Bank OZK Announces First Quarter 2022 Earnings

Little Rock, Arkansas, UNITED STATES


LITTLE ROCK, Ark., April 21, 2022 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income available to common shareholders for the first quarter of 2022 was $128.0 million, a 13.7% decrease from $148.4 million for the first quarter of 2021. Diluted earnings per common share for the first quarter of 2022 were $1.02, a 10.5% decrease from $1.14 for the first quarter of 2021.

The Bank’s provision for credit losses was $4.2 million for the first quarter of 2022 compared to negative provision for credit losses of $31.6 million for the first quarter of 2021. Its total allowance for credit losses (“ACL”) was $293.5 million at March 31, 2022. The calculations of the Bank’s provision expense for the first quarter of 2022 and its total ACL at March 31, 2022 were based on a number of key estimates, assumptions and economic forecasts. The Bank’s provision for the first quarter of 2022 and its ACL at March 31, 2022 included certain qualitative adjustments to capture risks that management thought were not fully reflected in its modeled results.

During the fourth quarter of 2021, the Bank completed its public offering of 4.625% Series A Non-Cumulative Perpetual Preferred Stock (“Series A Preferred Stock”) and, during the first quarter of 2022, the Bank paid a Series A Preferred Stock dividend of $4.5 million.

Non-interest income for the first quarter of 2022 included gains on sales of other assets of $7.0 million, of which $1.8 million was a gain from the sale of the Bank’s Magnolia, Arkansas branch. The Bank had $0.3 million of Bank Owned Life Insurance (“BOLI”) death benefits in the first quarter of 2022. Non-interest income for the first quarter of 2021 included gains on sales of other assets of $5.8 million, of which $4.4 million was from the sale of the Bank’s South Carolina branches. The Bank had $1.4 million in BOLI death benefits in the first quarter of 2021.

Pre-tax pre-provision net revenue (“PPNR”) was $173.1 million for the first quarter of 2022, a 7.7% increase from $160.7 million for the first quarter of 2021. 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 2022 were 1.97%, 11.67% and 13.73%, respectively, compared to 2.23%, 13.97% and 16.57%, respectively, for the first quarter of 2021. 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 excellent results for the first quarter of 2022. Our results were highlighted by our second consecutive quarter of record RESG loan originations, reflecting the importance of organic growth in our long-term strategy. Our strong capital and liquidity, disciplined credit culture and outstanding team have us well positioned for the future.”

KEY BALANCE SHEET METRICS

Total loans were $18.93 billion at March 31, 2022, a 1.2% increase from $18.72 billion at March 31, 2021. Non-purchased loans were $18.45 billion at March 31, 2022, a 2.6% increase from $17.98 billion at March 31, 2021. Purchased loans, which consist of loans acquired in previous acquisitions, were $0.48 billion at March 31, 2022, a 34.6% decrease from $0.74 billion at March 31, 2021.

Deposits were $20.33 billion at March 31, 2022, a 4.5% decrease from $21.30 billion at March 31, 2021. Total assets were $26.56 billion at March 31, 2022, a 2.6% decrease from $27.28 billion at March 31, 2021.

Common stockholders’ equity was $4.35 billion at March 31, 2022, a 0.7% decrease from $4.38 billion at March 31, 2021. Tangible common stockholders’ equity was $3.68 billion at March 31, 2022, a 0.7% decrease from $3.71 billion at March 31, 2021. Book value per common share was $35.47 at March 31, 2022, a 5.0% increase from $33.79 at March 31, 2021. Tangible book value per common share was $30.03 at March 31, 2022, a 5.0% increase from $28.60 at March 31, 2021. The calculations of the Bank’s common stockholders’ equity, tangible common stockholders’ equity and tangible book value per common share and the reconciliations to GAAP are included in the schedules accompanying this release.

The Bank’s ratio of total common stockholders’ equity to total assets was 16.38% at March 31, 2022, compared to 16.07% at March 31, 2021. Its ratio of total tangible common stockholders’ equity to total tangible assets was 14.22% at March 31, 2022, compared to 13.94% at March 31, 2021. The calculation of the Bank’s ratio of total tangible common stockholders’ equity to total tangible assets and the reconciliation to GAAP are included in the schedules accompanying this release.

