Exhibit 99
[OKLAHOMA'S SOUTHWEST BANCORP, INC. LETTERHEAD]
SOUTHWEST BANCORP, INC. REPORTS EARNINGS
CONTACT: RICK GREEN, PRESIDENT & C.E.O.
KERBY E. CROWELL, EXECUTIVE VICE PRESIDENT & C.F.O.
TELEPHONE: (405) 372-2230
RELEASE DATE: WEDNESDAY, JULY 21, 2004
July 21, 2004, Stillwater, Oklahoma . . . . Southwest Bancorp, Inc.
(Nasdaq National Market--OKSB, OKSBO), the Oklahoma-based parent company of the
Stillwater National Bank and Trust Company ("Stillwater National") and SNB Bank
of Wichita ("SNB Wichita"), today reported net income for the second quarter of
2004 of $4.6 million, a 14% increase from the second quarter of 2003. Diluted
earnings per share were $0.36 compared to $0.33 per share for the 2003 period,
up 9%. Net income for the first six months of 2004 was $8.8 million, a 17%
increase from the same period in 2003. Diluted earnings per share were $0.70
compared to $0.62 per share for the 2003 period, up 13%.
2004 RESULTS AND FOCUS
o Total assets of $1.8 billion; a 13% increase from year-end 2003.
o Portfolio loans of $1.2 billion; a 10% increase from year-end 2003.
o Net Income: $4.6 million; a 14% increase from second
quarter 2003.
$8.8 million; a 17% increase from the
first six months of 2003.
o Diluted earnings per share: $0.36; a 9% increase from second quarter
2003.
$0.70; a 13% increase from the first six
months of 2003.
o Dividends per share: $0.07; a 12% increase from second
quarter 2003.
$0.14; a 12% increase from the first six
months of 2003.
o Return on average equity: 15.98% for the second quarter 2004.
15.49% for the first six months of 2004.
o GAAP-based efficiency ratio: 52.10% for the second quarter 2004.
54.02% for the first six months of 2004.
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STRATEGIC PERSPECTIVE
"Southwest Bancorp, Inc. ("Southwest") maintains an intense focus on
specific performance goals designed to increase shareholder value. These goals
include annual growth in diluted earnings per share and assets of 10% or more
and geographic market share growth and expansion," said Rick Green, President
and Chief Executive Officer. Southwest's earnings growth during the first six
months of 2004 is primarily the result of significant loan growth and an
increase in net interest income due to improved interest spread and margin. We
are continuing to focus on increasing net interest income by prudent loan growth
coupled with careful management of interest margins and funding.
"We are pleased with the progress of our expansion strategy. For 2003
and the first six months of 2004, our Texas and Kansas operations contributed
over 12% and 18% of consolidated net income, respectively. At June 30, 2004,
loans from our Texas and Kansas operations accounted for $312.8 million, or 26%,
of consolidated portfolio loans. We plan to continue our expansion into other
markets outside of Oklahoma that meet our criteria for entry, including market
concentrations of healthcare professionals and facilities, small businesses, and
other niche markets that have proven successful for us. Southwest has received
regulatory approval to expand further in Texas by opening a second branch office
in the Dallas metropolitan area. The office is located in Preston Center at 5950
Berkshire Lane, Dallas, Texas where it is currently operating as a loan
production office. The Preston Center location will begin operating as a full
service branch late in the third quarter of 2004.
"At the end of the second quarter of 2004, Southwest had total assets of
$1.8 billion, loans of $1.5 billion, and deposits of $1.4 billion. At that date,
regulatory capital ratios for Southwest, Stillwater National, and SNB Wichita
continued to exceed regulatory requirements for a well-capitalized institution."
ADDITIONAL FINANCIAL INFORMATION
Net income for the first six months of 2004 was $8.8 million, up $1.3
million, or 17%, from the same period in 2003. Basic earnings per share for 2004
were $0.73, up 16% from $0.63 in 2003. Diluted earnings per share of $0.70
increased 13% over the first half of 2003.
Net interest income increased 23% from 2003. Non-interest income for
2004 declined $678,000 from 2003 due primarily to an $860,000 reduction in gain
on sales of mortgage loans which occurred due to the lower refinancing demand
created by higher mortgage interest rates in 2004.
