Southwest Bancorp Inc. Reports Second Quarter 2010 Earnings

STILLWATER, Okla., July 20 /PRNewswire-FirstCall/ -- Southwest Bancorp, Inc. (Nasdaq: OKSB), ("Southwest"), today reported net income available to common shareholders of $3.4 million, or $0.19 per diluted share for the second quarter 2010, compared to $4.9 million, or $0.33 per diluted share for the second quarter of 2009, and $3.3 million, or $0.23 per diluted share for the first quarter of 2010.  Net income available to common shareholders for the six months ended June 30, 2010 was $6.7 million, or $0.41 per diluted share, compared to $5.2 million, or $0.35 per diluted share, for the six months ended June 30, 2009.  At June 30, 2010, total assets were $3.0 billion.  

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Rick Green, Southwest Bancorp's President and Chief Executive Officer, stated, "During this quarter, Southwest sold 4,600,000 shares of common stock in a public offering resulting in net proceeds of approximately $54.3 million. The proceeds from the offering were used to increase Southwest's working capital and for general corporate purposes, including investment in Southwest's banking subsidiaries.  

Our capital position remains solid.  Southwest and its banking subsidiaries have maintained capital levels that exceed the minimums for regulatory "well-capitalized" status.  At June 30, 2010 Southwest's total regulatory capital was $473.0 million for a total risk-based capital ratio of 17.78%, and Tier 1 capital was $439.0 million for a Tier 1 risk-based capital ratio of 16.50%.  

Southwest continues to manage our loan portfolio through the difficult credit climate with our ongoing, disciplined workout process focused on addressing the challenges of the commercial real estate construction and mortgage sectors."  

Please review the following discussion and the attached financial tables for important additional information regarding our financial condition and performance.

Financial Overview

Condition: Total assets were $3.0 billion at June 30, 2010, a decrease of 3% from December 31, 2009.  At June 30, 2010 total loans were $2.6 billion, a decrease of 4% from December 31, 2009.

At June 30, 2010 the allowance for loan losses was $67.1 million, up 30% from June 30, 2009 and up 7% from year-end 2009, and represented 2.71% of noncovered portfolio loans versus 2.00% and 2.46% at June 30, 2009 and December 31, 2009, respectively.  The methodology used to determine the appropriate amount of the allowance for loan losses at a particular time includes consideration of risk factors related to Southwest and to our markets including regular assessments of national and local economic conditions and trends.  Provisions for loan losses are recorded in the amount necessary to maintain the allowance at the level management deems appropriate.  

Excluding assets subject to loss sharing agreements with the FDIC ("covered assets"), nonperforming assets increased to $145.4 million and 5.81% of portfolio loans and other real estate as of June 30, 2010 from $124.6 million and 4.87% of portfolio loans and other real estate as of December 31, 2009.  A breakdown of noncovered portfolio loans and noncovered nonperforming assets by type is shown in the following table:

		Noncovered		Percentage of		Noncovered		Percentage of
		portfolio		total noncovered		nonperforming		total noncovered
(dollars in thousands)		loans		portfolio loans		assets		nonperforming assets
Real estate construction		$     619,335		25.02%		$            75,079		51.65%
Commercial real estate		1,244,217		50.26		25,413		17.48
Commercial		470,086		18.99		8,139		5.60
Residential real estate mortgages		102,382		4.14		8,843		6.08
Other consumer loans		39,328		1.59		255		0.18
Other real estate owned		-		-		27,634		19.01
Total		$  2,475,348		100.00%		$          145,363		100.00%

Excluding covered loans, nonaccrual loans were $111.9 million as of June 30, 2010, an increase of $6.0 million, or 6%, from December 31, 2009.  These loans are carried at their estimated collectible amounts and no longer accrue interest.  Noncovered loans 90 days or more past due were $333,000 as of June 30, 2010 an increase of $23,000 from December 31, 2009.  These loans are deemed to have sufficient collateral and are in the process of collection.  

Excluding covered loans, performing loans considered potential problem loans, which are not included in the past due or nonaccrual categories but for which known information about possible credit problems cause management to be uncertain as to the continued ability of the borrowers to comply with the present loan repayment terms in future periods, amounted to $242.2 million at June 30, 2010, a decrease of $16.2 million from December 31, 2009.  Potential problem loans are subject to continuing management attention and are considered by management in determining the level of the allowance for loan losses.  

At June 30, 2010 Southwest and its banking subsidiaries exceeded all applicable regulatory capital requirements.  Southwest and each of its banking subsidiaries met the criteria for regulatory classification as "well-capitalized".  Southwest's capital exceeded the minimum requirements to be classified as "well-capitalized" by $207.0 million.  Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by Federal bank regulators.

Year-to-date Results:

Summary:  The $1.5 million increase in our net income available to common shareholders from 2009 is the result of an $8.4 million increase in net interest income driven by an improved net interest margin and a $2.1 million decrease in the provision for loan losses, offset in part by a $5.6 million decrease in noninterest income, a $2.1 million increase in noninterest expense, and a $1.3 million increase in income tax expense.  

