FINANCIAL HIGHLIGHTS Liberty Bancorp, Inc.
-------------------------------------------------------------------------------
June 30 Six Months Ended Three Months Ended
(In thousands, except per share data) 1995 1994 1995 1994
-------------------------------------------------------------------------------
For the Second Quarter
Total revenues $119,341 $96,347 $ 60,008 $ 49,082
Net interest income 40,650 38,346 21,612 19,110
Provision for loan losses _ _ _ _
Trust fees 7,768 8,170 3,824 4,010
Mortgage banking income 3,004 3,390 1,486 1,625
Other noninterest income 22,314 18,200 10,114 9,318
Noninterest expense 56,154 56,229 28,068 28,004
Income before provision
for income taxes 17,582 11,877 8,968 6,059
Provision for income taxes 5,578 1,768 2,869 902
Net income 12,004 10,109 6,099 5,157
Per share data _ primary
and fully-diluted
Net income 1.22 1.03 .62 .53
Cash dividends declared .40 .30 .20 .15
-------------------------------------------------------------------------------
At June 30
Loans $1,279,336 $1,076,327 $1,279,336 $1,076,327
Earning assets 2,237,376 2,207,272 2,237,376 2,207,272
Assets 2,702,864 2,661,836 2,702,864 2,661,836
Deposits 2,089,971 2,144,149 2,089,971 2,144,149
Total shareholders' investment 252,956 225,299 252,956 225,299
Book value per common share 26.68 23.76 26.68 23.76
-------------------------------------------------------------------------------
Average Year-to-Date Balances
Earning assets $2,320,676 $2,195,433 $2,317,935 $2,188,645
Assets 2,726,040 2,586,804 2,718,312 2,575,695
Deposits 2,211,397 2,106,393 2,205,82 2,096,525
Total shareholders' investment 244,681 227,083 249,725 225,172
-------------------------------------------------------------------------------
Ratios
Capital ratios
Leverage 8.49% 8.24% 8.49% 8.24%
Risk-based 14.38 15.23 14.38 15.23
Average shareholders' investment
as a % of average total assets 8.98 8.78 9.19 8.74
Average earning assets as
a % of average total assets 85.13 84.87 85.27 84.97
Rate of return on
Average earning assets 1.04 .93 1.06 .95
Average total assets .89 .79 .90 .80
Average total shareholders'
investment 9.89 8.98 9.80 9.19
Dividend payout ratio 32.79 29.13 32.26 28.30
Operating efficiency ratio 81.51 81.70 78.34 81.09
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 nine 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 otherwise meeting
Liberty's corporate objectives..
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 1995 Compared to First Six Months of 1994
For the first six months of 1995, Liberty reported net income of $12.0
million or $1.22 per common share. This compares to net income of $10.1
million or $1.03 per common share for the first six months of 1994. Net income
for the first six months of 1995 included net gains on the sale of securities
totaling $6.0 million before income tax and an increase in the effective income
tax rate as discussed below under "Income Taxes."
Net Interest Income
On a tax-equivalent basis, net interest income increased $2.3 million or
5.7% in the first six months of 1995 to $41.8 million compared to $39.6 million
for the first six months of 1994. The increase is primarily due to the
continued increase in loan levels as well as a decrease in lower-yielding
taxable securities and interest collected on nonaccrual loan payoffs. The net
interest margin for the first six months of both 1995 and 1994 was 3.64%.
Tax-equivalent interest income increased $19.6 million to $87.4 million
for the first six months of 1995 compared to $67.8 million in the same period
of 1994 due primarily to the increase in loan volumes and interest rates.
Since the end of the second quarter in 1994, the national prime interest rate
has increased 175 basis points. Liberty's average loans increased $225 million
and its yield on loans increased from 7.5% to 8.9%. 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 $101 million below the first six months of 1994 but the yield improved
99 basis points from 5.3% to 6.3% as maturities not used to fund the increased
loan demand were invested in higher yielding securities. These yield and
volume mix changes resulted in the yield on average earning assets increasing
from 6.2% in 1994 to 7.6% in 1995.
Total interest expense increased $17.4 million to $45.6 million for the
first six months of 1995 compared to $28.2 million for the same period in 1994.
This increase was attributable to the higher interest rates on all fund
sources, the $157.6 million higher average interest-bearing deposit level, and
$52.6 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 3.4% in 1994 to 4.9% in
1995.
