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, 1996
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 13, 1996
----- -----------------------------------
Common Stock 9,475,543
FORM 10-Q
For the The Quarterly Period Ended March 31, 1996
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 share data) 1996 1995
- -------------------------------------------------------------------------------
For the First Quarter
Total revenues $ 60,096 $ 59,333
Net interest income 22,075 19,038
Provision for loan losses 1,175 -
Trust fees 4,134 3,944
Mortgage banking income 1,715 1,518
Other noninterest income 8,794 12,200
Noninterest expense 26,888 28,086
Income before provision for income taxes 8,655 8,614
Provision for income taxes 2,604 2,709
Net income 6,051 5,905
Per share data - primary and fully-diluted
Net income .61 .60
Cash dividends declared .25 .20
- -------------------------------------------------------------------------------
At March 31
Loans $1,418,164 $1,208,806
Earning assets 2,468,744 2,227,595
Assets 2,906,710 2,672,325
Deposits 2,389,187 2,137,708
Total shareholders' investment 267,009 243,329
Book value per common share 28.20 25.70
- -------------------------------------------------------------------------------
Average Balances
Loans $1,401,115 $1,171,883
Earning assets 2,421,891 2,323,447
Assets 2,831,603 2,733,855
Deposits 2,315,291 2,217,032
Total shareholders' investment 270,473 239,581
- -------------------------------------------------------------------------------
Ratios
Capital ratios
Leverage 8.88% 8.47%
Risk-based 14.35 15.69
Average shareholders' investment as a % of
average total assets 9.55 8.76
Average earning assets as a % of average
total assets 85.53 84.99
Rate of return on
Average earning assets 1.00 1.03
Average total assets .86 .88
Average total shareholders' investment 9.00 10.00
Dividend payout ratio 40.98 33.33
Operating efficiency ratio 72.80 84.94
Provision for loan losses as a %
of average loans .34 -
FINANCIAL REVIEW
Liberty Bancorp, Inc. and its subsidiaries ("Liberty") provide a broad
range of banking and financial services to meet the diverse needs of individual
and corporate customers in the Oklahoma City and Tulsa metropolitan areas,
Oklahoma and the Mid-America region. Liberty Bank and Trust Company of Okla-
homa City, N.A. ("Liberty Oklahoma City") and Liberty Bank and Trust Company of
Tulsa, N.A. ("Liberty Tulsa") are Liberty's principal subsidiaries. Liberty
Mortgage Company, a subsidiary of Liberty Oklahoma City, engages in mortgage
banking activities.
Liberty has twenty 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 addi-
tion, it has three limited service detached drive-in facilities in Oklahoma
City, Tulsa and Norman. Liberty Mortgage Company ("LMC") conducts residential
mortgage operations from the main Liberty Oklahoma City location, three
branches and a correspondent network with community banks within the state.
The LMC branch locations are in Oklahoma City, Tulsa and Enid, Oklahoma. Com-
mercial mortgage operations are available at the main bank location of Liberty
Oklahoma City and the LMC branch in Tulsa.
The banking industry, both locally and nationally, is experiencing an ex-
pansion and consolidation trend which most likely will continue to present ac-
quisition opportunities. Liberty will systematically evaluate these possibili-
ties for the acquisition of smaller institutions as well as potential combina-
tions with larger institutions to determine whether they may offer the poten-
tial 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.
Performance Summary: First Three Months of 1996
Compared to First Three Months of 1995
For the first three months of 1996, Liberty reported net income of $6.1
million or $.61 per common share. This compares to net income of $5.9 million
or $.60 per common share for the first three months of 1995. The increase in
net income for the first three months of 1996 is primarily due to an increase
in interest income and reduced deposit insurance assessments. These increases
to income have been partially offset by lower net securities gains and a $1.2
million provision for loan losses.
Net Interest Income
On a tax-equivalent basis, net interest income increased $3.1 million or
15.9% in the first three months of 1996 to $22.7 million compared to $19.6 mil-
lion for the first three months of 1995. The increase is primarily due to the
continued increase in higher yielding loan levels as well as a decrease in
lower-yielding taxable securities. The net interest margin for the first three
months of 1996 increased to 3.78% from 3.42% in the first three months of 1995.
