##### 



FORM 10-K
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Year Ended December 31, 2007
 Commission File Number 0-23064
 SOUTHWEST BANCORP, INC.
  Oklahoma
    
    73-1136584(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)608 South Main Street, Stillwater, Oklahoma
(Address of principal executive office)
    
    74074
(Zip Code)
 : (405) 742-1800
  Title of Each Class
    
    Name of Each Exchange on which RegisteredCommon Stock, par value $1.00 per share
    
    The NASDAQ Stock Market
 None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
    Part III:
    
    Portions of the definitive proxy statement for the Annual Meeting of Shareholders to be held on April 24, 2008 (the Proxy
Statement).




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##### 



SOUTHWEST BANCORP, INC.
 Index
 Forward-Looking Statements
    
    iiForm 10-K Cross Reference Sheet
    
    iiSouthwest Bancorp, Inc.
    
    ivAbout This Report
    
    
    vFive Year Summary of Selected Financial Data
    
    
    1Securities Listing, Prices, and Dividends
    
    
    3Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    5Controls and Procedures
    
    
    28Reports of Independent Registered Public Accounting Firm
    
    
    29Consolidated Financial Statements
    
    
    31Notes to the Consolidated Financial Statements
    
    
    36Other Material Required by Form 10-K
    
    
    69Description of Business
    
    
    69Board of Directors
    
    
    81Executive Officers
    
    
    82Risk Factors
    
    
    88Properties
    
    
    94Exhibits, Financial Statement Schedules
    
    
    96Signatures
    
    
    98
 i




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##### 



FORWARD-LOOKING STATEMENTS
 SOUTHWEST BANCORP, INC.
 Form 10-K Cross Reference Sheet of Material Incorporated by Reference
  Item of Form 10-K
    
    LocationPart I.Item 1.
    
    Business.
    
    Forward-Looking Statements: on page ii,
Southwest Bancorp, Inc.: on page iv, About
this Report: on page v, and Business on
pages 69 through 87.Item 1A.
    
    Risk Factors
    
    Risk Factors on pages 88 through 92Item 1B.
    
    Unresolved Staff Comments
    
    Not applicable. The registrant did not receive
any comments from the staff of the Securities
and Exchange Commission regarding its periodic
or current reports within the last 180 days of
2007.Item 2.
    
    Properties
    
    Properties on pages 94 and 95.Item 3.
    
    Legal Proceedings
    
    Note 19 Commitments and Contingencies on
pages 61 and 62.Item 4.
    
    Submission of Matters to
a Vote of Security
Holders
    
    Not applicable. No matter was submitted to a
vote of security holders during the fourth
quarter of 2007.PART IIItem. 5.
    
    Market for Registrants
Common Equity, Related
Stockholder Matters, and
Issuer Purchases of
Equity Securities
    
    Securities Listing, Prices, and Dividends on
pages 2 through 4.Item 6.
    
    Selected Financial Data
    
    Five Year Summary of Selected Financial Data
on pages 1 and 2.Item 7.
    
    Managements Discussion
and Analysis of
Financial Condition and
Results of Operations
    
    Managements Discussion and Analysis of
Financial Condition and Results of Operations
on pages 5 through 27.Item 7A.
    
    Quantitative and
Qualitative Disclosures
about Market Risk
    
    The section titled Asset/Liability Management
Quantitative and Qualitative Disclosures about
Market Risk on pages 22 thru 24.Item 8.
    
    Financial Statements and
Supplementary Data
    
    Pages 29 through 68.Item 9.
    
    Changes in and
Disagreements with
auditors on Accounting
and
    
    Not applicable. During the past two years or
any subsequent period there has been no change
in or reportable disagreement
 ii




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##### 



Item of Form 10-K
    
    LocationFinancial
Disclosures
    
    with the independent registered public accounting firm
for Southwest or any of its subsidiaries.Item 9A.
    
    Controls and Procedures
    
    Controls and Procedures on page 28.Item 9B.
    
    Other Information
    
    Not applicable. The registrant reported all
items required to be reported in a Form 8-K
during the fourth quarter of 2007.Part IIIItem 10.
    
    Directors, Executive
Officers and
Corporate Governance
    
    The material labeled Election of Directors on
pages 2 through 5, Board Meetings and
Committee on pages 5 through 7, Section
16(a) Beneficial Ownership Reporting
Compliance on page 35, Code of Ethics on
page 36, Shareholder Proposals and
Communications on page 37, and Report of the
Audit Committee on page 36 of the Proxy
Statement is incorporated by reference in this
Report.Item 11.
    
    Executive Compensation
    
    The material labeled Director Compensation
on page 10, Executive Compensation on pages
21 through 26 , Compensation Discussion and
Analysis on pages 13 through 19, and
Compensation Committee Report on page 20 of
the Proxy Statement is incorporated by
reference in this Report.Item 12.
    
    Security Ownership of
Certain Beneficial
Owners and Management
and Related Stockholder
Matters
    
    The material labeled Common Stock Owned by
Directors and Executive Officers on pages 11
and 12 and Owners of More than 5% of
Southwests Common Stock on page 12 of the
Proxy Statement is incorporated by reference
in this Report. Information regarding
securities authorized for issuance under
equity compensation plans is included under
Equity Compensation Plan Information on page
4 of this report.Item 13.
    
    Certain Relationships
and Related Transactions
and Director
Independence
    
    The material labeled Director Independence
on pages 8 and 9, and Certain Transactions
on pages 34 and 35 of the Proxy Statement is
incorporated by reference in this Report.Item 14
    
    Principal Accounting
Fees and Services
    
    The material labeled Relationship with
Independent Public Accountants on pages 35
and 36 of the Proxy Statement is incorporated
by reference in this Report.Part IVItem 15.
    
    Exhibits, Financial
Statement Schedules
 iii




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##### 



Southwest Bancorp, Inc.
 SNB DirectBanker ®
       iv




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##### 



About This Report
  The SEC has not approved or disapproved this Report or passed upon its accuracy or adequacy.
 v




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##### 



FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA
  For the Year Ended December 31,(Dollars in thousands, except per share data)
    
    2007
    
    2006
    
    2005
    
    2004
    
    2003Operations DataInterest income
    
    $
    177,068
    
    
    $
    169,760
    
    
    $
    137,344
    
    
    $
    104,723
    
    
    $
    84,079Interest expense
    
    
    84,588
    
    
    
    76,922
    
    
    
    52,238
    
    
    
    32,246
    
    
    
    28,611Net interest income
    
    
    92,480
    
    
    
    92,838
    
    
    
    85,106
    
    
    
    72,477
    
    
    
    55,468Provision for loan losses
    
    
    8,581
    
    
    
    11,565
    
    
    
    15,785
    
    
    
    12,868
    
    
    
    8,408Gain on sales of loans and securities, net (1)
    
    
    4,923
    
    
    
    3,689
    
    
    
    4,915
    
    
    
    3,185
    
    
    
    4,139Noninterest income
    
    
    11,627
    
    
    
    13,087
    
    
    
    12,491
    
    
    
    10,900
    
    
    
    10,361Noninterest expenses (2)
    
    
    65,474
    
    
    
    56,643
    
    
    
    51,873
    
    
    
    44,526
    
    
    
    38,562Income before taxes
    
    
    34,975
    
    
    
    41,406
    
    
    
    34,854
    
    
    
    29,168
    
    
    
    22,998Taxes on income
    
    
    13,597
    
    
    
    15,409
    
    
    
    13,840
    
    
    
    10,539
    
    
    
    8,106Net income
    
    $
    21,378
    
    
    $
    25,997
    
    
    $
    21,014
    
    
    $
    18,629
    
    
    $
    14,892Dividends DeclaredCommon stock
    
    $
    5,299
    
    
    $
    4,681
    
    
    $
    4,035
    
    
    $
    3,380
    
    
    $
    2,959Ratio of total dividends declared to net income
    
    
    24.79
    %
    
    
    18.00
    %
    
    
    19.20
    %
    
    
    18.14
    %
    
    
    19.87
    %Per Share Data (3)Basic earnings per common share
    
    $
    1.49
    
    
    $
    1.84
    
    
    $
    1.60
    
    
    $
    1.54
    
    
    $
    1.26Diluted earnings per common share
    
    
    1.46
    
    
    
    1.79
    
    
    
    1.55
    
    
    
    1.48
    
    
    
    1.22Common stock cash dividends
    
    
    0.37
    
    
    
    0.33
    
    
    
    0.30
    
    
    
    0.28
    
    
    
    0.25Book value per common share (4)
    
    
    15.16
    
    
    
    13.87
    
    
    
    12.16
    
    
    
    10.41
    
    
    
    9.20Weighted average common shares outstanding:Basic
    
    
    14,313,239
    
    
    
    14,166,634
    
    
    
    13,165,642
    
    
    
    12,060,842
    
    
    
    11,798,810Diluted
    
    
    14,617,713
    
    
    
    14,492,554
    
    
    
    13,563,904
    
    
    
    12,548,059
    
    
    
    12,159,620Financial Condition Data (4)Investment securities
    
    $
    256,312
    
    
    $
    269,849
    
    
    $
    268,093
    
    
    $
    220,051
    
    
    $
    204,266Portfolio Loans (6)
    
    
    2,145,557
    
    
    
    1,602,726
    
    
    
    1,352,433
    
    
    
    1,269,318
    
    
    
    1,090,414Loans held for sale (6)
    
    
    66,275
    
    
    
    188,464
    
    
    
    383,447
    
    
    
    354,557
    
    
    
    218,422Total loans (5) (6)
    
    
    2,211,832
    
    
    
    1,791,190
    
    
    
    1,735,880
    
    
    
    1,623,875
    
    
    
    1,308,836Interest-earning assets
    
    
    2,478,133
    
    
    
    2,078,710
    
    
    
    2,006,578
    
    
    
    1,845,401
    
    
    
    1,514,314Total assets
    
    
    2,564,298
    
    
    
    2,170,628
    
    
    
    2,099,639
    
    
    
    1,913,787
    
    
    
    1,581,564Interest-bearing deposits
    
    
    1,801,512
    
    
    
    1,511,196
    
    
    
    1,433,265
    
    
    
    1,316,320
    
    
    
    1,036,793Total deposits
    
    
    2,058,579
    
    
    
    1,765,611
    
    
    
    1,657,820
    
    
    
    1,500,058
    
    
    
    1,204,125Other borrowings
    
    
    218,356
    
    
    
    138,094
    
    
    
    204,508
    
    
    
    200,065
    
    
    
    183,850Subordinated debentures
    
    
    46,393
    
    
    
    46,393
    
    
    
    46,393
    
    
    
    72,180
    
    
    
    72,180Total shareholders equity (7)
    
    
    217,609
    
    
    
    197,510
    
    
    
    170,444
    
    
    
    125,984
    
    
    
    109,935Mortgage servicing portfolio
    
    
    141,680
    
    
    
    135,904
    
    
    
    133,470
    
    
    
    125,353
    
    
    
    124,366Selected RatiosReturn on average assets
    
    
    0.94
    %
    
    
    1.18
    %
    
    
    1.01
    %
    
    
    1.03
    %
    
    
    0.99
    %Return on average equity
    
    
    10.19
    
    
    
    13.99
    
    
    
    13.78
    
    
    
    15.80
    
    
    
    14.59Net interest margin
    
    
    4.19
    
    
    
    4.41
    
    
    
    4.29
    
    
    
    4.16
    
    
    
    3.80Efficiency ratio (8)
    
    
    60.05
    
    
    
    51.67
    
    
    
    50.60
    
    
    
    51.44
    
    
    
    55.11Average assets per employee (9)
    
    $
    4,661
    
    
    $
    5,117
    
    
    $
    5,448
    
    
    $
    5,098
    
    
    $
    4,513
 1




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##### 



SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
 At December 31,(Dollars in thousands, except per share data)
    
    2007
    
    2006
    
    2005
    
    2004
    
    2003Asset Quality RatiosAllowance for loan losses to total loans (4)
    
    
    1.34
    %
    
    
    1.52
    %
    
    
    1.37
    %
    
    
    1.17
    %
    
    
    1.15
    %Nonperforming loans to total loans (4)(10)
    
    
    1.34
    
    
    
    1.64
    
    
    
    1.36
    
    
    
    1.43
    
    
    
    1.22Allowance for loan losses to nonperforming
loans (4)(10)
    
    
    100.04
    
    
    
    92.97
    
    
    
    100.96
    
    
    
    82.00
    
    
    
    94.31Nonperforming assets to total loans and other real
estate owned (4)(11)
    
    
    1.46
    
    
    
    1.74
    
    
    
    1.76
    
    
    
    1.72
    
    
    
    1.34Net loan charge-offs to average total loans
    
    
    0.33
    
    
    
    0.44
    
    
    
    0.63
    
    
    
    0.58
    
    
    
    0.36Capital RatiosAverage total shareholders equity to average assets
    
    
    9.21
    
    
    
    8.47
    
    
    
    7.34
    
    
    
    6.51
    
    
    
    6.75Tier I capital to risk-weighted assets (4)
    
    
    9.71
    
    
    
    12.25
    
    
    
    12.95
    
    
    
    10.88
    
    
    
    11.13Total capital to risk-weighted assets (4)
    
    
    10.97
    
    
    
    13.50
    
    
    
    14.21
    
    
    
    13.92
    
    
    
    14.90Leverage ratio (4)
    
    
    10.23
    
    
    
    10.91
    
    
    
    10.24
    
    
    
    8.61
    
    
    
    9.32
 
 (1)
    
    Gain on sales includes $1.9 million gain on a partial disposition of an equity security.
Please see Note 13 to the Consolidated Financial Statements.(2)
    
    Noninterest expenses include $3.3 million resulting from the write-off of a cash
receivable and associated legal fees and $713,000 in litigation and settlement costs
related to VISA, USA. Please see Note 19 to the Consolidated Financial Statements.(3)
    
    Except as otherwise noted, all share and per share information in this report has
been restated to the two-for-one stock split effected in the form of a stock dividend
paid August 29, 2003.(4)
    
    At period end.(5)
    
    Total loans include loans held for sale.(6)
    
    Net of unearned discounts but before deduction of allowance for loan losses.(7)
    
    Reflects the common stock offering and repurchases of common shares in 2005. Please
see Capital Resources on page 19 and Note 11 to the Consolidated Financial
Statements.(8)
    
    The efficiency ratio = noninterest expenses/(net interest income + total noninterest
income) as shown on the Consolidated Statements of Operations.(9)
    
    Ratio = year-to-date average assets divided by the number of full-time equivalent
employees at year-end.(10)
    
    Nonperforming loans consist of nonaccrual loans, loans contractually past due 90 days
or more and loans with restructured terms.(11)
    
    Nonperforming assets consist of nonperforming loans and other real estate owned. SECURITIES LISTING, PRICES, AND DIVIDENDS
 Stock Listing
  Transfer Agent and Registrar
 
 2




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##### 



Recent Stock Prices, Dividends, and Equity Compensation Plan Information
       2007
    
    2006Dividend
    
    
    
    
    
    
    
    
    
    DividendHigh
    
    Low
    
    Declared
    
    High
    
    Low
    
    DeclaredFor the Quarter Ending:March 31
    
    $
    28.63
    
    
    $
    24.26
    
    
    $
    0.0925
    
    
    $
    22.96
    
    
    $
    19.81
    
    
    $
    0.0825June 30
    
    
    27.85
    
    
    
    23.55
    
    
    
    0.0925
    
    
    
    25.76
    
    
    
    21.27
    
    
    
    0.0825September 30
    
    
    25.16
    
    
    
    18.00
    
    
    
    0.0925
    
    
    
    27.01
    
    
    
    24.16
    
    
    
    0.0825December 31
    
    
    21.43
    
    
    
    16.10
    
    
    
    0.0925
    
    
    
    28.67
    
    
    
    24.76
    
    
    
    0.0825
 3




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##### 







12/31/02
    
    12/31/03
    
    12/31/04
    
    12/31/05
    
    12/31/06
    
    12/31/07Southwest
    
    $
    100
    
    
    $
    141
    
    
    $
    197
    
    
    $
    163
    
    
    $
    230
    
    
    $
    154NASDAQ Bank Index
    
    
    100
    
    
    
    129
    
    
    
    147
    
    
    
    147
    
    
    
    161
    
    
    
    128NASDAQ Stock Market
Index (U.S.).
    
    
    100
    
    
    
    150
    
    
    
    163
    
    
    
    174
    
    
    
    183
    
    
    
    198
  Equity Compensation Plan Information
 Number ofsecuritiesNumber of
    
    
    
    
    
    remaining availablesecurities to be
    
    
    
    
    
    for future issuanceissued upon
    
    Weighted average
    
    under equityexercise of
    
    exercise price of
    
    compensation plansoutstanding
    
    outstanding
    
    excludingoptions, warrants
    
    options, warrants
    
    securitiesand rights
    
    and rights
    
    reflected in column(a)Plan category
    
    (a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    
    883,770
    
    
    $
    15.56
    
    
    
    414,725Equity compensation
plans not approved
by security holders
    
    
    0
    
    
    
    0
    
    
    
    0Total
    
    
    883,770
    
    
    $
    15.56
    
    
    
    414,725
 4




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##### 







MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 Overview
  
    
    Net income for 2007 was $21.4 million, down from $26.0 million in 2006 and up from $21.0
million in 2005.
    
