Bank OZK Announces Record Third Quarter 2023 Earnings

| Source: Bank OZK Bank OZK

LITTLE ROCK, Ark., Oct. 19, 2023 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income available to common stockholders for the third quarter of 2023 was a record $169.7 million, a 32.3% increase from $128.3 million for the third quarter of 2022. Diluted earnings per common share for the third quarter of 2023 were a record $1.49, a 38.0% increase from $1.08 for the third quarter of 2022.

For the nine months ended September 30, 2023, net income available to common stockholders was $503.5 million, a 29.5% increase from $388.7 million for the first nine months of 2022. Diluted earnings per common share for the first nine months of 2023 were $4.37, a 36.6% increase from $3.20 for the first nine months of 2022.

Pre-tax pre-provision net revenue (“PPNR”) was $264.0 million for the third quarter of 2023, a 26.9% increase from $208.1 million for the third quarter of 2022. For the first nine months of 2023, PPNR was $769.9 million, a 36.5% increase from $564.0 million for the first nine months of 2022. 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 $44.0 million for the third quarter and $121.6 million for the first nine months of 2023 compared to $39.8 million for the third quarter of 2022 and $51.0 million for the first nine months of 2022. The Bank’s total allowance for credit losses (“ACL”) was $461.5 million at September 30, 2023 compared to $335.6 million at September 30, 2022.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the third quarter of 2023 were 2.13%, 14.81% and 17.33%, respectively, compared to 1.97%, 11.85% and 14.02%, respectively, for the third quarter of 2022. The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first nine months of 2023 were 2.26%, 15.06% and 17.68%, respectively, compared to 1.99%, 11.97% and 14.14%, respectively, for the first nine months of 2022. The calculation of the Bank’s returns on average common stockholders’ equity and average tangible common stockholders’ equity and the reconciliations to GAAP are included in the schedules accompanying this release.

George Gleason, Chairman and Chief Executive Officer stated, “We have been well positioned for rising interest rates and the turbulent environment of the last six quarters, and our preparation has been reflected in our record results. We believe we are well positioned for the coming quarters, and we look forward to capitalizing on new opportunities.”

KEY BALANCE SHEET METRICS

Total loans were $25.33 billion at September 30, 2023, a 29.8% increase from $19.51 billion at September 30, 2022. Deposits were $25.55 billion at September 30, 2023, a 25.2% increase from $20.40 billion at September 30, 2022. Total assets were $32.77 billion at September 30, 2023, a 24.9% increase from $26.23 billion at September 30, 2022.

Common stockholders’ equity was $4.56 billion at September 30, 2023, an 8.7% increase from $4.20 billion at September 30, 2022. Tangible common stockholders’ equity was $3.90 billion at September 30, 2023, a 10.4% increase from $3.54 billion at September 30, 2022. The Bank did not repurchase any shares during the three months ended September 30, 2023. During the first nine months of 2023, the Bank repurchased 4.3 million shares for $151.5 million, which equates to a weighted average cost of approximately $35.19 per share.

Book value per common share was $40.35 at September 30, 2023, a 13.1% increase from $35.67 at September 30, 2022. Tangible book value per common share was $34.50 at September 30, 2023, a 14.9% increase from $30.02 at September 30, 2022.

The Bank’s ratio of total common stockholders’ equity to total assets was 13.93% at September 30, 2023, compared to 16.01% at September 30, 2022. Its ratio of total tangible common stockholders’ equity to total tangible assets was 12.16% at September 30, 2023, compared to 13.83% at September 30, 2022. The calculations of the Bank’s total common stockholders’ equity, tangible common stockholders’ equity, tangible book value per common share, and ratio of total tangible common stockholders’ equity to total tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.

ASSET QUALITY

The Bank’s ratio of nonperforming non-purchased loans to total loans (excluding purchased loans) was 0.25% at September 30, 2023, compared to 0.14% as of September 30, 2022. The Bank’s ratio of nonperforming assets to total assets (excluding purchased loans, except for their inclusion in total assets) was 0.40% at September 30, 2023, compared to 0.13% as of September 30, 2022. The Bank's annualized ratio of net charge-offs of total loans to average total loans was 0.15% for the third quarter and nine months ended September 30, 2023, compared to 0.09% for the third quarter and 0.03% for the first nine months of September 30, 2022.

MANAGEMENT’S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS

In connection with this release, the Bank released management’s comments on its quarterly results, which are available at http://ir.ozk.com. This release should be read in conjunction with management’s comments on the quarterly results.

Management will conduct a conference call to take questions at 10:00 a.m. CT (11:00 a.m. ET) on Friday, October 20, 2023. Interested parties may access the conference call live via webcast on the Bank’s investor relations website at https://ir.ozk.com/news/event-calendar, or may participate via telephone by registering using this online form. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the conference call webcast will be archived on the Bank's website for at least 30 days.