Tax-equivalent interest income increased $3.9 million to $46.1 million for
the first three months of 1996 compared to $42.3 million in the same period of
1995 due primarily to the $229 million increase in average loan volumes and a
$148.4 million increase in average federal funds sold. Funding for the in-
creased loan and federal funds sold levels was provided by taxable investment
securities sales and maturities not reinvested and by increased deposit levels.
Securities averaged $279 million below the first three months of 1995 but the
yield improved 46 basis points from 6.2% to 6.6% as maturities not used to fund
the increased loan demand were invested in higher yielding securities. These
yield and volume mix changes as well as an increase in interest rates resulted
in the yield on average earning assets increasing from 7.4% in 1995 to 7.7% in
1996.
Total interest expense increased $745 thousand to $23.4 million for the
first three months of 1996 compared to $22.6 million for the same period in
1995. This slight increase was primarily attributable to an increase of $75.7
million in average interest-bearing deposits. The average deposit increases
occurred primarily in the money market account deposits and also in large time
deposits. Liberty's cost of funds remained at 4.9% for the first three months
of 1996 and 1995.
Noninterest Income
Noninterest income for the first three months of 1996 decreased $3.0 mil-
lion or 17.1% from the first three months of 1995. The largest factor of this
decrease was in net securities gains which decreased $3.8 million due to sales
of equity and available for sale securities in the first quarter of 1995. Net
securities gains for the first three months of 1996 totaled $448 thousand com-
pared to $4.2 million for the same period of 1995. Other changes from the
first three months of 1995 included service charges on deposits which increased
$256 thousand, mortgage banking income which increased $197 thousand and trust
fees which increased $190 thousand.
Noninterest Expense
Noninterest expense decreased $1.2 million or 4.3% to $26.9 million for
the first three months of 1996 compared to $28.1 million for the same period
one year ago. The largest decrease was in the deposit insurance assessment
which decreased $1.1 million or 96.8% in 1996, due to insurance rate reductions
in the last half of 1995. The rates of highly capitalized commercial banks were
reduced from $.23 per hundred dollars of deposits to $.04 per hundred dollars
of deposits.
Salaries and employee benefits increased $513 thousand, partially as a re-
sult of increased expenses relating to management incentive and bonus plans.
Data processing expense increased $288 thousand due to additional contractual
expenses with Liberty's facilities manager. Other noninterest expense de-
creased $703 thousand or 21.5%. Liberty made a provision in the first quarter
of 1995 for $850 thousand to cover expenses related to anticipated payments,
settlements and costs of various matters, including legal proceedings which oc-
curred in the ordinary course of business. A similar provision was made in the
first quarter of 1996 for $102 thousand.
Net income from the operation of OREO amounted to $462 thousand and $253
thousand for the first three months of 1996 and 1995, respectively. 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, 1996 are $507 thousand in gains from the sale of OREO and $17 thousand of
other gross income on OREO properties. This compares with gains of $271 thou-
sand and other gross income of $43 thousand for the first three months of 1995.
Liberty's operating efficiency ratio for the first three months of 1996
improved to 72.8% compared to 84.9% in 1995. 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 $2.6 million in income tax expense (32% effective tax
rate) for the first three months of 1996. This compares to an income tax ex-
pense of $2.7 million for the first three months of 1995. It is anticipated
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 7.1% since year-end 1995. The level of nonperforming assets at
March 31, 1996 of $16.1 million is $410 thousand or 2.6% higher than the $15.6
million level one year ago. At March 31, 1996, total nonperforming assets were
1.1% of total loans and other real estate and assets owned and .6% of total as-
sets.
Nonperforming loans decreased by $688 thousand to $12.9 million or 5.1%
since December 31, 1995 and increased by $1.8 million or 16.3% from one year
earlier. Of the nonperforming loans at March 31, 1996, 25.0% were real estate-
related. Nonperforming loans at March 31, 1996 represented .9% of total loans.
