• Bank OZK Announces Record First Quarter 2023 Earnings

    Source: Nasdaq GlobeNewswire / 20 Apr 2023 16:01:01   America/New_York

    LITTLE ROCK, Ark., April 20, 2023 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income available to common stockholders for the first quarter of 2023 was a record $165.9 million, a 29.5% increase from $128.0 million for the first quarter of 2022. Diluted earnings per common share for the first quarter of 2023 were a record $1.41, a 38.2% increase from $1.02 for the first quarter of 2022.

    Provision for credit losses was $35.8 million for the first quarter of 2023 compared to $4.2 million for the first quarter of 2022 and $32.5 million for the fourth quarter of 2022. The Bank’s total allowance for credit losses (“ACL”) was $393.8 million at March 31, 2023 compared to $293.5 million at March 31, 2022.
    Pre-tax pre-provision net revenue (“PPNR”) was a record $246.4 million for the first quarter of 2023, a 42.4% increase from $173.1 million for the first quarter of 2022. The calculation of PPNR and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release.
    The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first quarter of 2023 were 2.41%, 15.24% and 17.94%, respectively, compared to 1.97%, 11.67% and 13.73%, respectively, for the first quarter of 2022. The calculation of the Bank’s returns on average common stockholders’ equity and average tangible common stockholders’ equity and the reconciliations to GAAP are included in the schedules accompanying this release.
    George Gleason, Chairman and Chief Executive Officer stated, “We are pleased to report our record results for the first quarter. These results could not be achieved without the outstanding performance of our teammates. Our strong capital, liquidity and profitability have us well-positioned for the future.”

    KEY BALANCE SHEET METRICS

    Total loans were $22.06 billion at March 31, 2023, a 16.5% increase from $18.93 billion at March 31, 2022. Deposits were $22.28 billion at March 31, 2023, a 9.6% increase from $20.33 billion at March 31, 2022. Total assets were $28.97 billion at March 31, 2023, a 9.1% increase from $26.56 billion at March 31, 2022.
    Common stockholders’ equity was $4.42 billion at March 31, 2023, a 1.7% increase from $4.35 billion at March 31, 2022. Tangible common stockholders’ equity was $3.76 billion at March 31, 2023, a 2.1% increase from $3.68 billion at March 31, 2022. During the four quarters ended March 31, 2023, the Bank repurchased approximately 7.84 million shares of its common stock at a weighted average cost of $38.75, for a total of $303.7 million, including 2.35 million shares at a weighted average cost of $38.59, for a total of $85.34 million, during the quarter just ended.
    Book value per common share was $38.43 at March 31, 2023, an 8.3% increase from $35.47 at March 31, 2022. Tangible book value per common share was $32.68 at March 31, 2023, a 8.8% increase from $30.03 at March 31, 2022.
    The Bank’s ratio of total common stockholders’ equity to total assets was 15.27% at March 31, 2023, compared to 16.38% at March 31, 2022. Its ratio of total tangible common stockholders’ equity to total tangible assets was 13.28% at March 31, 2023, compared to 14.22% at March 31, 2022.
    The calculations of the Bank’s common stockholders’ equity, tangible common stockholders’ equity, tangible book value per common share, and ratio of total tangible common stockholders’ equity to total tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.

    ASSET QUALITY

    The Bank’s ratio of nonperforming non-purchased loans to total loans (excluding purchased loans) was 0.15% at March 31, 2023, compared to 0.21% as of March 31, 2022. The Bank’s ratio of nonperforming assets to total assets (excluding purchased loans, except for their inclusion in total assets) was 0.34% at March 31, 2023, compared to 0.16% as of March 31, 2022. The Bank’s annualized ratio of net charge-offs of non-purchased loans to average non-purchased loans was 0.15% for the quarter ended March 31, 2023 compared to 0.08% for the quarter ended March 31, 2022.

    MANAGEMENT’S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS

    In connection with this release, the Bank released management’s comments on its quarterly results, which are available at http://ir.ozk.com. This release should be read in conjunction with management’s comments on the quarterly results.
    Management will conduct a conference call to take questions on these quarterly results and management’s comments at 10:00 a.m. CT (11:00 a.m. ET) on April 21, 2023. Interested parties may access the conference call live via webcast on the Bank’s investor relations website at https://ir.ozk.com/news/event-calendar, or may participate via telephone by registering using this online form. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the conference call webcast will be archived on the Bank's website for at least 30 days.
    The Bank files annual, quarterly and current reports, proxy materials, and other information required by the Securities Exchange Act of 1934 with the Federal Deposit Insurance Corporation (“FDIC”), copies of which are available electronically at the FDIC’s website at https://efr.fdic.gov/fcxweb/efr/index.html and are also available on the Bank’s investor relations website at ir.ozk.com. To receive automated email alerts for these materials please visit https://ir.ozk.com/other/email-alerts to sign up.

