<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999.
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-23064
SOUTHWEST BANCORP, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 73-1136584
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
608 South Main Street 74074
Stillwater, Oklahoma (Zip Code)
(Address of principal executive office)
Registrant's telephone number, including area code: (405) 372-2230
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 twelve 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 ninety days.
[x] YES [_] 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.
4,080,612
---------
1 of 21
<PAGE>
SOUTHWEST BANCORP, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Consolidated Statements of Financial Condition at
March 31, 1999 and December 31, 1998 3
Unaudited Consolidated Statements of Operations for the
three months ended March 31, 1999 and 1998 4
Unaudited Consolidated Statements of Cash Flows for the
three months ended March 31, 1999 and 1998 5
Unaudited Consolidated Statements of Shareholders' Equity for the
three months ended March 31, 1999 and 1998 6
Unaudited Consolidated Statements of Comprehensive Income for the
three months ended March 31, 1999 and 1998 7
Notes to Unaudited Consolidated Financial Statements 8
Average Balances, Yields and Rates 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 13
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 19
PART II. OTHER INFORMATION 20
SIGNATURES 21
</TABLE>
2
<PAGE>
SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands except share data)
MARCH 31, DECEMBER 31
1999 1998
---------- ----------
ASSETS
Cash and due from banks $ 22,748 $ 32,339
Federal funds sold - -
Cash and cash equivalents ---------- ----------
Investment securities: 22,748 32,339
Held to maturity, fair value $73,823 (1999)
and $78,772 (1998) $ 72,990 $ 77,575
Available for sale, amortized cost $98,817
(1999) and $96,240 (1998) 99,287 97,096
Loans receivable, net of allowance for loan losses
of $10,982 (1999) and $10,401 (1998) 802,624 782,918
Accrued interest receivable 9,293 8,658
Premises and equipment, net 20,216 19,204
Other assets 10,127 10,075
---------- ----------
Total assets $1,037,285 $1,027,865
========== ==========
LIABILITIES & SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 111,100 $ 120,099
Interest-bearing demand 42,563 43,079
Money market accounts 97,691 97,102
Savings accounts 3,647 3,416
Time deposits 589,419 579,365
---------- ----------
Total deposits 844,420 843,061
---------- ----------
Income taxes payable 1,185 151
Accrued interest payable 5,570 5,584
Other liabilities 1,560 1,683
Short-term borrowings 94,368 94,572
Long-term debt:
Guaranteed preferred beneficial interests
in the Company's subordinated debentures
subordinated debentures 25,013 25,013
---------- ----------
Total liabilities 972,116 970,064
---------- ----------
Commitments and contingencies - -
Shareholders' equity:
Serial preferred stock -
Series A, $1 par value; 1,000,000 shares
authorized; none issued - -
Class B, $1 par value; 1,000,000 shares
authorized; non issued - -
Common stock - $1 par value; 10,000,000 shares
authorized; issued
and outstanding 4,079,996 (1999) and
3,799,065 (1998) 4,080 3,799
Capital surplus 14,984 9,369
Retained earnings 45,822 44,120
Accumulated other comprehensive income:
Unrealized gain on investment securities
available for sale,
net of tax 283 513
---------- ----------
Total shareholders' equity 65,169 57,801
---------- ----------
Total liabilities & shareholders' equity $1,037,285 $1,027,865
========== ==========
See notes to unaudited consolidated financial statements.
3
<PAGE>
SOUTHWEST BANCORP, INC
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except share data)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH,
1999 1998
------------- -------------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 17,258 $ 16,996
Investment securities:
U.S. Government and agency obligations 1,832 2,425
State and political subdivisions 156 128
Mortgage-backed securities 448 254
Other securities 118 111
Federal funds sold 4 33
------------- -------------
Total interest income 19,816 19,947
Interest expense:
Interest-bearing demand 214 236
Money market accounts 860 867
Savings accounts 17 19
Time deposits 7,509 8,529
Short-term borrowings 1,194 405
Long-term debt 582 582
------------- -------------
Total interest expense 10,376 10,638
------------- -------------
Net interest income 9,440 9,309
Provision for loan losses 675 825
------------- -------------
Net interest income after provision for loan losses 8,765 8,484
Other income:
Service charges and fees 998 824
Other noninterest income 83 202
Gain (loss) on sales of loans receivable 606 569
Gain (loss) on sales of investment securities 81 17
------------- -------------
Total other income 1,768 1,612
Other expenses:
Salaries and employee benefits 3,359 3,342
Occupancy 1,472 1,186
FDIC and other insurance 60 64
General and administrative 2,355 1,860
------------- -------------
Total other expenses 7,246 6,452
------------- -------------
Income before taxes 3,287 3,644
Taxes on income 1,177 1,311
------------- -------------
Net income $ 2,110 $ 2,333
============= =============
Net income available to common shareholders $ 2,110 $ 1,936
============= =============
Basic earnings per common share $ 0.55 $ 0.51
============= =============
Diluted earnings per common share $ 0.54 $ 0.50
============= =============
</TABLE>
See notes to unaudited consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
FOR THE THREE MONTHS
ENDED MARCH 31,
1999 1998
------------ ------------
<S> <C> <C>
Operating activities:
Net income $ 2,110 $ 2,333
Adjustments to reconcile net income to net
cash (used in) provided from operating activities:
Provision for loan losses 675 825
Depreciation and amortization expense 653 412
Amortization of premiums and accretion of
discount on securities, net 75 30
Amortization of intangibles 67 55
(Gain) Loss on sales of securities (81) (17)
(Gain) Loss on sales of loans receivable (606) (569)
(Gain) Loss on other real estate owned, net 150 -
Proceeds from sales of residential mortgage loans 26,298 24,563
Residential mortgage loans originated for resale (27,202) (26,548)
Changes in assets and liabilities:
Accrued interest receivable (635) (1,434)
Other assets (113) 11
Income taxes payable 1,034 675
Accrued interest payable (14) (396)
Other liabilities (189) 478
------------ ------------
Net cash (used in) provided from operating activities 2,222 418
------------ ------------
Investing activities:
Proceeds from sales of available for sale securities 7,419 -
Proceeds from principal repayments and maturities:
Held to maturity securities 4,001 7,008
Available for sale securities 3,217 5,610
Purchases of held to maturity securities (1,960) (6,432)
Purchases of available for sale securities (10,663) (6,551)
Loans originated and principal repayments, net (31,627) (39,204)
Proceeds from sales of guaranteed student loans 12,756 6,611
Purchases of premises and equipment (1,665) (1,568)
Proceeds from sales of premises and equipment - 52
Proceeds from sales of other real estate - 174
------------ ------------
Net cash (used in) provided from investing activities (18,522) (34,300)
------------ ------------
Financing activities:
Net increase (decrease) in deposits 1,359 (2,198)
Net increase (decrease) in short-term borrowings (204) 22,277
Net proceeds from issuance of common stock 5,896 71
Common stock dividends paid (342) (303)
Preferred stock dividends paid - (397)
------------ ------------
Net cash (used in) provided from financing activities 6,709 19,450
------------ ------------
Net increase (decrease) in cash and cash equivalents (9,591) (14,432)
Cash and cash equivalents,
Beginning of period 32,339 36,259
------------ ------------
End of period $ 22,748 $ 21,827
============ ============
</TABLE>
See notes to unaudited consolidated financial statements.
