OZK Bank OZK

Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income for the first quarter of 2019 was $110.7 million, a 2.2% decrease from net income of $113.1 million for the first quarter of 2018. The Bank’s net income for the first quarter of 2019 included no tax-exempt bank owned life insurance (“BOLI”) death benefits compared to $2.7 million in the first quarter of 2018. Diluted earnings per common share for the first quarter of 2019 were $0.86, a 2.3% decrease from $0.88 for the first quarter of 2018.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first quarter of 2019 were 1.99%, 11.77% and 14.40%, respectively, compared to 2.16%, 13.17% and 16.53%, respectively, for the first quarter of 2018. The calculation of the Bank’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 pleased with our first quarter results. Our $110.7 million net income, 1.99% annualized return on average assets, 4.53% net interest margin and 38.5% efficiency ratio provide an excellent start for 2019. Our team of industry and technology professionals is well-positioned to capitalize on opportunities throughout 2019 and beyond.”

KEY BALANCE SHEET METRICS

Total loans were $17.48 billion at March 31, 2019, a 5.2% increase from $16.61 billion at March 31, 2018. Non-purchased loans, which exclude loans acquired in previous acquisitions, were $15.61 billion at March 31, 2019, a 14.2% increase from $13.67 billion at March 31, 2018. Purchased loans, which consist of loans acquired in previous acquisitions, were $1.86 billion at March 31, 2019, a 36.5% decrease from $2.93 billion at March 31, 2018. 

Deposits were $18.48 billion at March 31, 2019, a 3.6% increase from $17.83 billion at March 31, 2018. Total assets were $23.01 billion at March 31, 2019, a 4.4% increase from $22.04 billion at March 31, 2018.

Common stockholders’ equity was $3.88 billion at March 31, 2019, a 10.1% increase from $3.53 billion at March 31, 2018. Tangible common stockholders’ equity was $3.19 billion at March 31, 2019, a 13.1% increase from $2.82 billion at March 31, 2018. Book value per common share was $30.11 at March 31, 2019, a 9.8% increase from $27.42 at March 31, 2018. Tangible book value per common share was $24.73 at March 31, 2019, a 12.8% increase from $21.93 at March 31, 2018. The calculations of the Bank’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 Bank’s ratio of total common stockholders’ equity to total assets increased to 16.88% at March 31, 2019 compared to 16.00% at March 31, 2018. Its ratio of total tangible common stockholders’ equity to total tangible assets increased to 14.29% at March 31, 2019 compared to 13.22% at March 31, 2018. 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. 

MANAGEMENT’S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS

In connection with this release, the Bank released management’s comments on the results for the quarter just ended, which are available at http://ir.ozk.com. This release should be read in conjunction with management’s comments on the results for the first quarter of 2019. 

Management will conduct a conference call to take questions on these quarterly results and management’s comments at 3:00 p.m. CT (4:00 p.m. ET) on April 18, 2019. 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 passcode for this playback is 3885035. 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 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 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 tangible common stockholders’ equity 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 Bank. 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 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 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 implementing the Bank’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 acquisition on customer relationships and operating results; the availability of and access to capital; possible downgrades in the Bank’s credit ratings or outlook which could increase the costs or 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; 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; 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; 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 press release or as detailed from time to time in the other public reports the Bank files with the FDIC, including those factors included in the disclosures under the headings “Forward-Looking Information” and “Item 1A. Risk Factors” in the Bank’s most recent Annual Report on Form 10-K for the year ended December 31, 2018 and 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 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. Bank OZK has been recognized as the top performing bank in the nation in its asset size 13 times in the past eight years. Headquartered in Little Rock, Arkansas, Bank OZK conducts operations through 254 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, 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 SheetsUnaudited

