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Bank OZK Announces Record First Quarter 2021 Earnings

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LITTLE ROCK, Ark., April 22, 2021 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income for the first quarter of 2021 was a record $148.4 million compared to $11.9 million for the first quarter of 2020. Diluted earnings per common share for the first quarter of 2021 were $1.14 compared to $0.09 for the first quarter of 2020.

As a result of improving economic conditions, management recorded negative provision for credit losses of $31.6 million during the first quarter of 2021, reducing the Bank’s total allowance for credit losses (“ACL”) from $377.3 million at December 31, 2020 to $342.3 million at March 31, 2021. The Bank’s provision for credit losses was $117.7 million during the first quarter of 2020, reflecting significant economic uncertainty at that time. The Bank’s results for the first quarter of 2021 also included pretax gains of $4.4 million from the sale of its South Carolina branches and $1.4 million of tax-exempt bank-owned life insurance (“BOLI”) death benefits. The Bank had no gains from branch sales and had $0.6 million of tax-exempt BOLI death benefits during the first quarter of 2020.

Pre-tax pre-provision net revenue (“PPNR”) was $160.7 million for the first quarter of 2021, a 19.9% increase from $134.0 million for the first quarter of 2020, but a decrease of 1.3% from $162.9 million for the fourth quarter of 2020. The calculation of PPNR and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first quarter of 2021 were 2.23%, 13.97% and 16.57%, respectively, compared to 0.20%, 1.16% and 1.39%, respectively, for the first quarter of 2020. The calculation of the Bank’s return on average tangible common stockholders’ equity and the reconciliation to GAAP are included in the schedules accompanying this release.

George Gleason, Chairman and Chief Executive Officer stated, “We are pleased to report excellent results for the first quarter of 2021, including record quarterly net income, strong net interest income, continued improvement in our core spread, excellent asset quality and an efficiency ratio among the best in the industry. Our combination of strong earnings, robust capital and an exceptional team have us well positioned for the future.”

KEY BALANCE SHEET METRICS

Total loans were $18.72 billion at March 31, 2021, a 2.7% increase from $18.23 billion at March 31, 2020, but a decrease of 2.6% from $19.21 billion at December 31, 2020. Non-purchased loans were $17.98 billion at March 31, 2021, a 5.6% increase from $17.03 billion at March 31, 2020, but a decrease of 2.3% from $18.40 billion at December 31, 2020. Purchased loans, which consist of loans acquired in previous acquisitions, were $0.74 billion at March 31, 2021, a 38.6% decrease from $1.20 billion at March 31, 2020.

Deposits were $21.30 billion at March 31, 2021, a 13.2% increase from $18.81 billion at March 31, 2020, but a decrease of 0.7% from $21.45 billion at December 31, 2020. Total assets were $27.28 billion at March 31, 2021, an 11.0% increase from $24.57 billion at March 31, 2020.

Common stockholders’ equity was $4.38 billion at March 31, 2021, a 7.5% increase from $4.08 billion at March 31, 2020. Tangible common stockholders’ equity was $3.71 billion at March 31, 2021, a 9.1% increase from $3.40 billion at March 31, 2020. Book value per common share was $33.79 at March 31, 2021, a 7.0% increase from $31.57 at March 31, 2020. Tangible book value per common share was $28.60 at March 31, 2021, an 8.7% increase from $26.30 at March 31, 2020. 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 was 16.07% at March 31, 2021 compared to 16.62% at March 31, 2020. Its ratio of total tangible common stockholders’ equity to total tangible assets was 13.94% at March 31, 2021 compared to 14.24% at March 31, 2020. 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 its quarterly results, which are available at http://ir.ozk.com. This release should be read in conjunction with management’s comments on the quarterly results.