5
<PAGE>
SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in thousands except share data)
<TABLE>
<CAPTION>
ACCUMULATED TOTAL
OTHER SHARE-
PREDERRED STOCK COMMON STOCK CAPITAL RETAINED COMPREHENSIVE HOLDERS'
SHARES AMOUNT SHARES AMOUNT SURPLUS EARNINGS INCOME EQUITY
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1998 690,000 $690 3,787,839 $3,788 $24,764 $38,226 $ 580 $68,048
Cash dividends paid:
Preferred, $0.575 per share - - - - - (397) - (397)
Cash dividends declared:
Common, $0.09 per share - - - - - (341) - (341)
Common stock issued:
Employee Stock Option Plan - - 1,500 1 19 - - 20
Employee Stock Purchase Plan - - 685 1 18 - - 19
Dividend Reinvestment Plan - - 1,123 1 31 - - 32
Change in unrealized gain
(loss) on available for sale
securities, net of tax - - - - - - 74 74
Net income - - - - - 2,333 - 2,333
-------------------------------------------------------------------------------------------
Balance, March 31, 1998 690,000 $690 3,791,147 $3,791 $24,832 $39,821 $ 654 $69,788
===========================================================================================
Balance, January 1, 1999 - - 3,799,065 $3,799 $ 9,369 $44,120 $ 513 $57,801
Cash dividends declared:
Common, $0.10 per share - - - - - (408) - (408)
Common stock issued:
Employee Stock Option Plan - - 30,000 30 353 - - 383
Employee Stock Purchase Plan - - 608 1 14 - - 15
Dividend Reinvestment Plan - - 323 - 8 - - 8
Public Offering - - 250,000 250 5,240 - - 5,490
Change in unrealized gain
(loss) on available for sale
securities, net of tax - - - - - - (230) (230)
Net income - - - - - 2,110 - 2,110
-------------------------------------------------------------------------------------------
Balance, March 31, 1999 - - 4,079,996 $4,080 $14,984 $45,822 $ 283 $65,169
===========================================================================================
</TABLE>
See notes to unaudited consolidated financial statements.
6
<PAGE>
SOUTHWEST BANCORP, INC
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
1999 1998
----------- -----------
<S> <C> <C>
Net income $ 2,110 $2,333
Other comprehensive income (loss), before tax:
Unrealized holding gain (loss) on investment
securities available for sale arising during
the period (305) 140
Reclassification adjustment for (gains) losses
arising during the period (81) (17)
----------- -----------
Other comprehensive income (loss), before tax 1,724 2,456
Tax (expense) benefit related to items
of other comprehensive income (loss) 156 (49)
----------- -----------
Other comprehensive income (loss), net of tax $ 1,880 $2,407
=========== ===========
</TABLE>
See notes to unaudited consolidated financial statements.
7
<PAGE>
SOUTHWEST BANCORP, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: GENERAL
The accompanying unaudited consolidated financial statements were prepared in
accordance with instructions for Form 10-Q and, therefore, do not include all
information and footnotes necessary for a complete presentation of financial
position, results of operations, changes in shareholders' equity, and cash flows
in conformity with generally accepted accounting principles. However, the
consolidated financial statements include all adjustments (consisting only of
normal recurring accruals) which, in the opinion of management, are necessary
for a fair presentation. The results of operations and cash flows for the three
months ended March 31, 1999 and 1998 should not be considered indicative of the
results to be expected for the full year. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Southwest Bancorp, Inc. Annual
Report on Form 10-K for the year ended December 31, 1998.
NOTE 2: PRINCIPLES OF CONSOLIDATION
The accompanying unaudited consolidated financial statements include the
accounts of Southwest Bancorp, Inc. ("Southwest") and its wholly owned
subsidiaries, the Stillwater National Bank and Trust Company ("Stillwater
National") and SBI Capital Trust ("SBI Capital"). All significant intercompany
transactions and balances have been eliminated in consolidation.
NOTE 3: ACCOUNTING STANDARD ISSUED BUT NOT YET ADOPTED
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that Southwest recognize
all derivatives as either assets or liabilities in the statement of financial
condition and measure those instruments at fair value. The accounting for
changes in the fair value of a derivative (that is, gains and losses) depends on
the intended use of the derivative and the resulting designation. Southwest
will adopt SFAS No. 133 on January 1, 2000, as required. Management believes
that adoption of SFAS No. 133 will not have a material impact on Southwest's
consolidated financial condition or results of operations.
8
<PAGE>
NOTE 4: ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses is shown below for the indicated
periods.