The Bank files annual, quarterly and current reports, proxy materials, and other information required by the Securities Exchange Act of 1934 with the Federal Deposit Insurance Corporation (“FDIC”), copies of which are available electronically at the FDIC’s website at https://efr.fdic.gov/fcxweb/efr/index.html and are also available on the Bank’s investor relations website at ir.ozk.com. To receive automated email alerts for these materials please visit https://ir.ozk.com/other/email-alerts to sign up.

NON-GAAP FINANCIAL MEASURES

This release contains certain non-GAAP financial measures. The Bank uses these non-GAAP financial measures, specifically return on average common stockholders’ equity, return on average tangible common stockholders’ equity, tangible book value per common share, 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 hiring or retaining qualified personnel, obtaining regulatory or other approvals, delays in acquiring satisfactory sites, obtaining permits and designing, constructing and opening new offices or 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, including the effects of recent failures of other financial institutions; recently enacted and potential laws and regulatory requirements or changes to existing laws and regulatory requirements, including changes affecting oversight of the financial services industry, changes intended to manage or mitigate climate and related environmental risks or changes in the interpretation and enforcement of such laws and requirements, and the costs and expenses to comply with new and/or existing legislation and regulatory requirements; uncertainty regarding 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 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 cyber-attacks 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; the competition and costs of recruiting and retaining human talent; 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, 2022 and our quarterly reports on Form 10-Q. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described in, or implied by, such forward-looking statements. The Bank disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.

GENERAL INFORMATION

Bank OZK (Nasdaq: OZK) is a regional bank providing innovative financial solutions delivered by expert bankers with a relentless pursuit of excellence. Established in 1903, Bank OZK conducts banking operations with over 240 offices in eight states including Arkansas, Georgia, Florida, North Carolina, Texas, New York, California and Mississippi and had $32.77 billion in total assets as of September 30, 2023. For more information, visit www.ozk.com.

Bank OZK
Consolidated Balance Sheets
Unaudited
    
 September 30, 2023 December 31, 2022
 (Dollars in thousands)
ASSETS   
Cash and cash equivalents$1,864,300  $1,033,454 
Investment securities – available for sale (“AFS”) 3,153,817   3,491,613 
Investment securities – trading —   8,817 
Federal Home Loan Bank of Dallas (“FHLB”) and other bankers’ bank stocks 63,722   42,406 
Non-purchased loans 25,051,214   20,400,154 
Purchased loans 280,526   378,637 
Allowance for loan losses (303,358)  (208,858)
Net Loans 25,028,382   20,569,933 
Premises and equipment, net 665,806   678,405 
Foreclosed assets 68,738   6,616 
Accrued interest receivable 154,244   125,130 
Bank owned life insurance (“BOLI”) 804,394   789,805 
Goodwill and other intangible assets, net 660,789   663,543 
Other, net 303,136   246,846 
Total assets$32,767,328  $27,656,568 
    
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Deposits:   
Demand non-interest bearing$4,283,925  $4,658,451 
Savings and interest bearing transaction 9,029,610   9,905,717 
Time 12,239,321   6,935,975 
Total deposits 25,552,856   21,500,143 
Other borrowings 1,430,192   606,666 
Subordinated notes 347,556   346,947 
Subordinated debentures 121,652   121,591 
Reserve for losses on unfunded loan commitments 158,128   156,419 
Accrued interest payable and other liabilities 252,031   233,864 
Total liabilities$27,862,415  $22,965,630 
    
Commitments and contingencies   
    
Stockholders’ equity:   
Preferred Stock: $0.01 par value; 100,000,000 shares authorized; 14,000,000 issued and outstanding at September 30, 2023 and December 31, 2022 338,980   338,980 
Common Stock: $0.01 par value; 300,000,000 shares authorized; 113,136,232 and 117,176,928 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively 1,131   1,172 
Additional paid-in capital 1,607,510   1,753,941 
Retained earnings 3,154,869   2,773,135 
Accumulated other comprehensive (loss) income (198,986)  (177,649)
Total stockholders’ equity before noncontrolling interest 4,903,504   4,689,579 
Noncontrolling interest 1,409   1,359 
Total stockholders’ equity 4,904,913   4,690,938 
Total liabilities and stockholders’ equity$32,767,328  $27,656,568 


Bank OZK
Consolidated Statements of Income
Unaudited
    
 Three Months Ended 
September 30,		 Nine Months Ended 
September 30,
 2023 2022 2023 2022
 (Dollars in thousands, except per share amounts)
Interest income:       
Non-purchased loans$523,026  $295,054 $1,410,446  $791,313 
Purchased loans 6,005   7,148  17,845   24,300 
Investment securities:       
Taxable 9,887   10,269  29,761   31,246 
Tax-exempt 9,534   7,126  28,288   14,132 
Deposits with banks and federal funds sold 17,061   3,690  36,338   6,155 
Total interest income 565,513   323,287  1,522,678   867,146 
        
Interest expense:       
Deposits 178,823   21,997  408,577   41,343 
Other borrowings 14,326   2,460  30,339   4,500 
Subordinated notes 2,631   2,631  7,808   7,808 
Subordinated debentures 2,472   1,582  7,017   3,741 
Total interest expense 198,252   28,670  453,741   57,392 
        