Noninterest Income
Noninterest income for the first six months of 1995 increased $3.3 million
or 11.2% from the first six months of 1994. The largest factor of this
increase was in net securities gains which increased $5.5 million due to sales
of equity and available for sale securities in 1995. Net securities gains for
the first six months of 1995 totaled $6.0 million compared to $489 thousand for
the same period of 1994. Other changes from the first six months of 1994
included loan fees, which decreased $467 thousand, trust fees, which decreased
$402 thousand, and mortgage banking income, which decreased $386 thousand.
Other noninterest income decreased $891 thousand, primarily due to a gain on
mortgage servicing recognized in the second quarter of 1994.
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 $442 thousand or .77% to $56.8 million for the first
six months of 1995 compared to $57.3 million for the same period one year ago.
The largest decrease was in salaries and employee benefits which decreased $1.9
million or 7.0% in 1995, primarily due to employee count reductions in the
latter half of 1994.
Professional and other service expenses decreased $679 thousand or 16.1%,
largely as a result of reductions in the use of temporary employee services.
Equipment expense increased $496 thousand or 11.1% due to increased
depreciation on new data processing and other equipment. Other noninterest
expense increased $1.0 million or 17.7%. Included in this increase were
provisions for $1.8 million to cover expenses related to anticipated payments,
settlements and costs of various matters, including legal proceedings which
occurred in the ordinary course of business. This provision is offset by
decreases in expenses for software, telephone service and employee education
and training.
Liberty's operating efficiency ratio for the first six months of 1995 was
81.5% compared to 81.7% 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 $5.6 million in income tax expense (32% effective tax
rate) for the first six months of 1995 compared with $1.8 million (15%
effective tax rate) during the same period of 1994. The increase in income
taxes was due to the recognition in the third quarter of 1994 of future
benefits to be realized from remaining net operating loss carryforwards. 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.
Performance Summary: Second Quarter of 1995
Compared to Second Quarter 1994
During the second quarter of 1995 the Company reported net income of $6.1
million or $.62 per common share compared to net income of $5.2 million or $.53
per share for the second quarter of 1994. The primary changes between periods
were in net interest income, net securities gains and the provision for income
taxes.
Net Interest Income
On a tax-equivalent basis, net interest income for the second quarter of
1995 increased $2.5 million or 12.8% to $22.2 million from $19.7 million in the
second quarter of 1994. The tax-equivalent net interest margin was 3.84% for
the second quarter of 1995 compared to 3.61% for the same period one year ago.
Tax-equivalent interest income increased $10.5 million to $45.2 million
for the second quarter of 1995 compared to $34.7 million in the same period of
1994 due primarily to increased interest rates, a $228.1 million increase in
average loans and approximately $1.1 million of interest income collected from
the payoff of certain nonaccrual loans. The yield on average earning assets
increased from 6.36% to 7.82% primarily due to factors as mentioned in the
year-to-date analysis.
Total interest expense amounted to $23.0 million for the second quarter of
1995 compared to $15.0 million in the same period of 1994, primarily reflecting
higher levels of interest-bearing liabilities and higher interest rates as
described in the year-to-date analysis. The cost of funds increased to 4.99%
in the second quarter of 1995 from 3.52% the previous year.
Noninterest Income
Noninterest income increased $471 thousand or 3.2% in the second quarter
of 1995 compared to the second quarter of 1994, primarily due to $1.8 million
in net securities gains compared to $101 thousand in 1994. These gains were
offset by decreases in loan fees, trust fees, trading account profits and
commissions and mortgage banking income. Other noninterest income also
decreased $946 thousand due a $1.1 million gain on the sale of mortgage
servicing rights realized in the second quarter of 1994.
Noninterest Expense
Noninterest expense remained essentially the same during the second
quarter 1995 as compared the same period in 1994. Salaries and employee
benefits declined $1.0 million or 7.6% due to employee count reductions in the
latter half of 1994. Offsetting this savings, other noninterest expense
increased $774 thousand, primarily due to a $940 thousand provision to cover
expenses related to anticipated payments, settlements and cost of various
matters, including legal proceedings, incurred in the ordinary course of
business.
