (2.07) _ (1.45)
FINANCIAL REVIEW Liberty Bancorp, Inc.
Liberty Bancorp, Inc. and its subsidiaries ("Liberty") provide a broad
range of banking and financial services to meet the diverse needs of individual
and corporate customers in the Oklahoma City and Tulsa metropolitan areas,
Oklahoma and the Mid-America region. Liberty Bank and Trust Company of Okla-
homa City, N.A. ("Liberty Oklahoma City") and Liberty Bank and Trust Company of
Tulsa, N.A. ("Liberty Tulsa") are Liberty's principal subsidiaries. Liberty
Mortgage Company, a subsidiary of Liberty Oklahoma City, engages in mortgage
banking activities.
Liberty has twenty eight full-service banking locations in Oklahoma from
which it provides its financial services. These locations are in Oklahoma
City, Tulsa, Edmond, Norman, Choctaw, Jenks, Harrah and Midwest City. In addi-
tion, it has three limited service detached drive-in facilities in Oklahoma
City, Tulsa and Norman. Liberty Mortgage Company ("LMC") conducts residential
mortgage operations from the main Liberty Oklahoma City location and two Lib-
erty banking centers including one location in Oklahoma City and one in Tulsa.
Commercial mortgage operations are available at the main bank location of Lib-
erty Oklahoma City and an LMC branch in Tulsa.
This Financial Review should be read in conjunction with the consolidated
financial statements, notes to the consolidated financial statements and the
supplemental statistical and financial data presented elsewhere in this report.
General Conditions and Performance Summary:
First Six Months of 1994 Compared to First Six Months of 1993
For the first six months of 1994, Liberty reported net income of $10.1
million or $1.03 per common share. This compares to net income of $26.8 mil-
lion or $2.78 per common share for the first six months of 1993. Net income
for the first six months of 1993 included the cumulative effect of a change in
accounting for income taxes of $14.3 million. The first six months of 1993
also included a negative provision for loan losses of $7.7 million which was
partially offset by provisions for losses on mortgage receivables in process of
foreclosure and corporate risk reserves of $2.1 million. No comparable provi-
sions were made during the first six months of 1994. Excluding the effects of
the change in accounting for income taxes and the net negative provisions, net
income for the first six months of 1993 was $7.1 million.
Liberty's nonperforming loans at June 30, 1994, which are primarily nonac-
crual loans, totaled $10.8 million compared to $13.5 million at December 31,
1993 and $15.7 million at June 30, 1993. Other real estate and assets owned
("OREO"), net of reserves, decreased to $7.0 million at
June 30, 1994, compared to $10.8 million at December 31, 1993, and $11.6 mil-
lion at June 30, 1993. The continuing decrease in OREO is primarily due to
real estate sales.
No provisions for loan losses or losses on OREO were made during the first
six months of 1994. This compares to negative provisions of $7.6 million for
the same period in 1993. These provisions are discussed further in "Reserve
for Loan Losses" and "Reserve for Other Real Estate and Assets Owned."
During 1993 Liberty acquired Midwest National Bancshares, Inc., Tulban-
corp, Inc. and The First National Bank of Jenks. These banking companies had
respective assets of $38.6 million, $62.8 million and $33.4 million at the date
of acquisition. These acquisitions were treated as poolings-of-interest. Lib-
erty also acquired First Oklahoma Bank and Trust Co. of Edmond and The First
National Bank of Edmond. These two banks had total assets of $142.2 million
and were acquired as purchases.
Net Interest Income
On a tax-equivalent basis, net interest income for the first six months
of 1994 increased $2.4 million or 6.3% to $39.6 million from $37.2 million for
the first six months of 1993. The tax equivalent net interest margin was 3.6%
for the first six months of 1994 compared to 3.7% for the same period in 1993.
The net interest margin rate has remained relatively flat while market interest
rates have generally increased during the first six months of 1994.
Tax-equivalent interest income amounted to $67.8 million for the first
six months of 1994 compared to $64.4 million in the same period of 1993. Total
average earning assets increased 9.6%, while the average yield on earning as-
sets declined to 6.2% from 6.5%. Yields have decreased on securities from 6.0%
to 5.3% as a result of significant sales, maturities and paydowns reinvested in
a lower rate environment, and yields have decreased on loans from 7.9% to 7.5%
due to fixed-rate real estate loans and consumer loans refinancing and repric-
ing at lower rates.
Total interest expense amounted to $28.2 million for the first six
months of 1994 compared to $27.2 million for the first six months of 1993, re-
flecting the $151.4 million higher average deposit level even though the cost
of funds rate declined to 3.4% from 3.5%. Average deposit rates paid were pri-
marily lower due to significant levels of bank certificate of deposit maturi-
ties that have moved into savings and money market accounts or shorter-term and
lower-rate certificates.
Noninterest Income
Noninterest income for the first six months of 1994 increased $2.3 million
or 8.2% from the first six months of 1993. Service charges on deposits in-
creased $902 thousand or 14.3%. Of this increase, $511 thousand is attribut-
able to service charges on deposits of banks acquired, accounted for as a pur-
chase, during the last nine months of 1993. As a result of poor market condi-
tions, trading account profits decreased $525 thousand or 18.7%. Net securi-
ties gains totaled $489 thousand compared to $59 thousand in 1993. Other non-
interest income increased $1.0 million or 17.3% primarily due to gains on the
sale of mortgage servicing totaling $1.1 million.
Noninterest Expense
Noninterest expense (excluding net income from the operation of OREO,
which is discussed separately below in "Other Real Estate and Assets Owned")
increased $281 thousand or .5% to $57.3 million for the first six months of
1994 compared to $57.0 million for the same period one year ago. Decreases in
noninterest expenses, in many categories, is offset by $2.0 million of costs
attributable to acquired banks and affects several expense categories. A sig-
nificant decrease was in other noninterest expense which decreased $1.8 million
or 23.9%, primarily as a result of provisions in 1993 for losses on mortgage
receivables in process of foreclosure and other corporate risk reserves.
Salaries and employee benefits increased $2.0 million or 8.0% from the
first six months of 1993. Other than base salary increases, 1994 includes $836
million in salary and benefits for employees of new banking center locations.
Equipment expense increased $690 thousand or 18.3% primarily due to increased
depreciation on new data processing and other equipment.
The amortization of intangibles decreased $976 thousand or 43.2% as a re-
sult of accelerated write-offs in 1993 of the intangibles associated with pur-
chased mortgage servicing rights due to refinancings. The amortization on
these rights have decreased $1.4 million as compared to the first half of
1993. This decrease is partially offset by the amortization of bank acquisi-
tion premiums which increased $434 thousand.
