Economy Impacts Bank Earnings

With area financial institutions beginning to feel the effects of the recession, bank holding companies with a presence in Tulsa turned in a mixed bag of performance reports for the fourth quarter and the yearend.
BOK Financial Corp., Southwest Bancorp Inc. and BancFirst Corp. reported net income at significantly lower levels, while UMB Financial Corp. reported net income up and Commerce Bancshares, Inc. showed flat earnings performance.
BOK Financial Corp.
Tulsa-based BOK Financial Corp. showed a sharp drop in earnings, reporting net income for the fourth quarter of 2008 of $35.4 million, down 31 percent from the fourth quarter of 2007. Net income per diluted share was $0.53 for the fourth quarter of 2008 and 76 cents for the fourth quarter of 2007. Net income for 2008 was $153.2 million, down 30 percent from the previous year. Net income per diluted share was $2.27 for 2008 and $3.22 for 2007.
“BOK Financial ended 2008 with over $153 million in earnings, a larger reserve for credit losses and a strong capital position,” said President and CEO Stan Lybarger. “BOK Financial was also the largest traditional commercial bank in the country to decline participation in the U.S. Treasury’s TARP Capital Purchase Program.”
“We increased our reserve for credit losses by $101 million during 2008, in anticipation of continued deterioration in the nation’s economy and increased pressure on our customers,” Lybarger said. “Despite the environment, revenues continued to increase in 2008. Total revenue increased by $111 million as a result of continued loan growth and improved margins.”
Net interest revenue totaled $176.4 million, up $12.1 million over the third quarter of 2008 and $35.2 million over the fourth quarter of 2007.
Combined reserves for credit losses totaled $248 million or 1.93 percent of outstanding loans at Dec. 31, up from $209 million or 1.65 percent of outstanding loans at Sept. 30. Net loans charged off and provision for credit losses were $33.7 million and $73 million, respectively for the fourth quarter of 2008.
Southwest Bancorp Inc.
Southwest Bancorp, Inc. cited current economic conditions in reporting what it called “disappointing” results for year-end 2008 income, and also said it had raised $100 million in new capital during the year to take advantage of “opportunities for prudent loan growth.”
Stillwater-based Southwest Bancorp reported net income available to common shareholders of $3 million, or 20 cents per diluted share for the fourth quarter 2008, compared to $4.5 million, or 31 cents per diluted share for the fourth quarter of 2007.
Net income available to common shareholders for the year ended Dec. 31 was $14.7 million, or $1 per diluted share, compared to $21.4 million, or $1.46 per diluted share, for the prior year.
At Dec. 31, total assets were $2.9 billion compared to $2.6 billion at Dec. 31, 2007, and shareholders’ equity was $302.2 million compared to $217.6 million at year-end 2007.
“We continue to focus on our strategic goal of building long-term shareholder value during these uncertain times,” said Rick Green, president and chief executive officer.
“Southwest continues to generate earnings and dividends for our shareholders, but our 2008 performance was disappointing. … the main causes are linked to current economic conditions — the competitive pressures that have caused reductions in rates on deposits and other funding sources to decrease less than the drop in rates on earning assets and the market conditions that have required increases in our allowance for loan losses.
BancFirst Corp.
Citing lower net interest margins due to historically low interest rate levels, and higher loan provisions as a result of the slowing economy throughout 2008, Oklahoma City-based BancFirst Corp. reported net income of $8.1 million or 52 cents per diluted earnings per share for the fourth quarter and $44.4 million or $2.85 per diluted earnings per share for the year ended Dec. 31.
The results compare to $11.6 million or 75 cents per diluted earnings per share and $53.1 million or $3.33 per diluted earnings per share for the fourth quarter and year ended Dec. 31, 2007, respectively.
For the fourth quarter of 2008, the company’s net interest income was $33.7 million, down from $37.5 million in the fourth quarter a year ago.
The company’s loan loss provision was $3.1 million in the fourth quarter compared to $980,000 in the same period in 2007.
Loans grew by $27.4 million during the fourth quarter and are up $270.8 million from year end 2007.
At Dec. 31, 2008, nonperforming loans equaled 0.72 percent of total assets up from 0.40 percent a year ago. Net charge-offs were 0.38 percent of loans for the fourth quarter and 0.21 percent for the year 2008, below industry peer levels.
UMB Financial Corp.
Kansas City, Mo.-based UMB Financial Corp. announced earnings for the three months ended Dec. 31, of $20.2 million or 50 cents per share (49 cents diluted), an increase of $4.9 million, or 32.2 percent, compared to fourth quarter 2007 earnings of $15.3 million or 37 cents per share (37 cents diluted).
Earnings for the year ended Dec. 31, were $98.1 million or $2.41 per share ($2.38 diluted), an increase of $23.9 million, or 32.2 percent, compared to prior year earnings of $74.2 million or $1.78 per share ($1.77 diluted).
Excluding the security transfer product sale and Visa-related transactions in both periods, net income for the fourth quarter increased $2.4 million, or 13.7 percent, compared to the same period in 2007. Excluding the above items, net income for the year ended Dec. 31, increased $16.6 million, or 22.8 percent, compared to 2007.
Commerce Bancshares Inc.
Commerce Bancshares, Inc., announced earnings of 58 cents per share for the three months ended Dec. 31, compared to 58 cents in the fourth quarter of last year. Net income for the fourth quarter of 2008 amounted to $43.8 million compared to $43.7 million in the fourth quarter of last year.
For the year ended Dec. 31, earnings per share totaled $2.48 compared to $2.69 in 2007, a decrease of 7.8 percent, for the Kansas City, Mo., based holding company. Net income amounted to $188.7 million in 2008 compared with $206.7 million in 2007.
IBC Bank Opens Eastgate Metroplex Branch
IBC Bank will open its 19th branch in Tulsa Feb. 2 in the Eastgate Metroplex, 14002 E. 21st St.
The 642-SF branch will boast an ATM machine and offer a full range of deposit and loan products for personal and business customers as well as access to IBC Investment Services. Pete Velazquez, a two-year employee of IBC, will serve as branch manager.



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