Bank OZK Announces Record Second Quarter 2023 Earnings

Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income available to common stockholders for the second quarter of 2023 was a record $167.9 million, a 26.9% increase from $132.4 million for the second quarter of 2022. Diluted earnings per common share for the second quarter of 2023 were a record $1.47, a 33.6% increase from $1.10 for the second quarter of 2022.

For the six months ended June 30, 2023, net income available to common stockholders was $333.8 million, a 28.2% increase from $260.4 million for the first six months of 2022. Diluted earnings per common share for the first six months of 2023 were $2.88, a 35.8% increase from $2.12 for the first six months of 2022.

Pre-tax pre-provision net revenue (“PPNR”) was $259.5 million for the second quarter of 2023, a 41.9% increase from $182.8 million for the second quarter of 2022. For the first six months of 2023, PPNR was $505.9 million, a 42.1% increase from $355.9 million for the first six 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 $41.8 million for the second quarter and $77.6 million for the first six months of 2023 compared to $7.0 million for the second quarter of 2022 and $11.2 million for the first six months of 2022. The Bank’s total allowance for credit losses (“ACL”) was $426.8 million at June 30, 2023 compared to $299.9 million at June 30, 2022.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the second quarter of 2023 were 2.27%, 15.14% and 17.78%, respectively, compared to 2.02%, 12.40% and 14.69%, respectively, for the second quarter of 2022. The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first six months of 2023 were 2.34%, 15.19% and 17.86%, respectively, compared to 2.00%, 12.03% and 14.20%, respectively, for the first six 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 are pleased to report our record results for the quarter just ended, which continued our long tradition of industry-leading performance. Our strong earnings and capital have us well-positioned to grow and capitalize on opportunities resulting from the current macroeconomic and industry environment.”

KEY BALANCE SHEET METRICS

Total loans were $23.61 billion at June 30, 2023, a 26.0% increase from $18.74 billion at June 30, 2022. Deposits were $23.98 billion at June 30, 2023, a 20.0% increase from $19.98 billion at June 30, 2022. Total assets were $30.76 billion at June 30, 2023, an 18.7% increase from $25.92 billion at June 30, 2022.

Common stockholders’ equity was $4.47 billion at June 30, 2023, a 4.8% increase from $4.27 billion at June 30, 2022. Tangible common stockholders’ equity was $3.81 billion at June 30, 2023, a 5.8% increase from $3.60 billion at June 30, 2022. During the quarter just ended, the Bank repurchased approximately 1.96 million shares for $66.1 million, which equates to a weighted average cost of approximately $33.80 per share. During the first six 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 $39.51 at June 30, 2023, a 10.1% increase from $35.87 at June 30, 2022. Tangible book value per common share was $33.67 at June 30, 2023, an 11.2% increase from $30.27 at June 30, 2022.

The Bank’s ratio of total common stockholders’ equity to total assets was 14.53% at June 30, 2023, compared to 16.47% at June 30, 2022. Its ratio of total tangible common stockholders’ equity to total tangible assets was 12.66% at June 30, 2023, compared to 14.26% at June 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 0.15% at June 30, 2023, compared to 0.16% as of June 30, 2022. The Bank’s ratio of nonperforming assets to total assets (excluding purchased loans, except for their inclusion in total assets) was 0.32% at June 30, 2023, compared to 0.12% as of June 30, 2022. The Bank’s annualized ratio of net charge-offs of total loans to average total loans was 0.15% for the second quarter and six months ended June 30, 2023 compared to 0.01% for the second quarter and 0.00% for the six months ended June 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, July 21, 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 and expansion strategies, including hiring or retaining qualified personnel, obtaining regulatory or other approvals, delays in identifying satisfactory sites, obtaining permits and designing, constructing and opening new offices or relocating, selling or closing existing offices; 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; 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, including as a result of cyberattacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank or its customers; 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 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 $30.76 billion in total assets as of June 30, 2023. Bank OZK can be found at www.ozk.com and on Facebook, Twitter and LinkedIn or contacted at (501) 978-2265 or P.O. Box 8811, Little Rock, Arkansas 72231-8811.

