Southwest Bancorp (OKSB) 8-K Southwest Bancorp, Inc. Reports Second Quarter 2013 Results

For additional information:
           Mark W. Funke
           President & CEO
           Joe T. Shockley, Jr.
           EVP & CFO
           (405) 372-2230

For Immediate Release

Southwest Bancorp, Inc. Reports Second Quarter 2013 Results

July 23, 2013, Stillwater, Oklahoma . . . . Southwest Bancorp, Inc. (NASDAQ Global Select Market - OKSB, OKSBP), (“Southwest”), today reported net income available to common shareholders for the second quarter of 2013 of $4.4 million, or $0.22 per diluted share, up $2.0 million or 85% over the prior quarter.  Net income available to common shareholders was $2.4 million, or $0.12 per diluted share, for the first quarter of 2013 and $3.0 million, or $0.15 per diluted share, for the second quarter of 2012.  Net income available to common shareholders for the six months ended June 30, 2013 totaled $6.8 million, or $0.34 per diluted share, compared to $7.1 million, or $0.37 per diluted share, for the six months ended June 30, 2012.

Mark Funke, President and CEO, stated, “We are pleased with the progress we have made through the first six months of this year.  Net income available to common shareholders has improved this quarter compared to a year ago and nonperforming assets continue to be reduced.  We have added a number of talented new people to our company and, together with our tenured bankers, are continuing to maintain the highest level of service to our customers, while attracting new relationships to our organization.  I like the momentum we are developing in our company and for our customers.  As we move into the second half of 2013, we will continue to focus attention on improving asset quality, better operating efficiencies and appropriate capital management as we position our company for the future.”

Joe Shockley, CFO, stated, “The Company’s capital position and liquidity remain strong.  During the quarter, we repurchased the common stock warrant issued to the US Treasury as part of the CPP program and it is our intention to redeem our 10.5% Trust Preferred Securities in mid-September 2013, subject to regulatory approval.  The redemption of the Trust Preferred Securities will improve our net interest income by approximately $3.5 million annually.  These actions are continuing steps in restructuring the bank’s balance sheet.”

Financial Overview

Unless otherwise indicated, the following discussion excludes “covered” assets, which are subject to loss sharing agreements with the FDIC.  For information on covered versus noncovered assets, please see the accompanying unaudited financial statement and tables.

Condition:At June 30, 2013, total assets were $2.0 billion, down $59.7 million compared to March 31, 2013,  primarily due to a decline in cash and cash equivalents.  Total loans were $1.3 billion, flat from March 31, 2013.

Investment securities of $372.4 million as of June 30, 2013 increased $6.8 million compared March 31, 2013, and $32.0 million compared to a year ago.    The investment portfolio is managed to provide safety, liquidity, and collateral for public funds and borrowings.  The investment portfolio continues to be managed in compliance with the current investment policy, including interest rate and liquidity risk stress testing, and the average duration of the portfolio not exceeding four years.

At June 30, 2013, the allowance for loan losses was $40.3 million, a decrease of 6% from March 31, 2013.  The allowance for loan losses to portfolio loans was 3.12% as of June 30, 2013, compared to 3.29% as of March 31,

2013.  The allowance for loan losses to nonperforming loans was 136.44% as of June 30, 2013, compared to 131.78% as of March 31, 2013.

Nonperforming assets were $29.7 million, or 2.30% of portfolio loans and other real estate, as of June 30, 2013,  a decrease of $12.1 million (29%) from $41.8 million, or 3.20% of portfolio loans and other real estate, as of March 31, 2013.  The decrease in nonperforming assets during the second quarter is primarily attributable to the sale of other real estate properties totaling $9.2 million.  One of the transactions resulted in a $1.7 million pre-tax gain during the second quarter.  Other real estate at June 30, 2013 was $145,000 down from $9.4 million at March 31, 2013 and $17.3 million a year ago.  Nonperforming loans decreased by $2.8 million during the quarter. 

Total core funding, which includes all non-brokered deposits and sweep repurchase agreements, comprised 98% of total funding as of June 30, 2013 and March 31, 2013.  Wholesale funding, including FHLB borrowings, federal funds purchased, and brokered deposits, accounted for 2% of total funding at June 30, 2013 and March 31, 2013.  Please see Table 7 for details on core funding and non-brokered deposits, which are non-GAAP financial measures.

The capital ratios of Southwest and each of its banking subsidiaries, as of June 30, 2013,  exceeded the criteria for regulatory classification as “well-capitalized”.  Southwest’s total regulatory capital was $345.7 million, for a total risk-based capital ratio of 23.78%, and Tier 1 capital was $326.8 million, for a Tier 1 risk-based capital ratio of 22.48%.  Southwest’s capital exceeded the minimum to be classified as “well-capitalized” by $200.3 million.  Stillwater National Bank, Southwest’s principal banking subsidiary, had total regulatory capital of $278.4 million, for a total risk-based capital ratio of 21.79%, and Tier 1 capital of $247.1 million, for a Tier 1 risk-based capital ratio of 19.34%.  Stillwater National Bank exceeded the minimum to be classified as “well-capitalized” by $150.7 million.  Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators.

Second Quarter Results:

Summary:  For the second quarter of 2013, net income available to common shareholders was $4.4 million, compared to $3.0 million for the second quarter of 2012, and $2.4 million for the first quarter of 2013.  The $1.4 million increase in our net income available to common shareholders compared to the second quarter of 2012 is the result of a $3.9 million decrease in noninterest expense, a $1.1 million decrease primarily in dividends on preferred stock due to the repurchase during 2012, a $0.9 million decrease in the provision for loan losses, and a $0.2 million decrease in income tax expense, offset in part by a $4.6 million decrease in net interest income and a $0.1 million decrease in noninterest income. 