Net interest income 367,261   294,617  1,068,937   809,754 
Provision for credit losses 44,036   39,771  121,638   50,986 
Net interest income after provision for credit losses 323,225   254,846  947,299   758,768 
        
Non-interest income:       
Service charges on deposit accounts:       
NSF and overdraft fees 4,708   4,808  13,359   13,257 
All other service charges 6,973   7,089  20,662   20,963 
Trust income 2,213   2,007  6,358   6,012 
BOLI income:       
Increase in cash surrender value 5,252   4,940  15,295   14,579 
Death benefits —   510  —   807 
Loan service, maintenance and other fees 3,995   3,418  12,165   10,039 
Gains on sales of other assets 364   3,182  5,740   10,957 
Net gains (loss) on investment securities (270)  321  2,066   762 
Other 2,492   2,888  9,877   9,583 
Total non-interest income 25,727   29,163  85,522   86,959 
        
Non-interest expense:       
Salaries and employee benefits 64,107   57,367  192,576   166,427 
Net occupancy and equipment 17,797   18,244  55,357   52,474 
Other operating expenses 47,074   40,080  136,616   113,807 
Total non-interest expense 128,978   115,691  384,549   332,708 
        
Income before taxes 219,974   168,318  648,272   513,019 
Provision for income taxes 46,144   35,969  132,564   111,754 
Net income 173,830   132,349  515,708   401,265 
Earnings attributable to noncontrolling interest (37)  —  (50)  (3)
Preferred stock dividends 4,047   4,047  12,141   12,574 
Net income available to common stockholders$169,746  $128,302 $503,517  $388,688 
        
Basic earnings per common share$1.50  $1.08 $4.39  $3.21 
        
Diluted earnings per common share$1.49  $1.08 $4.37  $3.20 


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 September 30, 2023:             
Balances - June 30, 2023$338,980 $1,131  $1,602,964  $3,026,247  $(159,431) $1,372 $4,811,263 
Net income —  —   —   173,830   —   —  173,830 
Earnings attributable to noncontrolling interest —  —   —   (37)  —   37  — 
Total other comprehensive loss —  —   —   —   (39,555)  —  (39,555)
Preferred stock dividends, $0.28906 per share —  —   —   (4,047)  —   —  (4,047)
Common stock dividends, $0.36 per share —  —   —   (41,124)  —   —  (41,124)
Issuance of 2,446 shares of common stock pursuant to stock-based compensation plans —  —   77   —   —   —  77 
Stock-based compensation expense —  —   4,469   —   —   —  4,469 
Forfeitures of 11,663 shares of unvested restricted common stock —  —   —   —   —   —  — 
Balances - September 30, 2023$338,980 $1,131  $1,607,510  $3,154,869  $(198,986) $1,409 $4,904,913 
              
Nine months ended September 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 —  —   —   515,708   —   —  515,708 
Earnings attributable to noncontrolling interest —  —   —   (50)  —   50  — 
Total other comprehensive loss —  —   —   —   (21,337)  —  (21,337)
Preferred stock dividends, $0.86718 per share —  —   —   (12,141)  —   —  (12,141)
Common stock dividends, $1.05 per share —  —   —   (121,783)  —   —  (121,783)
Issuance of 505,633 shares of common stock pursuant to stock-based compensation plans —  5   618   —   —   —  623 
Repurchase and cancellation of 4,304,239 shares of common stock under share repurchase program, including excise taxes —  (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 —  —   13,044   —   —   —  13,044 
Forfeitures of 26,728 shares of unvested restricted common stock —  —   —   —   —   —  — 
Balances - September 30, 2023$338,980 $1,131  $1,607,510  $3,154,869  $(198,986) $1,409 $4,904,913 


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 September 30, 2022:             
Balances - June 30, 2022$338,980 $1,190  $1,817,650  $2,563,130  $(114,168) $3,120 $4,609,902 
Net income —  —   —   132,349   —   —  132,349 
Earnings attributable to noncontrolling interest —  —   —   —   —   —  — 
Total other comprehensive loss —  —   —   —   (113,505)  —  (113,505)
Preferred stock dividends, $0.28906 per share —  —   —   (4,047)  —     (4,047)
Common stock dividends, $0.32 per share —  —   —   (38,055)  —   —  (38,055)
Issuance of 5,414 shares of common stock pursuant to stock-based compensation plans —  —   172   —   —   —  172 
Repurchase and cancellation of 1,225,688 shares of common stock under share repurchase program —  (12)  (47,735)  —   —   —  (47,747)
Stock-based compensation expense —  —   3,475   —   —   —  3,475 
Forfeitures of 14,142 shares of unvested restricted common stock —  —   —   —   —   —  — 
Balances - September 30, 2022$338,980 $1,178  $1,773,562  $2,653,377  $(227,673) $3,120 $4,542,544 
              