    NON-GAAP FINANCIAL MEASURES

    This release contains certain non-GAAP financial measures. The Bank uses these non-GAAP financial measures, specifically return on average common stockholders’ equity, return on average tangible common stockholders’ equity, tangible book value per common share, common stockholders’ equity, tangible common stockholders’ equity, the ratio of total tangible common stockholders’ equity to total tangible assets, and PPNR, to assess the strength of its capital, its ability to generate earnings on tangible capital invested by its shareholders and trends in its net revenue. These measures typically adjust GAAP financial measures to exclude intangible assets or provision for credit losses. Management believes presentation of these non-GAAP financial measures provides useful supplemental information which contributes to a proper understanding of the financial results and capital levels of the Bank. These non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP performance measures that may be presented by other banks. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the schedules accompanying this release under the caption “Reconciliation of Non-GAAP Financial Measures.”

    FORWARD-LOOKING STATEMENTS

    This press release and other communications by the Bank include certain “forward-looking statements” regarding the Bank’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time. Those statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: potential delays or other problems in implementing the Bank’s growth and expansion strategies, including hiring or retaining qualified personnel, obtaining regulatory or other approvals, delays in identifying satisfactory sites, obtaining permits and designing, constructing and opening new offices or relocating, selling or closing existing offices; the availability of and access to capital; possible downgrades in the Bank’s credit ratings or outlook which could increase the costs of or decrease the availability of funding from capital markets; the ability to attract new or retain existing or acquired deposits or to retain or grow loans, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and long-term interest rates or changes in the relative relationships of various interest rate indices; the potential impact of the transition from the London Interbank Offered Rate (“LIBOR”) as a reference rate; competitive factors and pricing pressures, including their effect on the Bank’s net interest margin or core spread; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; conditions within the banking industry, including the effects of recent failures of other financial institutions; recently enacted and potential laws and regulatory requirements or changes to existing laws and regulatory requirements, including changes affecting oversight of the financial services industry, changes intended to manage or mitigate climate and related environmental risks or changes in the interpretation and enforcement of such laws and requirements, and the costs and expenses to comply with new and/or existing legislation and regulatory requirements; uncertainty regarding the U.S. government’s debt limit or changes in U.S. government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank or its customers; natural disasters or acts of war or terrorism; the potential impact of continuing inflationary pressures; the potential impact of supply chain disruptions; national, international or political instability or military conflict, including the ongoing war in Ukraine; the competition and costs of recruiting and retaining human talent; impairment of our goodwill or other intangible assets; adoption of new accounting standards, or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this communication or as detailed from time to time in our public filings, including those factors described in the disclosures under the headings “Forward-Looking Information” and “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, 2022 and our quarterly reports on Form 10-Q. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described in, or implied by, such forward-looking statements. The Bank disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.

    GENERAL INFORMATION

    Bank OZK (Nasdaq: OZK) is a regional bank providing innovative financial solutions delivered by expert bankers with a relentless pursuit of excellence. Established in 1903, Bank OZK conducts banking operations with over 240 offices in eight states including Arkansas, Georgia, Florida, North Carolina, Texas, New York, California and Mississippi and had $28.97 billion in total assets as of March 31, 2023. Bank OZK can be found at www.ozk.com and on Facebook, Twitter and LinkedIn or contacted at (501) 978-2265 or P.O. Box 8811, Little Rock, Arkansas 72231-8811.


    Bank OZK
    Consolidated Balance Sheets
    Unaudited

      March 31,  December 31, 
      2023  2022 
      (Dollars in thousands, except per share amounts) 
    ASSETS        
    Cash and cash equivalents $1,039,400  $1,033,454 
    Investment securities ― available for sale (“AFS”)  3,422,031   3,491,613 
    Investment securities ― trading  4,477   8,817 
    Federal Home Loan Bank of Dallas and other bankers’ bank stocks  62,304   42,406 
    Non-purchased loans  21,700,941   20,400,154 
    Purchased loans  361,065   378,637 
    Allowance for loan losses  (222,025)  (208,858)
    Net loans  21,839,981   20,569,933 
    Premises and equipment, net  677,061   678,405 
    Foreclosed assets  66,227   6,616 
    Accrued interest receivable  135,314   125,130 
    Bank owned life insurance (“BOLI”)  794,542   789,805 
    Goodwill and other intangible assets, net  662,354   663,543 
    Other, net  267,479   246,846 
    Total assets $28,971,170  $27,656,568 
             
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Deposits:        
    Demand non-interest bearing $4,419,754  $4,658,451 
    Savings and interest bearing transaction  9,446,120   9,905,717 
    Time  8,417,109   6,935,975 
    Total deposits  22,282,983   21,500,143 
    Other borrowings  994,079   606,666 
    Subordinated notes  347,147   346,947 
    Subordinated debentures  121,652   121,591 
    Reserve for losses on unfunded loan commitments  171,742   156,419 
    Accrued interest payable and other liabilities  290,269   233,864 
    Total liabilities  24,207,872   22,965,630 
             