STOCK REPURCHASES

During the quarter just ended, the Bank repurchased approximately 2.9 million of its common shares at a weighted average repurchase price of $45.61, for a total of $131.6 million. In evaluating its plans for future stock repurchases, the Bank considers a variety of factors including its capital position, alternative uses of capital, liquidity, financial performance, stock price, regulatory requirements and other factors. The Bank may suspend its stock repurchase program at any time.

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 22, 2022. Interested parties may listen to this call by dialing 1-844-818-5110 (U.S. and Canada) or 210-229-8841 (internationally) and asking for the Bank OZK conference call. A recorded playback of the call will be available for one week following the call at 1-855-859-2056 (U.S. and Canada) or 404-537-3406 (internationally). The conference ID for this playback is 8028109. The call will be available live or in a recorded version on the Bank’s Investor Relations website at ir.ozk.com under “Company News/Webcasts.” The Bank will also provide a transcript of the conference call on its Investor Relations website.

The Bank files with the Federal Deposit Insurance Corporation (“FDIC”) annual, quarterly and current reports, proxy materials and other information required by the Securities Exchange Act of 1934, 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 http://ir.ozk.com. To receive automated email alerts for these materials, please visit http://ir.ozk.com/EmailNotification 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 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 presentation 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 delays in identifying satisfactory sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices or relocating, selling or closing existing offices; the ability to enter into and/or close additional 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 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; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those actions in response to the coronavirus (“COVID-19”) pandemic such as the Coronavirus Aid, Relief and Economic Security Act, the Consolidated Appropriations Act of 2021, the American Rescue Plan Act of 2021, and any similar or related laws, rules and regulations; 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 adverse effects of the ongoing global COVID-19 pandemic, including the duration of the pandemic and actions taken to contain or treat COVID-19, on the Bank, the Bank’s customers, the Bank’s staff, the global economy and the financial markets; potential impact of supply chain disruptions or inflation; 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, 2021 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. Headquartered in Little Rock, Arkansas, Bank OZK conducts operations with over 240 offices in eight states including Arkansas, Georgia, Florida, North Carolina, Texas, California, New York and Mississippi. 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, 
  2022  2021 
  (Dollars in thousands, except per share amounts) 
ASSETS        
Cash and cash equivalents $1,605,812  $2,053,829 
Investment securities ― available for sale (“AFS”)  3,728,284   3,916,733 
Investment securities ― trading     14,957 
Federal Home Loan Bank of Dallas and other bankers’ bank stocks  40,876   40,788 
Non-purchased loans  18,449,723   17,791,610 
Purchased loans  481,299   516,215 
Allowance for loan losses  (204,213)  (217,380)
Net loans  18,726,809   18,090,445 
Premises and equipment, net  693,748   695,857 
Foreclosed assets  3,417   5,744 
Accrued interest receivable  83,114   83,025 
Bank owned life insurance (“BOLI”)  779,271   774,822 
Goodwill and other intangible assets, net  667,546   669,063 
Other, net  233,476   185,167 
Total assets $26,562,353  $26,530,430 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Deposits:        
Demand non-interest bearing $5,008,742  $4,983,788 
Savings and interest bearing transaction  9,753,148   9,245,727 
Time  5,567,772   5,979,619 
Total deposits  20,329,662   20,209,134 
Other borrowings  756,347   756,321 
Subordinated notes  346,333   346,133 
Subordinated debentures  121,171   121,033 
Reserve for losses on unfunded loan commitments  89,327   71,609 
Accrued interest payable and other liabilities  226,344   186,840 
Total liabilities  21,869,184   21,691,070 
         
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, 2022 and December 31, 2021  338,980   338,980 
Common stock; $0.01 par value; 300,000,000 shares authorized; 122,677,195 and 125,443,748 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively  1,227   1,254 
Additional paid-in capital  1,962,126   2,093,702 
Retained earnings  2,468,652   2,378,466 
Accumulated other comprehensive (loss) income  (80,928)  23,841 
Total stockholders’ equity before noncontrolling interest  4,690,057   4,836,243 
Noncontrolling interest  3,112   3,117 
Total stockholders’ equity  4,693,169   4,839,360 
Total liabilities and stockholders’ equity $26,562,353  $26,530,430 