    Diluted earnings per common share decreased to $1.46 in 2007, compared to $1.79 in 2006,
and $1.55 in 2005.
    
    Total loans grew to $2.21 billion at December 31, 2007, compared to $1.79 billion at
December 31, 2006, and $1.74 billion at December 31, 2005.
    
    Total shareholders equity at year-end 2007 increased 10% to $217.6 million compared to
$197.5 million for 2006 and $170.4 million for 2005.
    
    Total assets at year-end 2007 increased 18%, ending the year at $2.56 billion compared
to $2.17 billion at year-end 2006, and $2.10 billion at year-end 2005.
    
    Portfolio loans at year-end 2007 increased by $542.8 million, or 34% to $2.15 billion at
December 31, 2007, compared to $1.60 billion at December 31, 2006, and $1.35 billion at
December 31, 2005.
 Results of Operations
     5




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##### 



Summary of Annual Changes in Selected Consolidated Financial Data
  2007 Change
    
    
    
    
    
    2006 Change
    
    
    
    
    
    2005 Change(Dollars in thousands, except per share data)
    
    2007
    
    From 2006
    
    2006
    
    From 2005
    
    2005
    
    From 2004Operations DataInterest income
    
    $
    177,068
    
    
    $
    7,308
    
    
    $
    169,760
    
    
    $
    32,416
    
    
    $
    137,344
    
    
    $
    32,621Interest expense
    
    
    84,588
    
    
    
    7,666
    
    
    
    76,922
    
    
    
    24,684
    
    
    
    52,238
    
    
    
    19,992Net interest income
    
    
    92,480
    
    
    
    (358
    )
    
    
    92,838
    
    
    
    7,732
    
    
    
    85,106
    
    
    
    12,629Provision for loan losses
    
    
    8,581
    
    
    
    (2,984
    )
    
    
    11,565
    
    
    
    (4,220
    )
    
    
    15,785
    
    
    
    2,917Gain on sales of loans and securities
    
    
    4,923
    
    
    
    1,234
    
    
    
    3,689
    
    
    
    (1,226
    )
    
    
    4,915
    
    
    
    1,730Noninterest income
    
    
    11,627
    
    
    
    (1,460
    )
    
    
    13,087
    
    
    
    596
    
    
    
    12,491
    
    
    
    1,591Noninterest expenses
    
    
    65,474
    
    
    
    8,831
    
    
    
    56,643
    
    
    
    4,770
    
    
    
    51,873
    
    
    
    7,347Income before taxes
    
    
    34,975
    
    
    
    (6,431
    )
    
    
    41,406
    
    
    
    6,552
    
    
    
    34,854
    
    
    
    5,686Taxes on income
    
    
    13,597
    
    
    
    (1,812
    )
    
    
    15,409
    
    
    
    1,569
    
    
    
    13,840
    
    
    
    3,301Net income
    
    $
    21,378
    
    
    $
    (4,619
    )
    
    $
    25,997
    
    
    $
    4,983
    
    
    $
    21,014
    
    
    $
    2,385Per Share DataBasic earnings per common share
    
    $
    1.49
    
    
    $
    (0.35
    )
    
    $
    1.84
    
    
    $
    0.24
    
    
    $
    1.60
    
    
    $
    0.06Diluted earnings per common share
    
    
    1.46
    
    
    
    (0.33
    )
    
    
    1.79
    
    
    
    0.24
    
    
    
    1.55
    
    
    
    0.07Financial Condition Data  AveragesInvestment securities
    
    $
    276,867
    
    
    $
    6,515
    
    
    $
    270,352
    
    
    $
    25,266
    
    
    $
    245,086
    
    
    $
    30,098Total loans
    
    
    1,922,867
    
    
    
    91,871
    
    
    
    1,830,996
    
    
    
    96,495
    
    
    
    1,734,501
    
    
    
    206,566Interest-earning assets
    
    
    2,204,870
    
    
    
    100,180
    
    
    
    2,104,690
    
    
    
    121,353
    
    
    
    1,983,337
    
    
    
    239,351Total assets
    
    
    2,279,425
    
    
    
    84,330
    
    
    
    2,195,095
    
    
    
    119,314
    
    
    
    2,075,781
    
    
    
    265,857Interest-bearing deposits
    
    
    1,595,366
    
    
    
    97,233
    
    
    
    1,498,133
    
    
    
    65,120
    
    
    
    1,433,013
    
    
    
    252,043Total deposits
    
    
    1,839,825
    
    
    
    112,012
    
    
    
    1,727,813
    
    
    
    89,302
    
    
    
    1,638,511
    
    
    
    283,175Other borrowings
    
    
    161,684
    
    
    
    (52,993
    )
    
    
    214,677
    
    
    
    5,574
    
    
    
    209,103
    
    
    
    (43,028
    )Subordinated debentures
    
    
    46,393
    
    
    
    
    
    
    
    46,393
    
    
    
    (12,293
    )
    
    
    58,686
    
    
    
    (13,494
    )Total shareholders equity
    
    
    209,885
    
    
    
    24,068
    
    
    
    185,817
    
    
    
    33,363
    
    
    
    152,454
    
    
    
    34,542Selected RatiosReturn on average assets
    
    
    0.94
    %
    
    
    (0.24
    )%
    
    
    1.18
    %
    
    
    0.17
    %
    
    
    1.01
    %
    
    
    (0.02
    )%Return on average equity
    
    
    10.19
    
    
    
    (3.80
    )
    
    
    13.99
    
    
    
    0.21
    
    
    
    13.78
    
    
    
    (2.02
    )Net interest margin
    
    
    4.19
    
    
    
    (0.22
    )
    
    
    4.41
    
    
    
    0.12
    
    
    
    4.29
    
    
    
    0.13Asset Quality RatiosAllowance for loan losses to total loans
    
    
    1.34
    %
    
    
    (0.18
    )%
    
    
    1.52
    %
    
    
    0.15
    %
    
    
    1.37
    %
    
    
    0.20
    %Nonperforming loans to total loans
    
    
    1.34
    
    
    
    (0.30
    )
    
    
    1.64
    
    
    
    0.28
    
    
    
    1.36
    
    
    
    (0.07
    )Allowance for loan losses to nonperforming loans
    
    
    100.04
    
    
    
    7.07
    
    
    
    92.97
    
    
    
    (7.99
    )
    
    
    100.96
    
    
    
    18.96Nonperforming assets to total loans and
other real estate
    
    
    1.46
    
    
    
    (0.28
    )
    
    
    1.74
    
    
    
    (0.02
    )
    
    
    1.76
    
    
    
    0.04Net loan charge-offs to average total loans
    
    
    0.33
    
    
    
    (0.11
    )
    
    
    0.44
    
    
    
    (0.19
    )
    
    
    0.63
    
    
    
    0.05
 6




---



##### 



Net Interest Income
      7




---



##### 



Consolidated Average Balances, Yields and Rates
 For the Year Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Average
    
    
    
    
    
    Yield/
    
    Average
    
    
    
    
    
    Yield/
    
    Average
    
    
    
    
    
    Yield/Balance
    
    Interest
    
    Rate(1)
    
    Balance
    
    Interest
    
    Rate(1)
    
    Balance
    
    Interest
    
    Rate(1)AssetsTotal loans and leases
    
    $
    1,922,867
    
    
    $
    165,759
    
    
    
    8.62
    %
    
    $
    1,830,996
    
    
    $
    158,873
    
    
    
    8.68
    %
    
    $
    1,734,501
    
    
    $
    128,011
    
    
    
    7.38
    %Investment securities
    
    
    276,867
    
    
    
    11,055
    
    
    
    3.99
    
    
    
    270,352
    
    
    
    10,722
    
    
    
    3.97
    
    
    
    245,086
    
    
    
    9,211
    
    
    
    3.76Other interest-earning assets
    
    
    5,136
    
    
    
    254
    
    
    
    4.95
    
    
    
    3,342
    
    
    
    165
    
    
    
    4.94
    
    
    
    3,750
    
    
    
    122
    
    
    
    3.25Total interest-earning assets
    
    
    2,204,870
    
    
    
    177,068
    
    
    
    8.03
    
    
    
    2,104,690
    
    
    
    169,760
    
    
    
    8.07
    
    
    
    1,983,337
    
    
    
    137,344
    
    
    
    6.92Other assets
    
    
    74,555
    
    
    
    
    
    
    
    
    
    
    
    90,405
    
    
    
    
    
    
    
    
    
    
    
    92,444Total assets
    
    $
    2,279,425
    
    
    
    
    
    
    
    
    
    
    $
    2,195,095
    
    
    
    
    
    
    
    
    
    
    $
    2,075,781Liabilities and Shareholders EquityInterest-bearing demand deposits
    
    $
    62,038
    
    
    $
    355
    
    
    
    0.57
    %
    
    $
    56,984
    
    
    $
    282
    
    
    
    0.49
    %
    
    $
    58,243
    
    
    $
    267
    
    
    
    0.46
    %Money market accounts
    
    
    449,266
    
    
    
    19,664
    
    
    
    4.38
    
    
    
    384,470
    
    
    
    16,020
    
    
    
    4.17
    
    
    
    392,554
    
    
    
    10,727
    
    
    
    2.73Savings accounts
    
    
    12,274
    
    
    
    87
    
    
    
    0.71
    
    
    
    9,734
    
    
    
    50
    
    
    
    0.51
    
    
    
    8,631
    
    
    
    21
    
    
    
    0.24Time deposits
    
    
    1,071,788
    
    
    
    53,033
    
    
    
    4.95
    
    
    
    1,046,945
    
    
    
    46,750
    
    
    
    4.47
    
    
    
    973,585
    
    
    
    29,767
    
    
    
    3.06Total interest-bearing deposits
    
    
    1,595,366
    
    
    
    73,139
    
    
    
    4.58
    
    
    
    1,498,133
    
    
    
    63,102
    
    
    
    4.21
    
    
    
    1,433,013
    
    
    
    40,782
    
    
    
    2.85Other borrowings
    
    
    161,684
    
    
    
    7,555
    
    
    
    4.67
    
    
    
    214,677
    
    
    
    10,023
    
    
    
    4.67
    
    
    
    209,103
    
    
    
    7,343
    
    
    
    3.51Subordinated debentures
    
    
    46,393
    
    
    
    3,894
    
    
    
    8.39
    
    
    
    46,393
    
    
    
    3,797
    
    
    
    8.18
    
    
    
    58,686
    
    
    
    4,113
    
    
    
    7.01Total interest-bearing liabilities
    
    
    1,803,443
    
    
    
    84,588
    
    
    
    4.69
    
    
    
    1,759,203
    
    
    
    76,922
    
    
    
    4.37
    
    
    
    1,700,802
    
    
    
    52,238
    
    
    
    3.07Noninterest-bearing demand deposits
    
    
    244,459
    
    
    
    
    
    
    
    
    
    
    
    229,680
    
    
    
    
    
    
    
    
    
    
    
    205,498Other liabilities
    
    
    21,638
    
    
    
    
    
    
    
    
    
    
    
    20,395
    
    
    
    
    
    
    
    
    
    
    
    17,027Shareholders equity
    
    
    209,885
    
    
    
    
    
    
    
    
    
    
    
    185,817
    
    
    
    
    
    
    
    
    
    
    
    152,454Total liabilities and
shareholders equity
    
    $
    2,279,425
    
    
    
    
    
    
    
    
    
    
    $
    2,195,095
    
    
    
    
    
    
    
    
    
    
    $
    2,075,781Net interest income
    
    
    
    
    
    $
    92,480
    
    
    
    
    
    
    
    
    
    
    $
    92,838
    
    
    
    
    
    
    
    
    
    
    $
    85,106Interest rate spread
    
    
    
    
    
    
    
    
    
    
    3.34
    %
    
    
    
    
    
    
    
    
    
    
    3.70
    %
    
    
    
    
    
    
    
    
    
    
    3.85
    %Net interest margin (2)
    
    
    
    
    
    
    
    
    
    
    4.19
    %
    
    
    
    
    
    
    
    
    
    
    4.41
    %
    
    
    
    
    
    
    
    
    
    
    4.29
    %Ratio of average interest-earning assets to average
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    122.26
    %
    
    
    
    
    
    
    
    
    
    
    119.64
    %
    
    
    
    
    
    
    
    
    
    
    116.61
    %
 (1)
    
    Yields, interest rate spreads, and net interest margins are calculated using income recorded
in accordance with accounting principles generally accepted in the United States (GAAP), and
are not shown on the higher, non-GAAP tax-equivalent basis.(2)
    
    Net interest margin = net interest income / total average interest-earning assets.
 8




---



##### 



Effect of Volume and Rate Changes on Net Interest Income
 2007 vs. 2006
    
    
    2006 vs. 2005Increase
    
    
    Due to Change
    
    
    Increase
    
    
    Due to ChangeOr
    
    
    In Average:
    
    
    Or
    
    
    In Average:(Dollars in thousands)
    
    (Decrease)
    
    
    Volume
    
    
    Rate
    
    
    (Decrease)
    
    
    Volume
    
    
    RateInterest earned on:Loans receivable (1)
    
    $
    6,886
    
    
    $
    7,926
    
    
    $
    (1,040
    )
    
    $
    30,862
    
    
    $
    7,423
    
    
    $
    23,439Investment securities
    
    
    333
    
    
    
    260
    
    
    
    73
    
    
    
    1,511
    
    
    
    984
    
    
    
    527Other interest-earning assets
    
    
    89
    
    
    
    89
    
    
    
    
    
    
    
    43
    
    
    
    (14
    )
    
    
    57Total interest income
    
    
    7,308
    
    
    
    8,048
    
    
    
    (740
    )
    
    
    32,416
    
    
    
    8,779
    
    
    
    23,637Interest paid on:Interest-bearing demand
    
    
    73
    
    
    
    26
    
    
    
    47
    
    
    
    15
    
    
    
    (6
    )
    
    
    21Money market accounts
    
    
    3,644
    
    
    
    2,805
    
    
    
    839
    
    
    
    5,293
    
    
    
    (225
    )
    
    
    5,518Savings accounts
    
    
    37
    
    
    
    15
    
    
    
    22
    
    
    
    29
    
    
    
    3
    
    
    
    26Time deposits
    
    
    6,283
    
    
    
    1,088
    
    
    
    5,195
    
    
    
    16,983
    
    
    
    2,494
    
    
    
    14,489Other borrowings
    
    
    (2,468
    )
    
    
    (2,476
    )
    
    
    8
    
    
    
    2,680
    
    
    
    201
    
    
    
    2,479Subordinated debentures
    
    
    97
    
    
    
    
    
    
    
    97
    
    
    
    (316
    )
    
    
    (942
    )
    
    
    626Total interest expense
    
    
    7,666
    
    
    
    1,971
    
    
    
    5,695
    
    
    
    24,684
    
    
    
    1,851
    
    
    
    22,833Net interest income
    
    $
    (358
    )
    
    $
    6,077
    
    
    $
    (6,435
    )
    
    $
    7,732
    
    
    $
    6,928
    
    
    $
    804
 
 (1)
    
    Average balances include nonaccrual loans. Fees included in interest income on loans receivable are not considered material.
Interest on tax-exempt loans and securities is not shown on a tax-equivalent basis because it is not considered material.
Changes in rate-volume (changes in rate multiplied by changes in volume) are allocated between changes in rate and changes
in volume in proportion to the relative contribution of each.
  At December 31,Dollars in thousands
    
    2007
    
    2006
    
    2005Change due to:Volume
    
    $
    6,077
    
    
    $
    6,928
    
    
    $
    10,806Rate
    
    
    (6,435
    )
    
    
    804
    
    
    
    1,823Total
    
    $
    (358
    )
    
    $
    7,732
    
    
    $
    12,629
    9




---



##### 







Provision and Allowance for Loan Losses
        10




---



##### 



Allowance for Loan and Lease Losses
 At December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005
    
    2004
    
    2003Real estate mortgage Commercial
    
    $
    10,126
    
    
    
    34
    %
    
    $
    9,641
    
    
    
    34
    %
    
    $
    8,186
    
    
    
    32
    %
    
    $
    6,430
    
    
    
    32
    %
    
    $
    5,297
    
    
    
    31
    %One to four family
residential
    
    
    693
    
    
    
    5
    
    
    
    492
    
    
    
    5
    
    
    
    584
    
    
    
    5
    
    
    
    724
    
    
    
    5
    
    
    
    319
    
    
    
    6Real estate construction
    
    
    5,649
    
    
    
    33
    
    
    
    1,790
    
    
    
    25
    
    
    
    1,547
    
    
    
    17
    
    
    
    1,008
    
    
    
    15
    
    
    
    1,179
    
    
    
    18Commercial
    
    
    10,369
    
    
    
    23
    
    
    
    12,321
    
    
    
    24
    
    
    
    10,922
    
    
    
    22
    
    
    
    6,898
    
    
    
    24
    
    
    
    6,451
    
    
    
    27Installment and consumer Guaranteed student loans
    
    
    31
    
    
    
    3
    
    
    
    90
    
    
    
    10
    
    
    
    189
    
    
    
    22
    
    
    
    175
    
    
    
    22
    
    
    
    105
    
    
    
    16Other
    
    
    804
    
    
    
    2
    
    
    
    536
    
    
    
    2
    
    
    
    311
    
    
    
    2
    
    
    
    648
    
    
    
    2
    
    
    
    362
    
    
    
    2Unallocated
    
    
    1,912
    
    
    
    
    
    
    
    2,423
    
    
    