Nine months ended September 30, 2022:             
Balances - December 31, 2021$338,980 $1,254  $2,093,702  $2,378,466  $23,841  $3,117 $4,839,360 
Net income —  —   —   401,265   —   —  401,265 
Earnings attributable to noncontrolling interest —  —   —   (3)  —   3  — 
Total other comprehensive loss —  —   —   —   (251,514)  —  (251,514)
Preferred stock dividends, $0.89812 per share —  —   —   (12,574)  —     (12,574)
Common stock dividends, $0.93 per share —  —   —   (113,777)  —   —  (113,777)
Issuance of 295,343 shares of common stock pursuant to stock-based compensation plans —  3   2,249   —   —   —  2,252 
Repurchase and cancellation of 7,798,520 shares of common stock under share repurchase program —  (77)  (326,667)  —   —   —  (326,744)
Repurchase and cancellation of 112,974 shares of common stock withheld for tax pursuant to stock-based compensation plans. —  (1)  (5,398)  —   —   —  (5,399)
Stock-based compensation expense —  —   9,675   —   —   —  9,675 
Forfeitures of 65,992 shares of unvested restricted common stock —  (1)  1   —   —   —  — 
Balances - September 30, 2022$338,980 $1,178  $1,773,562  $2,653,377  $(227,673) $3,120 $4,542,544 


Bank OZK
Summary of Non-Interest Expense
Unaudited
    
 Three Months Ended 
September 30,		 Nine Months Ended 
September 30,
 2023 2022 2023 2022
 (Dollars in thousands)
Salaries and employee benefits$64,107 $57,367 $192,576 $166,427
Net occupancy and equipment 17,797  18,244  55,357  52,474
Other operating expenses:       
Software and data processing 9,584  8,700  28,634  25,861
Deposit insurance and assessments 5,500  2,650  14,548  6,900
Professional and outside services 4,640  5,403  15,190  15,929
Advertising and public relations 3,779  3,448  10,998  5,810
Telecommunication services 1,943  1,921  6,614  5,852
ATM expense 1,927  1,500  5,725  4,497
Travel and meals 1,926  1,962  5,644  5,906
Postage and supplies 1,716  2,035  5,859  5,240
Loan collection and repossession expense 1,210  402  2,113  1,081
Amortization of intangibles 376  1,298  2,754  4,331
Writedowns of foreclosed and other assets 141  87  1,106  345
Amortization of CRA and tax credit investments 8,171  5,155  20,151  14,885
Other 6,161  5,519  17,280  17,170
Total non-interest expense$128,978 $115,691 $384,549 $332,708


Bank OZK
Summary of Total Loans Outstanding
Unaudited
    
 September 30, 2023 December 31, 2022
 (Dollars in thousands)
Real estate:       
Residential 1-4 family$960,262  3.8% $981,567  4.7%
Non-farm/non-residential 5,251,392  20.7   4,665,268  22.5 
Construction/land development 10,743,850  42.4   8,215,056  39.5 
Agricultural 254,147  1.0   239,689  1.2 
Multifamily residential 2,045,927  8.1   1,503,398  7.2 
Total real estate 19,255,578  76.0   15,604,978  75.1 
Commercial and industrial 1,257,018  5.0   902,321  4.3 
Consumer 2,936,455  11.6   2,445,851  11.8 
Other 1,882,689  7.4   1,825,641  8.8 
Total loans 25,331,740  100.0%  20,778,791  100.0%
Allowance for loan losses (303,358)    (208,858)  
Net loans$25,028,382    $20,569,933   


Bank OZK
Allowance for Credit Losses
Unaudited
      
 Allowance for
Loan Losses		 Reserve for
Losses on
Unfunded Loan
Commitments		 Total Allowance
for Credit
Losses
 (Dollars in thousands)
Three months ended September 30, 2023:     
Balances – June 30, 2023$263,188  $163,632  $426,820 
Net charge-offs (9,370)  —   (9,370)
Provision for credit losses 49,540   (5,504)  44,036 
Balances - September 30, 2023$303,358  $158,128  $461,486 
      
Nine months ended September 30, 2023:     
Balances – December 31, 2022$208,858  $156,419  $365,277 
Net charge-offs (25,429)  —   (25,429)
Provision for credit losses 119,929   1,709   121,638 
Balances - September 30, 2023$303,358  $158,128  $461,486 
      
Three months ended September 30, 2022:     
Balances – June 30, 2022$190,795  $109,143  $299,938 
Net charge-offs (4,074)  —   (4,074)
Provision for credit losses 13,377   26,394   39,771 
Balances - September 30, 2022$200,098  $135,537  $335,635 
      
Nine months ended September 30, 2022:     
Balances – December 31, 2021$217,380  $71,609  $288,989 
Net charge-offs (4,340)  —   (4,340)
Provision for credit losses (12,942)  63,928   50,986 
Balances - September 30, 2022$200,098  $135,537  $335,635 




