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, 1997
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 1, 1997
----- -----------------------------------
Common Stock 9,711,511
FORM 10-Q
For the Quarterly Period Ended March 31, 1997
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) 1997 1996
- -------------------------------------------------------------------------------
For the First Quarter
Total revenues $ 64,416 $ 60,096
Net interest income 24,788 22,075
Provision for loan losses 2,300 1,175
Trust fees 4,527 4,134
Mortgage banking income 1,710 1,715
Other noninterest income 10,862 8,794
Noninterest expense 28,406 26,888
Income before provision for income taxes 11,181 8,655
Provision for income taxes 3,318 2,604
Net income 7,863 6,051
Per share data - primary and fully-diluted
Net income .78 .61
Cash dividends declared .30 .25
- -------------------------------------------------------------------------------
At March 31
Loans $1,497,147 $1,418,164
Earning assets 2,434,878 2,468,744
Assets 2,832,082 2,906,710
Deposits 2,352,005 2,389,187
Total shareholders' investment 283,269 267,009
Book value per common share 29.45 28.20
- -------------------------------------------------------------------------------
Average Balances
Loans $1,480,504 $1,401,115
Earning assets 2,437,994 2,421,891
Assets 2,811,043 2,831,603
Deposits 2,304,889 2,315,291
Total shareholders' investment 283,289 270,473
- -------------------------------------------------------------------------------
Ratios
Capital ratios
Leverage 9.68% 8.88%
Risk-based 15.25 14.35
Average shareholders' investment as a % of
average total assets 10.08 9.55
Average earning assets as a % of average
total assets 86.73 85.53
Rate of return on
Average earning assets 1.31 1.00
Average total assets 1.13 .86
Average total shareholders' investment 11.26 9.00
Dividend payout ratio 38.46 40.98
Operating efficiency ratio 67.92 72.80
Provision for loan losses as a %
of average loans .63 .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
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, three
branches and a correspondent network with community banks within the state.
The LMC branch locations are in Oklahoma City, Tulsa and Enid, Oklahoma.
Commercial mortgage operations are available at the main bank location of
Liberty Oklahoma City and the LMC branch in Tulsa.
On December 28, 1996, Banc One Corporation ("Banc One"), Banc One Oklahoma
Corporation and Liberty entered into a merger agreement ("Merger Agreement")
which provides for the merger of Liberty with and into Banc One Oklahoma
Corporation, a wholly owned subsidiary of Banc One, subject to the approval of
a majority of Liberty shareholders and various regulatory approvals. The
merger is expected to be consummated in the second quarter of 1997.
Pursuant to the Merger Agreement, each share of Liberty common stock will
be converted into 1.175 shares of Banc One common stock.
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 1997
Compared to First Three Months of 1996
For the first three months of 1997, Liberty reported net income of $7.9
million or $.78 per common share. This compares to net income of $6.1 million
or $.61 per common share for the first three months of 1996. The increase in
net income for the first three months of 1997 is primarily due to an increase
in net interest income and increased noninterest income. These increases to
income have been partially offset by higher provisions for loan losses, salary
expense and employee benefit costs.
Net Interest Income
On a tax-equivalent basis, net interest income increased $2.9 million or
12.9% in the first three months of 1997 to $25.7 million compared to $22.7
million for the first three months of 1996. The increase is primarily due to
the continued increase in higher yielding loan levels, decreases in lower-
yielding taxable securities and increased interest rates on earning assets.
The net interest margin for the first three months of 1997 increased to 4.27%
from 3.78% in the first three months of 1996.
Tax-equivalent interest income increased $2.1 million to $48.2 million for
the first three months of 1997 compared to $46.1 million in the same period of
1996 due primarily to the $79 million increase in average loan volumes and $1.2
million in interest collected on a specific nonaccrual loan. Funding for the
increased loan levels was provided by taxable investment securities sales and
maturities not reinvested. Taxable securities averaged $67 million below the
first three months of 1996 and the yield improved 47 basis points from 6.5% to
7.0% 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 7.7% in 1996 to 8.0% in 1997.
Total interest expense decreased $849 thousand to $22.5 million for the
first three months of 1997 compared to $23.4 million for the same period in
1996. This decrease was primarily attributable to decreases in time deposits
and their associated yields. Average savings and money market accounts and
federal funds purchased, which typically have lower yields, increased during
the first quarter. Liberty's cost of funds decreased slightly from 4.88% for
the first three months of 1996 to 4.82% in 1997.