Credit Risk Management
Nonperforming assets include nonperforming loans and other real estate and
assets owned net of reserves. Total nonperforming assets have decreased $6.1
million or 36.2% since year-end 1994. The level at June 30, 1995 of $10.8
million is $7.0 million or 39.5% less than the $17.8 million of nonperforming
assets one year ago. At June 30, 1995, total nonperforming assets were .92% of
total loans and other real estate and assets owned and .44% of total assets.
Nonperforming loans decreased by $4.1 million or 35.2% since December 31,
1994 and decreased by $3.4 million or 31.0% from one year earlier. Of the
nonperforming loans at June 30, 1995, 54% were real estate-related.
Nonperforming loans at June 30, 1995 were $7.5 million, representing .59% of
total loans.
Reserve for Loan Losses
The reserve for loan losses at June 30, 1995 was 242.5% of total
nonperforming loans and 1.4% of total loans. No provisions for loan losses
were made during the first six months of 1995 or 1994. The following table
summarizes the reserve for loan loss activity for the first six months of 1995
and 1994:
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Reserve for Loan Losses
-------------------------------------------------------------------------------
(In thousands) 1995 1994
-------------------------------------------------------------------------------
Balance at January 1 $19,081 $19,986
Additions
Recoveries 528 744
Provisions _ _
Less _ Charge-offs (1,443) (913)
-------------------------------------------------------------------------------
Balance at June 30 $18,166 $19,817
===============================================================================
Other Real Estate and Assets Owned
Net OREO decreased $2.0 thousand or 38.3% since year-end 1994 and $3.7
million or 52.8% from June 30, 1994. These reductions have primarily been the
result of sales. Net OREO at June 30, 1995 was $3.3 million. Net income from
the operation of OREO, exclusive of the provision for losses, amounted to $679
thousand and $1.0 million for the first six 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 six
months ended June 30, 1995 are $729 thousand in gains from the sale of OREO and
$76 thousand of other gross income on OREO properties. This compares with
gains of $1.2 million and other gross income of $138 thousand for the first six
months of 1994.
The following table illustrates the changes in the reserve for the first
six 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 (50) (943)
-------------------------------------------------------------------------------
Balance at June 30 $ 992 $1,578
===============================================================================
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 $80.0 million for the first six months of 1995
compared to $80.8 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 through the second quarter
of 1995. Because Liberty is liability sensitive, in the short-term its li-
abilities 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 9.36%
at June 30, 1995 compared to 8.1% at December 31, 1994 and 8.5% at June 30,
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 8.49% on Tier 1 capital of $228.7 million at June
30, 1995 compared to 8.67% on $226.4 million at December 31, 1994 and 8.24% on
$211.1 million at June 30, 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%. Liberty had a risk-based capital ratio at June 30, 1995
of 14.38%. This compares to 15.43% at December 31, 1994 and 15.23% at June 30,
1994. Liberty Oklahoma City and Liberty Tulsa had risk-based capital ratios at
June 30, 1995 of 13.42% and 13.08%, respectively. 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.
Parent Company Funding Sources and Dividends
At June 30, 1995, the parent company had cash and interest-bearing
deposits of $9.2 million compared to $6.2 million at year-end 1994 and $4.4
million at June 30, 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, offset by the payment of estimated income
taxes in June 1995 totaling $2.7 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 June 30, 1995 the ability of Liberty Oklahoma
City and Liberty Tulsa to pay dividends without regulatory approval was limited
to $34.6 million and $14.6 million, respectively.