Bank OZK
Consolidated Balance Sheets
Unaudited

	June 30, 2023			December 31, 2022
	(Dollars in thousands)
ASSETS
Cash and cash equivalents	$	1,454,789		$	1,033,454
Investment securities – available for sale (“AFS”)		3,262,366			3,491,613
Investment securities – trading		8,991			8,817
Federal Home Loan Bank of Dallas (“FHLB”) and other bankers’ bank stocks		62,855			42,406
Non-purchased loans		23,291,785			20,400,154
Purchased loans		315,661			378,637
Allowance for loan losses		(263,188	)		(208,858	)
Net Loans		23,344,259			20,569,933
Premises and equipment, net		670,262			678,405
Foreclosed assets		62,048			6,616
Accrued interest receivable		144,842			125,130
Bank owned life insurance (“BOLI”)		799,142			789,805
Goodwill and other intangible assets, net		661,166			663,543
Other, net		291,151			246,846
Total assets	$	30,761,870		$	27,656,568

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing	$	4,535,365		$	4,658,451
Savings and interest bearing transaction		8,975,142			9,905,717
Time		10,472,890			6,935,975
Total deposits		23,983,397			21,500,143
Other borrowings		1,104,478			606,666
Subordinated notes		347,350			346,947
Subordinated debentures		121,652			121,591
Reserve for losses on unfunded loan commitments		163,632			156,419
Accrued interest payable and other liabilities		230,098			233,864
Total liabilities	$	25,950,607		$	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 June 30, 2023 and December 31, 2022		338,980			338,980
Common Stock: $0.01 par value; 300,000,000 shares authorized; 113,145,449 and 117,176,928 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		1,131			1,172
Additional paid-in capital		1,602,964			1,753,941
Retained earnings		3,026,247			2,773,135
Accumulated other comprehensive (loss) income		(159,431	)		(177,649	)
Total stockholders’ equity before noncontrolling interest		4,809,891			4,689,579
Noncontrolling interest		1,372			1,359
Total stockholders’ equity		4,811,263			4,690,938
Total liabilities and stockholders’ equity	$	30,761,870		$	27,656,568

Bank OZK
Consolidated Statements of Income
Unaudited

	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
	(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans	$	472,524		$	256,264		$	887,420		$	496,259
Purchased loans		5,322			8,982			11,840			17,152
Investment securities:
Taxable		9,704			10,367			19,875			20,978
Tax-exempt		9,489			4,020			18,753			7,006
Deposits with banks and federal funds sold		11,407			1,855			19,277			2,464
Total interest income		508,446			281,488			957,165			543,859

Interest expense:
Deposits		136,122			10,855			229,754			19,347
Other borrowings		10,591			1,042			16,013			2,039
Subordinated notes		2,603			2,603			5,177			5,177
Subordinated debentures		2,306			1,195			4,545			2,159
Total interest expense		151,622			15,695			255,489			28,722

Net interest income		356,824			265,793			701,676			515,137
Provision for credit losses		41,774			7,025			77,602			11,215
Net interest income after provision for credit losses		315,050			258,768			624,074			503,922

Non-interest income:
Service charges on deposit accounts:
NSF and overdraft fees		4,373			4,247			8,651			8,449
All other service charges		7,187			7,184			13,688			13,874
Trust income		2,113			1,911			4,146			4,005
BOLI income:
Increase in cash surrender value		5,069			4,846			10,043			9,639
Death benefits		—			—			—			297
Loan service, maintenance and other fees		4,095			3,603			8,170			6,621
Gains on sales of other assets		5,033			784			5,377			7,776
Net gains on investment securities		620			531			2,336			441
Other		3,497			3,214			7,384			6,694
Total non-interest income		31,987			26,320			59,795			57,796

Non-interest expense:
Salaries and employee benefits		65,219			54,412			128,468			109,060
Net occupancy and equipment		19,476			17,060			37,560			34,309
Other operating expenses		44,660			37,828			89,543			73,647
Total non-interest expense		129,355			109,300			255,571			217,016

Income before taxes		217,682			175,788			428,298			344,702
Provision for income taxes		45,717			39,375			86,420			75,786
Net income		171,965			136,413			341,878			268,916
Earnings attributable to noncontrolling interest		(1	)		(8	)		(13	)		(3	)
Preferred stock dividends		4,047			4,047			8,094			8,527
Net income available to common stockholders	$	167,917		$	132,358		$	333,771		$	260,386