Net Interest Income:  Net interest income totaled $53.9 million for the first six months of 2010, compared to $45.5 million for the first six months of 2009, an increase of $8.4 million, or 19%.  Year-to-date net interest margin was 3.62%, compared to 3.20% in 2009.  Included in 2010 year-to-date net interest income is $846,000 of net recoveries from the resolution of nonperforming loans, additional discount accretion on loans and loss share receivable, offset in part by interest reversals on nonaccrual loans.  Included in 2009 year-to-date net interest income is a recovery of $1.9 million in interest from the successful resolution of a nonperforming loan.  These net recoveries had a 5 basis point and a 13 basis point impact, respectively.  

Provision for Loan Losses and Net Charge Offs:  The provision for loan losses totaled $16.3 million for the first six months of 2010, compared to $18.4 million for the first six months of 2009.  Noncovered net charge offs totaled $11.4 million, or 0.93% (annualized) of average noncovered portfolio loans year-to-date as of June 30, 2010, compared to $6.4 million, or 0.51% (annualized) of average noncovered portfolio loans for the same period in the prior year.

Noninterest Income:  Noninterest income totaled $8.1 million for the first six months of 2010, compared to $13.7 million for the first six months of 2009.  The decrease in noninterest income was primarily the result of a $3.3 million gain on the FDIC-assisted acquisition and a $2.9 million gain on sale of investment securities that were recorded in the prior year.

Noninterest Expense:  Noninterest expense totaled $31.4 million for the first six months of 2010, compared to $29.3 million for the first six months of 2009.  The increase consists of a $1.1 million increase in personnel expense, a $1.1 million increase in other general and administrative expense, and a $734,000 increase in other real estate expense, offset in part by a $679,000 decrease in provision for unfunded loan commitments and a $202,000 decrease in FDIC and other insurance expense.

Second Quarter Results:

Summary:  Net income available to common shareholders was $3.4 million in the second quarter of 2010, compared to $4.9 million in the second quarter of 2009 and $3.3 million in the first quarter of 2010.  The decrease from the second quarter of 2009 is the result of a $3.3 million decrease in noninterest income, a $1.5 million increase in noninterest expenses, and a $299,000 increase in the provision for loan losses, offset by a $2.7 million increase in net interest income and an $868,000 decrease in income taxes.  The increase from the first quarter of 2010 is the result of a $307,000 increase in net interest income, a $755,000 decrease in the provision for loan losses, and an $81,000 decrease in income taxes, offset by a $216,000 decrease in noninterest income and an $888,000 increase in noninterest expense.

Net Interest Income:  Net interest income totaled $27.1 million for the second quarter of 2010, compared to $24.5 million for the second quarter of 2009, an increase of $2.7 million, or 11%, and $26.8 million for the first quarter of 2010, an increase of $307,000, or 1%.  Net interest margin was 3.65% for the second quarter of 2010, compared to 3.41% for the second quarter of 2009 and 3.59% for the first quarter of 2010.  Included in the second quarter of 2010 net interest margin is a recovery of $452,000 from the quarterly adjustment of the discount accretion on loans and loss share receivable.  Included in the second quarter 2009 net interest margin is a recovery of $1.9 million in interest as a nonperforming loan was resolved.  Included in the first quarter 2010 net interest income is the net recovery of $394,000 from the resolution of a nonperforming loan and additional discount accretion on loans and loss share receivable, offset in part by interest reversals on nonaccrual loans.  These recoveries had a 6 basis point, a 26 basis point, and a 5 basis point impact, respectively.      

Provision for Loan Losses and Net Charge Offs:  The provision for loan losses totaled $7.8 million for the second quarter of 2010, compared to $7.5 million for the second quarter of 2009 and $8.5 million for the first quarter of 2010.  Noncovered net charge offs totaled $5.9 million, or 0.94% (annualized) of average noncovered portfolio loans for the second quarter of 2010, compared to $2.0 million, or 0.31% (annualized), and $5.8 million, or 0.93% (annualized), of average noncovered portfolio loans for the second quarter of 2009 and the first quarter of 2010, respectively.

Noninterest Income:  Noninterest income totaled $4.0 million for the second quarter of 2010, compared to $7.3 million for the second quarter of 2009 and $4.2 million for the first quarter of 2010.  The decrease in noninterest income from the second quarter of 2009 was primarily the result of a $3.3 million gain recognized on the FDIC-assisted transaction in June 2009.  

Noninterest Expense:  Noninterest expense totaled $16.1 million for the second quarter of 2010, compared to $14.7 million for the second quarter of 2009 and $15.3 million for the first quarter of 2010.  The increase from second quarter 2009 consists of a $1.1 million increase in other general and administrative expenses, a $750,000 increase personnel expense, and a $526,000 increase in other real estate expense, offset in part by a $798,000 decrease in FDIC and other insurance expense and a $124,000 decrease in provision for unfunded loan commitments.  The increase from first quarter 2010 consists of a $523,000 increase in other real estate expense and a $368,000 increase in other general and administrative expense.