Bank OZK
Summary of Deposits – By Account Type
Unaudited
 
 September 30, 2023 December 31, 2022
 (Dollars in thousands)
Non-interest bearing$4,283,925 16.8% $4,658,451 21.7%
Interest bearing:       
Transaction (NOW) 4,319,285 16.9   4,097,532 19.1 
Savings and money market 4,710,325 18.4   5,808,185 27.0 
Time deposits 12,239,321 47.9   6,935,975 32.2 
Total deposits$25,552,856 100.0% $21,500,143 100.0%


Bank OZK
Summary of Deposits – By Customer Type
Unaudited
 
 September 30, 2023 December 31, 2022
 (Dollars in thousands)
Non-interest bearing$4,283,925 16.8% $4,658,451 21.7%
Interest bearing:       
Consumer and commercial:       
Consumer – Non-Time 2,928,352 11.5   3,916,078 18.2 
Consumer – Time 8,756,078 34.3   4,936,061 23.0 
Commercial – Non-Time 2,320,691 9.1   2,741,007 12.7 
Commercial – Time 683,849 2.7   516,477 2.4 
Public funds 2,992,447 11.7   2,103,392 9.8 
Brokered 2,774,888 10.9   2,050,294 9.5 
Reciprocal 812,626 3.0   578,383 2.7 
Total deposits$25,552,856 100.0% $21,500,143 100.0%


Bank OZK
Selected Consolidated Financial Data
Unaudited
 
 Three Months Ended 
September 30,		 Nine Months Ended 
September 30,
 2023 2022 %
Change		 2023 2022 %
Change
 (Dollars in thousands, except per share amounts)
Income statement data:           
Net interest income$367,261  $294,617  24.7% $1,068,937  $809,754  32.0%
Provision for credit losses 44,036   39,771  10.7   121,638   50,986  138.6 
Non-interest income 25,727   29,163  (11.8)  85,522   86,959  (1.7)
Non-interest expense 128,978   115,691  11.5   384,549   332,708  15.6 
Net income 173,830   132,349  31.3   515,708   401,265  28.5 
Preferred stock dividends 4,047   4,047  —   12,141   12,574  (3.4)
Net income available to common stockholders 169,746   128,302  32.3   503,517   388,688  29.5 
Pre-tax pre-provision net revenue(1) 264,010   208,089  26.9   769,910   564,005  36.5 
Common share and per common share data:           
Diluted earnings per common share$1.49  $1.08  38.0% $4.37  $3.20  36.6%
Basic earnings per common share 1.50   1.08  38.9   4.39   3.21  36.8 
Common stock dividends per share 0.36   0.32  12.5   1.05   0.93  12.9 
Book value per share 40.35   35.67  13.1   40.35   35.67  13.1 
Tangible book value per common share(1) 34.50   30.02  14.9   34.50   30.02  14.9 
Weighted-average diluted shares outstanding (thousands) 113,770   118,856  (4.3)  115,226   121,539  (5.2)
End of period shares outstanding (thousands) 113,136   117,762  (3.9)  113,136   117,762  (3.9)
Balance sheet data at period end:           
Total assets$32,767,328  $26,232,119  24.9% $32,767,328  $26,232,119  24.9%
Total loans 25,331,740   19,513,712  29.8   25,331,740   19,513,712  29.8 
Non-purchased loans 25,051,214   19,103,546  31.1   25,051,214   19,103,546  31.1 
Purchased loans 280,526   410,166  (31.6)  280,526   410,166  (31.6)
Allowance for loan losses 303,358   200,098  51.6   303,358   200,098  51.6 
Foreclosed assets 68,738   6,559  948.0   68,738   6,559  948.0 
Investment securities – AFS 3,153,817   3,528,077  (10.6)  3,153,817   3,528,077  (10.6)
Goodwill and other intangible assets, net 660,789   664,732  (0.6)  660,789   664,732  (0.6)
Deposits 25,552,856   20,401,876  25.2   25,552,856   20,401,876  25.2 
Other borrowings 1,430,192   456,466  213.3   1,430,192   456,466  213.3 
Subordinated notes 347,556   346,741  0.2   347,556   346,741  0.2 
Subordinated debentures 121,652   121,450  0.2   121,652   121,450  0.2 
Unfunded balance of closed loans 20,625,371   20,091,101  2.7   20,625,371   20,091,101  2.7 
Reserve for losses on unfunded loan commitments 158,128   135,537  16.7   158,128   135,537  16.7 
Preferred stock 338,980   338,980  —   338,980   338,980  — 
Total common stockholders’ equity 4,564,524   4,200,444  8.7   4,564,524   4,200,444  8.7 
Net unrealized losses on investment securities AFS included in stockholders' equity (198,986)  (227,673)    (198,986)  (227,673)  
Loan (including purchased loans) to deposit ratio 99.13%  95.65%    99.13%  95.65%  
Selected ratios:           
Return on average assets(2) 2.13%  1.97%    2.26%  1.99%  
Return on average common stockholders' equity(1) (2) 14.81   11.85     15.06   11.97   
Return on average tangible common stockholders' equity(1) (2) 17.33   14.02     17.68   14.14   
Average common equity to total average assets 14.38   16.61     15.02   16.60   
Net interest margin – FTE(2) 5.05   5.03     5.29   4.60   
Efficiency ratio 32.60   35.50     33.09   36.92   
Net charge-offs to average non-purchased loans(2) (3) 0.17   0.09     0.12   0.07   
Net charge-offs to average total loans(2) 0.15   0.09     0.15   0.03   
Nonperforming loans to total loans(4) 0.25   0.14     0.25   0.14   
Nonperforming assets to total assets(4) 0.40   0.13     0.40   0.13   
Allowance for loan losses to total loans(5) 1.20   1.03     1.20   1.03   
Allowance for credit losses to total loans and unfunded loan commitments 1.00   0.85     1.00   0.85   
Other information:           
Non-accrual loans(4)$62,648  $24,633    $62,648  $24,633   
Accruing loans - 90 days past due(4) —   —     —   —   