    Commitments and contingencies        
             
    Stockholders’ equity:        
    Preferred stock: $0.01 par value; 100,000,000 shares authorized;
    14,000,000 issued and outstanding at March 31, 2023 and
    December 31, 2022    		  338,980   338,980 
    Common stock: $0.01 par value; 300,000,000 shares authorized;
    115,080,108 and 117,176,928 shares issued and outstanding at
    March 31, 2023 and December 31, 2022, respectively    		  1,151   1,172 
    Additional paid-in capital  1,664,569   1,753,941 
    Retained earnings  2,898,904   2,773,135 
    Accumulated other comprehensive (loss) income  (141,677)  (177,649)
    Total stockholders’ equity before noncontrolling interest  4,761,927   4,689,579 
    Noncontrolling interest  1,371   1,359 
    Total stockholders’ equity  4,763,298   4,690,938 
    Total liabilities and stockholders’ equity $28,971,170  $27,656,568 


    Bank OZK
    Consolidated Statements of Income
    Unaudited

     Three Months Ended
    March 31,    		 
     2023  2022 
     (Dollars in thousands, except per share amounts) 
    Interest income:       
    Non-purchased loans$414,896  $239,995 
    Purchased loans 6,518   8,170 
    Investment securities:       
    Taxable 10,171   10,611 
    Tax-exempt 9,264   2,986 
    Deposits with banks and federal funds sold 7,870   609 
    Total interest income 448,719   262,371 
            
    Interest expense:       
    Deposits 93,632   8,492 
    Other borrowings 5,422   998 
    Subordinated notes 2,574   2,574 
    Subordinated debentures 2,239   964 
    Total interest expense 103,867   13,028 
            
    Net interest income 344,852   249,343 
    Provision for credit losses 35,829   4,190 
    Net interest income after provision for credit losses 309,023   245,153 
            
    Non-interest income:       
    Service charges on deposit accounts:       
    NSF and overdraft fees 4,278   4,201 
    All other service charges 6,502   6,690 
    Trust income 2,033   2,094 
    BOLI income:       
    Increase in cash surrender value 4,974   4,793 
    Death benefits —   297 
    Loan service, maintenance and other fees 4,076   3,018 
    Gains on sales of other assets 343   6,992 
    Net gains (losses) on investment securities 1,716   (90)
    Other 3,887   3,480 
    Total non-interest income 27,809   31,475 
            
    Non-interest expense:       
    Salaries and employee benefits 63,249   54,648 
    Net occupancy and equipment 17,870   17,215 
    Other operating expenses 45,098   35,852 
    Total non-interest expense 126,217   107,715 
            
    Income before taxes 210,615   168,913 
    Provision for income taxes 40,703   36,410 
    Net income 169,912   132,503 
    Earnings attributable to noncontrolling interest (12)  5 
    Preferred stock dividends 4,047   4,480 
    Net income available to common stockholders$165,853  $128,028 
            
    Basic earnings per common share$1.42  $1.03 
            
    Diluted earnings per common share$1.41  $1.02 


    Bank OZK
    Consolidated Statements of Stockholders’ Equity
    Unaudited

      Preferred
    Stock    		  Common
    Stock    		  Additional
    Paid-In
    Capital    		  Retained
    Earnings    		  Accumulated
    Other
    Comprehensive
    (Loss) Income    		  Non-
    Controlling
    Interest    		  Total 
      (Dollars in thousands, except per share amounts) 
    Three months ended March 31, 2023:                     
    Balances – December 31, 2022 $338,980  $1,172  $1,753,941  $2,773,135  $(177,649) $1,359  $4,690,938 
    Net income  —   —   —   169,912   —   —   169,912 
    Earnings attributable to noncontrolling
    interest    		  —   —   —   (12)  —   12   — 
    Total other comprehensive income  —   —   —   —   35,972   —   35,972 
    Preferred stock dividends, $0.28906 per
    share    		  —   —   —   (4,047)  —   —   (4,047)
    Common stock dividends, $0.34 per
    share    		  —   —   —   (40,084)  —   —   (40,084)
    Issuance of 473,039 shares of common
    stock pursuant to stock-based
    compensation plans    		  —   5   518   —   —   —   523 
    Repurchase and cancellation of 2,348,138
    shares of common stock under share
    repurchase program    		  —   (24)  (85,315)  —   —   —   (85,339)
    Repurchase and cancellation of 215,362
    shares of common stock withheld for
    tax pursuant to stock-based
    compensation plans    		  —   (2)  (8,672)  —   —   —   (8,674)
    Stock-based compensation expense  —   —   4,097   —   —   —   4,097 
    Forfeitures of 6,359 shares of unvested
    restricted common stock    		  —   —   —   —   —   —   — 
    Balances – March 31, 2023 $338,980  $1,151  $1,664,569  $2,898,904  $(141,677) $1,371  $4,763,298 
                                 