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, Southwest offers commercial and consumer lending, deposit and investment services, and specialized cash management, and other financial services from offices in Oklahoma, Texas, and Kansas, and on the Internet, through SNB DirectBanker®.  We were organized in 1981 as the holding company for Stillwater National, which was chartered in 1894.  We became a public company in late 1993 with assets of approximately $434.0 million.  At June 30, 2010 we had total assets of $3.0 billion, deposits of $2.4 billion, and shareholders' equity of $375.3 million.

Our 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.  We established a strategic focus on healthcare lending in 1974.  We 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, 2010, approximately $713.2 million, or 29%, of our noncovered loans were loans to individuals and businesses in the healthcare industry.  

We also focus on commercial real estate mortgage and construction credits.  We do not focus on one-to-four family residential development loans or "spec" residential property credits.  Additionally, subprime lending has never been a part of our business strategy, and our exposure to subprime loans and subprime lenders is minimal.  One-to-four family mortgages account for less than 5% of total noncovered loans.  As of June 30, 2010 approximately $1.8 billion, or 74%, of our noncovered loans was commercial real estate mortgage and construction loans, including $418.6 million of loans to individuals and businesses in the healthcare industry.  Our commercial real estate mortgage and construction and commercial loans are concentrated in states that have experienced less adverse effects from the recession than many others.

We operate six offices in Texas, eleven offices in Oklahoma, and eight offices in Kansas.  At June 30, 2010 our Texas segment accounted for $1.0 billion, or 41% of total portfolio loans, followed by $914.0 million, or 36%, from our Oklahoma segment, $329.2 million, or 13%, from our Kansas segment, and $259.0 million, or 10%, from our other states segment.  

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.

Forward-Looking Statements

This Press Release includes forward-looking statements that are subject to risks and uncertainties.  These forward-looking statements include:  statements of Southwest's goals, intentions, and expectations; estimates of risks and of future costs and benefits; expectations regarding future financial performance of Southwest and its operating segments; assessments of loan quality, probable loan losses, and the amount and timing of loan payoffs; liquidity, contractual obligations, off-balance sheet risk and interest rate risk; estimates of value of acquired assets, deposits, and other liabilities; 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 time of future changes in interest rates, market behavior, and other economic conditions; future laws and regulations and accounting principles; 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.

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, 2010 through the date its financial statements are filed with the Securities and Exchange Commission.  The June 30, 2010 financial statements will be adjusted as necessary to properly consider 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 Financial Data	Table 6
Unaudited Quarterly Supplemental Analytical Data	Table 7

SOUTHWEST BANCORP, INC.										Table 1
UNAUDITED FINANCIAL HIGHLIGHTS
(Dollars in thousands except per share)
		Second Quarter						First Quarter
QUARTERLY HIGHLIGHTS						%				%
		2010		2009		Change		2010		Change
Operations
Net interest income		$      27,108		$      24,456		11%		$      26,801		1%
Provision for loan losses		7,776		7,477		4		8,531		(9)
Noninterest income		3,962		7,261		(45)		4,178		(5)
Noninterest expense		16,146		14,690		10		15,258		6
Income before taxes		7,148		9,550		(25)		7,190		(1)
Taxes on income		2,737		3,605		(24)		2,818		(3)
Net income		4,411		5,945		(26)		4,372		1
Net income available to common
shareholders		3,366		4,910		(31)		3,329		1
Diluted earnings per share		0.19		0.33		(42)		0.23		(17)
Balance Sheet
Total assets		3,010,835		3,038,985		(1)		3,074,923		(2)
Loans held for sale		25,615		26,006		(2)		25,586		-
Noncovered portfolio loans		2,475,348		2,587,230		(4)		2,516,397		(2)
Covered portfolio loans		68,006		117,096		(42)		76,909		(12)
Total deposits		2,444,939		2,452,295		-		2,554,165		(4)
Total shareholders' equity		375,319		305,416		23		315,341		19
Book value per common share		15.88		16.30		(3)		16.79		(5)
Key Ratios
Net interest margin		3.65%		3.41%				3.59%
Efficiency ratio		51.97		46.32				49.25
Total capital to risk-weighted assets		17.78		13.92				15.28
Nonperforming loans to portfolio loans - noncovered		4.76		3.19				4.11
Shareholders' equity to total assets		12.47		10.05				10.26
Tangible common equity to tangible assets*		10.02		7.65				7.87
Return on average assets (annualized)		0.58		0.81				0.57
Return on average common equity (annualized)		4.64		8.26				5.42
Return on average tangible equity (annualized)		5.45		8.12				5.84