The provision for loan losses of $4.2 million increased $478,000, or
13%, from 2003. Noninterest expense of $21.1 million increased $2.9 million, or
16%, primarily as a result of increases in compensation, general and
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administrative, and occupancy expenses. Southwest recorded a one-time charge
relating to executive retirement in the first quarter of 2004 of approximately
$294,000 after related tax benefits.
FINANCIAL CONDITION
At June 30, 2004, total assets were $1.8 billion, a $206.4 million
increase from the end of 2003. Total portfolio loans (loans other than those
held for sale) at the end of the second quarter 2004 were $1.2 billion, up
$110.4 million, or 10%, from year-end 2003, primarily as a result of growth in
commercial and commercial real estate lending.
ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING LOANS
Nonaccrual loans totaled $14.3 million at June 30, 2004, compared to
$14.5 million at December 31, 2003. Total nonperforming loans of $18.0 million
increased $2.0 million, or 13%, from year-end 2003, and represented 1.20% of
total loans, compared to 1.22% of total loans at year-end 2003. At June 30,
2004, $1.6 million, or 9%, of loans classified as nonperforming were guaranteed
by United States agencies or U.S. government sponsored entities.
Mr. Green said, "Much of our business is commercial lending. As a
result, weakness in one or a few large credits can have a significant impact on
our nonperforming loan totals. Through the years, however, we have demonstrated
the ability to resolve problem commercial loans. Three credit relationships
accounted for approximately $11.6 million, or 64%, of total nonperforming loans
at June 30, 2004. Management is actively managing these relationships with the
goal of resolving them during 2004."
The allowance for loan losses of $17.8 million increased $1.9 million,
or 12%, from year-end 2003, due primarily to the $186.2 million growth in loans
that occurred during the first six months of 2004. At second quarter-end 2004,
the allowance for loan losses was 1.19% of total loans, compared to 1.21% of
total loans at year-end 2003. Management believes the amount of the allowance is
appropriate, given its systematic methodology for calculating the allowance.
That methodology is designed to estimate inherent losses on total loans in the
portfolio, including those on nonperforming loans.
SECURITIES
Southwest's common stock is traded on the Nasdaq National Market under
the symbol OKSB. Trust preferred securities of Southwest's subsidiary, SBI
Capital Trust, trade on the Nasdaq National market under the symbol OKSBO.
Market makers for Southwest's common stock include Stifel Nicolaus & Co.,
Goldman Sachs & Co., Keefe Bruyette & Woods Inc., Merrill Lynch, RBC Dain
Rauscher, Inc., Schwab Capital Markets, Morgan Stanley & Company, Sandler
O'Neill & Partners and FTN Financial Securities Corp.
SOUTHWEST BANCORP AND SUBSIDIARIES
Southwest is the financial holding company for Stillwater National Bank
and Trust Company, SNB Bank of Wichita, Healthcare Strategic Support, Inc., and
Business Consulting Group, Inc. Southwest is an independent company, not
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controlled by other organizations or individuals and pursues an established
strategy of independent operation for the benefit of all of its shareholders.
A substantial portion of Southwest's current business and focus for the
future are services for local businesses, their primary employees, and other
managers and professionals. Southwest seeks to be the premier financial services
company for its selected markets. Information regarding Southwest can be
retrieved via the Internet, at WWW.OKSB.COM. Southwest, Stillwater National, and
SNB Wichita offer commercial and consumer lending, deposit, and investment
services, and specialized cash management, consulting and other financial
services from offices in Stillwater, Tulsa, Oklahoma City, and Chickasha,
Oklahoma, Wichita, Kansas and metropolitan Dallas, Texas; loan production
offices on the campuses of the University of Oklahoma Health Sciences Center and
Oklahoma State University-Tulsa; a marketing presence in the Student Union at
Oklahoma State University-Stillwater; and on the Internet. Information regarding
products and services of Stillwater National and SNB Wichita, including SNB
DIRECTBANKER(R), Southwest's online banking product, can be retrieved via the
Internet, at WWW.OKSB.COM. The Stillwater National and SNB Wichita web sites and
online banking technology are frequently updated in response to the changing
needs of the large base of Internet banking customers.