    Three months ended March 31, 2022:                         
    Balances – December 31, 2021 $338,980  $1,254  $2,093,702  $2,378,466  $23,841  $3,117  $4,839,360 
    Net income  —   —   —   132,503   —   —   132,503 
    Earnings attributable to noncontrolling
    interest    		  —   —   —   5   —   (5)  — 
    Total other comprehensive loss  —   —   —   —   (104,769)  —   (104,769)
    Preferred stock dividends, $0.32 per
    share    		  —   —   —   (4,480)  —   —   (4,480)
    Common stock dividends, $0.30 per
    share    		  —   —   —   (37,842)  —   —   (37,842)
    Issuance of 248,426 shares of common
    stock pursuant to stock-based
    compensation plans    		  —   3   1,484   —   —   —   1,487 
    Repurchase and cancellation of 2,883,013
    shares of common stock under share
    repurchase program    		  —   (29)  (131,536)  —   —   —   (131,565)
    Repurchase and cancellation of 112,974
    shares of common stock withheld for
    tax pursuant to stock-based
    compensation plans    		  —   (1)  (5,398)  —   —   —   (5,399)
    Stock-based compensation expense  —   —   3,874   —   —   —   3,874 
    Forfeitures of 18,992 shares of unvested
    restricted common stock    		  —   —   —   —   —   —   — 
    Balances – March 31, 2022 $338,980  $1,227  $1,962,126  $2,468,652  $(80,928) $3,112  $4,693,169 


    Bank OZK
    Summary of Non-Interest Expense
    Unaudited

      Three Months Ended
    March 31,    		 
      2023  2022 
      (Dollars in thousands) 
    Salaries and employee benefits $63,249  $54,648 
    Net occupancy and equipment  17,870   17,215 
    Other operating expenses:        
    Software and data processing  9,283   8,186 
    Professional and outside services  5,105   4,817 
    Deposit insurance and assessments  4,148   2,150 
    Advertising and public relations  4,036   1,259 
    Telecommunication services  2,273   2,010 
    ATM expense  2,139   1,509 
    Postage and supplies  1,926   1,698 
    Travel and meals  1,815   1,758 
    Amortization of intangibles  1,189   1,517 
    Writedowns of foreclosed and other assets  941   258 
    Loan collection and repossession expense  386   325 
    Amortization of CRA and tax credit investments  6,414   5,102 
    Other  5,443   5,263 
    Total non-interest expense $126,217  $107,715 


    Bank OZK
    Summary of Total Loans Outstanding
    Unaudited

      March 31, 2023  December 31, 2022 
      (Dollars in thousands) 
    Real estate:                
    Residential 1-4 family $950,730   4.3% $981,567   4.7%
    Non-farm/non-residential  4,868,670   22.1   4,665,268   22.5%
    Construction/land development  8,666,053   39.3   8,215,056   39.5%
    Agricultural  237,852   1.1   239,689   1.2%
    Multifamily residential  1,911,260   8.7   1,503,398   7.2%
    Total real estate  16,634,565   75.5   15,604,978   75.1 
    Commercial and industrial  1,089,991   4.9   902,321   4.3 
    Consumer  2,598,036   11.8   2,445,851   11.8 
    Other  1,739,414   7.8   1,825,641   8.8 
    Total loans  22,062,006   100.0%  20,778,791   100.0%
    Allowance for loan losses  (222,025)      (208,858)    
    Net loans $21,839,981      $20,569,933     


    Bank OZK
    Allowance for Credit Losses
    Unaudited

                  
       Allowance for
    Loan Losses    		  Reserve for
    Losses on
    Unfunded
    Loan
    Commitments    		  Total
    Allowance for
    Credit Losses    		 
       (Dollars in thousands) 
    Three months ended March 31, 2023:             
    Balances – December 31, 2022  $208,858  $156,419  $365,277 
    Net charge-offs   (7,339)  —   (7,339)
    Provision for credit losses   20,506   15,323   35,829 
    Balances – March 31, 2023  $222,025  $171,742  $393,767 
                  
    Three months ended March 31, 2022:             
    Balances – December 31, 2021  $217,380  $71,609  $288,989 
    Net charge-offs   361   —   361 
    Provision for credit losses   (13,528)  17,718   4,190 
    Balances – March 31, 2022  $204,213  $89,327  $293,540 
                  


    Bank OZK
    Summary of Deposits – By Account Type
    Unaudited

        
      March 31, 2023  December 31, 2022 
      (Dollars in thousands) 
    Non-interest bearing $4,419,754   19.8% $4,658,451   21.7%
    Interest bearing:                
    Transaction (NOW)  4,343,384   19.5   4,097,532   19.1 
    Savings and money market  5,102,736   22.9   5,808,185   27.0 
    Time deposits  8,417,109   37.8   6,935,975   32.2 
    Total deposits $22,282,983   100.0% $21,500,143   100.0%


