OZRK Bank Ozk (MM)

Bank of the Ozarks, Inc. (NASDAQ: OZRK) today announced that net income for the fourth quarter of 2016 was a record $87.8 million, a 70.6% increase from $51.5 million for the fourth quarter of 2015. Diluted earnings per common share for the fourth quarter of 2016 were $0.72, a 26.3% increase from $0.57 for the fourth quarter of 2015.

For the full year of 2016, net income was a record $270.0 million, a 48.1% increase from $182.3 million for the full year of 2015. Diluted earnings per common share for 2016 were $2.58, a 23.4% increase from $2.09 for 2015.

The Company’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the fourth quarter of 2016 were 1.92%, 12.62% and 17.08%, respectively, compared to 2.12%, 15.02% and 16.94%, respectively, for the fourth quarter of 2015. Returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the full year of 2016 were 1.89%, 13.05% and 16.25%, respectively, compared to 2.11%, 14.97% and 17.02%, respectively, for the full year of 2015. The calculation of the Company’s return on average tangible common stockholders’ equity and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release.

George Gleason, Chairman and Chief Executive Officer, stated, “We are very pleased to report our record results for both the fourth quarter and full year of 2016, including quarterly and annual records in net income, diluted earnings per common share, net interest income, service charge income and trust income, as well as quarterly growth of $845 million in non-purchased loans and leases, an excellent 5.02% net interest margin, a superb 34.3% efficiency ratio and pristine asset quality.”

KEY BALANCE SHEET METRICS

Total loans and leases, including purchased loans, were $14.56 billion at December 31, 2016, a 74.7% increase from $8.33 billion at December 31, 2015. Non-purchased loans and leases were $9.61 billion at December 31, 2016, a 47.1% increase from $6.53 billion at December 31, 2015. Purchased loans were $4.96 billion at December 31, 2016, a 174.5% increase from $1.81 billion at December 31, 2015, but an 8.2% decrease from $5.40 billion at September 30, 2016. The unfunded balance of closed loans totaled $10.07 billion at December 31, 2016, a 73.5% increase from $5.80 billion at December 31, 2015 and a 16.3% increase from $8.66 billion at September 30, 2016.

Deposits were $15.57 billion at December 31, 2016, a 95.4% increase from $7.97 billion at December 31, 2015. Total assets were $18.89 billion at December 31, 2016, a 91.2% increase from $9.88 billion at December 31, 2015.

Common stockholders’ equity was $2.79 billion at December 31, 2016, a 90.6% increase from $1.46 billion at December 31, 2015. Tangible common stockholders’ equity was $2.07 billion at December 31, 2016, a 57.8% increase from $1.31 billion at December 31, 2015. Book value per common share was $23.02 at December 31, 2016, a 42.5% increase from $16.16 at December 31, 2015. Tangible book value per common share was $17.08 at December 31, 2016, an 18.0% increase from $14.48 at December 31, 2015. The calculations of the Company’s 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 Company’s ratio of common stockholders’ equity to total assets decreased slightly to 14.78% at December 31, 2016 compared to 14.83% at December 31, 2015. Its ratio of tangible common stockholders’ equity to total tangible assets decreased to 11.40% at December 31, 2016 compared to 13.49% at December 31, 2015. The calculation of the Company’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.

NET INTEREST INCOME

Net interest income for the fourth quarter of 2016 was a record $194.8 million, an 82.9% increase from $106.5 million for the fourth quarter of 2015. Net interest margin, on a fully taxable equivalent (“FTE”) basis, was 5.02% for the fourth quarter of 2016, an increase of four basis points from 4.98% for the fourth quarter of 2015. Average earning assets were $15.69 billion for the fourth quarter of 2016, an 81.2% increase from $8.66 billion for the fourth quarter of 2015.

Net interest income for the full year of 2016 was a record $601.5 million, a 57.4% increase from $382.2 million for the full year of 2015. Net interest margin, on a FTE basis, was 4.92% for 2016, a 27 basis point decrease from 5.19% for 2015. Average earning assets were $12.42 billion for 2016, a 64.5% increase from $7.55 billion for 2015.