Income Taxes
Liberty recorded $1.8 million in income tax expense for the first six
months of 1994 compared with $3.1 million during the same period of 1993. The
decrease in income tax expense is primarily attributable to lower income before
tax during the first six months of 1994 compared to 1993 as well as larger
benefits expected during 1994 from the utilization of net operating loss carry-
forwards.
Liberty also adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS No. 109") in the first quarter of 1993.
This standard required, among other things, recognition of future tax benefits,
measured by enacted tax rates, attributable to deductible temporary differences
between financial statement and income tax bases of assets and liabilities and
to tax net operating loss carryforwards, to the extent that realization of such
benefits is more likely than not. Similarly, future tax liabilities were also
required to be recognized. The adoption of SFAS No. 109 resulted in a net de-
ferred asset and related benefit of $14.3 million or $1.48 per share on January
1, 1993. This change is reflected on the income statement as a cumulative ef-
fect of change in accounting principle.
Performance Summary: Second Quarter of 1994
Compared to Second Quarter 1993
During the second quarter of 1994, the Company reported net income of $5.2
million or $.53 per common share, compared to net income of $5.1 million or
$.53 per share, for the second quarter of 1993. The second quarter of 1993 in-
cluded a negative provision for loan losses of $2.7 million. No positive or
negative provisions were made to the reserve for loan losses in the second
quarter of 1994.
Net Interest Income
On a tax-equivalent basis, net interest income for the second quarter of
1994 increased $1.3 million or 7.1% to $19.7 million from $18.4 million in the
second quarter of 1993. The tax-equivalent net interest margin was 3.6% for
the second quarter of 1994 compared to 3.7% for the same period one year ago.
Tax-equivalent interest income amounted to $34.7 million for the second
quarter of 1994 compared to $31.7 million in the same period of 1993 reflecting
an increase in average earning assets. The yield on average earning assets re-
mained at approximately 6.4% for both periods.
Total interest expense amounted to $15.0 million for the second quarter of
1994 compared to $13.3 million in the same period of 1993, primarily reflecting
higher levels of interest-bearing liabilities.
Noninterest Income
Noninterest income increased $1.2 million or 8.7% in the second quarter of
1994 compared to the second quarter of 1993. The most significant increase was
in other noninterest income which increased $1.4 million or 54.0%. Of this
amount, $1.1 million is due to gains on the sale of mortgage servicing.
Noninterest Expense
Noninterest expense (excluding net income from the operation of OREO) in-
creased $420 thousand or 1.5%. This increase includes $1.0 million in nonin-
terest expenses attributable to acquired banks and affects several expense
categories. The primary increase occurred in salaries and benefits which in-
creased $965 thousand or 7.7%. Other than base salary increases, $398 thousand
of this increase was due to employees of branches acquired. Amortization of
intangibles decreased $874 thousand or 58.2% as a result of the accelerated
write-offs of purchased mortgage servicing rights.
The operation of OREO in the second quarter of 1994 produced income of
$295 thousand compared to $782 thousand in 1993. Income from gains on sales
decreased to $412 thousand from $799 thousand
Credit Risk Management
Nonperforming assets include nonperforming loans and other real estate and
assets owned net of reserves. Total nonperforming assets have decreased $6.5
million or 26.7% since year-end 1993. The level at June 30, 1994 of $17.8 mil-
lion is $9.4 million or 34.6% less than the $27.2 million of nonperforming as-
sets one year ago. The decreasing level of nonperforming assets is shown for
the previous five quarters in the following table:
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Nonperforming Assets
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6/30/94 3/31/94 12/31/93 9/30/93 6/30/93
- - ------------------------------------------------------------------------------
Nonperforming loans and other
real estate and assets owned,
gross, as a % of
Total loans and other real
estate and assets owned 1.79% 2.43% 2.82% 3.29% 3.94%
Total assets .73% .88% 1.01% 1.06% 1.26%
The following sections provide additional information concerning loan con-
centrations, nonperforming loans, reserve for loan losses, other real estate
and assets owned and the reserve for other real estate and assets owned.
Loan Concentrations
Loan concentrations are an important factor in the assessment of risk in
the loan portfolio. The percentage composition of the loan portfolio for the
last five quarters is reflected in the following table:
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Loan Portfolio
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6/30/94 3/31/94 12/31/93 9/30/93 6/30/93
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Commercial 40.1% 39.6% 40.8% 41.9% 42.3%
Energy 6.6 5.8 6.1 7.4 7.9
Real estate - construction 9.0 9.4 9.1 10.7 10.1
Real estate - mortgage 21.8 21.9 21.3 20.6 21.2
Correspondent and regional 1.7 1.9 1.8 2.4 2.6
Personal 20.8 21.4 20.9 17.0 15.9
Loans not expected or intended to be held until maturity are termed "held
for sale." These loans are carried at the lower of cost or estimated market
value and any adjustments are reflected as a reduction of noninterest income.
At June 30, 1994, these loans, primarily residential real estate mortgage
loans, totaled $14.9 million compared to $26.5 million at December 31, 1993 and
$21.2 million at June 30, 1993.
Nonperforming Loans
Nonperforming loans decreased by $2.6 million or 19.3% since December 31,
1993 and decreased by $4.8 million or 30.8% from one year earlier. Of the non-
performing loans at June 30, 1994, 66.5% were real estate-related.
Nonperforming loans for the past five quarters are shown in the following
table:
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Nonperforming Loans
- - ------------------------------------------------------------------------------
(In thousands) 6/30/94 3/31/94 12/31/93 9/30/93 6/30/93
- - ------------------------------------------------------------------------------
Nonaccrual $9,228 $11,173 $10,138 $11,685 $12,743
Restructured _ _ _ _ _
Past due 90 days or more 1,621 1,974 3,313 1,300 2,936
- - ------------------------------------------------------------------------------
Total nonperforming loans $10,849 $13,147 $13,451 $12,985 $15,679
==============================================================================
Nonperforming loans as a %
of total loans 1.01% 1.34% 1.44% 1.57% 1.97%
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Analysis of Nonperforming Loans by Type
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(In thousands) 6/30/94 3/31/94 12/31/93 9/30/93 6/30/93
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Commercial and other $ 1,985 $ 3,313 $ 3,604 $ 3,180 $ 4,349
Energy 432 449 632 543 846
Real estate - construction 2,691 2,938 3,236 2,290 2,483
Real estate - mortgage 4,522 5,244 5,135 6,176 7,303
Correspondent and regional _ _ _ _ _
Personal 1,219 1,203 844 796 698
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Total nonperforming loans $10,849 $13,147 $13,451 $12,985 $15,679
==============================================================================
The following table reflects the levels of performance of nonaccrual loans
as of June 30, 1994:
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Contractual Carrying
(In thousands) Balance Balance
- - --------------------------------------------------------------------------
Contractually current $ 6,405 $ 4,502
Contractually past due -
with substantial performance 501 278
with limited performance 386 304
with no performance 5,151 4,144
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Total nonaccrual loans $12,443 $9,228
==========================================================================
In the above table, substantial performance is defined as loans that have
met at least 85% of contractual payments during the past twelve months. Lim-
ited performance includes those loans on which any payments have been made dur-
ing the year. The gross interest income from nonaccrual and restructured loans
_ had they been performing in accordance with their original terms _ would have
been approximately $541 thousand and $597 thousand for the six months ended
June 30, 1994 and 1993, respectively. Payments received on a particular nonac-
crual loan are generally applied to any principal balance before interest in-
come is recorded. The amount of interest from these nonaccrual and restructured
loans included in interest income was approximately $31 thousand and $11 thou-
sand for the first six months of 1994 and 1993, respectively.