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

Bank OZK
Selected Consolidated Financial Data (continued)
Unaudited
  
 Three Months Ended
 September 30, 2023 June 30, 2023 %
Change
 (Dollars in thousands, except per share amounts)
Income statement data:     
Net interest income$367,261  $356,824  2.9%
Provision for credit losses 44,036   41,774  5.4 
Non-interest income 25,727   31,987  (19.6)
Non-interest expense 128,978   129,355  (0.3)
Net income 173,830   171,965  1.1 
Preferred stock dividends 4,047   4,047  — 
Net income available to common stockholders 169,746   167,917  1.1 
Pre-tax pre-provision net revenue(1) 264,010   259,456  1.8 
Common share and per common share data:     
Diluted earnings per common share$1.49  $1.47  1.4%
Basic earnings per common share 1.50   1.47  2.0 
Common stock dividends per share 0.36   0.35  2.9 
Book value per share 40.35   39.51  2.1 
Tangible book value per common share(1) 34.50   33.67  2.5 
Weighted-average diluted shares outstanding (thousands) 113,770   114,284  (0.4)
End of period shares outstanding (thousands) 113,136   113,145  — 
Balance sheet data at period end:     
Total assets$32,767,328  $30,761,870  6.5%
Total loans 25,331,740   23,607,446  7.3 
Non-purchased loans 25,051,214   23,291,785  7.6 
Purchased loans 280,526   315,661  (11.1)
Allowance for loan losses 303,358   263,188  15.3 
Foreclosed assets 68,738   62,048  10.8 
Investment securities – AFS 3,153,817   3,262,366  (3.3)
Goodwill and other intangible assets, net 660,789   661,166  (0.1)
Deposits 25,552,856   23,983,397  6.5 
Other borrowings 1,430,192   1,104,478  29.5 
Subordinated notes 347,556   347,350  0.1 
Subordinated debentures 121,652   121,652  — 
Unfunded balance of closed loans 20,625,371   21,119,761  (2.3)
Reserve for losses on unfunded loan commitments 158,128   163,632  (3.4)
Preferred stock 338,980   338,980  — 
Total common stockholders’ equity 4,564,524   4,470,911  2.1 
Net unrealized losses on investment securities AFS included in stockholders' equity (198,986)  (159,431)  
Loan (including purchased loans) to deposit ratio 99.13%  98.43%  
Selected ratios:     
Return on average assets(2) 2.13%  2.27%  
Return on average common stockholders' equity(1) (2) 14.81   15.14   
Return on average tangible common stockholders' equity(1) (2) 17.33   17.78   
Average common equity to total average assets 14.38   15.00   
Net interest margin – FTE(2) 5.05   5.32   
Efficiency ratio 32.60   33.05   
Net charge-offs to average non-purchased loans(2) (3) 0.17   0.03   
Net charge-offs to average total loans(2) 0.15   0.15   
Nonperforming loans to total loans(4) 0.25   0.15   
Nonperforming assets to total assets(4) 0.40   0.32   
Allowance for loan losses to total loans(5) 1.20   1.11   
Allowance for credit losses to total loans and unfunded loan commitments 1.00   0.95   
Other information:     
Non-accrual loans(4)$62,648  $35,320   
Accruing loans - 90 days past due(4) —   —   

