A high-flying Oklahoma banking company that is a favorite of Midwest analysts is predicting a drop in first-quarter earnings because it might have to write off a large loan.

Officials of Stillwater-based Southwest Bancorp said they expect to boost the bank's provision for loan losses to account for problems with a $1.8 million commercial loan.

The $829 million-asset company, parent of Stillwater National Bank and Trust Co., earned $2 million in the fourth quarter of 1996 and $7.6 million for the full year.

The borrower, a manufacturer and longtime bank customer, notified bank officials during this quarter that a series of mistakes in his operations might prevent full repayment, according to Southwest president and chief executive officer Robert L. McCormick Jr. Mr. McCormick gave no further details about either the borrower or the loan.

The banking company has not determined how much impact the loss provision might have on earnings but noted in the release that any negative effect would be reduced by tax benefits.

Southwest's sudden bad fortune is indicative of the danger banks face when they lend a lot to a single borrower. Even with a reliable, longtime borrower, sudden changes in personal financial status or the local economy can cause significant losses for an otherwise stable bank.

Stillwater National, which had only $22 million of assets 27 years ago, survived the devastating Oklahoma recession of the 1980s and has grown into a small-business lending powerhouse in recent years. From its base in the hometown of Oklahoma State University, it has expanded to the metropolitan areas of Oklahoma City and Tulsa and now competes with the state's largest banks. The bank is also the state's largest originator of student loans.

In late 1993, facing shareholder unhappiness with an illiquid stock, the bank went public at $11.75 a share and has watched the stock price rise ever since.

Despite the announcement about the loan, confidence remained high among investors and analysts. The stock was trading Tuesday afternoon at $21.

"Every so often you get a surprise that comes out of right field, and this appears to be one of those surprises," said Joseph A. Stieven, senior bank analyst at St. Louis-based Stifel, Nicolaus & Co., which underwrote Southwest's 1993 offering.

"This is the same management team that guided this company very successfully through the depression in the mid-'80s in Oklahoma," he added. "Our belief is that they will take care of this quickly, and things will be back to normal."

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