The $2.0 million increase in net income available to common shareholders compared to the first quarter of 2013 is the result of a $1.5 million decrease in noninterest expense and a $1.4 million decrease in the provision for loan losses, offset in part by a $0.5 million decrease in net interest income and a $0.4 million increase in income taxes. 

Net Interest Income:Net interest income totaled $15.1 million for the second quarter of 2013, compared to $19.7 million for the second quarter of 2012, a decrease of $4.6 million, or 23%, and to $15.6 million for the first quarter of 2013, a decrease of $0.5 million, or 3%.  Net interest margin was 3.07% for the second quarter of 2013, compared to 3.71% for the second quarter of 2012 and 3.16% for the first quarter of 2013.  With the rate environment remaining low in the short to mid-term, earning assets are repricing at lower rates.  Noncovered loans declined $226.3 million, or 15%, from June 30, 2012 and $7.2 million, or 1%, from March 31, 2013 primarily due to a decline in commercial real estate loans.

Provision for Loan Losses and Net Charge-offs:  The provision for loan losses is the amount that is required to maintain the allowance for losses at an appropriate level based upon the inherent risks in the loan portfolio after the effects of net charge-offs or net recoveries for the period.  The provision for loan losses was a credit (or negative) of $0.9 million for the second quarter of 2013, compared to a provision for loan losses of $32,000 for second quarter of 2012 and a provision for loan losses of $0.5 million for the first quarter of 2013.  For the second quarter of 2013, net charge-offs totaled $1.6 million, or 0.50% (annualized) of average portfolio loans, compared to net charge-offs of $1.2 million, or 0.31% (annualized) of average portfolio loans for the second quarter of 2012, and net charge-offs of $4.4 million, or 1.32% (annualized) of average portfolio loans for the first quarter of 2013. 

Noninterest Income:  Noninterest income totaled $3.5 million for the second quarter of 2013, compared to $3.6 million for the second  quarter of 2012, and $3.5 million for the first quarter of 2013.  The decrease from second

quarter 2012 includes a $0.3 million decrease in service charges and fees, offset in part by a $0.2 million increase in the gain on sales of loans. 

Noninterest Expense:Noninterest expense totaled $12.8 million for the second quarter of 2013, compared to $16.8 million for the second quarter of 2012 and $14.4 million for the first quarter of 2013. 

The $3.9 million decrease from second quarter of 2012 consists primarily of a $3.5 million decrease in other real estate expense, which includes $2.3 million recognized as gain on sale of other real estate properties and a $0.7 million decrease in write-downs of other real estate properties during the second quarter of 2013.  Also included in the decline from prior year is a $0.8 million decrease in general and administrative expense, which is primarily the result of decreased consulting fees, legal fees, and miscellaneous expenses, a $0.3 million decrease in FDIC and other insurance expense, and a $0.1 million decrease in provision for unfunded loan commitments, offset in part by a $0.7 million increase in personnel expense.

The $1.6 million decrease from first quarter of 2013 consists primarily of a $1.7 million decrease in other real estate expense, primarily due to the net gains on sales of other real estate properties in the second quarter of this year and lower write-downs of other real estate properties during the quarter.

Income Tax:  Income tax expense totaled $2.2 million for the second quarter of 2013, compared to $2.4 million for the second quarter of 2012 and $1.9 million for the first quarter of 2013.  The income tax expense fluctuates in relation to pre-tax income levels.  The second quarter 2013 effective tax rate was 33.74%, due to a $0.2 million adjustment in reserve for tax credits.

Year-to-date Results:

Summary:  Net income available to common shareholders was $6.8 million as of June 30, 2013, compared to $7.1 million as of June 30, 2012.  The $0.3 million decrease in our net income available to common shareholders from 2012 is the result of a $9.9 million decrease in net interest income, offset in part by a $2.1 million decrease in the provision for loan losses,  a $3.9 million decrease in noninterest expense, a $1.4 million decrease in income tax expense, and a $2.2 million decrease primarily in dividends on preferred stock due to the repurchase during 2012.  

Net Interest Income:Net interest income totaled $30.7 million for the first six months of 2013, compared to $40.6 million for the first six months of 2012, a decrease of $9.9 million, or 24%.  Lower average loan volume was the primary cause of this decrease.  Year-to-date net interest margin was 3.12%, compared to 3.77% for 2012.  With the rate environment remaining low, earning assets are repricing at lower rates.

Provision for Loan Losses and Net Charge-offs:    The provision for loan losses is the amount of expense that is required to maintain the allowance for losses at an appropriate level based upon the inherent risks in the loan portfolio after the effects of net charge-offs for the period.  The provision for loan losses was a credit (or negative) of $0.4 million for the first six months of 2013, compared to an expense of $1.7 million for the first six months of 2012.  Net charge-offs totaled $6.0 million, or 0.91% (annualized) of average portfolio loans year-to-date as of June 30, 2013, compared to $2.5 million, or 0.32% (annualized) of average portfolio loans for the same period 2012. 

Noninterest Income:  Noninterest income totaled $7.0 million for the first six months of 2013, compared to $7.1 million for the first six months of 2012.  The decrease consists of a $0.6 million decline in service charges and fees, offset in part by a $0.5 million increase in gains on sales of loans.    

Noninterest Expense:Noninterest expense totaled $27.2 million for the first six months of 2013, compared to $31.1 million for the first six months of 2012.  The decrease consists of a $3.5 million decrease in other real estate expense, which is primarily due to net gains recognized on the sale of other real estate properties combined with decreased expenses associated with other real estate properties.  Also included in the decline from prior year is a $1.3 million decrease in general and administrative expense, which is primarily the result of lower legal fees, consulting fees, other loan costs, and bank exam fees, and a $0.6 million decrease in FDIC and other insurance expense, offset in part by a $1.6 million increase in personnel expense.

Income Tax:  Income tax expense totaled $4.1 million for the first six months of 2013, compared to $5.6 million for the first six months of 2012.  The income tax expense fluctuates in relation to pre-tax income levels.  The year-to-date effective tax rate was 37.70% as of June 30, 2013. 