Reserve for Loan Losses
The reserve for loan losses at March 31, 1996 was 128.9% of total nonper-
forming loans and 1.17% of total loans. A $1.2 million provision was made in
the first quarter of 1996. As loans continue to increase, Liberty expects to
continue to provide additional reserves for the foreseeable future. No provi-
sions for loan losses were made during the first three months of 1995. The
following table summarizes the reserve for loan loss activity for the first
three months of 1996 and 1995:
- -------------------------------------------------------------------------------
Reserve for Loan Losses
- -------------------------------------------------------------------------------
(In thousands) 1996 1995
- -------------------------------------------------------------------------------
Balance at January 1 $16,483 $19,081
Additions
Recoveries 141 311
Provisions 1,175 -
Less: Charge-offs (1,231) (646)
- -------------------------------------------------------------------------------
Balance at March 31 $16,568 $18,746
===============================================================================
Liberty classifies certain loans as "impaired" and measures these loans
based on the present value of expected future cash flows discounted at the
loan's original effective interest rate. As a practical expedient, impairment
may be measured based on the loan's observable market price or the fair value
of the collateral if the loan is collateral dependent. When the measure of the
impaired loan is less than the recorded investment in the loan, the impairment
is recorded through a valuation allowance.
At March 31, 1996, Liberty had a recorded investment of $7.7 million in
loans classified as impaired, of which $1.7 million required a valuation allow-
ance of $439 thousand as calculated under SFAS No. 114. Interest income on im-
paired loans has been recorded by Liberty in a manner consistent with its in-
come recognition policies for other loans.
Other Real Estate and Assets Owned
Net other real estate and assets owned ("OREO") decreased $531 thousand or
14.2% since year-end 1995 and $1.4 million or 30.3% from March 31, 1995. These
reductions have primarily been the result of sales. Net OREO at March 31, 1996
was $3.2 million.
The following table illustrates the changes in the reserve for OREO for
the first three months of 1996 and 1995:
- -------------------------------------------------------------------------------
Reserve for Losses on Other Real Estate and Assets Owned
- -------------------------------------------------------------------------------
(In thousands) 1996 1995
- -------------------------------------------------------------------------------
Balance at January 1 $856 $1,042
Provisions for losses - -
Charge-offs (2) (38)
- -------------------------------------------------------------------------------
Balance at March 31 $854 $1,004
===============================================================================
Asset and Liability Management
Liberty's overall liquidity is more than adequate to meet its foreseeable
funding needs. Sufficient sources of asset based liquidity, such as marketable
securities and federal funds sold, are available to meet the planned loan
growth and other short-term needs of the company. Retail deposits are also a
major source of funds, but wholesale funding sources such as federal funds
purchased and other borrowings are also used to provide liquidity. While funds
are readily available, the competition for deposits is significant from other
banks and nonbanking investment products causing an upward pressure on interest
expense. However, Liberty's costs of funds are commensurate with local
competition.
As a result of lower levels of investment securities and increased deposit
levels, Liberty was a net seller of federal funds and securities under repur-
chase agreements averaging $89.3 million for the first three months of 1996
compared to being a net purchaser of $85.5 million for the same period in 1995.
Net loans as a percentage of deposits average 59.8% during the first three
months of 1996 compared to 52.0% for the same period in 1995. These amounts
and percentages are within the company's liquidity and interest rate risk poli-
cies. Due to the increase in loan volume, restructuring of the available for
sale portfolio into higher yields and more stable cost of funds, Liberty's net
interest margin has improved significantly in 1996 compared to the first three
months of 1995.
Capital Funds
Shareholders' investment of $267.0 million as a percentage of total assets
was 9.2% at March 31, 1996 compared to $268.9 million or 9.2% at December 31,
1995 and $243.3 million or 9.1% at March 31, 1995. The valuation of available
for sale securities included in shareholders' investment, net of tax, at March
31, 1996 declined $5.6 million from year-end 1995. Net earnings retained for
the first three months of 1996 amounted to $3.7 million.
Liberty's capital base remains more than adequate with a leverage ratio of
8.88% on Tier 1 capital of $249.9 million at March 31, 1996 compared to 9.02%
on $245.0 million at December 31, 1995 and 8.34% on $226.5 million at March 31,
1995. Liberty had a risk-based capital ratio at March 31, 1996 of 14.35%. This
compares to 13.97% at December 31, 1995 and 15.18% at March 31, 1995. Liberty
Oklahoma City and Liberty Tulsa had risk-based capital ratios at March 31, 1996
of 14.31% and 12.22%, 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 insur-
ance assessment purposes.