"Potential problem loans" are those loans which, although currently per-
forming, have credit weaknesses such that management has serious doubts as to
the borrowers' future ability to comply with present terms, and thus may result
in a change to nonperforming status. Management has identified, through in-
ternal credit ratings, certain performing loans which demonstrate some deterio-
ration in credit quality and, accordingly, are monitored more carefully. At
June 30, 1994, these loans totaled $15.0 million, compared to $17.0 million at
December 31, 1993 and $4.1 million at June 30, 1993. Of these amounts, ap-
proximately $96 thousand, $98 thousand and $159 thousand represented letters of
credit and unfunded loan commitments at June 30, 1994, December 31, 1993, and
June 30, 1993, respectively. Exposure to loss of principal on such loans and
commitments has been considered in the establishment of the reserve for loan
losses.
Reserve for Loan Losses
No provisions for loan losses were made during the first six months of
1994. Provisions during the first six months of 1993 amounted to a negative
$7.7 million. The negative provisions were made following discussions with
regulators and an assessment to reduce the reserves to a level deemed appropri-
ate for the anticipated inherent losses in the current loan portfolio.
The following table summarizes the reserve for loan loss activity for the
first six months of 1994 and 1993:
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Reserve for Loan Losses
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(In thousands) 1994 1993
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Balance at January 1 $19,986 $25,581
Additions
Recoveries 744 992
Provisions _ (7,654)
Reserves of acquired banks _ 1,241
Less _ Charge-offs (913) (1,516)
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Balance at June 30 $19,817 $18,644
============================================================================
The level of the reserve for loan losses as compared to nonperforming
loans and total loans is shown for the previous five quarters in the following
table:
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(Dollars in thousands) 6/30/94 3/31/94 12/31/93 9/30/93 6/30/93
- - -------------------------------------------------------------------------------
Total nonperforming loans 10,849 $13,147 $13,451 $12,985 $15,679
Reserve for loan losses 19,817 20,096 19,986 19,362 18,644
Reserve for loan losses as a % of
nonperforming loans 182.66% 152.86% 148.58% 149.11% 118.91%
Total loans 1.84% 2.05% 2.14% 2.34% 2.34%
Other Real Estate and Assets Owned
Net OREO decreased $3.9 million or 35.8% since year-end 1993 and $4.6 mil-
lion or 39.8% from June 30, 1993. These reductions have primarily been the re-
sult of sales. These levels are illustrated in the following five-quarter ta-
ble:
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Other Real Estate and Assets Owned by Type
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(In thousands) 6/30/94 3/31/94 12/31/93 9/30/93 6/30/93
- - ------------------------------------------------------------------------------
Land $ 6,561 $ 7,347 $ 8,791 $10,015 $11,884
Commercial-office buildings
and motels 827 2,166 2,487 2,703 2,621
Commercial-shopping centers 2 2 200 200 2
Residential-single family 1,047 1,256 1,631 1,787 1,848
Other 103 163 256 36 17
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Total Other Real Estate and
Assets Owned 8,540 10,934 13,365 14,741 16,372
- - ------------------------------------------------------------------------------
Less Reserve for Losses on
Other Real Estate and Assets
Owned (1,578) (1,986) (2,521) (3,468) (4,816)
- - ------------------------------------------------------------------------------
Other Real Estate and Assets
Owned, Net $ 6,962 $ 8,948 $10,844 $11,273 $11,556
==============================================================================
Net income from the operation of OREO, exclusive of the provision for
losses, amounted to $1.0 million and $1.5 million for the first six months of
1994 and 1993, respectively. The results of the operation of OREO include oper-
ating income generated and gains from the sale of OREO properties, reduced by
expenses related to the operation of OREO. Gross income from the operation of
OREO for the six months ended June 30, 1994 totaled $1.3 million. This income
included $1.2 million in gains from the sale of OREO.
Reserve for Other Real Estate and Assets Owned
No provisions were made to the reserve for OREO during the first six
months of 1994. This compares to $50 thousand provided during the first six
months of 1993. Total OREO reserves amounted to $1.6 million (18.5% of gross
OREO carrying values) at June 30, 1994, compared to $2.5 million (18.9% of
gross OREO carrying values) at December 31, 1993 and $4.8 million (29.4% of
gross OREO carrying values) at June 30, 1993. OREO charge-offs (which include
losses on sales and market value write-downs) for the first six months of 1994
amounted to $943 thousand compared to $477 thousand one year ago. The following
table illustrates the changes in the reserve for the first six months of 1994
and 1993:
- - -------------------------------------------------------------------
Reserve for Losses on Other Real Estate and Assets Owned
- - -------------------------------------------------------------------
(In thousands) 1994 1993
- - -------------------------------------------------------------------
Balance at January 1 $2,521 $5,001
Provisions for losses _ 50
Charge-offs (943) (477)
Reserves of acquired bank _ 242
- - -------------------------------------------------------------------
Balance at June 30 $1,578 $4,816
===================================================================
Asset and Liability Management
A senior management committee, the Investment/Asset/Liability Committee,
has the responsibility for monitoring and coordinating the asset and liability
positions, interest rate sensitivity, liquidity and other resource planning
strategies of Liberty on an ongoing basis. This committee monitors the antici-
pated effects of interest rate changes on both earnings and market value of
capital of interest rate moves from 50 to 400 basis points. In addition, the
committee has recommended policies, which the Board of Directors has adopted,
setting limits within which the asset/liability risk positions are to be main-
tained.
As a result of increased holdings of loans and marketable investment secu-
rities, Liberty was a net purchaser of federal funds averaging $80.8 million
for the first six months of 1994 compared to a $20.2 million net seller of fed-
eral funds for the same period in 1993.
Liquidity is the ability to meet financial obligations for the payment of
funds. Some of the sources of funds to provide liquidity include core depos-
its, large certificates of deposit, federal funds purchased from both upstream
and downstream banks, sale of securities under agreements to repurchase, Treas-
ury Tax and Loan accounts, investment securities held in the available for sale
account which can be sold or pledged for borrowing at the Federal Reserve dis-
count window or the Federal Home Loan Bank and the availability of loans and
investment securities held in the held-to-maturity account which can be pledged
for borrowings at the Federal Reserve discount window or the Federal Home Loan
Bank.