<TABLE>
<CAPTION>
For the three For the
months ended year ended
March 31, 1999 December 31, 1998
---------------- -------------------
(Dollars in thousands)
<S> <C> <C>
Balance at beginning of period $ 10,401 $ 8,282
Loans charged-off:
Real estate mortgage 44 460
Real estate construction 9 -
Commercial 117 1,320
Installment and consumer 88 594
---------------- -------------------
Total charge-offs 258 2,374
Recoveries:
Real estate mortgage 15 105
Commercial 105 582
Installment and consumer 44 426
---------------- -------------------
Total recoveries 164 1,113
---------------- -------------------
Net loans charged-off 94 1,261
Provision for loan losses 675 3,380
---------------- -------------------
Balance at end of period $ 10,982 $ 10,401
================ ===================
Loans outstanding:
Average $813,913 $756,611
End of period 813,606 793,319
Net charge-offs to total average loans (annualized) 0.05% 0.17%
Allowance for loan losses to total loans 1.35% 1.31%
</TABLE>
Nonperforming assets and other risk elements of the loan portfolio are shown
below as of the indicated dates:
<TABLE>
<CAPTION>
At At
March 31, 1999 December 31, 1998
---------------- -------------------
(Dollars in thousands)
<S> <C> <C>
Nonaccrual loans (1) $ 3,616 $ 872
Past due 90 days or more 238 451
Restructured terms - -
---------------- -------------------
Total nonperforming loans 3 ,854 1,323
Other real estate owned 3,500 3,650
---------------- -------------------
Total nonperforming assets $ 7,354 $ 4,973
================ ===================
Nonperforming loans to loans receivable 0.47% 0.17%
Allowance for loan losses to nonperforming loans 284,95% 786.17%
Nonperforming assets to loans receivable and
other real estate owned 0.90% 0.62%
</TABLE>
(1) The government-guaranteed portion of loans included in these total was $701
(1999) and $254 and (1998).
Southwest makes provisions for loan losses in amounts deemed necessary to
maintain the allowance for loan losses at an appropriate level. The adequacy of
the allowance for loan losses is determined by management based upon a number of
9
<PAGE>
factors including, among others, analytical reviews of loan loss experience in
relation to outstanding loans and commitments; unfunded loan commitments;
problem and nonperforming loans and other loans presenting credit concerns;
trends in loan growth, portfolio composition and quality; use of appraisals to
estimate the value of collateral; and management's judgment with respect to
current and expected economic conditions and their impact on the existing loan
portfolio. Changes in the allowance may also occur because of changing economic
conditions and their impact on economic prospects and the financial position of
borrowers. Based upon this review, management established an allowance of $11.0
million, or 1.35% of total loans, at March 31, 1999 compared to an allowance of
$10.4 million, or 1.31% of total loans, at December 31, 1998.
In establishing the level of the allowance for March 31, 1999, management
considered a number of factors, including the increased risk inherent in
commercial and commercial real estate loans, which are viewed as entailing
greater risk than certain other categories of loans, charge-off history, and the
rapid expansion of the loan portfolio over the last several years. Management
also considered other factors, including the levels of types of credits, such as
residential mortgage loans, deemed to be of relatively low risk. Southwest
determined the level of the allowance for loan losses at March 31, 1999 was
appropriate, after assessing these and other factors it deemed relevant.
Management conducted a similar analysis in order to determine the appropriate
allowance as of December 31, 1998.
Management strives to carefully monitor credit quality and the adequacy of the
allowance for loan losses, and to identify loans that may become nonperforming.
At March 31, 1999, total nonperforming loans were $3.9 million, or 0.47% of
total loans, compared to $1.3 million, or 0.17% of total loans, at December 31,
1998. At any time, however, there are loans included in the portfolio that will
result in losses to Southwest, but that have not been identified as
nonperforming or potential problem loans. Because the loan portfolio contains a
significant number of commercial and commercial real estate loans with
relatively large balances, the unexpected deterioration of one or a few of such
loans may cause a significant increase in nonperforming assets, and may lead to
a material increase in charge-offs and the provision for loan losses.
NOTE 5: LOANS RECEIVABLE
Southwest extends commercial and consumer credit primarily to customers in the
State of Oklahoma, which subjects the loan portfolio to the general economic
conditions within the state. At March 31, 1999 and December 31, 1998,
substantially all of Southwest's loans are collateralized with real estate,
inventory, accounts receivable and/or other assets, or are guaranteed by
agencies of the United States Government.
At March 31, 1999, loans to individuals and businesses in the healthcare
industry totaled approximately $83.9 million, or 10% of total loans. Southwest
does not have any other concentrations of loans to individuals or businesses
involved in a single industry totaling 5% of total loans.
The principal balance of loans for which accrual of interest has been
discontinued totaled approximately $3.6 million at March 31, 1999. During the
first three months of 1999, $5,000 in interest income was received on
nonaccruing loans. If interest on those loans had been accrued, total interest
income of $108,000 would have been recorded.
Those performing loans considered potential nonperforming loans, loans which are
not included in the past due, nonaccrual or restructured categories, but for
which known information about possible credit problems cause management to be
uncertain as to the ability of the borrowers to comply with the present loan
repayment terms over the next six months, amounted to approximately $32.7
million at March 31, 1999. Loans may be monitored by management and reported as
potential nonperforming loans for an extended period of time during which
management continues to be uncertain as to the ability of certain borrowers to
comply with the present loan repayment terms. These loans are subject to
continuing management attention and are considered by management in determining
the level of the allowance for loan losses.
NOTE 6: LONG-TERM DEBT
The guaranteed preferred beneficial interests in Southwest's subordinated
debentures represent interests in 9.30% subordinated debentures ("Subordinated
Debentures"), due July 31, 2027, issued by Southwest to its subsidiary, SBI
Capital Trust, in connection with SBI Capital's Cumulative Trust Preferred
Securities (the "Preferred Securities"). The Subordinated Debentures and
related payments are SBI Capital's only assets.
10
<PAGE>
The Preferred Securities meet the regulatory criteria for Tier I capital,
subject to Federal Reserve guidelines that limit the amount of the Preferred
Securities and cumulative perpetual preferred stock to an aggregate of 25% of
Tier I capital.