Parent Company Funding Sources and Dividends
At March 31, 1996, the parent company had cash and interest-bearing depos-
its of $1.7 million compared to $1.1 million at year-end 1995 and $11.2 million
at March 31, 1995. The primary changes in the funding position of the parent
company since March 31, 1995 were the payments of estimated income taxes, the
purchase of treasury stock resulting from employee benefit plans and various
other items.
The parent company's ability to fund various operating expenses and divi-
dends is generally dependent on parent-only earning power, cash reserves and
funds derived from its subsidiaries, principally Liberty Oklahoma City and Lib-
erty Tulsa. These funds historically have been provided primarily by in-
tercompany dividends and management fees. Management fees are generally lim-
ited 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, 1996 the ability of Liberty Oklahoma
City and Liberty Tulsa to pay dividends without regulatory approval was limited
to $27.8 million and $5.5 million, respectively.
Liberty paid cash dividends of $2.3 million or $.25 per share in the first
three months of 1996. This compares to cash dividends in the first three
months of 1995 of $1.9 million or $.20 per share. It is expected that such
cash dividends will continue if justified by Liberty's earnings, capital ade-
quacy 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 3/31/96 12/31/95 9/30/95 6/30/95 3/31/95
Interest income $45,453 $45,298 $44,513 $44,584 $41,671
Interest income (tax equivalent) 46,115 45,972 45,143 45,165 42,250
Interest expense 23,378 23,254 22,956 22,972 22,633
Net interest income 22,075 22,044 21,557 21,612 19,038
Provision for loan losses 1,175 1,150 200 - -
Trust fees 4,134 4,021 4,127 3,824 3,944
Mortgage banking income 1,715 1,489 1,645 1,486 1,518
Other noninterest income 8,794 10,115 9,534 10,114 12,200
Noninterest expense 26,888 26,718 25,571 28,068 28,086
Net income 6,051 6,678 7,511 6,099 5,905
Net income per share .61 .68 .76 .62 .60
Common stock price range
High 38.75 38.88 37.25 35.75 31.75
Low 35.75 36.25 32.25 29.75 29.25
Close 37.00 37.25 36.75 32.50 30.19
At Quarter End
Shares of common stock,
net of treasury stock
Outstanding 9,468 9,467 9,468 9,482 9,467
Fully-diluted 9,933 9,875 9,871 9,866 9,816
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
Average Balances/Net Interest Margin/Rates (1)
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Three months ended March 31, 1996 December 31, 1995 September 30, 1995
- -----------------------------------------------------------------------------------------------------------------------
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) $1,401,115 $29,936 8.59% $1,381,156 $30,565 8.78% $1,334,004 $29,648 8.82%
Investment securities (3)
Taxable 728,833 11,742 6.48 750,365 12,041 6.37 821,480 13,174 6.36
Nontaxable 80,776 1,585 7.89 78,866 1,572 7.91 71,262 1,418 7.89
Trading account securities 4,906 77 6.31 5,391 89 6.55 3,661 64 6.94
- ---------------------------- ----------- -------- --------- ------------ --------- -------- ----------- --------- -----
Total securities 814,515 13,404 6.62 834,622 13,702 6.51 896,403 14,656 6.49
Federal funds sold and
securities purchased under
agreements to resell and
other 206,261 2,775 5.41 118,116 1,705 5.73 55,824 839 5.96
- ---------------------------- ----------- -------- --------- ------------ --------- -------- ----------- --------- -----
Total earning
assets 2,421,891 46,115 7.66 2,333,894 45,972 7.81 2,286,231 45,143 7.83
Cash and due from banks-
noninterest-bearing 275,813 274,582 255,621
Reserve for loan losses (16,559) (16,333) (18,545)
Other assets 150,458 146,823 157,210
---------- ---------- ----------
Total assets $2,831,603 $2,738,966 $2,680,517
========== ========== ==========
Liabilities and
Shareholders' Investment
Interest-bearing deposits
Savings and money market
accounts $ 812,827 $ 7,155 3.54% $ 789,463 $ 7,373 3.71% $ 782,762 $ 7,303 3.70%
Other time deposits 899,003 13,335 5.97 818,085 12,349 5.99 780,445 11,805 6.00
- ---------------------------- ----------- -------- --------- ------------ --------- -------- ----------- --------- -----