    
    
    
    
    2,073
    
    
    
    
    
    
    
    3,108
    
    
    
    
    
    
    
    1,296
    
    
    
    Total
    
    $
    29,584
    
    
    
    100
    %
    
    $
    27,293
    
    
    
    100
    %
    
    $
    23,812
    
    
    
    100
    %
    
    $
    18,991
    
    
    
    100
    %
    
    $
    15,009
    
    
    
    100
    %
 11




---



##### 



Analysis of Loans and Leases
 For the Year Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005
    
    2004
    
    2003Balance at beginning of period
    
    $
    27,293
    
    
    $
    23,812
    
    
    $
    18,991
    
    
    $
    15,009
    
    
    $
    11,163Loans charged-off:Real estate mortgage
    
    
    1,877
    
    
    
    708
    
    
    
    2,872
    
    
    
    812
    
    
    
    717Real estate construction
    
    
    129
    
    
    
    445
    
    
    
    155
    
    
    
    275
    
    
    
    3Commercial
    
    
    4,579
    
    
    
    7,393
    
    
    
    8,587
    
    
    
    8,382
    
    
    
    3,915Installment and consumer
    
    
    414
    
    
    
    379
    
    
    
    406
    
    
    
    565
    
    
    
    442Total charge-offs
    
    
    6,999
    
    
    
    8,925
    
    
    
    12,020
    
    
    
    10,034
    
    
    
    5,077Recoveries:Real estate mortgage
    
    
    32
    
    
    
    414
    
    
    
    186
    
    
    
    151
    
    
    
    173Real estate construction
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    Commercial
    
    
    606
    
    
    
    403
    
    
    
    706
    
    
    
    907
    
    
    
    230Installment and consumer
    
    
    71
    
    
    
    24
    
    
    
    163
    
    
    
    90
    
    
    
    112Total recoveries
    
    
    709
    
    
    
    841
    
    
    
    1,056
    
    
    
    1,148
    
    
    
    515Net loans charged-off
    
    
    6,290
    
    
    
    8,084
    
    
    
    10,964
    
    
    
    8,886
    
    
    
    4,562Provision for loan losses
    
    
    8,581
    
    
    
    11,565
    
    
    
    15,785
    
    
    
    12,868
    
    
    
    8,408Balance at end of period
    
    $
    29,584
    
    
    $
    27,293
    
    
    $
    23,812
    
    
    $
    18,991
    
    
    $
    15,009Ratio of allowance for loan losses to
total loans at end of period
    
    
    1.34
    
    
    
    1.52
    
    
    
    1.37
    
    
    
    1.17
    
    
    
    1.15Ratio of net charge-offs to average
total loans during the period
    
    
    0.33
    
    
    
    0.44
    
    
    
    0.63
    
    
    
    0.58
    
    
    
    0.36
  Nonperforming Assets
 At December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005
    
    2004
    
    2003Total nonaccrual
    
    $
    19,534
    
    
    $
    26,735
    
    
    $
    22,099
    
    
    $
    22,230
    
    
    $
    14,530Total past due 90 days or more
    
    
    10,037
    
    
    
    2,622
    
    
    
    1,486
    
    
    
    929
    
    
    
    1,384Total nonperforming loans
    
    
    29,571
    
    
    
    29,357
    
    
    
    23,585
    
    
    
    23,159
    
    
    
    15,914Other real estate owned
    
    
    2,679
    
    
    
    1,873
    
    
    
    7,130
    
    
    
    4,937
    
    
    
    1,699Total nonperforming assets
    
    $
    32,250
    
    
    $
    31,230
    
    
    $
    30,715
    
    
    $
    28,096
    
    
    $
    17,613Nonperforming assets to loans and
other real estate owned
    
    
    1.46
    %
    
    
    1.74
    %
    
    
    1.76
    %
    
    
    1.72
    %
    
    
    1.34
    %Nonperforming loans to total loans
    
    
    1.34
    %
    
    
    1.64
    %
    
    
    1.36
    %
    
    
    1.43
    %
    
    
    1.22
    %Allowance for loan losses to
nonperforming loans
    
    
    100.04
    %
    
    
    92.97
    %
    
    
    100.96
    %
    
    
    82.00
    %
    
    
    94.31
    %Government-guaranteed portion of
nonperforming loans
    
    $
    1,337
    
    
    $
    1,629
    
    
    $
    1,602
    
    
    $
    1,458
    
    
    $
    2,694
 12




---



##### 



Noninterest Income
  COMPARISON SUMMARY-NONINTEREST INCOME
 2007 Change
    
    
    
    
    
    2006 Change(Dollars in thousands)
    
    2007
    
    From 2006
    
    2006
    
    From 2005
    
    2005Service charges and fees
    
    $
    9,920
    
    
    $
    (1,572
    )
    
    $
    11,492
    
    
    $
    547
    
    
    $
    10,945Other Noninterest income
    
    
    1,707
    
    
    
    112
    
    
    
    1,595
    
    
    
    49
    
    
    
    1,546Gain on sales of loans
    
    
    3,339
    
    
    
    (99
    )
    
    
    3,438
    
    
    
    (1,477
    )
    
    
    4,915Gain on sales of investment
securities
    
    
    1,584
    
    
    
    1,333
    
    
    
    251
    
    
    
    251
    
    
    
    Total noninterest income
    
    $
    16,550
    
    
    $
    (226
    )
    
    $
    16,776
    
    
    $
    (630
    )
    
    $
    17,406
    13




---



##### 



Noninterest expense
  COMPARISON SUMMARY-NONINTEREST EXPENSE
 2007 Change
    
    
    
    
    
    2006 Change(Dollars in thousands)
    
    2007
    
    From 2006
    
    2006
    
    From 2005
    
    2005Salaries and employee benefits
    
    $
    35,287
    
    
    $
    4,390
    
    
    $
    30,897
    
    
    $
    5,612
    
    
    $
    25,285Occupancy
    
    
    9,845
    
    
    
    (345
    )
    
    
    10,190
    
    
    
    280
    
    
    
    9,910FDIC and other insurance
    
    
    622
    
    
    
    111
    
    
    
    511
    
    
    
    25
    
    
    
    486Other real estate, net
    
    
    (58
    )
    
    
    (344
    )
    
    
    286
    
    
    
    (685
    )
    
    
    971Provision for unfunded loan
commitments
    
    
    1,129
    
    
    
    1,091
    
    
    
    38
    
    
    
    (899
    )
    
    
    937General and administrative
    
    
    18,649
    
    
    
    3,928
    
    
    
    14,721
    
    
    
    437
    
    
    
    14,284Total noninterest expense
    
    $
    65,474
    
    
    $
    8,831
    
    
    $
    56,643
    
    
    $
    4,770
    
    
    $
    51,873
      14




---



##### 



Operating Segments
 CONTRIBUTION OF OPERATING SEGMENTS
 FOR THE YEAR ENDED DECEMBER 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Oklahoma banking
    
    $
    17,285
    
    
    $
    15,404
    
    
    $
    11,875Other states banking
    
    
    8,224
    
    
    
    6,239
    
    
    
    3,387Secondary market
    
    
    1,097
    
    
    
    6,067
    
    
    
    9,516Other operations
    
    
    (5,228
    )
    
    
    (1,713
    )
    
    
    (3,764
    )Consolidated net income
    
    $
    21,378
    
    
    $
    25,997
    
    
    $
    21,014Oklahoma banking
    
    $
    1,039,001
    
    
    $
    912,862
    
    
    $
    836,850Other states banking
    
    
    1,106,556
    
    
    
    689,864
    
    
    
    518,708Secondary market
    
    
    66,275
    
    
    
    188,464
    
    
    
    380,346Other operations
    
    
    
    
    
    
    
    
    
    
    (24
    )Consolidated total loans
    
    $
    2,211,832
    
    
    $
    1,791,190
    
    
    $
    1,735,880Oklahoma banking
    
    $
    1,048,633
    
    
    $
    918,815
    
    
    $
    843,584Other states banking
    
    
    1,119,396
    
    
    
    694,346
    
    
    
    516,212Secondary market
    
    
    71,843
    
    
    
    201,131
    
    
    
    397,940Other operations
    
    
    324,426
    
    
    
    356,336
    
    
    
    341,903Consolidated total assets
    
    $
    2,564,298
    
    
    $
    2,170,628
    
    
    $
    2,099,639Oklahoma banking
    
    $
    1,278,954
    
    
    $
    1,161,549
    
    
    $
    1,056,936Other states banking
    
    
    247,807
    
    
    
    160,603
    
    
    
    87,275Secondary market
    
    
    1,346
    
    
    
    763
    
    
    
    2,872Other operations
    
    
    530,472
    
    
    
    442,696
    
    
    
    510,737Consolidated total deposits
    
    $
    2,058,579
    
    
    $
    1,765,611
    
    
    $
    1,657,820
     15




---



##### 



Taxes on Income
  Financial Condition
    16




---



##### 



Analysis of Securities
 At December 31,(Dollars in thousands)
    
    2007
    
    
    2006
    
    
    2005U.S. Government obligations
    
    $
    1,000
    
    
    $
    993
    
    
    $
    1,990Federal agency securities
    
    
    189,127
    
    
    
    221,391
    
    
    
    225,120Obligations of states and political subdivisions
    
    
    9,171
    
    
    
    2,854
    
    
    
    3,457Mortgage-backed securities
    
    
    38,347
    
    
    
    24,453
    
    
    
    22,186Other securities
    
    
    18,667
    
    
    
    20,158
    
    
    
    15,339Total investment securities
    
    $
    256,312
    
    
    $
    269,849
    
    
    $
    268,093Available for sale (fair value)
    
    $
    237,358
    
    
    $
    255,904
    
    
    $
    256,751Held to maturity (amortized cost)
    
    
    5,838
    
    
    
    1,630
    
    
    
    1,538Federal Reserve Bank and Federal Home
Loan Bank Stock
    
    
    13,116
    
    
    
    12,315
    
    
    
    9,804Total investment securities
    
    $
    256,312
    
    
    $
    269,849
    
    
    $
    268,093
   17




---



##### 



Maturity Table for Investment Securities
 One Year
    
    
    Two through
    
    
    Six through
    
    
    More than
    
    
    Total Investmentor Less
    
    
    Five Years
    
    
    Ten Years
    
    
    Ten Years
    
    
    Securities(Dollars in thousands)
    
    Cost
    
    
    Yield
    
    
    Cost
    
    
    Yield
    
    
    Cost
    
    
    Yield
    
    
    Cost
    
    
    Yield
    
    
    Cost
    
    
    Market
    
    
    YieldHeld to Maturity:U.S. government
obligations
    
    $
    1,000
    
    
    
    4.85
    %
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    1,000
    
    
    $
    1,009
    
    
    
    4.85
    %Obligations of states and
political subdivisions
    
    
    
    
    
    
    
    
    
    
    4,838
    
    
    
    3.57
    %
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    %
    
    
    4,838
    
    
    
    4,829
    
    
    
    3.57
    %Total
    
    $
    1,000
    
    
    
    4.85
    %
    
    $
    4,838
    
    
    
    3.57
    %
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    5,838
    
    
    $
    5,838
    
    
    
    3.79
    %Note: Averate yield for investments held for sale is based on amortized costAvailable for Sale:Federal agency securities
    
    $
    157,744
    
    
    
    3.63
    %
    
    $
    31,698
    
    
    
    4.61
    %
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    189,442
    
    
    $
    189,127
    
    
    
    3.79
    %Obligations of states and
political subdivisions
    
    
    1,507
    
    
    
    3.92
    %
    
    
    2,812
    
    
    
    3.54
    %
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    %
    
    
    4,319
    
    
    
    4,333
    
    
    
    3.67
    %Mortgage-backed
securities
    
    
    6,407
    
    
    
    3.98
    %
    
    
    29,409
    
    
    
    5.26
    %
    
    
    2,267
    
    
    
    4.74
    %
    
    
    17
    
    
    
    2.98
    %
    
    
    38,100
    
    
    
    38,347
    
    
    
    5.01
    %Other securities
    
    
    
    
    
    
    
    %
    
    
    17,962
    
    
    
    
    %
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    %
    
    
    17,962
    
    
    
    18,667
    
    
    
    0.00
    %Total
    
    $
    165,658
    
    
    
    3.64
    %
    
    $
    81,881
    
    
    
    3.79
    %
    
    $
    2,267
    
    
    
    4.74
    %
    
    $
    17
    
    
    
    2.98
    %
    
    $
    249,823
    
    
    $
    250,474
    
    
    
    3.70
    %Total
    
    $
    166,658
    
    
    
    
    
    
    $
    86,719
    
    
    
    
    
    
    $
    2,267
    
    
    
    
    
    
    $
    17
    
    
    
    
    
    
    $
    255,661
    
    
    $
    256,312
    18




---



##### 



Trends in the Composition of the Loan Portfolio
 At December 31,(Dollars in thousands)
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Real estate mortgage Commercial
    
    $
    750,047
    
    
    $
    609,271
    
    
    $
    563,074
    
    
    $
    523,358
    
    
    $
    402,596One to four family
residential
    
    
    111,085
    
    
    
    91,441
    
    
    
    93,478
    
    
    
    87,858
    
    
    
    83,250Real estate construction
    
    
    724,929
    
    
    
    453,750
    
    
    
    299,344
    
    
    
    248,278
    
    
    
    230,292Commercial
    
    
    521,501
    
    
    
    424,189
    
    
    
    374,101
    
    
    
    390,272
    
    
    
    355,965Installment and consumer Guaranteed student loans
    
    
    61,555
    
    
    
    181,458
    
    
    
    377,110
    
    
    
    348,970
    
    
    
    211,546Other
    
    
    42,715
    
    
    
    31,081
    
    
    
    28,773
    
    
    
    25,139
    
    
    
    25,1872,211,832
    
    
    
    1,791,190
    
    
    
    1,735,880
    
    
    
    1,623,875
    
    
    
    1,308,836Less: Allowance for loan
losses
    
    
    (29,584
    )
    
    
    (27,293
    )
    
    
    (23,812
    )
    
    
    (18,991
    )
    
    
    (15,009
    )Total loans, net
    
    $
    2,182,248
    
    
    $
    1,763,897
    
    
    $
    1,712,068
    
    
    $
    1,604,884
    
    
    $
    1,293,827
  Capital Resources
    19




---



##### 



Liquidity
   (Dollars in thousands)
    
    AmountThree months or less(1)
    
    $
    41,239Over three through six months(1)
    
    
    94,023Over six through 12 months(1)
    
    
    459,763Over 12 months
    
    
    95,960Total
    
    $
    690,985
 
 (1)
    
    The amount of certificates of deposit of
$100,000 and more that mature within 12 months is
$595.0 million. Percentage of Total Average AssetsSources and uses of funds
    
    2007
    
    2006
    
    2005Sources of Funds:Deposits:Noninterest-bearing demand
    
    
    10.72
    %
    
    
    10.46
    %
    
    
    9.90
    %Interest-bearing demand and money market accounts
    
    
    22.43
    
    
    
    20.11
    
    
    
    21.72Time and savings deposits
    
    
    47.56
    
    
    
    48.14
    
    
    
    47.32Other borrowings
    
    
    7.09
    
    
    
    9.78
    
    
    
    10.07Subordinated debentures
    
    
    2.04
    
    
    
    2.11
    
    
    
    2.83Other liabilities
    
    
    0.95
    
    
    
    0.93
    
    
    
    0.82Equity capital
    
    
    9.21
    
    
    
    8.47
    
    
    
    7.34Total
    
    
    100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %Uses of Funds:Loans
    
    
    84.36
    %
    
    
    83.41
    %
    
    
    83.56
    %Investment securities
    
    
    12.15
    
    
    
    12.32
    
    
    
    11.81Other interest-earning assets
    
    
    0.22
    
    
    
    0.15
    
    
    
    0.18Noninterest-earning assets
    
    
    3.27
    
    
    
    4.12
    
    
    
    4.45Total
    
    
    100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %
  20




---



##### 



21




---



##### 



Asset/Liability Management and Quantitative and Qualitative Disclosures about Market Risk
    22




---



##### 



0 to 3
    
    4 to 12
    
    Over 1 to
    
    Over(Dollars in thousands)
    
    Months
    
    Months
    
    5 Years
    
    5 Years
    
    TotalRate-sensitive assets:Total loans
    
    $
    1,437,177
    
    
    $
    177,298
    
    
    $
    427,539
    
    
    $
    169,818
    
    
    $
    2,211,832Investment securities
    
    
    60,698
    
    
    
    119,930
    
    
    
    40,678
    
    
    
    35,006
    
    
    
    256,312Due from banks
    
    
    9,989
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,989Total
    
    
    1,507,864
    
    
    
    297,228
    
    
    
    468,217
    
    
    
    204,824
    
    
    
    2,478,133Rate-sensitive liabilities:Money market deposit accounts
    
    
    541,950
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    541,950Time deposits
    
    
    438,673
    
    
    
    624,703
    
    
    
    99,813
    
    
    
    20,018
    
    
    
    1,183,207Savings accounts
    
    
    13,032
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,032Interest-bearing demand
    
    
    63,323
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,323Other borrowings
    
    
    164,356
    
    
    
    2,500
    
    
    
    26,500
    
    
    
    25,000
    
    
    
    218,356Subordinated debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,393
    
    
    
    46,393Total
    
    
    1,221,334
    
    
    
    627,203
    
    
    