Liberty's long-standing policy is to maintain as balanced a position in
interest-sensitive assets and liabilities as possible with a goal to achieve
consistent interest margins in all interest rate environments. Liberty is li-
ability sensitive largely due to the short-term nature of its deposits, espe-
cially savings and money market accounts, and short-term borrowings. Because of
this liability sensitivity, Liberty's net interest margin may be vulnerable to
upward trends in interest rates. The net interest margin of Liberty has not
been significantly impacted by this year's increase in interest rates because
the rates on short-term deposits have not been proportionately increased. Lib-
erty monitors its interest-sensitivity posture on a continuing basis to ensure
that interest rate changes do not create a material adverse impact. Liberty
also adjusts its asset and liability structures, to the extent possible, to al-
low for projected rate changes.
Capital Funds
Equity capital as a percentage of total assets amounted to 8.5% at June
30, 1994 compared to 8.5% at December 31, 1993 and 8.4% at June 30, 1993.
Capital adequacy is measured by banking regulators using the following
capital criteria and ratios. Tier 1 capital for bank holding companies in-
cludes common equity and perpetual preferred stock (subject to certain limita-
tions) minus intangible assets. Tier 2 capital includes supplementary elements
such as limited amounts of reserve for loan losses, perpetual preferred stock
(in excess of Tier 1 limits), subordinated debt and other items. The leverage
ratio, defined as Tier 1 capital divided by average adjusted total assets, lim-
its the amount of leverage a bank can undertake because of the ratio's emphasis
on equity or core capital. Liberty's leverage ratio was 8.24% on Tier 1 capital
of $211.1 million at June 30, 1994 compared to 7.87% on $197.8 million at De-
cember 31, 1993 and 8.52% on $192.0 million at June 30, 1993. All but the most
highly-rated banks are required to carry a minimum leverage ratio of 3% plus a
cushion of 1 to 2%.
The risk-based capital ratio, defined as total capital (Tier 1 plus Tier
2) divided by risk-weighted assets, is the regulators' other primary de-
terminant of capital adequacy and was designed principally as a measure of
credit risk. Banking organizations have been given a risk-based capital ra-
tio requirement of 8%. The Federal Deposit Insurance Corporation assesses in-
surance premiums based in part on the level of capital with banks which are
"well capitalized" paying assessments at lower rates. Liberty's and its sub-
sidiary banks' capital ratios are significantly higher than the current guide-
lines and the subsidiary banks are "well capitalized" for deposit insurance as-
sessment purposes. Liberty had a risk-based capital ratio at June 30, 1994 of
15.23%. This compares to 15.37% at December 31, 1993 and 18.31% at June 30,
1993. Liberty Oklahoma City and Liberty Tulsa had risk-based capital ratios at
June 30, 1994 of 13.46% and 16.17%, respectively.
Parent Company Funding Sources and Dividends
At June 30, 1994, the parent company had cash and interest-bearing depos-
its of $4.4 million compared to $6.2 million at year-end 1993 and $4.8 million
at June 30, 1993. The primary changes in the funding position of the parent
company since year-end 1993 were due to the repayment of intercompany accounts
payable recorded at year-end, the payment of dividends and advances to subsidi-
aries offset by dividends received from subsidiary banks. The parent company's
ability to fund various operating expenses and dividends is generally dependent
on parent-only earning power, cash reserves and funds derived from its subsidi-
aries, principally Liberty Oklahoma City and Liberty Tulsa. These funds his-
torically have been provided primarily by intercompany dividends and management
fees. Management fees are generally limited to reimbursement of actual ex-
penses. It is anticipated that the parent company's recurring cash sources
will continue to include management fees from subsidiaries, proceeds from the
sale of other assets (principally other real estate and assets owned) and re-
tained rights to any gains from the sales of mortgage servicing and other as-
sets. Dividends are paid by the subsidiary banks from time to time to support
the parent company's activities. Liberty Oklahoma City and Liberty Tulsa are
limited in their ability to pay dividends based on applicable provisions of the
National Bank Act pertaining to earnings and undivided profits. As of June 30,
1994 the ability of Liberty Oklahoma City and Liberty Tulsa to pay dividends
without regulatory approval was limited to $35.3 million and $18.3 million,
respectively.
Liberty paid two quarterly cash dividends of $.15 per common share in the
first six months of 1994, totaling $2.8 million. During the same period in
1993, Liberty paid one quarterly cash dividend of $.10 per common share, total-
ing $894 thousand. It is expected that cash dividends will continue if justi-
fied by Liberty's earnings, capital adequacy and financial condition.
In management's opinion, the parent company's current liquidity and cash
sources are anticipated to be adequate to meet its obligations in the near
term.
</TABLE>
<TABLE>
Selected Statistical Information Liberty Bancorp, Inc.