FORWARD-LOOKING STATEMENTS
This Press Release includes forward-looking statements, such as:
statements of Southwest's goals, intentions, and expectations; estimates of
risks and of future costs and benefits; assessments of the amount and timing of
problem loan payoffs and loan losses; off-balance sheet risk and market risk;
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, market behavior, and other
economic conditions; 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 growth and performance do not
necessarily indicate its future results.
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SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
JUNE 30, DECEMBER 31,
2004 2003
---------- ----------
ASSETS:
Cash and cash equivalents $ 28,614 $ 33,981
Investment securities:
Held to maturity, fair value $7,476 (2004)
and $16,144 (2003) 7,435 15,916
Available for sale, amortized cost
$205,158 (2004) and $176,470 (2003) 202,593 177,074
Federal Reserve Bank and Federal Home Loan
Bank Stock, at cost 12,153 11,276
Loans held for sale 297,928 218,422
Loans receivable, net of allowance for loan
losses of $17,790 (2004) and $15,848 (2003) 1,183,043 1,074,566
Accrued interest receivable 12,778 11,321
Premises and equipment, net 19,509 19,818
Other assets 23,111 18,351
---------- ----------
Total assets $1,787,164 $1,580,725
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Noninterest-bearing demand $ 179,032 $ 167,332
Interest-bearing demand 59,699 53,955
Money market accounts 440,432 376,016
Savings accounts 7,849 6,903
Time deposits of $100,000 or more 431,314 358,130
Other time deposits 237,574 241,789
---------- ----------
Total deposits 1,355,900 1,204,125
Other borrowings 227,483 183,850
Accrued interest payable 2,668 3,375
Income tax payable 6,788 2,850
Other liabilities 5,393 4,410
Subordinated Debentures 72,180 72,180
---------- ----------
Total liabilities 1,670,412 1,470,790
Shareholders' equity:
Common stock - $1 par value; 20,000,000
shares authorized; 12,243,042 shares
issued and outstanding 12,243 12,243
Capital surplus 7,819 6,997
Retained earnings 99,775 92,657
Accumulated other comprehensive income/(loss) (1,521) 360
Treasury stock, at cost; 163,395 (2004)
and 287,410 (2003) shares (1,564) (2,322)
---------- ----------
Total shareholders' equity 116,752 109,935
---------- ----------
Total liabilities & shareholders' equity $1,787,164 $1,580,725
========== ==========
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SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2004 2003 2004 2003
------- ------- ------- -------
Interest income:
Interest and fees on loans $22,419 $19,299 $43,223 $37,021
Investment securities 2,002 2,012 3,955 4,085
Other interest-bearing assets 2 2 3 6
------- ------- ------- -------
Total interest income 24,423 21,313 47,181 41,112
Interest expense:
Interest-bearing deposits 4,961 5,442 9,798 10,769
Other borrowings 1,318 1,253 2,540 2,548
Subordinated Debentures 1,079 613 2,160 1,213
------- ------- ------- -------
Total interest expense 7,358 7,308 14,498 14,530
------- ------- ------- -------
Net interest income 17,065 14,005 32,683 26,582
Provision for loan losses 2,551 2,000 4,200 3,722
Other income:
Service charges and fees 2,418 2,225 4,685 4,476
Gain on sales of loans receivable 707 1,062 1,313 1,999
Gain on sales of investment
securities -- 25 1 27
Other noninterest income 159 286 403 578
------- ------- ------- -------
Total other income 3,284 3,598 6,402 7,080
Other expenses:
Salaries and employee benefits 5,171 4,921 10,330 9,233
Occupancy 2,265 1,938 4,496 3,860
FDIC and other insurance 96 78 191 156
Other real estate 24 9 41 170
General and administrative 3,046 2,347 6,056 4,768
------- ------- ------- -------
Total other expenses 10,602 9,293 21,114 18,187
------- ------- ------- -------
Income before taxes 7,196 6,310 13,771 11,753
Taxes on income 2,592 2,277 4,965 4,207
------- ------- ------- -------
Net income $ 4,604 $ 4,033 $ 8,806 $ 7,546
======= ======= ======= =======
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SOUTHWEST BANCORP, INC.