NON-INTEREST INCOME

Non-interest income for the fourth quarter of 2016 increased 0.1% to $30.6 million compared to $30.5 million for the fourth quarter of 2015. The Company had no gains on sales of investment securities or gains on sales of purchased loans for the fourth quarter of 2016, but non-interest income for the fourth quarter of 2015 included $2.9 million of gains on sales of investment securities and $6.3 million of gains on sales of purchased loans.

Non-interest income for the full year of 2016 decreased 2.5% to $102.4 million compared to $105.0 million for 2015. Non-interest income for 2016 included $0.8 million of tax-exempt income from bank-owned life insurance (“BOLI”) death benefits, but no gains on sales of investment securities or gains on sales of purchased loans. Non-interest income for 2015 included $2.3 million of tax-exempt income from BOLI death benefits, $5.5 million of gains on sales of investment securities and $6.3 million of gains on sales of certain purchased loans.

NON-INTEREST EXPENSE

Non-interest expense for the fourth quarter of 2016 increased 51.7% to $78.4 million compared to $51.6 million for the fourth quarter of 2015. During the fourth quarter of 2016, the Company incurred approximately $1.2 million of acquisition-related and systems conversion expenses. During the fourth quarter of 2015, the Company incurred $6.4 million in prepayment penalties from prepaying Federal Home Loan Bank (“FHLB”) advances, $2.2 million of severance costs and approximately $1.0 million of acquisition-related and systems conversion expenses.

The Company’s efficiency ratio (non-interest expense divided by the sum of net interest income FTE and non-interest income) for the fourth quarter of 2016 improved to 34.3% compared to 37.1% for the fourth quarter of 2015.

Non-interest expense for the full year of 2016 increased 33.9% to $255.8 million compared to $191.0 million for the full year of 2015. During 2016 the Company incurred approximately $6.7 million of acquisition-related and systems conversion expenses and $0.1 million of software and contract termination charges. During 2015 the Company incurred $8.9 million in prepayment penalties from prepaying FHLB advances, $2.2 million of severance costs, approximately $6.7 million of acquisition-related and systems conversion expenses and $1.0 million of software and contract termination charges.

The Company’s efficiency ratio for the full year of 2016 improved to 35.8% compared to 38.4% for 2015.

The increases in the Company’s non-interest expense for the fourth quarter and full year of 2016 are primarily attributable to the growth of the Company, including its acquisitions of Community & Southern Holdings, Inc. and C1 Financial, Inc. in July 2016.

ASSET QUALITY, CHARGE-OFFS AND ALLOWANCE

Excluding purchased loans, the Company’s ratio of nonperforming loans and leases as a percent of total loans and leases was 0.15% at December 31, 2016 compared to 0.20% at December 31, 2015.

Excluding purchased loans, the Company’s ratio of nonperforming assets as a percent of total assets was 0.31% at December 31, 2016 compared to 0.37% at December 31, 2015.

Excluding purchased loans, the Company’s ratio of loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases improved to 0.16% at December 31, 2016, its best such ratio as a public company, compared to 0.28% at December 31, 2015.

The Company’s annualized net charge-off ratio for all loans and leases was 0.09% for the fourth quarter of 2016 compared to 0.17% for the fourth quarter of 2015. The Company’s net charge-off ratio for all loans and leases was 0.07% for the full year of 2016 compared to 0.17% for 2015.

The Company’s allowance for loan and lease losses for its non-purchased loans and leases was $74.9 million, or 0.78% of total non-purchased loans and leases, at December 31, 2016 compared to $59.7 million, or 0.91% of total non-purchased loans and leases, at December 31, 2015. The Company had $1.6 million of allowance for loan and lease losses for its purchased loans at December 31, 2016 compared to $1.2 million at December 31, 2015.