YEAR-TO-DATE  HIGHLIGHTS		Six Months
						%
		2010		2009		Change
Operations
Net interest income		$      53,909		$      45,494		18%
Provision for loan losses		16,307		18,359		(11)
Noninterest income		8,140		13,738		(41)
Noninterest expense		31,404		29,289		7
Income before taxes		14,338		11,584		24
Taxes on income		5,555		4,310		29
Net income		8,783		7,274		21
Net income available to common
shareholders		6,695		5,206		29
Diluted earnings per share		0.41		0.35		17
Balance Sheet
Total assets		3,010,835		3,038,985		(1)
Loans held for sale		25,615		26,006		(2)
Noncovered portfolio loans		2,475,348		2,587,230		(4)
Covered portfolio loans		68,006		117,096		(42)
Total deposits		2,444,939		2,452,295		-
Total shareholders' equity		375,319		305,416		23
Book value per share		15.88		16.30		(3)
Key Ratios
Net interest margin		3.62%		3.20%
Efficiency ratio (GAAP-based)		50.61		49.45
Total capital to risk-weighted assets		17.78		13.92
Nonperforming loans to portfolio loans - noncovered		4.76		3.19
Shareholders' equity to total assets		12.47		10.05
Tangible common equity to tangible assets*		10.02		7.65
Return on average assets		0.58		0.50
Return on average common equity		5.00		4.40
Return on average tangible equity		5.45		4.99
Balance sheet amounts and ratios are as of period end unless otherwise noted.
* This is a Non-GAAP financial measure.  Please see Table 7 for a reconciliation to the most directly comparable GAAP based measure.
Please see accompanying tables for additional financial information.

SOUTHWEST BANCORP, INC.							Table 2
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except  per share)
			June 30,		December 31,		June 30,
			2010		2009		2009
Assets
Cash and cash equivalents			$    125,290		$        118,847		$      33,724
Federal funds sold			-		-		809
	Cash and cash equivalents		125,290		118,847		34,533
Investment securities:
	Held to maturity. Fair value:  $6,731, $6,754, $6,834, respectively		6,670		6,670		6,795
	Available for sale. Amortized cost: $232,097, $236,199, $214.944, respectively		240,438		237,703		216,293
	Other investments, at cost		18,787		19,066		19,989
Loans held for sale			25,615		43,134		26,006
Noncovered loans receivable			2,475,348		2,539,294		2,587,230
	Less: Allowance for loan losses		(67,055)		(62,413)		(51,753)
	Net noncovered loans receivable		2,408,293		2,476,881		2,535,477
Covered loans receivable (includes loss share of $18.7 million, $23.9 million, $33.1 million, respectively)			68,006		85,405		117,096
	Net loans receivable		2,476,299		2,562,286		2,652,573
Accrued interest receivable			9,589		10,806		10,753
Premises and equipment, net			25,560		26,536		24,743
Noncovered other real estate			27,634		18,432		6,003
Covered other real estate			4,352		4,748		2,938
Goodwill			6,811		6,811		6,811
Other intangible assets, net			5,424		5,779		5,974
Other assets			38,366		47,473		25,574
	Total assets		$ 3,010,835		$     3,108,291		$ 3,038,985
Liabilities and shareholders' equity
Deposits:
	Noninterest-bearing demand		$    326,721		$        324,829		$    291,014
	Interest-bearing demand		102,218		74,201		94,060
	Money market accounts		510,549		505,521		483,162
	Savings accounts		25,321		25,730		25,660
	Time deposits of $100,000 or more		861,110		1,004,439		905,202
	Other time deposits		619,020		658,010		653,197
	Total deposits		2,444,939		2,592,730		2,452,295
Accrued interest payable			2,567		3,191		5,953
Income tax payable			4,053		4,486		5,752
Other liabilities			8,958		13,121		11,238
Other borrowings			93,036		103,022		176,368
Subordinated debentures			81,963		81,963		81,963
	Total liabilities		2,635,516		2,798,513		2,733,569
Shareholders' equity
Serial preferred stock; 2,000,000 shares authorized;
70,000 shares issued and outstanding			67,375		67,037		66,710
Common stock - $1 par value; 40,000,000 shares
authorized; 19,388,797, 14,750,713, 14,658,042 shares issued, respectively			19,389		14,751		14,658
Paid in capital			98,712		49,029		48,387
Retained earnings			184,710		178,016		175,089
Accumulated other comprehensive income			5,133		945		853
Treasury stock, at cost, 0, 0, 15,602 shares, respectively			-		-		(281)
	Total shareholders' equity		375,319		309,778		305,416
	Total liabilities and shareholders' equity		$ 3,010,835		$     3,108,291		$ 3,038,985

SOUTHWEST BANCORP, INC.								Table 3
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share)
		For the three months				For the six months
		ended June 30,				ended June 30,
		2010		2009		2010		2009
Interest income
	Loans	$  33,891		$  36,009		$ 68,263		$ 69,277
	Investment securities	2,320		2,079		4,640		4,591
	Other interest-earning assets	68		3		135		9
	Total interest income	36,279		38,091		73,038		73,877
Interest expense
	Interest-bearing deposits	7,371		11,072		15,545		23,132
	Other borrowings	524		1,180		1,041		2,464
	Subordinated debentures	1,276		1,383		2,543		2,787
	Total interest expense	9,171		13,635		19,129		28,383
Net interest income		27,108		24,456		53,909		45,494
Provision for loan losses		7,776		7,477		16,307		18,359
Net interest income after provision for loan losses		19,332		16,979		37,602		27,135
Noninterest income
	Service charges and fees	3,170		2,817		6,266		5,417
	Gain on acquisition	-		3,281		-		3,281
	Gain on sales of loans	416		926		1,401		1,644
	Gain on investment securities	34		(9)		41		2,912
	Other noninterest income	342		246		432		484
	Total noninterest income	3,962		7,261		8,140		13,738
Noninterest expense
	Salaries and employee benefits	7,637		6,887		15,217		14,126
	Occupancy	2,836		2,789		5,619		5,520
	FDIC and other insurance	1,521		2,319		3,108		3,310
	Other real estate, net	629		103		735		1
	General and administrative	3,523		2,592		6,725		6,332
	Total noninterest expense	16,146		14,690		31,404		29,289
Income before taxes		7,148		9,550		14,338		11,584
	Taxes on income	2,737		3,605		5,555		4,310
Net income		$   4,411		$   5,945		$ 8,783		$ 7,274
Net income available to common shareholders		$   3,366		$   4,910		$ 6,695		$ 5,206
Basic earnings per common share		$     0.19		$     0.34		$     0.41		$     0.36
Diluted earnings per common share		0.19		0.33		0.41		0.35
Common dividends declared per share		-		0.0238		-		0.0476

