Exhibit 99
[OKLAHOMA'S SOUTHWEST BANCORP, INC. LOGO]
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: OCTOBER 21, 2004
October 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 third quarter of
2004 of $4.9 million, a 42% increase from the third quarter of 2003. Diluted
earnings per share were $0.39 compared to $0.28 per share for the 2003 period,
up 39%. Net income for the first nine months of 2004 was $13.7 million, a 25%
increase from the same period in 2003. Diluted earnings per share were $1.09
compared to $0.90 per share for the 2003 period, up 21%.
2004 RESULTS AND FOCUS
o Total assets of $1.9 billion; a 19% increase from year-end 2003.
o Portfolio loans of $1.3 billion; a 15% increase from year-end 2003.
o Net Income: $4.9 million; a 42% increase from third
quarter 2003.
$13.7 million; a 25% increase from the
first nine months of 2003.
o Diluted earnings per share: $0.39; a 39% increase from third quarter
2003.
$1.09; a 21% increase from the first nine
months of 2003.
o Dividends per share: $0.07; a 12% increase from third quarter
2003.
$0.21; a 12% increase from the first nine
months of 2003.
o Return on average equity: 16.19% for the third quarter 2004.
15.73% for the first nine months of 2004.
o GAAP-based efficiency ratio: 49.09% for the third quarter 2004.
52.20% for the first nine 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 nine
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
in our Oklahoma, Texas and Kansas markets and in government guaranteed student
lending coupled with careful management of interest margins and funding. We are
very pleased with this quarter's unusually favorable performance, which was
primarily the result of our continued achievement of strategic goals,
particularly in loan growth and margin improvement. Other initiatives also
contributed, including continued emphasis on appropriately pricing loan
renewals, commercial loan participation sales, and service charge increases."
At the end of the third quarter of 2004, Southwest had total assets of
$1.9 billion, loans of $1.6 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 nine months of 2004 was $13.7 million, up $2.7
million, or 25%, from the same period in 2003. Basic earnings per share for 2004
were $1.13, up 22% from $0.93 in 2003. Diluted earnings per share of $1.09
increased 21% over the first nine months of 2003.
Net interest income increased 27% from 2003. Non-interest income for
2004 declined $549,000 from 2003 due primarily to an $1.2 million 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 $8.1 million increased $1.7 million,
or 26%, from 2003. Noninterest expense of $32.4 million increased $4.3 million,
or 15%, primarily as a result of increases in compensation, general and
administrative, and occupancy expenses. Southwest recorded a charge relating to
executive retirement in the first quarter of 2004 of approximately $294,000
after related tax benefits.
FINANCIAL CONDITION
At September 30, 2004, total assets were $1.9 billion, a $301.7 million
increase from the end of 2003. Total portfolio loans (loans other than those
held for sale) at the end of the third quarter 2004 were $1.3 billion, up $167.8
million, or 15%, from year-end 2003, primarily as a result of growth in total
commercial and commercial real estate loans. Loans held for sale are primarily
government guaranteed student loans.
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ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING LOANS
Nonaccrual loans totaled $28.5 million at September 30, 2004, compared
to $14.5 million at December 31, 2003. Total nonperforming loans of $30.8
million increased $14.8 million, or 93%, from year-end 2003, and represented
1.91% of total loans, compared to 1.22% of total loans at year-end 2003. At
September 30, 2004, $1.4 million, or 5%, 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. Five credit relationships
accounted for approximately $21.7 million, or 71%, of total nonperforming loans
at September 30, 2004. All of these credits were identified as problem or
potential problem credits in previous quarters. Management continues to actively
manage these relationships, and anticipates they will be significantly reduced
within the next six months."
The allowance for loan losses of $19.9 million increased $4.1 million,
or 26%, from year-end 2003. At third quarter-end 2004, the allowance for loan
losses was 1.24% 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 Capital
Markets Corp., Schwab Capital Markets, Morgan Stanley & Co., Inc., Sandler
O'Neill & Partners, FTN Midwest Research Secs., and Citigroup Global Markets,
Inc.
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
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 in Kansas City, Kansas and 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. Stillwater National has applied to open an additional branch office in
Austin, Texas. 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.