Southwest Bancorp and Subsidiaries

Southwest is the bank holding company for Stillwater National Bank and Trust Company (“Stillwater National”) and Bank of Kansas. Through its subsidiaries, commercial and consumer lending, deposit and investment services, specialized cash management, and other financial services are offered from offices in Oklahoma, Texas, and Kansas.  Stillwater National was chartered in 1894 and Southwest was organized in 1981 as the holding company.  At June 30, 2013,  Southwest had total assets of $2.0 billion, deposits of $1.6 billion, and shareholders’ equity of $249.4 million.

Southwest’s area of expertise focuses on the special financial needs of healthcare and health professionals, businesses and their managers and owners, and commercial and commercial real estate borrowers.  The strategic focus on healthcare lending was established in 1974.  Southwest and its subsidiaries provide credit and other services, such as deposits, cash management, and document imaging for physicians and other healthcare practitioners to start or develop their practices and finance the development and purchase of medical offices, clinics, surgical care centers, hospitals, and similar facilities.  As of June 30, 2013, approximately $429.4 million, or 33%, of noncovered loans were loans to individuals and businesses in the healthcare industry.  Regular market reviews are conducted of current and potential healthcare lending business and the appropriate concentrations within healthcare based upon economic and regulatory conditions.

Additionally, Southwest also focuses on commercial real estate mortgage and construction lending.  As of June 30, 2013, approximately $0.9 billion, or 73%, of noncovered loans were commercial real estate mortgage and construction loans, including $285.7 million of loans to individuals and businesses in the healthcare industry. 

Southwest’s common stock is traded on the NASDAQ Global Select Market under the symbol OKSB.  Southwest’s public trust preferred securities are traded on the NASDAQ Global Select Market under the symbol OKSBP.

Caution About Forward-Looking Statements

Southwest makes forward-looking statements in this news release that are subject to risks and uncertainties.  These statements are intended to be covered by the safe harbor provision for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include: 

· Statements of Southwest's goals, intentions, and expectations;

· Estimates of risks and of future costs and benefits;

· Expectations regarding Southwest’s future financial performance and the financial performance of its operating segments;

· Expectations regarding regulatory actions;

· Expectations regarding Southwest’s ability to utilize tax loss benefits;

· Assessments of loan quality, probable loan losses, and the amount and timing of loan payoffs;

· Estimates of the value of assets held for sale or available for sale; 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: the amount and timing of future changes in interest rates, market behavior, and other economic conditions; future laws, regulations, and accounting principles; changes in regulatory standards and examination policies, and a variety of other matters. These other matters include, among other things, the direct and indirect effects of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators.  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 growth and performance do not necessarily indicate future results.  For other factors, risks, and uncertainties that could cause actual results to differ materially from estimates and projections contained in forward-looking statements, please read Southwest’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2012.  You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors”.

The cautionary statements in this release also identify important factors and possible events that involve risk and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements.  These forward-looking statements speak only as of the date on which the statements were made.  Southwest does not intend, and undertakes no obligation, to update or revise any forward-looking statements contained in this release, whether as a result of differences in actual results, changes in assumptions, or changes in other factors affecting such statements, except as required by law.

Southwest is required under generally accepted accounting principles to evaluate subsequent events and their impact, if any, on its financial statements as of June 30, 2013 through the date its financial statements are filed with the Securities and Exchange Commission.  The June  30,  2013 financial statements included in this release will be adjusted if necessary to properly reflect the impact of subsequent events on estimates used to prepare those statements. 

Financial Tables

Unaudited Financial Highlights	Table 1
Unaudited Consolidated Statements of Financial Condition	Table 2
Unaudited Consolidated Statements of Operations	Table 3
Unaudited Average Balances, Yields, and Rates-Quarterly	Table 4
Unaudited Average Balances, Yields, and Rates-Year-to-date	Table 5
Unaudited Quarterly Summary Loan Data	Table 6
Unaudited Quarterly Summary Financial Data	Table 7
Unaudited Quarterly Supplemental Analytical Data	Table 8

SOUTHWEST BANCORP, INC.
UNAUDITED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share) Table 1

