Operating Segments
 12 Months Ended
Dec. 31, 2014
Operating Segments [Abstract]  
Operating Segments

 

Note 19:  Operating Segments

 

We operate five principal segments:  Oklahoma Banking, Texas Banking, Kansas Banking,  Mortgage Banking, and Other Operations.  The Oklahoma Banking segment, the Texas Banking segment, and the Kansas Banking segment provide deposit and lending services.  The Mortgage Banking segment consists of residential mortgage lending services to customers.  Prior to the fourth quarter of 2013, the Mortgage Banking segment only included loans available for sale in the secondary market.  During the fourth quarter of 2013, one-to-four family mortgages were combined with the available for sale loans for inclusion in the Mortgage Banking segment.  This adjustment had an immaterial impact on interest income for the first nine months of 2013 and 2012.  Other Operations includes our funds management unit and corporate investments. 

 

The primary purpose of the funds management unit is to manage our overall internal liquidity needs and interest rate risk.  Each segment borrows funds from or provides funds to the funds management unit as needed to support its operations.  The value of funds provided to and the cost of funds borrowed from the funds management unit by each segment are internally priced at rates that approximate market rates for funds with similar duration.  The yield used in the funds transfer pricing curve is a blend of rates based on the volume usage of retail and brokered certificates of deposit and FHLB advances. 

 

Effective January 1, 2013, and as a result of new management, we began to identify reportable segments by geographic location of relationship manager.  Operating results are adjusted for allocated service and management costs. In addition to this realignment, management decided to eliminate a capital credit allocation between the reportable segments.  The prior year information has been realigned and reallocated for consistency with current identified reportable segments.    

 

The accounting policies of each reportable segment are the same as ours.  Expenses for consolidated back-office operations are allocated to operating segments based on estimated uses of those services.  General overhead expenses such as executive administration, accounting, and audit are allocated based on the direct expense and/or deposit and loan volumes of the operating segment.  Income tax expense for the operating segments is calculated at statutory rates.  The Other Operations segment records the tax expense or benefit necessary to reconcile to the consolidated financial statements. 

 

Capital is assigned to each of the segments using a risk-based capital pricing methodology that assigns capital ratios by asset, deposit, or revenue category based on credit risk, interest rate risk, market risk, operational risk, and liquidity risk factors.  There were no significant changes in 2014 due to funds transfer pricing, capital assignments, or expense allocations. 

 

The following table summarizes financial results by operating segment: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2014

 

Oklahoma

 

Texas

 

Kansas

 

Mortgage

 

Other

 

Total

(Dollars in thousands)

Banking

 

Banking

 

Banking

 

Banking

 

Operations*

 

Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
38,090 

 

$
19,187 

 

$
9,469 

 

$
756 

 

$
(2,498)

 

$
65,004 

Provision for loan losses

 
(2,537)

 

 
(3,640)

 

 
(425)

 

 
(24)

 

 
2 

 

 
(6,624)

Noninterest income

 
6,885 

 

 
1,594 

 

 
1,576 

 

 
2,145 

 

 
6,731 

 

 
18,931 

Noninterest expenses

 
29,086 

 

 
13,387 

 

 
8,616 

 

 
2,277 

 

 
3,546 

 

 
56,912 

Income before taxes

 
18,426 

 

 
11,034 

 

 
2,854 

 

 
648 

 

 
685 

 

 
33,647 

Taxes on income

 
6,909 

 

 
4,138 

 

 
1,070 

 

 
243 

 

 
257 

 

 
12,617 

Net income

$
11,517 

 

$
6,896 

 

$
1,784 

 

$
405 

 

$
428 

 

$
21,030 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Includes externally generated revenue of $7.6 million, primarily from investing services, and an internally generated loss of $3.3 million from the funds management unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans at period end

$
772,710 

 

$
460,680 

 

$
146,043 

 

$
20,552 

 

$
6 

 

$
1,399,991 

Total assets at period end

 
781,647 

 