Bank OZK
Consolidated Statements of Income
Unaudited

 Three Months Ended
March 31,
 
 2022  2021 
 (Dollars in thousands, except per share amounts) 
Interest income:       
Non-purchased loans$239,995  $239,827 
Purchased loans 8,170   11,935 
Investment securities:       
Taxable 10,611   8,083 
Tax-exempt 2,986   3,681 
Deposits with banks and federal funds sold 609   538 
Total interest income 262,371   264,064 
        
Interest expense:       
Deposits 8,492   24,350 
Other borrowings 998   990 
Subordinated notes 2,574   3,146 
Subordinated debentures 964   942 
Total interest expense 13,028   29,428 
        
Net interest income 249,343   234,636 
Provision for credit losses 4,190   (31,559)
Net interest income after provision for credit losses 245,153   266,195 
        
Non-interest income:       
Service charges on deposit accounts:       
NSF/Overdraft fees 4,201   3,323 
All other service charges 6,690   6,342 
Trust income 2,094   2,206 
BOLI income:       
Increase in cash surrender value 4,793   4,881 
Death benefits 297   1,409 
Loan service, maintenance and other fees 3,018   3,551 
Gains on sales of other assets 6,992   5,828 
Net (losses) gains on investment securities (90)   
Other 3,480   4,577 
Total non-interest income 31,475   32,117 
        
Non-interest expense:       
Salaries and employee benefits 54,648   53,645 
Net occupancy and equipment 17,215   16,468 
Other operating expenses 35,852   35,946 
Total non-interest expense 107,715   106,059 
        
Income before taxes 168,913   192,253 
Provision for income taxes 36,410   43,818 
Net income 132,503   148,435 
Earnings attributable to noncontrolling interest 5   (19)
Preferred stock dividends 4,480    
Net income available to common stockholders$128,028  $148,416 
        
Basic earnings per common share$1.03  $1.15 
        
Diluted earnings per common share$1.02  $1.14 



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, 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 49,020 shares of common stock for exercise of stock options    1   1,486            1,487 
Issuance of 199,406 shares of unvested restricted common stock    2   (2)            
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 taxes pursuant to restricted stock vesting    (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 
                            
Three months ended March 31, 2021:                           
Balances – December 31, 2020$  $1,294  $2,265,850  $1,946,875  $58,252  $3,085  $4,275,356 
Net income          148,435         148,435 
Earnings attributable to noncontrolling interest          (19)     19    
Total other comprehensive loss             (7,788)     (7,788)
Common stock dividends, $0.2775 per share          (35,893)        (35,893)
Issuance of 128,100 shares of common stock for exercise of stock options    1   4,492            4,493 
Issuance of 312,503 shares of unvested restricted common stock    3   (3)            
Repurchase and cancellation of 55,740 shares of common stock withheld for taxes pursuant to restricted stock vesting    (1)  (1,970)           (1,971)
Stock-based compensation expense       3,677            3,677 
Forfeitures of 16,405 shares of unvested restricted common stock                    
Balances – March 31, 2021$  $1,297  $2,272,046  $2,059,398  $50,464  $3,104  $4,386,309 


Bank OZK
Summary of Non-Interest Expense
Unaudited

  Three Months Ended
March 31,
 
  2022  2021 
  (Dollars in thousands) 
Salaries and employee benefits $54,648  $53,645 
Net occupancy and equipment  17,215   16,468 
Other operating expenses:        
Professional and outside services  7,082   6,326 
Software and data processing  5,921   5,792 
Deposit insurance and assessments  2,150   3,520 
Telecommunication services  2,010   2,232 
Travel and meals  1,758   774 
Postage and supplies  1,698   1,645 
ATM expense  1,509   1,283 
Advertising and public relations  1,259   308 
Loan collection and repossession expense  325   509 
Writedowns of foreclosed and other assets  258   1,363 
Amortization of intangibles  1,517   1,730 
Amortization of CRA and tax credit investments  5,102   4,125 
Other  5,263   6,339 
Total non-interest expense $107,715  $106,059 


Bank OZK
Summary of Total Loans Outstanding
Unaudited

                 
  March 31, 2022  December 31, 2021 
  (Dollars in thousands) 
                 