CONFERENCE CALL AND TRANSCRIPT

Management will conduct a conference call to discuss its quarterly and year end results at 10:00 a.m. CST (11:00 a.m. EST) on Tuesday, January 17, 2017. Interested parties may listen to this call by dialing 1-844-534-7317 (U.S. and Canada) or 574-990-3009 (internationally) and asking for the Bank of the Ozarks 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 passcode for this playback is 44837481. The call will be available live or in a recorded version on the Company’s website www.bankozarks.com under “Investor Relations.” The Company will also provide a transcript of the conference call on the Company’s website under Investor Relations. The transcript will be available for 90 days.

NON-GAAP FINANCIAL MEASURES

This release contains certain non-GAAP financial measures. The Company’s management uses these non-GAAP financial measures, specifically return on average tangible common stockholders’ equity, tangible book value per common share and the ratio of total tangible common stockholders’ equity to total tangible assets, as important measures of the strength of its capital and its ability to generate earnings on its tangible capital invested by its shareholders. These measures typically adjust GAAP financial measures to exclude intangible assets. 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 Company. These non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. 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 release and other communications by the Company include certain “forward-looking statements” regarding the Company’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 implementing the Company’s growth, expansion and acquisition strategies including delays in identifying sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices; the ability to enter into and/or close additional acquisitions; problems with, or additional expenses relating to, integrating acquisitions; the inability to realize expected cost savings and/or synergies from acquisitions; problems with managing acquisitions; the effect of the announcements of any future mergers or acquisitions on customer relationships and operating results; the ability to attract new or retain existing or acquired deposits or to retain or grow loans and leases, 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; competitive factors and pricing pressures, including their effect on the Company’s net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers and lessees, collateral values, the value of investment securities and asset recovery values; changes in legal and regulatory requirements, including additional legal and regulatory requirements to which the Company is subject as a result of its total assets exceeding $10 billion; the availability and access to capital; possible downgrades in the Company’s credit ratings or outlook which could increase the costs or availability of funding from capital markets; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new legislation and regulatory actions; changes in U.S. government monetary and fiscal policy; possible further downgrade of U.S. Treasury securities; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or its customers; adoption of new accounting standards or changes in existing standards; and adverse results (including costs, fines, reputational harm or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions as well as other factors identified in this press release or as detailed from time to time in the Company’s reports filed with the Securities and Exchange Commission (“SEC”), including those factors included in the disclosures under the headings “Forward-Looking Information” and “Item 1A. Risk Factors” in the Company’s most recent Annual Report on Form 10-K for the year ended December 31, 2015 or its 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 projected in, or implied by, such forward-looking statements. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

GENERAL INFORMATION

Bank of the Ozarks, Inc. shares trade on the NASDAQ Global Select Market under the symbol “OZRK.” The Company owns a state-chartered subsidiary bank that conducts banking operations through 249 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, New York and California. The Company may be contacted at (501) 978-2265 or P. O. Box 8811, Little Rock, Arkansas 72231-8811. The Company can be found at www.bankozarks.com and on Facebook, Twitter and LinkedIn.

         

Bank of the Ozarks, Inc.Selected Consolidated Financial Data(Dollars in Thousands, Except Per Share Amounts)Unaudited

      Quarters Ended December 31,     Years Ended December 31, 2016     2015     % Change 2016     2015     % Change

Income statement data:

    Net interest income $ 194,800 $ 106,518 82.9 % $ 601,505 $ 382,151 57.4 % Provision for loan and lease losses 9,855 5,211 89.1 23,792 19,415 22.5 Non-interest income 30,571 30,540 0.1 102,399 105,015 (2.5 ) Non-interest expense 78,358 51,646 51.7 255,754 190,982 33.9 Net income available to common stockholders 87,787 51,455 70.6 269,979 182,253 48.1

Common stock data:

Net income per share - diluted $ 0.72 $ 0.57 26.3 % $ 2.58 $ 2.09 23.4 % Net income per share - basic 0.72 0.58 24.1 2.59 2.10 23.3 Cash dividends per share 0.165 0.145 13.8 0.63 0.55 14.5 Book value per share 23.02 16.16 42.5 23.02 16.16 42.5 Tangible book value per share(1) 17.08 14.48 18.0 17.08 14.48 18.0 Diluted shares outstanding (thousands) 121,476 89,522 104,700 87,348 End of period shares outstanding (thousands) 121,268 90,612 121,268 90,612

Balance sheet data at period end:

Assets $ 18,890,142 $ 9,879,459 91.2 % $ 18,890,142 $ 9,879,459 91.2 % Non-purchased loans and leases 9,605,093 6,528,634 47.1 9,605,093 6,528,634 47.1 Purchased loans 4,958,022 1,806,037 174.5 4,958,022 1,806,037 174.5 Allowance for loan and lease losses 76,541 60,854 25.8 76,541 60,854 25.8 Foreclosed assets 43,702 22,870 91.1 43,702 22,870 91.1 Investment securities 1,471,612 602,348 144.3 1,471,612 602,348 144.3 Goodwill 660,119 125,442 426.2 660,119 125,442 426.2 Other intangibles - net of amortization 60,831 26,898 126.2 60,831 26,898 126.2 Deposits 15,574,878 7,971,468 95.4 15,574,878 7,971,468 95.4 Repurchase agreements with customers 65,110 65,800 (1.0 ) 65,110 65,800 (1.0 ) Other borrowings 41,903 204,540 (79.5 ) 41,903 204,540 (79.5 ) Subordinated notes 222,516 — N/A 222,516 — N/A Subordinated debentures 118,242 117,685 0.5 118,242 117,685 0.5 Common stockholders’ equity 2,791,607 1,464,631 90.6 2,791,607 1,464,631 90.6

Net unrealized gains (losses) on investment securities AFS included in common stockholders' equity

(25,920 ) 7,959 (25,920 ) 7,959

Loan and lease (including purchased loans) to deposit ratio

93.50 % 104.56 % 93.50 % 104.56 %

Selected ratios:

Return on average assets (2) 1.92 % 2.12 % 1.89 % 2.11 % Return on average common stockholders’ equity (2) 12.62 15.02 13.05 14.97 Return on average tangible common stockholders’ equity (1) (2) 17.08 16.94 16.25 17.02 Average common equity to total average assets 15.21 14.09 14.49 14.12 Net interest margin – FTE (2) 5.02 4.98 4.92 5.19 Efficiency ratio 34.27 37.12 35.84 38.45 Net charge-offs to average non-purchased loans and leases (2) (3) 0.08 0.22 0.06 0.18 Net charge-offs to average total loans and leases(2) 0.09 0.17 0.07 0.17 Nonperforming loans and leases to total loans and leases(4) 0.15 0.20 0.15 0.20 Nonperforming assets to total assets(4) 0.31 0.37 0.31 0.37

Allowance for loan and lease losses to non-purchased loans and leases(4)

0.78 0.91 0.78 0.91

Other information:

Non-accrual loans and leases(4) $ 14,371 $ 13,194 $ 14,371 $ 13,194 Accruing loans and leases - 90 days past due(4) — — — — Troubled and restructured loans and leases(4) — — — — Impaired purchased loans 6,516 8,054 6,516 8,054  

(1)Calculations of tangible book value per common share and return on 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 and any allowance for such loans, except for their inclusion in total assets.