SOUTHWEST BANCORP, INC.													Table 4
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES
(Dollars in thousands)
			For the three months ended June 30,
			2010						2009
			Average				Average		Average				Average
			Balance		Interest		Yield/Rate		Balance		Interest		Yield/Rate
Assets
Loans (2)			$ 2,606,686		$  33,891		5.21%		$ 2,649,140		$  36,009		5.45%
Investment securities			258,936		2,320		3.59		225,353		2,079		3.70
Other interest-earning assets			109,964		68		0.25		4,321		3		0.28
	Total interest-earning assets		2,975,586		36,279		4.89		2,878,814		38,091		5.31
Other assets			67,454						67,725
	Total assets		$ 3,043,040						$ 2,946,539
Liabilities and Shareholders' Equity
Interest-bearing demand deposits			$      107,693		$         140		0.52%		$      87,036		$         150		0.69%
Money market accounts			505,863		1,037		0.82		470,506		1,211		1.03
Savings accounts			25,615		16		0.25		17,309		14		0.32
Time deposits			1,527,074		6,178		1.62		1,497,651		9,697		2.60
Total interest-bearing deposits			2,166,245		7,371		1.36		2,072,502		11,072		2.14
Other borrowings			97,909		524		2.15		198,936		1,180		2.38
Subordinated debentures			81,963		1,276		6.23		81,963		1,383		6.75
	Total interest-bearing liabilities		2,346,117		9,171		1.57		2,353,401		13,635		2.32
	Noninterest-bearing demand deposits		321,651						267,406
	Other liabilities		16,921						20,827
	Shareholders' equity		358,351						304,905
	Total liabilities and shareholders' equity		$ 3,043,040						$ 2,946,539
	Net interest income and spread				$  27,108		3.32%				$  24,456		2.99%
	Net interest margin (1)						3.65%						3.41%
	Average interest-earning assets
	to average interest-bearing liabilities		126.83%						122.33%
(1)   Net interest margin = annualized net interest income / average interest-earning assets
(2)     Information regarding noncovered and covered loans for the period shown is not readily available.

SOUTHWEST BANCORP, INC.													Table 5
UNAUDITED AVERAGE BALANCES, YIELDS, AND RATES
(Dollars in thousands)
			For the six months ended June 30,
			2010						2009
			Average				Average		Average				Average
			Balance		Interest		Yield/Rate		Balance		Interest		Yield/Rate
Assets
Loans (2)			$ 2,637,992		$  68,263		5.22%		$ 2,622,282		$  69,277		5.33%
Investment securities			259,635		4,640		3.60		236,862		4,591		3.91
Other interest-earning assets			103,173		135		0.26		3,557		9		0.51
	Total interest-earning assets		3,000,800		73,038		4.91		2,862,701		73,877		5.20
Other assets			73,314						68,333
	Total assets		$ 3,074,114						$ 2,931,034
Liabilities and Shareholders' Equity
Interest-bearing demand deposits			$    107,602		$         272		0.51%		$      87,870		$         303		0.70%
Money market accounts			505,178		2,050		0.82		469,970		2,564		1.10
Savings accounts			25,622		32		0.25		16,198		23		0.29
Time deposits			1,588,142		13,191		1.67		1,470,271		20,242		2.78
Total interest-bearing deposits			2,226,544		15,545		1.41		2,044,309		23,132		2.28
Other borrowings			97,604		1,041		2.15		217,597		2,464		2.28
Subordinated debentures			81,963		2,543		6.21		81,963		2,787		6.80
	Total interest-bearing liabilities		2,406,111		19,129		1.60		2,343,869		28,383		2.44
	Noninterest-bearing demand deposits		312,717						261,980
	Other liabilities		17,971						20,119
	Shareholders' equity		337,315						305,066
	Total liabilities and shareholders' equity		$ 3,074,114						$ 2,931,034
	Net interest income and spread				$    53,909		3.31%				$    45,494		2.76%
	Net interest margin (1)						3.62%						3.20%
	Average interest-earning assets
	to average interest-bearing liabilities		124.72%						122.14%
(1)   Net interest margin = net interest income / average interest-earning assets.
(2)     Information regarding noncovered and covered loans for the period shown is not readily available.