    Bank OZK
    Summary of Deposits – By Customer Type
    Unaudited

        
      March 31, 2023  December 31, 2022 
      (Dollars in thousands) 
    Non-interest bearing $4,419,754   19.8% $4,658,451   21.7%
    Interest bearing:                
    Consumer and commercial:                
    Consumer – non-time  3,489,601   15.7   3,916,078   18.2 
    Consumer – time  6,154,802   27.6   4,936,061   23.0 
    Commercial – non-time  2,487,083   11.2   2,741,007   12.7 
    Commercial – time  560,223   2.5   516,477   2.4 
    Public funds  2,324,654   10.4   2,103,392   9.8 
    Brokered  2,104,023   9.5   2,050,294   9.5 
    Reciprocal  742,843   3.3   578,383   2.7 
    Total deposits $22,282,983   100.0% $21,500,143   100.0%


    Bank OZK
    Selected Consolidated Financial Data
    Unaudited

      Three Months Ended
    March 31,    		 
      2023  2022  % Change 
      (Dollars in thousands, except per share amounts) 
    Income statement data:            
    Net interest income $344,852  $249,343   38.3%
    Provision for credit losses  35,829   4,190   755.1%
    Non-interest income  27,809   31,475   (11.6)
    Non-interest expense  126,217   107,715   17.2 
    Net income  169,912   132,503   28.2 
    Preferred stock dividends  4,047   4,480   (9.7)
    Net income available to common stockholders  165,853   128,028   29.5 
    Pre-tax pre-provision net revenue (1)  246,444   173,103   42.4 
    Common share and per common share data:            
    Diluted earnings per common share $1.41  $1.02   38.2%
    Basic earnings per common share  1.42   1.03   37.9 
    Common stock dividends per share  0.34   0.30   13.3 
    Book value per share  38.43   35.47   8.3 
    Tangible book value per common share (1)  32.68   30.03   8.8 
    Weighted-average diluted shares outstanding (thousands)  117,405   125,004   (6.1)
    End of period shares outstanding (thousands)  115,080   122,677   (6.2)
    Balance sheet data at period end:            
    Total assets $28,971,170  $26,562,353   9.1%
    Total loans  22,062,006   18,931,022   16.5 
    Non-purchased loans  21,700,941   18,449,723   17.6 
    Purchased loans  361,065   481,299   (25.0)
    Allowance for loan losses  222,025   204,213   8.7 
    Foreclosed assets  66,227   3,417   1,838.2 
    Investment securities − AFS  3,422,031   3,728,284   (8.2)
    Goodwill and other intangible assets, net  662,354   667,546   (0.8)
    Deposits  22,282,983   20,329,662   9.6 
    Other borrowings  994,079   756,347   31.4 
    Subordinated notes  347,147   346,333   0.2 
    Subordinated debentures  121,652   121,171   0.4 
    Unfunded balance of closed loans  20,965,040   14,954,367   40.2 
    Reserve for losses on unfunded loan commitments  171,742   89,327   92.3 
    Preferred stock  338,980   338,980   — 
    Total common stockholders’ equity (1)  4,422,947   4,351,077   1.7 
    Net unrealized losses on investment securities AFS
    included in stockholders’ equity    		  (141,677)  (80,928)    
    Loan (including purchased loans) to deposit ratio  99.01%  93.12%    
    Selected ratios:            
    Return on average assets (2)  2.41%  1.97%    
    Return on average common stockholders’ equity (1) (2)  15.24   11.67     
    Return on average tangible common stockholders’ equity (1) (2)  17.94   13.73     
    Average common equity to total average assets  15.78   16.86     
    Net interest margin – FTE (2)  5.54   4.24     
    Efficiency ratio  33.63   38.22     
    Net charge-offs to average non-purchased loans (2) (3)  0.15   0.08     
    Net charge-offs to average total loans (2)  0.14   (0.01)    
    Nonperforming loans to total loans (4)  0.15   0.21     
    Nonperforming assets to total assets (4)  0.34   0.16     
    Allowance for loan losses to total loans (5)  1.01   1.08     
    Allowance for credit losses to total loans and unfunded loan commitments  0.92   0.87     
    Other information:            
    Non-accrual loans (4) $33,371  $37,363     
    Accruing loans − 90 days past due  —   —     

             (1)  Calculations of pre-tax pre-provision net revenue, tangible book value per common share, total common stockholders’ equity and returns on average common stockholders’ equity and average tangible common stockholders’ equity and the reconciliations to GAAP are included in the schedules accompanying this release.
             (2)  Ratios for interim periods annualized based on actual days.
             (3)  Excludes purchased loans and net charge-offs related to such loans.
             (4)  Excludes purchased loans, except for their inclusion in total assets.
             (5)  Excludes reserve for losses on unfunded loan commitments.