    126,313
    
    
    
    91,411
    
    
    
    2,066,261Interest sensitivity gap
    
    $
    286,530
    
    
    $
    (329,975
    )
    
    $
    341,904
    
    
    $
    113,413
    
    
    $
    411,872Cumulative interest sensitivity gap
    
    $
    286,530
    
    
    $
    (43,445
    )
    
    $
    298,459
    
    
    $
    411,872
    
    
    $
    411,872Percentage of rate-sensitive assets
to rate-sensitive liabilities
    
    
    123.46
    %
    
    
    47.39
    %
    
    
    370.68
    %
    
    
    224.07
    %
    
    
    119.93
    %Percentage of cumulative gap to
total assets
    
    
    11.17
    %
    
    
    (1.69
    )%
    
    
    11.64
    %
    
    
    16.06
    %
    
    
    16.06
    %
     23




---



##### 



Estimated Changes in Net Interest Income
 Changes in Interest Rates:
    
    +300 bp
    
    +200 bp
    
    +100 bp
    
    (100) bp
    
    (200) bp
    
    (300) bpPolicy Limit
    
    
    (18.00
    )%
    
    
    (10.00
    )%
    
    
    (5.00
    )%
    
    
    (5.00
    )%
    
    
    (10.00
    )%
    
    
    (18.00
    )%December 31, 2007
    
    
    + 9.59
    %
    
    
    + 3.87
    %
    
    
    + 2.10
    %
    
    
    (2.97
    )%
    
    
    (5.68
    )%
    
    
    (9.35
    )%December 31, 2006
    
    
    + 12.02
    %
    
    
    + 6.15
    %
    
    
    + 1.96
    %
    
    
    (2.80
    )%
    
    
    (6.56
    )%
    
    
    (11.14
    )%
   Estimated Changes in Economic Value of Equity (EVE)
 Changes in Interest Rates:
    
    +300 bp
    
    +200 bp
    
    + 100 bp
    
    (100) bp
    
    (200) bp
    
    (300) bpPolicy Limit
    
    
    (35.00
    )%
    
    
    (20.00
    )%
    
    
    (10.00
    )%
    
    
    (10.00
    )%
    
    
    (20.00
    )%
    
    
    (35.00
    )%December 31, 2007
    
    
    (9.68
    )%
    
    
    (4.31
    )%
    
    
    (0.57
    )%
    
    
    + 0.04
    %
    
    
    + 0.91
    %
    
    
    + 2.30
    %December 31, 2006
    
    
    (7.68
    )%
    
    
    (4.90
    )%
    
    
    (1.52
    )%
    
    
    + 0.97
    %
    
    
    + 1.40
    %
    
    
    + 1.10
    %
  Off-Balance Sheet Arrangements
  24




---



##### 



Consolidation of Variable Interest Entities.
 Effects of Inflation
  Contractual Obligations
  Payments due by periodLess than
    
    1-3
    
    3-5
    
    Over(Dollars in thousands)
    
    1 Year
    
    Years
    
    Years
    
    5 Years
    
    TotalDeposits without stated maturity:(1)Noninterest bearing
    
    $
    257,067
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    257,067Interest bearing
    
    
    618,305
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    618,305Time deposits(2)
    
    
    1,137,653
    
    
    
    73,425
    
    
    
    5,227
    
    
    
    22
    
    
    
    1,216,327Other borrowings(2)
    
    
    169,013
    
    
    
    8,862
    
    
    
    24,134
    
    
    
    29,449
    
    
    
    231,458Subordinated debentures(2)
    
    
    3,375
    
    
    
    6,751
    
    
    
    6,751
    
    
    
    122,789
    
    
    
    139,666Operating leases
    
    
    2,373
    
    
    
    3,807
    
    
    
    1,395
    
    
    
    51
    
    
    
    7,626Total
    
    $
    2,187,786
    
    
    $
    92,845
    
    
    $
    37,507
    
    
    $
    152,311
    
    
    $
    2,470,449
 (1)
    
    Excludes interest.(2)
    
    Includes interest. Interest on variable rate obligations is shown at rates in effect at December 31, 2007. The contractual
amounts to be paid on variable rate obligations are affected by changes in market interest rates. Future changes in market
interest rates could materially affect the contractual amounts to be paid. Accounting for
Uncertainty in Income Taxes
   25




---



##### 



Critical Accounting Policies
  Allowance
for Loan Losses
   Reserve for Unfunded Loan Commitments 
 Stock
Compensation
 26




---



##### 



Investment Securities
 Derivative
Instruments
 Non-GAAP Financial Measures
  27




---



##### 



Controls and Procedures
 Disclosure Controls and Procedures
  Internal Control Over Financial Reporting
   Fourth Quarter 2007 Changes in Internal Control over Financial Reporting
  28




---



##### 



Report on Effectiveness of Internal Control over Financial Reporting
        
 29




---



##### 



Reports of Independent Registered Public Accounting Firm
 Report on Consolidated Financial Statements
     Share-Based Payment Accounting for Uncertainty
in Income Taxes
  
 30




---



##### 



SOUTHWEST BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 AT DECEMBER 31,(Dollars in thousands)
    
    2007
    
    2006AssetsCash and due from banks
    
    $
    45,678
    
    
    $
    46,618Federal funds sold
    
    
    
    
    
    
    11,000Cash and cash equivalents
    
    $
    45,678
    
    
    $
    57,618Investment securities:Held to maturity, fair value $5,838 (2007) and $1,621 (2006)
    
    
    5,838
    
    
    
    1,630Available for sale, amortized cost $236,707 (2007) and $258,742 (2006)
    
    
    237,358
    
    
    
    255,904Federal Reserve Bank and Federal Home Loan Bank Stock, at cost
    
    
    13,116
    
    
    
    12,315Loans held for sale
    
    
    66,275
    
    
    
    188,464Loans receivable
    
    
    2,145,557
    
    
    
    1,602,726Less: Allowance for loan losses
    
    
    (29,584
    )
    
    
    (27,293
    )Net loans receivable
    
    
    2,115,973
    
    
    
    1,575,433Accrued interest receivable
    
    
    23,117
    
    
    
    24,269Premises and equipment, net
    
    
    24,323
    
    
    
    21,818Other real estate
    
    
    2,679
    
    
    
    1,873Goodwill
    
    
    7,064
    
    
    
    1,213Other intangible assets, net
    
    
    4,580
    
    
    
    3,069Other assets
    
    
    18,297
    
    
    
    27,022Total assets
    
    $
    2,564,298
    
    
    $
    2,170,628Liabilities and shareholders equityDeposits:Noninterest-bearing demand
    
    $
    257,067
    
    
    $
    254,415Interest-bearing demand
    
    
    63,323
    
    
    
    55,396Money market accounts
    
    
    541,950
    
    
    
    371,912Savings accounts
    
    
    13,032
    
    
    
    11,273Time deposits of $100,000 or more
    
    
    690,985
    
    
    
    648,664Other time deposits
    
    
    492,222
    
    
    
    423,951Total deposits
    
    
    2,058,579
    
    
    
    1,765,611Accrued interest payable
    
    
    11,441
    
    
    
    13,260Income tax payable
    
    
    1,766
    
    
    
    1,136Other liabilities
    
    
    10,154
    
    
    
    8,624Other borrowings
    
    
    218,356
    
    
    
    138,094Subordinated debentures
    
    
    46,393
    
    
    
    46,393Total liabilities
    
    
    2,346,689
    
    
    
    1,973,118Shareholders equity:Common stock  $1 par value; 20,000,000 shares authorized;
14,658,042 shares issued and outstanding
    
    
    14,658
    
    
    
    14,658Paid in capital
    
    
    46,478
    
    
    
    45,901Retained earnings
    
    
    161,482
    
    
    
    146,197Accumulated other comprehensive gain (loss)
    
    
    408
    
    
    
    (1,738
    )Treasury stock, at cost; 300,833 (2007) and 417,535 (2006)
    
    
    (5,417
    )
    
    
    (7,508
    )Total shareholders equity
    
    
    217,609
    
    
    
    197,510Total liabilities & shareholders equity
    
    $
    2,564,298
    
    
    $
    2,170,628
  31




---



##### 



SOUTHWEST BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE YEAR ENDED DECEMBER 31,(Dollars in thousands, except per share data)
    
    2007
    
    2006
    
    2005Interest income:Interest and fees on loans
    
    $
    165,759
    
    
    $
    158,873
    
    
    $
    128,011Investment securities:U.S. Government and agency obligations
    
    
    8,506
    
    
    
    8,709
    
    
    
    7,643Mortgage-backed securities
    
    
    1,444
    
    
    
    1,051
    
    
    
    625State and political subdivisions
    
    
    260
    
    
    
    115
    
    
    
    171Other securities
    
    
    845
    
    
    
    847
    
    
    
    772Federal funds sold
    
    
    254
    
    
    
    165
    
    
    
    122Total interest income
    
    
    177,068
    
    
    
    169,760
    
    
    
    137,344Interest expense:Interest-bearing demand
    
    
    355
    
    
    
    282
    
    
    
    267Money market accounts
    
    
    19,664
    
    
    
    16,020
    
    
    
    10,727Savings accounts
    
    
    87
    
    
    
    50
    
    
    
    21Time deposits of $100,000 or more
    
    
    31,231
    
    
    
    29,887
    
    
    
    19,977Other time deposits
    
    
    21,802
    
    
    
    16,863
    
    
    
    9,790Other borrowings
    
    
    7,555
    
    
    
    10,023
    
    
    
    7,343Subordinated debentures
    
    
    3,894
    
    
    
    3,797
    
    
    
    4,113Total interest expense
    
    
    84,588
    
    
    
    76,922
    
    
    
    52,238Net interest income
    
    
    92,480
    
    
    
    92,838
    
    
    
    85,106Provision for loan losses
    
    
    8,581
    
    
    
    11,565
    
    
    
    15,785Net interest income after provision for loan losses
    
    
    83,899
    
    
    
    81,273
    
    
    
    69,321Noninterest income:Service charges and fees
    
    
    9,920
    
    
    
    11,492
    
    
    
    10,945Other noninterest income
    
    
    1,707
    
    
    
    1,595
    
    
    
    1,546Gain on sales of loans
    
    
    3,339
    
    
    
    3,438
    
    
    
    4,915Gain on sales of investment securities
    
    
    1,584
    
    
    
    251
    
    
    
    Total noninterest income
    
    
    16,550
    
    
    
    16,776
    
    
    
    17,406Noninterest expense:Salaries and employee benefits
    
    
    35,287
    
    
    
    30,897
    
    
    
    25,285Occupancy
    
    
    9,845
    
    
    
    10,190
    
    
    
    9,910FDIC and other insurance
    
    
    622
    
    
    
    511
    
    
    
    486Other real estate, net
    
    
    (58
    )
    
    
    286
    
    
    
    971General and administrative
    
    
    19,778
    
    
    
    14,759
    
    
    
    15,221Total noninterest expense
    
    
    65,474
    
    
    
    56,643
    
    
    
    51,873Income before taxes
    
    
    34,975
    
    
    
    41,406
    
    
    
    34,854Taxes on income
    
    
    13,597
    
    
    
    15,409
    
    
    
    13,840Net income
    
    $
    21,378
    
    
    $
    25,997
    
    
    $
    21,014Basic earnings per common share
    
    $
    1.49
    
    
    $
    1.84
    
    
    $
    1.60Diluted earnings per common share
    
    
    1.46
    
    
    
    1.79
    
    
    
    1.55Cash dividends declared per share
    
    
    0.37
    
    
    
    0.33
    
    
    
    0.30
  32




---



##### 



SOUTHWEST BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 FOR THE YEAR ENDED DECEMBER 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Net income
    
    $
    21,378
    
    
    $
    25,997
    
    
    $
    21,014Other comprehensive income (loss):Unrealized holding gain (loss) on available for
sale securities
    
    
    5,073
    
    
    
    2,842
    
    
    
    (4,128
    )Reclassification adjustment for gains
arising during the period
    
    
    (1,584
    )
    
    
    (251
    )
    
    
    Other comprehensive income (loss), before tax
    
    
    3,489
    
    
    
    2,591
    
    
    
    (4,128
    )Tax (expense) benefit related to items
of other comprehensive income
    
    
    (1,343
    )
    
    
    (1,004
    )
    
    
    1,600Other comprehensive income (loss), net of tax
    
    
    2,146
    
    
    
    1,587
    
    
    
    (2,528
    )Comprehensive income
    
    $
    23,524
    
    
    $
    27,584
    
    
    $
    18,486
  33




---



##### 



SOUTHWEST BANCORP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 Accumulated
    
    
    
    
    
    TotalOther
    
    
    
    
    
    Share-Common Stock
    
    Paid in
    
    Retained
    
    Comprehensive
    
    Treasury
    
    holders(Dollars in thousands, except per share data)
    
    Shares
    
    Amount
    
    Capital
    
    Earnings
    
    Income (Loss)
    
    Stock
    
    EquityBalance, December 31, 2004
    
    
    12,243,042
    
    
    $
    12,243
    
    
    $
    7,993
    
    
    $
    107,905
    
    
    $
    (797
    )
    
    $
    (1,360
    )
    
    $
    125,984Cash dividends:Common, $0.30 per
share, and
other dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,037
    )
    
    
    
    
    
    
    
    
    
    
    (4,037
    )Common stock issued:Employee Stock
Option Plan
    
    
    
    
    
    
    
    
    
    
    (422
    )
    
    
    
    
    
    
    
    
    
    
    2,157
    
    
    
    1,735Employee Stock
Purchase Plan
    
    
    
    
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    70Dividend
Reinvestment Plan
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    43
    
    
    
    92Restricted Stock
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    
    
    
    
    
    
    
    
    99
    
    
    
    196Public Offering
    
    
    2,415,000
    
    
    
    2,415
    
    
    
    37,085
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,500Tax benefit related to exercise
of stock options
    
    
    
    
    
    
    
    
    
    
    834
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    834Other comprehensive loss,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,528
    )
    
    
    
    
    
    
    (2,528
    )Treasury shares purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,416
    )
    
    
    (12,416
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,014
    
    
    
    
    
    
    
    
    
    
    
    21,014Balance, December 31, 2005
    
    
    14,658,042
    
    
    
    14,658
    
    
    
    45,672
    
    
    
    124,882
    
    
    
    (3,325
    )
    
    
    (11,443
    )
    
    
    170,444Cash dividends:Common, $0.33 per
share, and
other dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,682
    )
    
    
    
    
    
    
    
    
    
    
    (4,682
    )Common stock issued:Employee Stock
Option Plan
    
    
    
    
    
    
    
    
    
    
    (1,690
    )
    
    
    
    
    
    
    
    
    
    
    3,622
    
    
    
    1,932Employee Stock
Purchase Plan
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    75Dividend
Reinvestment Plan
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    102Restricted Stock
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    178
    
    
    
    215Tax benefit related to exercise
of stock options
    
    
    
    
    
    
    
    
    
    
    1,018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,018Stock option grants
    
    
    
    
    
    
    
    
    
    
    822
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    822Other comprehensive income,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,587
    
    
    
    
    
    
    
    1,587Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,997
    
    
    
    
    
    
    
    
    
    
    
    25,997Balance, December 31, 2006
    
    
    14,658,042
    
    
    
    14,658
    
    
    
    45,901
    
    
    
    146,197
    
    
    
    (1,738
    )
    
    
    (7,508
    )
    
    
    197,510Cash dividends:Common, $0.37 per
share, and
other dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,290
    )
    
    
    
    
    
    
    
    
    
    
    (5,290
    )Common stock issued:Employee Stock
Option Plan
    
    
    
    
    
    
    
    
    
    
    (782
    )
    
    
    
    
    
    
    
    
    
    
    1,707
    
    
    
    925Employee Stock
Purchase Plan
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    76
    
    
    
    96Dividend
Reinvestment Plan
    
    
    
    
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    71
    
    
    
    94Restricted Stock
    
    
    
    
    
    
    
    
    
    
    108
    
    
    
    
    
    
    
    
    
    
    
    237
    
    
    
    345Adjustment related to adoption
of FIN 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (803
    )
    
    
    
    
    
    
    
    
    
    
    (803
    )Tax benefit related to exercise
of stock options
    
    
    
    
    
    
    
    
    
    
    474
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    474Stock option grants
    
    
    
    
    
    
    
    
    
    
    734
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    734Other comprehensive income,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,146
    
    
    
    
    
    
    
    2,146Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,378
    
    
    
    
    
    
    
    
    
    
    
    21,378Balance, December 31, 2007
    
    
    14,658,042
    
    
    $
    14,658
    
    
    $
    46,478
    
    
    $
    161,482
    
    
    $
    408
    
    
    $
    (5,417
    )
    
    $
    217,609
  34




---



##### 



SOUTHWEST BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE YEAR ENDED DECEMBER 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Operating activities:Net income
    
    $
    21,378
    
    
    $
    25,997
    
    
    $
    21,014Adjustments to reconcile net income to net
cash provided by operating activities:Provision for loan losses
    
    
    8,581
    
    
    
    11,565
    
    
    
    15,785Deferred taxes
    
    
    (839
    )
    
    
    (2,279
    )
    
    
    (1,252
    )Fixed asset depreciation and amortization
    
    
    2,812
    
    
    
    2,940
    
    
    
    2,610Securities premium amortization (discount
accretion), net
    
    
    (205
    )
    
    
    43
    
    
    