Total interest-bearing
deposits 1,711,830 20,490 4.81 1,607,548 19,722 4.87 1,563,207 19,108 4.85
Federal funds purchased and
securities sold under
agreements to repurchase 116,391 1,491 5.15 131,932 1,846 5.55 121,319 1,705 5.58
Other borrowings 98,983 1,397 5.68 114,146 1,686 5.86 146,610 2,143 5.80
- ---------------------------- ----------- -------- --------- ------------ --------- -------- ----------- --------- -----
Total interest-bearing
liabilities 1,927,204 23,378 4.88 1,853,626 23,254 4.98 1,831,136 22,956 4.97
Demand deposits 603,461 592,442 563,629
Other liabilities 30,465 30,862 30,393
Shareholders' investment 270,473 262,036 255,359
---------- ---------- ----------
Total liabilities and
shareholders'
investment $2,831,603 $2,738,966 $2,680,517
========== ========== ==========
Interest income/
earning assets $46,115 7.66% $45,972 7.81% $45,143 7.83%
Interest expense/
earning assets 23,378 3.88 23,254 3.95 22,956 3.98
------- ---- ------- ---- ------- ----
Net interest margin $22,737 3.78% $22,718 3.86% $22,187 3.85%
======= ==== ======= ==== ======= ====
<FN>
(1) Income and rates shown on a tax-equivalent basis have been computed based on the statutory rate of 35%.
(2) Includes nonaccrual loans.
(3) Includes available for sale securities at amortized cost for all years presented.
</TABLE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------
Average Balances/Net Interest Margin/Rates (1)
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
Three months ended June 30, 1995 March 31, 1995
Average Average Average Average
(In thousands) Balance Interest Rate Balance Interest Rate
- ----------------------------------------- ------------ ----------- ------- ------------ ----------- -----
<S> <C> <C> <C> <C> <C> <C>
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%
======= ==== ======= ====
<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.
- -------------------------------------------------------------------------------
March 31, December 31, March 31,
(In thousands, except share data) 1996 1995 1995
- -------------------------------------------------------------------------------
Assets
Cash and due from banks
Noninterest-bearing $ 297,768 $ 299,473 $ 290,817
Interest-bearing 516 623 179
Federal funds sold and securities
purchased under agreements to resell 233,300 260,740 21,130
- -------------------------------------------------------------------------------
Total cash and cash equivalents 531,584 560,836 312,126
- -------------------------------------------------------------------------------
Trading securities 8,488 8,689 2,837
Investment securities
Available for sale 607,756 594,979 555,788
Held to maturity 180,547 192,687 421,375
Equity 19,973 19,757 17,480
- -------------------------------------------------------------------------------
Total investment securities 808,276 807,423 994,643
- -------------------------------------------------------------------------------
Loans, net 1,401,596 1,387,731 1,190,060
Property and equipment, net 64,503 65,733 68,170
Accounts receivable 16,461 10,969 18,559
Accrued income receivable 27,255 27,165 25,676
Deferred tax asset, net 9,663 7,740 17,278
Other real estate and assets owned, net 3,200 3,731 4,593
Other assets 35,684 42,527 38,383
- -------------------------------------------------------------------------------
Total assets $2,906,710 $2,922,544 $2,672,325
===============================================================================
Liabilities and Shareholders' Investment
Deposits
Noninterest-bearing $ 632,780 $ 590,056 $ 543,060
Interest-bearing 1,756,407 1,732,522 1,594,648
- -------------------------------------------------------------------------------
Total deposits 2,389,187 2,322,578 2,137,708
- -------------------------------------------------------------------------------
Other borrowings
Federal funds purchased and securities
sold under agreements to repurchase 123,256 171,739 173,152
Other 94,066 128,267 84,764
- -------------------------------------------------------------------------------
Total other borrowings 217,322 300,006 257,916
- -------------------------------------------------------------------------------