Real estate:                
Residential 1-4 family $921,310   4.9% $887,024   4.8%
Non-farm/non-residential  3,942,133   20.8   3,782,892   20.7 
Construction/land development  8,752,873   46.2   8,246,674   45.0 
Agricultural  256,462   1.4   247,727   1.4 
Multifamily residential  761,634   4.0   934,845   5.1 
Total real estate  14,634,412   77.3   14,099,162   77.0 
Commercial and industrial  440,203   2.3   510,784   2.8 
Consumer  2,257,909   11.9   2,185,429   11.9 
Other  1,598,498   8.5   1,512,450   8.3 
Total loans  18,931,022   100.0%  18,307,825   100.0%
Allowance for loan losses  (204,213)      (217,380)    
Net loans $18,726,809      $18,090,445     


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, 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 
             
Three months ended March 31, 2021:            
Balances – December 31, 2020 $295,824  $81,481  $377,305 
Net charge-offs  (3,439)     (3,439)
Provision for credit losses  (24,308)  (7,251)  (31,559)
Balances – March 31, 2021 $268,077  $74,230  $342,307 


Bank OZK
Summary of Deposits – By Account Type
Unaudited

                 
  March 31, 2022  December 31, 2021 
  (Dollars in thousands) 
Non-interest bearing $5,008,742   24.6% $4,983,788   24.7%
Interest bearing:                
Transaction (NOW)  3,434,321   16.9   3,412,369   16.9 
Savings and money market  6,318,827   31.1   5,833,358   28.9 
Time deposits  5,567,772   27.4   5,979,619   29.5 
Total deposits $20,329,662   100.0% $20,209,134   100.0%


Summary of Deposits – By Customer Type
Unaudited

    
  March 31, 2022  December 31, 2021 
  (Dollars in thousands) 
Non-Interest Bearing $5,008,742   24.6% $4,983,788   24.7%
Interest Bearing:                
Consumer and Commercial:                
Consumer – Non-Time  4,491,178   22.1   4,334,378   21.4 
Consumer – Time  4,089,074   20.1   4,318,742   21.4 
Commercial – Non-Time  2,645,789   13.0   2,634,817   13.0 
Commercial – Time  792,562   3.9   905,347   4.5 
Public Funds  2,043,667   10.1   2,094,800   10.4 
Brokered  754,979   3.7   452,137   2.2 
Reciprocal  503,671   2.5   485,125   2.4 
Total deposits $20,329,662   100.0% $20,209,134   100.0%



Bank OZK
Selected Consolidated Financial Data
Unaudited

  Three Months Ended
March 31,
 
  2022  2021  % Change 
  (Dollars in thousands, except per share amounts) 
Income statement data:            
Net interest income $249,343  $234,636   6.3%
Provision for credit losses  4,190   (31,559) NM 
Non-interest income  31,475   32,117   (2.0)
Non-interest expense  107,715   106,059   1.6 
Net income  132,503   148,435   (10.7)
Preferred stock dividends  4,480     NM 
Net income available to common stockholders  128,028   148,416   (13.7)
Pre-tax pre-provision net revenue (1)  173,103   160,694   7.7 
Common share and per common share data:            
Diluted earnings per common share $1.02  $1.14   (10.5)%
Basic earnings per common share
  1.03   1.15   (10.4)
Common stock dividends per share  0.30   0.2775   8.1 
Book value per share  35.47   33.79   5.0 
Tangible book value per share (1)  30.03   28.60   5.0 
Weighted-average diluted shares outstanding (thousands)  125,004   129,816   (3.7)
End of period shares outstanding (thousands)  122,677   129,719   (5.4)
Balance sheet data at period end:            
Total assets $26,562,353  $27,276,892   (2.6)%
Total loans  18,931,022   18,715,065   1.2 
Non-purchased loans  18,449,723   17,979,435   2.6 
Purchased loans  481,299   735,630   (34.6)
Allowance for loan losses  204,213   268,077   (23.8)
Foreclosed assets  3,417   8,436   (59.5)
Investment securities − AFS  3,728,284   4,162,479   (10.4)
Goodwill and other intangible assets, net  667,546   673,728   (0.9)
Deposits  20,329,662   21,296,442   (4.5)
Other borrowings  756,347   756,297   0.0 
Subordinated notes  346,333   224,141   54.5 
Subordinated debentures  121,171   120,613   0.5 
Unfunded balance of closed loans  14,954,367   11,780,099   26.9 
Reserve for losses on unfunded loan commitments  89,327   74,230   20.3 
Preferred stock  338,980     NM 
Total common stockholders’ equity (1)  4,351,077   4,383,205   (0.7)
Net unrealized (losses) gains on investment securities AFS included in stockholders’ equity  (80,928)  50,464     
Loan (including purchased loans) to deposit ratio  93.12%  87.88%    
Selected ratios:            
Return on average assets (2)  1.97%  2.23%    
Return on average common stockholders’ equity (1) (2)  11.67   13.97     
Return on average tangible common stockholders’ equity (1) (2)  13.73   16.57     
Average common equity to total average assets  16.86   15.93     
Net interest margin – FTE (2)  4.24   3.86     
Efficiency ratio  38.22   39.57     
Net charge-offs to average non-purchased loans (2) (3)  0.08   0.08     
Net charge-offs to average total loans (2)  (0.01)  0.07     
Nonperforming loans to total loans (4)  0.21   0.25     
Nonperforming assets to total assets (4)  0.16   0.19     
Allowance for loan losses to total loans (5)  1.08   1.43     
Other information:            
Non-accrual loans (4) $37,363  $43,059     
Accruing loans − 90 days past due (4)          
Troubled and restructured non-purchased loans − accruing (4)  1,263   1,380     