           

Bank of the Ozarks, Inc.Supplemental Quarterly Financial Data(Dollars in Thousands, Except Per Share Amounts)Unaudited

      3/31/15     6/30/15     9/30/15     12/31/15     3/31/16     6/30/16     9/30/16     12/31/16

Earnings Summary:

Net interest income $ 85,489 $ 93,756 $ 96,387 $ 106,518 $ 112,517 $ 119,038 $ 175,150 $ 194,800 Federal tax (FTE) adjustment   2,570   2,552   2,368   2,092   1,911   2,067   2,533   3,254 Net interest income (FTE) 88,059 96,308 98,755 108,610 114,428 121,105 177,683 198,054 Provision for loan and lease losses (6,315 ) (4,308 ) (3,581 ) (5,211 ) (2,017 ) (4,834 ) (7,086 ) (9,855 ) Non-interest income 29,067 23,270 22,138 30,540 19,865 22,733 29,231 30,571 Non-interest expense   (50,184 )   (43,724 )   (45,428 )   (51,646 )   (47,686 )   (50,928 )   (78,781 )   (78,358 ) Pretax income (FTE) 60,627 71,546 71,884 82,293 84,590 88,076 121,047 140,412 FTE adjustment (2,570 ) (2,552 ) (2,368 ) (2,092 ) (1,911 ) (2,067 ) (2,533 ) (3,254 ) Provision for income taxes (18,139 ) (24,190 ) (23,385 ) (28,740 ) (30,984 ) (31,514 ) (42,470 ) (49,312 ) Noncontrolling interest   (24 )   (28 )   (3 )   (6 )   (7 )   (21 )   (14 )   (59 )

Net income available to common stockholders

$ 39,894 $ 44,776 $ 46,128 $ 51,455 $ 51,688 $ 54,474 $ 76,030 $ 87,787

Earnings per common share – diluted

$ 0.47 $ 0.51 $ 0.52 $ 0.57 $ 0.57 $ 0.60 $ 0.66 $ 0.72

Non-interest Income:

Service charges on deposit accounts $ 6,627 $ 7,088 $ 7,425 $ 7,558 $ 7,657 $ 8,119 $ 10,926 $ 11,759 Mortgage lending income 1,507 1,772 1,825 1,713 1,284 2,057 2,616 2,097 Trust income 1,432 1,463 1,500 1,508 1,507 1,574 1,564 1,623 BOLI income 3,623 1,785 2,264 2,412 2,861 2,745 4,638 4,564 Other income from purchased loans 8,908 6,971 5,456 4,790 3,052 4,599 4,635 4,993 Net gains on investment securities 2,534 85 — 2,863 — — — 4 Gains on sales of other assets 2,829 2,557 1,905 7,463 1,027 998 594 1,537 Other   1,607   1,549   1,763   2,233   2,477   2,641   4,258   3,994 Total non-interest income $ 29,067 $ 23,270 $ 22,138 $ 30,540 $ 19,865 $ 22,733 $ 29,231 $ 30,571

Non-interest Expense:

Salaries and employee benefits $ 22,597 $ 22,646 $ 21,207 $ 21,504 $ 23,362 $ 24,921 $ 38,069 $ 36,481 Net occupancy expense 7,291 7,344 8,076 8,537 8,531 8,388 11,669 13,936 Other operating expenses 18,700 12,094 14,448 19,879 14,067 16,062 26,447 24,783 Amortization of intangibles   1,596   1,640   1,697   1,726   1,726

 

  1,557   2,596   3,158 Total non-interest expense $ 50,184 $ 43,724 $ 45,428 $ 51,646 $ 47,686 $ 50,928 $ 78,781 $ 78,358

Allowance for Loan and Lease Losses:

Balance at beginning of period $ 52,918 $ 54,147 $ 56,749 $ 59,017 $ 60,854 $ 61,760 $ 65,133 $ 69,760 Net charge-offs (5,086 ) (1,706 ) (1,313 ) (3,374 ) (1,111 ) (1,461 ) (2,459 ) (3,074 ) Provision for loan and lease losses   6,315   4,308   3,581   5,211   2,017   4,834   7,086   9,855 Balance at end of period $ 54,147 $ 56,749 $ 59,017 $ 60,854 $ 61,760 $ 65,133 $ 69,760 $ 76,541

Selected Ratios:

Net interest margin – FTE(1) 5.42 % 5.37 % 5.07 % 4.98 % 4.92 % 4.82 % 4.90 % 5.02 % Efficiency ratio 42.85 36.56 37.58 37.12 35.51 35.41 38.07 34.27