Basic earnings per common share	$	1.47		$	1.10		$	2.89		$	2.13

Diluted earnings per common share	$	1.47		$	1.10		$	2.88		$	2.12

Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited

	Preferred Stock		Common Stock			AdditionalPaid-inCapital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Non-Controlling Interest		Total
	(Dollars in thousands, except per share amounts)
Three months ended June 30, 2023:
Balances – March 31, 2023	$	338,980	$	1,151		$	1,664,569		$	2,898,904		$	(141,677	)	$	1,371	$	4,763,298
Net income		—		—			—			171,965			—			—		171,965
Earnings attributable to noncontrolling interest		—		—			—			(1	)		—			1		—
Total other comprehensive income (loss)		—		—			—			—			(17,754	)		—		(17,754	)
Preferred stock dividends, $0.28906 per share		—		—			—			(4,047	)		—			—		(4,047	)
Common stock dividends, $0.35 per share		—		—			—			(40,574	)		—			—		(40,574	)
Issuance of 30,148 shares of common stock pursuant to stock-based compensation plans		—		—			23			—			—			—		23
Repurchase and cancellation of 1,956,101 shares of common stock under share repurchase program, including excise taxes		—		(20	)		(66,106	)		—								(66,126	)
Stock-based compensation expense		—		—			4,478			—			—			—		4,478
Forfeitures of 8,706 shares of unvested restricted common stock		—		—			—			—			—			—		—
Balances – June 30, 2023	$	338,980	$	1,131		$	1,602,964		$	3,026,247		$	(159,431	)	$	1,372	$	4,811,263

Six months ended June 30, 2023:
Balances – December 31, 2022	$	338,980	$	1,172		$	1,753,941		$	2,773,135		$	(177,649	)	$	1,359	$	4,690,938
Net income		—		—			—			341,878			—			—		341,878
Earnings attributable to noncontrolling interest		—		—			—			(13	)		—			13		—
Total other comprehensive income		—		—			—			—			18,218			—		18,218
Preferred stock dividends, $0.57812 per share		—		—			—			(8,094	)		—			—		(8,094	)
Common stock dividends, $0.69 per share		—		—			—			(80,659	)		—			—		(80,659	)
Issuance of 503,187 shares of common stock pursuant to stock-based compensation plans		—		5			541			—			—			—		546
Repurchase and cancellation of 4,304,239 shares of common stock under share repurchase program, including excise 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		—		—			8,575			—			—			—		8,575
Forfeitures of 15,065 shares of unvested restricted common stock		—		—			—			—			—			—		—
Balances – June 30, 2023	$	338,980	$	1,131		$	1,602,964		$	3,026,247		$	(159,431	)	$	1,372	$	4,811,263

Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited

	Preferred Stock		Common Stock			AdditionalPaid-inCapital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Non-Controlling Interest		Total
	(Dollars in thousands, except per share amounts)
Three months ended June 30, 2022:
Balances – March 31, 2022	$	338,980	$	1,227		$	1,962,126		$	2,468,652		$	(80,928	)	$	3,112	$	4,693,169
Net income		—		—			—			136,413			—			—		136,413
Earnings attributable to noncontrolling interest		—		—			—			(8	)		—			8		—
Total other comprehensive loss		—		—			—			—			(33,240	)		—		(33,240	)
Preferred stock dividends, $0.28906 per share		—		—			—			(4,047	)		—					(4,047	)
Common stock dividends, $0.31 per share		—		—			—			(37,880	)		—			—		(37,880	)
Issuance of 41,503 shares of common stock pursuant to stock-based compensation plans		—		—			594			—			—			—		594
Repurchase and cancellation of 3,689,819 shares of common stock under share repurchase program		—		(37	)		(147,396	)		—			—			—		(147,433	)
Stock-based compensation expense		—		—			2,326			—			—			—		2,326
Forfeitures of 32,858 shares of unvested restricted common stock		—		—			—			—			—			—		—
Balances – June 30, 2022	$	338,980	$	1,190		$	1,817,650		$	2,563,130		$	(114,168	)	$	3,120	$	4,609,902

Six months ended June 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		—		—			—			268,916			—			—		268,916
Earnings attributable to noncontrolling interest		—		—			—			(3	)		—			3		—
Total other comprehensive loss		—		—			—			—			(138,009	)		—		(138,009	)
Preferred stock dividends, $0.60906 per share		—		—			—			(8,527	)		—					(8,527	)
Common stock dividends, $0.61 per share		—		—			—			(75,722	)		—			—		(75,722	)
Issuance of 289,929 shares of common stock pursuant to stock-based compensation plans		—		3			2,077			—			—			—		2,080
Repurchase and cancellation of 6,572,832 shares of common stock under share repurchase program		—		(65	)		(278,932	)		—			—			—		(278,997	)
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		—		—			6,200			—			—			—		6,200
Forfeitures of 51,850 shares of unvested restricted common stock		—		(1	)		1			—			—			—		—
Balances – June 30, 2022	$	338,980	$	1,190		$	1,817,650		$	2,563,130		$	(114,168	)	$	3,120	$	4,609,902