Liberty paid cash dividends of $.40 per share in the first six months of
1995. This dividend totaled $3.8 million. This compares to cash dividends in
the first six months of 1994 of $2.8 million or $.30 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.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Consolidated Summary of Quarterly Financial Information
-------------------------------------------------------------------------------
(In thousands, except per share data)
For quarter ended 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94
-------------------------------------------------------------------------------
Interest income $44,584 $41,671 $38,796 $35,957 $34,129
Interest income
(tax equivalent) 45,165 42,250 39,353 36,412 34,703
Interest expense 22,972 22,633 19,002 16,417 15,019
Net interest income 21,612 19,038 19,794 19,540 19,110
Provision for loan losses _ _ _ _ _
Trust fees 3,824 3,944 3,641 3,771 4,010
Mortgage banking income 1,486 1,518 1,418 1,434 1,625
Other noninterest income 10,114 12,200 11,135 7,902 9,318
Noninterest expense 28,068 28,086 28,212 27,330 28,004
Net income 6,099 5,905 5,159 10,608 5,157
Net income per share .62 .60 .53 1.08 .53
Common stock price range
High 35.75 31.75 33.50 33.50 33.50
Low 29.75 29.25 27.75 30.75 27.25
Close 32.50 30.19 29.00 33.50 31.50
At Quarter End
Shares of common stock,
net of treasury stock
Outstanding 9,482 9,467 9,474 9,484 9,484
Fully-diluted 9,866 9,816 9,803 9,836 9,825
-------------------------------------------------------------------------------
Average Balances/Net Interest Margin/Rates (1)
-------------------------------------------------------------------------------
Year-to-Date 1995 1994
-------------------------------------------------------------------------------
Average Average Average Average
(In thousands) Balance Interest Rate Balance Interest Rate
-------------------------------------------------------------------------------
Assets
Loans (2) $1,206,587 $52,937 8.85% $ 981,440 $36,530 7.51%
Investment securities(3)
Taxable 991,642 30,160 6.13 1,102,288 27,815 5.09
Nontaxable 63,020 2,506 8.02 52,950 2,295 8.74
Trading account
securities 3,466 127 7.39 3,775 117 6.25
-------------------------------------------------------------------------------
Total securities 1,058,128 32,793 6.25 1,159,013 30,227 5.26
Federal funds sold and
securities purchased
under agreements to
resell and other 55,961 1,685 6.07 54,980 1,034 3.79
-------------------------------------------------------------------------------
Total earning assets 2,320,676 87,415 7.60 2,195,433 67,791 6.23
Cash and due from banks-
noninterest-bearing 258,079 257,482
Reserve for loan losses (18,802) (20,009)
Other assets 166,087 153,898
------------ -----------
Total assets $2,726,040 $2,586,804
============ ============
Liabilities and Shareholders'
Investment
Interest-bearing deposits
Savings and money
market accounts $ 781,689 $14,360 3.70% $ 702,395 $8,810 2.53%
Other time deposits 842,659 24,337 5.82 764,333 15,381 4.06
-------------------------------------------------------------------------------
Total interest-
bearing deposits 1,624,348 38,697 4.80 1,466,728 24,191 3.33
Federal funds purchased
and securities sold
under agreements to
repurchase 135,898 3,862 5.73 135,747 2,371 3.52
Other borrowings 105,854 3,046 5.80 92,191 1,679 3.67
-------------------------------------------------------------------------------
Total interest-bearing
liabilities 1,866,100 45,605 4.93 1,694,666 28,241 3.36
Demand deposits 587,049 639,665
Other liabilities 28,210 25,390
Shareholders' investment 244,681 227,083
Total liabilities ---------- ----------
and shareholders'
investment $2,726,040 $2,586,804
============ ==========
Interest income/earning assets $87,415 7.60% $67,791 6.23%
Interest expense/earning assets 45,605 3.96 28,241 2.59
------- ---- ------- ----
Net interest margin $41,810 3.64% $39,550 3.64%
======= ==== ======= ====
(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.
-------------------------------------------------------------------------------
Average Balances/Net Interest Margin/Rates (1)
-------------------------------------------------------------------------------
Three months ended June 30, 1995 March 31, 1995
-------------------------------------------------------------------------------
Average Average Average Average
(In thousands) Balance Interest Rate Balance Interest Rate
-------------------------------------------------------------------------------
Assets
Loans (2) $1,240,910 $28,154 9.10% $1,171,883 $24,783 8.58%
Investment securities(3)
Taxable 956,804 14,875 6.24 1,026,867 15,285 6.04
Nontaxable 62,384 1,241 7.98 63,663 1,265 8.06
Trading account
securities 3,766 70 7.46 3,163 57 7.31
