• Bank OZK Announces Record Second Quarter 2024 Earnings and $200 Million Stock Repurchase Program

    Source: Nasdaq GlobeNewswire / 17 Jul 2024 15:01:26   America/Chicago

    LITTLE ROCK, Ark., July 17, 2024 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income available to common stockholders for the second quarter of 2024 was a record $173.5 million, a 3.3% increase from $167.9 million for the second quarter of 2023. For the first six months of 2024, net income available to common stockholders was $345.0 million, a 3.4% increase from $333.8 million for the first six months of 2023.

    Diluted earnings per common share for the second quarter of 2024 were a record $1.52, a 3.4% increase from $1.47 for the second quarter of 2023. For the first six months of 2024, diluted earnings per common share were $3.03, a 5.2% increase from $2.88 for the first six months of 2023.

    Pre-tax pre-provision net revenue (“PPNR”) was a record $279.3 million for the second quarter of 2024, a 7.7% increase from $259.5 million for the second quarter of 2023. For the first six months of 2024, PPNR was $552.0 million, a 9.1% increase from the $505.9 million for the first six months of 2023. The calculation of PPNR and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release.

    Provision for credit losses was $49.0 million for the second quarter of 2024 compared to $41.8 million for the second quarter of 2023, while our net charge-offs were only $11.8 million and $8.7 million, respectively, for those quarters. For the first six months of 2024, provision for credit losses was $91.9 million compared to $77.6 million for the first six months of 2023, while our net charge-offs were only $19.1 million and $16.1 million, respectively, for those six-month periods. The Bank’s total allowance for credit losses (“ACL”) was $574.1 million at June 30, 2024, an increase of $147.3 million compared to $426.8 million at June 30, 2023.

    The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the second quarter of 2024 were 1.92%, 13.98% and 16.11%, respectively, compared to 2.27%, 15.14% and 17.78%, respectively, for the second quarter of 2023. For the first six months of 2024, the Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity were 1.94%, 14.07%, and 16.24%, respectively, compared to 2.34%, 15.19%, and 17.86%, respectively, for the first six months of 2023. 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 very pleased with our record results for the quarter just ended giving us our seventh consecutive quarter of record net income and earnings per share and eighth consecutive quarter of record net interest income. These record results have allowed us to consistently increase dividends, significantly grow capital and opportunistically repurchase shares, all while almost doubling our allowance for credit losses.”

    KEY BALANCE SHEET METRICS

    Total loans were $28.67 billion at June 30, 2024, a 21.5% increase from $23.61 billion at June 30, 2023. Deposits were $29.94 billion at June 30, 2024, a 24.9% increase from $23.98 billion at June 30, 2023. Total assets were $36.84 billion at June 30, 2024, a 19.7% increase from $30.76 billion at June 30, 2023.

    Common stockholders’ equity was $5.07 billion at June 30, 2024, a 13.4% increase from $4.47 billion at June 30, 2023. Tangible common stockholders’ equity was $4.41 billion at June 30, 2024, a 15.7% increase from $3.81 billion at June 30, 2023.

    Book value per common share was $44.67 at June 30, 2024, a $5.16 increase from $39.51 at June 30, 2023. Tangible book value per common share was $38.85 at June 30, 2024, a $5.18 increase from $33.67 at June 30, 2023.

    The Bank’s strong profitability has allowed it to maintain strong capital ratios even as it has achieved significant growth. The Bank’s ratio of total common stockholders’ equity to total assets was 13.76% at June 30, 2024, compared to 14.53% at June 30, 2023. The Bank’s ratio of total tangible common stockholders’ equity to total tangible assets was 12.19% at June 30, 2024, compared to 12.66% at June 30, 2023. The calculations of the Bank’s total common stockholders’ equity, tangible common stockholders’ equity, ratio of total tangible common stockholders’ equity to total tangible assets and tangible book value per common share, and the reconciliations to GAAP, are included in the schedules accompanying this release.

    The Bank’s Board recently approved a stock repurchase program authorizing the purchase of up to $200 million of outstanding common stock through expiration of the program on July 1, 2025. In evaluating stock repurchases, management will consider a variety of factors including the Bank’s stock price, expected growth, capital position, alternative uses of capital, liquidity, financial performance, current and expected macroeconomic environment, regulatory requirements and other factors.

    ASSET QUALITY

    The Bank’s various asset quality ratios for the quarter just ended continued to perform well compared to the industry, notwithstanding the challenging macroeconomic environment. This reflects the Bank’s long-term focus on asset quality. The Bank’s ratio of nonperforming non-purchased loans to total loans (excluding purchased loans) was 0.28% at June 30, 2024, compared to 0.15% as of June 30, 2023. The Bank’s ratio of nonperforming assets to total assets (excluding purchased loans, except for their inclusion in total assets) was 0.41% at June 30, 2024, compared to 0.32% as of June 30, 2023. The Bank’s annualized ratio of net charge-offs to average total loans was 0.17% for the quarter and 0.14% for the six months ended June 30, 2024, compared to 0.15% for both the second quarter and six months ended June 30, 2023.

