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: March 31, 1995
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 May 15, 1995
----- -----------------------------------
Common Stock 9,483,495
FORM 10-Q
For the The Quarterly Period Ended March 31, 1995
CROSS-REFERENCE INDEX
Reference Page(s)
Quarterly Report on
Form 10-Q
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
ITEM 2 CHANGES IN SECURITIES
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
ITEM 5 OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
FINANCIAL HIGHLIGHTS Liberty Bancorp, Inc.
- -------------------------------------------------------------------------------
(In thousands, except per share data) 1995 1994
- -------------------------------------------------------------------------------
For the First Quarter
Total revenues $59,333 $47,265
Net interest income 19,038 19,236
Provision for loan losses _ _
Trust fees 3,944 4,160
Mortgage banking income 1,518 1,765
Other noninterest income 12,200 8,882
Noninterest expense 28,086 28,225
Income before provision for income taxes 8,614 5,818
Provision for income taxes 2,709 866
Net income 5,905 4,952
Per share data _ primary and fully-diluted
Net income .60 .51
Cash dividends declared .20 .15
- -------------------------------------------------------------------------------
At March 31
Loans $1,208,806 $ 979,300
Earning assets 2,227,595 2,230,206
Assets 2,672,325 2,740,134
Deposits 2,137,708 2,201,625
Total shareholders' investment 243,329 225,065
Book value per common share 25.70 23.75
- -------------------------------------------------------------------------------
Average First Quarter Balances
Earning assets $2,323,447 $2,202,297
Assets 2,733,855 2,598,036
Deposits 2,217,032 2,116,371
Total shareholders' investment 239,581 229,016
- -------------------------------------------------------------------------------
Ratios
Capital ratios
Leverage 8.47 % 7.88
Risk-based 15.69 15.15
Average shareholders' investment as a % of
average total assets 8.76 8.81
Average earning assets as a % of average
total assets 84.99 84.77
Rate of return on
Average earning assets 1.03 .91
Average total assets .88 .77
Average total shareholders' investment 10.00 8.77
Dividend payout ratio 33.33 29.41
Operating efficiency ratio 84.94 82.32
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
Oklahoma 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
addition, 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
Liberty banking centers including one location in Oklahoma City and one in
Tulsa. Commercial mortgage operations are available at the main bank location
of Liberty Oklahoma City and an LMC branch in Tulsa.
The banking industry, both locally and nationally, is experiencing an
expansion and consolidation trend which most likely will continue to present
acquisition opportunities. Liberty will systematically evaluate these
possibilities for the acquisition of smaller institutions as well as potential
combinations with larger institutions to determine whether they may offer the
potential for further enhancing shareholder value and improving service to
customers and expanding career opportunities for employees.
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 Three Months of 1995 Compared to First Three Months of 1994
For the first three months of 1995, Liberty reported net income of $5.9
million or $.60 per common share. This compares to net income of $5.0 million
or $.51 per common share for the first three months of 1994. Net income for
the first three months of 1995 included a gain on the sale of equity securities
of $4.2 million before income tax.
Net Interest Income
On a tax-equivalent basis, net interest income decreased $249 thousand or
1.3% in the first quarter of 1995 to $19.6 million compared to $19.9 million
for the first quarter of 1994. Also, the tax-equivalent interest margin
decreased to 3.42% in 1995 from 3.66% in 1994 due to the slower repricing of
some fixed rate loans and securities as compared to the repricing of deposits
and other borrowings together with lower levels of noninterest-bearing
deposits. The net interest margin is expected to improve in the second quarter
of 1995 as these loans and securities mature and reprice at higher yields.
Tax-equivalent interest income increased $9.2 million to $42.3 million for
the first three months of 1995 compared to $33.1 million in the same period of
1994 due primarily to the increase in loan volumes and interest rates. Since
the first quarter in 1994, the national prime interest rate has increased 275
basis points. Liberty's average loans increased $222.2 million and its yield
on loans increased from 7.4% to 8.6%. Funding for the increased loan levels
was provided by investment securities sales and maturities not reinvested and
by increased interest-bearing deposit levels. Securities averaged $120.7
million below the first quarter in 1994 but the yield improved 97 basis points
from 5.2% to 6.2% as maturities not used for loan demand were invested in
higher yielding securities. These yield and volume mix changes resulted in the
yield on average earning assets increasing from 6.09% in 1994 to 7.37% in 1995.