NOTE 7: EARNINGS PER SHARE
Basic earnings per common share is computed based upon net income, after
deducting the dividend requirements of preferred stock, divided by the weighted
average number of common shares outstanding during each period. Diluted
earnings per common share is computed based upon net income, after deducting the
dividend requirements of preferred stock, divided by the weighted average number
of common shares outstanding during each period adjusted for the effect of
dilutive potential common shares calculated using the treasury stock method. At
March 31, 1999, there were 180,000 antidilutive options to purchase common
shares. At March 31, 1998, there were no antidilutive options to purchase
common shares.
The following is a reconciliation of net income available to common shareholders
and the common shares used in the calculations of basic and diluted earnings per
common share:
<TABLE>
<CAPTION>
For the three months
ended March 31,
1999 1998
------------ -------------
(Dollars in thousands)
<S> <C> <C>
Net income $ 2,110 $ 2,333
Less: preferred stock dividend requirement - (397)
------------ -------------
Net income available to common shareholders $ 2,110 $ 1,936
============ =============
Weighted average common shares outstanding:
Basic earnings per share 3,843,223 3,790,332
Effect of dilutive securities:
Stock options 97,994 117,960
------------ -------------
Weighted average common shares outstanding:
Diluted earnings per share 3,941,217 3,908,292
============ =============
</TABLE>
NOTE 8: ISSUANCE OF COMMON STOCK
On March 19, 1999, Southwest completed its public offering of 1,061,231 shares
of its common stock. The offering included 811,231 shares sold by the Estate of
Paul C. Wise and Dr. James B. Wise and 250,000 newly issued shares sold by
Southwest. Southwest received proceeds of $5.5 million, after offering expenses
and underwriting discount. The net proceeds were invested in Stillwater
National, where the funds will be available for general corporate purposes and
for use in lending and investment activities. Southwest recorded $303,000 in
offering expenses paid on behalf of the selling shareholders. No shares were
sold under the over-allotment option granted to the underwriters in the
offering.
11
<PAGE>
SOUTHWEST BANCORP, INC.
AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands except share data)
<TABLE>
<CAPTION>
For the three months ended March 31,
1999 1998
--------------------------------------------------------------
Average Average Average Average
Balance Yield/Rate Balance Yield/Rate
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Loans receivable $ 813,913 8.60% $744,108 9.26%
Investment securities 173,019 5.97 188,442 6.27
Other interest-earning assets 1,027 3.95 2,688 5.58
------------- ------------
Total interest-earning assets 987,959 8.13 935,238 8.65
Noninterest-earning assets 48,780 41,776
------------- ------------
Total assets $1,036,739 $977,014
============= ============
Liabilities and shareholders' equity:
Interest-bearing demand $ 45,403 1.93% $ 42,423 2.26%
Money market accounts 97,043 3.59 92,120 3.82
Savings accounts 3,528 1.95 3,503 2.20
Time deposits 588,091 5.18 614,036 5.63
------------- ------------
Total interest-bearing deposits 734,065 4.75 752,082 5.20
Short-term borrowings (1) 102,790 4.71 31,649 5.19
Long-term debt 25,013 9.30 25,013 9.30
------------- ------------
Total interest-bearing liabilities 861,868 4.88 808,744 5.33
Noninterest-bearing demand 99,667 90,534
Other noninterest-bearing liabilities 15,926 9,193
Shareholders' equity 59,278 68,543
------------- ------------
Total liabilities and shareholders' equity $1,036,739 $977,014
============= ============
Interest rate spread 3.25% 3.32%
============ ============
Net interest margin (2) 3.88% 4.04%
============ ============
Ratio of average interest-earning assets
to average interest-bearing liabilities 114.63% 115.64%
============= =============
</TABLE>
(1) The increase in short-term borrowings resulted mainly from increases in
Federal Home Loan Bank borrowings and in Sweep Repurchase Agreements, under
which commercial demand deposits are moved into repurchase agreements.
(2) Net interest margin = net interest income / total interest-earning assets
12
<PAGE>
SOUTHWEST BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward Looking Statements. This Management's Discussion and Analysis includes
forward looking statements, such as: statements of Southwest's goals,
intentions, and expectations; estimates of risks and of future costs and
benefits; and statements of Southwest's ability to achieve financial and other
goals. These forward looking statements are subject to significant uncertainties
because they are based upon: future interest rates and other economic
conditions; statements by suppliers of data processing equipment and services,
government agencies, and other third parties as to year 2000 compliance and
costs; future laws and regulations; and a variety of other matters. Because of
these uncertainties, the actual future results may be materially different from
the results indicated by these forward looking statements. In addition,
Southwest's past results do not necessarily indicate its future results.
You should read this management's discussion and analysis of Southwest's
consolidated financial condition and results of operations in conjunction with
Southwest's consolidated financial statements and the accompanying notes.
GENERAL
Southwest Bancorp, Inc. ("Southwest") is a registered bank holding company
headquartered in Stillwater, Oklahoma. Southwest and its subsidiary, the
Stillwater National Bank and Trust Company ("Stillwater National"), are
independent, Oklahoma institutions, and are not controlled by out of state
organizations or individuals.
Southwest offers a broad range of commercial and consumer banking and other
financial services through full service offices in Stillwater, Oklahoma City,
Tulsa and Chickasha, Oklahoma. Southwest devotes substantial efforts to
marketing and providing services to local businesses, their primary employees,
and to other managers and professionals living and working in Southwest's
Oklahoma market areas. Southwest has adapted to state branching limitations by
developing a marketing and delivery system that does not rely on an extensive
branch network.
Southwest has established and pursued a strategy of independent operation for
the benefit of all of its shareholders, and has capitalized on its position as
an Oklahoma owned and operated banking organization to increase its banking
business. Southwest has grown from $434 million in assets at year-end 1993, to
$1.037 billion at March 31, 1999, without acquiring other financial
institutions. Southwest considers acquisitions of other financial institutions,
however, from time to time, although it does not have any specific agreements or
understandings for any such acquisition at present.
FINANCIAL CONDITION
Southwest's total assets increased by $9.4 million, or 1%, from $1.028 billion
at December 31, 1998 to $1.037 billion at March 31, 1999.