Noninterest Income
Noninterest income for the first three months of 1997 increased $2.5
million or 16.8% from the first three months of 1996. A major factor of this
increase was in net securities gains which increased $494 thousand due to sales
of equity and available for sale securities. Net securities gains for the
first three months of 1997 totaled $942 thousand compared to $448 thousand for
the same period of 1996. Other changes from the first three months of 1996
included trading account profits and commissions which increased $431 thousand
and trust fees which increased $393 thousand and the reversal of provisions
made in previous periods for various risk elements totaling $863 thousand.
Noninterest Expense
Noninterest expense increased $1.5 million or 5.6% to $28.4 million for
the first three months of 1997 compared to $26.9 million for the same period
one year ago. The largest increase was in salaries and employee benefits which
increased $1.1 million due to higher base salaries of $357 thousand, trading
commissions of $237 thousand on higher sales, increased medical plan claims of
$242 thousand and increased payroll taxes of $229 thousand.
Net income from the operation of other real estate and assets owned
("OREO") amounted to $147 thousand and $462 thousand for the first three months
of 1997 and 1996, respectively.
Liberty's operating efficiency ratio for the first three months of 1997
decreased to 67.9% compared to 72.8% in 1996. 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 $3.3 million in income tax expense for the first three
months of 1997 compared to $2.6 million for the first three months of 1996. The
effective tax rate was 30% for both periods.
Credit Risk Management
Nonperforming assets include nonperforming loans and other real estate and
assets owned net of reserves. The level of nonperforming assets at March 31,
1997 of $13.9 million is $2.1 million or 13.3% lower than the $16.1 million
level one year ago. At March 31, 1997, total nonperforming assets were .9% of
total loans and other real estate and assets owned and .5% of total assets.
Nonperforming loans increased by $373 thousand to $12.2 million or 3.2%
since December 31, 1996 and decreased by $628 thousand or 4.9% from one year
earlier. Nonperforming loans at March 31, 1997 represented .8% of total loans.
Reserve for Loan Losses
The reserve for loan losses at March 31, 1997 was 165.8% of total
nonperforming loans and 1.35% of total loans. A $2.3 million provision was
provided in the first quarter of 1997 compared to $1.2 million provided in the
first quarter of 1996. The following table summarizes the reserve for loan
loss activity for the first three months of 1997 and 1996:
- -------------------------------------------------------------------------------
Reserve for Loan Losses
- -------------------------------------------------------------------------------
(In thousands) 1997 1996
- -------------------------------------------------------------------------------
Balance at January 1 $19,779 $16,483
Additions
Recoveries 249 141
Provisions 2,300 1,175
Less: Charge-offs (2,056) (1,231)
- -------------------------------------------------------------------------------
Balance at March 31 $20,272 $16,568
===============================================================================
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, 1997, Liberty had a recorded investment of $9.2 million in
loans classified as impaired, of which $4.8 million required a valuation
allowance of $473 thousand. Interest income on impaired loans has been
recorded by Liberty in a manner consistent with its income recognition policies
for other loans.
Other Real Estate and Assets Owned
Net OREO decreased $413 thousand or 19.7% since year-end 1996 and $1.5
million or 47.3% from March 31, 1996. These reductions have primarily been the
result of sales. Net OREO at March 31, 1997 was $1.7 million.
The following table illustrates the changes in the reserve for OREO for
the first three months of 1997 and 1996:
- -------------------------------------------------------------------------------
Reserve for Losses on Other Real Estate and Assets Owned
- -------------------------------------------------------------------------------
(In thousands) 1997 1996
- -------------------------------------------------------------------------------
Balance at January 1 $670 $856
Provisions for losses - -
Charge-offs (9) (2)
- -------------------------------------------------------------------------------
Balance at March 31 $661 $854
===============================================================================
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
repurchase agreements averaging $76.9 million for the first three months of
1997 compared to $89.3 million for the same period in 1996. Net loans as a
percentage of deposits averaged 63.4% during the first three months of 1997
compared to 59.8% for the same period in 1996. These amounts and percentages
are within the company's liquidity and interest rate risk policies. 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 1997 compared to the first three months of 1996.