		March 31,				December 31,
		2019				2018
		(Dollars in thousands, except per share amounts)
ASSETS
Cash and cash equivalents		$	607,698			$	290,672
Investment securities - available for sale ("AFS")			2,769,602				2,862,340
Federal Home Loan Bank of Dallas and other banker's bank stocks			12,089				25,941
Non-purchased loans			15,610,681				15,073,791
Purchased loans			1,864,715				2,044,032
Allowance for loan losses			(105,954	)			(102,264	)
Net loans			17,369,442				17,015,559
Premises and equipment, net			647,032				567,189
Foreclosed assets			14,096				16,171
Accrued interest receivable			85,545				81,968
Bank owned life insurance (“BOLI”)			726,165				721,238
Intangible assets, net			693,316				696,461
Other, net			80,667				110,491
Total assets		$	23,005,652			$	22,388,030
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing		$	2,865,213			$	2,748,273
Savings and interest bearing transaction			9,874,987				9,682,713
Time			5,736,668				5,507,429
Total deposits			18,476,868				17,938,415
Repurchase agreements with customers			25,517				20,564
Other borrowings			1,489				96,692
Subordinated notes			223,375				223,281
Subordinated debentures			119,496				119,358
Accrued interest payable and other liabilities			273,143				216,355
Total liabilities			19,119,888				18,614,665
Commitments and contingencies
Stockholders’ equity:
Preferred stock; $0.01 par value; 100,000,000 shares authorized; no shares issued or outstanding at March 31, 2019 or December 31, 2018			—				—
Common stock; $0.01 par value; 300,000,000 shares authorized; 128,947,528 and 128,611,049 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively			1,289				1,286
Additional paid-in capital			2,239,404				2,237,948
Retained earnings			1,647,626				1,565,201
Accumulated other comprehensive loss			(5,676	)			(34,105	)
Total stockholders’ equity before noncontrolling interest			3,882,643				3,770,330
Noncontrolling interest			3,121				3,035
Total stockholders’ equity			3,885,764				3,773,365
Total liabilities and stockholders’ equity		$	23,005,652			$	22,388,030

 

Bank OZK Consolidated Statements of Income Unaudited

		Three Months Ended
		March 31,
		2019				2018
		(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans		$	245,864			$	190,426
Purchased loans			30,195				50,977
Investment securities:
Taxable			14,897				11,431
Tax-exempt			3,873				4,160
Deposits with banks and federal funds sold			414				498
Total interest income			295,243				257,492
Interest expense:
Deposits			63,087				34,392
Repurchase agreements with customers			22				159
Other borrowings			1,389				633
Subordinated notes			3,146				3,146
Subordinated debentures			1,711				1,386
Total interest expense			69,355				39,716
Net interest income			225,888				217,776
Provision for loan losses			6,681				5,567
Net interest income after provision for loan losses			219,207				212,209
Non-interest income:
Service charges on deposit accounts			9,722				9,525
Trust income			1,730				1,793
BOLI income			5,162				7,580
Other income from purchased loans			795				1,251
Loan service, maintenance and other fees			4,874				4,743
Net gains on investment securities			—				17
Gains on sales of other assets			284				1,426
Other			1,505				2,372
Total non-interest income			24,072				28,707
Non-interest expense:
Salaries and employee benefits			44,868				45,499
Net occupancy and equipment			14,750				14,150
Other operating expenses			37,060				34,161
Total non-interest expense			96,678				93,810
Income before taxes			146,601				147,106
Provision for income taxes			35,889				33,973
Net income			110,712				113,133
Earnings attributable to noncontrolling interest			(6	)			11
Net income available to common stockholders		$	110,706			$	113,144
Basic earnings per common share		$	0.86			$	0.88
Diluted earnings per common share		$	0.86			$	0.88
Dividends declared per common share		$	0.22			$	0.19

 