Bank OZK
Summary of Non-Interest Expense
Unaudited

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(Dollars in thousands)
Salaries and employee benefits	$	65,219	$	54,412	$	128,468	$	109,060
Net occupancy and equipment		19,476		17,060		37,560		34,309
Other operating expenses:
Software and data processing		9,768		8,976		19,051		17,162
Professional and outside services		5,445		5,708		10,550		10,525
Deposit insurance and assessments		4,900		2,100		9,048		4,250
Advertising and public relations		3,184		1,103		7,219		2,362
Postage and supplies		2,431		1,461		4,144		3,126
Telecommunication services		2,398		1,921		4,671		3,931
Travel and meals		1,903		2,186		3,718		3,944
ATM expense		1,659		1,488		3,798		2,997
Amortization of intangibles		1,189		1,516		2,377		3,033
Loan collection and repossession expense		517		353		904		678
Writedowns of foreclosed and other assets		24		—		965		258
Amortization of CRA and tax credit investments		5,566		4,628		11,980		9,730
Other		5,676		6,388		11,118		11,651
Total non-interest expense	$	129,355	$	109,300	$	255,571	$	217,016

Bank OZK
Summary of Total Loans Outstanding
Unaudited

	June 30, 2023					December 31, 2022
	(Dollars in thousands)
Real estate:
Residential 1-4 family	$	966,684		4.1	%	$	981,567		4.7	%
Non-farm/non-residential		4,960,287		21.0			4,665,268		22.5
Construction/land development		9,446,030		40.0			8,215,056		39.5
Agricultural		243,798		1.0			239,689		1.2
Multifamily residential		1,988,764		8.4			1,503,398		7.2
Total real estate		17,605,563		74.5			15,604,978		75.1
Commercial and industrial		1,268,787		5.4			902,321		4.3
Consumer		2,825,552		12.0			2,445,851		11.8
Other		1,907,545		8.1			1,825,641		8.8
Total loans		23,607,447		100.0	%		20,778,791		100.0	%
Allowance for loan losses		(263,188	)				(208,858	)
Net loans	$	23,344,259				$	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 June 30, 2023:
Balances – March 31, 2023	$	222,025		$	171,742		$	393,767
Net charge-offs		(8,721	)		—			(8,721	)
Provision for credit losses		49,884			(8,110	)		41,774
Balances – June 30, 2023	$	263,188		$	163,632		$	426,820

Six Months Ended June 30, 2023:
Balances – December 31, 2022	$	208,858		$	156,419		$	365,277
Net charge-offs		(16,059	)		—			(16,059	)
Provision for credit losses		70,389			7,213			77,602
Balances – June 30, 2023	$	263,188		$	163,632		$	426,820

Three months ended June 30, 2022:
Balances – March 31, 2022	$	204,213		$	89,327		$	293,540
Net charge-offs		(627	)		—			(627	)
Provision for credit losses		(12,791	)		19,816			7,025
Balances – June 30, 2022	$	190,795		$	109,143		$	299,938

Six Months Ended June 30, 2022:
Balances – December 31, 2021	$	217,380		$	71,609		$	288,989
Net charge-offs		(266	)		—			(266	)
Provision for credit losses		(26,319	)		37,534			11,215
Balances – June 30, 2022	$	190,795		$	109,143		$	299,938

Bank OZK
Summary of Deposits – By Account Type
Unaudited

	June 30, 2023				December 31, 2022
	(Dollars in thousands)
Non-interest bearing	$	4,535,365	18.9	%	$	4,658,451	21.7	%
Interest bearing:
Transaction (NOW)		4,208,777	17.5			4,097,532	19.1
Savings and money market		4,766,365	19.9			5,808,185	27.0
Time deposits		10,472,890	43.7			6,935,975	32.2
Total deposits	$	23,983,397	100.0	%	$	21,500,143	100.0	%

Bank OZK
Summary of Deposits – By Customer Type
Unaudited

	June 30, 2023				December 31, 2022
	(Dollars in thousands)
Non-interest bearing	$	4,535,365	18.9	%	$	4,658,451	21.7	%
Interest bearing:
Consumer and commercial:
Consumer – Non-Time		3,142,531	13.1			3,916,078	18.2
Consumer – Time		7,498,988	31.3			4,936,061	23.0
Commercial – Non-Time		2,333,786	9.7			2,741,007	12.7
Commercial – Time		621,105	2.6			516,477	2.4
Public funds		2,595,415	10.8			2,103,392	9.8
Brokered		2,355,647	9.8			2,050,294	9.5
Reciprocal		900,560	3.8			578,383	2.7
Total deposits	$	23,983,397	100.0	%	$	21,500,143	100.0	%