(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.
NM – Not meaningful


      

Selected Consolidated Financial Data (continued)
Unaudited

  Three Months Ended 
  March 31,  December 31,     
  2022  2021  % Change 
 (Dollars in thousands, except per share amounts) 
Income statement data:            
Net interest income $249,343  $266,381   (6.4)%
Provision for credit losses  4,190   (7,992) NM 
Non-interest income  31,475   29,695   6.0 
Non-interest expense  107,715   110,106   (2.2)
Net income  132,503   149,765   (11.5)
Preferred stock dividends  4,480     NM 
Net income available to common stockholders  128,028   149,760   (14.5)
Pre-tax pre-provision net revenue (1)  173,103   185,970   (6.9)
Common share and per common share data:            
Diluted earnings per common share $1.02  $1.17   (12.8)%
Basic earnings per common share
  1.03   1.17   (12.0)
Dividends per share  0.30   0.290   3.4 
Book value per share  35.47   35.85   (1.1)
Tangible book value per share (1)  30.03   30.52   (1.6)
Weighted-average diluted shares outstanding (thousands)  125,004   128,246   (2.5)
End of period shares outstanding (thousands)  122,677   125,444   (2.2)
Balance sheet data at period end:            
Total assets $26,562,353  $26,530,430   0.1%
Total loans  18,931,022   18,307,825   3.4 
Non-purchased loans  18,449,723   17,791,610   3.7 
Purchased loans  481,299   516,215   (6.8)
Allowance for loan losses  204,213   217,380   (6.1)
Foreclosed assets  3,417   5,744   (40.5)
Investment securities − AFS  3,728,284   3,916,733   (4.8)
Goodwill and other intangible assets, net  667,546   669,063   (0.2)
Deposits  20,329,662   20,209,134   0.6 
Other borrowings  756,347   756,321   0.0 
Subordinated notes  346,333   346,133   0.1 
Subordinated debentures  121,171   121,033   0.1 
Unfunded balance of closed loans  14,954,367   13,619,578   9.8 
Reserve for losses on unfunded loan commitments  89,327   71,609   24.7 
Preferred stock  338,980   338,980    
Total common stockholders’ equity (1)  4,351,077   4,497,263   (3.3)
Net unrealized gains on investment securities AFS included in stockholders’ equity  (80,928)  23,841     
Loan (including purchased loans) to deposit ratio  93.12%  90.59%    
Selected ratios:            
Return on average assets (2)  1.97%  2.25%    
Return on average common stockholders’ equity (1) (2)  11.67   13.08     
Return on average tangible common stockholders’ equity (1) (2)  13.73   15.34     
Net interest margin – FTE (2)  4.24   4.41     
Efficiency ratio  38.22   37.06     
Net charge-offs to average non-purchased loans (2) (3)  0.08   0.05     
Net charge-offs to average total loans (2)  (0.01)  0.04     
Nonperforming loans to total loans (4)  0.21   0.19     
Nonperforming assets to total assets (4)  0.16   0.15     
Allowance for loan losses to total loans (5)  1.08   1.19     
Other information:            
Non-accrual loans (4) $37,363  $33,274     
Accruing loans − 90 days past due (4)          
Troubled and restructured non-purchased loans − accruing (4)  1,263   1,285     