Total interest expense increased $9.4 million to $22.6 million for the
first three months of 1995 compared to $13.2 million for the same period in
1994. This increase was attributable to the $184.3 million higher average
interest-bearing deposit level, higher interest rates on all fund sources and
$83.6 million lower average noninterest-bearing deposits. The average deposit
increases occurred primarily in the money market account deposits and also in
large deposit liabilities especially where some maturities have been extended.
As a result, Liberty's cost of funds increased from 2.43% in 1994 to 3.95% in
1995.
Noninterest Income
Noninterest income for the first three months of 1995 increased $2.9
million or 19.3% from the first three months of 1994. The largest factor of
this increase was in net securities gains which increased $3.8 million due to a
$4.2 million gain from the sale of equity securities in 1995. Aside from the
security gains, most other categories showed decreases in 1995. Most notable
were service charges on deposits, which decreased $276 thousand, mortgage
banking income, which decreased $247 thousand, and loan fees, which decreased
$219 thousand.
Noninterest Expense
Noninterest expense (excluding net income from the operation of OREO,
which is discussed separately below in "Reserve for Other Real Estate and
Assets Owned") decreased $637 thousand or 2.2% to $28.3 million for the first
three months of 1995 compared to $29.0 million for the same period one year
ago. The largest decrease was in salaries and employee benefits which
decreased $900 thousand or 6.5% in 1995, primarily due to employee count
reductions later in 1994.
Professional and other service expenses decreased $481 thousand or 22.2%,
largely as a result of reductions in the use of temporary employee services.
Equipment expense increased $317 thousand or 14.5% due to increased
depreciation on new data processing and other equipment. Other noninterest
expense increased $230 thousand. Included in this increase was a provision for
$850 thousand to cover expenses related to various matters, including legal
proceedings which occurred in the ordinary course of business. This provision
is offset by decreases in expenses for software, business development and
employee education and training.
Liberty's operating efficiency ratio for the first three months of 1995
was 84.9% compared to 82.3% in 1994. The operating efficiency ratio is defined
as noninterest expense as a percent of net interest income on a tax equivalent
basis plus noninterest income less security gains or losses.
Income Taxes
Liberty recorded $2.7 million in income tax expense (31% effective tax
rate) for the first three months of 1995 compared with $866 thousand (15%
effective tax rate) during the same period of 1994. The increase in income
taxes was due to the recognition of the future benefit to be realized from its
remaining net operating loss carryforwards in the third quarter of 1994. Prior
to the third quarter of 1994, a valuation allowance had been provided equal to
Liberty's net operating loss carryforwards. Benefits associated with these net
operating loss carryforwards, prior to third quarter 1994, were recognized when
realized. In the third quarter of 1994, the valuation allowance was removed
based on Liberty's estimate that it was more likely than not that sufficient
taxable income would be generated to allow Liberty to utilize its remaining net
operating loss carryforwards. It is estimated that future effective income tax
rates will approximate the statutory rate less the effects of permanent
differences, primarily tax-exempt interest income.
Credit Risk Management
Nonperforming assets include nonperforming loans and other real estate and
assets owned net of reserves. Total nonperforming assets have decreased $1.2
million or 7.3% since year-end 1994. The level at March 31, 1995 of $15.6
million is $6.5 million or 29.2% less than the $22.1 million of nonperforming
assets one year ago. At March 31, 1995, total nonperforming assets were 1.37%
of total loans and other real estate and assets owned and .62% of total assets.
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.
Nonperforming loans decreased by $504 thousand or 4.4% since December 31,
1994 and decreased by $2.1 million or 15.9% from one year earlier. Of the
nonperforming loans at March 31, 1995, 53% were real estate-related.
Nonperforming loans at March 31, 1995 were $11.1 million, representing .91% of
total loans.