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------------
Consolidated Summary of Quarterly Financial Information
(In thousands, except per share data)
For the quarter ended 6/30/94 3/31/94 12/31/93 9/30/93 6/30/93
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income $34,129 $32,458 $34,015 $31,143 $31,152
Interest income (tax equivalent) 34,703 33,088 34,603 31,702 31,722
Interest expense 15,019 13,222 13,453 13,166 13,342
Net interest income 19,110 19,236 20,562 17,977 17,810
Provisions for loan losses _ _ 206 85 (2,737)
Trust fees 4,010 4,160 3,715 3,975 3,846
Mortgage banking income 1,625 1,765 1,913 1,871 1,987
Other noninterest income 9,318 8,882 10,178 7,560 7,920
Noninterest expense 28,004 28,225 36,410 26,828 27,097
Net income 5,157 4,952 6,262 3,428 5,144
Net income per share .53 .51 .64 .35 .53
Common stock price range
High $33.50 $28.25 $34.00 $35.50 $34.25
Low 27.25 26.50 28.00 32.50 28.75
Close 31.50 27.75 28.00 35.50 32.75
At Quarter End
Shares of Common Stock, net of treasury stock
Outstanding 9,484 9,478 9,478 9,478 9,477
Fully-diluted 9,825 9,780 9,775 9,782 9,774
</TABLE>
<TABLE>
Average Balances/Net Interest Margin/Rates (1)
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------
First six months 1994 1993
- - ----------------------------------------------------------------------------------------------------------------
Average Average Average Average
(In thousands) Balance Interest Rate Balance Interest Rate
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Loans (2) $ 981,440 $36,530 7.51 % $ 744,211 $29,187 7.91 %
Investment securities (3)
Taxable 1,102,288 27,815 5.09 1,058,969 30,747 5.86
Nontaxable 52,950 2,295 8.74 52,496 2,164 8.31
Trading account securities 3,775 117 6.25 4,065 126 6.25
- - -------------------------------------- ------------- --------- -------------- -------------- --------- --------
Total securities 1,159,013 30,227 5.26 1,115,530 33,037 5.97
Federal funds sold and securities
purchased under agreements to
resell and other 54,980 1,034 3.79 143,661 2,192 3.08
- - -------------------------------------- ------------- --------- -------------- -------------- --------- --------
Total earning assets 2,195,433 67,791 6.23 2,003,402 64,416 6.48
Cash and due from banks-
noninterest-bearing 257,482 261,660
Reserve for loan losses (20,009) (23,924)
Other assets 153,898 137,485
------------- --------------
Total assets $2,586,804 $2,378,623
============= ==============
Liabilities and Shareholders'
Investment
Interest-bearing deposits
Savings and money market
accounts $ 702,395 $ 8,810 2.53 % $ 588,811 $ 7,880 2.70 %
Other time deposits 764,333 15,381 4.06 726,537 15,452 4.29
- - -------------------------------------- ------------- --------- -------------- -------------- --------- --------
Total interest-bearing deposits 1,466,728 24,191 3.33 1,315,348 23,332 3.58
Federal funds purchased and
securities sold under agreements
to repurchase 135,747 2,371 3.52 123,470 1,754 2.86
Other borrowings 92,191 1,679 3.67 114,489 1,778 3.13
Long-term debt _ _ _ 8,979 350 7.86
- - -------------------------------------- ------------- --------- -------------- -------------- --------- --------
Total interest-bearing liabilities 1,694,666 28,241 3.36 1,562,286 27,214 3.51
Demand deposits 639,665 588,806
Other liabilities 25,390 27,461
Shareholders' investment 227,083 200,070
------------- --------------
Total liabilities and
shareholders' investment $2,586,804 $2,378,623
============= ==============
Interest income/earning assets $67,791 6.23 % $64,416 6.48
Interest expense/earning assets 28,241 2.59 27,214 2.74
------- ------ ------- ------
Net interest margin $39,550 3.64 % $37,202 3.74 %
======= ====== ======= ======
<FN>
(1) Income and rates shown on a tax-equivalent basis have been computed based on the statutory rate of 35%.
(2) Includes nonaccrual loans.
(3) Includes available for sale securities at amortized cost for all years presented.
</TABLE>
<TABLE>
Average Balances/Net Interest Margin/Rates (1)
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------
Three months ended June 30, 1994 March 31, 1994
- - ----------------------------------------------------------------------------------------------------------------
Average Average Average Average
(In thousands) Balance Interest Rate Balance Interest Rate
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Loans (2) $1,012,846 $19,282 7.64 % $ 949,684 $17,248 7.37 %
Investment securities (3)
Taxable 1,048,016 13,554 5.19 1,157,164 14,261 5.00
Nontaxable 52,476 1,081 8.26 53,431 1,214 9.21
Trading account securities 3,730 62 6.67 3,820 55 5.84
- - -------------------------------------- ------------- --------- -------------- -------------- --------- --------
Total securities 1,104,222 14,697 5.34 1,214,415 15,530 5.19
Federal funds sold and securities
purchased under agreements to
resell and other 71,577 724 4.06 38,198 310 3.29
- - -------------------------------------- ------------- --------- -------------- -------------- --------- --------
Total earning assets 2,188,645 34,703 6.36 2,202,297 33,088 6.09
Cash and due from banks-
noninterest-bearing 253,410 261,599
Reserve for loan losses (20,071) (19,947)
Other assets 153,711 154,087
------------- --------------
Total assets $2,575,695 $2,598,036
============= ==============
Liabilities and Shareholders'
Investment
Interest-bearing deposits
Savings and money market
accounts $ 709,365 $ 4,605 2.60 % $ 695,347 $ 4,205 2.45 %
Other time deposits 772,047 8,167 4.24 756,534 7,214 3.87
- - -------------------------------------- ------------- --------- -------------- -------------- --------- --------
Total interest-bearing deposits 1,481,412 12,772 3.46 1,451,881 11,419 3.19
Federal funds purchased and
securities sold under agreements
to repurchase 142,633 1,382 3.89 128,785 989 3.11
Other borrowings 85,899 865 4.04 98,553 814 3.35
Long-term debt _ _ _ _ _ -_
- - -------------------------------------- ------------- --------- -------------- -------------- --------- --------
Total interest-bearing liabilities 1,709,944 15,019 3.52 1,679,219 13,222 3.19
Demand deposits 615,113 664,490
Other liabilities 25,466 25,311
Shareholders' investment 225,172 229,016
------------- --------------
Total liabilities and
shareholders' investment $2,575,695 $2,598,036
============= ==============
Interest income/earning assets $34,703 6.36 % $33,088 6.09 %
Interest expense/earning assets 15,019 2.75 13,222 2.43
------- ------ ------- ------
Net interest margin $19,684 3.61 % $19,866 3.66 %
======= ====== ======= ======
<FN>
(1) Income and rates shown on a tax-equivalent basis have been computed based on the statutory rate of 35%.
(2) Includes nonaccrual loans.
(3) Includes available for sale securities at amortized cost for all years presented.