    135Amortization of intangibles
    
    
    646
    
    
    
    493
    
    
    
    379Stock based compensation
    
    
    959
    
    
    
    973
    
    
    
    Tax benefit from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    834Net gain on sale/call of investment securities
    
    
    (1,584
    )
    
    
    (251
    )
    
    
    Net gain on sales of loans
    
    
    (3,339
    )
    
    
    (3,438
    )
    
    
    (4,915
    )Net loss on sales of premises/equipment
    
    
    11
    
    
    
    210
    
    
    
    20Net (gain) loss on other real estate owned
    
    
    (11
    )
    
    
    (220
    )
    
    
    27Proceeds from sales of residential mortgage loans
    
    
    55,274
    
    
    
    74,424
    
    
    
    89,238Residential mortgage loans originated for resale
    
    
    (54,276
    )
    
    
    (76,079
    )
    
    
    (87,808
    )Proceeds from sales of student loans
    
    
    271,798
    
    
    
    779,728
    
    
    
    778,196Student loans originated for resale
    
    
    (149,629
    )
    
    
    (581,880
    )
    
    
    (817,477
    )Net changes in assets and liabilities:Accrued interest receivable
    
    
    1,396
    
    
    
    (9,716
    )
    
    
    709Other assets
    
    
    5,884
    
    
    
    (614
    )
    
    
    233Income taxes payable
    
    
    1,104
    
    
    
    1,866
    
    
    
    (1,978
    )Excess tax benefit from share-based payment arrangements
    
    
    (474
    )
    
    
    (1,018
    )
    
    
    Accrued interest payable
    
    
    (2,159
    )
    
    
    4,263
    
    
    
    4,042Other liabilities
    
    
    51
    
    
    
    (2,770
    )
    
    
    2,706Net cash provided by operating activities
    
    
    157,378
    
    
    
    224,237
    
    
    
    2,498Investing activities:Proceeds from sales of available for sale securities
    
    
    10,204
    
    
    
    20,216
    
    
    
    Proceeds from principal repayments, calls and maturities:Held to maturity securities
    
    
    
    
    
    
    1,000
    
    
    
    1,995Available for sale securities
    
    
    55,212
    
    
    
    8,989
    
    
    
    9,009Proceeds from redemptions of Federal Home Loan Bank stock
    
    
    
    
    
    
    
    
    
    
    4,629Purchases of Federal Home Loan Bank stock and Federal Reserve
Bank stock
    
    
    (801
    )
    
    
    (2,511
    )
    
    
    (969
    )Purchases of held to maturity securities
    
    
    (4,202
    )
    
    
    (1,095
    )
    
    
    (528
    )Purchases of available for sale securities
    
    
    (22,096
    )
    
    
    (10,490
    )
    
    
    (66,439
    )Loans originated and principal repayments, net
    
    
    (504,969
    )
    
    
    (243,716
    )
    
    
    (87,456
    )Net acquisition Bank of Kansas (2007), McMullen Bank (2006)
    
    
    (4,057
    )
    
    
    (182
    )
    
    
    Purchases of premises and equipment
    
    
    (3,287
    )
    
    
    (2,915
    )
    
    
    (3,424
    )Proceeds from sales of premises and equipment
    
    
    63
    
    
    
    337
    
    
    
    90Proceeds from sales of other real estate owned
    
    
    469
    
    
    
    6,072
    
    
    
    5,013Net cash used in investing activities
    
    
    (473,464
    )
    
    
    (224,295
    )
    
    
    (138,080
    )Financing activities:Net increase in deposits
    
    
    227,431
    
    
    
    75,245
    
    
    
    157,762Net increase (decrease) in other borrowings
    
    
    80,262
    
    
    
    (66,414
    )
    
    
    4,443Net proceeds from issuance of common stock
    
    
    1,115
    
    
    
    2,109
    
    
    
    41,593Redemption of subordinated debentures
    
    
    
    
    
    
    
    
    
    
    (25,787
    )Purchases of treasury stock
    
    
    
    
    
    
    
    
    
    
    (12,416
    )Excess tax benefit from share-based payment arrangements
    
    
    474
    
    
    
    1,018
    
    
    
    Common stock dividends paid
    
    
    (5,136
    )
    
    
    (4,559
    )
    
    
    (3,833
    )Net cash provided from financing activities
    
    
    304,146
    
    
    
    7,399
    
    
    
    161,762Net increase (decrease) in cash and cash equivalents
    
    
    (11,940
    )
    
    
    7,341
    
    
    
    26,180Cash and cash equivalents,Beginning of period
    
    
    57,618
    
    
    
    50,277
    
    
    
    24,097End of period
    
    $
    45,678
    
    
    $
    57,618
    
    
    $
    50,277
  35




---



##### 



SOUTHWEST BANCORP, INC.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE YEARS ENDED DECEMBER 31, 2007, 2006, AND 2005
 1. Summary of Significant Accounting and Reporting Policies
 Organization and Nature of Operations
 Management Estimates
 Cash and Cash Equivalents
 Investment Securities
   36




---



##### 



Loans
  Allowance for Loan Losses
 37




---



##### 



Reserve for Unfunded Loan Commitments 
 Premises and Equipment
 Other Real Estate Owned
 38




---



##### 



Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets Acquisition of Certain Financial Institutions. Accounting for Servicing of Financial Assets
     Deposits
 Loan Servicing Income
 Taxes on Income
 39




---



##### 



Accounting for Uncertainty in Income Taxes
 Earnings per Common Share
 2007
    
    2006
    
    2005Weighted average common shares outstanding:Basic earnings per share
    
    
    14,313,239
    
    
    
    14,166,634
    
    
    
    13,165,642Effect of dilutive securities:Stock options
    
    
    304,474
    
    
    
    325,920
    
    
    
    398,262Weighted average common shares outstanding:Diluted earnings per share
    
    
    14,617,713
    
    
    
    14,492,554
    
    
    
    13,563,904
 Share-Based Compensation
 Share-Based Payment
 Accounting for Stock-Based
Compensation, Accounting for Stock-Based Compensation  Transition and
Disclosure Accounting for Stock Issued to
Employees
 Derivatives Amendment of Statement 133 on
Derivative Instruments and Hedging Activities Accounting for Derivative
Instruments and Hedging Activities
  40




---



##### 



Comprehensive Income
 Trust
 Liquidity
 2. Acquisitions
    (Dollars in thousands)
    
    AmountCash and cash equivalents
    
    $
    11,560Loans
    
    
    41,838Securities
    
    
    19,266Premises and equipment
    
    
    2,084Core deposit intangibles
    
    
    1,716Other assets
    
    
    (626
    )Total assets acquired
    
    $
    75,838Deposits
    
    
    65,877Other liabilities
    
    
    195Net assets acquired
    
    $
    9,766Less: purchase price
    
    
    15,617Goodwill
    
    $
    5,851
   41




---



##### 



3. Investment Securities
  At December 31, 2007Amortized
    
    Gross Unrealized
    
    Fair(Dollars in thousands)
    
    Cost
    
    Gains
    
    Losses
    
    ValueHeld to Maturity:U.S. Government obligations
    
    $
    1,000
    
    
    $
    9
    
    
    $
    
    
    
    $
    1,009Obligations of state and political subdivisions
    
    
    4,838
    
    
    
    2
    
    
    
    (11
    )
    
    
    4,829Total
    
    $
    5,838
    
    
    $
    11
    
    
    $
    (11
    )
    
    $
    5,838Available for Sale:Federal agency securities
    
    $
    189,442
    
    
    $
    175
    
    
    $
    (490
    )
    
    $
    189,127Obligations of state and political subdivisions
    
    
    4,319
    
    
    
    25
    
    
    
    (11
    )
    
    
    4,333Mortgage-backed securities
    
    
    38,100
    
    
    
    277
    
    
    
    (30
    )
    
    
    38,347Equity securities
    
    
    4,846
    
    
    
    733
    
    
    
    (28
    )
    
    
    5,551Total
    
    $
    236,707
    
    
    $
    1,210
    
    
    $
    (559
    )
    
    $
    237,358
 At December 31, 2006Amortized
    
    Gross Unrealized
    
    Fair(Dollars in thousands)
    
    Cost
    
    Gains
    
    Losses
    
    ValueHeld to Maturity:Obligations of state and political subdivisions
    
    $
    1,630
    
    
    $
    
    
    
    $
    (9
    )
    
    $
    1,621Total
    
    $
    1,630
    
    
    $
    
    
    
    $
    (9
    )
    
    $
    1,621Available for Sale:U.S. Government obligations
    
    $
    1,001
    
    
    $
    
    
    
    $
    (8
    )
    
    $
    993Federal agency securities
    
    
    225,301
    
    
    
    
    
    
    
    (3,910
    )
    
    
    221,391Obligations of state and political subdivisions
    
    
    1,250
    
    
    
    
    
    
    
    (26
    )
    
    
    1,224Mortgage-backed securities
    
    
    24,594
    
    
    
    29
    
    
    
    (170
    )
    
    
    24,453Equity securities
    
    
    6,596
    
    
    
    1,248
    
    
    
    (1
    )
    
    
    7,843Total
    
    $
    258,742
    
    
    $
    1,277
    
    
    $
    (4,115
    )
    
    $
    255,904
 42




---



##### 



Continuous Unrealized Losses Existing for:Amortized cost of
    
    
    
    
    
    
    
    
    
    Fair value ofNumber of
    
    securities with
    
    Less Than
    
    More Than
    
    securities with(Dollars in thousands)
    
    Securities
    
    unrealized losses
    
    12 Months
    
    12 Months
    
    unrealized lossesAt December 31, 2007:Held to Maturity:Obligations of state and
political subdivisions
    
    
    5
    
    
    $
    3,202
    
    
    $
    (11
    )
    
    $
    
    
    
    $
    3,191Total
    
    
    5
    
    
    $
    3,202
    
    
    $
    (11
    )
    
    $
    
    
    
    $
    3,191Available for Sale:Federal agency securities
    
    
    63
    
    
    $
    153,991
    
    
    $
    
    
    
    $
    (490
    )
    
    $
    153,501Obligations of state and
political subdivisions
    
    
    1
    
    
    
    1,250
    
    
    
    
    
    
    
    (11
    )
    
    
    1,239Mortgage-backed securities
    
    
    25
    
    
    
    10,478
    
    
    
    (4
    )
    
    
    (26
    )
    
    
    10,448Equity securities
    
    
    1
    
    
    
    1,010
    
    
    
    (28
    )
    
    
    
    
    
    
    982Total
    
    
    90
    
    
    $
    166,729
    
    
    $
    (32
    )
    
    $
    (527
    )
    
    $
    166,170At December 31, 2006:Held to Maturity:Obligations of state and
political subdivisions
    
    
    3
    
    
    $
    1,630
    
    
    $
    (7
    )
    
    $
    (2
    )
    
    $
    1,621Total
    
    
    3
    
    
    $
    1,630
    
    
    $
    (7
    )
    
    $
    (2
    )
    
    $
    1,621Available for Sale:U.S. Government obligations
    
    
    1
    
    
    $
    1,001
    
    
    $
    
    
    
    $
    (8
    )
    
    $
    993Federal agency securities
    
    
    87
    
    
    
    225,511
    
    
    
    
    
    
    
    (4,120
    )
    
    
    221,391Obligations of state and
political subdivisions
    
    
    1
    
    
    
    1,250
    
    
    
    
    
    
    
    (26
    )
    
    
    1,224Mortgage-backed securities
    
    
    41
    
    
    
    20,126
    
    
    
    (38
    )
    
    
    (132
    )
    
    
    19,956Equity securities
    
    
    4
    
    
    
    252
    
    
    
    (1
    )
    
    
    
    
    
    
    251Total
    
    
    134
    
    
    $
    248,140
    
    
    $
    (39
    )
    
    $
    (4,286
    )
    
    $
    243,815
   43




---



##### 



Available for Sale
    
    Held to MaturityAmortized
    
    Fair
    
    Amortized
    
    Fair(Dollars in thousands)
    
    Cost
    
    Value
    
    Cost
    
    ValueOne year or less
    
    $
    165,658
    
    
    $
    165,164
    
    
    $
    1,000
    
    
    $
    1,009More than one year through five years
    
    
    68,765
    
    
    
    69,901
    
    
    
    4,838
    
    
    
    4,829More than five years through ten years
    
    
    2,267
    
    
    
    2,277
    
    
    
    
    
    
    
    More than ten years
    
    
    17
    
    
    
    16
    
    
    
    
    
    
    
    Total
    
    $
    236,707
    
    
    $
    237,358
    
    
    $
    5,838
    
    
    $
    5,838
   4. Loans
  At December 31,(Dollars in thousands)
    
    2007
    
    2006Real estate mortgage:Commercial
    
    $
    750,047
    
    
    $
    609,271One-to-four family residential
    
    
    111,085
    
    
    
    91,441Real estate construction
    
    
    724,929
    
    
    
    453,750Commercial
    
    
    521,501
    
    
    
    424,189Installment and consumer:Guaranteed student loans
    
    
    61,555
    
    
    
    181,458Other
    
    
    42,715
    
    
    
    31,0812,211,832
    
    
    
    1,791,190Allowance for loan losses
    
    
    (29,584
    )
    
    
    (27,293
    )Total loans, net
    
    $
    2,182,248
    
    
    $
    1,763,897
    44




---



##### 



One year
    
    Two to
    
    Over(Dollars in thousands)
    
    or less
    
    five years
    
    five years
    
    TotalReal estate mortgage:Commercial
    
    $
    125,152
    
    
    $
    464,515
    
    
    $
    160,380
    
    
    $
    750,047One-to-four family residential
    
    
    14,305
    
    
    
    36,583
    
    
    
    60,197
    
    
    
    111,085Real estate construction
    
    
    248,600
    
    
    
    420,282
    
    
    
    56,047
    
    
    
    724,929Commercial
    
    
    199,571
    
    
    
    194,654
    
    
    
    127,276
    
    
    
    521,501Installment and consumer:Guaranteed student loans
    
    
    61,555
    
    
    
    
    
    
    
    
    
    
    
    61,555Other
    
    
    19,114
    
    
    
    22,407
    
    
    
    1,194
    
    
    
    42,715Total
    
    $
    668,297
    
    
    $
    1,138,441
    
    
    $
    405,094
    
    
    $
    2,211,832
  (Dollars in thousands)
    
    Fixed
    
    Variable
    
    TotalReal estate mortgage:Commercial
    
    $
    233,618
    
    
    $
    391,277
    
    
    $
    624,895One-to-four family residential
    
    
    49,881
    
    
    
    46,899
    
    
    
    96,780Real estate construction
    
    
    92,610
    
    
    
    383,719
    
    
    
    476,329Commercial
    
    
    112,695
    
    
    
    209,235
    
    
    
    321,930Installment and consumer
    
    
    10,821
    
    
    
    12,780
    
    
    
    23,601Total
    
    $
    499,625
    
    
    $
    1,043,910
    
    
    $
    1,543,535
 45




---



##### 



For the Year Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Beginning balance
    
    $
    27,293
    
    
    $
    23,812
    
    
    $
    18,991Provision for loan losses
    
    
    8,581
    
    
    
    11,565
    
    
    
    15,785Loans charged off
    
    
    (6,999
    )
    
    
    (8,925
    )
    
    
    (12,020
    )Recoveries
    
    
    709
    
    
    
    841
    
    
    
    1,056Total
    
    $
    29,584
    
    
    $
    27,293
    
    
    $
    23,812
  5. Derivative Instruments and Hedging Activities
  Amendment of Statement 133 on Derivative
Instruments and Hedging Activities Accounting for Derivative Instruments and
Hedging Activities
    46




---



##### 



(Dollars in thousands)
    
    December 31, 2007Gross Unrealized
    
    EstimatedNotional Amt
    
    Gains
    
    Losses
    
    Fair ValueFair-value hedgesInterest-rate swapsReceive fixed, pay floating
    
    $
    149,975
    
    
    $
    64
    
    
    $
    
    
    
    $
    64$
    149,975
    
    
    $
    64
    
    
    $
    
    
    
    $
    64Weighted average floating pay rate
    
    
    5.04
    %Weighted average fixed receive rate
    
    
    5.32
    %Weighted average maturity in months
    
    
    2
 (Dollars in thousands)
    
    December 31, 2006Gross Unrealized
    
    EstimatedNotional Amt
    
    Gains
    
    Losses
    
    Fair ValueFair-value hedgesInterest-rate swapsReceive fixed, pay floating
    
    $
    239,261
    
    
    $
    
    
    
    $
    (166
    )
    
    $
    (166
    )Pay fixed, receive floating
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    239,261
    
    
    $
    
    
    
    $
    (166
    )
    
    $
    (166
    )Weighted average floating pay rate
    
    
    5.17
    %Weighted average fixed receive rate
    
    
    5.13
    %Weighted average maturity in months
    
    
    5
  47




---



##### 



6. Premises and Equipment
  At December 31,(Dollars in thousands)
    
    2007
    
    2006Land
    
    $
    5,382
    
    
    $
    4,937Buildings and improvements
    
    
    14,517
    
    
    
    12,525Furniture, fixtures, and equipment
    
    
    29,092
    
    
    
    27,453Construction/Remodeling in progress
    
    
    1,330
    
    
    
    64250,321
    
    
    
    45,557Accumulated depreciation and amortization
    
    
    (25,998
    )
    