Net charge-offs to average non-purchased loans and leases(1)(2)

0.37 0.12 0.05 0.22 0.06 0.05 0.06 0.08

Net charge-offs to average total loans and leases(1)

0.36 0.11 0.08 0.17 0.05 0.06 0.07 0.09

Nonperforming loans and leases to total loans and leases(3)

0.33 0.34 0.26 0.20 0.15 0.09 0.08 0.15 Nonperforming assets to total assets(3) 0.56 0.49 0.41 0.37 0.29 0.25 0.28 0.31

Allowance for loan and lease losses to total non-purchased loans and leases(3)

1.26 1.19 1.08 0.91 0.80 0.78 0.78 0.78

Loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases(3)

0.57 0.50 0.41 0.28 0.23 0.22 0.17 0.16  

(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 and any allowance for such loans, except for their inclusion in total assets.

           

Bank of the Ozarks, Inc.Average Consolidated Balance Sheets and Net Interest Analysis – FTEUnaudited

      Quarters Ended December 31,     Years Ended December 31, 2016   2015 2016   2015 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         Earning assets:

Interest earning deposits and federal funds sold

$ 52,300 $ 214 1.63 % $ 3,863 $ 6 0.58 % $ 30,260 $ 366 1.21 % $ 2,902 $ 41 1.40 % Investment securities: Taxable 686,632 3,559 2.06 367,336 3,162 3.42 466,059 11,373 2.44 363,254 13,131 3.61 Tax-exempt – FTE 737,712 9,037 4.87 388,294 5,784 5.91 514,545 27,049 5.26 422,983 26,406 6.24

Non-purchased loans and leases – FTE

9,017,000 116,565 5.14 5,997,684 74,949 4.96 8,083,647 411,181 5.09 4,898,552 244,978 5.00 Purchased loans   5,197,439   89,408 6.84   1,902,408   32,868 6.85   3,325,443   222,350 6.69   1,862,102   134,745 7.24 Total earning assets – FTE 15,691,083 218,783 5.55 8,659,585 116,769 5.35 12,419,954 672,319 5.41 7,549,793 419,301 5.55 Non-interest earning assets   2,492,341   981,900   1,850,124   1,071,541 Total assets $ 18,183,424 $ 9,641,485 $ 14,270,078 $ 8,621,334

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest bearing liabilities: Deposits:

Savings and interest bearing transaction

$ 7,344,679 $ 6,450 0.35 % $ 4,083,514 $ 2,551 0.25 % $ 5,897,821 $ 20,316 0.34 % $ 3,557,037 $ 7,969 0.22 %

Time deposits of $100,000 or more

3,209,817 6,808 0.84 1,404,524 2,150 0.61 2,439,447 19,906 0.82 1,244,879 6,375 0.51 Other time deposits   1,768,097   2,738 0.62   914,769   927 0.40   1,448,166   8,372 0.58   880,189   3,372 0.38

Total interest bearing deposits

12,322,593 15,996 0.52 6,402,807 5,628 0.35 9,785,434 48,594 0.50 5,682,105 17,716 0.31

Repurchase agreements with customers

69,664 26 0.15 74,025 20 0.11 64,044 89 0.14 73,995 76 0.10 Other borrowings 41,947 287 2.72 237,845 1,507 2.51 46,949 1,168 2.49 187,608 6,111 3.26 Subordinated debt 222,467 3,259 5.83 — — — 116,679 6,801 5.83 — — — Subordinated debentures   118,165   1,161 3.91   117,108   1,004 3.40   117,958   4,398 3.73   111,409   3,665 3.29

Total interest bearing liabilities

12,774,836 20,729 0.65 6,831,785 8,159 0.47 10,131,064 61,050 0.60 6,055,117 27,568 0.46 Non-interest bearing liabilities: Non-interest bearing deposits 2,565,123 1,402,586 2,006,933 1,301,574