    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 at 10:00 a.m. CT (11:00 a.m. ET) on Thursday, July 18, 2024. 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, total common stockholders’ equity, total 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 tables at the end of 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, expansion and acquisition strategies, including obtaining regulatory or other approvals, delays in acquiring satisfactory sites, obtaining permits and designing, constructing and opening new offices, relocating, selling or closing existing offices, or integrating any acquisitions; 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 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; 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; recently enacted and potential new 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, changes as a result of the U.S. presidential and congressional elections, and the costs and expenses to comply with new and/or existing legislation and regulatory requirements; uncertainty regarding changes in U.S. government monetary and fiscal policy; the impact of any U.S. federal government shutdown or budgetary crisis; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding artificial intelligence and maintaining cybersecurity; the impact of any failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business or others, including as a result of cyberattacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank, its customers or others; natural disasters; acts of war or terrorism; the potential impact of continuing inflationary pressures; the potential impact of supply chain disruptions; national or international political instability or military conflict, including the conflict in the Middle East and the ongoing war in Ukraine; competition for and costs of recruiting and retaining qualified personnel; impairment of our goodwill; 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, 2023 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 in approximately 240 offices in nine states including Arkansas, Georgia, Florida, North Carolina, Tennessee, Texas, New York, California and Mississippi and had $36.84 billion in total assets as of June 30, 2024. For more information, visit www.ozk.com.

     
    Bank OZK
    Consolidated Balance Sheets
    Unaudited
     
     June 30, 2024 December 31, 2023
     (Dollars in thousands)
    ASSETS   
    Cash and cash equivalents$        2,568,813  $        2,149,529 
    Investment securities – available for sale (“AFS”)         2,981,929           3,244,371 
    Federal Home Loan Bank of Dallas (“FHLB”) and other bankers’ bank stocks         24,453           50,400 
    Non-purchased loans         28,455,342           26,195,030 
    Purchased loans         218,343           264,045 
    Allowance for loan losses         (407,079)          (339,394)
    Net Loans         28,266,606           26,119,681 
    Premises and equipment, net         702,505           676,821 
    Foreclosed assets         71,023           61,720 
    Accrued interest receivable         177,403           170,110 
    Bank owned life insurance (“BOLI”)         819,602           808,490 
    Goodwill         660,789           660,789 
    Other, net         563,050           295,546 
    Total assets$        36,836,173  $        34,237,457 
        
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Deposits:   
    Demand non-interest bearing$        4,045,666  $        4,095,874 
    Savings and interest bearing transaction         9,209,732           9,074,296 
    Time         16,688,265           14,234,973 
    Total deposits         29,943,663           27,405,143 
    Other borrowings         400,943           805,318 
    Subordinated notes         348,164           347,761 
    Subordinated debentures         121,652           121,652 
    Reserve for losses on unfunded credit commitments         167,022           161,834 
    Accrued interest payable and other liabilities         445,944           255,773 
    Total liabilities$        31,427,388  $        29,097,481 
        
    Commitments and contingencies   
        
    Stockholders’ equity:   
    Preferred Stock: $0.01 par value; 100,000,000 shares authorized; 14,000,000 issued and outstanding at June 30, 2024 and December 31, 2023         338,980           338,980 
    Common Stock: $0.01 par value; 300,000,000 shares authorized; 113,465,238 and 113,148,672 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively         1,135           1,131 
    Additional paid-in capital         1,615,101           1,612,446 
    Retained earnings         3,553,523           3,283,818 
    Accumulated other comprehensive loss         (100,939)          (97,374)
    Total stockholders’ equity before noncontrolling interest         5,407,800           5,139,001 
    Noncontrolling interest         985           975 
    Total stockholders’ equity         5,408,785           5,139,976 
    Total liabilities and stockholders’ equity$        36,836,173  $        34,237,457 


     
    Bank OZK
    Consolidated Statements of Income
    Unaudited
     
     Three Months Ended
    June 30,
     Six Months Ended
    June 30,
      2024   2023   2024   2023 
     (Dollars in thousands, except per share amounts)
    Interest income:       
    Non-purchased loans$        616,648  $        472,524  $        1,203,629  $        887,420 
    Purchased loans         4,644           5,322           9,604           11,840 
    Investment securities:       
    Taxable         8,793           9,704           18,126           19,875 
    Tax-exempt         11,147           9,489           22,321           18,753 
    Deposits with banks         26,604           11,407           51,210           19,277 
    Total interest income         667,836           508,446           1,304,890           957,165 
            
    Interest expense:       
    Deposits         270,804           136,122           525,126           229,754 
    Other borrowings         3,964           10,591           4,715           16,013 
    Subordinated notes         2,603           2,603           5,177           5,177 
    Subordinated debentures         2,471           2,306           4,944           4,545 
    Total interest expense         279,842           151,622           539,962           255,489 
            
    Net interest income         387,994           356,824           764,928           701,676 
    Provision for credit losses         49,012           41,774           91,935           77,602 
    Net interest income after provision for credit losses         338,982           315,050           672,993           624,074 
            
    Non-interest income:       
    Service charges on deposit accounts:       
    NSF fees         —           1,004           —           1,995 
    Overdraft fees         3,364           3,369           6,790           6,656 
    All other service charges         7,558           7,187           14,397           13,688 
    Trust income         2,082           2,113           4,406           4,146 
    BOLI income         5,606           5,069           11,112           10,043 
    Loan service, maintenance and other fees         6,481           4,095           12,824           8,170 
    Gains on sales of other assets         1,073           5,033           1,532           5,377 
    Net gains on investment securities         125           620           535           2,336 
    Other         2,493           3,497           6,271           7,384 
    Total non-interest income         28,782           31,987           57,867           59,795 
            