    
    (23,739
    )Premises and equipment, net
    
    $
    24,323
    
    
    $
    21,818
 7. Goodwill and Other Intangible Assets
    At December 31,(Dollars in thousands)
    
    2007
    
    
    2006Core deposit premiums
    
    $
    4,370
    
    
    $
    2,654Less accumulated amortization
    
    
    1,317
    
    
    
    1,059Core deposit premiums, net
    
    $
    3,053
    
    
    $
    1,595Loan servicing rights
    
    $
    4,365
    
    
    $
    3,924Less accumulated amortization
    
    
    2,838
    
    
    
    2,450Loan servicing rights, net
    
    $
    1,527
    
    
    $
    1,474Other intangible assets, net
    
    $
    4,580
    
    
    $
    3,069




---



##### 



Core Deposit
    
    Loan Servicing(Dollars in thousands)
    
    Premiums
    
    Rights
    
    Total2008
    
    $
    397
    
    
    $
    374
    
    
    $
    7712009
    
    
    389
    
    
    
    313
    
    
    
    7022010
    
    
    386
    
    
    
    254
    
    
    
    6402011
    
    
    366
    
    
    
    196
    
    
    
    5622012
    
    
    327
    
    
    
    140
    
    
    
    467
 8. Other Borrowed Funds
  At December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Amounts outstanding at end of period:Treasury, tax and loan note option
    
    $
    1,361
    
    
    $
    1,196
    
    
    $
    2,216Federal funds purchased and securities sold
under repurchase agreements
    
    
    162,962
    
    
    
    50,398
    
    
    
    65,342Borrowed from the Federal Home Loan Bank
    
    
    51,500
    
    
    
    86,500
    
    
    
    136,850Other
    
    
    2,533
    
    
    
    
    
    
    
    100Total other borrowings
    
    $
    218,356
    
    
    $
    138,094
    
    
    $
    204,508Weighted average rate outstanding at end of period:Treasury, tax and loan note option
    
    
    3.59
    %
    
    
    5.04
    %
    
    
    3.95
    %Federal funds purchased and securities sold
under repurchase agreements
    
    
    4.15
    
    
    
    4.20
    
    
    
    2.88Borrowed from the Federal Home Loan Bank
    
    
    4.10
    
    
    
    4.89
    
    
    
    4.33Other
    
    
    6.25
    
    
    
    
    
    
    
    5.25Maximum amounts of borrowings outstanding
at any month-end:Treasury, tax and loan note option
    
    $
    2,416
    
    
    $
    2,362
    
    
    $
    2,216Federal funds purchased and securities sold
under repurchase agreements
    
    
    172,641
    
    
    
    150,954
    
    
    
    130,342Borrowed from the Federal Home Loan Bank
    
    
    101,500
    
    
    
    185,040
    
    
    
    146,500Other
    
    
    7,500
    
    
    
    
    
    
    
    100Approximate average short-term borrowings
outstanding for the year:Treasury, tax and loan note option
    
    $
    551
    
    
    $
    617
    
    
    $
    672Federal funds purchased and securities sold
under repurchase agreements
    
    
    105,023
    
    
    
    95,090
    
    
    
    78,641Borrowed from the Federal Home Loan Bank
    
    
    52,853
    
    
    
    118,970
    
    
    
    129,763Other
    
    
    3,055
    
    
    
    
    
    
    
    1Approximate weighted average rate for the year:Treasury, tax and loan note option
    
    
    3.81
    %
    
    
    4.73
    %
    
    
    3.00
    %Federal funds purchased and securities sold
under repurchase agreements
    
    
    4.59
    
    
    
    4.55
    
    
    
    2.86Borrowed from the Federal Home Loan Bank
    
    
    4.74
    
    
    
    4.76
    
    
    
    3.91Other
    
    
    6.93
    
    
    
    
    
    
    
    5.25




---



##### 



9. Subordinated Debentures




---



##### 








---



##### 



Consolidation of
Variable Interest Entities.
 10. Income Taxes
  For the Year Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Current tax expense:Federal
    
    $
    13,311
    
    
    $
    15,948
    
    
    $
    13,657State
    
    
    1,925
    
    
    
    1,740
    
    
    
    1,435Deferred tax expense (benefit):Federal
    
    
    (1,371
    )
    
    
    (1,896
    )
    
    
    (1,127
    )State
    
    
    (268
    )
    
    
    (383
    )
    
    
    (125
    )Taxes on income
    
    $
    13,597
    
    
    $
    15,409
    
    
    $
    13,840
  For the Year Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Computed tax expense at statutory rates
    
    $
    12,293
    
    
    $
    14,492
    
    
    $
    12,199Increase (decrease) in income
taxes resulting from:Low income housing credit
    
    
    
    
    
    
    (500
    )
    
    
    (500
    )Benefit of income not subject to U.S. Federal income tax
    
    
    (137
    )
    
    
    (86
    )
    
    
    (111
    )Expenses not deductible for U.S. Federal income tax
    
    
    475
    
    
    
    417
    
    
    
    172State income taxes, net of Federal income tax benefit
    
    
    396
    
    
    
    626
    
    
    
    852New markets tax credit
    
    
    (151
    )
    
    
    (172
    )
    
    
    Expiration of capital loss carryforward
    
    
    
    
    
    
    34
    
    
    
    Other
    
    
    721
    
    
    
    598
    
    
    
    1,228Taxes on income
    
    $
    13,597
    
    
    $
    15,409
    
    
    $
    13,840




---



##### 



For the Year Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Provision for loan losses
    
    $
    (1,506
    )
    
    $
    (1,368
    )
    
    $
    (2,241
    )Accumulated depreciation
    
    
    114
    
    
    
    (157
    )
    
    
    (267
    )Prepaid maintenance
    
    
    84
    
    
    
    (58
    )
    
    
    39Nonaccrual loan interest
    
    
    (316
    )
    
    
    (823
    )
    
    
    Deferred compensation accrual
    
    
    (26
    )
    
    
    (12
    )
    
    
    (9
    )Mark-to-market adjustments
    
    
    61
    
    
    
    36
    
    
    
    540FHLB stock dividends
    
    
    196
    
    
    
    205
    
    
    
    580Write-downs on other real estate
    
    
    (8
    )
    
    
    (68
    )
    
    
    (171
    )Amortizable assets
    
    
    (15
    )
    
    
    10
    
    
    
    (41
    )Stock-based compensation
    
    
    (75
    )
    
    
    (96
    )
    
    
    Litigation and settlement
    
    
    (238
    )
    
    
    
    
    
    
    New markets tax credit
    
    
    95
    
    
    
    68
    
    
    
    68Other
    
    
    (5
    )
    
    
    (16
    )
    
    
    250Total
    
    $
    (1,639
    )
    
    $
    (2,279
    )
    
    $
    (1,252
    )
   At December 31,(Dollars in thousands)
    
    2007
    
    2006Provision for loan losses
    
    $
    12,697
    
    
    $
    11,367Accumulated depreciation
    
    
    (2,705
    )
    
    
    (2,415
    )Prepaid maintenance
    
    
    (343
    )
    
    
    (259
    )Nonaccrual loan interest
    
    
    1,139
    
    
    
    823Deferred compensation accrual
    
    
    205
    
    
    
    180Mark-to-market adjustments
    
    
    113
    
    
    
    174FHLB stock dividends
    
    
    (792
    )
    
    
    (596
    )Write-downs on other real estate
    
    
    247
    
    
    
    239Amortizable assets
    
    
    (494
    )
    
    
    (62
    )Stock-based compensation
    
    
    171
    
    
    
    96Litigation and settlement
    
    
    238
    
    
    
    New markets tax credit
    
    
    (298
    )
    
    
    (203
    )Other
    
    
    115
    
    
    
    11110,293
    
    
    
    9,455Deferred taxes (payable) receivable on
investment securities available for sale
    
    
    (242
    )
    
    
    1,101Net deferred tax asset
    
    $
    10,051
    
    
    $
    10,556
 Accounting for Uncertainty in Income Taxes,
 53
        (Dollars in thousands)Balance at January 1, 2007
    
    $
    2,093Increases in unrecognized tax benefits as a result of tax positions taken during
current period
    
    
    992Increases in unrecognized tax benefits as a result of tax positions taken during prior
period
    
    
    131Amount of decreases in unrecognized tax benefits relating to settlements with taxing
authorities
    
    
    Reductions to unrecognized tax benefits  lapse of the applicable statute of limitations
    
    
    Balance at December 31, 2007
    
    $
    3,216
    11. Shareholders Equity
    54
        Share-Based Compensation
 12. Capital Requirements
   55
        To Be Well CapitalizedUnder Prompt Corrective
    
    For CapitalActual
    
    Action Provisions
    
    Adequacy Purposes(Dollars in thousands)
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioAs of December 31, 2007:Total Capital (to risk-weighted assets)Southwest
    
    $
    284,730
    
    
    
    10.97
    %
    
    
    N/A
    
    
    
    N/A
    
    
    $
    207,607
    
    
    
    8.00
    %Stillwater National
    
    
    256,752
    
    
    
    10.30
    
    
    $
    249,385
    
    
    
    10.00
    %
    
    
    199,508
    
    
    
    8.00SNB Wichita
    
    
    6,199
    
    
    
    12.13
    
    
    
    5,111
    
    
    
    10.00
    
    
    
    4,088
    
    
    
    8.00SNB Kansas
    
    
    8,103
    
    
    
    16.79
    
    
    
    4,826
    
    
    
    10.00
    
    
    
    3,861
    
    
    
    8.00Tier I Capital (to risk-weighted assets)Southwest
    
    
    251,980
    
    
    
    9.71
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    103,804
    
    
    
    4.00Stillwater National
    
    
    225,243
    
    
    
    9.03
    
    
    
    149,631
    
    
    
    6.00
    
    
    
    99,754
    
    
    
    4.00SNB Wichita
    
    
    5,638
    
    
    
    11.03
    
    
    
    3,066
    
    
    
    6.00
    
    
    
    2,044
    
    
    
    4.00SNB Kansas
    
    
    7,763
    
    
    
    16.08
    
    
    
    2,896
    
    
    
    6.00
    
    
    
    1,931
    
    
    
    4.00Tier I Leverage (to average assets)Southwest
    
    
    251,980
    
    
    
    10.23
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    98,543
    
    
    
    4.00Stillwater National
    
    
    225,243
    
    
    
    9.68
    
    
    
    116,351
    
    
    
    5.00
    
    
    
    93,081
    
    
    
    4.00SNB Wichita
    
    
    5,638
    
    
    
    9.10
    
    
    
    3,099
    
    
    
    5.00
    
    
    
    2,479
    
    
    
    4.00SNB Kansas
    
    
    7,763
    
    
    
    10.32
    
    
    
    3,762
    
    
    
    5.00
    
    
    
    3,010
    
    
    
    4.00As of December 31, 2006:Total Capital (to risk-weighted assets)Southwest
    
    $
    266,097
    
    
    
    13.50
    %
    
    
    N/A
    
    
    
    N/A
    
    
    $
    157,450
    
    
    
    8.00
    %Stillwater National
    
    
    232,311
    
    
    
    12.11
    
    
    $
    191,867
    
    
    
    10.00
    %
    
    
    153,494
    
    
    
    8.00SNB Wichita
    
    
    6,096
    
    
    
    15.65
    
    
    
    3,895
    
    
    
    10.00
    
    
    
    3,116
    
    
    
    8.00Tier I Capital (to risk-weighted assets)Southwest
    
    
    241,399
    
    
    
    12.25
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    78,725
    
    
    
    4.00Stillwater National
    
    
    207,756
    
    
    
    10.84
    
    
    
    115,120
    
    
    
    6.00
    
    
    
    76,747
    
    
    
    4.00SNB Wichita
    
    
    5,625
    
    
    
    14.44
    
    
    
    2,337
    
    
    
    6.00
    
    
    
    1,558
    
    
    
    4.00Tier I Leverage (to average assets)Southwest
    
    
    241,399
    
    
    
    10.91
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    88,526
    
    
    
    4.00Stillwater National
    
    
    207,756
    
    
    
    9.74
    
    
    
    106,659
    
    
    
    5.00
    
    
    
    85,327
    
    
    
    4.00SNB Wichita
    
    
    5,625
    
    
    
    10.43
    
    
    
    2,696
    
    
    
    5.00
    
    
    
    2,157
    
    
    
    4.00
   13. Partial Disposition of Equity Security
  56
        14. Employee Benefits
  Stock
Options
   (Dollars in thousands, except per share data)
    
    2005Net income, as reported
    
    $
    21,014Less: Proforma compensation
expense related to options net of tax effects
    
    
    386Net income, proforma
    
    $
    20,628Earnings per common shareBasic, as presented
    
    $
    1.60Basic, proforma
    
    $
    1.57Diluted, as presented
    
    $
    1.55Diluted, proforma
    
    $
    1.52Weighted average fair value at grant date
    
    $
    3.04
  57
        2007
    
    2006
    
    2005Expected dividend yield
    
    
    1.45
    %
    
    
    1.43
    %
    
    
    1.90
    %Expected volatility
    
    
    29.70
    %
    
    
    26.83
    %
    
    
    28.09
    %Risk-free interest rate
    
    
    4.48
    %
    
    
    4.81
    %
    
    
    4.94
    %Expected option term (in years)
    
    
    2.50
    
    
    
    2.50
    
    
    
    7.93
    WeightedWeighted
    
    Average AggregateAverage
    
    Remaining
    
    IntrinsicNumber of
    
    Exercise
    
    Contractual
    
    Value (dollarsOptions
    
    Price
    
    Life (Years)
    
    in thousands)Outstanding at December 31, 2004
    
    
    989,712
    
    
    $
    9.56Granted
    
    
    148,236
    
    
    
    20.22Exercised
    
    
    (174,262
    )
    
    
    9.96Canceled/expired
    
    
    (41,813
    )
    
    
    11.66Outstanding at December 31, 2005
    
    
    921,873
    
    
    $
    11.21Granted
    
    
    147,372
    
    
    
    23.26Exercised
    
    
    (201,236
    )
    
    
    9.60Canceled/expired
    
    
    (7,999
    )
    
    
    16.91Outstanding at December 31, 2006
    
    
    860,010
    
    
    $
    13.50Granted
    
    
    124,431
    
    
    
    25.78Exercised
    
    
    (96,338
    )
    
    
    9.88Canceled/expired
    
    
    (4,333
    )
    
    
    26.58Outstanding at December 31, 2007
    
    
    883,770
    
    
    $
    15.56
    
    
    
    2.34
    
    
    $
    4,426Total exercisable at December 31, 2005
    
    
    636,124
    
    
    $
    10.50Total exercisable at December 31, 2006
    
    
    621,710
    
    
    $
    12.60Total exercisable at December 31, 2007
    
    
    705,670
    
    
    $
    14.56
    
    
    
    2.05
    
    
    $
    3,800
  58
        Shares
    
    WeightedIssuable
    
    AverageUpon Exercise
    
    Grant Dateof Options
    
    Fair ValueNonvested Balance at
December 31, 2006
    
    
    238,300
    
    
    $
    4.34Granted
    
    
    124,431
    
    
    
    5.42Vested
    
    
    (180,298
    )
    
    
    4.83Forfeited
    
    
    (4,333
    )
    
    
    5.81Nonvested Balance at
December 31, 2007
    
    
    178,100
    
    
    $
    4.56
  Restricted
Stock
  15. Related Party Transactions
   59
        16. Operating Leases
  2008
    
    $
    2,373,0002009
    
    
    2,176,0002010
    
    
    1,631,0002011
    
    
    1,145,0002012
    
    
    250,000Thereafter
    
    
    51,000
  17. Fair Value Disclosures of Financial Instruments
 Disclosures About Fair Value of Financial Instruments
 Cash and cash equivalents
 Investment securities
 Loans
 Accrued interest receivable
 Deposits
 Other borrowings
 Subordinated debentures
 Other liabilities and accrued interest payable
 Commitments
 60
        At December 31, 2007
    
    At December 31, 2006Carrying
    
    Fair
    
    Carrying
    
    Fair(Dollars in thousands)
    
    Values
    
    Values
    
    Values
    
    ValuesCash and cash equivalents
    
    $
    45,678
    
    
    $
    45,678
    
    
    $
    46,618
    
    
    $
    46,618Investment securities:Held to maturity
    
    
    5,838
    
    
    
    5,838
    
    
    
    1,630
    
    
    
    1,621Available for sale
    
    
    237,358
    
    
    
    237,358
    
    
    
    255,904
    
    
    
    255,904FRB and FHLB stock
    
    
    13,116
    
    
    
    13,116
    
    
    
    12,315
    
    
    
    12,315Total loans
    
    
    2,182,248
    
    
    
    2,215,161
    
    
    
    1,763,897
    
    
    
    1,769,464Accrued interest receivable
    
    
    23,117
    
    
    
    23,117
    
    
    
    24,269
    
    
    
    24,269Derivative instruments
    
    
    64
    
    
    
    64
    
    
    
    166
    
    
    
    166Deposits
    
    
    2,058,579
    
    
    
    2,060,931
    
    
    
    1,765,611
    
    
    
    1,711,210Accrued interest payable
    
    
    11,441
    
    
    
    11,441
    
    
    
    13,260
    
    
    
    13,260Other liabilities
    
    
    10,154
    
    
    
    10,154
    
    
    
    8,624
    
    
    
    8,624Other borrowings
    
    
    218,356
    
    
    
    218,356
    
    
    
    138,094
    
    
    