Other non-interest bearing liabilities

  73,806   45,254   60,553   43,819 Total liabilities 15,413,765 8,279,625 12,198,550 7,400,510 Common stockholders’ equity 2,766,415 1,358,694 2,068,328 1,217,475 Noncontrolling interest     3,244   3,166   3,200   3,349

Total liabilities and stockholders’ equity

  $ 18,183,424     $ 9,641,485     $ 14,270,078     $ 8,621,334     Net interest income – FTE $ 198,054 $ 108,610 $ 611,269 $ 391,733 Net interest margin – FTE   5.02 %   4.98 %   4.92 %   5.19 %            

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

Bank of the Ozarks, Inc.Calculation of Average Tangible CommonStockholders’ Equity and the Return onAverage Tangible Common Stockholders’ EquityUnaudited

        Quarters Ended     Years Ended December 31, December 31, 2016     2015 2016     2015 (Dollars in thousands) Net income available to common stockholders $ 87,787 $ 51,455 $ 269,979 $ 182,253 Average common stockholders’ equity before

noncontrolling interest

$ 2,766,415 $ 1,358,694 $ 2,068,328 $ 1,217,475 Less average intangible assets: Goodwill (658,224 ) (125,838 ) (363,324 ) (118,013 )

Core deposit and bank charter intangibles, net of accumulated amortization

  (62,937 )   (27,867 )   (43,623 )   (28,660 ) Total average intangibles   (721,161 )   (153,705 )   (406,947 )   (146,673 ) Average tangible common stockholders’ equity $ 2,045,254 $ 1,204,989 $ 1,661,381 $ 1,070,802 Return on average common stockholders’ equity(1)   12.62 %   15.02 %   13.05 %   14.97 % Return on average tangible common stockholders’ equity(1)   17.08 %   16.94 %   16.25 %   17.02 %  

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

       

Bank of the Ozarks, Inc.Calculation of Tangible CommonStockholders’ Equity and TangibleBook Value per Common ShareUnaudited

        December 31, 2016     2015

(In thousands, except

per share amounts)

Total common stockholders’ equity before noncontrolling interest $ 2,791,607 $ 1,464,631 Less intangible assets: Goodwill (660,119 ) (125,442 )

Core deposit and bank charter intangibles, net of accumulated amortization

  (60,831 )   (26,898 ) Total intangibles   (720,950 )   (152,340 ) Total tangible common stockholders’ equity $ 2,070,657 $ 1,312,291 Shares of common stock outstanding   121,268   90,612 Book value per common share $ 23.02 $ 16.16 Tangible book value per common share $ 17.08 $ 14.48            

Bank of the Ozarks, Inc.Calculation of Total Tangible Common Stockholders’Equity and the Ratio of Total Tangible CommonStockholders’ Equity to Total Tangible AssetsUnaudited

        December 31, 2016     2015 (Dollars in thousands) Total common stockholders’ equity before noncontrolling interest $ 2,791,607 $ 1,464,631 Less intangible assets: Goodwill (660,119 ) (125,442 )

Core deposit and bank charter intangibles, net of accumulated amortization

  (60,831 )   (26,898 ) Total intangibles   (720,950 )   (152,340 ) Total tangible common stockholders’ equity $ 2,070,657 $ 1,312,291 Total assets $ 18,890,142 $ 9,879,459 Less intangible assets: Goodwill (660,119 ) (125,442 )

Core deposit and bank charter intangibles, net of accumulated amortization

  (60,831 )   (26,898 ) Total intangibles   (720,950 )   (152,340 ) Total tangible assets $ 18,169,192 $ 9,727,119 Ratio of total common stockholders’ equity to total assets   14.78 %   14.83 %

Ratio of total tangible common stockholders’ equity to total tangible assets

  11.40 %   13.49 %        

View source version on businesswire.com: http://www.businesswire.com/news/home/20170117005158/en/

Bank of the Ozarks, Inc.Media Contact:Susan Blair, 501-978-2217orInvestor Contact:Tim Hicks, 501-978-2336