 
458,489 

 

 
147,256 

 

 
24,057 

 

 
530,585 

 

 
1,942,034 

Total deposits at period end

 
1,109,613 

 

 
224,634 

 

 
110,901 

 

 
3,864 

 

 
84,987 

 

 
1,533,999 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2013

 

Oklahoma

 

Texas

 

Kansas

 

Mortgage

 

Other

 

Total

(Dollars in thousands)

Banking

 

Banking

 

Banking

 

Banking

 

Operations*

 

Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
34,725 

 

$
18,949 

 

$
10,527 

 

$
670 

 

$
(2,221)

 

$
62,650 

Provision for loan losses

 
(486)

 

 
(6,403)

 

 
(472)

 

 
148 

 

 
4 

 

 
(7,209)

Noninterest income

 
6,943 

 

 
1,305 

 

 
1,944 

 

 
2,701 

 

 
750 

 

 
13,643 

Noninterest expenses

 
28,000 

 

 
9,494 

 

 
11,898 

 

 
2,287 

 

 
3,632 

 

 
55,311 

Income (loss) before taxes

 
14,154 

 

 
17,163 

 

 
1,045 

 

 
936 

 

 
(5,107)

 

 
28,191 

Taxes on income

 
5,400 

 

 
6,548 

 

 
399 

 

 
357 

 

 
(1,948)

 

 
10,756 

Net income (loss)

$
8,754 

 

$
10,615 

 

$
646 

 

$
579 

 

$
(3,159)

 

$
17,435 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Includes externally generated loss of $1.6 million, primarily from investing services, and an internally generated revenue of $0.1 million from the funds management unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans at period end

$
681,991 

 

$
366,697 

 

$
198,992 

 

$
23,215 

 

$
8 

 

$
1,270,903 

Total assets at period end

 
686,736 

 

 
361,058 

 

 
203,631 

 

 
26,162 

 

 
703,836 

 

 
1,981,423 

Total deposits at period end

 
1,113,715 

 

 
207,227 

 

 
247,884 

 

 
1,895 

 

 
13,365 

 

 
1,584,086 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2012

 

Oklahoma

 

Texas

 

Kansas

 

Mortgage

 

Other

 

Total

(Dollars in thousands)

Banking

 

Banking

 

Banking

 

Banking

 

Operations*

 

Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
37,954 

 

$
25,190 

 

$
9,685 

 

$
1,370 

 

$
2,364 

 

$
76,563 

Provision for loan losses

 
448 

 

 
5,364 

 

 
(2,705)

 

 

 -

 

 

 -

 

 
3,107 

Noninterest income

 
7,697 

 

 
1,854 

 

 
2,440 

 

 
2,771 

 

 
1,174 

 

 
15,936 

Noninterest expenses

 
29,406 

 

 
12,848 

 

 
13,767 

 

 
2,430 

 

 
4,871 

 

 
63,322 

Income (loss) before taxes

 
15,797 

 

 
8,832 

 

 
1,063 

 

 
1,711 

 

 
(1,333)

 

 
26,070 

Taxes on income

 
5,989 

 

 
3,348 

 

 
403 

 

 
649 

 

 
(506)

 

 
9,883 

Net income (loss)

$
9,808 

 

$
5,484 

 

$
660 

 

$
1,062 

 

$
(827)

 

$
16,187 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Includes externally generated revenue of $0.8 million, primarily from investing services, and an internally generated revenue of $2.8 million from the funds management unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans at period end

$
652,121 

 

$
520,481 

 

$
174,451 

 

$
31,682 

 

$

 -

 

$
1,378,735 

Total assets at period end

 
664,607 

 

 
515,675 

 

 
178,291 

 

 
34,304 

 

 
729,378 

 

 
2,122,255 

Total deposits at period end

 
1,254,348 

 

 
166,919 

 

 
270,368 

 

 
2,420 

 

 
15,523 

 

 
1,709,578