Bank OZK
Selected Consolidated Financial Data
Unaudited

	Three Months Ended June 30,								Six Months Ended June 30,
		2023			2022		% Change			2023			2022		%Change
	(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income	$	356,824		$	265,793		34.2	%	$	701,676		$	515,137		36.2	%
Provision for credit losses		41,774			7,025		494.6			77,602			11,215		591.9
Non-interest income		31,987			26,320		21.5			59,795			57,796		3.5
Non-interest expense		129,355			109,300		18.3			255,571			217,016		17.8
Net income		171,965			136,413		26.1			341,878			268,916		27.1
Preferred stock dividends		4,047			4,047		—			8,094			8,527		(5.1	)
Net income available to common stockholders		167,917			132,358		26.9			333,771			260,386		28.2
Pre-tax pre-provision net revenue (1)		259,456			182,813		41.9			505,900			355,917		42.1
Common share and per common share data:
Diluted earnings per common share	$	1.47		$	1.10		33.6	%	$	2.88		$	2.12		35.8	%
Basic earnings per common share		1.47			1.10		33.6			2.89			2.13		35.7
Common stock dividends per share		0.35			0.31		12.9			0.69			0.61		13.1
Book value per share		39.51			35.87		10.1			39.51			35.87		10.1
Tangible book value per common share (1)		33.67			30.27		11.2			33.67			30.27		11.2
Weighted-average diluted shares outstanding (thousands)		114,284			120,827		(5.4	)		115,871			122,905		(5.7	)
End of period shares outstanding (thousands)		113,145			118,996		(4.9	)		113,145			118,996		(4.9	)
Balance sheet data at period end:
Total assets	$	30,761,870		$	25,919,965		18.7	%	$	30,761,870		$	25,919,965		18.7	%
Total loans		23,607,446			18,742,718		26.0			23,607,446			18,742,718		26.0
Non-purchased loans		23,291,785			18,297,638		27.3			23,291,785			18,297,638		27.3
Purchased loans		315,661			445,080		(29.1	)		315,661			445,080		(29.1	)
Allowance for loan losses		263,188			190,795		37.9			263,188			190,795		37.9
Foreclosed assets		62,048			2,593		2292.9			62,048			2,593		2292.9
Investment securities – AFS		3,262,366			3,705,807		(12.0	)		3,262,366			3,705,807		(12.0	)
Goodwill and other intangible assets, net		661,166			666,029		(0.7	)		661,166			666,029		(0.7	)
Deposits		23,983,397			19,984,187		20.0			23,983,397			19,984,187		20.0
Other borrowings		1,104,478			505,221		118.6			1,104,478			505,221		118.6
Subordinated notes		347,350			346,536		0.2			347,350			346,536		0.2
Subordinated debentures		121,652			121,310		0.3			121,652			121,310		0.3
Unfunded balance of closed loans		21,119,761			17,369,767		21.6			21,119,761			17,369,767		21.6
Reserve for losses on unfunded loan commitments		163,632			109,143		49.9			163,632			109,143		49.9
Preferred stock		338,980			338,980		—			338,980			338,980		—
Total common stockholders’ equity		4,470,911			4,267,802		4.8			4,470,911			4,267,802		4.8
Net unrealized losses on investment securities AFS included in stockholders’ equity		(159,431	)		(114,168	)				(159,431	)		(114,168	)
Loan (including purchased loans) to deposit ratio		98.43	%		93.79	%				98.43	%		93.79	%
Selected ratios:
Return on average assets (2)		2.27	%		2.02	%				2.34	%		2.00	%
Return on average common stockholders’ equity (1) (2)		15.14			12.40					15.19			12.03
Return on average tangible common stockholders’ equity (1) (2)		17.78			14.69					17.86			14.20
Average common equity to total average assets		15.00			16.32					15.38			16.60
Net interest margin – FTE (2)		5.32			4.52					5.43			4.38
Efficiency ratio		33.05			37.25					33.33			37.73
Net charge-offs to average non-purchased loans (2) (3)		0.03			0.03					0.09			0.05
Net charge-offs to average total loans (2)		0.15			0.01					0.15			0.00
Nonperforming loans to total loans (4)		0.15			0.16					0.15			0.16
Nonperforming assets to total assets (4)		0.32			0.12					0.32			0.12
Allowance for loan losses to total loans (5)		1.11			1.02					1.11			1.02
Allowance for credit losses to total loans and unfunded loan commitments		0.95			0.83					0.95			0.83
Other information:
Non-accrual loans (4)	$	35,320		$	28,171				$	35,320		$	28,171
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
	June 30, 2023			March 31, 2023			% Change
	(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income	$	356,824		$	344,852		3.5	%
Provision for credit losses		41,774			35,829		16.6
Non-interest income		31,987			27,809		15.0
Non-interest expense		129,355			126,217		2.5
Net income		171,965			169,912		1.2
Preferred stock dividends		4,047			4,047		—
Net income available to common stockholders		167,917			165,853		1.2
Pre-tax pre-provision net revenue (1)		259,456			246,444		5.3
Common share and per common share data:
Diluted earnings per common share	$	1.47		$	1.41		4.3	%
Basic earnings per common share		1.47			1.42		3.5
Common stock dividends per share		0.35			0.34		2.9
Book value per share		39.51			38.43		2.8
Tangible book value per common share (1)		33.67			32.68		3.0
Weighted-average diluted shares outstanding (thousands)		114,284			117,405		(2.7	)
End of period shares outstanding (thousands)		113,145			115,080		(1.7	)
Balance sheet data at period end:
Total assets	$	30,761,870		$	28,971,170		6.2	%
Total loans		23,607,446			22,062,006		7.0
Non-purchased loans		23,291,785			21,700,941		7.3
Purchased loans		315,661			361,065		(12.6	)
Allowance for loan losses		263,188			222,025		18.5
Foreclosed assets		62,048			66,227		(6.3	)
Investment securities – AFS		3,262,366			3,422,031		(4.7	)
Goodwill and other intangible assets, net		661,166			662,354		(0.2	)
Deposits		23,983,397			22,282,983		7.6
Other borrowings		1,104,478			994,079		11.1
Subordinated notes		347,350			347,147		0.1
Subordinated debentures		121,652			121,652		—
Unfunded balance of closed loans		21,119,761			20,965,040		0.7
Reserve for losses on unfunded loan commitments		163,632			171,742		(4.7	)
Preferred stock		338,980			338,980		—
Total common stockholders’ equity		4,470,911			4,422,947		1.1
Net unrealized losses on investment securities AFS included in stockholders’ equity		(159,431	)		(141,677	)
Loan (including purchased loans) to deposit ratio		98.43	%		99.01	%
Selected ratios:
Return on average assets (2)		2.27	%		2.41	%
Return on average common stockholders’ equity (1) (2)		15.14			15.24
Return on average tangible common stockholders’ equity (1) (2)		17.78			17.94
Average common equity to total average assets		15.00			15.78
Net interest margin – FTE (2)		5.32			5.54
Efficiency ratio		33.05			33.63
Net charge-offs to average non-purchased loans (2) (3)		0.03			0.15
Net charge-offs to average total loans (2)		0.15			0.14
Nonperforming loans to total loans (4)		0.15			0.15
Nonperforming assets to total assets (4)		0.32			0.34
Allowance for loan losses to total loans (5)		1.11			1.01
Allowance for credit losses to total loans and unfunded loan commitments		0.95			0.92
Other information:
Non-accrual loans (4)	$	35,320		$	33,371
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