Capital Funds
Shareholders' investment of $283.3 million as a percentage of total assets
was 10.0% at March 31, 1997 compared to $280.3 million or 9.7% at December 31,
1996 and $267.0 million or 9.2% at March 31, 1996. The valuation of available
for sale securities included in shareholders' investment, net of tax, at March
31, 1997 declined $4.4 million from year-end 1996. Net earnings retained for
the first three months of 1997 amounted to $5.0 million.
Liberty's capital base remains well above regulatory minimums with a
leverage ratio of 9.68% on Tier 1 capital of $270.8 million at March 31, 1997
compared to 9.47% on $262.5 million at December 31, 1996 and 8.88% on $249.9
million at March 31, 1996. Liberty had a risk-based capital ratio at March 31,
1997 of 15.25%. This compares to 14.81% at December 31, 1996 and 14.35% at
March 31, 1996. Liberty Oklahoma City and Liberty Tulsa had risk-based capital
ratios at March 31, 1997 of 14.89% and 12.32%, 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 March 31, 1997, the parent company had cash and interest-bearing
deposits of $22.3 million compared to $15.9 million at year-end 1996 and $1.7
million at March 31, 1996. The primary changes in the funding position of the
parent company since March 31, 1996 were dividends received from subsidiary
banks, dividends paid and intercompany tax settlements.
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
intercompany dividends and management fees. Management fees are generally
limited to reimbursement of actual expenses. It is anticipated that the parent
company's recurring cash sources will continue to include management fees from
subsidiaries, proceeds from the sale of other assets (principally other real
estate and assets owned) and retained rights to any gains from the sales of
mortgage servicing and other assets. Dividends are paid by the subsidiary
banks from time to time to support the parent company's activities. Liberty
Oklahoma City and Liberty Tulsa are limited in their ability to pay dividends
based on applicable provisions of the National Bank Act pertaining to earnings
and undivided profits. As of March 31, 1997 the ability of Liberty Oklahoma
City and Liberty Tulsa to pay dividends without regulatory approval was limited
to $25.9 million and $4.2 million, respectively.
Liberty paid cash dividends of $2.9 million or $.30 per share in the first
three months of 1997. This compares to cash dividends in the first three
months of 1996 of $2.3 million or $.25 per share.
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 3/31/97 12/31/96 9/30/96 6/30/96 3/31/96
- -------------------------------------------------------------------------------
Interest income $47,317 $46,445 $46,576 $46,054 $45,453
Interest income (tax equivalent) 48,197 47,250 47,270 46,696 46,115
Interest expense 22,529 22,821 23,370 23,108 23,378
Net interest income 24,788 23,624 23,206 22,946 22,075
Provision for loan losses 2,300 2,400 4,275 - -
Trust fees 4,527 4,262 4,123 4,120 4,134
Mortgage banking income 1,710 1,649 1,700 1,565 1,715
Other noninterest income 10,862 10,629 8,520 10,056 8,794
Noninterest expense 28,406 27,789 29,352 27,426 26,888
Net income 7,863 7,238 7,724 6,649 6,051
Net income per share .78 .73 .78 .67 .61
Common stock price range
High 55.88 50.25 38.50 37.25 38.75
Low 46.25 38.00 34.75 35.25 35.75
Close 46.50 49.75 38.00 35.50 37.00
At Quarter End
Shares of common stock,
net of treasury stock
Outstanding 9,619 9,457 9,449 9,462 9,468
Fully-diluted 10,104 10,015 9,917 9,902 9,933
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
Average Balances/Net Interest Margin/Rates (1)
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Three months ended March 31, 1997 December 31, 1996 September 30, 1996
- -----------------------------------------------------------------------------------------------------------------------
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) $1,480,504 $32,355 8.86% $1,458,568 $31,202 8.51% $1,435,645 $30,850 8.55%
Investment securities (3)
Taxable 661,687 11,342 6.95 717,904 12,281 6.81 736,262 12,521 6.77
Nontaxable 88,112 1,753 8.07 84,273 1,637 7.73 81,628 1,632 7.95
Trading account securities 6,718 104 6.28 7,259 114 6.25 11,418 152 5.30
- ---------------------------- ----------- -------- --------- ------------ --------- -------- ----------- --------- -----