(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.
NM – Not meaningful


Bank OZK
Supplemental Quarterly Financial Data
Unaudited

  6/30/20  9/30/20  12/31/20  3/31/21  6/30/21  9/30/21  12/31/21  03/31/22 
  (Dollars in thousands, except per share amounts) 
Earnings Summary:                                
Net interest income $216,593  $224,657  $237,600  $234,636  $240,746  $247,957  $266,381  $249,343 
Federal tax (FTE) adjustment  1,753   1,605   1,533   1,275   1,355   1,106   1,009   1,017 
Net interest income (FTE)  218,346   226,262   239,133   235,911   242,101   249,063   267,390   250,360 
Provision for credit losses  (72,026)  (7,200)  (6,750)  31,559   30,932   7,454   7,992   (4,190)
Non-interest income  21,591   26,676   28,661   32,117   27,742   25,984   29,695   31,475 
Non-interest expense  (100,953)  (105,641)  (103,394)  (106,059)  (103,711)  (110,397)  (110,106)  (107,715)
Pretax income (FTE)  66,958   140,097   157,650   193,528   197,064   172,104   194,971   169,930 
FTE adjustment  (1,753)  (1,605)  (1,533)  (1,275)  (1,355)  (1,106)  (1,009)  (1,017)
Provision for income taxes  (14,948)  (29,251)  (35,607)  (43,818)  (45,161)  (40,713)  (44,197)  (36,410)
Noncontrolling interest  9   12   3   (19)  (13)  5   (5)  5 
Preferred stock dividend                       (4,480)
Net income available to common stockholders $50,266  $109,253  $120,513  $148,416  $150,535  $130,290  $149,760  $128,028 
Earnings per common share – diluted $0.39  $0.84  $0.93  $1.14  $1.16  $1.00  $1.17  $1.02 
PPNR $137,231  $145,692  $162,867  $160,694  $164,777  $163,544  $185,970  $173,103 
Non-interest Income:                                
Service charges on deposit accounts:                                
NSF/Overdraft fees $2,702  $3,494  $4,024  $3,323  $3,244  $4,080  $4,315  $4,201 
All other service charges  5,579   5,933   5,959   6,342   7,067   7,097   7,149   6,690 
Trust income  1,759   1,936   1,909   2,206   1,911   2,247   2,141   2,094 
BOLI income:                                
Increase in cash surrender value  5,057   5,081   5,034   4,881   4,919   4,940   4,901   4,793 
Death benefits           1,409         618   297 
Loan service, maintenance and other fees  3,394   3,351   3,797   3,551   3,953   3,307   3,148   3,018 
Gains on sales of other assets  621   891   5,189   5,828   2,341   463   1,330   6,992 
Net gains (losses) on investment securities     2,244               504   (90)
Other  2,479   3,746   2,749   4,577   4,307   3,850   5,589   3,480 
Total non-interest income $21,591  $26,676  $28,661  $32,117  $27,742  $25,984  $29,695  $31,475 
Non-interest Expense:                                
Salaries and employee benefits $48,410  $53,119  $53,832  $53,645  $52,119  $53,769  $55,034  $54,648 
Net occupancy and equipment  15,756   16,676   15,617   16,468   16,168   17,161   17,004   17,215 
Other operating expenses  36,787   35,846   33,945   35,946   35,424   39,467   38,068   35,852 
Total non-interest expense $100,953  $105,641  $103,394  $106,059  $103,711  $110,397  $110,106  $107,715 
Balance Sheet Data:                                
Total assets $26,380,409  $26,888,308  $27,162,596  $27,276,892  $26,605,938  $26,143,367  $26,530,430  $26,562,353 
Non-purchased loans  18,247,431   18,419,958   18,401,495   17,979,435   17,611,848   17,707,452   17,791,610   18,449,723 
Purchased loans  1,063,647   938,485   807,673   735,630   659,822   597,851   516,215   481,299 
Investment securities – AFS  3,299,944   3,468,243   3,405,351   4,162,479   4,693,396   3,846,496   3,916,733   3,728,284 
Deposits  20,723,598   21,287,405   21,450,356   21,296,442   20,706,777   20,102,440   20,209,134   20,329,662 
Unfunded balance of closed loans  11,411,441   11,604,614   11,847,117   11,780,099   11,709,818   12,385,369   13,619,578   14,954,367 
Preferred stock                    338,980   338,980 
Total stockholders' equity before noncontrolling interest  4,110,666   4,186,285   4,272,271   4,383,205   4,501,676   4,553,240   4,836,243   4,690,057 