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

Bank OZK
Supplemental Quarterly Financial Data
Unaudited
 
 9/30/23 6/30/23 3/31/23 12/31/22 9/30/22
 (Dollars in thousands)
Earnings summary:         
Net interest income$367,261  $356,824  $344,852  $332,488  $294,617 
Federal tax (FTE) adjustment 2,632   2,602   2,603   2,383   2,151 
Net interest income (FTE) 369,893   359,426   347,455   334,871   296,768 
Provision for credit losses (44,036)  (41,774)  (35,829)  (32,508)  (39,771)
Non-interest income 25,727   31,987   27,809   27,544   29,163 
Non-interest expense (128,978)  (129,355)  (126,217)  (119,013)  (115,691)
Pre-tax income (FTE) 222,606   220,284   213,218   210,894   170,469 
FTE adjustment (2,632)  (2,602)  (2,603)  (2,383)  (2,151)
Provision for income taxes (46,144)  (45,717)  (40,703)  (45,686)  (35,969)
Noncontrolling interest (37)  (1)  (12)  54   — 
Preferred stock dividend (4,047)  (4,047)  (4,047)  (4,047)  (4,047)
Net income available to common stockholders$169,746  $167,917  $165,853  $158,832  $128,302 
Earnings per common share – diluted$1.49  $1.47  $1.41  $1.34  $1.08 
Pre-tax pre-provision net revenue(1)$264,010  $259,456  $246,444  $241,019  $208,089 
Selected balance sheet data at period end:         
Total assets$32,767,328  $30,761,870  $28,971,170  $27,656,568  $26,232,119 
Non-purchased loans 25,051,214   23,291,785   21,700,941   20,400,154   19,103,546 
Purchased loans 280,526   315,661   361,065   378,637   410,166 
Investment securities – AFS 3,153,817   3,262,366   3,422,031   3,491,613   3,528,077 
Deposits 25,552,856   23,983,397   22,282,983   21,500,143   20,401,876 
Unfunded balance of closed loans 20,625,371   21,119,761   20,965,040   21,062,733   20,091,101 
Allowance for credit losses:         
Balance at beginning of period$426,820  $393,767  $365,277  $335,635  $299,938 
Net charge-offs (9,370)  (8,721)  (7,339)  (2,866)  (4,074)
Provision for credit losses 44,036   41,774   35,829   32,508   39,771 
Balance at end of period$461,486  $426,820  $393,767  $365,277  $335,635 
Allowance for loan losses$303,358  $263,188  $222,025  $208,858  $200,098 
Reserve for losses on unfunded loan commitments 158,128   163,632   171,742   156,419   135,537 
Total allowance for credit losses$461,486  $426,820  $393,767  $365,277  $335,635 
Selected ratios:         
Net interest margin – FTE(2) 5.05%  5.32%  5.54%  5.46%  5.03%
Efficiency ratio 32.60   33.05   33.63   32.84   35.50 
Net charge-offs to average non-purchased loans(2) (3) 0.17   0.03   0.15   0.09   0.09 
Net charge-offs to average total loans(2) 0.15   0.15   0.14   0.06   0.09 
Nonperforming loans to total loans(4) 0.25   0.15   0.15   0.22   0.14 
Nonperforming assets to total assets(4) 0.40   0.32   0.34   0.19   0.13 
Allowance for loan losses to total loans(5) 1.20   1.11   1.01   1.01   1.03 
Allowance for credit losses to total loans and unfunded loan commitments 1.00   0.95   0.92   0.87   0.85 
Loans past due 30 days or more, including past due non-accrual loans, to total loans(4) 0.21   0.14   0.15   0.13   0.11 

(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 September 30, Nine Months Ended September 30,
 2023
 2022
 2023
 2022
 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 and federal funds sold$1,312,533 $17,061 5.16% $699,489 $3,690 2.09% $1,005,263 $36,338 4.83% $1,023,707 $6,155 0.80%
Investment securities:                       
Taxable 2,243,378  9,887 1.75   2,809,479  10,269 1.45   2,351,707  29,761 1.69   3,080,645  31,246 1.36 
Tax-exempt – FTE 1,031,685  12,068 4.64   907,955  9,020 3.94   1,033,430  35,807 4.63   706,628  17,889 3.38 
Non-purchased loans – FTE 24,162,671  523,124 8.59   18,544,681  295,311 6.32   22,472,789  1,410,764 8.39   18,413,106  792,025 5.75 
Purchased loans 298,817  6,005 7.97   429,312  7,148 6.61   338,537  17,845 7.05   464,205  24,300 7.00 
Total earning assets – FTE 29,049,084  568,145 7.76   23,390,916  325,438 5.52   27,201,726  1,530,515 7.52   23,688,291  871,615 4.92 
Non-interest earning assets 2,557,808      2,474,862      2,554,214      2,460,424    
Total assets$31,606,892     $25,865,778     $29,755,940     $26,148,715    
LIABILITIES AND STOCKHOLDERS’ EQUITY                    
Interest bearing liabilities:                       
Deposits:                       
Savings and interest bearing transaction$8,806,690 $56,169 2.53% $9,614,806 $13,639 0.56% $9,201,712 $147,334 2.14% $9,611,716 $21,801 0.30%
Time deposits 11,606,189  122,654 4.19   5,232,727  8,358 0.63   9,621,410  261,243 3.63   5,464,267  19,542 0.48 
Total interest bearing deposits 20,412,879  178,823 3.48   14,847,533  21,997 0.59   18,823,122  408,577 2.90   15,075,983  41,343 0.37 
Other borrowings 1,048,566  14,326 5.42   517,161  2,460 1.89   783,566  30,339 5.20   647,083  4,500 0.93 
Subordinated notes 347,456  2,631 3.00   346,642  2,631 3.01   347,254  7,808 3.01   346,433  7,808 3.01 
Subordinated debentures 121,652  2,472 8.06   121,382  1,582 5.17   121,647  7,017 7.71   121,239  3,741 4.13 
Total interest bearing liabilities 21,930,553  198,252 3.59   15,832,718  28,670 0.72   20,075,589  453,741 3.02   16,190,738  57,392 0.47 
Non-interest bearing liabilities:                       
Non-interest bearing deposits 4,294,191      4,998,392      4,370,763      4,915,023    
Other non-interest bearing liabilities 495,147      395,671      499,163      359,327    
Total liabilities 26,719,891      21,226,781      24,945,515      21,465,088    
Total stockholders’ equity before noncontrolling interest 4,885,620      4,635,887      4,809,053      4,680,513    
Noncontrolling interest 1,381      3,110      1,372      3,114    
Total liabilities and stockholders’ equity$31,606,892     $25,865,778     $29,755,940     $26,148,715    
Net interest income – FTE  $369,893     $296,768     $1,076,774     $814,223  
Net interest margin – FTE    5.05%     5.03%     5.29%     4.60%
Core spread(1)    5.11%     5.73%     5.49%     5.38%