SOUTHWEST BANCORP, INC.													Table 6
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA
(Dollars in thousands except per share)
			2010				2009
			Jun. 30		Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31
OPERATIONS
Interest income:
Loans			$            33,891		$            34,372		$            36,355		$            35,607		$            36,009		$            33,268
Investment securities			2,320		2,320		2,433		2,122		2,079		2,512
Other interest-earning assets			68		67		1		4		3		6
Total interest income			36,279		36,759		38,789		37,733		38,091		35,786
Interest expense:
	Interest bearing demand deposits		140		132		66		107		150		153
	Money market accounts		1,037		1,013		1,170		1,220		1,211		1,353
	Savings accounts		16		16		16		39		14		9
	Time deposits of $100,000 or more		3,517		4,024		4,340		4,822		5,552		5,980
	Other time deposits		2,661		2,989		3,498		3,909		4,145		4,565
Total interest-bearing deposits			7,371		8,174		9,090		10,097		11,072		12,060
Other borrowings			524		517		625		960		1,180		1,284
Subordinated debentures			1,276		1,267		1,277		1,276		1,383		1,404
Total interest expense			9,171		9,958		10,992		12,333		13,635		14,748
Net interest income			27,108		26,801		27,797		25,400		24,456		21,038
Provision for loan losses			7,776		8,531		10,640		10,177		7,477		10,882
Noninterest income:
Service charges and fees			3,170		3,096		3,295		2,992		2,817		2,600
Gain on sales of loans			416		985		933		386		926		718
Gain (loss) on investment securities			34		7		3		10		(9)		2,921
Other noninterest income			342		90		257		322		3,527		238
Total noninterest income			3,962		4,178		4,488		3,710		7,261		6,477
Noninterest expense:
Salaries and employee benefits			7,637		7,580		7,349		7,824		6,887		7,239
Occupancy			2,836		2,783		3,159		2,958		2,789		2,731
FDIC and other insurance			1,521		1,587		1,101		1,134		2,319		991
Other real estate, net			629		106		39		90		103		(102)
Provision for unfunded loan commitments			(512)		(465)		147		(79)		(388)		90
Other general and administrative			4,035		3,667		4,246		3,601		2,980		3,650
Total noninterest expenses			16,146		15,258		16,041		15,528		14,690		14,599
Income before taxes			7,148		7,190		5,604		3,405		9,550		2,034
	Taxes on income		2,737		2,818		2,030		1,271		3,605		705
Net income			$              4,411		$              4,372		$              3,574		$              2,134		$              5,945		$              1,329
Net income available to common shareholders			$              3,366		$              3,329		$              2,534		$              1,097		$              4,910		$                 296
PER SHARE DATA
Basic earnings per common share			$                0.19		$                0.23		$                0.17		$                0.07		$                0.34		$                0.02
Diluted earnings per common share			0.19		0.23		0.17		0.07		0.33		0.02
Common dividends declared per share			-		-		0.0238		0.0238		0.0238		0.0238
Book value per share			15.88		16.79		16.46		16.43		16.30		16.01
Tangible book value per share*			15.53		16.33		15.99		15.96		15.84		15.52
COMMON STOCK
Shares issued			19,388,797		14,779,711		14,750,713		14,748,223		14,658,042		14,658,042
Less treasury shares			-		-		-		-		(15,602)		(49,930)
Outstanding shares			19,388,797		14,779,711		14,750,713		14,748,223		14,642,440		14,608,112
OTHER FINANCIAL DATA
Investment securities			$          265,895		$          260,837		$          263,439		$          258,790		$          243,077		$          179,006
Loans held for sale			25,615		25,586		43,134		36,526		26,006		76,404
Noncovered portfolio loans			2,475,348		2,516,397		2,539,294		2,572,111		2,587,230		2,526,293
Total noncovered loans			2,500,963		2,541,983		2,582,428		2,608,637		2,613,236		2,602,697
Covered portfolio loans			68,006		76,909		85,405		103,630		117,096		-
Total assets			3,010,835		3,074,923		3,108,291		3,029,347		3,038,985		2,928,133
Total deposits			2,444,939		2,554,165		2,592,730		2,473,162		2,452,295		2,330,089
Other borrowings			93,036		103,620		103,022		146,449		176,368		193,739
Subordinated debentures			81,963		81,963		81,963		81,963		81,963		81,963
Total shareholders' equity			375,319		315,341		309,778		309,118		305,416		300,406
Mortgage servicing portfolio			249,632		241,224		237,459		223,226		209,425		179,959
INTANGIBLE ASSET DATA
Goodwill			$              6,811		$              6,811		$              6,811		$              6,811		$              6,811		$              7,071
Core deposit intangible			3,830		3,967		4,103		4,240		4,378		2,498
Mortgage servicing rights			1,589		1,603		1,670		1,625		1,589		1,362
Nonmortgage servicing rights			5		5		6		7		7		8
Total intangible assets			$            12,235		$            12,386		$            12,590		$            12,683		$            12,785		$            10,939
Intangible amortization expense			$                 350		$                 359		$                 381		$                 344		$                 391		$                 204
Continued
____________________
*This is a Non-GAAP based financial measure.