Loans were $813.6 million at March 31, 1999, an increase of $20.3 million, or
3%, compared to December 31, 1998. Southwest experienced increases in the
categories of residential mortgages ($9.0 million, or 11%), commercial loans
($8.0 million, or 3%), real estate construction loans ($7.8 million, or 10%),
and student loans ($1.5 million, or 2%). These increases were offset by
reductions in commercial mortgages ($3.9 million, or 1%), and other consumer
loans ($2.1 million, or 5%). The allowance for loan losses increased by
$581,000, or 6%, from December 31, 1998 to March 31, 1999. At March 31, 1999,
the allowance for loan losses was $11.0 million, or 1.35% of total loans,
compared to $10.4 million, or 1.31% of total loans, at December 31, 1998.
Investment securities were $172.3 at March 31, 1999, a reduction of $2.4
million, or 1%, compared to December 31, 1998.
Premises and equipment increased by $1.0 million primarily due to the
construction costs for the new Tulsa Banking Center at 15th and Utica. The new
Tulsa Banking Center opened in January 1999.
13
<PAGE>
Southwest's deposits increased by $1.3 million, or less than 1%, from $843.1
million at December 31, 1998 to $844.4 million at March 31, 1999. Increases
occurred in time deposits ($10.1 million, or 2%), money market accounts
($589,000, or less than 1%) and savings accounts ($231,000, or 7%). These
increases were offset by decreases in demand deposits ($9.0 million, or 7%) and
NOW accounts ($516,000, or 1%) as compared to December 31, 1998. For reserve
calculation and regulatory reporting, Stillwater National uses a product that
reclassifies excess funds in interest-bearing and noninterest-bearing
transaction accounts into interest-bearing and noninterest-bearing money market
accounts, respectively. This reclassification has no effect on the customer,
but reduces the amount of reserve funds Stillwater National is required to keep
on deposit at the Federal Reserve Bank. The freed funds can then be used to
support Southwest's lending and investment operations. Deposit amounts shown in
this report are shown without the effect of the reclassification.
Shareholders' equity increased by $7.4 million, or 13%, due primarily to
earnings, net of common stock dividends, for the first three months of 1999 and
the net proceeds of its recent public offering of 250,000 shares of common
stock. Shareholders' equity also benefited from a $406,000 increase due to
proceeds of common stock issued through the employee stock purchase plan, the
employee stock option plan and the dividend reinvestment plan. These increases
were offset by a $230,000 decrease attributable to a change in the net
unrealized gains on investment securities available for sale (net of tax). On
March 31, 1999, Southwest and Stillwater National continued to exceed all
applicable regulatory capital requirements.
RESULTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1999 AND 1998
NET INCOME
For the first three months of 1999, Southwest recorded net income and net income
available to common shareholders of $2.1 million. This was $223,000 less than
the $2.3 million in net income and $174,000 more than the $1.9 million in net
income available to common shareholders (after deduction of dividends on
preferred stock) recorded for the first three months of 1998. Southwest
redeemed its Series A Preferred Stock on September 1, 1998. The reduction in
net income was primarily the result of the after-tax effect of $303,000 in
offering expenses paid by Southwest on behalf of the selling shareholders in its
recent public offering. Average common shares outstanding were 3,843,223 for the
first quarter of 1999 and 3,790,332 for the first quarter of 1998. Basic and
diluted earnings per common share increased to $0.55 and $0.54 per share for the
first three months of 1999 from $0.51 and $0.50 per share for the same period in
1998, respectively.
Net interest income increased $131,000, or 1%, for the first three months of
1999 compared to the same period in 1998. This increase in net interest income,
as well as a $150,000, or 18%, reduction in the provision for loan losses, a
$156,000, or 10%, increase in other income and a $134,000, or 10%, decrease in
tax expense, was offset by a $794,000, or 12%, increase in other expenses. For
the first three months of 1999, the return on average total equity and average
common equity was 14.44% compared to a 13.80% return on average total equity and
a 15.32% return on average common equity for the first three months of 1998.
Without the expenses incurred on behalf of the selling shareholders, return on
average common equity for the first three months of 1999 was 15.73%.
NET INTEREST INCOME
Net interest income increased to $9.4 million for the first three months of 1999
from $9.3 million for the same period in 1998 as declining rates paid on
interest-bearing liabilities reduced interest expense by $262,000. This
reduction was partially offset by a $131,000 reduction in interest income.
Yields on Southwest's interest-earning assets declined by 52 basis points, and
the rates paid on Southwest's interest-bearing liabilities declined by 45 basis
points, resulting in a reduction in the interest rate spread to 3.25% for the
first three months of 1999 from 3.32% for the first three months of 1998. Net
interest margin also declined from 4.04% to 3.88%. The ratio of average
interest-earning assets to average interest-bearing liabilities declined to
114.63% for the first three months of 1999 from 115.64% for the first three
months of 1998, primarily due to the increase in short-term borrowings.
Total interest income for the first three months of 1999 was $19.8 million, a
less than 1% reduction from $19.9 million during the same period in 1998. The
principal factor in the reduction of interest income was lower yields earned on
interest-earning assets. Southwest's average yield on loans declined to 8.60%
for the first three months of 1999 from 9.26% in 1998. During the same period,
average investment securities decreased $15.4 million, or 8%, and the related
yield declined to
14
<PAGE>
5.97% from 6.27%. The reduction caused by lower yields was partially offset by
the $69.8 million, or 9%, increase in the volume of average loans outstanding.
Total interest expense for the first three months of 1999 was $10.4 million, a
decrease of 2% from $10.6 million for the same period in 1998. The decrease in
total interest expense can be attributed to a decrease in the rates paid on
average interest-bearing liabilities, which declined to 4.88% from 5.33%.
During the same period, average interest-bearing liabilities increased $53.1
million, or 7%. Rates paid on deposits decreased for all categories; the
largest reduction was a 45 basis point reduction in the average rate paid on
time deposits.
OTHER INCOME
Other income increased by $156,000 for the first three months of 1999 compared
to the first three months of 1998 primarily as a result of a $174,000 increase
in service charges and fees. Other increases were $64,000 in gains on sales of
securities and $37,000 in gains on sales of loans. These increases were offset
by a $119,000 reduction in other noninterest income. The gains on sales of
securities in 1999 occurred when "available for sale" securities were called
prior to their stated maturity date.