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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)
SEPTEMBER 30, DECEMBER 31,
2004 2003
----------------- -----------------
ASSETS:
Cash and cash equivalents $ 31,018 $ 33,981
Investment securities:
Held to maturity, fair value $2,536 (2004) and $16,144 (2003) 2,501 15,916
Available for sale, amortized cost $194,385 (2004) and $176,470 (2003) 194,056 177,074
Federal Reserve Bank and Federal Home Loan Bank Stock, at cost 13,342 11,276
Loans held for sale 348,887 218,422
Loans receivable, net of allowance for loan losses
of $19,921 (2004) and $15,848 (2003) 1,238,295 1,074,566
Accrued interest receivable 13,926 11,321
Premises and equipment, net 19,722 19,818
Other assets 20,703 18,351
----------- -----------
Total assets $ 1,882,450 $ 1,580,725
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Noninterest-bearing demand $ 183,183 $ 167,332
Interest-bearing demand 58,403 53,955
Money market accounts 399,104 376,016
Savings accounts 8,245 6,903
Time deposits of $100,000 or more 431,158 358,130
Other time deposits 344,862 241,789
----------- -----------
Total deposits 1,424,955 1,204,125
Other borrowings 245,722 183,850
Accrued interest payable 3,261 3,375
Income tax payable 7,489 2,850
Other liabilities 6,697 4,410
Subordinated Debentures 72,180 72,180
----------- -----------
Total liabilities 1,760,304 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 7,860 6,997
Retained earnings 103,784 92,657
Accumulated other comprehensive income/(loss) (193) 360
Treasury stock, at cost; 161,375 (2004) and 287,410 (2003) shares (1,548) (2,322)
----------- -----------
Total shareholders' equity 122,146 109,935
----------- -----------
Total liabilities & shareholders' equity $ 1,882,450 $ 1,580,725
=========== ===========
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SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
For the three months For the nine months
ended September 30, ended September 30,
2004 2003 2004 2003
----------- ------------ ------------- -------------
Interest income:
Interest and fees on loans $25,245 $19,250 $68,468 $56,271
Investment securities 1,960 1,925 5,915 6,010
Other interest-bearing assets 4 1 7 7
----------- ------------ ------------- -------------
Total interest income 27,209 21,176 74,390 62,288
Interest expense:
Interest-bearing deposits 5,460 4,983 15,258 15,752
Other borrowings 1,643 1,174 4,183 3,722
Subordinated Debentures 1,136 817 3,296 2,030
----------- ------------ ------------- -------------
Total interest expense 8,239 6,974 22,737 21,504
----------- ------------ ------------- -------------
Net interest income 18,970 14,202 51,653 40,784
Provision for loan losses 3,900 2,726 8,100 6,448
Other income:
Service charges and fees 2,629 2,442 7,314 6,918
Gain on sales of loans receivable 1,073 1,158 2,386 3,157
Gain (loss) on sales of investment securities (110) 1 (109) 28
Other noninterest income 328 190 731 768
----------- ------------ ------------- -------------
Total other income 3,920 3,791 10,322 10,871
Other expenses:
Salaries and employee benefits 5,563 5,200 15,893 14,433
Occupancy 2,500 2,078 6,996 5,938
FDIC and other insurance 110 90 301 246
Other real estate 66 (2) 107 168
General and administrative 2,998 2,535 9,054 7,303
----------- ------------ ------------- -------------
Total other expenses 11,237 9,901 32,351 28,088
----------- ------------ ------------- -------------
Income before taxes 7,753 5,366 21,524 17,119
Taxes on income 2,898 1,943 7,863 6,150
----------- ------------ ------------- -------------
Net income $4,855 $3,423 $13,661 $10,969
=========== ============ ============= =============
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SOUTHWEST BANCORP, INC.
AVERAGE BALANCES, YIELDS AND RATES
(Dollars in thousands)
For the three months ended
September 30, 2004
----------------------------------------------
Interest
Average Income/ Average
Balance Expense Yield/Rate
----------------------------------------------
ASSETS:
Loans receivable $1,580,974 $25,245 6.35%
Investment securities 216,828 1,960 3.60
Other interest-earning assets 1,222 4 1.30
------------ --------- --------
Total interest-earning assets 1,799,024 27,209 6.02
Noninterest-earning assets 66,378
------------
Total assets $1,865,402
============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest-bearing demand $ 56,137 $ 63 0.45%
Money market accounts 433,426 1,621 1.49
Savings accounts 8,204 5 0.24
Time deposits 704,142 3,771 2.13
------------ --------- --------
Total interest-bearing deposits 1,201,909 5,460 1.81
Other borrowings 281,549 1,643 2.32
Subordinated Debentures 72,180 1,136 6.30
------------ --------- --------
Total interest-bearing liabilities 1,555,638 8,239 2.11
--------- --------
Noninterest-bearing demand deposits 178,408
Other noninterest-bearing liabilities 12,075
Shareholders' equity 119,281
------------
Total liabilities and shareholders' equity $1,865,402
============
Net interest income $18,970
=========
Interest rate spread 3.91%
========
Net interest margin (1) 4.19%
========
Ratio of average interest-earning assets
to average interest-bearing liabilities 115.65%
============
Net interest income and margin
(tax-equivalent basis) (2) $19,020 4.21%
========= ========
(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 nine months ended
September 30, 2004
----------------------------------------------
Interest
Average Income/ Average
Balance Expense Yield/Rate
----------------------------------------------
ASSETS:
Loans receivable $1,478,443 $68,468 6.19%
Investment securities 214,224 5,915 3.69
Other interest-earning assets 1,111 7 0.84
------------ --------- -------
Total interest-earning assets 1,693,778 74,390 5.87
Noninterest-earning assets 64,879
------------
Total assets $1,758,657
============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Interest-bearing demand $ 59,158 $ 240 0.54%
Money market accounts 411,274 4,425 1.44
Savings accounts 7,721 14 0.24
Time deposits 666,308 10,579 2.12
------------ --------- -------
Total interest-bearing deposits 1,144,461 15,258 1.78
Other borrowings 245,799 4,183 2.27
Subordinated Debentures 72,180 3,296 6.00
------------ --------- -------
Total interest-bearing liabilities 1,462,440 22,737 2.08
--------- -------
Noninterest-bearing demand deposits 169,656
Other noninterest-bearing liabilities 10,587
Shareholders' equity 115,974
------------
Total liabilities and shareholders' equity $1,758,657
============
Net interest income $51,653
=========
Interest rate spread 3.79%
=======
Net interest margin (1) 4.07%
=======
Ratio of average interest-earning assets
to average interest-bearing liabilities 115.82%
============
Net interest income and margin
(tax-equivalent basis) (2) $51,886 4.09%
========= =======
(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%.