	Second Quarter					First Quarter
QUARTERLY HIGHLIGHTS					%			%
	2013		2012		Change		2013	Change
Operations
Net interest income	$	15,134	$	19,747	(23)%	$	15,606	(3)%
Provision for loan losses		(876)		32	(2,838)		498	(276)
Noninterest income		3,491		3,601	(3)		3,537	(1)
Noninterest expense		12,839		16,769	(23)		14,388	(11)
Income before taxes		6,662		6,547	2		4,257	56
Taxes on income		2,248		2,430	(7)		1,868	20
Net income		4,414		4,117	7		2,389	85
Net income available to common shareholders		4,414		3,011	47		2,389	85
Diluted earnings per share		0.22		0.15	47		0.12	83
Balance Sheet
Total assets		2,031,962		2,264,123	(10)		2,091,694	(3)
Loans held for sale		7,217		23,996	(70)		7,297	(1)
Noncovered portfolio loans		1,289,226		1,498,708	(14)		1,296,317	(1)
Covered portfolio loans		21,646		30,712	(30)		23,601	(8)
Total deposits		1,615,961		1,788,379	(10)		1,677,668	(4)
Total shareholders' equity		249,420		309,003	(19)		250,509	(0)
Book value per common share		12.67		12.64	0		12.72	(0)
Key Ratios
Net interest margin		3.07%		3.71%			3.16%
Efficiency ratio		68.93		71.82			75.16
Total capital to risk-weighted assets		23.78		23.52			23.54
Nonperforming loans to portfolio loans - noncovered		2.29		1.38			2.50
Shareholders' equity to total assets		12.27		13.86			11.98
Tangible common equity to tangible assets*		12.22		10.56			11.93
Return on average assets (annualized)		0.87		0.72			0.46
Return on average common equity (annualized)		7.00		4.92			3.89
Return on average tangible common equity (annualized)**		7.03		5.06			3.90
YEAR-TO-DATE  HIGHLIGHTS	Six Months
					%
	2013		2012		Change
Operations
Net interest income	$	30,740	$	40,596	(24)%
Provision for loan losses		(378)		1,748	(122)
Noninterest income		7,028		7,115	(1)
Noninterest expense		27,227		31,078	(12)
Income before taxes		10,919		14,885	(27)
Taxes on income		4,116		5,557	(26)
Net income		6,803		9,328	(27)
Net income available to common
shareholders		6,803		7,130	(5)
Diluted earnings per share		0.34		0.37	(8)
Balance Sheet
Total assets		2,031,962		2,264,123	(10)
Loans held for sale		7,217		23,996	(70)
Noncovered portfolio loans		1,289,226		1,498,708	(14)
Covered portfolio loans		21,646		30,712	(30)
Total deposits		1,615,961		1,788,379	(10)
Total shareholders' equity		249,420		309,003	(19)
Book value per common share		12.67		12.64	0
Key Ratios
Net interest margin		3.12%		3.77%
Efficiency ratio (GAAP-based)		72.09		65.14
Total capital to risk-weighted assets		23.78		23.52
Nonperforming loans to portfolio loans - noncovered		2.29		1.38
Shareholders' equity to total assets		12.27		13.86
Tangible common equity to tangible assets*		12.22		10.56
Return on average assets (annualized)		0.66		0.81
Return on average common equity (annualized)		5.46		5.87
Return on average tangible common equity (annualized)**		5.49		6.04

Balance sheet amounts and ratios are as of period end unless otherwise noted.
* This is a Non-GAAP financial measure.  Please see Table 8 for a reconciliation to the most directly comparable GAAP based measure.
** This is a Non-GAAP financial measure.
Please see accompanying tables for additional financial information.

SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands) Table 2

	June 30,		December 31,			June 30,
	2013		2012			2012
Assets
Cash and due from banks	$	32,137	$	45,045	$	39,539
Interest-bearing deposits		266,835		243,034		236,336
Cash and cash equivalents		298,972		288,079		275,875
Securities held to maturity (fair values of $12,188, $13,659, and $13,735, respectively)		11,758		12,797		12,962
Securities available for sale (amortized cost of $361,397, $358,317, and $320,929, respectively)		360,645		364,315		327,416
Loans held for sale		7,217		31,682		23,996
Noncovered loans receivable		1,289,226		1,321,346		1,498,708
Less: Allowance for loan losses		(40,270)		(46,494)		(43,807)
Net noncovered loans receivable		1,248,956		1,274,852		1,454,901
Covered loans receivable (includes loss share: $5,062, $6,714, and $8,096, respectively)		21,646		25,707		30,712
Less: Allowance for loan losses		(82)		(224)		(91)
Net covered loans receivable		21,564		25,483		30,621
Net loans receivable		1,270,520		1,300,335		1,485,522
Accrued interest receivable		6,067		6,365		7,014
Income tax receivable		1,839		24,525		24,974
Premises and equipment, net		21,063		21,691		22,436
Noncovered other real estate		145		11,315		17,263
Covered other real estate		1,666		3,643		3,825
Goodwill		1,214		1,214		1,214
Other intangible assets, net		4,981		4,864		4,760
Other assets		45,875		51,430		56,866
Total assets	$	2,031,962	$	2,122,255	$	2,264,123
Liabilities
Deposits:
Noninterest-bearing demand	$	412,176	$	424,008	$	421,083
Interest-bearing demand		138,502		112,012		119,929
Money market accounts		408,145		423,417		361,839
Savings accounts		38,611		37,693		35,610
Time deposits of $100,000 or more		295,179		351,273		431,317
Other time deposits		323,348		361,175		418,601
Total deposits		1,615,961		1,709,578		1,788,379
Accrued interest payable		1,020		1,116		831
Other liabilities		9,264		13,180		15,470
Other borrowings		74,334		70,362		68,477
Subordinated debentures		81,963		81,963		81,963
Total liabilities		1,782,542		1,876,199		1,955,120
Shareholders' equity
Serial preferred stock - $1,000 par value; 2,000,000 shares authorized;
0, 0, and 70,000 shares issued and outstanding, respectively		-		-		68,837
Common stock - $1 par value; 40,000,000 shares authorized;
19,692,606, 19,529,705, and 19,447,202 shares issued and outstanding, respectively		19,693		19,530		19,447
Additional paid-in capital		99,342		99,705		98,899
Retained earnings		131,896		125,093		119,776
Accumulated other comprehensive income (loss)		(1,511)		1,728		2,044
Total shareholders' equity		249,420		246,056		309,003
Total liabilities and shareholders' equity	$	2,031,962	$	2,122,255	$	2,264,123

SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands) Table 3

	For the three months				For the six months
	ended June 30,				ended June 30,
	2013		2012		2013		2012
Interest income
Loans	$	16,415	$	21,708	$	33,421	$	45,085
Investment securities		1,594		2,139		3,285		4,085
Other interest-earning assets		255		193		495		377
Total interest income		18,264		24,040		37,201		49,547
Interest expense
Interest-bearing deposits		1,442		2,542		3,094		5,438
Other borrowings		222		222		442		446
Subordinated debentures		1,466		1,529		2,925		3,067
Total interest expense		3,130		4,293		6,461		8,951
Net interest income		15,134		19,747		30,740		40,596
Provision for loan losses		(876)		32		(378)		1,748
Net interest income after provision for loan losses		16,010		19,715		31,118		38,848
Noninterest income
Service charges and fees		2,607		2,931		5,267		5,858
Gain on sales of loans		831		582		1,645		1,117
Gain on investment securities		-		35		-		35
Other noninterest income		53		53		116		105
Total noninterest income		3,491		3,601		7,028		7,115
Noninterest expense
Salaries and employee benefits		8,039		7,354		16,175		14,601
Occupancy		2,679		2,635		5,253		5,180
FDIC and other insurance		400		699		891		1,482
Other real estate, net		(1,394)		2,059		(1,041)		2,431
General and administrative		3,115		4,022		5,949		7,384
Total noninterest expense		12,839		16,769		27,227		31,078
Income before taxes		6,662		6,547		10,919		14,885
Taxes on income		2,248		2,430		4,116		5,557
Net income	$	4,414	$	4,117	$	6,803	$	9,328
Net income available to common shareholders	$	4,414	$	3,011	$	6,803	$	7,130
Basic earnings per common share	$	0.22	$	0.15	$	0.34	$	0.37
Diluted earnings per common share		0.22		0.15		0.34		0.37
Common dividends declared per share		-		-		-		-

SOUTHWEST BANCORP, INC.
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES - QUARTERLY
(Dollars in thousands) Table 4

	For the three months ended
	June 30, 2013					March 31, 2013
	Average				Average	Average				Average
	Balance		Interest		Yield/Rate	Balance		Interest		Yield/Rate
Assets
Noncovered loans	$	1,296,589	$	16,018	4.96%	$	1,330,578	$	16,514	5.03%
Covered loans		22,361		397	7.12		24,895		492	8.01
Investment securities		374,353		1,594	1.71		380,525		1,691	1.80
Other interest-earning assets		282,067		255	0.36		268,396		240	0.36
Total interest-earning assets		1,975,370		18,264	3.71		2,004,394		18,937	3.83
Other assets		63,390					87,592
Total assets	$	2,038,760				$	2,091,986
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	126,250	$	37	0.12%	$	133,600	$	45	0.14%
Money market accounts		420,477		190	0.18		419,635		236	0.23
Savings accounts		38,833		12	0.12		38,721		12	0.13
Time deposits		633,647		1,203	0.76		683,159		1,359	0.81
Total interest-bearing deposits		1,219,207		1,442	0.47		1,275,115		1,652	0.53
Other borrowings		71,857		222	1.24		69,728		220	1.28
Subordinated debentures		81,963		1,466	7.15		81,963		1,459	7.12
Total interest-bearing liabilities		1,373,027		3,130	0.91		1,426,806		3,331	0.95
Noninterest-bearing demand deposits		402,224					403,547
Other liabilities		10,561					12,285
Shareholders' equity		252,948					249,348
Total liabilities and shareholders' equity	$	2,038,760				$	2,091,986
Net interest income and spread			$	15,134	2.80%			$	15,606	2.88%
Net interest margin (1)					3.07%					3.16%
Average interest-earning assets
to average interest-bearing liabilities		143.87%					140.48%
(1) Net interest margin = annualized net interest income / average interest-earning assets

SOUTHWEST BANCORP, INC.
UNAUDITED AVERAGE BLANCES, YIELDS, AND RATES – YEAR-TO-DATE
(Dollars in thousands) Table 5

	For the six months ended June 30,
	2013					2012
	Average				Average	Average				Average
	Balance		Interest		Yield/Rate	Balance		Interest		Yield/Rate
Assets
Noncovered loans	$	1,313,490	$	32,532	4.99%	$	1,614,980	$	43,848	5.46%
Covered loans		23,621		889	7.59		33,951		1,237	7.33
Investment securities		377,422		3,285	1.76		327,180		4,085	2.51
Other interest-earning assets		275,269		495	0.36		191,839		377	0.40
Total interest-earning assets		1,989,802		37,201	3.77		2,167,950		49,547	4.60
Other assets		75,423					153,370
Total assets	$	2,065,225				$	2,321,320
Liabilities and Shareholders' Equity
Interest-bearing demand deposits	$	129,905	$	82	0.13%	$	120,626	$	129	0.22%
Money market accounts		420,058		426	0.20		375,289		520	0.28
Savings accounts		38,777		24	0.12		34,609		26	0.15
Time deposits		658,266		2,562	0.78		905,900		4,763	1.06
Total interest-bearing deposits		1,247,006		3,094	0.50		1,436,424		5,438	0.76
Other borrowings		70,798		442	1.26		57,301		446	1.57
Subordinated debentures		81,963		2,925	7.14		81,963		3,067	7.48
Total interest-bearing liabilities		1,399,767		6,461	0.93		1,575,688		8,951	1.14
Noninterest-bearing demand deposits		402,882					383,008
Other liabilities		11,418					49,692
Shareholders' equity		251,158					312,932
Total liabilities and shareholders' equity	$	2,065,225				$	2,321,320
Net interest income and spread			$	30,740	2.84%			$	40,596	3.46%
Net interest margin (1)					3.12%					3.77%
Average interest-earning assets
to average interest-bearing liabilities		142.15%					137.59%
(1) Net interest margin = annualized net interest income / average interest-earning assets

SOUTHWEST BANCORP, INC.
UNAUDITED QUARTERLY SUMMARY LOAN DATA
(Dollars in thousands) Table 6