Bank OZK Consolidated Statements of Stockholders’ Equity Unaudited

		CommonStock				AdditionalPaid-InCapital				RetainedEarnings				AccumulatedOtherComprehensiveLoss				Non-ControllingInterest				Total
		(Dollars in thousands, except per share amounts)
Balances – December 31, 2018		$	1,286			$	2,237,948			$	1,565,201			$	(34,105	)		$	3,035			$	3,773,365
Net income			—				—				110,712				—				—				110,712
Earnings attributable to noncontrolling interest			—				—				(6	)			—				6				—
Total other comprehensive income			—				—				—				28,429				—				28,429
Common stock dividends paid, $0.22 per share			—				—				(28,281	)			—				—				(28,281	)
Noncontrolling interest cash contribution			—				—				—				—				80				80
Issuance of 29,300 shares of common stock for exercise of stock options			—				387				—				—				—				387
Issuance of 383,874 shares of unvested restricted common stock			4				(4	)			—				—				—				—
Repurchase and cancellation of 62,742 shares of common stock			(1	)			(1,646	)			—				—				—				(1,647	)
Stock-based compensation expense			—				2,719				—				—				—				2,719
Forfeiture of 13,953 shares of unvested restricted common stock			—				—				—				—				—				—
Balances – March 31, 2019		$	1,289			$	2,239,404			$	1,647,626			$	(5,676	)		$	3,121			$	3,885,764
Balances – December 31, 2017		$	1,283			$	2,221,844			$	1,250,313			$	(12,712	)		$	3,060			$	3,463,788
Net income			—				—				113,133				—				—				113,133
Earnings attributable to noncontrolling interest			—				—				11				—				(11	)			—
Total other comprehensive loss			—				—				—				(28,196	)			—				(28,196	)
Common stock dividends paid, $0.19 per share			—				—				(24,408	)			—				—				(24,408	)
Issuance of 200,025 shares of common stock for exercise of stock options			2				5,323				—				—				—				5,325
Issuance of 198,268 shares of unvested restricted common stock			2				(2	)			—				—				—				—
Repurchase and cancellation of 70,931 shares of common stock			(1	)			(3,729	)			—				—				—				(3,730	)
Stock-based compensation expense			—				3,742				—				—				—				3,742
Forfeitures of 3,301 shares of unvested restricted common stock			—				—				—				—				—				—
Balances – March 31, 2018		$	1,286			$	2,227,178			$	1,339,049			$	(40,908	)		$	3,049			$	3,529,654

 

Bank OZK Summary of Non-Interest Expense Unaudited

		Three Months Ended
		March 31,
		2019				2018
		(Dollars in thousands)
Salaries and employee benefits		$	44,868			$	45,499
Net occupancy and equipment			14,750				14,150
Other operating expenses:
Professional and outside services			8,564				8,705
Software and data processing			4,709				3,340
Deposit insurance and assessments			3,652				3,562
Telecommunication services			3,344				3,197
Travel and meals			2,669				2,153
Postage and supplies			2,103				2,195
Advertising and public relations			1,683				1,331
ATM expense			987				1,363
Loan collection and repossession expense			984				790
Writedowns of foreclosed and other assets			562				151
Amortization of intangibles			3,145				3,145
Other			4,658				4,229
Total non-interest expense		$	96,678			$	93,810

 

Bank OZK Summary of Total Loans Outstanding Unaudited

		March 31, 2019								December 31, 2018
		(Dollars in thousands)
Real estate:
Residential 1-4 family		$	1,030,062				5.9	%		$	1,049,460				6.1	%
Non-farm/non-residential			4,196,446				24.0				4,319,388				25.2
Construction/land development			6,719,940				38.4				6,562,185				38.4
Agricultural			180,653				1.0				165,088				1.0
Multifamily residential			1,357,890				7.8				1,116,026				6.5
Total real estate			13,484,991				77.1				13,212,147				77.2
Commercial and industrial			748,466				4.3				823,417				4.8
Consumer			2,439,891				14.0				2,345,863				13.7
Other			802,048				4.6				736,396				4.3
Total loans		$	17,475,396				100.0	%		$	17,117,823				100.0	%

 

Summary of Deposits Unaudited

		March 31, 2019								December 31, 2018
		(Dollars in thousands)
Non-interest bearing		$	2,865,213				15.5	%		$	2,748,273				15.3	%
Interest bearing:
Transaction (NOW)			2,597,570				14.0				2,359,299				13.2
Savings and money market			7,277,417				39.4				7,323,414				40.8
Time deposits less than $100			2,524,138				13.7				2,297,101				12.8
Time deposits of $100 or more			3,212,530				17.4				3,210,328				17.9
Total deposits		$	18,476,868				100.0	%		$	17,938,415				100.0	%

 

Bank OZKSelected Consolidated Financial Data(Dollars in thousands, except per share amounts)Unaudited