    138,094Subordinated debentures
    
    
    46,393
    
    
    
    46,393
    
    
    
    46,393
    
    
    
    46,393
 18. Financial Instruments with Off-Balance Sheet Risk
   At December 31,(Dollars in thousands)
    
    2007
    
    2006Commitments to extend commercial and real estate mortgage credit
    
    $
    861,851
    
    
    $
    572,182Standby and commercial letters of credit
    
    
    18,580
    
    
    
    12,215Total
    
    $
    880,431
    
    
    $
    584,397
  19. Commitments and Contingencies
  61
        20. Supplemental Cash Flow Information
 For the Years Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Cash paid for interest
    
    $
    86,407
    
    
    $
    72,615
    
    
    $
    48,196Cash paid for taxes on income
    
    
    14,808
    
    
    
    15,321
    
    
    
    15,544Loans transferred to other real estate owned
    
    
    1,284
    
    
    
    615
    
    
    
    7,303
 21. Operating Segments
 62




---



##### 



For the Year Ended December 31, 2007Oklahoma
    
    Other States
    
    Secondary
    
    Other
    
    Total(Dollars in thousands)
    
    Banking
    
    Banking
    
    Market
    
    Operations
    
    CompanyNet interest income
    
    $
    52,659
    
    
    $
    39,214
    
    
    $
    1,738
    
    
    $
    (1,131
    )
    
    $
    92,480Provision for loan losses
    
    
    2,665
    
    
    
    5,916
    
    
    
    
    
    
    
    
    
    
    
    8,581Noninterest income
    
    
    9,565
    
    
    
    1,856
    
    
    
    3,403
    
    
    
    1,726
    
    
    
    16,550Noninterest expenses
    
    
    31,478
    
    
    
    21,871
    
    
    
    3,360
    
    
    
    8,765
    
    
    
    65,474Income before taxes
    
    
    28,081
    
    
    
    13,283
    
    
    
    1,781
    
    
    
    (8,170
    )
    
    
    34,975Taxes on income
    
    
    10,796
    
    
    
    5,059
    
    
    
    684
    
    
    
    (2,942
    )
    
    
    13,597Net income
    
    $
    17,285
    
    
    $
    8,224
    
    
    $
    1,097
    
    
    $
    (5,228
    )
    
    $
    21,378Fixed asset expenditures
    
    $
    1,169
    
    
    $
    1,273
    
    
    $
    57
    
    
    $
    788
    
    
    $
    3,287Total loans at period end
    
    
    1,039,001
    
    
    
    1,106,556
    
    
    
    66,275
    
    
    
    
    
    
    
    2,211,832Total assets at period end
    
    
    1,048,633
    
    
    
    1,119,396
    
    
    
    71,843
    
    
    
    324,426
    
    
    
    2,564,298Total deposits at period end (1)
    
    
    1,278,954
    
    
    
    247,807
    
    
    
    1,346
    
    
    
    530,472
    
    
    
    2,058,579
 
 (1)
    
    Brokered Deposits are included in the Oklahoma Banking Segment. 63




---



##### 



For the Year Ended December 31, 2006Oklahoma
    
    Other States
    
    Secondary
    
    Other
    
    Total(Dollars in thousands)
    
    Banking
    
    Banking
    
    Market
    
    Operations
    
    CompanyNet interest income
    
    $
    53,307
    
    
    $
    29,885
    
    
    $
    9,555
    
    
    $
    91
    
    
    $
    92,838Provision for loan losses
    
    
    7,182
    
    
    
    4,383
    
    
    
    
    
    
    
    
    
    
    
    11,565Noninterest income
    
    
    8,098
    
    
    
    857
    
    
    
    3,679
    
    
    
    4,142
    
    
    
    16,776Noninterest expenses
    
    
    30,082
    
    
    
    15,966
    
    
    
    4,141
    
    
    
    6,454
    
    
    
    56,643Income before taxes
    
    
    24,141
    
    
    
    10,393
    
    
    
    9,093
    
    
    
    (2,221
    )
    
    
    41,406Taxes on income
    
    
    8,737
    
    
    
    4,154
    
    
    
    3,026
    
    
    
    (508
    )
    
    
    15,409Net income
    
    $
    15,404
    
    
    $
    6,239
    
    
    $
    6,067
    
    
    -$
    1,713
    
    
    $
    25,997Fixed asset expenditures
    
    $
    455
    
    
    $
    508
    
    
    $
    
    
    
    $
    1,952
    
    
    $
    2,915Total loans at period end
    
    
    912,862
    
    
    
    689,864
    
    
    
    188,464
    
    
    
    
    
    
    
    1,791,190Total assets at period end
    
    
    918,815
    
    
    
    694,346
    
    
    
    201,131
    
    
    
    356,336
    
    
    
    2,170,628Total deposits at period end (1)
    
    
    1,161,549
    
    
    
    160,603
    
    
    
    763
    
    
    
    442,696
    
    
    
    1,765,611
 
 (1)
    
    Brokered Deposits are included in the Oklahoma Banking Segment. For the Year Ended December 31, 2005Oklahoma
    
    Other States
    
    Secondary
    
    Other
    
    Total(Dollars in thousands)
    
    Banking
    
    Banking
    
    Market
    
    Operations
    
    CompanyNet interest income
    
    $
    50,942
    
    
    $
    21,153
    
    
    $
    17,348
    
    
    -$
    4,337
    
    
    $
    85,106Provision for loan losses
    
    
    11,371
    
    
    
    4,414
    
    
    
    
    
    
    
    
    
    
    
    15,785Noninterest income
    
    
    8,284
    
    
    
    990
    
    
    
    4,221
    
    
    
    3,911
    
    
    
    17,406Noninterest expenses
    
    
    28,262
    
    
    
    12,082
    
    
    
    5,780
    
    
    
    5,749
    
    
    
    51,873Income before taxes
    
    
    19,593
    
    
    
    5,647
    
    
    
    15,789
    
    
    
    (6,175
    )
    
    
    34,854Taxes on income
    
    
    7,718
    
    
    
    2,260
    
    
    
    6,273
    
    
    
    (2,411
    )
    
    
    13,840Net income
    
    $
    11,875
    
    
    $
    3,387
    
    
    $
    9,516
    
    
    -$
    3,764
    
    
    $
    21,014Fixed asset expenditures
    
    $
    485
    
    
    $
    1,412
    
    
    $
    
    
    
    $
    1,527
    
    
    $
    3,424Total loans at period end
    
    
    836,850
    
    
    
    518,708
    
    
    
    380,346
    
    
    
    (24
    )
    
    
    1,735,880Total assets at period end
    
    
    843,584
    
    
    
    516,212
    
    
    
    397,940
    
    
    
    341,903
    
    
    
    2,099,639Total deposits at period end (1)
    
    
    1,056,936
    
    
    
    87,275
    
    
    
    2,872
    
    
    
    510,737
    
    
    
    1,657,820
 
 (1)
    
    Brokered Deposits are included in the Oklahoma Banking Segment. 64




---



##### 



22. Parent Company Condensed Financial Information
  At December 31,(Dollars in thousands)
    
    2007
    
    2006Statements of Financial ConditionAssets:Cash and due from banks
    
    $
    3,384
    
    
    $
    2,041Investment in subsidiary banks
    
    
    243,693
    
    
    
    208,920Investments in other subsidiaries
    
    
    7,564
    
    
    
    7,269Investment securities, available for sale
    
    
    12,971
    
    
    
    25,840Other assets
    
    
    1,490
    
    
    
    2,561Total
    
    $
    269,102
    
    
    $
    246,631Liabilities:Subordinated debentures
    
    $
    46,393
    
    
    $
    46,393Notes payable
    
    
    2,500
    
    
    
    Other liabilities
    
    
    2,600
    
    
    
    2,728Shareholders Equity:Common stock and related accounts
    
    
    217,609
    
    
    
    197,510Total
    
    $
    269,102
    
    
    $
    246,631
 For the Year Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Statements of Operations Income:Cash dividends from subsidiaries
    
    $
    7,117
    
    
    $
    5,614
    
    
    $
    13,624Noninterest income
    
    
    
    
    
    
    
    
    
    
    144Investment income
    
    
    389
    
    
    
    834
    
    
    
    717Interest and fees on loans
    
    
    
    
    
    
    
    
    
    
    9Total income
    
    
    7,506
    
    
    
    6,448
    
    
    
    14,494Expense:Interest on subordinated debentures
    
    
    3,894
    
    
    
    3,797
    
    
    
    4,113Noninterest expense
    
    
    2,492
    
    
    
    1,930
    
    
    
    1,827Total expense
    
    
    6,386
    
    
    
    5,727
    
    
    
    5,940Total income (loss) before taxes and equity in
undistributed income of subsidiaries
    
    
    1,120
    
    
    
    721
    
    
    
    8,554Taxes on income
    
    
    (2,036
    )
    
    
    (1,268
    )
    
    
    (1,891
    )Income before equity in undistributed
income of subsidiaries
    
    
    3,156
    
    
    
    1,989
    
    
    
    10,445Equity in undistributed income of subsidiaries
    
    
    18,222
    
    
    
    24,008
    
    
    
    10,569Net income
    
    $
    21,378
    
    
    $
    25,997
    
    
    $
    21,014
 65




---



##### 



For the Year Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Statements of Cash FlowsOperating activities:Net income
    
    $
    21,378
    
    
    $
    25,997
    
    
    $
    21,014Equity in undistributed income of subsidiaries
    
    
    (18,222
    )
    
    
    (24,008
    )
    
    
    (10,569
    )Other, net
    
    
    1,343
    
    
    
    203
    
    
    
    1,736Net cash provided by operating activities
    
    
    4,499
    
    
    
    2,192
    
    
    
    12,181Investing activities:Available for sale securities:Purchases
    
    
    (35
    )
    
    
    (1,039
    )
    
    
    (26,998
    )Sales / Maturities
    
    
    13,124
    
    
    
    5,005
    
    
    
    Loans originated and principal repayments, net
    
    
    
    
    
    
    
    
    
    
    151Capital contribution to Banks
    
    
    (15,510
    )
    
    
    (5,000
    )
    
    
    (12,500
    )Capital contribution/advances to other subsidiaries
    
    
    
    
    
    
    (100
    )
    
    
    Return of capital/advances from other subsidiaries
    
    
    450
    
    
    
    
    
    
    
    774Net cash provided by (used in) investing activities
    
    
    (1,971
    )
    
    
    (1,134
    )
    
    
    (38,573
    )Financing activities:Net increase (decrease) in short-term borrowings
    
    
    2,500
    
    
    
    
    
    
    
    Net proceeds from issuance of common stock
    
    
    1,460
    
    
    
    2,323
    
    
    
    41,593Redemption of subordinated debentures
    
    
    
    
    
    
    
    
    
    
    (25,787
    )Purchases of treasury stock
    
    
    
    
    
    
    
    
    
    
    (12,416
    )Cash dividends paid on common stock
    
    
    (5,145
    )
    
    
    (4,559
    )
    
    
    (3,831
    )Net cash provided by (used in) financing activities
    
    
    (1,185
    )
    
    
    (2,236
    )
    
    
    (441
    )Net increase (decrease) in cash and cash equivalents
    
    
    1,343
    
    
    
    (1,178
    )
    
    
    (26,833
    )Cash and cash equivalents,Beginning of year
    
    
    2,041
    
    
    
    3,219
    
    
    
    30,052End of year
    
    $
    3,384
    
    
    $
    2,041
    
    
    $
    3,219
 66




---



##### 



23. Selected Quarterly Financial Data (Unaudited)
 For the Quarter Ended(Dollars in thousands, except per share data)
    
    12-31-07
    
    09-30-07
    
    06-30-07
    
    03-31-07Operations DataInterest income
    
    $
    46,297
    
    
    $
    45,201
    
    
    $
    42,540
    
    
    $
    43,030Interest expense
    
    
    22,790
    
    
    
    21,525
    
    
    
    19,957
    
    
    
    20,316Net interest income
    
    
    23,507
    
    
    
    23,676
    
    
    
    22,583
    
    
    
    22,714Provision for loan losses
    
    
    2,464
    
    
    
    2,149
    
    
    
    2,107
    
    
    
    1,861Gain on sales of securities and loans
    
    
    788
    
    
    
    656
    
    
    
    2,719
    
    
    
    760Noninterest income
    
    
    3,312
    
    
    
    3,000
    
    
    
    2,735
    
    
    
    2,580Noninterest expenses
    
    
    17,673
    
    
    
    16,162
    
    
    
    14,808
    
    
    
    16,831Income before taxes
    
    
    7,470
    
    
    
    9,021
    
    
    
    11,122
    
    
    
    7,362Taxes on income
    
    
    2,949
    
    
    
    3,505
    
    
    
    4,281
    
    
    
    2,862Net income
    
    $
    4,521
    
    
    $
    5,516
    
    
    $
    6,841
    
    
    $
    4,500Per Share DataBasic earnings per common share
    
    $
    0.32
    
    
    $
    0.38
    
    
    $
    0.48
    
    
    $
    0.32Diluted earnings per common share
    
    
    0.31
    
    
    
    0.38
    
    
    
    0.47
    
    
    
    0.31Dividends declared per common share
    
    
    0.0925
    
    
    
    0.0925
    
    
    
    0.0925
    
    
    
    0.0925Weighted average common shares outstandingBasic
    
    
    14,353,910
    
    
    
    14,335,008
    
    
    
    14,299,111
    
    
    
    14,263,698Diluted
    
    
    14,584,878
    
    
    
    14,612,732
    
    
    
    14,644,863
    
    
    
    14,642,913
 For the Quarter Ended(Dollars in thousands, except per share data)
    
    12-31-06
    
    09-30-06
    
    06-30-06
    
    03-31-06Operations DataInterest income
    
    $
    44,723
    
    
    $
    43,817
    
    
    $
    41,812
    
    
    $
    39,408Interest expense
    
    
    20,684
    
    
    
    20,121
    
    
    
    18,951
    
    
    
    17,166Net interest income
    
    
    24,039
    
    
    
    23,696
    
    
    
    22,861
    
    
    
    22,242Provision for loan losses
    
    
    2,567
    
    
    
    3,006
    
    
    
    3,316
    
    
    
    2,676Gain on sales of securities and loans
    
    
    1,402
    
    
    
    676
    
    
    
    969
    
    
    
    642Noninterest income
    
    
    2,942
    
    
    
    3,283
    
    
    
    3,536
    
    
    
    3,326Noninterest expenses
    
    
    15,691
    
    
    
    13,910
    
    
    
    13,852
    
    
    
    13,190Income before taxes
    
    
    10,125
    
    
    
    10,739
    
    
    
    10,198
    
    
    
    10,344Taxes on income
    
    
    3,672
    
    
    
    4,100
    
    
    
    3,572
    
    
    
    4,065Net income
    
    $
    6,453
    
    
    $
    6,639
    
    
    $
    6,626
    
    
    $
    6,279Per Share DataBasic earnings per common share
    
    $
    0.45
    
    
    $
    0.47
    
    
    $
    0.46
    
    
    $
    0.45Diluted earnings per common share
    
    
    0.44
    
    
    
    0.46
    
    
    
    0.45
    
    
    
    0.44Dividends declared per common share
    
    
    0.0825
    
    
    
    0.0825
    
    
    
    0.0825
    
    
    
    0.0825Weighted average common shares outstandingBasic
    
    
    14,230,015
    
    
    
    14,206,947
    
    
    
    14,151,442
    
    
    
    14,075,998Diluted
    
    
    14,562,343
    
    
    
    14,533,573
    
    
    
    14,470,954
    
    
    
    14,406,911
 67




---



##### 



24. Accounting Standard Issued But Not Yet Adopted
 Fair Value
Measurements
 The Fair Value
Option for Financial Assets and Financial Liabilities
 Business
Combinations (Revised 2007) Business
Combinations Accounting for Contingencies
 Written Loan Commitments Recorded at Fair Value Through Earnings Application of Accounting Principles to Loan Commitments
 68




---



##### 



OTHER MATERIAL REQUIRED BY FORM 10-K
 Business
 General
  Products and Services
 SNB DirectBanker®,
 Strategic Focus
 SNB DirectBanker®
 69




---



##### 



Organization
  Banking Segments
 Oklahoma Banking Segment.
 Other States Banking Segment
 Secondary Market Segment
   70




---



##### 



Support and Control Functions SNB DirectBanker®
  Banking Offices and Geographic Markets
  SNB
DirectBanker®
 Competition
  71




---



##### 







Regulation, Supervision, and Governmental Policy
  72




---



##### 







Bank Holding Company Regulation
         73




---



##### 







National Bank Regulation
    State Non-Member Bank Regulation.
   Federal Savings Bank Regulation
 74




---



##### 







Limits on Loans to One Borrower
 75




---



##### 







Transactions with Affiliates
 Real Estate Lending Guidelines
 Federal Deposit Insurance.
 Regulatory Capital Requirements
 76




---



##### 







77




---



##### 







Brokered Deposits
 Supervision and Regulation of Mortgage Banking Operations
 Community Reinvestment
 78




---



##### 







Bank Secrecy Act
 Sarbanes-Oxley Act of 2002
 Other Laws and Regulations
 Enforcement Actions
 79




---



##### 







Employees
  80




---



##### 







Board of Directors of Southwest Bancorp, Inc. and Stillwater National Bank & Trust Company
 Robert B. Rodgers, Chairman of the Board
    