Total securities 756,517 13,199 7.08 809,436 14,032 6.90 829,308 14,305 6.86
Federal funds sold and
securities purchased under
agreements to resell and
other 200,973 2,643 5.33 150,664 2,016 5.32 157,326 2,115 5.35
- ---------------------------- ----------- -------- --------- ------------ --------- -------- ----------- --------- -----
Total earning
assets 2,437,994 48,197 8.02 2,418,668 47,250 7.77 2,422,279 47,270 7.76
Cash and due from banks-
noninterest-bearing 242,504 241,062 230,735
Reserve for loan losses (19,651) (19,356) (16,634)
Other assets 150,196 148,356 147,459
---------- ---------- ----------
Total assets $2,811,043 $2,788,730 $2,783,839
========== ========== ==========
Liabilities and
Shareholders' Investment
Interest-bearing deposits
Savings and money market
accounts $ 828,462 $ 7,555 3.70% $ 819,672 $ 7,450 3.62% $ 806,986 $ 7,435 3.67%
Other time deposits 874,374 12,371 5.74 878,135 12,796 5.80 909,065 13,399 5.86
- ---------------------------- ----------- -------- --------- ------------ --------- -------- ----------- --------- -----
Total interest-bearing
deposits 1,702,836 19,926 4.75 1,697,807 20,246 4.74 1,716,051 20,834 4.83
Federal funds purchased and
securities sold under
agreements to repurchase 123,682 1,566 5.13 120,587 1,567 5.17 104,340 1,343 5.12
Other borrowings 70,161 1,037 5.99 65,650 1,008 6.11 80,185 1,193 5.92
- ---------------------------- ----------- -------- --------- ------------ --------- -------- ----------- --------- -----
Total interest-bearing
liabilities 1,896,679 22,529 4.82 1,884,044 22,821 4.82 1,900,576 23,370 4.89
Demand deposits 602,053 594,728 581,234
Other liabilities 29,022 32,488 31,067
Shareholders' investment 283,289 277,470 270,962
---------- ---------- ----------
Total liabilities and
shareholders'
investment $2,811,043 $2,788,730 $2,783,839
========== ========== ==========
Interest income/
earning assets $48,197 8.02% $47,250 7.77% $47,270 7.76%
Interest expense/
earning assets 22,529 3.75 22,821 3.75 23,370 3.84
------- ---- ------- ---- ------- ----
Net interest margin $25,668 4.27% $24,429 4.02% $23,900 3.92%
======= ==== ======= ==== ======= ====
<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, 1996 March 31, 1996
Average Average Average Average
(In thousands) Balance Interest Rate Balance Interest Rate
- ----------------------------------------- ------------ ----------- ------- ------------ ----------- -----
<S> <C> <C> <C> <C> <C> <C>
Assets
Loans (2) $1,414,577 $30,774 8.75% $1,401,115 $29,936 8.59%
Investment securities (3)
Taxable 718,576 11,779 6.59 728,833 11,742 6.48
Nontaxable 78,519 1,557 7.98 80,776 1,585 7.89
Trading account securities 18,280 255 5.61 4,906 77 6.31
- ----------------------------------------- ------------ ----------- ------- ------------ ----------- -----
Total securities 815,375 13,591 6.70 814,515 13,404 6.62
Federal funds sold and securities
purchased under agreements to
resell and other 178,825 2,331 5.24 206,261 2,775 5.41
- ----------------------------------------- ------------ ----------- ------- ------------ ----------- -----
Total earning assets 2,408,777 46,696 7.80 2,421,891 46,115 7.66
Cash and due from banks-
noninterest-bearing 253,630 275,813
Reserve for loan losses (16,433) (16,559)
Other assets 158,315 150,458
---------- ----------
Total assets $2,804,289 $2,831,603
========== ==========
Liabilities and Shareholders'
Investment
Interest-bearing deposits
Savings and money market
accounts $ 801,890 $ 7,114 3.57% $ 812,827 $ 7,155 3.54%
Other time deposits 924,342 13,413 5.84 899,003 13,335 5.97
- ----------------------------------------- ------------ ----------- ------- ------------ ----------- -----
Total interest-bearing deposits 1,726,232 20,527 4.78 1,711,830 20,490 4.81
Federal funds purchased and
securities sold under agreements
to repurchase 113,469 1,420 5.03 116,391 1,491 5.15
Other borrowings 80,836 1,161 5.78 98,983 1,397 5.68
- ----------------------------------------- ------------ ----------- ------- ------------ ----------- -----
Total interest-bearing liabilities 1,920,537 23,108 4.84 1,927,204 23,378 4.88
Demand deposits 581,950 603,461
Other liabilities 33,997 30,465
Shareholders' investment 267,805 270,473
---------- ----------
Total liabilities and shareholders'
investment $2,804,289 $2,831,603
========== ==========
Interest income/earning assets $46,696 7.80% $46,115 7.66%
Interest expense/earning assets 23,108 3.86 23,378 3.88