Bank OZK
Supplemental Quarterly Financial Data (Continued)
Unaudited

  6/30/20  9/30/20  12/31/20  3/31/21  6/30/21  9/30/21  12/31/21  03/31/22 
  (Dollars in thousands, except per share amounts) 
Allowance for Credit Losses:                                
Balance at beginning of period $316,409  $374,494  $377,273  $377,305  $342,307  $307,564  $298,798  $288,989 
Net charge-offs  (13,941)  (4,421)  (6,718)  (3,439)  (3,811)  (1,312)  (1,817)  361 
Provision for credit losses  72,026   7,200   6,750   (31,559)  (30,932)  (7,454)  (7,992)  4,190 
Balance at end of period $374,494  $377,273  $377,305  $342,307  $307,564  $298,798  $288,989  $293,540 
Allowance for loan losses $306,196  $308,847  $295,824  $268,077  $248,753  $237,722  $217,380  $204,213 
Reserve for losses on unfunded loan commitments  68,298   68,426   81,481   74,230   58,811   61,076   71,609   89,327 
Total allowance for credit losses $374,494  $377,273  $377,305  $342,307  $307,564  $298,798  $288,989  $293,540 
Selected Ratios:                                
Net interest margin – FTE (1)  3.74%  3.69%  3.88%  3.86%  3.95%  4.16%  4.41%  4.24%
Efficiency ratio  42.07   41.77   38.61   39.57   38.43   40.14   37.06   38.22 
Net charge-offs to average non-purchased loans (1) (2)  0.05   0.09   0.14   0.08   0.09   0.04   0.05   0.08 
Net charge-offs to average total loans (1)  0.29   0.09   0.14   0.07   0.08   0.03   0.04   (0.01)
Nonperforming loans to total loans (3)  0.18   0.15   0.25   0.25   0.22   0.20   0.19   0.21 
Nonperforming assets to total assets (3)  0.19   0.17   0.21   0.19   0.18   0.17   0.15   0.16 
Allowance for loan losses to total loans (4)  1.59   1.60   1.54   1.43   1.36   1.30   1.19   1.08 
Loans past due 30 days or more, including past due non-accrual loans, to total loans (3)  0.13   0.13   0.16   0.13   0.10   0.13   0.15   0.14 

         (1)  Ratios for interim periods annualized based on actual days.
         (2)  Excludes purchased loans and net charge-offs related to such loans.
         (3)  Excludes purchased loans, except for their inclusion in total assets.
         (4)  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, 
  2022  2021 
  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 $1,359,510  $609   0.18% $2,212,680  $538   0.10%
Investment securities:                        
Taxable  3,378,613   10,611   1.27   2,422,127   8,083   1.35 
Tax-exempt – FTE  570,987   3,779   2.68   1,167,827   4,659   1.62 
Non-purchased loans – FTE  18,154,626   240,219   5.37   18,188,269   240,124   5.35 
Purchased loans  499,418   8,170   6.63   776,097   11,935   6.24 
Total earning assets – FTE  23,963,154   263,388   4.46   24,767,000   265,339   4.34 
Non-interest earning assets  2,421,122           2,279,477         
Total assets $26,384,276          $27,046,477         
LIABILITIES AND STOCKHOLDERS’ EQUITY                        
Interest bearing liabilities:                        
Deposits:                        
Savings and interest bearing transaction $9,522,195  $2,783   0.12% $8,337,990  $3,616   0.18%
Time deposits  5,760,998   5,709   0.40   8,996,193   20,734   0.93 
Total interest bearing deposits  15,283,193   8,492   0.23   17,334,183   24,350   0.57 
Other borrowings  756,115   998   0.54   756,184   990   0.53 
Subordinated notes  346,227   2,574   3.02   224,092   3,146   5.69 
Subordinated debentures  121,097   964   3.23   120,540   942   3.17 
Total interest bearing liabilities  16,506,632   13,028   0.32   18,434,999   29,428   0.65 
Non-interest bearing liabilities:                        
Non-interest bearing deposits  4,773,827           3,972,815         
Other non-interest bearing liabilities  312,408           328,401         
Total liabilities  21,592,867           22,736,215         
Total stockholders’ equity before noncontrolling interest  4,788,294           4,307,174         
Noncontrolling interest  3,114           3,088         
Total liabilities and stockholders’ equity $26,384,275          $27,046,477         
Net interest income – FTE     $250,360          $235,911     
Net interest margin – FTE          4.24%          3.86%
Core spread (1)          5.14%          4.78%

