Southwest Bancorp announced it plans to write off $5.1 million of bad loans in the third quarter and record a net loss of $500,000 for the period.
The loan chargeoffs, up from $775,000 written off in the same quarter last year, are the entire balance of a group of related corporate loans that the $851 million-asset company expects will not be repaid, according to a Securities and Exchange Commission filing.
Kerby Crowell, chief financial officer of the Stillwater, Okla., company, said it had been lending to the troubled borrower since 1991 and had been closely monitoring the loans since 1994.
Southwest chose to charge off the credits during this quarter after learning that another creditor had sued the same borrower for delinquency, Mr. Crowell said. He declined to give any more details about the borrower or the outstanding loans.
The large chargeoff is the second of its kind for Southwest this year. It charged off $1.8 million in March after a manufacturer indicated it may not be able to repay its loan fully. For the first nine months of this year, loan-loss provisions are expected to total $8.9 million, up from $2.4 million for the same period of 1996.
Southwest Bancorp, which went public in 1993 and is the parent of Stillwater National Bank and Trust Co., specializes in small-business lending.