    Non-interest expense:       
    Salaries and employee benefits         73,409           65,219           142,973           128,468 
    Net occupancy and equipment         18,421           19,476           36,395           37,560 
    Other operating expenses         45,621           44,660           91,396           89,543 
    Total non-interest expense         137,451           129,355           270,764           255,571 
            
    Income before taxes         230,313           217,682           460,096           428,298 
    Provision for income taxes         52,778           45,717           107,005           86,420 
    Net income         177,535           171,965           353,091           341,878 
    Earnings attributable to noncontrolling interest         8           (1)          (10)          (13)
    Preferred stock dividends         4,047           4,047           8,094           8,094 
    Net income available to common stockholders$        173,496  $        167,917  $        344,987  $        333,771 
            
    Basic earnings per common share$        1.53  $        1.47  $        3.04  $        2.89 
            
    Diluted earnings per common share$        1.52  $        1.47  $        3.03  $        2.88 


     
    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 June 30, 2024:             
    Balances – March 31, 2024$        338,980  $        1,134  $        1,609,268  $        3,424,672  $        (107,207) $        993  $        5,267,840 
    Net income         —           —           —           177,535           —           —           177,535 
    Earnings attributable to noncontrolling interest         —           —           —           8           —           (8)          — 
    Total other comprehensive income         —           —           —           —           6,268           —           6,268 
    Preferred stock dividends, $0.28906 per share         —           —           —           (4,047)          —           —           (4,047)
    Common stock dividends, $0.39 per share         —           —           —           (44,645)          —           —           (44,645)
    Issuance of 33,636 shares of common stock pursuant to stock-based compensation plans         —           1           232           —           —           —           233 
    Stock-based compensation expense         —           —           5,601           —           —           —           5,601 
    Forfeitures of 3,214 shares of unvested restricted common stock         —           —           —           —           —           —           — 
    Balances – June 30, 2024$        338,980  $        1,135  $        1,615,101  $        3,553,523  $        (100,939) $        985  $        5,408,785 
                  
    Six months ended June 30, 2024:             
    Balances – December 31, 2023$        338,980  $        1,131  $        1,612,446  $        3,283,818  $        (97,374) $        975  $        5,139,976 
    Cumulative effect of change in accounting principle         —           —           —           12,690           —           —           12,690 
    Balances – January 1, 2024         338,980           1,131           1,612,446           3,296,508           (97,374)          975           5,152,666 
    Net income         —           —           —           353,091           —           —           353,091 
    Earnings attributable to noncontrolling interest         —           —           —           (10)          —           10           — 
    Total other comprehensive loss         —           —           —           —           (3,565)          —           (3,565)
    Preferred stock dividends, $0.57812 per share         —           —           —           (8,094)          —           —           (8,094)
    Common stock dividends, $0.77 per share         —           —           —           (87,972)          —           —           (87,972)
    Issuance of 518,454 shares of common stock pursuant to stock-based compensation plans         —           6           411           —           —           —           417 
    Repurchase and cancellation of 184,415 shares of common stock withheld for tax pursuant to stock-based compensation plans         —           (2)          (8,008)          —           —           —           (8,010)
    Stock-based compensation expense         —           —           10,252           —           —           —           10,252 
    Forfeitures of 17,473 shares of unvested restricted common stock         —           —           —           —           —           —           — 
    Balances – June 30, 2024$        338,980  $        1,135  $        1,615,101  $        3,553,523  $        (100,939) $        985  $        5,408,785 


     
    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 June 30, 2023:             
    Balances – March 31, 2023$        338,980  $        1,151  $        1,664,569  $        2,898,904  $        (141,677) $        1,371  $        4,763,298 
    Net income         —           —           —           171,965           —           —           171,965 
    Earnings attributable to noncontrolling interest         —           —           —           (1)          —           1           — 
    Total other comprehensive income (loss)         —           —           —           —           (17,754)          —           (17,754)
    Preferred stock dividends, $0.28906 per share         —           —           —           (4,047)          —             (4,047)
    Common stock dividends, $0.35 per share         —           —           —           (40,574)          —           —           (40,574)
    Issuance of 30,148 shares of common stock pursuant to stock-based compensation plans         —           —           23           —           —           —           23 
    Repurchase and cancellation of 1,956,101 shares of common stock under share repurchase program, including excise tax         —           (20)          (66,106)          —           —           —           (66,126)
    Stock-based compensation expense         —           —           4,478           —           —           —           4,478 
    Forfeitures of 8,706 shares of unvested restricted common stock         —           —           —           —           —           —           — 
    Balances – June 30, 2023$        338,980  $        1,131  $        1,602,964  $        3,026,247  $        (159,431) $        1,372  $        4,811,263 
                  