-------------------------------------------------------------------------------
Total securities 1,022,954 16,186 6.35 1,093,693 16,607 6.16
Federal funds sold and
securities purchased
under agreements to
resell and other 54,071 825 6.12 57,871 860 6.03
-------------------------------------------------------------------------------
Total earning assets 2,317,935 45,165 7.82 2,323,447 42,250 7.37
Cash and due from banks-
noninterest-bearing 252,626 263,592
Reserve for loan losses (18,625) (18,981)
Other assets 166,376 165,797
---------- ----------
Total assets $2,718,312 $2,733,855
========== ===========
Liabilities and Shareholders'
Investment
Interest-bearing deposits
Savings and money
market accounts $ 787,954 $ 7,318 3.73% $ 775,354 $ 7,042 3.68%
Other time deposits 824,703 12,248 5.96 860,814 12,089 5.70
-------------------------------------------------------------------------------
Total interest-bearing
deposits 1,612,657 19,566 4.87 1,636,168 19,131 4.74
Federal funds purchased and
securities sold
under agreements
to repurchase 129,446 1,859 5.76 142,421 2,003 5.70
Other borrowings 103,734 1,547 5.98 107,997 1,499 5.63
-------------------------------------------------------------------------------
Total interest-
bearing liabilities 1,845,837 22,972 4.99 1,886,586 22,633 4.87
Demand deposits 593,167 580,864
Other liabilities 29,583 26,824
Shareholders' investment 249,725 239,581
Total liabilities --------- ----------
and shareholders'
investment $2,718,312 $2,733,855
========== ==========
Interest income/earning assets $45,165 7.82% $42,250 7.37%
Interest expense/earning assets 22,972 3.98 22,633 3.95
------- ---- ------- ----
Net interest margin $22,193 3.84% $19,617 3.42%
======= ==== ======= ====
(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>
-----------------------------------------------------------------------------------------------------------------------------------
Average Balances/Net Interest Margin/Rates (1)
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Three months ended December 31, 1994 September 30, 1994 June 30, 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) $1,148,162 $23,984 8.29% $1,093,446 $21,791 7.91% $1,012,846 $19,282 7.64%
Investment securities (3)
Taxable 941,022 13,338 5.62 947,142 12,923 5.41 1,048,016 13,554 5.19
Nontaxable 59,387 1,190 7.95 51,208 999 7.74 52,476 1,081 8.26
Trading account securities 4,010 74 7.32 3,761 54 5.70 3,730 62 6.67
Total securities 1,004,419 14,602 5.77 1,002,111 13,976 5.53 1,104,222 14,697 5.34
Federal funds sold and
securities purchased under
agreements to resell and
other 56,929 767 5.35 54,988 645 4.65 71,577 724 4.06
---------------------------- ------------- --------- ----------- ------------- --------- ----------- ------------- --------- ------
Total earning assets 2,209,510 39,353 7.07 2,150,545 36,412 6.72 2,188,645 34,703 6.36
Cash and due from banks-
noninterest-bearing 269,831 247,218 253,410
Reserve for loan losses (19,549) (19,755) (20,071)
Other assets 157,862 150,322 153,711
------------- ------------- -------------
Total assets $2,617,654 $2,528,330 $2,575,695
============= ============= =============
Liabilities and
Shareholders' Investment
Interest-bearing deposits
Savings and money market
accounts $ 729,798 $ 5,840 3.17% $ 712,532 $ 4,968 2.77% $ 709,365 $ 4,605 2.60%
Other time deposits 803,382 10,357 5.11 757,631 8,885 4.65 772,047 8,167 4.24
---------------------------- ------------- --------- ----------- ------------- --------- ----------- ------------- --------- ------
Total interest-bearing
deposits 1,533,180 16,197 4.19 1,470,163 13,853 3.74 1,481,412 12,772 3.46
Federal funds purchased and
securities sold under
agreements to repurchase 126,592 1,599 5.01 139,733 1,532 4.35 142,633 1,382 3.89
Other borrowings 88,975 1,206 5.38 86,290 1,032 4.74 85,899 865 4.04
---------------------------- ------------- --------- ----------- ------------- --------- ----------- ------------- --------- ------
Total interest-bearing
liabilities 1,748,747 19,002 4.31 1,696,186 16,417 3.84 1,709,944 15,019 3.52
Demand deposits 607,912 579,718 615,113
Other liabilities 25,621 24,466 25,466
Shareholders' investment 235,374 227,960 225,172
------------- ------------- -------------
Total liabilities and
shareholders'
investment $2,617,654 $2,528,330 $2,575,695
============= ============= =============
Interest income/earning
assets $39,353 7.07% $36,412 6.72% $34,703 6.36%
Interest expense/earning
assets 19,002 3.41 16,417 3.03 15,019 2.75
--------- --------- --------- --------- --------- ------
Net interest margin $20,351 3.66% $19,995 3.69% $19,684 3.61%
========= ========= ========= ========= ========= ======
<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>
CONSOLIDATED BALANCE SHEET Liberty Bancorp, Inc.