Management will conduct a conference call to take questions on these quarterly results and management’s comments at 10:00 a.m. CT (11:00 a.m. ET) on April 23, 2021. Interested parties may listen to this call by dialing 1-844-818-5110 (U.S. and Canada) or 210-229-8841 (internationally) and asking for the Bank OZK conference call. A recorded playback of the call will be available for one week following the call at 1-855-859-2056 (U.S. and Canada) or 404-537-3406 (internationally). The conference ID for this playback is 4472527. 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, 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 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 satisfactory sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices or relocating, selling or closing existing offices; the ability to enter into and/or close additional acquisitions; the availability of and access to capital; possible downgrades in the Bank’s credit ratings or outlook which could increase the costs 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; the potential impact of the proposed phase-out of the London Interbank Offered Rate (“LIBOR”) or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Bank’s net interest margin or core spread; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief and Economic Security Act, the Consolidated Appropriations Act of 2021, the American Rescue Plan Act of 2021, and any similar or related laws, rules and regulations; changes in U.S. government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, the Bank’s operational or security systems or infrastructure, or those of third parties with whom it does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank or its customers; natural disasters or acts of war or terrorism; the adverse effects of the COVID-19 pandemic, including the duration of the pandemic and actions taken to contain or treat COVID-19, on the Bank, the Bank’s customers, the Bank’s staff, the global economy and financial markets; national, international or political instability; impairment of the Bank’s goodwill or other intangible assets; adoption of new accounting standards, or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this press release or as detailed from time to time in the other public reports the Bank files with the FDIC, including those factors described 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, 2020 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. Headquartered in Little Rock, Arkansas, Bank OZK conducts operations through more than 250 branches, loan production offices and other offices in Arkansas, Georgia, Florida, North Carolina, Texas, California, New York and Mississippi. Bank OZK can be found at www.ozk.com and on Facebook, Twitter and LinkedIn or contacted at (501) 978-2265 or P. O. Box 8811, Little Rock, Arkansas 72231-8811.

Investor Contact:

Tim Hicks (501) 978-2336

Media Contact:

Susan Blair (501) 978-2217

Bank OZK
Consolidated Balance Sheets
Unaudited

March 31,

December 31,

2021

2020

(Dollars in thousands, except per share amounts)

ASSETS

Cash and cash equivalents

$

2,216,336

$

2,393,662

Investment securities ― available for sale ("AFS")

4,162,479

3,405,351

Federal Home Loan Bank of Dallas and other bankers' bank stocks

38,578

38,486

Non-purchased loans

17,979,435

18,401,495

Purchased loans

735,630

807,673

Allowance for loan losses

(268,077

)

(295,824

)

Net loans

18,446,988

18,913,344

Premises and equipment, net

729,433

738,842

Foreclosed assets

8,436

11,085

Accrued interest receivable

94,265

88,077

Bank owned life insurance (“BOLI”)

761,680

758,071

Goodwill and other intangible assets, net

673,728

675,458

Other, net

144,969

140,220

Total assets

$

27,276,892

$

27,162,596

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits:

Demand non-interest bearing

$

4,196,603

$

3,996,546

Savings and interest bearing transaction

8,529,229

8,160,982

Time

8,570,610

9,292,828

Total deposits

21,296,442

21,450,356

Repurchase agreements with customers

5,936

8,013

Other borrowings

750,361

750,928

Subordinated notes

224,141

224,047

Subordinated debentures

120,613

120,475

Reserve for losses on unfunded loan commitments

74,230

81,481

Accrued interest payable and other liabilities

418,860

251,940

Total liabilities

22,890,583

22,887,240

Commitments and contingencies

Stockholders’ equity:

Preferred stock; $0.01 par value; 100,000,000 shares authorized; no shares
issued or outstanding at March 31, 2021 or December 31, 2020

Common stock; $0.01 par value; 300,000,000 shares authorized;
129,718,906 and 129,350,448 shares issued and outstanding at
March 31, 2021 and December 31, 2020, respectively

1,297

1,294

Additional paid-in capital

2,272,046

2,265,850

Retained earnings

2,059,398

1,946,875

Accumulated other comprehensive income

50,464

58,252

Total stockholders’ equity before noncontrolling interest

4,383,205

4,272,271

Noncontrolling interest

3,104

3,085

Total stockholders’ equity

4,386,309

4,275,356

Total liabilities and stockholders’ equity

$

27,276,892

$

27,162,596


Bank OZK
Consolidated Statements of Income
Unaudited

Three Months Ended March 31,

2021

2020

(Dollars in thousands, except per share amounts)

Interest income:

Non-purchased loans

$

239,827

$

231,853

Purchased loans

11,935

21,387

Investment securities:

Taxable

8,083

10,760

Tax-exempt

3,681

3,597

Deposits with banks and federal funds sold

538

4,376

Total interest income

264,064

271,973

Interest expense:

Deposits

24,350

57,682

Repurchase agreements with customers

4

6

Other borrowings

986

50

Subordinated notes

3,146

3,172

Subordinated debentures

942

1,288

Total interest expense

29,428

62,198

Net interest income

234,636

209,775

Provision for credit losses

(31,559

)

117,663

Net interest income after provision for credit losses

266,195

92,112

Non-interest income:

Service charges on deposit accounts

9,665

10,009

Trust income

2,206

1,939

BOLI income:

Increase in cash surrender value

4,881

5,067

Death benefits

1,409

608

Loan service, maintenance and other fees

3,551

3,716

Gains on sales of other assets

5,828

161

Net gains on investment securities

2,223

Other

4,577

3,957

Total non-interest income

32,117

27,680

Non-interest expense:

Salaries and employee benefits

53,645

51,473

Net occupancy and equipment

16,468

15,330

Other operating expenses

35,946

36,622

Total non-interest expense

106,059

103,425

Income before taxes

192,253

16,367

Provision for income taxes

43,818

4,509

Net income

148,435

11,858

Earnings attributable to noncontrolling interest

(19

)

8

Net income available to common stockholders

$

148,416

$

11,866

Basic earnings per common share

$

1.15

$

0.09

Diluted earnings per common share

$

1.14

$

0.09


Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited

Common
Stock

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income

Non-
Controlling
Interest

Total

(Dollars in thousands, except per share amounts)

Three months ended March 31, 2021:

Balances – December 31, 2020

$

1,294

$

2,265,850

$

1,946,875

$

58,252

$

3,085

$

4,275,356

Net income

148,435

148,435

Earnings attributable to noncontrolling interest

(19

)

19

Total other comprehensive loss

(7,788

)

(7,788

)

Common stock dividends, $0.2775 per
share

(35,893

)

(35,893

)

Issuance of 128,100 shares of common
stock for exercise of stock options

1

4,492

4,493

Issuance of 312,503 shares of unvested
restricted common stock

3

(3

)

Repurchase and cancellation of 55,740
shares of common stock

(1

)

(1,970

)

(1,971

)

Stock-based compensation expense

3,677

3,677

Forfeitures of 16,405 shares of unvested
restricted common stock

Balances – March 31, 2021

$

1,297

$

2,272,046

$

2,059,398

$

50,464

$

3,104

$

4,386,309

Three months ended March 31, 2020:

Balances – December 31, 2019

$

1,289

$

2,251,824

$

1,869,983

$

27,255

$

3,117

$

4,153,468

Cumulative effect of change
in accounting principle

(75,344

)

(75,344

)

Balances – January 1, 2020

1,289

2,251,824

1,794,639

27,255

3,117

4,078,124

Net income

11,858

11,858

Earnings attributable to noncontrolling interest

8

(8

)

Total other comprehensive income

27,633

27,633

Common stock dividends, $0.26 per
share

(33,527

)

(33,527

)

Issuance of 4,300 shares of common
stock for exercise of stock options

45

45

Issuance of 447,085 shares of unvested
restricted common stock

4

(4

)

Repurchase and cancellation of 61,873
shares of common stock

(1,853

)

(1,853

)

Stock-based compensation expense

3,979

3,979

Forfeitures of 16,101 shares of unvested
restricted common stock

Balances – March 31, 2020

$

1,293

$

2,253,991

$

1,772,978

$

54,888

$

3,109

$

4,086,259


Bank OZK
Summary of Non-Interest Expense
Unaudited

Three Months Ended
March 31,

2021

2020

(Dollars in thousands)

Salaries and employee benefits

$

53,645

$

51,473

Net occupancy and equipment

16,468

15,330

Other operating expenses:

Professional and outside services

6,326

6,764

Software and data processing

5,792

4,974

Deposit insurance and assessments

3,520

3,420

Telecommunication services

2,232

2,177

Postage and supplies

1,645

2,053

Writedowns of foreclosed and other assets

1,363

879

ATM expense

1,283

1,160

Travel and meals

774

2,102

Loan collection and repossession expense

509

694

Advertising and public relations

308

1,703

Amortization of intangibles

1,730

2,795

Amortization of CRA and tax credit investments

4,125

2,740

Other

6,339

5,161

Total non-interest expense

$

106,059

$

103,425


Bank OZK
Summary of Total Loans Outstanding
Unaudited

March 31, 2021

December 31, 2020

(Dollars in thousands)

Real estate:

Residential 1-4 family

$

869,585

4.6

%

$

911,115

4.7

%

Non-farm/non-residential

4,406,692

23.5

4,213,636

21.9

Construction/land development

7,733,670

41.3

8,046,978

41.9

Agricultural

212,681

1.1

204,868

1.1

Multifamily residential

797,847

4.3

856,297

4.5

Total real estate

14,020,475

74.8

14,232,894

74.1

Commercial and industrial

790,568

4.2

842,206

4.4

Consumer

2,275,011

12.2

2,393,964

12.5

Other

1,629,011

8.8

1,740,104

9.0

Total loans

18,715,065

100.0

%

19,209,168

100.0

%

Allowance for loan losses

(268,077

)

(295,824

)