    Six months ended June 30, 2023:             
    Balances – December 31, 2022$        338,980  $        1,172  $        1,753,941  $        2,773,135  $        (177,649) $        1,359  $        4,690,938 
    Net income         —           —           —           341,878           —           —           341,878 
    Earnings attributable to noncontrolling
    interest
             —           —           —           (13)          —           13           — 
    Total other comprehensive income         —           —           —           —           18,218           —           18,218 
    Preferred stock dividends, $0.57812 per share         —           —           —           (8,094)          —             (8,094)
    Common stock dividends, $0.69 per share         —           —           —           (80,659)          —           —           (80,659)
    Issuance of 503,187 shares of common stock pursuant to stock-based compensation plans         —           5           541           —           —           —           546 
    Repurchase and cancellation of 4,304,239 shares of common stock under share repurchase program, including excise tax         —           (44)          (151,421)          —           —           —           (151,465)
    Repurchase and cancellation of 215,362 shares of common stock withheld for tax pursuant to stock-based compensation plans         —           (2)          (8,672)          —           —           —           (8,674)
    Stock-based compensation expense         —           —           8,575           —           —           —           8,575 
    Forfeitures of 15,065 shares of unvested restricted common stock         —           —           —           —           —           —           — 
    Balances – June 30, 2023$        338,980  $        1,131  $        1,602,964  $        3,026,247  $        (159,431) $        1,372  $        4,811,263 


     
    Bank OZK
    Summary of Non-Interest Expense
    Unaudited
     
     Three Months Ended
    June 30,
     Six Months Ended
    June 30,
      2024   2023   2024   2023 
     (Dollars in thousands)
    Salaries and employee benefits$        73,409  $        65,219  $        142,973  $        128,468 
    Net occupancy and equipment         18,421           19,476           36,395           37,560 
    Other operating expenses:       
    Software and data processing         12,159           9,768           23,274           19,051 
    Deposit insurance and assessments         5,309           4,900           13,559           9,048 
    Professional and outside services         6,683           5,445           12,652           10,550 
    Advertising and public relations         6,888           3,184           10,785           7,219 
    Amortization of CRA and tax credit investments (1)         —           5,566           —           11,980 
    Other         14,582           15,797           31,126           31,695 
    Total non-interest expense$        137,451  $        129,355  $        270,764  $        255,571 
     
    (1) Effective January 1, 2024, the Bank adopted ASU 2023-02, Investments-Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which resulted in the amortization of the Bank's CRA and tax credit investments being included in income tax expense instead of non-interest expense.


     
    Bank OZK
    Summary of Total Loans Outstanding
    Unaudited
     
     June 30, 2024 December 31, 2023
     (Dollars in thousands)
    Real estate:       
    Residential 1-4 family$        1,001,809          3.5% $        961,338          3.6%
    Non-farm/non-residential         6,479,285          22.6           5,309,239          20.1 
    Construction/land development         11,491,193          40.1           11,653,487          44.0 
    Agricultural         276,785          1.0           256,423          1.0 
    Multifamily residential         2,359,446         8.2           2,064,106          7.8 
    Total real estate         21,608,518          75.4           20,244,593          76.5 
    Commercial and industrial         1,499,489          5.2           1,269,610          4.8 
    Consumer         3,419,053          11.9           2,965,042          11.2 
    Other         2,146,625          7.5           1,979,830          7.5 
    Total loans         28,673,685          100.0%          26,459,075          100.0%
    Allowance for loan losses         (407,079)            (339,394)  
    Net loans$        28,266,606    $        26,119,681   


     
    Bank OZK
    Allowance for Credit Losses
    Unaudited
     
     Allowance for Loan Losses Reserve for Losses on Unfunded Credit Commitments Total Allowance for Credit Losses
     (Dollars in thousands)
    Three months ended June 30, 2024:     
    Balances – March 31, 2024$        365,935  $        170,952  $        536,887 
    Net charge-offs         (11,798)          —           (11,798)
    Provision for credit losses         52,942           (3,930)          49,012 
    Balances – June 30, 2024$        407,079  $        167,022  $        574,101 
          
    Six months ended June 30, 2024:     
    Balances – December 31, 2023$        339,394  $        161,834  $        501,228 
    Net charge-offs         (19,062)          —           (19,062)
    Provision for credit losses         86,747           5,188           91,935 
    Balances – June 30, 2024$        407,079  $        167,022  $        574,101 
          
    Three months ended June 30, 2023:     
    Balances – March 31, 2023$        222,025  $        171,742  $        393,767 
    Net charge-offs         (8,721)          —           (8,721)
    Provision for credit losses         49,884           (8,110)          41,774 
    Balances – June 30, 2023$        263,188  $        163,632  $        426,820 
          
    Six months ended June 30, 2023:     
    Balances – December 31, 2022$        208,858  $        156,419  $        365,277 
    Net charge-offs         (16,059)          —           (16,059)
    Provision for credit losses         70,389           7,213           77,602 
    Balances – June 30, 2023$        263,188  $        163,632  $        426,820 


     
    Bank OZK
    Deposits – By Customer Type
    Unaudited
     
     June 30, 2024 December 31, 2023
     (Dollars in thousands)
    Non-interest bearing$        4,045,666          13.5% $        4,095,874          14.9%
    Interest bearing:       
    Consumer and commercial:       
    Consumer – Non-Time         2,832,203          9.5           2,792,199          10.2 
    Consumer – Time         12,188,301          40.7           10,216,217          37.3 
    Commercial – Non-Time         2,780,634          9.3           2,439,175          8.9 
    Commercial – Time         906,077          3.0           767,566          2.8 
    Public funds         3,760,669          12.6           3,725,766          13.6 
    Brokered         2,860,164          9.6           2,655,317          9.7 
    Reciprocal         569,949          1.8           713,029          2.6 
    Total deposits$        29,943,663          100.0% $        27,405,143          100.0%