    Bank OZK
    Selected Consolidated Financial Data (continued)
    Unaudited

      Three Months Ended 
      March 31, 2023  December 31, 2022  %
    Change    		 
      (Dollars in thousands, except per share amounts) 
    Income statement data:            
    Net interest income $344,852  $332,488   3.7%
    Provision for credit losses  35,829   32,508   10.2 
    Non-interest income  27,809   27,544   1.0 
    Non-interest expense  126,217   119,013   6.1 
    Net income  169,912   162,825   4.4 
    Preferred stock dividends  4,047   4,047   — 
    Net income available to common stockholders  165,853   158,832   4.4 
    Pre-tax pre-provision net revenue (1)  246,444   241,019   2.3 
    Common share and per common share data:            
    Diluted earnings per common share $1.41  $1.34   5.2%
    Basic earnings per common share  1.42   1.35   5.2 
    Common stock dividends per share  0.34   0.33   3.0 
    Book value per share  38.43   37.13   3.5 
    Tangible book value per common share (1)  32.68   31.47   3.8 
    Weighted-average diluted shares outstanding (thousands)  117,405   118,201   (0.7)
    End of period shares outstanding (thousands)  115,080   117,177   (1.8)
    Balance sheet data at period end:            
    Total assets $28,971,170  $27,656,568   4.8%
    Total loans  22,062,006   20,778,791   6.2 
    Non-purchased loans  21,700,941   20,400,154   6.4 
    Purchased loans  361,065   378,637   (4.6)
    Allowance for loan losses  222,025   208,858   6.3 
    Foreclosed assets  66,227   6,616   901.0 
    Investment securities − AFS  3,422,031   3,491,613   (2.0)
    Goodwill and other intangible assets, net  662,354   663,543   (0.2)
    Deposits  22,282,983   21,500,143   3.6 
    Other borrowings  994,079   606,666   63.9 
    Subordinated notes  347,147   346,947   0.1 
    Subordinated debentures  121,652   121,591   0.1 
    Unfunded balance of closed loans  20,965,040   21,062,733   (0.5)
    Reserve for losses on unfunded loan commitments  171,742   156,419   9.8 
    Preferred stock  338,980   338,980   — 
    Total common stockholders’ equity (1)  4,422,947   4,350,599   1.7 
    Net unrealized losses on investment securities AFS
    included in stockholders’ equity    		  (141,677)  (177,649)    
    Loan (including purchased loans) to deposit ratio  99.01%  96.64%    
    Selected ratios:            
    Return on average assets (2)  2.41%  2.35%    
    Return on average common stockholders’ equity (1) (2)  15.24   14.76     
    Return on average tangible common stockholders’ equity (1) (2)  17.94   17.48     
    Average common equity to average assets  15.78   15.90     
    Net interest margin – FTE (2)  5.54   5.46     
    Efficiency ratio  33.63   32.84     
    Net charge-offs to average non-purchased loans (2) (3)  0.15   0.09     
    Net charge-offs to average total loans (2)  0.14   0.06     
    Nonperforming loans to total loans (4)  0.15   0.22     
    Nonperforming assets to total assets (4)  0.34   0.19     
    Allowance for loan losses to total loans (5)  1.01   1.01     
    Allowance for loan losses to total loans and
    unfunded loan commitments    		  0.92   0.87     
    Other information:            
    Non-accrual loans (4) $33,371  $43,411     
    Accruing loans − 90 days past due  —   —     

             (1)  Calculations of pre-tax pre-provision net revenue, total common stockholders’ equity, tangible book value per common share and returns on average common stockholders’ equity and average tangible common stockholders’ equity and the reconciliations to GAAP are included in the schedules accompanying this release.
             (2)  Ratios for interim periods annualized based on actual days.
             (3)  Excludes purchased loans and net charge-offs related to such loans.
             (4)  Excludes purchased loans, except for their inclusion in total assets.
             (5)  Excludes reserve for losses on unfunded loan commitments.        