AVERAGE BALANCES, YIELDS AND RATES
(DOLLARS IN THOUSANDS)
FOR THE THREE MONTHS ENDED
JUNE 30, 2004
---------------------------------
INTEREST AVERAGE
AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE
---------- -------- --------
ASSETS:
Loans receivable $1,473,538 $ 22,419 6.12%
Investment securities 218,987 2,002 3.68
Other interest-earning assets 1,436 2 0.56
---------- -------- --------
Total interest-earning assets 1,693,961 24,423 5.80
Noninterest-earning assets 65,489
----------
Total assets $1,759,450
==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest-bearing demand $ 61,757 $ 91 0.59%
Money market accounts 414,304 1,450 1.41
Savings accounts 7,629 4 0.21
Time deposits 662,647 3,416 2.07
---------- -------- --------
Total interest-bearing deposits 1,146,337 4,961 1.74
Other borrowings 243,138 1,318 2.18
Subordinated Debentures 72,180 1,079 5.98
---------- -------- --------
Total interest-bearing liabilities 1,461,655 7,358 2.02
-------- --------
Noninterest-bearing demand 171,977
Other noninterest-bearing liabilities 9,931
Shareholders' equity 115,887
----------
Total liabilities and
shareholders' equity $1,759,450
==========
Net interest income $ 17,065
========
Interest rate spread 3.78%
=========
Net interest margin (1) 4.05%
=========
Ratio of average interest-earning assets
to average interest-bearing liabilities 115.89%
==========
Net interest income and margin
(tax-equivalent basis) (2) $ 17,147 4.07%
======== =========
(1) The net interest margin is equal to annualized net interest income
divided by average interest-earning assets.
(2) In order to make pretax income and resultant yields on tax-exempt
investments and loans comparable to those on taxable investments and
loans, a tax-equivalent on taxable investments and loans, a tax
equivalent adjustment is made equally to interest income and income tax
expense with no effect on after tax income. The tax equivalent
adjustment has been computed using a federal income tax rate of 35%.
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SOUTHWEST BANCORP, INC.
AVERAGE BALANCES, YIELDS AND RATES
(DOLLARS IN THOUSANDS)
FOR THE SIX MONTHS ENDED
JUNE 30, 2004
--------------------------------
INTEREST AVERAGE
AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE
---------- -------- --------
ASSETS:
Loans receivable $1,426,632 $ 43,223 6.09%
Investment securities 212,910 3,955 3.74
Other interest-earning assets 1,054 3 0.57
---------- -------- --------
Total interest-earning assets 1,640,596 47,181 5.78
Noninterest-earning assets 64,121
----------
Total assets $1,704,717
==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest-bearing demand $ 60,686 $ 177 0.59%
Money market accounts 400,096 2,804 1.41
Savings accounts 7,478 9 0.24
Time deposits 647,182 6,808 2.12
---------- -------- --------
Total interest-bearing deposits 1,115,442 9,798 1.77
Other borrowings 227,728 2,540 2.24
Subordinated Debentures 72,180 2,160 5.99
---------- -------- --------
Total interest-bearing liabilities 1,415,350 14,498 2.06
-------- --------
Noninterest-bearing demand 165,231
Other noninterest-bearing liabilities 9,835
Shareholders' equity 114,301
----------
Total liabilities and
shareholders' equity $1,704,717
==========
Net interest income $ 32,683
========
Interest rate spread 3.72%
========
Net interest margin (1) 4.01%
========
Ratio of average interest-earning assets
to average interest-bearing liabilities 115.91%
==========
Net interest income and margin
(tax-equivalent basis) (2) $ 32,500 4.03%
======== =========
(1) The net interest margin is equal to annualized net interest income
divided by average interest-earning assets.
(2) In order to make pretax income and resultant yields on tax-exempt
investments and loans comparable to those on taxable investments and
loans, a tax-equivalent on taxable investments and loans, a tax
equivalent adjustment is made equally to interest income and income tax
expense with no effect on after tax income. The tax equivalent
adjustment has been computed using a federal income tax rate of 35%.