     
    Bank OZK
    Selected Consolidated Financial Data
    Unaudited
     
     Three Months Ended
    June 30,
     Six Months Ended
    June 30,
      2024   2023  %
    Change
      2024   2023  %
    Change
     (Dollars in thousands, except per share amounts)
    Income statement data:           
    Net interest income$        387,994  $        356,824          8.7% $        764,928  $        701,676          9.0%
    Provision for credit losses         49,012           41,774          17.3           91,935           77,602          18.5 
    Non-interest income         28,782           31,987          (10.0)          57,867           59,795          (3.2)
    Non-interest expense         137,451           129,355          6.3           270,764           255,571          5.9 
    Net income         177,535           171,965          3.2           353,091           341,878          3.3 
    Preferred stock dividends         4,047           4,047          —           8,094           8,094          — 
    Net income available to common stockholders         173,496           167,917          3.3           344,987           333,771          3.4 
    Pre-tax pre-provision net revenue (1)         279,325           259,456          7.7           552,031           505,900          9.1 
    Common share and per common share data:           
    Diluted earnings per common share$        1.52  $        1.47          3.4% $        3.03  $        2.88          5.2%
    Basic earnings per common share         1.53           1.47          4.1           3.04           2.89          5.2 
    Common stock dividends per share         0.39           0.35          11.4           0.77           0.69          11.6 
    Book value per share         44.67           39.51          13.1           44.67           39.51          13.1 
    Tangible book value per common share (1)         38.85           33.67          15.4           38.85           33.67          15.4 
    Weighted-average diluted shares outstanding (thousands)         113,995           114,284          (0.3)          113,954           115,871          (1.7)
    End of period shares outstanding (thousands)         113,465           113,145          0.3           113,465           113,145          0.3 
    Balance sheet data at period end:           
    Total assets$        36,836,173  $        30,761,870          19.7% $        36,836,173  $        30,761,870          19.7%
    Total loans         28,673,685           23,607,446          21.5           28,673,685           23,607,446          21.5 
    Non-purchased loans         28,455,342           23,291,785          22.2           28,455,342           23,291,785          22.2 
    Purchased loans         218,343           315,661          (30.8)          218,343           315,661          (30.8)
    Allowance for loan losses         407,079           263,188          54.7           407,079           263,188          54.7 
    Foreclosed assets         71,023           62,048          14.5           71,023           62,048          14.5 
    Investment securities – AFS         2,981,929           3,262,366          (8.6)          2,981,929           3,262,366          (8.6)
    Deposits         29,943,663           23,983,397          24.9           29,943,663           23,983,397          24.9 
    Other borrowings         400,943           1,104,478          (63.7)          400,943           1,104,478          (63.7)
    Unfunded credit commitments         19,737,557           21,119,761          (6.5)          19,737,557           21,119,761          (6.5)
    Reserve for losses on unfunded credit commitments         167,022           163,632          2.1           167,022           163,632          2.1 
    Preferred stock         338,980           338,980          —           338,980           338,980          — 
    Total common stockholders’ equity (1)          5,068,820           4,470,911          13.4           5,068,820           4,470,911          13.4 
    Total tangible common stockholders' equity (1)         4,408,031           3,809,745          15.7           4,408,031           3,809,745          15.7 
    Net unrealized losses on investment securities AFS included in stockholders’ equity         (100,939)          (159,431)            (100,939)          (159,431)  
    Loan (including purchased loans) to deposit ratio         95.76%          98.43%            95.76%          98.43%  
    Selected ratios:           
    Return on average assets (2)         1.92%          2.27%            1.94%          2.34%  
    Return on average common stockholders’ equity (1) (2)         13.98           15.14             14.07           15.19   
    Return on average tangible common stockholders’ equity (1) (2)         16.11           17.78             16.24           17.86   
    Total tangible common stockholders' equity to total tangible assets (1)         12.19           12.66             12.19           12.66   
    Net interest margin – FTE (2)         4.68           5.32             4.70           5.43   
    Efficiency ratio         32.74           33.05             32.67           33.33   
    Net charge-offs to average non-purchased loans (2) (3)         0.18           0.03             0.14           0.09   
    Net charge-offs to average total loans (2)         0.17           0.15             0.14           0.15   
    Nonperforming loans to total loans (4)         0.28           0.15             0.28           0.15   
    Nonperforming assets to total assets (4)         0.41           0.32             0.41           0.32   
    Allowance for loan losses to total loans (5)         1.42           1.11             1.42           1.11   
    Allowance for credit losses to total loans and unfunded credit commitments         1.19           0.95             1.19           0.95   
    Other information:           
    Non-accrual loans (4)$        80,523  $        35,320    $        80,523  $        35,320   


     (1)
    See accompanying schedules for 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
    Selected Consolidated Financial Data (continued)
    Unaudited
     