------- ---- ------- ----
Net interest margin $23,588 3.94% $22,737 3.78%
======= ==== ======= ====
<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) 1997 1996 1996
- -------------------------------------------------------------------------------
Assets
Cash and due from banks
Noninterest-bearing $ 258,958 $ 304,389 $ 297,768
Interest-bearing 402 502 516
Federal funds sold and securities
purchased under agreements to resell 263,932 170,185 233,300
- -------------------------------------------------------------------------------
Total cash and cash equivalents 523,292 475,076 531,584
- -------------------------------------------------------------------------------
Trading securities 7,434 9,766 8,488
Investment securities
Available for sale 469,532 602,423 607,756
Held to maturity 175,165 175,572 180,547
Equity 21,266 20,710 19,973
- -------------------------------------------------------------------------------
Total investment securities 665,963 798,705 808,276
- -------------------------------------------------------------------------------
Loans 1,497,147 1,477,472 1,418,164
Less: Reserve for loan losses (20,272) (19,779) (16,568)
- -------------------------------------------------------------------------------
Loans, net 1,476,875 1,457,693 1,401,596
- -------------------------------------------------------------------------------
Property and equipment, net 60,359 61,129 64,503
Accounts receivable 13,878 13,332 16,461
Accrued income receivable 22,721 25,030 27,255
Deferred tax asset, net 13,043 11,038 9,663
Other real estate and assets owned, net 1,687 2,100 3,200
Other assets 46,830 43,766 35,684
- -------------------------------------------------------------------------------
Total assets $2,832,082 $2,897,635 $2,906,710
===============================================================================
Liabilities and Shareholders' Investment
Deposits
Noninterest-bearing $ 663,590 $ 673,801 $ 632,780
Interest-bearing 1,688,415 1,709,983 1,756,407
- -------------------------------------------------------------------------------
Total deposits 2,352,005 2,383,784 2,389,187
- -------------------------------------------------------------------------------
Other borrowings
Federal funds purchased and securities
sold under agreements to repurchase 101,773 130,894 123,256
Other 59,463 71,225 94,066
- -------------------------------------------------------------------------------
Total other borrowings 161,236 202,119 217,322
- -------------------------------------------------------------------------------
Accrued interest, expenses and taxes 21,842 23,793 22,644
Accounts payable 12,711 5,811 9,800
Other liabilities 1,019 1,877 748
- -------------------------------------------------------------------------------
Total liabilities 2,548,813 2,617,384 2,639,701
- -------------------------------------------------------------------------------
Shareholders' Investment
Common stock ($.01 par value; 50,000,000
shares authorized) 96 95 95
- ---------------------------------------------
March 31, Dec. 31, March 31,
1997 1996 1996
- ---------------------------------------------
Shares
issued 9,619,061 9,488,428 9,488,428
Shares
outstanding 9,619,061 9,457,466 9,468,295
- ---------------------------------------------
Capital surplus 210,337 209,244 210,486
Retained earnings 73,779 68,776 54,261
Treasury stock, at cost - 30,962 shares at
December 31, 1996, 20,133 shares at
December 31, 1995 and 21,453 shares at
March 31, 1996 - (1,195) (736)
Unrealized security gains (losses), net of
tax (25) 4,422 4,405
Deferred compensation (918) (1,091) (1,502)
- -------------------------------------------------------------------------------
Total shareholders' investment 283,269 280,251 267,009
- -------------------------------------------------------------------------------
Total liabilities and shareholders'
investment $2,832,082 $2,897,635 $2,906,710
===============================================================================
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) 1997 1996
- -------------------------------------------------------------------------------
Interest Income
Loans $32,292 $29,835
Investments
Taxable 11,143 11,742
Nontaxable 1,149 1,032
Trading 90 69
Federal funds sold and other 2,643 2,775
- -------------------------------------------------------------------------------
Total interest income 47,317 45,453