(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, 
 2022  2021  2021 
 (Dollars in thousands) 
Net income available to common stockholders$128,028  $148,416  $149,760 
Average stockholders’ equity before noncontrolling interest$4,788,294  $4,307,174  $4,755,706 
Less average preferred stock (338,980)     (213,693)
Total average common stockholders’ equity 4,449,314   4,307,174   4,542,013 
Less average intangible assets:           
Goodwill (660,789)  (660,789)  (660,789)
Core deposit and other intangible assets, net of accumulated amortization (7,572)  (13,828)  (9,032)
Total average intangibles (668,361)  (674,617)  (669,821)
Average tangible common stockholders’ equity$3,780,953  $3,632,557  $3,872,192 
Return on average common stockholders’ equity (1) 11.67%  13.97%  13.08%
Return on average tangible common stockholders’ equity (1) 13.73%  16.57%  15.34%

(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, 
  2022  2021  2021 
  (In thousands, except per share amounts) 
Total stockholders’ equity before noncontrolling interest $4,690,057  $4,383,205  $4,836,243 
Less preferred stock  (338,980)     (338,980)
Total common stockholders' equity  4,351,077   4,383,205   4,497,263 
Less intangible assets:            
Goodwill  (660,789)  (660,789)  (660,789)
Core deposit and other intangible assets, net of accumulated amortization  (6,757)  (12,939)  (8,274)
Total intangibles  (667,546)  (673,728)  (669,063)
Total tangible common stockholders’ equity $3,683,531  $3,709,477  $3,828,200 
Shares of common stock outstanding  122,677   129,719   125,444 
Book value per common share $35.47  $33.79  $35.85 
Tangible book value per common share $30.03  $28.60  $30.52 



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, 
  2022  2021 
  (Dollars in thousands) 
Total stockholders’ equity before noncontrolling interest $4,690,057  $4,383,205 
Less preferred stock  (338,980)   
Total common stockholders’ equity  4,351,077   4,383,205 
Less intangible assets:        
Goodwill  (660,789)  (660,789)
Core deposit and other intangible assets, net of accumulated amortization  (6,757)  (12,939)
Total intangibles  (667,546)  (673,728)
Total tangible common stockholders’ equity $3,683,531  $3,709,477 
Total assets $26,562,353  $27,276,892 
Less intangible assets:        
Goodwill  (660,789)  (660,789)
Core deposit and other intangible assets, net of accumulated amortization  (6,757)  (12,939)
Total intangibles  (667,546)  (673,728)
Total tangible assets $25,894,807  $26,603,164 
Ratio of total common stockholders’ equity to total assets  16.38%  16.07%
Ratio of total tangible common stockholders’ equity to total tangible assets  14.22%  13.94%


Calculation of Pre-Tax Pre-Provision Net Revenue
Unaudited

  Three Months Ended 
  March 31,  December 31, 
  2022  2021  2021 
  (Dollars in thousands) 
Income before taxes $168,913  $192,253  $193,962 
Provision for credit losses  4,190   (31,559)  (7,992)
Pre-tax pre-provision net revenue $173,103  $160,694  $185,970 


Investor Contact: Tim Hicks (501) 978-2336
Media Contact: Candace Graham (501) 320-4165