</TABLE>
<TABLE>
Average Balances/Net Interest Margin/Rates (1)
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------------
Three months ended December 31, 1993 September 30, 1993 June 30, 1993
- - ------------------------------------------------------------------------------------------------------------------------------------
Average Average Average Average Average Average
(In thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Loans (2) $ 882,358 $18,205 8.19 % $ 801,665 $15,465 7.65 % $ 754,583 $14,858 7.90 %
Investment securities (3)
Taxable 1,162,816 14,882 5.08 1,129,398 14,632 5.14 1,094,243 15,075 5.53
Nontaxable 54,586 1,119 8.13 50,203 1,006 7.95 51,101 1,030 8.08
Trading account securities 2,651 39 5.84 4,560 66 5.74 4,105 64 6.25
- - --------------------------------------- ------------ --------- -------- ----------- --------- ------- ------------ --------- -------
Total securities 1,220,053 16,040 5.22 1,184,161 15,704 5.26 1,149,449 16,169 5.64
Federal funds sold and securities
purchased under agreements to
resell and other 43,935 358 3.23 66,614 533 3.17 89,207 695 3.12
- - --------------------------------------- ------------ --------- -------- ----------- --------- ------- ------------ --------- -------
Total earning assets 2,146,346 34,603 6.40 2,052,440 31,702 6.13 1,993,239 31,722 6.38
Cash and due from banks-
noninterest-bearing 267,252 247,928 255,600
Reserve for loan losses (19,839) (19,124) (21,500)
Other assets 150,722 144,357 145,561
------------ ----------- ------------
Total assets $2,544,481 $2,425,601 $2,372,900
============ =========== ============
Liabilities and Shareholders'
Investment
Interest-bearing deposits
Savings and money market
accounts $ 686,680 $4,374 2.53% $ 629,150 $4,149 2.62% $ 593,535 $3,989 2.70%
Other time deposits 730,186 7,230 3.93 687,090 7,077 4.09 714,727 7,478 4.20
- - --------------------------------------- ------------ --------- -------- ----------- --------- ------- ------------ --------- -------
Total interest-bearing Deposits 1,416,866 11,604 3.25 1,316,240 11,226 3.38 1,308,262 11,467 3.52
Federal funds purchased and
securities sold under agreements
to repurchase 148,516 1,093 2.92 92,998 667 2.85 125,452 898 2.87
Other borrowings 70,295 685 3.87 144,234 1,102 3.03 104,703 804 3.08
Long-term debt 2,958 71 9.52 8,698 171 7.80 8,880 173 7.81
- - --------------------------------------- ------------ --------- -------- ----------- --------- ------- ------------ --------- -------
Total interest-bearing liabilities 1,638,635 13,453 3.26 1,562,170 13,166 3.34 1,547,297 13,342 3.46
Demand deposits 661,200 622,562 584,063
Other liabilities 25,045 24,377 30,150
Shareholders' investment 219,601 216,492 211,390
------------ ----------- ------------
Total liabilities and shareholders'
investment $2,544,481 $2,425,601 $2,372,900
============ =========== ============
Interest income/earning assets $34,603 6.40% $31,702 6.13% $31,722 6.38%
Interest expense/earning assets 13,453 2.49 13,166 2.55 13,342 2.68
--------- -------- --------- ------- --------- -------
Net interest margin $21,150 3.91% $18,536 3.58% $18,380 3.70%
========= ======== ========= ======= ========== =======
<FN>
(1) Income and rates shown on a tax-equivalent basis have been computed based on the statutory rate of 35%.
(2) Includes nonaccrual loans.
(3) Includes available for sale securities at amortized cost for all years presented.
</TABLE>
<TABLE>
Consolidated Balance Sheet Liberty Bancorp, Inc.
<CAPTION>
- - ----------------------------------------------------------------------------------------------
June 30, December 31, June 30,
(In thousands, except share data) 1994 1993 1993
- - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Cash and due from banks
Noninterest-bearing $ 305,443 $ 310,127 $ 322,378
Interest-bearing 1,472 2,587 8,757
Federal funds sold and securities
purchased under agreements to resell 90,025 24,565 95,475
Investment securities
Trading 4,395 1,891 2,077
Available for sale 584,881 766,827 54,688
Held to maturity 430,631 463,084 1,104,536
Equity 19,541 18,628 13,466
- - ------------------------------------------------------- ------------- ------------ -----------
Total securities 1,039,448 1,250,430 1,174,767
- - ------------------------------------------------------- ------------- ------------ -----------
Loans 1,076,327 936,000 796,140
Less: Reserve for loan losses (19,817) (19,986) (18,644)
- - ------------------------------------------------------- ------------- ------------ -----------
Loans, net 1,056,510 916,014 777,496
- - ------------------------------------------------------- ------------- ------------ -----------
Property and equipment, net 67,016 64,152 56,375
Accrued income receivable 24,124 23,675 20,408
Accounts receivable 27,752 17,639 47,379
Deferred tax asset, net 18,003 13,584 11,471
Other real estate and assets owned, net 6,962 10,844 11,556
Other assets 25,081 26,159 23,059
- - ------------------------------------------------------- ------------- ------------ -----------
Total assets $2,661,836 $2,659,776 $2,549,121
======================================================= ============= ============ ===========
Liabilities and Shareholders' Investment
Deposits
Noninterest-bearing $ 638,157 $ 689,227 $ 679,021
Interest-bearing 1,505,992 1,435,917 1,287,053
- - ------------------------------------------------------- ------------- ------------ -----------
Total deposits 2,144,149 2,125,144 1,966,074
Other borrowings
Federal funds purchased and securities
sold under agreements to repurchase 90,215 116,486 81,520
Other 149,365 161,626 222,357
Accrued interest, expenses and taxes 15,009 15,503 13,947
Accounts payable 36,401 11,621 43,500
Long-term notes _ _ 7,223
Other liabilities 1,398 2,151 1,589
- - ------------------------------------------------------- ------------- ------------ -----------
Total liabilities 2,436,537 2,432,531 2,336,210
- - ------------------------------------------------------- ------------- ------------ -----------
Shareholders' Investment
Common stock ($.01 par value;
50,000,000 shares authorized) 95 95 94
- - -------------------------------------------------------
June 30, December 31, June 30,
1994 1993 1993
- - -------------------------------------------------------
Shares issued 9,483,593 9,477,870 9,476,870
Shares outstanding 9,483,593 9,477,819 9,476,819
Capital surplus 211,806 211,708 211,720
Retained earnings 19,050 11,785 3,903
Treasury stock, at cost _
51 common shares at December 31, 1993
and June 30, 1993. _ (1) (1)
Unrealized security gains (losses),
net of tax (3,232) 6,184 _
Deferred compensation (2,420) (2,526) (2,805)
- - ------------------------------------------------------- ------------- ------------ -----------
Total shareholders' investment 225,299 227,245 212,911
- - ------------------------------------------------------- ------------- ------------ -----------
Total liabilities and
shareholders' investment $2,661,836 $2,659,776 $2,549,121
======================================================= ============= ============ ===========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
Consolidated Statement of Income Liberty Bancorp, Inc.