	2013				2012
		Jun. 30	Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31
LOAN COMPOSITION
Noncovered:
Real estate mortgage:
Commercial	$	786,686	$	819,873	$	870,977	$	898,453	$	931,239	$	996,486
One-to-four family residential		77,445		73,911		70,952		74,081		74,390		76,287
Real estate construction:
Commercial		158,907		139,462		130,753		206,342		211,098		222,678
One-to-four family residential		5,241		5,015		3,656		3,438		4,184		3,814
Commercial		235,667		232,224		240,498		244,018		263,085		273,324
Installment and consumer:
Guaranteed student loans		4,520		4,576		4,680		4,872		5,153		5,276
Other		27,977		28,553		31,512		32,710		33,555		31,766
Total noncovered loans, including held for sale		1,296,443		1,303,614		1,353,028		1,463,914		1,522,704		1,609,631
Less allowance for loan losses		(40,270)		(42,639)		(46,494)		(43,607)		(43,807)		(45,023)
Total noncovered loans, net	$	1,256,173	$	1,260,975	$	1,306,534	$	1,420,307	$	1,478,897	$	1,564,608
Covered:
Real estate mortgage:
Commercial	$	15,452	$	16,970	$	18,298	$	20,664	$	21,472	$	22,607
One-to-four family residential		4,253		4,458		4,881		5,059		5,432		5,766
Real estate construction:
Commercial		320		367		382		419		1,627		2,344
Commercial		1,554		1,715		2,037		1,937		2,033		2,401
Installment and consumer		67		91		109		118		148		196
Total covered loans		21,646		23,601		25,707		28,197		30,712		33,314
Less allowance for loan losses		(82)		(214)		(224)		(138)		(91)		(60)
Total covered loans, net	$	21,564	$	23,387	$	25,483	$	28,059	$	30,621	$	33,254
LOANS BY SEGMENT
Oklahoma banking	$	656,356	$	628,747	$	652,121	$	704,916	$	751,758	$	810,217
Texas banking		444,327		495,815		520,481		560,197		588,370		616,455
Kansas banking		210,189		195,355		174,451		192,249		189,292		177,508
Subtotal		1,310,872		1,319,917		1,347,053		1,457,362		1,529,420		1,604,180
Secondary market		7,217		7,298		31,682		34,749		23,996		38,765
Total loans	$	1,318,089	$	1,327,215	$	1,378,735	$	1,492,111	$	1,553,416	$	1,642,945
NONPERFORMING LOANS BY TYPE
Construction & development	$	5,989	$	6,409	$	3,355	$	3,436	$	3,608	$	3,768
Commercial real estate		12,325		13,362		18,337		20,576		4,932		6,821
Commercial		10,719		11,861		15,232		1,791		10,878		2,209
One-to-four family residential		418		651		1,310		949		1,125		1,508
Consumer		64		73		160		131		176		118
Total nonperforming loans - noncovered	$	29,515	$	32,356	$	38,394	$	26,883	$	20,719	$	14,424
NONPERFORMING LOANS BY SEGMENT
Oklahoma banking	$	1,678	$	2,000	$	2,956	$	4,369	$	2,979	$	3,550
Texas banking		26,294		28,817		33,756		19,940		14,894		5,703
Kansas banking		1,543		1,539		1,682		2,574		2,846		5,171
Total nonperforming loans - noncovered	$	29,515	$	32,356	$	38,394	$	26,883	$	20,719	$	14,424
OTHER REAL ESTATE BY TYPE
Construction & development	$	145	$	215	$	215	$	445	$	2,585	$	3,542
Commercial real estate		-		9,207		11,003		14,130		14,129		14,854
One-to-four family residential		-		-		97		108		549		933
Total other real estate - noncovered	$	145	$	9,422	$	11,315	$	14,683	$	17,263	$	19,329
Continued

SOUTHWEST BANCORP, INC.
UNAUDITED QUARTERLY SUMMARY LOAN DATA
(Dollars in thousands) Table 6
Continued

			2013			2012
		Jun. 30	Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31
OTHER REAL ESTATE BY SEGMENT
Oklahoma banking	$	-	$	1,980	$	3,393	$	6,178	$	6,178	$	6,273
Texas banking		-		7,227		7,227		7,227		9,162		9,846
Kansas banking		145		215		695		1,278		1,923		3,210
Total other real estate - noncovered	$	145	$	9,422	$	11,315	$	14,683	$	17,263	$	19,329
POTENTIAL PROBLEM LOANS BY TYPE
Construction & development	$	20,745	$	19,968	$	22,077	$	22,565	$	25,563	$	33,907
Commercial real estate		62,166		60,329		58,549		53,725		71,537		67,654
Commercial		10,136		8,220		12,526		9,305		12,753		23,506
One-to-four family residential		1,071		1,129		1,147		1,157		1,230		1,253
Consumer		-		-		62		-		-		-
Total potential problem loans  - noncovered	$	94,118	$	89,646	$	94,361	$	86,752	$	111,083	$	126,320
POTENTIAL PROBLEM LOANS BY SEGMENT
Oklahoma banking	$	31,495	$	32,246	$	30,875	$	39,606	$	48,038	$	44,122
Texas banking		58,710		51,978		58,377		43,313		59,368		79,735
Kansas banking		3,913		5,422		5,109		3,833		3,677		2,463
Total potential problem loans  - noncovered	$	94,118	$	89,646	$	94,361	$	86,752	$	111,083	$	126,320
LOANS OUT OF MARKET
Net balance of loans out of market:
Arizona	$	31,564	$	33,017	$	40,326	$	41,255	$	39,449	$	34,749
Iowa		22,537		22,659		22,826		22,958		23,022		23,130
Kentucky		11,860		10,144		8,691		7,517		9,455		517
California		9,632		10,866		9,791		9,684		9,922		10,252
Mississippi		9,233		9,170		9,239		9,842		-		-
Colorado		8,586		3,067		3,110		3,119		3,111		3,104
South Carolina		7,165		7,205		7,244		7,283		7,320		-
Florida		6,346		6,333		6,254		6,204		6,240		6,269
Tennessee		6,171		6,246		6,204		6,232		6,310		6,368
Ohio		4,759		4,132		10,438		11,182		11,502		12,650
Other		17,455		15,198		19,542		20,565		20,917		25,851
Total loans out of market	$	135,308	$	128,037	$	143,665	$	145,841	$	137,248	$	122,890
Nonperforming loans out of market:
Arizona	$	12,167	$	13,419	$	11,599	$	250	$	256	$	261
New York		1,048		-		-		-		-		-
Florida		264		270		275		281		287		293
Colorado		-		131		131		131		131		131
Other		1		-		59		-		-		-
Total nonperforming out of market	$	13,480	$	13,820	$	12,064	$	662	$	674	$	685
Potential problem loans out of market:
Iowa	$	11,719	$	11,792	$	11,868	$	11,941	$	11,970	$	12,035
New Jersey		1,244		-		-		-		-		-
California		512		524		536		548		559		570
Florida		75		80		85		90		95		100
Arizona		-		-		9,037		-		-		-
Total potential problem out of market	$	13,550	$	12,396	$	21,526	$	12,579	$	12,624	$	12,705
Continued