-------------------------------------------------------------------------------
June 30, December 31, June 30,
(In thousands, except share data) 1995 1994 1994
-------------------------------------------------------------------------------
Assets
Cash and due from banks
Noninterest-bearing $ 292,890 $ 361,953 $ 305,443
Interest-bearing 431 1,103 1,472
Federal funds sold and securities
purchased under agreements to resell 14,590 52,900 90,025
-------------------------------------------------------------------------------
Total cash and cash equivalents 307,911 415,956 396,940
-------------------------------------------------------------------------------
Trading securities 3,047 21,207 4,395
Investment securities
Available for sale 489,822 656,135 584,881
Held to maturity 431,906 416,084 430,631
Equity 18,244 18,455 19,541
------------------------------------------------------------------------------
Total investment securities 939,972 1,090,674 1,035,053
-------------------------------------------------------------------------------
Loans 1,279,336 1,179,779 1,076,327
Less: Reserve for loan losses (18,166) (19,081) (19,817)
-------------------------------------------------------------------------------
Loans, net 1,261,170 1,160,698 1,056,510
-------------------------------------------------------------------------------
Property and equipment, net 67,639 68,471 67,016
Accounts receivable 33,107 25,642 27,752
Accrued income receivable 26,221 25,354 24,124
Deferred tax asset, net 14,417 21,661 18,003
Other real estate and assets owned, net 3,286 5,328 6,962
Other assets 46,094 48,708 25,081
-------------------------------------------------------------------------------
Total assets $2,702,864 $2,883,699 $2,661,836
===============================================================================
Liabilities and Shareholders' Investment
Deposits
Noninterest-bearing $ 550,319 $ 728,240 $ 638,157
Interest-bearing 1,539,652 1,645,947 1,505,992
------------------------------------------------------------------------------
Total deposits 2,089,971 2,374,187 2,144,149
Other borrowings
Federal funds purchased and securities
sold under agreements to repurchase 125,041 139,700 90,215
Other 183,178 90,452 149,365
Accrued interest, expenses and taxes 21,130 17,606 15,009
Accounts payable 29,469 26,339 36,401
Other liabilities 1,119 1,035 1,398
-------------------------------------------------------------------------------
Total liabilities 2,449,908 2,649,319 2,436,537
-------------------------------------------------------------------------------
Shareholders' Investment
Common stock ($.01 par value;
50,000,000 shares authorized)
--------------------------------------------- 95 95 95
June 30, December 31, June 30,
1995 1994 1994
---------------------------------------------
Shares
issued 9,488,428 9,488,428 9,483,593
Shares
outstanding 9,481,741 9,474,413 9,483,593
Capital surplus 211,406 211,733 211,806
Retained earnings 40,182 31,972 19,050
Treasury stock, at cost _
6,687 shares at June 30, 1995 and
14,015 shares at December 31, 1994 (216) (435) _
Unrealized security gains (losses),
net of tax 3,376 (6,854) (3,232)
Deferred compensation (1,887) (2,131) (2,420)
-------------------------------------------------------------------------------
Total shareholders' investment 252,956 234,380 225,299
-------------------------------------------------------------------------------
Total liabilities and
shareholders' investment $2,702,864 $2,883,699 $2,661,836
==============================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
CONSOLIDATED STATEMENT OF INCOME Liberty Bancorp, Inc.