<CAPTION>
- - ------------------------------------------------------------------------------------------------
June 30 Six Months Ended Three Months Ended
(In thousands, except per share data) 1994 1993 1994 1993
- - ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income
Loans $36,167 $28,805 $19,126 $14,670
Investments
Taxable 27,815 30,747 13,554 15,075
Nontaxable 1,469 1,393 672 659
Trading 102 106 53 53
Federal funds sold and other 1,034 2,192 724 695
- - ----------------------------------------------- ------------- ------------ ------------- -------
Total interest income 66,587 63,243 34,129 31,152
- - ----------------------------------------------- ------------- ------------ ------------- -------
Interest Expense
Deposits 24,191 23,332 12,772 11,467
Other borrowings 4,050 3,532 2,247 1,702
Long-term notes _ 350 _ 173
- - ----------------------------------------------- ------------- ------------ ------------- -------
Total interest expense 28,241 27,214 15,019 13,342
- - ----------------------------------------------- ------------- ------------ ------------- -------
Net Interest Income 38,346 36,029 19,110 17,810
Provision for loan losses _ (7,654) _ (2,737)
- - ----------------------------------------------- ------------- ------------ ------------- -------
Net Interest Income After Provision
for Loan Losses 38,346 43,683 19,110 20,547
- - ----------------------------------------------- ------------- ------------ ------------- -------
Noninterest Income
Trust fees 8,170 7,818 4,010 3,846
Service charges on deposits 7,205 6,303 3,336 3,261
Mortgage banking income 3,390 3,665 1,625 1,987
Trading account profits and commissions 2,278 2,803 1,110 1,358
Loan fees 1,269 921 692 528
Net securities gains 489 59 101 125
Other 6,959 5,935 4,079 2,648
- - ----------------------------------------------- ------------- ------------ ------------- -------
Total noninterest income 29,760 27,504 14,953 13,753
- - ----------------------------------------------- ------------- ------------ ------------- -------
Noninterest Expense
Salaries 22,340 21,016 11,097 10,567
Employee benefits 5,122 4,402 2,451 2,016
Equipment 4,467 3,777 2,282 1,998
Professional and other services 4,226 4,627 2,054 2,398
Occupancy, net 4,227 4,017 2,095 2,045
Data processing 3,305 2,953 1,763 1,456
Printing, postage and supplies 2,711 2,603 1,286 1,324
Deposit insurance assessments 2,155 2,253 1,078 1,132
Advertising and business development 1,781 1,654 946 956
Amortization of intangibles, including
purchased mortgage servicing rights 1,284 2,260 629 1,503
Net income from operation of other real
estate and assets owned (1,046) (1,504) (295) (782)
Other 5,657 7,432 2,618 2,484
- - ----------------------------------------------- ------------- ------------ ------------- -------
Total noninterest expense 56,229 55,490 28,004 27,097
- - ----------------------------------------------- ------------- ------------ ------------- -------
Income Before Provision for Income Taxes 11,877 15,697 6,059 7,203
Provision for income taxes 1,768 3,110 902 2,059
- - ----------------------------------------------- ------------- ------------ ------------- -------
Income Before Cumulative Effect of Change in
Accounting Principle and Extraordinary Item 10,109 12,587 5,157 5,144
Cumulative effect of change in
accounting principle _ 14,255 _ _
- - ----------------------------------------------- ------------- ------------ ------------- -------
Net Income $10,109 $26,842 $ 5,157 $5,144
=============================================== ============= ============ ============= =======
Income Per Share (Primary and Fully-Diluted)
Income before cumulative effect of change in
accounting principle $1.03 $ 1.30 $.53 $.53
Cumulative effect of change in
accounting principle _ 1.48 _ _
- - ----------------------------------------------- ------------- ------------ ------------- -------
Net Income - Primary and Fully-Diluted $1.03 $2.78 $.53 $.53
=============================================== ============= ============ ============= =======
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
Consolidated Statement of Shareholders' Investment Liberty Bancorp, Inc.
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------------------------------
Retained Unrealized
Earnings Security Total
Common Capital (Accumulated Treasury Gains Deferred Shareholders'
(Dollars in thousands) Stock Surplus Deficit) Stock (Losses), Net Compensation Investment
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- - -------------------------------------------- ----- ------------ -------------- ----------- --------------- ------------- -----------
Balance January 1, 1993 $88 $204,165 ($22,587) ($1) $ _ ($2,824) $178,841
Common stock issued in
acquisitions (637,312 shares) 6 6,850 542 _ _ _ 7,398
Net income _ _ 26,842 _ _ _ 26,842
Dividends paid ($.10 per share) _ _ (894) _ _ _ (894)
Amortization of deferred compensation _ _ _ _ _ 19 19
Common stock issued to employee
benefit plans (24,108 common shares) _ 705 _ _ _ _ 705
- - -------------------------------------------- ----- ------------ -------------- ----------- --------------- ------------- -----------
Balance June 30, 1993 $94 $211,720 $3,903 ($1) _ ($2,805) $212,911
============================================ ===== ============ ============== =========== =============== ============= ===========
Balance January 1, 1994 $95 $211,708 $11,785 ($1) $6,184 ($2,526) $227,245
Net income _ _ 10,109 _ _ _ 10,109
Dividends paid ($.30 per share) _ _ (2,844) _ _ _ (2,844)
Amortization of deferred compensation _ _ _ _ _ 216 216
Change in unrealized gains (losses) on
available for sale securities, net of tax _ _ _ _ (9,416) _ (9,416)
Purchase of treasury stock (19,475 shares) _ _ _ (555) _ _ (555)
Common and treasury stock issued
to employee benefit plans (5,733 common
shares and 19,526 treasury shares) _ 98 _ 556 _ (110) 544
- - -------------------------------------------- ----- ------------ -------------- ----------- --------------- ------------- -----------
Balance June 30, 1994 $95 $211,806 $19,050 _ ($3,232) ($2,420) $225,299
============================================ ===== ============ ============== =========== =============== ============= ===========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
Consolidated Statement of Cash Flows Liberty Bancorp, Inc.
<CAPTION>
- - ----------------------------------------------------------------------------------------------
First six months (In thousands) 1994 1993
- - ----------------------------------------------------------------------------------------------
<S> <C> <C>
Cash provided (absorbed) by operating activities
Net income $ 10,109 $ 26,842
Adjustments to reconcile net income to net cash provided by
operating activities:
Provisions for losses _ (5,660)
Cumulative effect of change in accounting principle _ (14,255)
Provision for income taxes 1,768 3,110
Depreciation and amortization 4,579 4,746
Net amortization of securities 6,983 4,511
Gain on sale of assets (5,029) (4,232)
Change in trading account securities 415 1,342
Loans made for purposes of resale (81,320) (60,462)
Proceeds from sale of loans held for resale 52,988 55,073
Change in accrued income and accounts receivable 3,772 (5,515)
Change in accrued interest, expenses and taxes, accounts payable
and other liabilities 7,576 (2,130)
Change in other assets (881) 725
- - -------------------------------------------------------------------- -------------- ----------
Net cash provided by operating activities 960 4,095
- - -------------------------------------------------------------------- -------------- ----------
Cash provided (absorbed) by investing activities
Maturities and paydowns on securities 121,609 197,757
Sales of securities 509,693 84,467
Purchases of securities (438,501) (421,336)
Change in net loans made by bank subsidiaries (108,574) (38,805)
Principal payments received on loans made by parent
company and nonbank subsidiaries 2,583 907
Loans made to customers by nonbank subsidiaries (4,117) (162)
Expenditures for property and equipment (6,231) (7,219)
Proceeds from sale of property and equipment 37 464
Sale proceeds and collections from other real estate and
assets acquired in settlement of loans 4,458 6,086
Cash and cash-equivalents received in financial institution
acquisitons, net of consideration _ 9,105
Sales of mortgage servicing contracts 287 _
Purchases of mortgage servicing contracts (161) (113)
- - -------------------------------------------------------------------- -------------- ----------
Net cash provided (absorbed) by investing activities 81,083 (168,849)
- - -------------------------------------------------------------------- -------------- ----------
Cash provided (absorbed) by financing activities
Change in savings and demand deposits (18,807) (10,630)
Change in time deposits 37,812 (49,857)
Change in short-term borrowings (38,532) 16,794
Payment on long-term notes _ (322)
Proceeds from issuance of common stock to
employees' and shareholders' plans 544 520
Purchase of treasury stock (555) _
Dividends paid on common stock (2,844) (894)
- - -------------------------------------------------------------------- -------------- ----------
Net cash absorbed by financing activities (22,382) (44,389)
- - -------------------------------------------------------------------- -------------- ----------
Net change in cash and cash equivalents 59,661 (209,143)
Cash and cash equivalents at December 31 337,279 635,753
- - -------------------------------------------------------------------- -------------- ----------
Cash and cash equivalents at June 30 $396,940 $426,610
==================================================================== ============== ==========
<FN>
Interest paid during the first six months of 1994 and 1993 totaled $29,319,000 and $29,178,000, respectively.