(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 Nine Months Ended
 September 30, September 30, June 30, September 30, September 30,
 2023
 2022
 2023
 2023
 2022
 (Dollars in thousands)
Net income available to common stockholders$169,746  $128,302  $167,917  $503,517  $388,688 
Average stockholders’ equity before noncontrolling interest$4,885,620  $4,635,887  $4,788,584  $4,809,053  $4,680,513 
Less average preferred stock (338,980)  (338,980)  (338,980)  (338,980)  (338,980)
Total average common stockholders’ equity 4,546,640   4,296,907   4,449,604   4,470,073   4,341,533 
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 —   (4,747)  (999)  (1,098)  (6,124)
Total average intangibles (660,789)  (665,536)  (661,788)  (661,887)  (666,913)
Average tangible common stockholders’ equity$3,885,851  $3,631,371  $3,787,816  $3,808,186  $3,674,620 
Return on average common stockholders’ equity(1) 14.81%  11.85%  15.14%  15.06%  11.97%
Return on average tangible common stockholders’ equity(1) 17.33%  14.02%  17.78%  17.68%  14.14%

(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
 
 September 30, December 31,
 2023 2022 2022
 (In thousands, except per share amounts)
Total stockholders’ equity before noncontrolling interest$4,903,504  $4,539,424  $4,689,579 
Less preferred stock (338,980)  (338,980)  (338,980)
Total common stockholders’ equity$4,564,524  $4,200,444  $4,350,599 
Less intangible assets:     
Goodwill (660,789)  (660,789)  (660,789)
Core deposit and other intangible assets, net of accumulated amortization —   (3,943)  (2,754)
Total intangibles (660,789)  (664,732)  (663,543)
Total tangible common stockholders’ equity$3,903,735  $3,535,712  $3,687,056 
Shares of common stock outstanding 113,136   117,762   117,177 
Book value per common share$40.35  $35.67  $37.13 
Tangible book value per common share$34.50  $30.02  $31.47 


Calculation of Total Common Stockholders’ Equity,
Total Tangible Common Stockholders’ Equity
and the Ratio of Total Tangible Common Stockholders’ Equity
to Total Tangible Assets
Unaudited
 
 September 30,
 2023 2022
 (Dollars in thousands)
Total stockholders’ equity before noncontrolling interest$4,903,504  $4,539,424 
Less preferred stock (338,980)  (338,980)
Total common stockholders’ equity$4,564,524  $4,200,444 
Less intangible assets:   
Goodwill (660,789)  (660,789)
Core deposit and other intangible assets, net of accumulated amortization —   (3,943)
Total intangibles (660,789)  (664,732)
Total tangible common stockholders’ equity 3,903,735   3,535,712 
Total assets$32,767,328  $26,232,119 
Less intangible assets:   
Goodwill$(660,789) $(660,789)
Core deposit and other intangible assets, net of accumulated amortization —   (3,943)
Total intangibles (660,789)  (664,732)
Total tangible assets$32,106,539  $25,567,387 
Ratio of total common stockholders’ equity to total assets 13.93%  16.01%
Ratio of total tangible common stockholders’ equity to total tangible assets 12.16%  13.83%


Calculation of Pre-Tax Pre-Provision Net Revenue
Unaudited
    
 Three Months Ended Nine Months Ended
 Sept 30, June 30, March 31, December 31, Sept 30, September 30,
 2023 2023 2023 2022
 2022 2023 2022
 (Dollars in thousands)    
Net income available to common stockholders$169,746 $167,917 $165,853 $158,832  $128,302 $503,517 $388,688
Preferred stock dividends 4,047  4,047  4,047  4,047   4,047  12,141  12,574
Earnings attributable to noncontrolling interest 37  1  12  (54)  —  50  3
Provision for income taxes 46,144  45,717  40,703  45,686   35,969  132,564  111,754
Provision for credit losses 44,036  41,774  35,829  32,508   39,771  121,638  50,986
Pre-tax pre-provision net revenue$264,010 $259,456 $246,444 $241,019  $208,089 $769,910 $564,005


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