SOUTHWEST BANCORP, INC.													Table 6
UNAUDITED QUARTERLY SUMMARY FINANCIAL DATA													Continued
(Dollars in thousands except per share)
			2010				2009
			Jun. 30		Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31
LOAN COMPOSITION
Noncovered
Real estate mortgage:
Commercial			$       1,251,709		$       1,230,009		$       1,212,409		$       1,221,739		$       1,208,819		$       1,098,587
One-to-four family residential			106,814		111,185		114,614		125,034		116,068		114,111
Real estate construction
Commercial			589,590		630,472		618,078		612,905		622,298		640,132
One-to-four family residential			35,129		34,996		41,109		39,009		51,292		79,309
Commercial			471,004		487,074		520,505		538,757		554,734		558,834
Installment and consumer:
Guaranteed student loans			7,389		10,199		36,163		30,949		18,477		69,792
Other			39,328		38,048		39,550		40,244		41,548		41,932
Total noncovered loans, including held for sale			2,500,963		2,541,983		2,582,428		2,608,637		2,613,236		2,602,697
Less allowance for loan losses			(67,055)		(65,168)		(62,413)		(57,777)		(51,753)		(46,262)
Total noncovered loans, net			$       2,433,908		$       2,476,815		$       2,520,015		$       2,550,860		$       2,561,483		$       2,556,435
Covered
Real estate mortgage:
Commercial			$            36,107		$            37,487		$            39,836		$            37,820		$            40,411		$                   -
One-to-four family residential			10,277		10,843		12,630		17,246		17,889		-
Real estate construction
Commercial			8,190		11,173		12,515		14,178		14,277		-
One-to-four family residential			3,853		5,273		5,324		9,936		13,647		-
Commercial			8,487		10,807		13,412		21,475		27,203		-
Installment and consumer:			1,092		1,326		1,688		2,975		3,669		-
Total covered loans			$            68,006		$            76,909		$            85,405		$          103,630		$          117,096		$                   -
DEPOSIT COMPOSITION
Non-interest bearing demand			$          326,721		$          317,896		$          324,829		$          309,767		$          291,014		$          274,175
Interest-bearing demand			102,218		119,757		74,201		82,622		94,060		85,629
Money market accounts			510,549		506,659		505,521		506,196		483,162		467,924
Savings accounts			25,321		25,871		25,730		25,636		25,660		15,797
Time deposits of $100,000 or more			861,110		944,871		1,004,439		888,814		905,202		849,814
Other time deposits			619,020		639,111		658,010		660,127		653,197		636,750
Total deposits			$       2,444,939		$       2,554,165		$       2,592,730		$       2,473,162		$       2,452,295		$       2,330,089
LOANS BY SEGMENT
Oklahoma banking			$  914,004		$  926,870		$  933,150		$  943,982		$  967,981		$  949,454
Texas banking			1,041,228		1,063,511		1,054,404		1,042,369		1,037,694		990,135
Kansas banking			329,157		342,596		359,633		400,710		412,314		309,774
Other states banking			258,965		260,329		277,512		288,680		286,337		276,930
Subtotal			2,543,354		2,593,306		2,624,699		2,675,741		2,704,326		2,526,293
Secondary market			25,615		25,586		43,134		36,526		26,006		76,404
Total loans			$2,568,969		$2,618,892		$2,667,833		$2,712,267		$2,730,332		$2,602,697
NET INCOME BY SEGMENT
Oklahoma banking			$       4,334		$       2,820		$       3,807		$       2,529		$       3,284		$       3,210
Texas banking			697		1,656		3,591		2,686		3,662		1,119
Kansas banking			985		(355)		(2,328)		(1,180)		2,405		598
Other states banking			(507)		1,722		300		57		(78)		(1,974)
Subtotal			5,509		5,843		5,370		4,092		9,273		2,953
Secondary market			72		327		(3)		(201)		117		(61)
Other operations			(1,170)		(1,798)		(1,793)		(1,757)		(3,445)		(1,563)
Net income			$       4,411		$       4,372		$       3,574		$       2,134		$       5,945		$       1,329
OFFICES AND EMPLOYEES
FTE Employees			447		455		466		471		478		425
Branches			23		24		24		24		24		18
Loan production offices			2		2		3		3		3		3
Assets per employee			$       6,736		$       6,758		$       6,670		$       6,432		$       6,358		$       6,890
____________________
Balance sheet amounts are as of period end unless otherwise noted.