- -------------------------------------------------------------------------------
Interest Expense
Deposits 19,926 20,490
Other borrowings 2,603 2,888
- -------------------------------------------------------------------------------
Total interest expense 22,529 23,378
- -------------------------------------------------------------------------------
Net Interest Income 24,788 22,075
Provision for loan losses 2,300 1,175
- -------------------------------------------------------------------------------
Net Interest Income After Provision for Loan Losses 22,488 20,900
- -------------------------------------------------------------------------------
Noninterest Income
Trust fees 4,527 4,134
Service charges on deposits 3,903 3,849
Mortgage banking income 1,710 1,715
Trading account profits and commissions 1,442 1,011
Credit card fees 691 675
Net securities gains 942 448
Loan fees 345 351
Other 3,539 2,460
- -------------------------------------------------------------------------------
Total noninterest income 17,099 14,643
- -------------------------------------------------------------------------------
Noninterest Expense
Salaries 11,592 10,897
Employee benefits 3,052 2,630
Equipment 2,564 2,590
Occupancy, net 2,147 2,073
Data processing 1,831 1,879
Professional and other services 2,142 1,830
Printing, postage and supplies 1,288 1,273
Advertising and business development 937 991
Amortization of intangibles, including
purchased mortgage servicing rights 708 584
Deposit insurance assessments 76 37
Net income from operation of other
real estate and assets owned (147) (462)
Other 2,216 2,566
- -------------------------------------------------------------------------------
Total noninterest expense 28,406 26,888
- -------------------------------------------------------------------------------
Income Before Provision for Income Taxes 11,181 8,655
Provision for income taxes 3,318 2,604
- -------------------------------------------------------------------------------
Net Income $ 7,863 $ 6,051
===============================================================================
Net Income Per Share - Primary and Fully-Diluted $ .78 $ .61
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 December 31, 1995 $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
================================================= ==== ========== ========= ======= ========== ============ ===========
Balance December 31, 1996 $95 $209,244 $68,776 $(1,195) $4,422 $(1,091) $280,251
Net income - - 7,863 - - - 7,863
Dividends paid ($.30 per share) - - (2,860) - - - (2,860)
Amortization of deferred compensation - - - - - 173 173
Change in unrealized gains (losses) on
available for sale securities, net of tax - - - - (4,447) - (4,447)
Purchase of treasury stock (237 shares) - - - (12) - - (12)
Common and treasury stock issued (130,633
and 31,199 shares, respectively) 1 1,093 - 1,207 - - 2,301
- ------------------------------------------------- ---- ---------- --------- ------- ---------- ------------ -----------
Balance March 31, 1997 $96 $210,337 $73,779 $ - $ (25) $ (918) $283,269
================================================= ==== ========== ========= ======= ========== ============ ===========
<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) 1997 1996
- -------------------------------------------------------------------------------
Cash provided (absorbed) by operating activities
Net income $ 7,863 $ 6,051
Adjustments to reconcile net income to net cash provided
(absorbed) by operating activities:
Provisions for losses 1,437 1,277
Provision for income taxes 3,318 2,604
Depreciation and amortization 2,441 3,226
Net amortization of investment securities (26) 984
Gain on sale of assets (1,245) (2,962)
Change in trading account securities 3,895 2,048
Loans made for purposes of resale (28,217) (28,258)
Proceeds from sale of loans held for resale 27,954 20,140
Change in accrued interest, expenses and taxes,
accounts payable and other liabilities (4,376) (4,747)
Change in accrued income receivable, accounts
receivable and other assets 3,883 5,313
- -------------------------------------------------------------------------------
Net cash provided by operating activities 16,927 5,676
- -------------------------------------------------------------------------------
Cash provided (absorbed) by investing activities
Proceeds from maturities and paydowns on