SOUTHWEST BANCORP, INC.
UNAUDITED QUARTERLY SUMMARY LOAN DATA
(Dollars in thousands) Table 6
Continued

	2013				2012
		Jun. 30	Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31
ALLOWANCE ACTIVITY
Balance, beginning of period	$	42,853	$	46,718	$	43,745	$	43,898	$	45,083	$	44,684
Charge offs		2,072		4,651		722		2,653		2,229		1,936
Recoveries		447		288		610		4,226		1,012		619
Net charge offs (recoveries)		1,625		4,363		112		(1,573)		1,217		1,317
Provision for loan losses		(876)		498		3,085		(1,726)		32		1,716
Balance, end of period	$	40,352	$	42,853	$	46,718	$	43,745	$	43,898	$	45,083
NET CHARGE OFFS BY TYPE
Construction & development	$	111	$	(19)	$	(22)	$	(1,823)	$	(85)	$	(42)
Commercial real estate		7		416		(18)		2,022		91		14
Commercial		1,085		3,751		239		(1,894)		1,228		1,211
One-to-four family residential		363		167		(40)		20		(105)		123
Consumer		59		48		(47)		102		88		11
Total net charge offs (recoveries) by type	$	1,625	$	4,363	$	112	$	(1,573)	$	1,217	$	1,317
NET CHARGE OFFS BY SEGMENT
Oklahoma banking	$	200	$	589	$	(261)	$	5	$	(247)	$	1,150
Texas banking		1,356		3,241		305		857		1,139		227
Kansas banking		69		533		68		(2,435)		325		(60)
Total net charge offs (recoveries) by segment	$	1,625	$	4,363	$	112	$	(1,573)	$	1,217	$	1,317

SOUTHWEST BANCORP, INC.
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA
(Dollars in thousands, except per share data) Table 7

	2013				2012
		Jun. 30	Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31
PER SHARE DATA
Basic earnings per common share	$	0.22	$	0.12	$	0.05	$	0.22	$	0.15	$	0.21
Diluted earnings per common share		0.22		0.12		0.05		0.22		0.15		0.21
Book value per common share		12.67		12.72		12.60		12.59		12.35		12.21
Tangible book value per share*		12.60		12.66		12.54		12.53		12.29		12.15
COMMON STOCK
Shares issued and outstanding		19,692,606		19,692,038		19,529,721		19,448,312		19,447,202		19,445,913
OTHER FINANCIAL DATA
Investment securities	$	372,403	$	365,605	$	377,112	$	381,499	$	340,378	$	333,860
Loans held for sale		7,217		7,297		31,682		34,749		23,996		38,765
Noncovered portfolio loans		1,289,226		1,296,317		1,321,346		1,429,165		1,498,708		1,570,866
Total noncovered loans		1,296,443		1,303,614		1,353,028		1,463,914		1,522,704		1,609,631
Covered portfolio loans		21,646		23,601		25,707		28,197		30,712		33,314
Total assets		2,031,962		2,091,694		2,122,255		2,151,153		2,264,123		2,268,264
Total deposits		1,615,961		1,677,668		1,709,578		1,743,673		1,788,379		1,806,780
Other borrowings		74,334		70,872		70,362		66,694		68,477		55,139
Subordinated debentures		81,963		81,963		81,963		81,963		81,963		81,963
Total shareholders' equity		249,420		250,509		246,056		244,821		309,003		306,046
Mortgage servicing portfolio		368,825		356,032		343,397		329,184		305,465		301,378
INTANGIBLE ASSET DATA
Goodwill	$	1,214	$	1,214	$	1,214	$	1,214	$	1,214	$	1,214
Core deposit intangible		2,306		2,424		2,543		2,664		2,785		2,906
Mortgage servicing rights		2,675		2,445		2,321		2,122		1,975		1,952
Total intangible assets	$	6,195	$	6,083	$	6,078	$	6,000	$	5,974	$	6,072
Intangible amortization expense	$	313	$	410	$	283	$	283	$	282	$	296
DEPOSIT COMPOSITION
Non-interest bearing demand	$	412,176	$	416,979	$	424,008	$	429,407	$	421,083	$	395,141
Interest-bearing demand		138,502		125,914		112,012		113,677		119,929		119,759
Money market accounts		408,145		437,629		423,417		385,296		361,839		349,419
Savings accounts		38,611		39,733		37,693		36,461		35,610		34,679
Time deposits of $100,000 or more		295,179		317,270		351,273		389,969		431,317		464,876
Other time deposits		323,348		340,143		361,175		388,863		418,601		442,906
Total deposits**	$	1,615,961	$	1,677,668	$	1,709,578	$	1,743,673	$	1,788,379	$	1,806,780
OFFICES AND EMPLOYEES
FTE Employees		408		412		422		429		430		435
Branches		22		22		22		23��		23		23
Loan production offices		1		1		1		2		2		2
Assets per employee	$	4,980	$	5,077	$	5,029	$	5,014	$	5,265	$	5,214
____________________
*This is a Non-GAAP based financial measure.
**Calculation of Non-brokered Deposits and Core Funding (Non-GAAP Financial Measures)
Total deposits	$	1,615,961	$	1,677,668	$	1,709,578	$	1,743,673	$	1,788,379	$	1,806,780
Less:
Brokered time deposits		4,904		5,760		9,865		10,197		12,238		13,307
Other brokered deposits		3,422		3,422		3,421		4,421		4,420		6,529
Non-brokered deposits	$	1,607,635	$	1,668,486	$	1,696,292	$	1,729,055	$	1,771,721	$	1,786,944
Plus:
Sweep repurchase agreements		49,334		45,872		45,362		41,694		43,477		30,139
Core funding	$	1,656,969	$	1,714,358	$	1,741,654	$	1,770,749	$	1,815,198	$	1,817,083
Balance sheet amounts are as of period end unless otherwise noted.