    Bank OZK
    Supplemental Quarterly Financial Data
    Unaudited

      3/31/23  12/31/22  9/30/22  6/30/22  3/31/22 
      (Dollars in thousands, except per share amounts) 
    Earnings summary:                    
    Net interest income $344,852  $332,488  $294,617  $265,793  $249,343 
    Federal tax (FTE) adjustment  2,603   2,383   2,151   1,300   1,017 
    Net interest income (FTE)  347,455   334,871   296,768   267,093   250,360 
    Provision for credit losses  (35,829)  (32,508)  (39,771)  (7,025)  (4,190)
    Non-interest income  27,809   27,544   29,163   26,320   31,475 
    Non-interest expense  (126,217)  (119,013)  (115,691)  (109,300)  (107,715)
    Pre-tax income (FTE)  213,218   210,894   170,469   177,088   169,930 
    FTE adjustment  (2,603)  (2,383)  (2,151)  (1,300)  (1,017)
    Provision for income taxes  (40,703)  (45,686)  (35,969)  (39,375)  (36,410)
    Noncontrolling interest  (12)  54   —   (8)  5 
    Preferred stock dividend  (4,047)  (4,047)  (4,047)  (4,047)  (4,480)
    Net income available to common stockholders $165,853  $158,832  $128,302  $132,358  $128,028 
    Earnings per common share – diluted $1.41  $1.34  $1.08  $1.10  $1.02 
    Pre-tax pre-provision net revenue (1) $246,444  $241,019  $208,089  $182,813  $173,103 
    Selected balance sheet data at period end:                    
    Total assets $28,971,170  $27,656,568  $26,232,119  $25,919,965  $26,562,353 
    Non-purchased loans  21,700,941   20,400,154   19,103,546   18,297,638   18,449,723 
    Purchased loans  361,065   378,637   410,166   445,080   481,299 
    Investment securities – AFS  3,422,031   3,491,613   3,528,077   3,705,807   3,728,284 
    Deposits  22,282,983   21,500,143   20,401,876   19,984,187   20,329,662 
    Unfunded balance of closed loans  20,965,040   21,062,733   20,091,101   17,369,767   14,954,367 
    Allowance for credit losses:                    
    Balance at beginning of period $365,277  $335,635  $299,938  $293,540  $288,989 
    Net charge-offs  (7,339)  (2,866)  (4,074)  (627)  361 
    Provision for credit losses  35,829   32,508   39,771   7,025   4,190 
    Balance at end of period $393,767  $365,277  $335,635  $299,938  $293,540 
    Allowance for loan losses $222,025  $208,858  $200,098  $190,795  $204,213 
    Reserve for losses on unfunded loan commitments  171,742   156,419   135,537   109,143   89,327 
    Total allowance for credit losses $393,767  $365,277  $335,635  $299,938  $293,540 
    Selected ratios:                    
    Net interest margin – FTE (2)  5.54%  5.46%  5.03%  4.52%  4.24%
    Efficiency ratio  33.63   32.84   35.50   37.25   38.22 
    Net charge-offs to average non-purchased loans (2) (3)  0.15   0.09   0.09   0.03   0.08 
    Net charge-offs to average total loans (2)  0.14   0.06   0.09   0.01   (0.01)
    Nonperforming loans to total loans (4)  0.15   0.22   0.14   0.16   0.21 
    Nonperforming assets to total assets (4)  0.34   0.19   0.13   0.12   0.16 
    Allowance for loan losses to total loans (5)  1.01   1.01   1.03   1.02   1.08 
    Allowance for credit losses to total loans and
    unfunded commitments    		  0.92   0.87   0.85   0.83   0.87 
    Loans past due 30 days or more, including past due
    non-accrual loans, to total loans (4)    		  0.15   0.13   0.11   0.11   0.14 

              (1)  Calculations of pre-tax pre-provision net revenue and the reconciliation to GAAP are included in the schedules that follow under the caption “Reconciliation of Non-GAAP Financial Measures.”
              (2)  Ratios for interim periods annualized based on actual days.
              (3)  Excludes purchased loans and net charge-offs related to such loans.
              (4)  Excludes purchased loans, except for their inclusion in total assets.
              (5)  Excludes reserve for losses on unfunded loan commitments.


    Bank OZK
    Average Consolidated Balance Sheets and Net Interest Analysis – FTE
    Unaudited

      Three Months Ended March 31, 
      2023  2022 
      Average
    Balance    		  Income/
    Expense    		  Yield/
    Rate    		  Average
    Balance    		  Income/
    Expense    		  Yield/
    Rate    		 
      (Dollars in thousands) 
    ASSETS                        
    Interest earning assets:                        
    Interest earning deposits and federal funds sold $739,521  $7,870   4.32% $1,359,510  $609   0.18%
    Investment securities:                        
    Taxable  2,450,756   10,171   1.68   3,378,613   10,611   1.27 
    Tax-exempt – FTE  1,027,806   11,727   4.63   570,987   3,779   2.68 
    Non-purchased loans – FTE  20,850,529   415,037   8.07   18,154,626   240,219   5.37 
    Purchased loans  370,887   6,518   7.13   499,418   8,170   6.63 
    Total earning assets – FTE  25,439,499   451,323   7.19   23,963,154   263,388   4.46 
    Non-interest earning assets  2,517,047           2,421,122         
    Total assets $27,956,546          $26,384,276         
    LIABILITIES AND STOCKHOLDERS’ EQUITY                        
    Interest bearing liabilities:                        
    Deposits:                        
    Savings and interest bearing transaction $9,733,499  $42,515   1.77% $9,522,195  $2,783   0.12%
    Time deposits  7,563,013   51,117   2.74   5,760,998   5,709   0.40 
    Total interest bearing deposits  17,296,512   93,632   2.20   15,283,193   8,492   0.23 
    Other borrowings  467,098   5,422   4.71   756,115   998   0.54 
    Subordinated notes  347,049   2,574   3.01   346,227   2,574   3.02 
    Subordinated debentures  121,638   2,239   7.47   121,097   964   3.23 
    Total interest bearing liabilities  18,232,297   103,867   2.31   16,506,632   13,028  0.32 
    Non-interest bearing liabilities:                        
    Non-interest bearing deposits  4,471,407           4,773,827         
    Other non-interest bearing liabilities  499,997           312,409         
    Total liabilities  23,203,701           21,592,868         
                             
    Total stockholders’ equity before noncontrolling interest  4,751,481           4,788,294         
    Noncontrolling interest  1,364           3,114         
    Total liabilities and stockholders’ equity $27,956,546          $26,384,276         
    Net interest income – FTE     $347,456          $250,360     
    Net interest margin – FTE          5.54%          4.24%
    Core spread (1)          5.87%          5.14%

    (1)   Core spread is the difference between the yield on the Bank’s non-purchased loans-FTE and the rate on its interest bearing deposits.