Reserve for Loan Losses
The reserve for loan losses at March 31, 1995 was 169.6% of total
nonperforming loans and 1.55% of total loans. No provisions for loan losses
were made during the first three months of 1995 or 1994. The following table
summarizes the reserve for loan loss activity for the first three months of
1995 and 1994:
Reserve for Loan Losses
The reserve for loan losses at March 31, 1995 was 169.6% of total
nonperforming loans and 1.55% of total loans. No provisions for loan losses
were made during the first three months of 1995 or 1994. The following table
summarizes the reserve for loan loss activity for the first three months of
1995 and 1994:
- -------------------------------------------------------------------------------
Reserve for Loan Losses
- -------------------------------------------------------------------------------
(In thousands) 1995 1994
- -------------------------------------------------------------------------------
Balance at January 1 $19,081 $19,986
Additions
Recoveries 311 400
Provisions _ _
Less _ Charge-offs (646) (290)
- -------------------------------------------------------------------------------
Balance at March 31 $18,746 $20,096
===============================================================================
Other Real Estate and Assets Owned
Net OREO decreased $735 thousand or 13.8% since year-end 1994 and $4.4
million or 48.7% from March 31, 1994. These reductions have primarily been the
result of sales. Net OREO at March 31, 1995 was $4.6 million. Net income from
the operation of OREO, exclusive of the provision for losses, amounted to $253
thousand and $751 thousand for the first three months of 1995 and 1994, respec-
tively. The results of the operation of OREO include operating income generated
and gains from the sale of OREO properties, reduced by expenses related to the
operation of OREO. Included in income from the operation of OREO for the three
months ended March 31, 1995 are $271 thousand in gains from the sale of OREO
and $43 thousand of other gross income on OREO properties. This compares with
gains of $799 thousand and other gross income of $122 thousand for the first
three months of 1994.
The following table illustrates the changes in the reserve for the first
three months of 1995 and 1994:
- -------------------------------------------------------------------------------
Reserve for Losses on Other Real Estate and Assets Owned
- -------------------------------------------------------------------------------
(In thousands) 1995 1994
- -------------------------------------------------------------------------------
Balance at January 1 $1,042 $2,521
Provisions for losses _ _
Charge-offs (38) (535)
- -------------------------------------------------------------------------------
Balance at March 31 $1,004 $1,986
===============================================================================
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
anticipated effects of interest rate changes on both earnings and market value
of capital for 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
maintained.
As a result of increased holdings of loans and marketable investment
securities, Liberty was a net purchaser of federal funds and securities under
repurchase agreements averaging $85.5 million for the first three months of
1995 compared to $94.0 million for the same period in 1994.
Liquidity is the ability to meet financial obligations for the payment of
funds. Some of the sources of funds to provide liquidity include core
deposits, large certificates of deposit, federal funds purchased from both
upstream and downstream banks, sale of securities under agreements to
repurchase, Treasury 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 discount 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
liability sensitive largely due to the short-term nature of its deposits,
especially savings and money market accounts, and short-term borrowings. Be-
cause of this liability sensitivity, Liberty's net interest margin in the near
term may be vulnerable to upward trends in interest rates.
The net interest margin of Liberty has been impacted by an increase in
interest rates, as experienced in the past year and first quarter of 1995. Be-
cause Liberty is liability sensitive, in the short-term its liabilities reprice
at the higher rates sooner than its assets. As such, the net interest margin is
narrowed as liabilities are repriced or mature. However, the increase in
liability rates, particularly in a increasing rate environment, may not
increase as much as asset rates depending on the timing of the decision to
increase consumer deposit rates. Liberty monitors its interest-sensitivity pos-
ture 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 allow for projected rate changes.
Capital Funds
Shareholders' investment as a percentage of total assets amounted to 9.1%
at March 31, 1995 compared to 8.1% at December 31, 1994 and 8.2% at March 31,
1994.
Capital adequacy is currently measured by banking regulators using various
capital criteria and ratios under the heading of risk-based capital. Tier 1
capital for bank holding companies includes common equity and perpetual
preferred stock (subject to certain limitations) 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, limits the amount of leverage
a bank can undertake because of the ratio's emphasis on equity or core capital.