Accrued interest, expenses and taxes 22,644 23,275 19,141
Accounts payable 9,800 6,888 13,377
Other liabilities 748 903 854
- -------------------------------------------------------------------------------
Total liabilities 2,639,701 2,653,650 2,428,996
- -------------------------------------------------------------------------------
Shareholders' Investment
Common stock ($.01 par value; 50,000,000
shares authorized) 95 95 95
- ---------------------------------------------
March 31, Dec. 31, March 31,
1996 1995 1995
- ---------------------------------------------
Shares
issued 9,488,428 9,488,428 9,488,428
Shares
outstanding 9,468,295 9,467,012 9,466,975
- ---------------------------------------------
Capital surplus 210,486 210,597 211,535
Retained earnings 54,261 50,578 35,980
Treasury stock, at cost - 20,133 shares at
March 31, 1996, 21,416 shares at
December 31, 1995 and 21,453 shares at
March 31, 1995 (736) (768) (673)
Unrealized security gains (losses), net of
tax 4,405 10,025 (1,598)
Deferred compensation (1,502) (1,633) (2,010)
- -------------------------------------------------------------------------------
Total shareholders' investment 267,009 268,894 243,329
- -------------------------------------------------------------------------------
Total liabilities and shareholders'
investment $2,906,710 $2,922,544 $2,672,325
===============================================================================
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 share data) 1996 1995
- -------------------------------------------------------------------------------
Interest Income
Loans $29,835 $24,647
Investments
Taxable 11,742 15,285
Nontaxable 1,032 829
Trading 69 50
Federal funds sold and other 2,775 860
- -------------------------------------------------------------------------------
Total interest income 45,453 41,671
- -------------------------------------------------------------------------------
Interest Expense
Deposits 20,490 19,131
Other borrowings 2,888 3,502
- -------------------------------------------------------------------------------
Total interest expense 23,378 22,633
- -------------------------------------------------------------------------------
Net Interest Income 22,075 19,038
Provision for loan losses 1,175 -
- -------------------------------------------------------------------------------
Net Interest Income After Provision for Loan Losses 20,900 19,038
- -------------------------------------------------------------------------------
Noninterest Income
Trust fees 4,134 3,944
Service charges on deposits 3,849 3,593
Mortgage banking income 1,715 1,518
Trading account profits and commissions 1,011 988
Credit card fees 675 617
Net securities gains 448 4,214
Loan fees 351 358
Other 2,460 2,430
- -------------------------------------------------------------------------------
Total noninterest income 14,643 17,662
- -------------------------------------------------------------------------------
Noninterest Expense
Salaries 10,897 10,664
Employee benefits 2,630 2,350
Equipment 2,590 2,502
Occupancy, net 2,073 2,200
Data processing 1,879 1,591
Professional and other services 1,830 1,691
Printing, postage and supplies 1,273 1,394
Advertising and business development 991 934
Amortization of intangibles, including
purchased mortgage servicing rights 584 590
Deposit insurance assessments 37 1,154
Net income from operation of other
real estate and assets owned (462) (253)
Other 2,566 3,269
- -------------------------------------------------------------------------------
Total noninterest expense 26,888 28,086
- -------------------------------------------------------------------------------
Income Before Provision for Income Taxes 8,655 8,614
Provision for income taxes 2,604 2,709
- -------------------------------------------------------------------------------
Net Income $ 6,051 $ 5,905
===============================================================================
Net Income Per Share - Primary and Fully-Diluted $ .61 $ .60
The accompanying notes are an integral part of these consolidated financial
statements.
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF SHAREHOLDERS' INVESTMENT Liberty Bancorp, Inc.