		Three Months EndedMarch 31,
		2019				2018				% Change
Income statement data:
Net interest income		$	225,888			$	217,776				3.7	%
Provision for loan losses			6,681				5,567				20.0
Non-interest income			24,072				28,707				(16.1	)
Non-interest expense			96,678				93,810				3.1
Net income available to common stockholders			110,706				113,144				(2.2	)
Common stock data:
Net income per share - diluted		$	0.86			$	0.88				(2.3	)%
Net income per share - basic			0.86				0.88				(2.3	)
Cash dividends per share			0.22				0.19				15.8
Book value per share			30.11				27.42				9.8
Tangible book value per share (1)			24.73				21.93				12.8
Diluted shares outstanding (thousands)			128,964				128,762
End of period shares outstanding (thousands)			128,948				128,612
Balance sheet data at period end:
Total assets		$	23,005,652			$	22,039,439				4.4	%
Total loans			17,475,396				16,609,096				5.2
Non-purchased loans			15,610,681				13,674,561				14.2
Purchased loans			1,864,715				2,934,535				(36.5	)
Allowance for loan losses			105,954				98,097				8.0
Foreclosed assets			14,096				21,931				(35.7	)
Investment securities			2,781,691				2,612,961				6.4
Goodwill and other intangible assets			693,316				705,896				(1.8	)
Deposits			18,476,868				17,833,672				3.6
Repurchase agreements with customers			25,517				149,075				(82.9	)
Other borrowings			1,489				1,942				(23.3	)
Subordinated notes			223,375				222,993				0.2
Subordinated debentures			119,496				118,938				0.5
Unfunded balance of closed loans			11,544,218				12,551,032				(8.0	)
Total common stockholders’ equity			3,882,643				3,526,605				10.1
Net annualized losses on investment securities AFS included in common stockholders' equity			(5,676	)			(40,908	)
Loan, including purchased loans, to deposit ratio			94.58	%			93.13	%
Selected ratios:
Return on average assets(2)			1.99	%			2.16	%
Return on average common stockholders’ equity(2)			11.77				13.17
Return on average tangible common stockholders’ equity(1) (2)			14.40				16.53
Average common equity to total average assets			16.91				16.37
Net interest margin – FTE(2)			4.53				4.69
Efficiency ratio			38.49				37.88
Net charge-offs to average non-purchased loans(2) (3)			0.05				0.04
Net charge-offs to average total loans(2)			0.07				0.04
Nonperforming loans to total loans(4)			0.22				0.09
Nonperforming assets to total assets(4)			0.21				0.16
Allowance for loan losses to non-purchased loans(5)			0.67				0.71
Other information:
Non-accrual loans(4)		$	33,405			$	12,471
Accruing loans - 90 days past due(4)			—				—
Troubled and restructured non-purchased loans - accruing(4)			470				—
Impaired purchased loans			16,695				6,849

(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, except for their inclusion in total assets.(5)Excludes purchased loans and any allowance for such loans.

 

Bank OZKSupplemental Quarterly Financial Data(Dollars in thousands, except per share amounts)Unaudited