    Bank OZK

    Reconciliation of Non-GAAP Financial Measures

    Calculation of Average Common Stockholders’ Equity,
    Average Tangible Common Stockholders’ Equity
    and the Annualized Returns on Average Common Stockholders’ Equity and
    Average Tangible Common Stockholders’ Equity
    Unaudited

     Three Months Ended     
     March 31,  December 31, 
     2023  2022  2022 
     (Dollars in thousands) 
    Net income available to common stockholders$165,853  $128,028  $158,832 
    Average stockholders’ equity before noncontrolling interest$4,751,481  $4,788,294  $4,608,570 
    Less average preferred stock (338,980)  (338,980)  (338,980)
    Total average common stockholders’ equity 4,412,501   4,449,314   4,269,590 
    Less average intangible assets:           
    Goodwill (660,789)  (660,789)  (660,789)
    Core deposit and other intangible assets,
    net of accumulated amortization    		 (2,243)  (7,572)  (3,421)
    Total average intangibles (663,032)  (668,361)  (664,210)
    Average tangible common stockholders’ equity$3,749,469  $3,780,953  $3,605,380 
    Return on average common stockholders’ equity (1) 15.24%  11.67%  14.76%
    Return on average tangible common stockholders’ equity (1) 17.94%  13.73%  17.48%

    (1) Ratios for interim periods annualized based on actual days.


    Calculation of Total Common Stockholders’ Equity,
    Total Tangible Common Stockholders’ Equity
    and Tangible Book Value per Common Share
    Unaudited

      March 31,  December 31, 
      2023  2022  2022 
      (In thousands, except per share amounts) 
    Total stockholders’ equity before noncontrolling interest $4,761,927  $4,690,057  $4,689,579 
    Less preferred stock  (338,980)  (338,980)  (338,980)
    Total common stockholders' equity  4,422,947   4,351,077   4,350,599 
    Less intangible assets:            
    Goodwill  (660,789)  (660,789)  (660,789)
    Core deposit and other intangible assets, net of
    accumulated amortization    		  (1,565)  (6,757)  (2,754)
    Total intangibles  (662,354)  (667,546)  (663,543)
    Total tangible common stockholders’ equity $3,760,593  $3,683,531  $3,687,056 
    Shares of common stock outstanding  115,080   122,677   117,177 
    Book value per common share $38.43  $35.47  $37.13 
    Tangible book value per common share $32.68  $30.03  $31.47 


    Calculation of Total Common Stockholders’ Equity,
    Total Tangible Common Stockholders’ Equity
    and the Ratio of Total Tangible Common Stockholders’ Equity
    to Total Tangible Assets
    Unaudited

      March 31, 
      2023  2022 
      (Dollars in thousands) 
    Total stockholders’ equity before noncontrolling interest $4,761,927  $4,690,057 
    Less preferred stock  (338,980)  (338,980)
    Total common stockholders’ equity  4,422,947   4,351,077 
    Less intangible assets:        
    Goodwill  (660,789)  (660,789)
    Core deposit and other intangible assets, net of
    accumulated amortization    		  (1,565)  (6,757)
    Total intangibles  (662,354)  (667,546)
    Total tangible common stockholders’ equity $3,760,593  $3,683,531 
    Total assets $28,971,170  $26,562,353 
    Less intangible assets:        
    Goodwill  (660,789)  (660,789)
    Core deposit and other intangible assets, net of
    accumulated amortization    		  (1,565)  (6,757)
    Total intangibles  (662,354)  (667,546)
    Total tangible assets $28,308,816  $25,894,807 
    Ratio of total common stockholders’ equity to total assets  15.27%  16.38%
    Ratio of total tangible common stockholders’ equity to total
    tangible assets    		  13.28%  14.22%


    Calculation of Pre-Tax Pre-Provision Net Revenue
    Unaudited

      Three Months Ended 
      March 31,
    2023    		  December 31,
    2022    		  September 30,
    2022    		  June 30,
    2022    		  March 31,
    2022    		 
      (Dollars in thousands) 
    Net income available to common
    stockholders    		 $165,853  $158,832  $128,302  $132,358  $128,028 
    Preferred stock dividends  4,047   4,047   4,047   4,047   4,480 
    Earnings attributable to noncontrolling
    interest    		  12   (54)  —   8   (5)
    Provision for income taxes  40,703   45,686   35,969   39,375   36,410 
    Provision for credit losses  35,829   32,508   39,771   7,025   4,190 
    Pre-tax pre-provision net revenue $246,444  $241,019  $208,089  $182,813  $173,103 


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