Net loans

$

18,446,988

$

18,913,344


Bank OZK
Allowance for Credit Losses
Unaudited

Allowance for Loan Losses

Reserve for Losses on Unfunded Loan Commitments

Total Allowance for Credit Losses

(Dollars in thousands)

Three months ended March 31, 2021:

Balances – December 31, 2020

$

295,824

$

81,481

$

377,305

Net charge-offs

(3,439

)

(3,439

)

Provision

(24,308

)

(7,251

)

(31,559

)

Balances – March 31, 2021

$

268,077

$

74,230

$

342,307

Three months ended March 31, 2020:

Balances – December 31, 2019

$

108,525

$

$

108,525

Adoption of CECL methodology

39,588

54,924

94,512

Balances – January 1, 2020

148,113

54,924

203,037

Net charge-offs

(4,291

)

(4,291

)

Provision

94,915

22,748

117,663

Balances – March 31, 2020

$

238,737

$

77,672

$

316,409


Bank OZK
Summary of Deposits – By Account Type
Unaudited

March 31, 2021

December 31, 2020

(Dollars in thousands)

Non-interest bearing

$

4,196,603

19.7

%

$

3,996,546

18.6

%

Interest bearing:

Transaction (NOW)

3,253,715

15.3

3,124,007

14.6

Savings and money market

5,275,514

24.8

5,036,975

23.5

Time deposits less than $100

2,657,568

12.5

3,075,845

14.3

Time deposits of $100 or more

5,913,042

27.7

6,216,983

29.0

Total deposits

$

21,296,442

100.0

%

$

21,450,356

100.0

%


Summary of Deposits – By Customer Type
Unaudited

March 31, 2021

December 31, 2020

(Dollars in thousands)

Consumer

$

11,252,744

52.8

%

$

11,165,603

52.1

%

Commercial

6,259,409

29.4

6,056,536

28.2

Public Funds

2,048,909

9.6

2,111,971

9.8

Brokered

1,210,155

5.7

1,600,116

7.5

Reciprocal

525,225

2.5

516,130

2.4

Total deposits

$

21,296,442

100.0

%

$

21,450,356

100.0

%


Bank OZK
Selected Consolidated Financial Data
Unaudited

Three Months Ended
March 31,

2021

2020

% Change

(Dollars in thousands, except per share amounts)

Income statement data:

Net interest income

$

234,636

$

209,775

11.9

%

Provision for credit losses

(31,559

)

117,663

(126.8

)

Non-interest income

32,117

27,680

16.0

Non-interest expense

106,059

103,425

2.5

Net income available to common stockholders

148,416

11,866

1,150.8

Pre-tax pre-provision net revenue(1)

160,694

134,030

19.9

Common share and per common share data:

Net income per share − diluted

$

1.14

$

0.09

1,166.7

%

Net income per share − basic

1.15

0.09

1,177.8

Dividends per share

0.2775

0.26

6.7

Book value per share

33.79

31.57

7.0

Tangible book value per share(1)

28.60

26.30

8.7

Weighted-average diluted shares outstanding (thousands)

129,816

129,307

0.4

End of period shares outstanding (thousands)

129,719

129,324

0.3

Balance sheet data at period end:

Total assets

$

27,276,892

$

24,565,810

11.0

%

Total loans

18,715,065

18,228,204

2.7

Non-purchased loans

17,979,435

17,030,378

5.6

Purchased loans

735,630

1,197,826

(38.6

)

Allowance for loan losses

268,077

238,737

12.3

Foreclosed assets

8,436

20,616

(59.1

)

Investment securities − AFS

4,162,479

2,816,556

47.8

Goodwill and other intangible assets, net

673,728

681,747

(1.2

)

Deposits

21,296,442

18,809,190

13.2

Other borrowings

750,361

1,051,353

(28.6

)

Subordinated notes

224,141

223,759

0.2

Subordinated debentures

120,613

120,055

0.5

Unfunded balance of closed loans

11,780,099

11,334,737

3.9

Reserve for losses on unfunded loan commitments

74,230

77,672

(4.4

)

Total common stockholders’ equity

4,383,205

4,083,150

7.3

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

50,464

54,888

Loan (including purchased loans) to deposit ratio

87.88

%

96.91

%

Selected ratios:

Return on average assets(2)

2.23

%

0.20

%

Return on average common stockholders’ equity(2)

13.97

1.16

Return on average tangible common stockholders’ equity(1) (2)

16.57

1.39

Average common equity to total average assets

15.93

17.31

Net interest margin – FTE(2)

3.86

3.96

Efficiency ratio

39.57

43.35

Net charge-offs to average non-purchased loans(2) (3)

0.08

0.08

Net charge-offs to average total loans(2)

0.07

0.10

Nonperforming loans to total loans(4)

0.25

0.16

Nonperforming assets to total assets(4)

0.19

0.19

Allowance for loan losses to total loans(5)

1.43

1.31

Other information:

Non-accrual loans(4)

$

43,059

$

25,681

Accruing loans − 90 days past due(4)

Troubled and restructured non-purchased loans − accruing(4)

1,380

757


(1) Calculations of pre-tax pre-provision net revenue, 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 reserve for losses on unfunded loan commitments.