     Three Months Ended
     June 30, 2024 March 31, 2024 %
    Change
     (Dollars in thousands, except per share amounts)
    Income statement data:     
    Net interest income$        387,994  $        376,934          2.9%
    Provision for credit losses         49,012           42,923          14.2 
    Non-interest income         28,782           29,084          (1.0)
    Non-interest expense         137,451           133,314          3.1 
    Net income         177,535           175,555          1.1 
    Preferred stock dividends         4,047           4,047          — 
    Net income available to common stockholders         173,496           171,490          1.2 
    Pre-tax pre-provision net revenue (1)         279,325           272,704          2.4 
    Common share and per common share data:     
    Diluted earnings per common share$        1.52  $        1.51          0.7%
    Basic earnings per common share         1.53           1.51          1.3 
    Common stock dividends per share         0.39           0.38          2.6 
    Book value per share         44.67           43.44          2.8 
    Tangible book value per common share (1)         38.85           37.62          3.3 
    Weighted-average diluted shares outstanding (thousands)         113,995           113,883          0.1 
    End of period shares outstanding (thousands)         113,465           113,435          — 
    Balance sheet data at period end:     
    Total assets$        36,836,173  $        36,029,904          2.2%
    Total loans         28,673,685           28,031,348          2.3 
    Non-purchased loans         28,455,342           27,781,091          2.4 
    Purchased loans         218,343           250,257          (12.8)
    Allowance for loan losses         407,079           365,935          11.2 
    Foreclosed assets         71,023           60,782          16.8 
    Investment securities – AFS         2,981,929           3,072,391          (2.9)
    Deposits         29,943,663           29,406,070          1.8 
    Other borrowings         400,943           202,009          98.5 
    Unfunded credit commitments         19,737,557           20,458,796          (3.5)
    Reserve for losses on unfunded credit commitments         167,022           170,952          (2.3)
    Total common stockholders’ equity (1)          5,068,820           4,927,867          2.9 
    Total tangible common stockholders' equity (1)         4,408,031           4,267,078          3.3 
    Net unrealized losses on investment securities AFS included in stockholders’ equity         (100,939)          (107,207)  
    Loan (including purchased loans) to deposit ratio         95.76%          95.33%  
    Selected ratios:     
    Return on average assets (2)         1.92%          1.96%  
    Return on average common stockholders’ equity (1) (2)         13.98           14.16   
    Return on average tangible common stockholders’ equity (1) (2)         16.11           16.38   
    Total tangible common stockholders' equity to total tangible assets (1)         12.19           12.06   
    Net interest margin – FTE (2)         4.68           4.71   
    Efficiency ratio         32.74           32.59   
    Net charge-offs to average non-purchased loans (2) (3)         0.18           0.11   
    Net charge-offs to average total loans (2)         0.17           0.11   
    Nonperforming loans to total loans (4)         0.28           0.20   
    Nonperforming assets to total assets (4)         0.41           0.32   
    Allowance for loan losses to total loans (5)         1.42           1.31   
    Allowance for credit losses to total loans and unfunded credit commitments         1.19           1.11   
    Other information:     
    Non-accrual loans (4)$        80,523  $        56,217   


     (1)
    See accompanying schedules for 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
    Supplemental Quarterly Financial Data
    Unaudited
     
     6/30/24 3/31/24 12/31/23 9/30/23 6/30/23
     (Dollars in thousands, except per share amounts)
    Earnings summary:         
    Net interest income$        387,994  $        376,934  $        370,548  $        367,261  $        356,824 
    Federal tax (FTE) adjustment         3,037           3,030           2,925           2,632           2,602 
    Net interest income (FTE)         391,031           379,964           373,473           369,893           359,426 
    Provision for credit losses         (49,012)          (42,923)          (43,832)          (44,036)          (41,774)
    Non-interest income         28,782           29,084           37,027           25,727           31,987 
    Non-interest expense         (137,451)          (133,314)          (145,011)          (128,978)          (129,355)
    Pre-tax income (FTE)         233,350           232,811           221,657           222,606           220,284 
    FTE adjustment         (3,037)          (3,030)          (2,925)          (2,632)          (2,602)
    Provision for income taxes         (52,778)          (54,226)          (43,600)          (46,144)          (45,717)
    Noncontrolling interest         8           (18)          (6)          (37)          (1)
    Preferred stock dividend         (4,047)          (4,047)          (4,047)          (4,047)          (4,047)
    Net income available to common stockholders$        173,496  $        171,490  $        171,079  $        169,746  $        167,917 
    Earnings per common share – diluted$        1.52  $        1.51  $        1.50  $        1.49  $        1.47 
    Pre-tax pre-provision net revenue (1)$        279,325  $        272,704  $        262,564  $        264,010  $        259,456 
    Selected balance sheet data at period end:         
    Total assets$        36,836,173  $        36,029,904  $        34,237,457  $        32,767,328  $        30,761,870 
    Non-purchased loans         28,455,342           27,781,091           26,195,030           25,051,214           23,291,785 
    Purchased loans         218,343           250,257           264,045           280,526           315,661 
    Investment securities – AFS         2,981,929           3,072,391           3,244,371           3,153,817           3,262,366 
    Deposits         29,943,663           29,406,070           27,405,143           25,552,856           23,983,397 
    Unfunded credit commitments         19,737,557           20,458,796           20,561,029           20,625,371           21,119,761 
    Allowance for credit losses:         
    Balance at beginning of period$        536,887  $        501,228  $        461,486  $        426,820  $        393,767 
    Net charge-offs         (11,798)          (7,264)          (4,090)          (9,370)          (8,721)
    Provision for credit losses         49,012           42,923           43,832           44,036           41,774 
    Balance at end of period$        574,101  $        536,887  $        501,228  $        461,486  $        426,820 
    Allowance for loan losses$        407,079  $        365,935  $        339,394  $        303,358  $        263,188 
    Reserve for losses on unfunded credit commitments         167,022           170,952           161,834           158,128           163,632 
    Total allowance for credit losses$        574,101  $        536,887  $        501,228  $        461,486  $        426,820 
    Selected ratios:         
    Net interest margin – FTE (2)         4.68%          4.71%          4.82%          5.05%          5.32%
    Efficiency ratio         32.74           32.59           35.33           32.60           33.05 
    Net charge-offs to average non-purchased loans (2) (3)         0.18           0.11           0.07           0.17           0.03 
    Net charge-offs to average total loans (2)         0.17           0.11           0.06           0.15           0.15 
    Nonperforming loans to total loans (4)         0.28           0.20           0.23           0.25           0.15 
    Nonperforming assets to total assets (4)         0.41           0.32           0.36           0.40           0.32 
    Allowance for loan losses to total loans (5)         1.42           1.31           1.28           1.20           1.11 
    Allowance for credit losses to total loans and unfunded credit commitments         1.19           1.11           1.07           1.00           0.95 
    Loans past due 30 days or more, including past due non-accrual loans, to total loans (4)         0.16           0.17           0.20           0.21           0.14 