Income taxes paid during the first six months of 1994 and 1993 totaled $935,000 and $150,000, respectively.
Net transfers of loans to other real estate owned during the six months of 1994 and 1993 totaled approximately
(697,000) and $839,000, respectively.
Loans made to finance sales of other real estate and assets owned totaled approximately $630,000 in the first
six months of 1994 and 1993.
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Liberty Bancorp, Inc.
Note 1 Accounting Policies
The condensed financial statements included herein have been prepared by
Liberty Bancorp, Inc. ("Liberty") without audit, and include all adjustments
which, in the opinion of management, are of a normal recurring nature and are
necessary to present fairly the results of the interim periods, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain in-
formation and footnote disclosures, normally included in financial statements
prepared in accordance with generally accepted accounting principles, have been
condensed or omitted pursuant to such rules and regulations. Certain reclassi-
fications have been made to provide consistent financial statement classi-
fications in the periods presented herein. Such reclassifications had no ef-
fect on net income or total assets.
It is suggested that these condensed financial statements be read in con-
junction with the financial statements and the notes thereto included in Lib-
erty's 1993 annual report on Form 10-K.
Note 2 Earnings Per Share
Earnings per share are calculated using Liberty's weighted average common
and common-equivalent shares (primarily stock options) outstanding during the
periods. The weighted average number of shares used to compute primary and
fully-diluted earnings per share are presented below.
- - ---------------------------------------------------------------------------
Six Months Three Months
Ended Ended
- - ---------------------------------------------------------------------------
June 30 (In thousands) 1994 1993 1994 1993
- - ---------------------------------------------------------------------------
Weighted average shares outstanding
Primary 9,798 9,714 9,809 9,764
Fully-diluted 9,818 9,719 9,822 9,771
Note 3 Acquisitions
Purchase Transactions _ On August 1, and October 1, 1993, Liberty acquired the
First Oklahoma Bank and Trust Co. of Edmond and The First National Bank of Ed-
mond, respectively, for a total cash purchase price of $20,148,000. The trans-
actions were accounted for as purchases. Total assets acquired amounted to ap-
proximately $142,155,000. For each of these acquisitions, the consolidated
statements of income includes only the income and expense of the acquired banks
since acquisition. The purchase price was allocated to the net assets acquired
based on their estimated fair values with the excess allocated to cost in ex-
cess of net assets acquired. The effect on Liberty's results of operations for
1993, had these transactions occurred at the beginning of the year, was not
significant.
Poolings-of-Interests _ The following table presents the business combinations
occurring during 1993 which have been accounted for as poolings-of-interests.
A total of 637,312 shares of common stock were issued in connection with these
business combinations. Adjustments to conform the acquired banks' accounting
policies to those of Liberty were not material.
- - ---------------------------------------------------------------
(In thousands) Assets
Acquired
- - ---------------------------------------------------------------
First National Bank of Jenks $ 33,408
Midwest National Bank 38,581
Bank of Tulsa 62,820
- - ---------------------------------------------------------------
Total $134,809
===============================================================
The following table shows the effect of the three banks' prior results of
operations for the first six months of 1993.
- - -----------------------------------------------------------------------------
Pooled
(In thousands) Liberty Banks Combined
- - -----------------------------------------------------------------------------
Interest income $59,332 $3,911 $63,243
Net interest income 33,541 2,488 36,029
Cumulative effect of change in accounting
principle 14,412 (157) 14,255
Net income 26,423 419 26,842
Note 4 Change in Accounting Principle _ Accounting for Income Taxes
On January 1, 1993, Liberty adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes ("SFAS No. 109"). In accordance
with this statement, Liberty recognized a net deferred tax asset reflecting the
benefit expected to be realized from net deductible temporary differences of
approximately $14.3 million which was accounted for as a cumulative effect of
change in accounting principle.
PART II
OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Shareholders
The 1994 Annual Meeting of Shareholders of Liberty Bancorp, Inc. was held
April 20, 1994. The meeting included the election of members of the Board of
Directors whose terms expired at the meeting. The members elected were Robert
S. Ellis, M.D., Edward C. Lawson, Jr., Charles E. Nelson and William G. Paul.
The vote for all nominees was as follows:
For Withhold Authority
--- ------------------
7,718,342 3,697
Directors whose terms did not expire at the meeting and who continued in office
were Molly Shi Boren, Donald L. Brawner, M.D., Thomas G. Donnell, Martin E.
Fate, Jr., William J. Fisher, Jr., C.W. Flint, Jr., James L. Hall, Jr., Raymond
H. Hefner, Jr., Walter H. Helmerich, III, Joseph S. Jankowsky, John E. Kirk-
patrick, Judy Z. Kishner, David L. Kyle, Herb Mee, Jr., V. Lee Powell, Jon R.
Stuart, Robert E. Torray and John S. Zink.
Liberty bancorp, Inc.
Form 10-Q
For the Quarter Ended June 30, 1993
Cross-Reference Index
Part I Financial Information
ITEM 1. Financial Statements
Consolidated Balance Sheet
Consolidated Statement of Income
Consolidated Statement of Shareholders' Investment
Consolidated Statement of Cash Flows
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (Financial Review)
Part II.
Item 4. Submission of Matters to a Vote of Shareholders
Item 6. Exhibits and Reports of Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None
Liberty Bancorp, Inc.
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 thereunto duly authorized.
LIBERTY BANCORP, INC.
/S/ Mischa Gorkuscha
Mischa Gorkuscha
Senior Vice-President and
Chief Financial Officer
(Principal Financial Officer)
Dated: August 15, 1994