SOUTHWEST BANCORP, INC.													Table 7
UNAUDITED QUARTERLY SUPPLEMENTAL ANALYTICAL DATA
(Dollars in thousands except per share)
			2010				2009
			Jun. 30		Mar. 31		Dec. 31		Sep. 30		Jun. 30		Mar. 31
PERFORMANCE RATIOS
Return on average assets (annualized)			0.58%		0.57%		0.46%		0.28%		0.81%		0.18%
Return on average common equity (annualized)			4.64		5.42		4.06		1.78		8.26		0.50
Return on average tangible equity (annualized)			5.45		5.84		4.78		2.87		8.12		1.83
Net interest margin (annualized)			3.65		3.59		3.71		3.39		3.41		3.00
Total dividends declared to net income			19.84		20.02		34.31		57.46		20.58		92.00
Effective tax rate			38.29		39.19		36.22		37.33		37.75		34.66
Efficiency ratio			51.97		49.25		49.69		53.34		46.32		53.06
NONPERFORMING ASSETS
Noncovered
Nonaccrual loans			$          111,871		$            97,858		$          105,887		$            94,715		$            74,205		$            73,383
90 days past due and accruing			333		4		310		10,578		8,409		10,552
Restructured			5,525		5,650		-		-		-		-
Total nonperforming loans			117,729		103,512		106,197		105,293		82,614		83,935
Other real estate			27,634		18,809		18,432		6,389		6,003		5,351
Total nonperforming assets			$          145,363		$          122,321		$          124,629		$          111,682		$            88,617		$            89,286
Potential problem loans			$          242,217		$          275,912		$          258,399		$          255,051		$          178,081		$          133,810
Covered
Nonaccrual loans			$            14,504		$            16,192		$            12,322		$            14,686		$              8,607		$                   -
90 days past due and accruing			130		356		1,136		4,544		3,658		-
Total nonperforming loans			14,634		16,548		13,458		19,230		12,265		-
Other real estate			4,352		4,489		4,748		2,598		2,938		-
Total nonperforming assets			$            18,986		$            21,037		$            18,206		$            21,828		$            15,203		$                   -
Potential problem loans			$              6,184		$              6,620		$              8,874		$              4,421		$              5,977		$                   -
ALLOWANCE ACTIVITY
Balance, beginning of period			$            65,168		$            62,413		$            57,777		$            51,753		$            46,262		$            39,773
Charge offs			6,168		6,545		6,756		4,372		2,975		4,810
Recoveries			279		769		752		219		989		417
Net charge offs			5,889		5,776		6,004		4,153		1,986		4,393
Provision for loan losses			7,776		8,531		10,640		10,177		7,477		10,882
Balance, end of period			$            67,055		$            65,168		$            62,413		$            57,777		$            51,753		$            46,262
ASSET QUALITY RATIOS
Noncovered
Nonperforming assets to portfolio loans and
	other real estate		5.81%		4.82%		4.87%		4.33%		3.41%		3.53%
Nonperforming loans to portfolio loans			4.76		4.11		4.18		4.09		3.19		3.32
Net loan charge-offs to average portfolio
	loans (annualized)		0.94		0.93		0.95		0.62		0.31		0.71
Allowance for loan losses to portfolio loans			2.71		2.59		2.46		2.25		2.00		1.83
Allowance for loan losses to
	nonperforming loans		56.96		62.96		58.77		54.87		62.64		55.12
Covered
Nonperforming assets to portfolio loans and
	other real estate		26.24%		25.84%		20.19%		20.55%		12.67%		-
Nonperforming loans to portfolio loans			21.52		21.52		15.76		18.56		10.47		-
CAPITAL RATIOS
Average total shareholders' equity to
	average assets		11.78%		10.18%		10.31%		10.24%		10.35%		10.47%
Leverage ratio			14.48		12.32		12.42		12.39		12.70		12.72
Tier 1 capital to risk-weighted assets			16.50		14.00		13.28		13.04		12.67		12.85
Total capital to risk-weighted assets			17.78		15.28		14.55		14.31		13.92		14.11
Tangible common equity to tangible assets**			10.02		7.87		7.61		7.79		7.65		7.76
REGULATORY CAPITAL DATA
Tier I capital			$          438,973		$          381,280		$          377,418		$          374,805		$          372,713		$          369,482
Total capital			472,971		415,955		413,438		411,201		409,764		405,613
Total risk adjusted assets			2,659,886		2,722,628		2,841,476		2,873,558		2,942,821		2,875,290
Average total assets			3,032,328		3,094,756		3,039,014		3,024,885		2,935,189		2,905,653
____________________
**Calculation of Tangible Capital to Tangible Assets (Non-GAAP Financial Measure)
	Total shareholders' equity		$          375,319		$          315,341		$          309,778		$          309,118		$          305,416		$          300,406
	Less:
	Goodwill		6,811		6,811		6,811		6,811		6,811		7,071
	Preferred stock		67,375		67,205		67,037		66,872		66,710		66,549
	Tangible common equity		$          301,133		$          241,325		$          235,930		$          235,435		$          231,895		$          226,786
	Total assets		$       3,010,835		$       3,074,923		$       3,108,291		$       3,029,347		$       3,038,985		$       2,928,133
	Less goodwill		6,811		6,811		6,811		6,811		6,811		7,071
	Tangible assets		$       3,004,024		$       3,068,112		$       3,101,480		$       3,022,536		$       3,032,174		$       2,921,062
	Tangible common equity to tangible assets		10.02%		7.87%		7.61%		7.79%		7.65%		7.76%
Balance sheet amounts and ratios are as of period end unless otherwise noted.

SOURCE Southwest Bancorp, Inc.

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