     (1)
    Calculations of pre-tax pre-provision net revenue and the reconciliation 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
    Average Consolidated Balance Sheets and Net Interest Analysis – FTE
    Unaudited
     
     Three Months Ended June 30, Six months ended June 30,
      2024   2023   2024   2023 
     Average Balance Income/ Expense Yield/Rate Average Balance Income/ Expense Yield/Rate Average Balance Income/ Expense Yield/Rate Average Balance Income/ Expense Yield/Rate
     (Dollars in thousands)
    ASSETS                       
    Interest earning assets:                       
    Interest earning deposits$        2,013,116 $        26,604         5.32% $        957,439 $        11,407         4.78% $        1,937,493 $        51,210         5.32% $        849,082 $        19,277         4.58%
    Investment securities:                       
    Taxable         1,877,176          8,793         1.88           2,363,265          9,704         1.65           1,965,078          18,126         1.85           2,406,769          19,875         1.67 
    Tax-exempt – FTE         1,143,254          14,111         4.96           1,040,757          12,011         4.63           1,157,685          28,254         4.91           1,034,317          23,738         4.63 
    Non-purchased loans – FTE         28,303,265          616,720         8.76           22,368,771          472,604         8.47           27,709,736          1,203,762         8.74           21,613,844          887,640         8.28 
    Purchased loans         240,778          4,644         7.76           346,696          5,322         6.16           249,283          9,604         7.75           358,725          11,840         6.66 
    Total earning assets – FTE         33,577,589          670,872         8.04           27,076,928          511,048         7.57           33,019,275          1,310,956         7.98           26,262,737          962,370         7.39 
    Non-interest earning assets         2,761,795              2,587,338              2,750,997              2,552,387    
    Total assets$        36,339,384     $        29,664,266     $        35,770,272     $        28,815,124    
    LIABILITIES AND STOCKHOLDERS’ EQUITY                    
    Interest bearing liabilities:                       
    Deposits:                       
    Savings and interest bearing transaction$        9,277,131 $        68,593         2.97% $        9,075,132 $        48,650         2.15% $        9,229,938 $        135,494         2.95% $        9,402,496 $        91,164         1.96%
    Time deposits         16,385,329          202,211         4.96           9,650,599          87,472         3.64         15,930,851          389,632        4.92           8,612,573          138,590         3.24 
    Total interest bearing deposits         25,662,460          270,804         4.24           18,725,731          136,122         2.92           25,160,789          525,126         4.20           18,015,069          229,754         2.57 
    Other borrowings (2)         321,521          3,964         4.96           828,644          10,591         5.13           203,281          4,715         4.66           648,870          16,013         4.98 
    Subordinated notes         348,066          2,603         3.01           347,251          2,603         3.01           347,965          5,177         2.99           347,151          5,177         3.01 
    Subordinated debentures         121,652          2,471         8.17           121,652          2,306        7.60           121,652          4,944         8.17           121,645          4,545         7.54 
    Total interest bearing liabilities         26,453,699          279,842         4.25           20,023,278          151,622         3.04           25,833,687          539,962         4.20           19,132,735          255,489         2.69 
    Non-interest bearing liabilities:                       
    Non-interest bearing deposits         3,893,094              4,348,639              3,996,931              4,409,684    
    Other non-interest bearing liabilities         660,618              502,394              667,969              501,203    
    Total liabilities         31,007,411              24,874,311              30,498,587              24,043,622    
    Total stockholders’ equity before noncontrolling interest         5,330,984              4,788,584              5,270,700              4,770,135    
    Noncontrolling interest         989              1,371              985              1,367    
    Total liabilities and stockholders’ equity$        36,339,384     $        29,664,266     $        35,770,272     $        28,815,124    
    Net interest income – FTE  $        391,030     $        359,426     $        770,994     $        706,881  
    Net interest margin – FTE            4.68%             5.32%             4.70%             5.43%
    Core spread (1)            4.52%             5.55%             4.54%             5.71%


     (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.
     (2)
    The interest expense and the rates paid "other borrowings" include capitalized interest which totaled $0.5 million and $0.8 million for the second quarter and first six months of 2024. Capitalized interest was not material for the second quarter and first six months of 2023.