-------------------------------------------------------------------------------
June 30 Six Months Ended Three Months Ended
First six months
(In thousands, except per share data) 1995 1994 1995 1994
-------------------------------------------------------------------------------
Interest Income
Loans $52,662 $36,167 $28,015 $19,126
Investments
Taxable 30,160 27,815 14,875 13,554
Nontaxable 1,640 1,469 811 672
Trading 108 102 58 53
Federal funds sold and other 1,685 1,034 825 724
------------------------------------------------------------------------------
Total interest income 86,255 66,587 44,584 34,129
-------------------------------------------------------------------------------
Interest Expense
Deposits 38,697 24,191 19,566 12,772
Other borrowings 6,908 4,050 3,406 2,247
-------------------------------------------------------------------------------
Total interest expense 45,605 28,241 22,972 15,019
-------------------------------------------------------------------------------
Net Interest Income 40,650 38,346 21,612 19,110
Provision for loan losses _ _ - _
-------------------------------------------------------------------------------
Net Interest Income After Provision
for Loan Losses 40,650 38,346 21,612 19,110
-------------------------------------------------------------------------------
Noninterest Income
Trust fees 7,768 8,170 3,824 4,010
Service charges on deposits 7,320 7,205 3,727 3,336
Mortgage banking income 3,004 3,390 1,486 1,625
Trading account profits and
commissions 1,922 2,278 934 1,110
Credit card fees 1,187 988 570 692
Loan fees 802 1,269 444 483
Net securities gains 6,003 489 1,789 101
Other 5,080 5,971 2,650 3,596
-------------------------------------------------------------------------------
Total noninterest income 33,086 29,760 15,424 14,953
-------------------------------------------------------------------------------
Noninterest Expense
Salaries 21,013 22,340 10,349 11,097
Employee benefits 4,522 5,122 2,172 2,451
Equipment 4,963 4,467 2,461 2,282
Occupancy, net 4,455 4,227 2,255 2,095
Professional and other services 3,547 4,226 1,856 2,054
Data processing 3,435 3,305 1,844 1,763
Printing, postage and supplies 2,835 2,711 1,441 1,286
Deposit insurance assessments 2,329 2,155 1,175 1,078
Advertising and business development 1,891 1,781 957 946
Amortization of intangibles, including
purchased mortgage servicing rights 1,182 1,284 592 629
Net income from operation of
other real estate and assets owned (679 (1,046) (426) (295)
Other 6,661 5,657 3,392 2,618
-------------------------------------------------------------------------------
Total noninterest expense 56,154 56,229 28,068 28,004
-------------------------------------------------------------------------------
Income Before Provision for Income Taxes 17,582 11,877 8,968 6,059
Provision for income taxes 5,578 1,768 2,869 902
-------------------------------------------------------------------------------
Net Income $12,004 $10,109 $ 6,099 $ 5,157
===============================================================================
Net Income Per Share - Primary
and Fully-Diluted $1.22 $1.03 $.62 $.53
===============================================================================
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) $227,245
Net income _ _ 10,109 _ _ _ 10,109
Dividends paid ($.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
(5,733 common and 19,526
treasury shares) _ 98 _ 556 _ (110) 544
--------------------------------------------- --------- -------------- ---------- ------------- ---------- ------------- ----------
Balance June 30, 1994 $95 $211,806 $19,050 _ ($3,232) ($2,420) $225,299
============================================= ========= ============== ========== ============= ========== ============= ==========
Balance January 1, 1995 $95 $211,733 $31,972 ($ 435) ($6,854) ($2,131) $234,380
Net income _ _ 12,004 _ _ _ 12,004
Dividends paid ($.40 per share) _ _ (3,794) _ _ _ (3,794)
Amortization of deferred compensation _ _ _ _ _ 244 244
Change in unrealized gains (losses) on
available for sale securities, net of tax _ _ _ _ 10,230 _ 10,230
Purchase of treasury stock (38,900 shares) _ _ _ (1,198) _ _ (1,198)
Treasury stock issued (46,228 shares) _ (327) _ 1,417 _ _ 1,090
--------------------------------------------- --------- -------------- ---------- ------------- ---------- ------------- ----------
Balance June 30, 1995 $95 $211,406 $40,182 ($ 216) $3,376 ($1,887) $252,956
============================================= ========= ============== ========== ============= ========== ============= ==========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS Liberty Bancorp, Inc.