Page 8 of 10
SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data) For the three months For the nine months
ended September 30, ended September 30,
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------------------------------------------
PER COMMON SHARE DATA:
- ------------------------------------------------------------------------------------------------------------------------------
Basic Earnings $ 0.40 $ 0.30 $ 1.13 $ 0.93
Diluted Earnings 0.39 0.28 1.09 0.90
Dividends declared 0.07 0.06 0.21 0.19
Book value (at period end) 10.11 8.93
- ------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
- ------------------------------------------------------------------------------------------------------------------------------
Basic 12,081,379 11,839,891 12,050,485 11,762,996
Diluted 12,593,875 12,398,000 12,545,902 12,247,042
- ------------------------------------------------------------------------------------------------------------------------------
KEY RATIOS:
- ------------------------------------------------------------------------------------------------------------------------------
Return on average assets 1.04% 0.88% 1.04% 0.98%
Return on average total shareholders' equity 16.19% 13.10% 15.73% 14.56%
Efficiency ratio 49.09% 55.03% 52.20% 54.38%
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL RATIOS AS OF PERIOD END:
- ------------------------------------------------------------------------------------------------------------------------------
Leverage ratio 8.75% 9.27%
Tier I capital ratio 10.68% 11.07%
Total capital ratio 13.85% 13.01%
Tier I capital $ 163,041 $ 140,130
Total capital 211,358 164,699
Total risk adjusted assets 1,526,214 1,265,517
- ------------------------------------------------------------------------------------------------------------------------------
LOAN COMPOSITION AS OF PERIOD END:
- ------------------------------------------------------------------------------------------------------------------------------
Real estate mortgage:
Commercial $ 522,812 $ 400,859
One-to-four family residential 87,296 83,280
Real estate construction 244,023 212,872
Commercial 386,325 375,807
Installment and consumer:
Government-guaranteed student loans 341,335 186,735
Other 25,312 24,615
----------- -----------
Total loans, including loans held for sale $1,607,103 $1,284,168
Less: Allowance for loan losses (19,921) (14,625)
----------- -----------
Total loans, net $1,587,182 $1,269,543
=========== ===========
Page 9 of 10
SOUTHWEST BANCORP, INC.
UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS (CONTINUED)
(Dollars in thousands, except per share data)
For the nine months
ended September 30,
2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
ASSET QUALITY AS OF PERIOD END:
- -----------------------------------------------------------------------------------------------------------------------------------
Nonaccrual loans (1) $ 28,476 $ 16,950
Restructured loans - -
90 day past due and accruing 2,276 2,293
-------- ---------
Total nonperforming loans (1) $ 30,752 $ 19,243
======== =========
Other real estate owned $ 2,467 $ 482
Allowance for loan losses as a percentage of total loans 1.24% 1.14%
Allowance for loan losses as a percentage of nonperforming loans 64.78% 76.00%
Nonperforming loans as a percentage of total loans 1.91% 1.50%
Nonperforming assets as a percentage of total loans and other real estate 2.06% 1.54%
Total charge-offs $ 4,441 $ 4,089
Total recoveries 414 378
-------- ---------
Net charge-offs $ 4,027 $ 3,711
======== =========
Net charge-offs as a percentage of average loans 0.36% 0.40%
- ------------------------------------------------------------------------------------------------------------------------------
OTHER MISCELLANEOUS INFORMATION AS OF PERIOD END:
- ------------------------------------------------------------------------------------------------------------------------------
Goodwill $ 194 $ 194
Mortgage Servicing Rights 1,188 1,112
Non-mortgage Servicing Rights 83 92
--------- ---------
Total Intangible Assets $ 1,465 $ 1,398
========= =========
1-4 family mortgage loans serviced for others $124,183 $124,310
Intangible amortization expense 239 322
FTE employees (at period end) 360 340
Number of ATMs 286 334
Number of branches 9 8
(1) The government-guaranteed portion of loans included in these totals were
$1.4 million (2004) and $2.6 million (2003).
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