	6/30/23			3/31/23			12/31/22			9/30/22			6/30/22
	(Dollars in thousands)
Earnings summary:
Net interest income	$	356,824		$	344,852		$	332,488		$	294,617		$	265,793
Federal tax (FTE) adjustment		2,602			2,603			2,383			2,151			1,300
Net interest income (FTE)		359,426			347,455			334,871			296,768			267,093
Provision for credit losses		(41,774	)		(35,829	)		(32,508	)		(39,771	)		(7,025	)
Non-interest income		31,987			27,809			27,544			29,163			26,320
Non-interest expense		(129,355	)		(126,217	)		(119,013	)		(115,691	)		(109,300	)
Pre-tax income (FTE)		220,284			213,218			210,894			170,469			177,088
FTE adjustment		(2,602	)		(2,603	)		(2,383	)		(2,151	)		(1,300	)
Provision for income taxes		(45,717	)		(40,703	)		(45,686	)		(35,969	)		(39,375	)
Noncontrolling interest		(1	)		(12	)		54			—			(8	)
Preferred stock dividend		(4,047	)		(4,047	)		(4,047	)		(4,047	)		(4,047	)
Net income available to common stockholders	$	167,917		$	165,853		$	158,832		$	128,302		$	132,358
Earnings per common share – diluted	$	1.47		$	1.41		$	1.34		$	1.08		$	1.10
Pre-tax pre-provision net revenue (1)	$	259,456		$	246,444		$	241,019		$	208,089		$	182,813
Selected balance sheet data at period end:
Total assets	$	30,761,870		$	28,971,170		$	27,656,568		$	26,232,119		$	25,919,965
Non-purchased loans		23,291,785			21,700,941			20,400,154			19,103,546			18,297,638
Purchased loans		315,661			361,065			378,637			410,166			445,080
Investment securities – AFS		3,262,366			3,422,031			3,491,613			3,528,077			3,705,807
Deposits		23,983,397			22,282,983			21,500,143			20,401,876			19,984,187
Unfunded balance of closed loans		21,119,761			20,965,040			21,062,733			20,091,101			17,369,767
Allowance for credit losses:
Balance at beginning of period	$	393,767		$	365,277		$	335,635		$	299,938		$	293,540
Net charge-offs		(8,721	)		(7,339	)		(2,866	)		(4,074	)		(627	)
Provision for credit losses		41,774			35,829			32,508			39,771			7,025
Balance at end of period	$	426,820		$	393,767		$	365,277		$	335,635		$	299,938
Allowance for loan losses	$	263,188		$	222,025		$	208,858		$	200,098		$	190,795
Reserve for losses on unfunded loan commitments		163,632			171,742			156,419			135,537			109,143
Total allowance for credit losses	$	426,820		$	393,767		$	365,277		$	335,635		$	299,938
Selected ratios:
Net interest margin – FTE (2)		5.32	%		5.54	%		5.46	%		5.03	%		4.52	%
Efficiency ratio		33.05			33.63			32.84			35.50			37.25
Net charge-offs to average non-purchased loans (2) (3)		0.03			0.15			0.09			0.09			0.03
Net charge-offs to average total loans (2)		0.15			0.14			0.06			0.09			0.01
Nonperforming loans to total loans (4)		0.15			0.15			0.22			0.14			0.16
Nonperforming assets to total assets (4)		0.32			0.34			0.19			0.13			0.12
Allowance for loan losses to total loans (5)		1.11			1.01			1.01			1.03			1.02
Allowance for credit losses to total loans and unfunded loan commitments		0.95			0.92			0.87			0.85			0.83
Loans past due 30 days or more, including past due non-accrual loans, to total loans (4)		0.14			0.15			0.13			0.11			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 June 30,												Six Months Ended June 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	$	957,439	$	11,407	4.78	%	$	1,019,374	$	1,855	0.73	%	$	849,082	$	19,277	4.58	%	$	1,188,502	$	2,464	0.42	%
Investment securities:
Taxable		2,363,265		9,704	1.65			3,060,097		10,367	1.36			2,406,769		19,875	1.67			3,218,475		20,978	1.31
Tax-exempt – FTE		1,040,757		12,011	4.63			637,235		5,088	3.20			1,034,317		23,738	4.63			604,295		8,868	2.96
Non-purchased loans – FTE		22,368,771		472,604	8.47			18,535,726		256,495	5.55			21,613,844		887,640	8.28			18,346,228		496,714	5.46
Purchased loans		346,696		5,322	6.16			464,655		8,982	7.75			358,725		11,840	6.66			481,941		17,152	7.18
Total earning assets – FTE		27,076,928		511,048	7.57			23,717,087		282,787	4.78			26,262,737		962,370	7.39			23,839,441		546,176	4.62
Non-interest earning assets		2,587,338						2,507,837						2,552,387						2,453,085
Total assets	$	29,664,266					$	26,224,924					$	28,815,124					$	26,292,526
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction	$	9,075,132	$	48,650	2.15	%	$	9,697,128	$	5,379	0.22	%	$	9,402,496	$	91,164	1.96	%	$	9,610,145	$	8,162	0.17	%
Time deposits		9,650,599		87,472	3.64			5,404,880		5,476	0.41			8,612,573		138,590	3.24			5,581,955		11,185	0.40
Total interest bearing deposits		18,725,731		136,122	2.92			15,102,008		10,855	0.29			18,015,069		229,754	2.57			15,192,100		19,347	0.26
Other borrowings		828,644		10,591	5.13			670,599		1,042	0.62			648,870		16,013	4.98			713,121		2,039	0.58
Subordinated notes		347,251		2,603	3.01			346,426		2,603	3.01			347,151		5,177	3.01			346,327		5,177	3.01
Subordinated debentures		121,652		2,306	7.60			121,234		1,195	3.95			121,645		4,545	7.54			121,166		2,159	3.59
Total interest bearing liabilities		20,023,278		151,622	3.04			16,240,267		15,695	0.39			19,132,735		255,489	2.69			16,372,714		28,722	0.35
Non-interest bearing liabilities:
Non-interest bearing deposits		4,348,639						4,970,380						4,409,684						4,872,646
Other non-interest bearing liabilities		502,394						392,126						501,203						340,854
Total liabilities		24,874,311						21,602,773						24,043,622						21,586,214
Total stockholders’ equity before noncontrolling interest		4,788,584						4,619,033						4,770,135						4,703,196
Noncontrolling interest		1,371						3,118						1,367						3,116
Total liabilities and stockholders’ equity	$	29,664,266					$	26,224,924					$	28,815,124					$	26,292,526
Net interest income – FTE			$	359,427					$	267,092					$	706,881					$	517,454
Net interest margin – FTE					5.32	%					4.52	%					5.43	%					4.38	%
Core spread (1)					5.55	%					5.26	%					5.71	%					5.20	%