OTHER EXPENSES
Southwest's other expenses increased $794,000 for the first three months of 1999
compared to the first three months of 1998. This increase was primarily the
result of a $495,000 increase in general and administrative expense. In
addition, occupancy expenses increased $286,000 and salaries and employee
benefits increased $17,000. These increases were offset by a $4,000 reduction
in FDIC and other insurance. The increase in general and administrative expense
was due primarily to the $303,000 in offering expenses paid on behalf of the
selling shareholders in Southwest's recent public offering and a $150,000 write-
down of the carrying value of an other real estate property. The increase in
occupancy expense was due primarily to increased data processing, depreciation
and equipment costs, as systems, facilities and equipment continue to be
upgraded, and the expenses related to the new Tulsa Utica building.
PROVISION FOR LOAN LOSSES
Southwest makes provisions for loan losses in amounts deemed necessary to
maintain the allowance for loan losses at an appropriate level. The adequacy of
the allowance for loan losses is determined by management. See Note 4,
Allowance for Loan Losses, in the Notes to Unaudited Financial Statements for
additional information.
TAXES ON INCOME
Southwest's income tax expense for the first three months of 1999 and 1998 was
$1.2 million and $1.3 million, respectively. Southwest's effective tax rates
have been lower than the 34% Federal and 6% State statutory rates primarily
because of tax-exempt income on municipal obligations and loans.
* * * * * * *
LIQUIDITY
Liquidity is measured by a financial institution's ability to raise funds
through deposits, borrowed funds, capital, or the sale of highly marketable
assets such as residential mortgage loans and investment securities.
Southwest's portfolio of government-guaranteed student loans and SBA loans are
also readily salable. Additional sources of liquidity, including cash flow from
the repayment of loans, are also considered in determining whether liquidity is
satisfactory. Liquidity is also achieved through growth of core deposits and
liquid assets, and accessibility to the capital and money markets. These funds
are used to meet deposit withdrawals, maintain reserve requirements, fund loans,
and operate the organization. Core deposits, defined as demand deposits,
interest-bearing transaction accounts, savings deposits and certificates of
deposit less than $100,000 were 76% and 83% of total deposits at March 31, 1999
and 1998, respectively.
Southwest uses various forms of short-term borrowings for cash management and
liquidity purposes on a limited basis. These forms of borrowings include
federal funds purchases, securities sold under agreements to repurchase, and
borrowings
15
<PAGE>
from the Federal Reserve Bank, the Student Loan Marketing Association ("SLMA")
and the Federal Home Loan Bank of Topeka ("FHLB"). Stillwater National carries
interest-bearing demand notes issued by the U.S. Treasury in connection with the
Treasury Tax and Loan note program. Stillwater National has approved federal
funds purchase lines with three other banks, a $35.0 million line of credit from
the SLMA and a $116.6 million line of credit from the FHLB. Borrowings under the
SLMA line would be secured by student loans. Borrowings under the FHLB line
would be secured by all unpledged securities and other loans. During the first
three months of 1999, the only categories of short-term borrowings whose
averages exceeded 30% of ending shareholders' equity were repurchase agreements
and funds borrowed from the FHLB.
<TABLE>
<CAPTION>
March 31, 1999 March 31, 1998
---------------------------------- ----------------------------------
Repurchase Funds Borrowed Repurchase Funds Borrowed
Agreements from the FHLB Agreements from the FHLB
---------------------------------- ----------------------------------
(Dollars in thousands) (Dollars in thousands)
<S> <C> <C> <C> <C>
Amount outstanding at end of period $37,301 $55,350 $19,475 $15,000
Weighted average rate paid at end of
period 4.36% 4.90% 4.95% 5.58%
Average Balance:
For the three months ended $38,906 $56,077 $20,816 $ 5,111
Average Rate Paid:
For the three months ended 4.37% 4.91% 4.94% 5.36%
Maximum amount outstanding at any
month end $40,335 $73,000 $23,459 $15,000
</TABLE>
Stillwater National also has available unsecured brokered certificate of deposit
lines of credit from Merrill Lynch & Co., Morgan Stanley Dean Witter and Salomon
Smith Barney that total $260.0 million.
During the first three months of 1999, cash and cash equivalents decreased by
$9.6 million. This decline was the result of cash used in investing activities
of $18.5 million which was not entirely offset by cash generated from financing
activities (primarily from the issuance of common stock) of $6.7 million and
$2.2 million in cash provided from operating activities.
Cash and cash equivalents, during the first three months of 1998, decreased by
$14.4 million. The decrease was the result of cash used in investing activities
of $34.3 million which was not entirely offset by cash generated from financing
activities (primarily increased short-term borrowings) of 19.5 million and
$418,000 in cash provided from operating activities.
CAPITAL RESOURCES
On March 19, 1999, Southwest completed its public offering of 1,061,231 shares
of its common stock. The offering included 811,231 shares sold by the Estate of
Paul C. Wise and Dr. James B. Wise and 250,000 newly issued shares sold by
Southwest. Southwest received proceeds of $5.5 million, after offering expenses
and underwriting discount. The net proceeds were invested in Stillwater
National, where the funds will be available for general corporate purposes and
for use in lending and investment activities. No shares were sold under the
over-allotment option granted to the underwriters in the offering.
In the first three months of 1999, earnings, net of common stock dividends,
contributed $1.7 million to shareholders' equity. The sale of common stock
through the dividend reinvestment plan, the employee stock purchase plan and the
employee stock option plan contributed an additional $406,000 to shareholders'
equity in the first quarter of 1999. Net unrealized gains on investment
securities available for sale (net of tax) decreased to $283,000 at March 31,
1999 compared to $513,000 at December 31, 1998.
Bank holding companies are required to maintain capital ratios in accordance
with guidelines adopted by the Federal Reserve Board ("FRB"). The guidelines
are commonly known as Risk-Based Capital Guidelines. On March 31, 1999,
Southwest exceeded all applicable capital requirements, having a total risk-
based capital ratio of 11.64%, a Tier I risk-based capital ratio of 9.98%, and a
leverage ratio of 8.32%. As of March 31, 1999, Stillwater National also met the
criteria for classification as a "well-capitalized" institution under the prompt
corrective action rules promulgated under the Federal Deposit Insurance Act.