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Unrealized
Security Total
Common Capital Retained Treasury Gains Deferred Shareholders'
(Dollars in thousands) Stock Surplus Earnings Stock (Losses) Compensation Investment
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
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
================================================= ==== ========== ========= ======= ========== ============ ===========
Balance January 1, 1996 $95 $210,597 $50,578 $(768) $10,025 $(1,633) $268,894
Net income - - 6,051 - - - 6,051
Dividends paid ($.25 per share) - - (2,368) - - - (2,368)
Amortization of deferred compensation - - - - - 131 131
Change in unrealized gains (losses) on
available for sale securities, net of tax - - - - (5,620) - (5,620)
Purchase of treasury stock (26,920 shares) - - - (988) - - (988)
Treasury stock issued (28,203 shares) - (111) - 1,020 - - 909
- ------------------------------------------------- ---- ---------- --------- ------- ---------- ------------ -----------
Balance March 31, 1996 $95 $210,486 $54,261 $(736) $ 4,405 $(1,502) $267,009
================================================= ==== ========== ========= ======= ========== ============ ===========
<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) 1996 1995
- -------------------------------------------------------------------------------
Cash provided (absorbed) by operating activities
Net income $ 6,051 $ 5,905
Adjustments to reconcile net income to net cash provided
(absorbed) by operating activities:
Provisions for losses 1,277 850
Provision for income taxes 2,604 2,709
Depreciation and amortization 3,226 2,578
Net amortization of investment securities 984 610
Gain on sale of assets (2,962) (5,388)
Change in trading account securities 2,048 15,868
Loans made for purposes of resale (28,258) (21,468)
Proceeds from sale of loans held for resale 20,140 10,303
Change in accrued interest, expenses and taxes,
accounts payable and other liabilities (4,747) (2,678)
Change in accrued income receivable, accounts
receivable and other assets 5,313 8,621
- -------------------------------------------------------------------------------
Net cash provided by operating activities 5,676 17,910
- -------------------------------------------------------------------------------
Cash provided (absorbed) by investing activities
Proceeds from maturities and paydowns on
Available for sale securities 150,386 76,733
Held to maturity securities 25,777 24,138
Proceeds from sales of
Available for sale securities 79,997 310,692
Equity securities - 11,819
Purchases of
Available for sale securities (252,262) (277,962)
Held to maturity securities (13,719) (31,035)
Equity securities (215) (6,668)
Change in net loans made by bank subsidiaries (7,636) (17,166)
Principal payments received on loans made by parent
company and nonbank subsidiaries 1,475 968
Loans made to customers by nonbank subsidiaries (1,114) (1,643)
Expenditures for property and equipment (552) (1,646)
Proceeds from sale of property and equipment (1) -
Sale proceeds and collections from other real estate and
assets acquired in settlement of loans 1,472 1,128
Purchases of mortgage servicing contracts (14) (50)
- -------------------------------------------------------------------------------
Net cash provided (absorbed) by investing activities (16,406) 89,308
- -------------------------------------------------------------------------------
Cash provided (absorbed) by financing activities
Change in savings and demand deposits 23,422 (207,719)
Change in time deposits 43,187 (28,760)
Change in short-term borrowings (82,684) 27,764
Proceeds from issuance of common and treasury stock 909 157
Purchase of treasury stock (988) (593)
Dividends paid on common stock (2,368) (1,897)
- -------------------------------------------------------------------------------
Net cash provided (absorbed) by financing activities (18,522) (211,048)
- -------------------------------------------------------------------------------
Net change in cash and cash equivalents (29,252) (103,830)
Cash and cash equivalents at beginning of year 560,836 415,956
- -------------------------------------------------------------------------------
Cash and cash equivalents at end of year $531,584 $312,126
===============================================================================
Additional cash flow information
Interest paid $ 22,056 $ 22,581
Income tax refunded 5 1,508
Noncash items included in investing activities
Net loans transferred to (from) other real estate
and assets owned 483 99
Loans made top finance the sale of other real estate
and assets owned 12 -
The accompanying notes are an integral part of these consolidated financial
statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Accounting Policies
The condensed financial statements included herein have been prepared by
Liberty Bancorp, Inc. ("Liberty") without audit, and include all adjustments
which, in the opinion of management, are of a normal recurring nature and are
necessary to present fairly the results of the interim periods, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain in-
formation and footnote disclosures, normally included in financial statements
prepared in accordance with generally accepted accounting principles, have been
condensed or omitted pursuant to such rules and regulations. Certain reclassi-
fications have been made to provide consistent financial statement classi-
fications in the periods presented herein. Such reclassifications had no ef-
fect on net income or total assets.