(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									Six Months Ended
	June 30,			June 30,			March 31,			June 30,			June 30,
	2023			2022			2023			2023			2022
	(Dollars in thousands)
Net income available to common stockholders	$	167,917		$	132,358		$	165,853		$	333,771		$	260,386
Average stockholders’ equity before noncontrolling interest	$	4,788,584		$	4,619,033		$	4,751,481		$	4,770,135		$	4,703,196
Less average preferred stock		(338,980	)		(338,980	)		(338,980	)		(338,980	)		(338,980	)
Total average common stockholders’ equity		4,449,604			4,280,053			4,412,501			4,431,155			4,364,216
Less average intangible assets:
Goodwill		(660,789	)		(660,789	)		(660,789	)		(660,789	)		(660,789	)
Core deposit and other intangible assets, net of accumulated amortization		(999	)		(6,084	)		(2,243	)		(1,618	)		(6,824	)
Total average intangibles		(661,788	)		(666,873	)		(663,032	)		(662,407	)		(667,613	)
Average tangible common stockholders’ equity	$	3,787,816		$	3,613,180		$	3,749,469		$	3,768,748		$	3,696,603
Return on average common stockholders’ equity(1)		15.14	%		12.40	%		15.24	%		15.19	%		12.03	%
Return on average tangible common stockholders’ equity(1)		17.78	%		14.69	%		17.94	%		17.86	%		14.20	%