Designation as a well-capitalized institution under these regulations does not
constitute a recommendation or endorsement of Southwest or Stillwater National
by Federal bank regulators.
16
<PAGE>
Southwest declared a dividend of $.10 per common share payable on April 1, 1999
to shareholders of record as of March 19, 1999.
EFFECTS OF INFLATION
The consolidated financial statements and related consolidated financial data
presented herein have been prepared in accordance with generally accepted
accounting principles and practices within the banking industry which require
the measurement of financial position and operating results in terms of
historical dollars without considering the changes in the relative purchasing
power of money over time due to inflation. Unlike most industrial companies,
virtually all the assets and liabilities of a financial institution are monetary
in nature. As a result, interest rates have a more significant impact on a
financial institution's performance than the effects of general levels of
inflation.
YEAR 2000 ISSUES
Many computer programs now in use have not been designed to properly recognize
years after 1999. If not corrected, these programs could fail or create
erroneous results. This Year 2000 ("Y2K") issue affects the entire banking
industry because of its reliance on computers and other equipment that use
computer chips. This problem is not limited to computer systems. Y2K issues
may affect every system that has an embedded microchip, such as automated teller
machines, elevators, vaults, heating, air conditioning, and security systems.
Y2K issues may also affect the operation of third parties with whom Southwest
does business such as vendors, suppliers, utility companies, and customers.
The Y2K issue poses certain risks to Southwest and its operations. Some of
these risks are present because Southwest purchases technology and information
system applications from other parties who also face Y2K challenges. Other
risks are specific to the banking industry.
Commercial banks may experience a deposit base reduction if customers withdraw
significant amounts of cash in anticipation of Y2K. Such a deposit contraction
could cause an increase in interest rates, require Southwest to locate
alternative sources of funding or sell investment securities or other liquid
assets to meet liquidity needs, and may reduce future earnings. To reduce
customer concerns regarding Y2K noncompliance, a customer awareness plan has
been implemented which is directed towards making deposit customers
knowledgeable about Southwest's Y2K compliance efforts.
Southwest lends significant amounts to businesses and individuals in its
marketing areas. If these borrowers are adversely affected by Y2K problems,
they may not be able to repay their loans in a timely manner. This increased
credit risk could adversely affect Southwest's financial performance. In an
effort to identify any potential loan loss risk because of borrower Y2K
noncompliance, all loan customers with loans or commitments exceeding $500,000
were asked to complete a Y2K questionnaire. Where the customer did not reply,
the loan officer personally contacted the customer. Southwest purchased
software to assist it in interpreting the responses, and has analyzed the
results and any risks identified. Southwest has also modified its loan
underwriting controls to ensure that potential borrowers are carefully evaluated
for Y2K compliance before any new loan is approved.
Southwest's operations, like those of many other companies, can be adversely
affected by Y2K triggered failures which may be experienced by third parties
upon whom Southwest relies for processing transactions. Southwest has
identified all critical third-party service providers and vendors and is
monitoring their Y2K compliance programs. Southwest's primary supplier of data
processing services has adopted a Y2K compliance plan, which includes a
timetable for making changes necessary to be able to provide services in the
year 2000. That supplier has provided written assurances to Southwest regarding
its progress toward Y2K compliance and has been examined for Y2K readiness by
federal bank examiners.
Southwest's operations may also be adversely affected by Y2K related failures of
third party providers of electricity, telecommunications services and other
utility services. Although Southwest's contingency plan includes backup power
generation, failures in these areas could impact Southwest's ability to conduct
business. The Y2K compliance of these providers is largely beyond the control
of Southwest.
Southwest has created a task force to establish a Y2K plan to prevent or
mitigate the adverse effects of the Y2K issue on Southwest and its customers.
Goals of the Y2K plan include identifying Y2K risks related to information
systems and
17
<PAGE>
equipment used by Southwest, informing customers of Y2K issues and risks they
may encounter personally, implementing changes in systems and equipment
necessary to achieve Y2K compliance, verifying that these changes are effective,
and establishing a contingency plan for operations in 2000 if problems do arise.
Federal bank examiners are examining all banking organizations for Y2K
compliance. The Comptroller of the Currency has examined Southwest's Y2K
compliance plan and its implementation progress. In addition, the Board of
Directors is carefully monitoring progress under the plan on a monthly basis.
Southwest's plan to address the Y2K issue involves several phases, described
below:
. Awareness - In this phase, Southwest's Y2K plan and project team were
established, the overall Y2K approach was identified, compliance
standards were defined, and responsibility for corrective action was
assigned. This phase has been completed.
. Assessment - During this phase, Southwest gathered and analyzed
information to determine the size and the impact of the Y2K problem
and then made decisions to modify, re-engineer, or replace existing
systems and programs. This phase has been completed.
. Renovation - This phase involves obtaining and implementing upgraded
software applications provided by Southwest's vendors, modifying
system codes, reengineering Y2K vulnerable systems and programs,
developing bridges for systems which cannot be reengineered, and
changing files and databases as necessary. This phase has been
completed.
. Validation - During the validation phase, Southwest is testing systems
and software for Y2K compliance in an effort to identify and correct
any errors that may be identified in the renovation phase. Ninety-five
percent of system validation has been performed and the remainder is
expected to be completed by June 30, 1999.
. Implementation - In this phase, all new and revised systems will be
implemented, data exchange issues will be resolved, and backup and
recovery plans will be developed. This phase will begin once the
validation phase is complete and will be fully executed by December
31, 1999.
Based on information developed to date, Company management believes that the
cost of remediation will not be material to Southwest's business, operations,
liquidity, capital resources, or financial condition. Southwest estimates that
total cash outlays in connection with Y2K compliance will be less than $500,000,
excluding costs of Company employees involved in Y2K compliance activities.
Less than one half of this amount had been expended as of March 31, 1999.
Southwest is funding Y2K expenditures through continuing operations.