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SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
PER COMMON SHARE DATA:
- ------------------------------------------------------------------------------------------------------------------------------------
Basic Earnings $ 0.38 $ 0.33 $ 0.73 $ 0.63
Diluted Earnings 0.36 0.33 0.70 0.62
Dividends declared 0.07 0.06 0.14 0.13
Book value (at period end) 9.67 8.80
- ------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
- ------------------------------------------------------------------------------------------------------------------------------------
Basic 12,074,336 11,792,068 12,034,868 11,723,912
Diluted 12,546,687 12,199,100 12,521,389 12,161,674
- ------------------------------------------------------------------------------------------------------------------------------------
KEY RATIOS:
- ------------------------------------------------------------------------------------------------------------------------------------
Return on average assets 1.05% 1.07% 1.04% 1.04%
Return on average total shareholders' equity 15.98% 16.04% 15.49% 15.33%
Efficiency ratio 52.10% 52.79% 54.02% 54.03%
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL RATIOS AS OF PERIOD END:
- ------------------------------------------------------------------------------------------------------------------------------------
Leverage ratio 8.96% 9.04%
Tier I capital ratio 10.69% 10.74%
Total capital ratio 13.98% 12.69%
Tier I capital $ 157,502 $ 136,462
Total capital 205,909 161,200
Total risk adjusted assets 1,473,396 1,270,050
- ------------------------------------------------------------------------------------------------------------------------------------
LOAN COMPOSITION AS OF PERIOD END:
- ------------------------------------------------------------------------------------------------------------------------------------
Real estate mortgage:
Commercial $ 461,435 $ 383,570
One-to-four family residential 84,633 95,185
Real estate construction 254,982 200,809
Commercial 377,322 392,084
Installment and consumer:
Government-guaranteed student loans 292,858 162,812
Other 27,531 24,855
---------- ----------
Total loans, including loans held for sale $1,498,761 $1,259,315
Less: Allowance for loan losses (17,790) (13,877)
---------- ----------
Total loans, net $1,480,971 $1,245,438
========== ==========
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SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE SIX MONTHS
ENDED JUNE 30,
2004 2003
- ------------------------------------------------------------------------------------------------------------------------------------
ASSET QUALITY AS OF PERIOD END:
- ------------------------------------------------------------------------------------------------------------------------------------
Nonaccrual loans (1) $14,301 $ 10,337
Restructured loans - -
90 day past due and accruing (2) 3,663 2,009
------- --------
Total nonperforming loans (3) $17,964 $ 12,346
======= ========
Other real estate owned $ 2,087 $ 551
Allowance for loan losses as a percentage of total loans 1.19% 1.10%
Allowance for loan losses as a percentage of nonperforming loans 99.03% 112.40%
Nonperforming loans as a percentage of total loans 1.20% 0.98%
Nonperforming assets as a percentage of total loans and other real estate 1.34% 1.02%
Total charge-offs $ 2,522 $ 1,979
Total recoveries 264 246
------- --------
Net charge-offs $ 2,258 $ 1,733
======= ========
Net charge-offs as a percentage of average loans 0.32% 0.28%
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OTHER MISCELLANEOUS INFORMATION AS OF PERIOD END:
- ------------------------------------------------------------------------------------------------------------------------------------
Goodwill $ 194 $ 194
Mortgage Servicing Rights 1,159 1,008
Non-mortgage Servicing Rights 86 110
-------- --------
Total Intangible Assets $ 1,439 $ 1,312
======== ========
1-4 family mortgage loans serviced for others $122,705 $119,061
Intangible amortization expense 159 236
FTE employees (at period end) 331 326
Number of ATMs 285 338
Number of branches 0 0
(1) The government-guaranteed portion of loans included in these totals were
$1.4 million (2004) and $1.1 million (2003).
(2) The government-guaranteed portion of loans included in these totals were
$215,000 (2004) and $0 (2003).
(3) The government-guaranteed portion of loans included in these totals were
$1.6 million (2004) and $1.1 million (2003).
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