SOUTHWEST BANCORP, INC.
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA
(Dollars in thousands) Table 8

	2013				2012
		Jun. 30	Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31
PERFORMANCE RATIOS
Return on average assets (annualized)		0.87%		0.46%		0.18%		1.06%		0.73%		0.89%
Return on average common equity (annualized)		7.00		3.89		1.56		7.11		5.03		7.00
Return on average tangible common equity
(annualized)*		7.03		3.90		1.56		7.15		5.06		7.03
Net interest margin (annualized)		3.07		3.16		3.41		3.59		3.71		3.82
Effective tax rate		33.74		43.88		31.45		39.73		37.12		37.50
Efficiency ratio		68.93		75.16		79.68		64.47		71.82		58.73
NONPERFORMING ASSETS
Noncovered:
Nonaccrual loans	$	29,513	$	32,356	$	35,104	$	26,493	$	20,474	$	14,324
90 days past due and accruing		2		-		3,290		390		245		100
Total nonperforming loans		29,515		32,356		38,394		26,883		20,719		14,424
Other real estate		145		9,422		11,315		14,683		17,263		19,329
Total nonperforming assets	$	29,660	$	41,778	$	49,709	$	41,566	$	37,982	$	33,753
Performing restructured	$	993	$	512	$	290	$	281	$	328	$	1,700
Potential problem loans	$	94,118	$	89,646	$	94,361	$	86,752	$	111,083	$	126,320
Covered:
Nonaccrual loans	$	3,062	$	2,873	$	3,595	$	4,809	$	6,067	$	7,015
90 days past due and accruing		-		-		-		353		-		-
Total nonperforming loans		3,062		2,873		3,595		5,162		6,067		7,015
Other real estate		1,666		2,243		3,643		4,142		3,825		4,694
Total nonperforming assets	$	4,728	$	5,116	$	7,238	$	9,304	$	9,892	$	11,709
Performing restructured	$	1,800	$	1,854	$	2,523	$	2,548	$	1,701	$	-
Potential problem loans	$	3,352	$	3,986	$	3,155	$	1,621	$	1,573	$	553
ASSET QUALITY RATIOS
Net loan charge-offs to average portfolio
loans (annualized)		0.50%		1.32%		0.03%		(0.42)%		0.31%		0.32%
Noncovered:
Nonperforming assets to portfolio loans and
other real estate		2.30%		3.20%		3.73%		2.88%		2.51%		2.12%
Nonperforming loans to portfolio loans		2.29		2.50		2.91		1.88		1.38		0.92
Allowance for loan losses to portfolio loans		3.12		3.29		3.52		3.05		2.92		2.87
Allowance for loan losses to
nonperforming loans		136.44		131.78		121.10		162.21		211.43		312.14
Covered:
Nonperforming assets to portfolio loans and
other real estate		20.28%		19.80%		24.66%		28.77%		28.64%		30.81%
Nonperforming loans to portfolio loans		14.15		12.17		13.98		18.31		19.75		21.06
Allowance for loan losses to portfolio loans		0.38		0.91		0.87		0.49		0.30		0.18
Allowance for loan losses to
nonperforming loans		2.68		7.45		6.23		2.67		1.50		0.86
CAPITAL RATIOS
Average total shareholders' equity to
average assets		12.41%		11.92%		11.61%		12.31%		13.56%		12.99%
Leverage ratio		16.10		15.59		15.01		14.49		16.84		16.20
Tier 1 capital to risk-weighted assets		22.48		22.25		20.28		19.36		22.24		21.21
Total capital to risk-weighted assets		23.78		23.54		21.56		20.64		23.52		22.49
Tangible common equity to tangible assets***		12.22		11.93		11.54		11.33		10.56		10.42
Continued

SOUTHWEST BANCORP, INC.
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA
(Dollars in thousands) Table 8 Continued

	2013				2012
		Jun. 30	Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31
REGULATORY CAPITAL DATA
Tier I capital	$	326,831	$	324,659	$	319,665	$	317,665	$	382,263	$	378,949
Total capital		345,717		343,562		339,964		338,739		404,252		401,808
Total risk adjusted assets		1,453,878		1,459,465		1,576,521		1,641,121		1,719,058		1,786,282
Average total assets		2,030,064		2,082,789		2,130,035		2,192,579		2,269,640		2,339,784
____________________
*This is a Non-GAAP based financial measure.
***Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure)
Total shareholders' equity	$	249,420	$	250,509	$	246,056	$	244,821	$	309,003	$	306,046
Less:
Goodwill		1,214		1,214		1,214		1,214		1,214		1,214
Preferred stock		-		-		-		-		68,837		68,644
Tangible common equity	$	248,206	$	249,295	$	244,842	$	243,607	$	238,952	$	236,188
Total assets	$	2,031,962	$	2,091,694	$	2,122,255	$	2,151,153	$	2,264,123	$	2,268,264
Less goodwill		1,214		1,214		1,214		1,214		1,214		1,214
Tangible assets	$	2,030,748	$	2,090,480	$	2,121,041	$	2,149,939	$	2,262,909	$	2,267,050
Tangible common equity to tangible assets		12.22%		11.93%		11.54%		11.33%		10.56%		10.42%
Balance sheet amounts and ratios are as of period end unless otherwise noted.