Liberty's leverage ratio was 8.34% on Tier 1 capital of $226.5 million at March
31, 1995 compared to 8.67% on $226.4 million at December 31, 1994 and 7.88% on
$203.0 million at March 31, 1994. 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
insurance premiums based in part on the level of capital with banks which are
"well capitalized" paying assessments at lower rates. Liberty's and its
subsidiary banks' capital ratios are significantly higher than the current
guidelines and the subsidiary banks are "well capitalized" for deposit
insurance assessment purposes. Liberty had a risk-based capital ratio at March
31, 1995 of 15.18%. This compares to 15.43% at December 31, 1994 and 15.15% at
March 31, 1994. Liberty Oklahoma City and Liberty Tulsa had risk-based capital
ratios at March 31, 1995 of 13.64% and 14.47%, respectively.
Parent Company Funding Sources and Dividends
At March 31, 1995, the parent company had cash and interest-bearing
deposits of $11.2 million compared to $6.2 million at year-end 1994 and $3.0
million at March 31, 1994. The primary change in the funding position of the
parent company since year-end 1994 was the sale of equity securities in
February 1995 totaling $5.2 million.
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 subsidiaries, principally Liberty Oklahoma City and
Liberty Tulsa. These funds historically have been provided primarily by in-
tercompany dividends and management fees. Management fees are generally
limited to reimbursement of actual expenses. 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 retained rights to any gains from the sales of
mortgage servicing and other assets. 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 March 31, 1995 the ability of Liberty Oklahoma
City and Liberty Tulsa to pay dividends without regulatory approval was limited
to $31.2 million and $13.5 million, respectively.
Liberty paid a cash dividend of $.20 per share for the first quarter of
1995. This dividend totaled $1.9 million. This compares to a dividend in the
first quarter of 1994 of $1.4 million or $.15 per share. It is expected that
such cash dividends will continue if justified 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.
SELECTED STATISTICAL INFORMATION Liberty Bancorp, Inc.
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Consolidated Summary of Quarterly Financial Information
- -------------------------------------------------------------------------------
(In thousands, except per share data)
- -------------------------------------------------------------------------------
For quarter ended 3/31/95 12/31/94 9/30/94 6/30/94 3/31/94
- -------------------------------------------------------------------------------
Interest income $41,671 $38,796 $35,957 $34,129 $32,458
Interest income
(tax equivalent) 42,250 39,353 36,412 34,703 33,088
Interest expense 22,633 19,002 16,417 15,019 13,222
Net interest income 19,038 19,794 19,540 19,110 19,236
Provision for loan losses _ _ _ _ _
Trust fees 3,944 3,641 3,771 4,010 4,160
Mortgage banking income 1,518 1,418 1,434 1,625 1,765
Other noninterest income 12,200 11,135 7,902 9,318 8,882
Noninterest expense 28,086 28,212 27,330 28,004 28,225
Net income 5,905 5,159 10,608 5,157 4,952
Net income per share .60 .53 1.08 .53 .51
Common stock price range
High 31.75 33.50 33.50 33.50 28.25
Low 29.25 27.75 30.75 27.25 26.50
Close 30.19 29.00 33.50 31.50 27.75
At Quarter End
Shares of common stock,
net of treasury stock
Outstanding 9,467 9,474 9,484 9,484 9,478
Fully-diluted 9,816 9,803 9,836 9,825 9,780
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
Average Balances/Net Interest Margin/Rates (1)
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Three months ended March 31, December 31, September 30,
1995 1994 1994
- -----------------------------------------------------------------------------------------------------------------------------------
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) $1,171,883 $24,783 8.58% $1,148,162 $23,984 8.29% $1,093,446 $21,791 7.91%
Investment securities (3)
Taxable 1,026,867 15,285 6.04 941,022 13,338 5.62 947,142 12,923 5.41
Nontaxable 63,663 1,265 8.06 59,387 1,190 7.95 51,208 999 7.74
Trading account securities 3,163 57 7.31 4,010 74 7.32 3,761 54 5.70
- ---------------------------- ------------- --------- ----------- ------------- --------- ----------- ------------- --------- ------
Total securities 1,093,693 16,607 6.16 1,004,419 14,602 5.77 1,002,111 13,976 5.53
Federal funds sold and secu-
rities purchased under
aggreements to resell and
other 57,871 860 6.03 56,929 767 5.35 54,988 645 4.65
- ---------------------------- ------------- --------- ----------- ------------- --------- ----------- ------------- --------- ------
Total earning assets 2,323,447 42,250 7.37 2,209,510 39,353 7.07 2,150,545 36,412 6.72
Cash and due from banks-
noninterest-bearing 263,592 269,831 247,218
Reserve for loan losses (18,981) (19,549) (19,755)