It is suggested that these condensed financial statements be read in con-
junction with the financial statements and the notes thereto included in Lib-
erty's 1995 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
- -------------------------------------------------------------------------------
1996 1995
- -------------------------------------------------------------------------------
Weighted average shares outstanding
Primary 9,940 9,817
Fully-diluted 9,940 9,817
PART II
OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Shareholders
The 1996 Annual Meeting of Shareholders of Liberty Bancorp, Inc. was held
April 17, 1996. The meeting included the election of members of the Board of
Directors whose terms expired at the meeting. The members elected Thomas G.
Donnell, William F. Fisher, Jr., Walter H. Helmerich, III, Joseph S. Jankowsky,
John E. Kirkpatrick, Robert E. Torray and John S. Zink. The votes for the
nominees were as follows:
Withhold
Nominee For Against Authority
------- --- ------- ---------
Thomas G. Donnell 7,933,807 249,763 5,294
William F. Fisher, Jr. 7,935,940 247,630 3,161
Walter H. Helmerich, III 7,938,611 244,959 490
Joseph S. Jankowsky 7,934,014 249,556 5,087
John E. Kirkpatrick 7,937,531 246,039 1,570
Robert E. Torray 7,937,538 246,032 1,563
John S. Zink 7,935,841 247,729 3,260
Directors whose terms did not expire at the meeting and who continued in
office were Donald L. Brawner, M.D., Robert S. Ellis, M.D., Charles W. Flint,
III, James L. Hall, Jr., Raymond H. Hefner, Jr., Edward F. Keller, Judy Z.
Kishner, David L. Kyle, Edward C. Lawson, Jr., Herb Mee, Jr., Charles E. Nel-
son, William G. Paul, V. Lee Powell, Jon R. Stuart, Clifton L. Taulbert, W. H.
Thompson, Jr. and J. Otis Winters.
Additionally, the shareholders voted to amend the 1990 Stock Option Plan
by increasing the number of shares authorized for options from 705,000 to
730,000. The voting was as follows:
For Against Abstain
--- ------- -------
7,821,818 357,547 4,205
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, 1996
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 297,768,000
<INT-BEARING-DEPOSITS> 516,000
<FED-FUNDS-SOLD> 233,300,000
<TRADING-ASSETS> 8,488,000
<INVESTMENTS-HELD-FOR-SALE> 607,756,000
<INVESTMENTS-CARRYING> 808,276,000
<INVESTMENTS-MARKET> 811,066,000
<LOANS> 1,418,164,000
<ALLOWANCE> 16,568,000
<TOTAL-ASSETS> 2,906,710,000
<DEPOSITS> 2,389,187,000
<SHORT-TERM> 217,322,000
<LIABILITIES-OTHER> 33,192,000
<LONG-TERM> 0
0
0
<COMMON> 95,000
<OTHER-SE> 266,914,000
<TOTAL-LIABILITIES-AND-EQUITY> 2,906,710,000
<INTEREST-LOAN> 29,835,000
<INTEREST-INVEST> 12,774,000
<INTEREST-OTHER> 2,844,000
<INTEREST-TOTAL> 45,453,000
<INTEREST-DEPOSIT> 20,490,000
<INTEREST-EXPENSE> 23,378,000
<INTEREST-INCOME-NET> 22,075,000
<LOAN-LOSSES> 1,175,000
<SECURITIES-GAINS> 448,000
<EXPENSE-OTHER> 26,888,000
<INCOME-PRETAX> 8,655,000
<INCOME-PRE-EXTRAORDINARY> 6,051,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,051,000
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
<YIELD-ACTUAL> 3.78
<LOANS-NON> 7,089,000
<LOANS-PAST> 641,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 473,000
<ALLOWANCE-OPEN> 16,483,000
<CHARGE-OFFS> 1,231,000
<RECOVERIES> 141,000
<ALLOWANCE-CLOSE> 16,568,000
<ALLOWANCE-DOMESTIC> 16,568,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