		6/30/17				9/30/17				12/31/17				3/31/18				6/30/18				9/30/18				12/31/2018				3/31/2019
Earnings Summary:
Net interest income		$	202,105			$	209,722			$	214,831			$	217,776			$	224,661			$	220,614			$	228,382			$	225,888
Federal tax (FTE) adjustment			3,396				3,014				2,450				1,166				1,151				1,132				1,219				1,207
Net interest income (FTE)			205,501				212,736				217,281				218,942				225,812				221,746				229,601				227,095
Provision for loan losses			(6,103	)			(7,777	)			(9,279	)			(5,567	)			(9,610	)			(41,949	)			(7,271	)			(6,681	)
Non-interest income			31,840				32,747				30,213				28,707				27,386				24,121				27,560				24,072
Non-interest expense			(83,828	)			(84,399	)			(86,177	)			(93,810	)			(89,107	)			(102,942	)			(94,893	)			(96,678	)
Pretax income (FTE)			147,410				153,307				152,038				148,272				154,481				100,976				154,997				147,808
FTE adjustment			(3,396	)			(3,014	)			(2,450	)			(1,166	)			(1,151	)			(1,132	)			(1,219	)			(1,207	)
Provision for income taxes			(53,488	)			(54,246	)			(3,434	)			(33,973	)			(38,589	)			(25,665	)			(38,750	)			(35,889	)
Noncontrolling interest			6				(40	)			10				11				10				1				3				(6	)
Net income available to common stockholders		$	90,532			$	96,007			$	146,164			$	113,144			$	114,751			$	74,180			$	115,031			$	110,706
Earnings per common share – diluted		$	0.73			$	0.75			$	1.14			$	0.88			$	0.89			$	0.58			$	0.89			$	0.86
Non-interest Income:
Service charges on deposit accounts		$	11,764			$	9,729			$	10,058			$	9,525			$	9,704			$	9,730			$	10,585			$	9,722
Trust income			1,577				1,755				1,729				1,793				1,591				1,730				1,821				1,730
BOLI income			4,594				4,453				5,166				7,580				5,259				5,321				5,751				5,162
Other income from purchased loans			4,777				2,933				2,009				1,251				2,744				1,418				2,370				795
Loan service, maintenance and other fees			3,427				5,274				4,289				4,743				5,641				4,724				5,245				4,874
Gains (losses) on sales of other assets			672				1,363				1,899				1,426				844				(518	)			465				284
Net gains on investment securities			404				2,429				1,201				17				—				—				—				—
Other			4,625				4,811				3,862				2,372				1,603				1,716				1,323				1,505
Total non-interest income		$	31,840			$	32,747			$	30,213			$	28,707			$	27,386			$	24,121			$	27,560			$	24,072
Non-interest Expense:
Salaries and employee benefits		$	39,892			$	35,331			$	38,417			$	45,499			$	41,665			$	41,477			$	41,837			$	44,868
Net occupancy expense			12,937				13,595				13,474				14,150				13,827				14,358				14,027				14,750
Other operating expenses			30,999				35,473				34,286				34,161				33,615				47,107				39,029				37,060
Total non-interest expense		$	83,828			$	84,399			$	86,177			$	93,810			$	89,107			$	102,942			$	94,893			$	96,678
Balance Sheet Data:
Total assets		$	20,064,589			$	20,768,493			$	21,275,647			$	22,039,439			$	22,220,380			$	22,086,539			$	22,388,030			$	23,005,652
Non-purchased loans			11,025,203				12,047,094				12,733,937				13,674,561				14,183,533				14,440,623				15,073,791				15,610,681
Purchased loans			4,159,139				3,731,536				3,309,092				2,934,535				2,580,341				2,285,168				2,044,032				1,864,715
Investment securities			2,101,751				1,975,102				2,622,796				2,612,961				2,617,859				2,706,156				2,888,281				2,781,691
Deposits			16,241,440				16,823,359				17,192,345				17,833,672				17,897,085				17,822,915				17,938,415				18,476,868
Unfunded balance of closed loans			11,883,679				12,519,839				13,192,439				12,551,032				11,999,661				11,891,247				11,364,975				11,544,218
Common stockholders' equity			3,260,123				3,334,740				3,460,728				3,526,605				3,613,903				3,653,596				3,770,330				3,882,643
Allowance for Loan Losses:
Balance at beginning of period		$	78,224			$	82,320			$	86,784			$	94,120			$	98,097			$	104,638			$	98,200			$	102,264
Net charge-offs			(2,007	)			(3,313	)			(1,943	)			(1,590	)			(3,069	)			(48,387	)			(3,207	)			(2,991	)
Provision for loan losses			6,103				7,777				9,279				5,567				9,610				41,949				7,271				6,681
Balance at end of period		$	82,320			$	86,784			$	94,120			$	98,097			$	104,638			$	98,200			$	102,264			$	105,954
Selected Ratios:
Net interest margin – FTE(1)			4.99	%			4.84	%			4.72	%			4.69	%			4.66	%			4.47	%			4.55	%			4.53	%
Efficiency ratio			35.32				34.38				34.82				37.88				35.19				41.87				36.90				38.49
Net charge-offs to average non-purchased loans(1) (2)			0.03				0.08				0.08				0.04				0.05				1.32				0.06				0.05
Net charge-offs to average total loans(1)			0.05				0.09				0.05				0.04				0.07				1.14				0.07				0.07
Nonperforming loans to total loans(3)			0.11				0.11				0.10				0.09				0.10				0.23				0.23				0.22
Nonperforming assets to total assets(3)			0.23				0.20				0.18				0.16				0.15				0.23				0.23				0.21
Allowance for loan losses to total non-purchased loans(4)			0.73				0.71				0.73				0.71				0.73				0.67				0.67				0.67
Loans past due 30 days or more, including past due non-accrual loans, to total loans(3)			0.15				0.12				0.15				0.14				0.12				0.17				0.28				0.27

(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 purchased loans and any allowance for such loans.