Available for sale securities 54,994 150,386
Held to maturity securities 17,748 25,777
Proceeds from sales of
Available for sale securities 146,006 79,997
Purchases of
Available for sale securities (74,595) (252,262)
Held to maturity securities (2,125) (13,719)
Equity securities (253) (215)
Change in net loans made by bank subsidiaries (35,864) (7,636)
Principal payments received on loans made by parent
company and nonbank subsidiaries 1,122 1,475
Loans made to customers by nonbank subsidiaries (2,211) (1,114)
Expenditures for property and equipment (894) (552)
Proceeds from sale of property and equipment - (1)
Sale proceeds and collections from other real estate and
assets acquired in settlement of loans 628 1,472
Purchases of mortgage servicing contracts (33) (14)
- -------------------------------------------------------------------------------
Net cash provided (absorbed) by investing activities 104,523 (16,406)
- -------------------------------------------------------------------------------
Cash provided (absorbed) by financing activities
Change in savings and demand deposits (1,918) 23,422
Change in time deposits (29,861) 43,187
Change in short-term borrowings (40,883) (82,684)
Proceeds from issuance of common and treasury stock 2,301 909
Purchase of treasury stock (12) (988)
Dividends paid on common stock (2,861) (2,368)
- -------------------------------------------------------------------------------
Net cash provided (absorbed) by financing activities (73,234) (18,522)
- -------------------------------------------------------------------------------
Net change in cash and cash equivalents 48,216 (29,252)
Cash and cash equivalents at beginning of year 475,076 560,836
- -------------------------------------------------------------------------------
Cash and cash equivalents at March 31 $523,292 $531,584
===============================================================================
Additional cash flow information
Interest paid $ 20,083 $ 22,056
Income tax refunded - 5
Income tax paid 1,600 -
Noncash items included in investing activities
Net loans transferred to (from) other real estate
and assets owned 36 483
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
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 included in Liberty's
1996 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
- -------------------------------------------------------------------------------
1997 1996
- -------------------------------------------------------------------------------
Weighted average shares outstanding
Primary 10,035 9,940
Fully-diluted 10,035 9,940
PART II
OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Shareholders
The 1997 Annual Meeting of Shareholders of Liberty Bancorp, Inc. was held
March 31, 1997. The meeting included the vote on the proposal to approve a
merger agreement among Liberty Bancorp, Inc., Banc One Corporation and Banc One
Oklahoma Corporation, a wholly owned subsidiary of Banc One Corporation. The
votes on the proposal were as follows:
Withhold
For Against Authority
--- ------- ---------
7,958,677 31,365 21,049
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, 1997
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 258,958,000
<INT-BEARING-DEPOSITS> 402,000
<FED-FUNDS-SOLD> 263,932,000
<TRADING-ASSETS> 7,434,000
<INVESTMENTS-HELD-FOR-SALE> 469,532,000
<INVESTMENTS-CARRYING> 665,963,000
<INVESTMENTS-MARKET> 669,718,000
<LOANS> 1,497,147,000
<ALLOWANCE> 20,272,000
<TOTAL-ASSETS> 2,832,082,000
<DEPOSITS> 2,352,005,000
<SHORT-TERM> 161,236,000
<LIABILITIES-OTHER> 35,572,000
<LONG-TERM> 0
0
0
<COMMON> 96,000
<OTHER-SE> 283,173,000
<TOTAL-LIABILITIES-AND-EQUITY> 2,832,082,000
<INTEREST-LOAN> 32,292,000
<INTEREST-INVEST> 12,292,000
<INTEREST-OTHER> 2,733,000
<INTEREST-TOTAL> 47,317,000
<INTEREST-DEPOSIT> 19,926,000
<INTEREST-EXPENSE> 22,529,000
<INTEREST-INCOME-NET> 24,788,000
<LOAN-LOSSES> 2,300,000
<SECURITIES-GAINS> 942,000
<EXPENSE-OTHER> 28,406,000
<INCOME-PRETAX> 11,181,000
<INCOME-PRE-EXTRAORDINARY> 7,863,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,863,000
<EPS-PRIMARY> .78
<EPS-DILUTED> .78
<YIELD-ACTUAL> 4.27
<LOANS-NON> 8,356,000
<LOANS-PAST> 3,031,000
<LOANS-TROUBLED> 840,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 19,779,000
<CHARGE-OFFS> 2,056,000
<RECOVERIES> 249,000
<ALLOWANCE-CLOSE> 20,272,000
<ALLOWANCE-DOMESTIC> 20,272,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