Other assets 165,797 157,862 150,322
----------- ----------- -----------
Total assets $2,733,855 $2,617,654 $2,528,330
=========== =========== ===========
Liabilities and Shareholders'
Investment
Interest-bearing deposits
Savings and money market
accounts $ 775,354 $ 7,042 3.68% $ 729,798 $ 5,840 3.17% $ 712,532 $ 4,968 2.77%
Other time deposits 860,814 12,089 5.70 803,382 10,357 5.11 757,631 8,885 4.65
- ---------------------------- ------------- --------- ----------- ------------- --------- ----------- ------------- --------- ------
Total interest-bearing
deposits 1,636,168 19,131 4.74 1,533,180 16,197 4.19 1,470,163 13,853 3.74
Federal funds purchased
and securities sold under
agreements to repurchase 142,421 2,003 5.70 126,592 1,599 5.01 139,733 1,532 4.35
Other borrowings 107,997 1,499 5.63 88,975 1,206 5.38 86,290 1,032 4.74
- ---------------------------- ------------- --------- ----------- ------------- --------- ----------- ------------- --------- ------
Total interest-bearing
liabilities 1,886,586 22,633 4.87 1,748,747 19,002 4.31 1,696,186 16,417 3.84
Demand deposits 580,864 607,912 579,718
Other liabilities 26,824 25,621 24,466
Shareholders' investment 239,581 235,374 227,960
----------- ----------- -----------
Total liabilities and
shareholders' investment $2,733,855 $2,617,654 $2,528,330
=========== =========== ===========
Interest income/earning assets $42,250 7.37% $39,353 7.07% $36,412 6.72%
Interest expense/earning assets 22,633 3.95 19,002 3.41 16,417 3.03
------- ----- ------- ----- ------- -----
Net interest margin $19,617 3.42% $20,351 3.66% $19,995 3.69%
======= ===== ======= ----- ======= =====
<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>
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Average Balances/Net Interest Margin/Rates (1)
- -------------------------------------------------------------------------------
Three months ended June 30, March 31,
1994 1994
------------------------------------------------------------------------------
Average Average Average Average
(In thousands) Balance Interest Rate Balance Interest Rate
- -------------------------------------------------------------------------------
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 pur-
chased 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
- -------------------------------------------------------------------------------
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 shareholder's
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%
======= ===== ======= =====
(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.
CONSOLIDATED BALANCE SHEET Liberty Bancorp, Inc.
- -------------------------------------------------------------------------------
March 31, December 31, March 31,
(In thousands, except share data) 1995 1994 1994
- -------------------------------------------------------------------------------
Assets
Cash and due from banks
Noninterest-bearing $ 290,817 $ 361,953 $ 343,846
Interest-bearing 179 1,103 1,830
Federal funds sold and securities
purchased under agreements to resell 21,130 52,900 77,270
- -------------------------------------------------------------------------------
Total cash and cash equivalents 312,126 415,956 422,946
- -------------------------------------------------------------------------------
Trading securities 2,837 21,207 708
Investment securities
Available for sale 555,788 656,135 712,094
Held to maturity 421,375 416,084 440,218
Equity 17,480 18,455 18,786
- -------------------------------------------------------------------------------
Total investment securities 994,643 1,090,674 1,171,098
- ------------------------------------------------------------------------------
Loans 1,208,806 1,179,779 979,300
Less: Reserve for loan losses (18,746) (19,081) (20,096)
- -------------------------------------------------------------------------------
Loans, net 1,190,060 1,160,698 959,204
- -------------------------------------------------------------------------------
Property and equipment, net 68,170 68,471 66,618
Accounts receivable 18,559 25,642 41,780
Accrued income receivable 25,676 25,354 23,787
Deferred tax asset, net 17,278 21,661 16,296
Other real estate and assets owned, net 4,593 5,328 8,948
Other assets 38,383 48,708 28,749
- -------------------------------------------------------------------------------
Total assets $2,672,325 $2,883,699 $2,740,134
===============================================================================
Liabilities and Shareholders' Investment
Deposits
Noninterest-bearing $ 543,060 $ 728,240 $ 727,695
Interest-bearing 1,594,648 1,645,947 1,473,930
- ----------------------------------------------------- -------------------------
Total deposits 2,137,708 2,374,187 2,201,625
- -------------------------------------------------------------------------------
Other borrowings
Federal funds purchased and
securities sold under
agreements to repurchase 173,152 139,700 106,459