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

Calculation of Total Common Stockholders’ Equity, Total Tangible Common Stockholders’ Equity and Tangible Book Value per Common Share
Unaudited

	June 30,						December 31,
		2023			2022			2022
	(In thousands, except per share amounts)
Total stockholders’ equity before noncontrolling interest	$	4,809,891		$	4,606,782		$	4,689,579
Less preferred stock		(338,980	)		(338,980	)		(338,980	)
Total common stockholders’ equity	$	4,470,911		$	4,267,802		$	4,350,599
Less intangible assets:
Goodwill		(660,789	)		(660,789	)		(660,789	)
Core deposit and other intangible assets, net of accumulated amortization		(377	)		(5,240	)		(2,754	)
Total intangibles		(661,166	)		(666,029	)		(663,543	)
Total tangible common stockholders’ equity	$	3,809,745		$	3,601,773		$	3,687,056
Shares of common stock outstanding		113,145			118,996			117,177
Book value per common share	$	39.51		$	35.87		$	37.13
Tangible book value per common share	$	33.67		$	30.27		$	31.47

Calculation of Total Common Stockholders’ Equity,Total Tangible Common Stockholders’ Equityand the Ratio of Total Tangible Common Stockholders’ Equity to Total Tangible Assets
Unaudited

	June 30,
	2023			2022
	(Dollars in thousands)
Total stockholders’ equity before noncontrolling interest	$	4,809,891		$	4,606,782
Less preferred stock		(338,980	)		(338,980	)
Total common stockholders’ equity	$	4,470,911		$	4,267,802
Less intangible assets:
Goodwill		(660,789	)		(660,789	)
Core deposit and other intangible assets, net of accumulated amortization		(377	)		(5,240	)
Total intangibles		(661,166	)		(666,029	)
Total tangible common stockholders’ equity		3,809,745			3,601,773
Total assets	$	30,761,870		$	25,919,965
Less intangible assets:
Goodwill	$	(660,789	)	$	(660,789	)
Core deposit and other intangible assets, net of accumulated amortization		(377	)		(5,240	)
Total intangibles	$	(661,166	)	$	(666,029	)
Total tangible assets	$	30,100,704		$	25,253,936
Ratio of total common stockholders’ equity to total assets		14.53	%		16.47	%
Ratio of total tangible common stockholders’ equity to total tangible assets		12.66	%		14.26	%

Calculation of Pre-Tax Pre-Provision Net Revenue
Unaudited

	Three Months Ended											Six Months Ended
	June 30,		March 31,		December 31,			September 30,		June 30,		June 30,		June 30,
	2023		2023			2022		2022		2022		2023		2022
	(Dollars in thousands)
Net income available to common stockholders	$	167,917	$	165,853	$	158,832		$	128,302	$	132,358	$	333,771	$	260,386
Preferred stock dividends		4,047		4,047		4,047			4,047		4,047		8,094		8,527
Earnings attributable to noncontrolling interest		1		12		(54	)		—		8		13		3
Provision for income taxes		45,717		40,703		45,686			35,969		39,375		86,420		75,786
Provision for credit losses		41,774		35,829		32,508			39,771		7,025		77,602		11,215
Pre-tax pre-provision net revenue	$	259,456	$	246,444	$	241,019		$	208,089	$	182,813	$	505,900	$	355,917