     
    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 Six Months Ended
     June 30, June 30, March 31, June 30, June 30,
      2024   2023   2024   2024   2023 
     (Dollars in thousands)
    Net income available to common stockholders$        173,496  $        167,917  $        171,490  $        344,987  $        333,771 
    Average stockholders’ equity before noncontrolling interest$        5,330,984  $       4,788,584  $        5,210,418  $        5,270,700  $        4,770,135 
    Less average preferred stock         (338,980)          (338,980)          (338,980)          (338,980)          (338,980)
    Total average common stockholders’ equity         4,992,004           4,449,604  $        4,871,438           4,931,720           4,431,155 
    Less average intangible assets:         
    Goodwill         (660,789)          (660,789)          (660,789)          (660,789)          (660,789)
    Core deposit and other intangible assets, net of accumulated amortization         —           (999)            —           (1,618)
    Total average intangibles         (660,789)          (661,788)          (660,789)          (660,789)          (662,407)
    Average tangible common stockholders’ equity$        4,331,215  $        3,787,816  $        4,210,649  $        4,270,931  $        3,768,748 
    Return on average common stockholders’ equity(1)         13.98%          15.14%          14.16%          14.07%          15.19%
    Return on average tangible common stockholders’ equity(1)         16.11%          17.78%          16.38%          16.24%          17.86%

     

    (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
     
     June 30, March 31,
      2024   2023   2024 
     (In thousands, except per share amounts)
    Total stockholders’ equity before noncontrolling interest$        5,407,800  $        4,809,891  $        5,266,847 
    Less preferred stock         (338,980)          (338,980)          (338,980)
    Total common stockholders’ equity$        5,068,820  $        4,470,911  $        4,927,867 
    Less intangible assets:     
    Goodwill         (660,789)          (660,789)          (660,789)
    Core deposit and other intangible assets, net of accumulated amortization         —           (377)          — 
    Total intangibles         (660,789)          (661,166)          (660,789)
    Total tangible common stockholders’ equity$        4,408,031  $        3,809,745  $        4,267,078 
    Shares of common stock outstanding         113,465           113,145           113,435 
    Book value per common share$        44.67  $        39.51  $        43.44 
    Tangible book value per common share$        38.85  $        33.67  $        37.62 


     
    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
     
     June 30, March 31,
      2024   2023   2024 
     (Dollars in thousands)
    Total stockholders’ equity before noncontrolling interest$        5,407,800  $        4,809,891  $        5,266,847 
    Less preferred stock         (338,980)          (338,980)          (338,980)
    Total common stockholders’ equity$        5,068,820  $        4,470,911  $        4,927,867 
    Less intangible assets:     
    Goodwill         (660,789)          (660,789)          (660,789)
    Core deposit and other intangible assets, net of accumulated amortization         —           (377)          — 
    Total intangibles         (660,789)          (661,166)          (660,789)
    Total tangible common stockholders’ equity         4,408,031           3,809,745           4,267,078 
    Total assets$        36,836,173  $        30,761,870  $        36,029,904 
    Less intangible assets:     
    Goodwill$        (660,789) $        (660,789) $        (660,789)
    Core deposit and other intangible assets, net of accumulated amortization         —           (377)          — 
    Total intangibles         (660,789)          (661,166)          (660,789)
    Total tangible assets$        36,175,384  $        30,100,704  $        35,369,115 
    Ratio of total common stockholders’ equity to total assets         13.76%          14.53%          13.68%
    Ratio of total tangible common stockholders’ equity to total tangible assets         12.19%          12.66%          12.06%


     
    Calculation of Pre-Tax Pre-Provision Net Revenue
    Unaudited
     
     Three Months Ended Six Months Ended
     June 30, March 31, December 31, September 30 June 30, June 30,
      2024   2024   2023   2023   2023   2024   2023 
     (Dollars in thousands)
    Net income available to common stockholders$        173,496  $        171,490  $        171,079  $        169,746  $        167,917  $        344,987  $        333,771 
    Preferred stock dividends         4,047           4,047           4,047           4,047           4,047           8,094            8,094 
    Earnings attributable to noncontrolling interest         (8)          18           6           37           1           10           13 
    Provision for income taxes         52,778           54,226           43,600           46,144           45,717           107,005           86,420 
    Provision for credit losses         49,012           42,923           43,832           44,036           41,774           91,935           77,602 
    Pre-tax pre-provision net revenue$        279,325  $        272,704  $        262,564  $        264,010  $        259,456  $        552,031  $        505,900 


       
    Investor Contact: Jay Staley (501) 906-7842
    Media Contact: Michelle Rossow (501) 906-3922
       

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