    President, Bob Rodgers Motor CompanyRick Green, Vice Chairman of the Board
    
    President and Chief Executive OfficerSouthwest, Stillwater National, SNB Wichita and
SNB KansasJames E. Berry II
    
    Owner, Shading ConceptsTom D. Berry
    
    Auctioneer, Real Estate Broker, Oil & Gas ExplorationJoe Berry Cannon
    
    Assistant Professor of Management, Oral Roberts
University School of BusinessJohn Cohlmia
    
    Real Estate Broker, Grubb & Ellis/Levy BeffortDavid S. Crockett Jr., CPA
    
    Owner, David S. Crockett & Co., CPAsJ. Berry Harrison
    
    Oklahoma State Senator (retired) and RancherJames M. Johnson
    
    Self-employed Small Business OwnerDavid P. Lambert
    
    Chairman of the Board, Lambert Construction CompanyLinford R. Pitts
    
    President, Stillwater Transfer & Storage, Inc.Russell W. Teubner
    
    Founder and Chief Executive Officer,
HostBridge TechnologyBoard of Directors of SNB Bank of WichitaRobert B. Rodgers, Chairman of the Board
    
    President, Bob Rodgers Motor CompanyRick Green, Vice Chairman of the Board
    
    President and Chief Executive OfficerSouthwest, Stillwater National, SNB Wichita and
SNB KansasKerby E. Crowell, CPA
    
    Executive Vice President and Chief Financial Officer, Southwest, Stillwater
National, and SNB WichitaSteven N. Hadley
    
    President, SNB WichitaAnthony W. Martin
    
    Dentist/Owner, Martin & Frankenberry D.D.S.P.A.
 81




---



##### 



Board of Directors of Bank of KansasRobert B. Rodgers, Chairman of the Board
    
    President, Bob Rodgers Motor CompanyRick Green, Vice Chairman of the Board
    
    President and Chief Executive OfficerSouthwest, Stillwater National, SNB Wichita and
SNB KansasJoseph Ernie Beaudet
    
    President, SNB KansasAnthony W. Martin
    
    Dentist/Owner, Martin & Frankenberry D.D.S.P.A.D. Densmore Hart
    
    Chairman, Hart Capital, LLC
 82




---



##### 



Executive Officers
  Name
    
    Age
    
    PositionJoseph Ernie Beaudet
    
    
    55
    
    
    President, SNB KansasRobert H. Beuttas
    
    
    52
    
    
    President, SNB Bank of Dallas-Preston Center Division of Stillwater National*Priscilla Barnes
    
    
    51
    
    
    Senior Vice President, Regulatory Risk Management of Stillwater NationalKerby E. Crowell
    
    
    58
    
    
    Executive Vice President, Chief Financial Officer, and Secretary of Southwest and Stillwater
National; Director, Chief Financial Officer, and Secretary of SNB Wichita; Secretary of SNB
KansasJohn T. Danielson
    
    
    49
    
    
    President, SNB Bank of San Antonio Division of Stillwater NationalDavid Dietz
    
    
    52
    
    
    Executive Vice President and Chief Information Officer of Stillwater NationalHal E. Fudge
    
    
    48
    
    
    President, Healthcare Lending Division of Stillwater NationalAllen Glenn
    
    
    38
    
    
    President, Business Consulting Group, Inc. and Executive Vice President of Stillwater
NationalSteven M. Gobel
    
    
    56
    
    
    Executive Vice President, Chief Accounting and Controls Officer and Associate Chief
Financial Officer of Southwest and Stillwater NationalSteven N. Hadley
    
    
    50
    
    
    President, SNB WichitaRex E. Horning
    
    
    56
    
    
    President, Stillwater Division of Stillwater NationalJerry L. Lanier
    
    
    59
    
    
    Executive Vice President and Chief Lending Officer of Stillwater NationalLen McLaughlin
    
    
    55
    
    
    President, SNB Bank of Dallas-Frisco Division of Stillwater NationalJ. Randall Mills
    
    
    53
    
    
    President, Healthcare Strategic Support, Inc.Jason D. Osborn
    
    
    37
    
    
    President, Oklahoma City Division of Stillwater NationalSteven M. Peterson
    
    
    43
    
    
    President, SNB Bank of Austin Division of Stillwater National*Jerry Rackley
    
    
    46
    
    
    Executive Director, Corporate Marketing of Stillwater National
 83




---



##### 







Name
    
    Age
    
    PositionKimberly G. Sinclair
    
    
    52
    
    
    Executive Vice President and Chief Administrative Officer of Stillwater NationalDouglas J. Watts
    
    
    58
    
    
    President, Kansas City Division of Stillwater NationalCharles H. Westerheide
    
    
    59
    
    
    Executive Vice President and Treasurer of Stillwater NationalDavid L. York
    
    
    61
    
    
    President, Tulsa Division of Stillwater National
 
 *
    
    Advisor to the Executive Officers  Joseph Ernie Beaudet
 Robert H. Beuttas
 Kerby E. Crowell
 John T. Danielson
 David Dietz
 84




---



##### 







Hal E. Fudge
 Allen Glenn
 Steven M. Gobel
 Steven N. Hadley
 Rex E. Horning
 Jerry L. Lanier
 85




---



##### 







Len McLaughlin
 J. Randall Mills
 Jason D. Osborn
 Steven M. Peterson
 Kimberly G. Sinclair
 Douglas J. Watts
 Charles H. Westerheide
 86




---



##### 







David L. York
 87




---



##### 







RISK FACTORS
 Investing in our common stock involves risks. You should carefully consider the following risk
factors before you decide to make an investment decision regarding our stock. The risk factors may
cause our future earnings to be lower or our financial condition to be less favorable than we
expect. In addition, other risks of which we are not aware, or which we do not believe are
material, may cause earnings to be lower, or may hurt our financial condition. You should also
consider the other information in this Annual Report on Form 10-K , as well as in the documents
incorporated by reference into it.
 We may be unable to execute our growth strategy.
    Changes in interest rates and other factors beyond our control may adversely affect our earnings
and financial condition.
   88




---



##### 







Changes in local economic conditions could adversely affect our business.
  Adverse changes in healthcare-related businesses could lead to slower loan growth and higher levels
of problem loans and charge-offs.
  Our allowance for loan losses may not be adequate to cover our actual loan losses, which could
adversely affect our earnings.
   89




---



##### 







Unseasoned loans may increase the risk of credit defaults in the future.
  We use wholesale funding sources to supplement our core deposits, which exposes us to liquidity
risk and potential earnings volatility or other adverse effects if we are unable to secure adequate
funding.
  We rely on our management and other key personnel, and the loss of any of them may adversely affect
our operations.
  The market price for our common stock may be highly volatile.
  
    
    Variations in our anticipated or actual operating results or the results of our
competitors;
    
    Changes in investors or analysts perceptions of the risks and conditions of our
business;
    
    The size of the public float of our common stock;
    
    Regulatory developments;
    
    The announcement of acquisitions or new branch locations by us or our competitors;
    
    Market conditions; and
    
    General economic conditions.
 Competition may decrease our growth or profits.
  90




---



##### 







Government regulation significantly affects our business.
  Our ability to pay dividends is limited by law and contract.
  Restrictions on unfriendly acquisitions could prevent a takeover.
    91




---



##### 







Future sales of our common stock or other securities may dilute the value of our common stock.
   92




---



##### 







Availability of Filings
  93




---



##### 







Properties
  Southwest Bancorp, Inc.Corporate Headquarters608 S. Main StreetP.O. Box 1988
    
    Stillwater, Oklahoma 74076
    
    405-742-1800www.oksb.comBusiness Consulting Group, Inc.1624 Cimarron Plaza*P.O. Box 1988
    
    Stillwater, Oklahoma 74076
    
    405-372-2234Healthcare Strategic Support, Inc.2431 E. 61st, Suite 170*P.O. Box 521500
    
    Tulsa, Oklahoma 74152
    
    918-523-3690SNB Bank of WichitaCorporate Headquarters8415 E. 21st Street North, Suite 150*
    
    Wichita, Kansas 67206
    
    316-315-1660www.snbwichita.comBank of Kansas LocationsCorporate Headquarters524 N. Main Street
    
    South Hutchinson, Kansas 67505
    
    620-728-3000www.bankofkansas.comNorth hutchinson100 East 30th Avenue
    
    Hutchinson, Kansas 67502
    
    620-728-3000Stillwater National Bank & Trust Company LocationsCorporate Headquarters608 S. Main StreetP.O. Box 1988
    
    Stillwater, Oklahoma 74076
    
    405-372-2234www.banksnb.comDrive-in Facility308 S. Main StreetP.O. Box 1988
    
    Stillwater, Oklahoma 74076
    
    405-372-2234Operations Center1624 Cimarron Plaza*P.O. Box 1988
    
    Stillwater, Oklahoma 74076
    
    405-372-2234Waterford Branch6301 Waterford Blvd., Suite 101*
    
    Oklahoma City, Oklahoma 73118
    
    405-427-3100South OKC Branch8101 S. Walker Ave., Suite B
    
    Oklahoma City, Oklahoma 73139
    
    405-427-3100
 94




---



##### 







Chickasha Branch500 W. Grand Avenue
    
    Chickasha, Oklahoma 73018
    
    405-427-3100Tulsa Utica Branch1500 S. Utica AvenueP.O. Box 521500
    
    Tulsa, Oklahoma 74152
    
    918-523-3750Tulsa 61st Branch2431 E. 61st, Suite 170*P.O. Box 521500
    
    Tulsa, Oklahoma 74152
    
    918-523-3750SNB McMullen Bank-Tilden Branch205 Elm Street
    
    Tilden, Texas 78072
    
    361-274-3391SNB Bank of Dallas5300 Town and Country Blvd., Suite 100*
    
    Frisco, Texas 75034
    
    972-624-2960SNB Bank of Dallas-Preston Center5950 Berkshire Lane, Suite 350*
    
    Dallas, Texas 75225
    
    972-624-2960SNB Bank of Austin3600 Bee Cave Road, Suite 100*
    
    Austin, Texas 78746
    
    512-314-6741SNB Bank of San Antonio-Stone Oak Branch777 E. Sonterra Blvd, Suite 190*
    
    San Antonio, Texas 78258
    
    210-442-6141SNB Bank of San Antonio-Medical Hill Branch9324 Huebner Road
    
    San Antonio, Texas 78240
    
    210-442-6141Stillwater National Bank Loan Production Office11350 Tomahawk Creek Parkway*Suite 100
    
    Leawood, Kansas 66211
    
    913-906-4400Stillwater National Bank Loan Production Office9990 Richmond, Suite 140*
    
    Houston, Texas 77042
    
    713-782-3154OSU Campus Branch Bank1102 W. Hall of Fame Avenue*P.O. Box 1988
    
    Stillwater, Oklahoma 74076
    
    405-372-2234OUHSC Loan Office1106 N. Stonewall*
    
    Oklahoma City, Oklahoma 73117
    
    405-427-3100OSU-Stillwater Marketing OfficeStudent Union, Room 150*P.O. Box 1988
    
    Stillwater, Oklahoma 74076
    
    405-372-2234
 
 *
    
    Leased from third parties. Other properties are owned. 95




---



##### 



PART IV
  Documents Filed as Part of this Report
 Financial Statements
        Financial Statement Schedules
 Exhibits
 No.
    
    Exhibit3.1
    
    
    Amended and Restated Certificate of Incorporation of Southwest Bancorp, Inc.
(incorporated by reference to Exhibit 3.1 to Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996)3.2
    
    
    Bylaws of Southwest Bancorp, Inc., as amended (incorporated by reference to Exhibit 3.2
to Current Report on Form 8-K filed November 19, 2007)4.1
    
    
    Rights Agreement, dated as of April 22, 1999, between Southwest Bancorp, Inc. and
Harris Trust & Savings Bank, as rights agent and Form of Certificate of Designations
setting forth terms of Class B, Series 1 Preferred Stock of Southwest Bancorp, Inc.
referred to in the rights agreement (incorporated by reference to Exhibits 1 and 2 to
Current Report on Form 8-K dated April 22, 1999)*
    
    
    10.1
    
    
    Southwest Bancorp, Inc. Employee Stock Purchase Plan
(incorporated by reference from Exhibit 4.1 to Registration
Statement on Form S-8 (File No. 33-97850))*
    
    
    10.2
    
    
    Southwest Bancorp, Inc. and Affiliates Amended and Restated
Severance Compensation Plan (incorporated by reference from
Exhibit 10.6 to Current Report on Form 8-K filed January 2,
2008)*
    
    
    10.3
    
    
    Southwest Bancorp, Inc. 1994 Stock Option Plan (incorporated
by reference from Exhibit 10.3 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1993)*
    
    
    10.4
    
    
    Southwest Bancorp, Inc. 1999 Stock Option Plan as Amended
and Restated (incorporated by reference from Exhibit 10 to
Quarterly Report on Form 10-Q for the quarter ended June 30,
2007)*
    
    
    10.5
    
    
    Stillwater National Bank and Trust Company 2002 and 2003
Deferred Compensation Plans (incorporated by reference from
Exhibit 10.5 to Annual Report on Form 10-K for the fiscal
year ended December 31, 2002)*
    
    
    10.6
    
    
    Stillwater National Bank and Trust Company Amended and
Restated Supplemental Profit Sharing Plan for Rick Green
(incorporated by reference from Exhibit 10.3 to Current
Report on Form 8-K filed January 2, 2008)
 96




---



##### 



No.
    
    Exhibit*
    
    
    10.7
    
    
    Stillwater National Bank and Trust Company Amended and
Restated Supplemental Profit Sharing Plan for Kerby E.
Crowell (incorporated by reference from Exhibit 10.4 to
Current Report on Form 8-K filed January 2, 2008)*
    
    
    10.8
    
    
    Stillwater National Bank and Trust Company Amended and
Restated Supplemental Profit Sharing Plan for Jerry L.
Lanier (incorporated by reference from Exhibit 10.5 to
Current Report on Form 8-K filed January 2, 2008)10.9
    
    
    Indemnification Agreements by and between Southwest Bancorp, Inc. and James E. Berry
II, Thomas D. Berry, Joe Berry Cannon, J. Berry Harrison, Erd M. Johnson, David P.
Lambert, Linford R. Pitts, Robert B. Rodgers, Russell W. Teubner, John Cohlmia, and
Anthony W. Martin (incorporated by reference from Exhibit 10.9 to Annual Report on Form
10-K for the fiscal year ended December 31, 2005)10.10
    
    
    Indemnification Agreements by and between Southwest Bancorp, Inc. and Rick Green,
Kerby E. Crowell, David Dietz, Allen Glenn, Steve Gobel, Steven N. Hadley, Jerry L.
Lanier, Randy Mills, Kimberly Sinclair, Kay Smith, and Charles H. Westerheide
(incorporated by reference from Exhibit 10.10 to Annual Report on Form 10-K for the fiscal
year ended December 31, 2005)10.11
    
    
    Indemnification Agreements by and between Southwest Bancorp, Inc. and David S.
Crockett, Jr. (incorporated by reference from Exhibit 10(a) to Quarterly Report on Form
10-Q for the quarter ended September 30, 2006)10.12
    
    
    Indemnification Agreements by and between Southwest Bancorp, Inc. and James M.
Johnson (incorporated by reference from Exhibit 10(b) to Quarterly Report on Form 10-Q for
the quarter ended September 30, 2006)*
    
    
    10.13
    
    
    2007 Directors Deferred Compensation Plan by and between
Southwest Bancorp, Inc. and James M. Johnson (incorporated
by reference to Exhibit 10 to Current Report on Form 8-K
dated December 28, 2006)*
    
    
    10.14
    
    
    Amendment to 2007 Directors Deferred Compensation Plan by
and between Southwest Bancorp, Inc. and James M. Johnson
(incorporated by reference to Exhibit 10.1 to Current
Report on Form 8-K filed January 2, 2008)10.15
    
    
    Audit Committee Financial Expert Agreement by and between Southwest Bancorp, Inc.
and David S. Crockett, Jr. Incorporated by reference to Exhibit 10.15 to Annual Report on
Form 10-K for the fiscal year ended December 31, 2006)*
    
    
    10.16
    
    
    2008 Directors Deferred Compensation Plan by and
between Southwest Bancorp, Inc. and James M. Johnson
(incorporated by reference to Exhibit 10.2 to Current
Report on Form 8-K filed January 2, 2008)21
    
    
    Subsidiaries of the Registrant23
    
    
    Consent of Registered Public Accounting Firm24
    
    
    Power of Attorney31(a), (b)
    
    
    Rule 13a-14(a)/15d-14(a) Certifications32(a), (b)
    
    
    18 U.S.C. Section 1350 Certifications
 
 *
    
    Management contract or compensatory plan or arrangement required to be filed pursuant to Item
14(c) of Form 10-K. 97




---



##### 



SIGNATURES
  SOUTHWEST BANCORP, INC.March 7, 2008
    by:
    /s/ Rick GreenRick GreenChief Executive Officer  /s/ Rick Green
    
    March 7, 2008Rick GreenDirector and Chief Executive Officer
(Principal Executive Officer) /s/ Kerby E. Crowell
    
    March 7, 2008Kerby E. CrowellExecutive Vice President,
Chief Financial Officer and Secretary
(Principal Financial and
Accounting Officer)  By:
    /s/ Rick GreenRick GreenAttorney-in-Fact for Majority of the
Directors of Southwest 98