Bank OZKAverage Consolidated Balance Sheets and Net Interest Analysis – FTEUnaudited

		Three Months Ended March 31,
		2019												2018
		AverageBalance				Income/Expense				Yield/Rate				AverageBalance				Income/Expense				Yield/Rate
		(Dollars in thousands)
ASSETS
Earning assets:
Interest earning deposits and federal funds sold		$	67,015			$	414				2.50	%		$	110,085			$	498				1.83	%
Investment securities:
Taxable			2,310,770				14,897				2.61				2,062,358				11,431				2.25
Tax-exempt – FTE			515,613				4,903				3.86				556,776				5,265				3.84
Non-purchased loans – FTE			15,482,768				246,041				6.44				13,010,093				190,487				5.94
Purchased loans			1,947,783				30,195				6.29				3,181,740				50,977				6.50
Total earning assets – FTE			20,323,949				296,450				5.92				18,921,052				258,658				5.54
Non-interest earning assets			2,232,416												2,359,796
Total assets		$	22,556,365											$	21,280,848
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction		$	9,531,133			$	36,103				1.54	%		$	9,857,347			$	22,570				0.93	%
Time deposits of $100 or more			3,170,510				15,555				1.99				3,036,123				8,781				1.17
Other time deposits			2,435,425				11,429				1.90				1,445,948				3,041				0.85
Total interest bearing deposits			15,137,068				63,087				1.69				14,339,418				34,392				0.97
Repurchase agreements with customers			22,192				22				0.40				112,434				159				0.57
Other borrowings			269,588				1,389				2.09				165,943				633				1.55
Subordinated notes			223,321				3,146				5.71				222,947				3,146				5.72
Subordinated debentures			119,412				1,711				5.81				118,864				1,386				4.73
Total interest bearing liabilities			15,771,581				69,355				1.78				14,959,606				39,716				1.08
Non-interest bearing liabilities:
Non-interest bearing deposits			2,757,110												2,666,111
Other non-interest bearing liabilities			210,588												167,778
Total liabilities			18,739,279												17,793,495
Common stockholders’ equity			3,813,979												3,484,297
Noncontrolling interest			3,107												3,056
Total liabilities and stockholders’ equity		$	22,556,365											$	21,280,848
Net interest income – FTE						$	227,095											$	218,942
Net interest margin – FTE											4.53	%											4.69	%

 

Bank OZKReconciliation of Non-GAAP Financial Measures

Calculation of Average Tangible CommonStockholders’ Equity and the Annualized Return onAverage Tangible Common Stockholders’ EquityUnaudited

		Three Months Ended
		March 31,
		2019				2018
		(Dollars in thousands)
Net income available to common stockholders		$	110,706			$	113,144
Average common stockholders’ equity before noncontrolling interest		$	3,813,979			$	3,484,297
Less average intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangibles, net of accumulated amortization			(34,437	)			(47,122	)
Total average intangibles			(695,226	)			(707,911	)
Average tangible common stockholders’ equity		$	3,118,753			$	2,776,386
Return on average common stockholders’ equity(1)			11.77	%			13.17	%
Return on average tangible common stockholders’ equity(1)			14.40	%			16.53	%

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

 

Calculation of Total Tangible CommonStockholders’ Equity and TangibleBook Value per Common ShareUnaudited

		March 31,
		2019				2018
		(In thousands, except per share amounts)
Total common stockholders’ equity before noncontrolling interest		$	3,882,643			$	3,526,605
Less intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(32,527	)			(45,107	)
Total intangibles			(693,316	)			(705,896	)
Total tangible common stockholders’ equity		$	3,189,327			$	2,820,709
Shares of common stock outstanding			128,948				128,612
Book value per common share		$	30.11			$	27.42
Tangible book value per common share		$	24.73			$	21.93

 

Calculation of Total Tangible Common Stockholders’Equity and the Ratio of Total Tangible CommonStockholders’ Equity to Total Tangible AssetsUnaudited

		March 31,
		2019				2018
		(Dollars in thousands)
Total common stockholders’ equity before noncontrolling interest		$	3,882,643			$	3,526,605
Less intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(32,527	)			(45,107	)
Total intangibles			(693,316	)			(705,896	)
Total tangible common stockholders’ equity		$	3,189,327			$	2,820,709
Total assets		$	23,005,652			$	22,039,439
Less intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(32,527	)			(45,107	)
Total intangibles			(693,316	)			(705,896	)
Total tangible assets		$	22,312,336			$	21,333,543
Ratio of total common stockholders’ equity to total assets			16.88	%			16.00	%
Ratio of total tangible common stockholders’ equity to total tangible assets			14.29	%			13.22	%

Media Contact: Susan Blair (501) 978-2217Investor Contact: Tim Hicks (501) 978-2336