Designated personnel will report to work on January 1 and 2, 2000, (Saturday and
Sunday) to assess the proper functioning of critical and non-critical systems.
In the event that some or all systems experience failure, Southwest has
developed a detailed contingency plan. This plan calls for manual processing of
bank transactions at a designated location supported by a backup power system.
Delays in processing transactions would result in the event that Southwest is
forced to process transactions manually. These delays could disrupt normal
business activities of Southwest and its customers.
The discussion above regarding issues associated with Y2K includes certain
forward looking statements. Southwest's ability to predict results or effects
of issues related to the Y2K issue is inherently uncertain and is subject to
factors that may cause actual results to differ materially from those projected.
Factors that could affect the actual results include the following:
. The possibility that protection procedures, contingency plans, and
remediation efforts will not operate as intended;
. Southwest's failure to timely or completely identify all software or
hardware applications requiring remediation;
. Unexpected costs;
. The uncertainty associated with the impact of Y2K issues on the
banking industry and Southwest's customers, vendors, and others with
whom it conducts business; and
. The general economy.
* * * * * * *
18
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Management has determined that no additional disclosures are necessary to assess
changes in information about market risk that have occurred since December 31,
1998.
RECENT DEVELOPMENTS
SHARE REPURCHASE PROGRAM
On April 22, 1999, the Board of Directors of Southwest authorized the
repurchase of up to 5%, or 204,000 shares, of its outstanding common stock, par
value $1.00 per share, in connection with shares expected to be issued under
Southwest's dividend reinvestment, stock option, and employee benefit plans and
for other corporate purposes. The share repurchases are expected to be made
primarily on the open market from time to time until April 30, 2001, or earlier
termination of the repurchase program by the Board. Repurchases under the
program will be made at the discretion of management based upon market,
business, legal, accounting and other factors.
SHAREHOLDER RIGHTS PLAN
On April 22, 1999, the Board of Directors adopted a Rights Plan
designed to protect the company's shareholders against acquisitions that the
board believes are unfair or otherwise not in the best interests of Southwest
and its shareholders, and entered into a related Rights Agreement, dated as of
and to be effective on April 22, 1999 (the "Rights Agreement") between the
Company and Harris Trust and Savings Bank, as Rights Agent. In accordance with
the Rights Agreement, the Board also declared a dividend distribution of one
right for each outstanding share of common stock of the Company to shareholders
of record at the close of business on April 22, 1999 (the "Record Date"). The
rights generally become exercisable if an acquiring party accumulates, or
announces an offer to acquire, 10% or more of Southwest's voting stock. The
rights will expire on April 22, 2009. Each right, in effect, will entitle the
holder (other than the acquiring party) to buy, at the right's then current
exercise price, Southwest common stock or equivalent securities having a value
of twice the right's exercise price. The exercise price of each right was
initially set at $110.00. In addition, upon the occurrence of certain events,
holders of the rights would be entitled to purchase, at the then current
exercise price, common stock or equivalent securities of an acquiring entity
worth twice the exercise price. Under the Plan, Southwest also may exchange each
right, other than rights owned by an acquiring party, for a share of its common
stock or equivalent securities.
SETTLEMENT OF PENDING LITIGATION
The Board of Directors announced on April 22, 1999, that Southwest's
principal subsidiary, the Stillwater National Bank and Trust Company, had agreed
in principle to make a cash payment to settle pending litigation. The charge is
expected to increase other expenses for the second quarter 1999 by approximately
$600,000 (approximately $367,000 net of tax deductions). Stillwater National
believes that the possibility that it would have lost the litigation was remote,
but has agreed to settle in order to avoid the costs of protracted litigation.
19
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal proceedings
None
Item 2. Changes in securities
None
Item 3. Defaults upon senior securities
None
Item 4. Submission of matters to a vote of security holders
None
Item 5. Other information
None
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits.
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K.
On January 8, 1999, Southwest filed a Form 8-K reporting, in
Item 5, that it had reached an agreement with the Estate of
Paul C. Wise and Dr. James B. Wise that called for the sale
of their 811,000 shares of Southwest common stock in a
proposed registered public offering, in which Southwest
would sell 250,000 additional common shares.
20
<PAGE>
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.
SOUTHWEST BANCORP, INC.
(Registrant)
By: /s/ Rick J. Green May 3, 1999
----------------------------------------- ------------------
Rick J. Green Date
President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Kerby E. Crowell May 3, 1999
----------------------------------------- ------------------
Kerby E. Crowell Date
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
21
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
RESTATED FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SOUTHWEST
BANCORP'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1999,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 21,525
<INT-BEARING-DEPOSITS> 1,223
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 99,287
<INVESTMENTS-CARRYING> 72,990
<INVESTMENTS-MARKET> 73,823
<LOANS> 813,606
<ALLOWANCE> 10,982
<TOTAL-ASSETS> 1,037,285
<DEPOSITS> 844,420
<SHORT-TERM> 94,368
<LIABILITIES-OTHER> 8,315
<LONG-TERM> 25,013
0
0
<COMMON> 4,080
<OTHER-SE> 61,089
<TOTAL-LIABILITIES-AND-EQUITY> 1,037,285
<INTEREST-LOAN> 17,258
<INTEREST-INVEST> 2,554
<INTEREST-OTHER> 4
<INTEREST-TOTAL> 19,816
<INTEREST-DEPOSIT> 8,600
<INTEREST-EXPENSE> 10,376
<INTEREST-INCOME-NET> 9,440
<LOAN-LOSSES> 675
<SECURITIES-GAINS> 81
<EXPENSE-OTHER> 7,246
<INCOME-PRETAX> 3,287
<INCOME-PRE-EXTRAORDINARY> 3,287
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,110
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.54
<YIELD-ACTUAL> 8.13
<LOANS-NON> 3,616
<LOANS-PAST> 238
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 32,692
<ALLOWANCE-OPEN> 10,401
<CHARGE-OFFS> 258
<RECOVERIES> 164
<ALLOWANCE-CLOSE> 10,982
<ALLOWANCE-DOMESTIC> 10,982
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 3,020
</TABLE>