Other 84,764 90,452 155,965
Accrued interest, expenses and ta 19,141 17,606 15,358
Accounts payable 13,377 26,339 31,462
Other liabilities 854 1,035 4,200
- -------------------------------------------------------------------------------
Total liabilities 2,428,996 2,649,319 2,515,069
- -------------------------------------------------------------------------------
Shareholders' Investment
Common stock($.01 par value;
50,000,000 shares authorized) 95 95 95
- -------------------------------------------
March 31, December 31, March 31,
1995 1994 1994
- -------------------------------------------
Shares
issued 9,488,428 9,488,428 9,478,177
Shares out-
standing 9,466,975 9,474,413 9,478,177
Capital surplus 211,535 211,733 211,703
Retained earnings 35,980 31,972 15,316
Treasury stock, at cost _ 21,453
shares at March 31, 1995 and
and 14,015 shares at December 31, 1994 (673) (435) _
Unrealized security gains (losses),
net of tax (1,598) (6,854) 402
Deferred compensation (2,010) (2,131) (2,451)
- -------------------------------------------------------------------------------
Total shareholders' investment 243,329 234,380 225,065
- -------------------------------------------------------------------------------
Total liabilities and
shareholders' investment $2,672,325 $2,883,699 $2,740,134
===============================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
CONSOLIDATED STATEMENT OF INCOME Liberty Bancorp, Inc.
- -------------------------------------------------------------------------------
First three months (In thousands, except per share data) 1995 1994
- -------------------------------------------------------------------------------
Interest Income
Loans $24,647 $17,041
Investments
Taxable 15,285 14,261
Nontaxable 829 797
Trading 50 49
Federal funds sold and other 860 310
- -------------------------------------------------------------------------------
Total interest income 41,671 32,458
------------------------------------------------------------------------------
Interest Expense
Deposits 19,131 11,419
Other borrowings 3,502 1,803
- -------------------------------------------------------------------------------
Total interest expense 22,633 13,222
- -------------------------------------------------------------------------------
Net Interest Income 19,038 19,236
Provision for loan losses _ _
- -------------------------------------------------------------------------------
Net Interest Income After Provision for Loan Losses 19,038 19,236
- -------------------------------------------------------------------------------
Noninterest Income
Trust fees 3,944 4,160
Service charges on deposits 3,593 3,869
Mortgage banking income 1,518 1,765
Trading account profits and commissions 988 1,168
Loan fees 358 577
Credit card fees 617 505
Net securities gains 4,214 388
Other 2,430 2,375
- -------------------------------------------------------------------------------
Total noninterest income 17,662 14,807
- -------------------------------------------------------------------------------
Noninterest Expense
Salaries 10,664 11,243
Employee benefits 2,350 2,671
Equipment 2,502 2,185
Occupancy, net 2,200 2,132
Professional and other services 1,691 2,172
Data processing 1,591 1,542
Printing, postage and supplies 1,394 1,425
Deposit insurance assessments 1,154 1,077
Advertising and business development 934 835
Amortization of intangibles, including purchased
mortgage servicing rights 590 655
Net income from operation of other real estate
and assets owned (253) (751)
Other 3,269 3,039
- -------------------------------------------------------------------------------
Total noninterest expense 28,086 28,225
- -------------------------------------------------------------------------------
Income Before Provision for Income Taxes 8,614 5,818
Provision for income taxes 2,709 866
- -------------------------------------------------------------------------------
Net Income $ 5,905 $ 4,952
===============================================================================
Net Income Per Share - Primary and Fully-Diluted $.60 $.51
===============================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
<TABLE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT Liberty Bancorp, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Unrealized
Retained Security Total
Common Capital Earnings Treasury Gains Deferred Shareholders'
(Dollars in thousands) Stock Surplus (Deficit) Stock (Losses) Compensation Investment
- -------------------------------------------- ------- ------------ ----------- --------- --------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance January 1, 1994 $95 $211,708 $11,785 ($ 1) $6,184 ($2,526) $227,245
Net income _ _ 4,952 _ _ _ 4,952
Dividends paid ($.15 per share) _ _ (1,421) _ _ _ (1,421)
Amortization of deferred compensation _ _ _ _ _ 75 75
Change in unrealized gains (losses) on
available for sale securities, net of tax _ _ _ _ (5,782) _ (5,782)