-------------------------------------------------------------------------------
First six months (In thousands) 1995 1994
-------------------------------------------------------------------------------
Cash provided (absorbed) by operating activities
Net income $ 12,004 $ 10,109
Adjustments to reconcile net income to net cash
provided (absorbed) by operating activities:
Provisions for losses 1,790 _
Provision for income taxes 5,578 1,768
Depreciation and amortization 5,330 4,579
Net amortization of investment securities 2,648 6,983
Gain on sale of assets (8,572) (5,029)
Change in trading account securities 18,462 415
Loans made for purposes of resale (41,390) (81,320)
Proceeds from sale of loans held for resale 20,705 52,988
Change in accrued interest, expenses and taxes,
accounts payable and other liabilities (1,741) 7,576
Change in accrued income receivable, accounts
receivable and other assets (3,269) 2,891
-------------------------------------------------------------------------------
Net cash provided by operating activities 11,545 960
-------------------------------------------------------------------------------
Cash provided (absorbed) by investing activities
Proceeds from maturities and paydowns on
Available for sale securities 99,313 82,841
Held to maturity securities 43,047 38,768
Proceeds from sales of
Available for sale securities 469,737 509,571
Equity securities 11,819 122
Purchases of
Available for sale securities (385,114) (428,704)
Held to maturity securities (61,579) (9,156)
Equity securities (7,432) (641)
Change in net loans made by bank subsidiaries (78,065) (108,574)
Principal payments received on loans made by parent
company and nonbank subsidiaries 2,093 2,583
Loans made to customers by nonbank subsidiaries (3,112) (4,117)
Expenditures for property and equipment (3,061) (6,231)
Proceeds from sale of property and equipment 22 37
Sale proceeds and collections from other real estate
and assets acquired in settlement of loans 2,951 4,458
Sales of mortgage servicing contracts _ 287
Purchases of mortgage servicing contracts (158) (161)
-------------------------------------------------------------------------------
Net cash provided by investing activities 90,461 81,083
-------------------------------------------------------------------------------
Cash provided (absorbed) by financing activities
Change in savings and demand deposits (198,219) (18,807)
Change in time deposits (85,997) 37,812
Change in short-term borrowings 78,067 (38,532)
Proceeds from issuance of common and treasury stock 1,090 544
Purchase of treasury stock (1,198) (555)
Dividends paid on common stock (3,794) (2,844)
-------------------------------------------------------------------------------
Net cash provided (absorbed) by financing activities (210,051) (22,382)
-------------------------------------------------------------------------------
Net change in cash and cash equivalents (108,045) 59,661
Cash and cash equivalents at beginning of year 415,956 337,279
-------------------------------------------------------------------------------
Cash and cash equivalents at June 30 $307,911 $396,940
===============================================================================
Additional cash flow information
Interest paid $46,524 $29,319
Income tax paid 2,615 935
Income tax refunded 1,508 _
Noncash items included in investing activities
Net loans transferred to (from) other real estate
and assets owned 110 (697)
Loans made to finance the sale of other real estate
and assets owned _ 630
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.
-------------------------------------------------------------------------------
June 30 (In thousands) Six Months Ended Three Months Ended
1995 1994 1995 1994
-------------------------------------------------------------------------------
Weighted average shares outstanding
Primary 9,828 9,798 9,839 9,809
Fully-diluted 9,837 9,818 9,845 9,822
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 292,890,000
<INT-BEARING-DEPOSITS> 431,000
<FED-FUNDS-SOLD> 14,590,000
<TRADING-ASSETS> 3,047,000
<INVESTMENTS-HELD-FOR-SALE> 489,822,000
<INVESTMENTS-CARRYING> 939,972,000
<INVESTMENTS-MARKET> 943,469,000
<LOANS> 1,279,336,000
<ALLOWANCE> 18,166,000
<TOTAL-ASSETS> 2,702,864,000
<DEPOSITS> 2,089,971,000
<SHORT-TERM> 308,219,000
<LIABILITIES-OTHER> 51,718,000
<LONG-TERM> 0
<COMMON> 95,000
0
0
<OTHER-SE> 252,861,000
<TOTAL-LIABILITIES-AND-EQUITY> 2,702,864,000
<INTEREST-LOAN> 52,662,000
<INTEREST-INVEST> 31,800,000
<INTEREST-OTHER> 1,793,000
<INTEREST-TOTAL> 86,255,000
<INTEREST-DEPOSIT> 38,697,000
<INTEREST-EXPENSE> 45,605,000
<INTEREST-INCOME-NET> 40,650,000
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 6,003,000
<EXPENSE-OTHER> 56,154,000
<INCOME-PRETAX> 17,582,000
<INCOME-PRE-EXTRAORDINARY> 12,004,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,004,000
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.22
<YIELD-ACTUAL> 3.64
<LOANS-NON> 5,646,000
<LOANS-PAST> 1,845,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 5,273,000
<ALLOWANCE-OPEN> 19,081,000
<CHARGE-OFFS> 1,443,000
<RECOVERIES> 528,000
<ALLOWANCE-CLOSE> 18,166,000
<ALLOWANCE-DOMESTIC> 18,166,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