Purchase of treasury stock (12,880 shares) _ _ _ (356) _ _ (356)
Common and treasury stock issued
(317 common and 12,931
treasury shares) _ (5) _ 357 _ _ 352
- -------------------------------------------- ------- ------------ ----------- --------- --------------- --------------- -----------
Balance March 31, 1994 $95 $211,703 $15,316 $ 0 $402 ($2,451) $225,065
============================================ ======= ============ =========== ========= =============== =============== ===========
Balance January 1, 1995 $95 $211,733 $31,972 ($ 435) ($6,854) ($2,131) $234,380
Net income _ _ 5,905 _ _ _ 5,905
Dividends paid ($.20 per share) _ _ (1,897) _ _ _ (1,897)
Amortization of deferred compensation _ _ _ _ _ 121 121
Change in unrealized gains (losses) on
available for sale securities, net of tax _ _ _ _ 5,256 _ 5,256
Purchase of treasury stock (19,446 shares) _ _ _ (593) _ _ (593)
Treasury stock issued (12,008 shares) _ (198) _ 355 _ _ 157
- -------------------------------------------- ------- ------------ ----------- --------- --------------- --------------- -----------
Balance March 31, 1995 $95 $211,535 $35,980 ($ 673) ($1,598) ($2,010) $243,329
============================================ ======= ============ =========== ========= =============== =============== ===========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS Liberty Bancorp, Inc.
- -------------------------------------------------------------------------------
First three months (In thousands) 1995 1994
- -------------------------------------------------------------------------------
Cash provided (absorbed) by operating activities
Net income $ 5,905 $ 4,952
Adjustments to reconcile net income to net cash
provided (absorbed) by operating activities:
Provisions for losses 850 _
Provision for income taxes 2,709 866
Depreciation and amortization 2,578 2,059
Net amortization (accretion) of
investment securities 610 3,142
Gain on sale of assets (5,388) (2,449)
Change in trading account securities 15,868 3,457
Loans made for purposes of resale (21,468) (44,772)
Proceeds from sale of loans held for resale 10,303 31,315
Change in accrued interest, expenses and taxes,
accounts payable and other liabilities (2,678) (1,836)
Change in accrued income receivable, accounts
receivable and other assets 8,621 (2,809)
- -------------------------------------------------------------------------------
Net cash provided (absorbed) by operating activities 17,910 (6,075)
- -------------------------------------------------------------------------------
Cash provided (absorbed) by investing activities
Proceeds from maturities and paydowns on
Available for sale securities 76,733 49,180
Held to maturity securities 24,138 22,166
Proceeds from sales of
Available for sale securities 310,692 228,869
Equity securities 11,819 102
Purchases of
Available for sale securities (277,962) (237,103)
Held to maturity securities (31,035) (671)
Equity securities (6,668) (38)
Change in net loans made by bank subsidiaries (17,166) (27,230)
Principal payments received on loans made by parent
company and nonbank subsidiaries 968 1,015
Loans made to customers by nonbank subsidiaries (1,643) (2,515)
Expenditures for property and equipment (1,646) (4,025)
Proceeds from sale of property and equipment _ 12
Sale proceeds and collections from other real estate and
assets acquired in settlement of loans 1,128 2,694
Purchases of mortgage servicing contracts (50) (82)
- -------------------------------------------------------------------------------
Net cash provided by investing activities 89,308 32,374
- -------------------------------------------------------------------------------
Cash provided (absorbed) by financing activities
Change in savings and demand deposits (207,719) 27,045
Change in time deposits (28,760) 49,436
Change in short-term borrowings 27,764 (15,688)
Proceeds from issuance of common and treasury stock 157 352
Purchase of treasury stock (593) (356)
Dividends paid on common stock (1,897) (1,421)
- -------------------------------------------------------------------------------
Net cash provided (absorbed) by financing activities (211,048) 59,368
- -------------------------------------------------------------------------------
Net change in cash and cash equivalents (103,830) 85,667
Cash and cash equivalents at beginning of year 415,956 337,279
- -------------------------------------------------------------------------------
Cash and cash equivalents at March 31 $312,126 $422,946
===============================================================================
Additional cash flow information
Interest paid $22,581 $14,365
Income tax paid (refunded) (1,508) _
Noncash items included in investing activities
Net loans transferred to (from) other real estate
and assets owned 99 (96)
Loans made to finance the sale of other real estate
and assets owned _ 120
The accompanying notes are an integral part of these consolidated financial
statements.
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
information 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
reclassifications have been made to provide consistent financial statement
classifications in the periods presented herein. Such reclassifications had no
effect on net income or total assets.
It is suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto included in
Liberty's 1994 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.
- -------------------------------------------------------------------------------
March 31 (In thousands) Three Months Ended
- -------------------------------------------------------------------------------
1995 1994
- -------------------------------------------------------------------------------
Weighted average shares outstanding
Primary 9,817 9,775
Fully-diluted 9,817 9,775
PART II
OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Shareholders
The 1995 Annual Meeting of Shareholders of Liberty Bancorp, Inc. was held
April 19, 1995. The meeting included the election of members of the Board of
Directors whose terms expired at the meeting. The members elected were Donald
L. Brawner, M.D., C.W. Flint, Jr., James L. Hall, Jr., Raymond H. Hefner, Jr.,
Herb Mee, Jr., V. Lee Powell, Jon R. Stuart, Clifton L. Taulbert and J. Otis
Winters.. The vote for all nominees was as follows:
For Withhold Authority
--- ------------------
7,207,163 15,880
Directors whose terms did not expire at the meeting and who continued in
office were Thomas G. Donnell, Robert S. Ellis, M.D., William J. Fisher, Jr.,
C.W. Flint, Jr., Walter H. Helmerich, III, Joseph S. Jankowsky, John E.
Kirkpatrick, Judy Z. Kishner, David L. Kyle, Edward C. Lawson, Jr., Charles E.
Nelson, William G. Paul, Robert E. Torray and John S. Zink.
Additionally, the shareholders voted to amend the 1990 Stock Option Plan
by increasing the number of shares authorized for options from 525,000 to
705,000. The voting was as follows:
For Against Abstain
--- ------- -------
7,033,320 176,130 13,593
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: May 15, 1995
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 290,817,000
<INT-BEARING-DEPOSITS> 179,000
<FED-FUNDS-SOLD> 21,130,000
<TRADING-ASSETS> 2,837,000
<INVESTMENTS-HELD-FOR-SALE> 555,788,000
<INVESTMENTS-CARRYING> 994,643,000
<INVESTMENTS-MARKET> 987,449,000
<LOANS> 1,208,806,000
<ALLOWANCE> 18,746,000
<TOTAL-ASSETS> 2,672,325,000
<DEPOSITS> 2,137,708,000
<SHORT-TERM> 257,916,000
<LIABILITIES-OTHER> 33,372,000
<LONG-TERM> 0
<COMMON> 95,000
0
0
<OTHER-SE> 243,234,000
<TOTAL-LIABILITIES-AND-EQUITY> 2,672,325,000
<INTEREST-LOAN> 24,647,000
<INTEREST-INVEST> 16,114,000
<INTEREST-OTHER> 910,000
<INTEREST-TOTAL> 41,671,000
<INTEREST-DEPOSIT> 19,131,000
<INTEREST-EXPENSE> 22,633,000
<INTEREST-INCOME-NET> 19,038,000
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 4,214,000
<EXPENSE-OTHER> 28,086,000
<INCOME-PRETAX> 8,614,000
<INCOME-PRE-EXTRAORDINARY> 5,905,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,905,000
<EPS-PRIMARY> .60
<EPS-DILUTED> .60
<YIELD-ACTUAL> 3.42
<LOANS-NON> 8,224,000
<LOANS-PAST> 2,828,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 160,000
<ALLOWANCE-OPEN> 19,081,000
<CHARGE-OFFS> 646,000
<RECOVERIES> 311,000
<ALLOWANCE-CLOSE> 18,746,000
<ALLOWANCE-DOMESTIC> 18,746,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