Selected Consolidated Financial Data (continued)
Unaudited

Three Months Ended

March 31,

December 31,

2021

2020

% Change

(Dollars in thousands, except per share amounts)

Income statement data:

Net interest income

$

234,636

$

237,600

(1.2

)%

Provision for credit losses

(31,559

)

6,750

(567.5

)

Non-interest income

32,117

28,661

12.1

Non-interest expense

106,059

103,394

2.6

Net income available to common stockholders

148,416

120,513

23.2

Pre-tax pre-provision net revenue(1)

160,694

162,867

(1.3

)

Common share and per common share data:

Net income per share − diluted

$

1.14

$

0.93

22.6

%

Net income per share − basic

1.15

0.93

23.7

Dividends per share

0.2775

0.275

0.9

Book value per share

33.79

33.03

2.3

Tangible book value per share(1)

28.60

27.81

2.8

Weighted-average diluted shares outstanding (thousands)

129,816

129,523

0.2

End of period shares outstanding (thousands)

129,719

129,350

0.3

Balance sheet data at period end:

Total assets

$

27,276,892

$

27,162,596

0.4

%

Total loans

18,715,065

19,209,168

(2.6

)

Non-purchased loans

17,979,435

18,401,495

(2.3

)

Purchased loans

735,630

807,673

(8.9

)

Allowance for loan losses

268,077

295,824

(9.4

)

Foreclosed assets

8,436

11,085

(23.9

)

Investment securities − AFS

4,162,479

3,405,351

22.2

Goodwill and other intangible assets, net

673,728

675,458

(0.3

)

Deposits

21,296,442

21,450,356

(0.7

)

Other borrowings

750,361

750,928

(0.1

)

Subordinated notes

224,141

224,047

0.1

Subordinated debentures

120,613

120,475

Unfun...ded balance of closed loans

11,780,099

11,847,117

(0.6

)

Reserve for losses on unfunded loan commitments

74,230

81,481

(8.9

)

Total common stockholders’ equity

4,383,205

4,272,271

2.6

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

50,464

58,252

Loan (including purchased loans) to deposit ratio

87.88

%

89.55

%

Selected ratios:

Return on average assets(2)

2.23

%

1.79

%

Return on average common stockholders’ equity(2)

13.97

11.36

Return on average tangible common stockholders’ equity(1) (2)

16.57

13.53

Average common equity to total average assets

15.93

15.74

Net interest margin – FTE(2)

3.86

3.88

Efficiency ratio

39.57

38.61

Net charge-offs to average non-purchased loans(2) (3)

0.08

0.14

Net charge-offs to average total loans(2)

0.07

0.14

Nonperforming loans to total loans(4)

0.25

0.25

Nonperforming assets to total assets(4)

0.19

0.21

Allowance for loan losses to total loans(5)

1.43

1.54

Other information:

Non-accrual loans(4)

$

43,059

$

44,402

Accruing loans − 90 days past due(4)

Troubled and restructured non-purchased loans − accruing(4)

1,380

1,483

(1) Calculations of pre-tax pre-provision net revenue, 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 reserve for losses on unfunded loan commitments.


Bank OZK
Supplemental Quarterly Financial Data
Unaudited

6/30/19

9/30/19

12/31/19

3/31/20

6/30/20

9/30/20

12/31/20

3/31/21

(Dollars in thousands, except per share amounts)

Earnings Summary:

Net interest income

$

224,536

$

218,780

$

214,977

$

209,775

$

216,593

$

224,657

$

237,600

$

234,636

Federal tax (FTE) adjustment

1,136

1,038

1,028

1,133

1,753

1,605

1,533

1,275

Net interest income (FTE)

225,672

219,818

216,005

210,908

218,346

226,262

239,133

235,911

Provision for credit losses

(6,769

)

(7,854

)

(4,938

)

(117,663

)

(72,026

)

(7,200

)

(6,750

)

31,559

Non-interest income

26,603

26,446

30,406

27,680

21,591

26,676

28,661

32,117

Non-interest expense

(99,131

)

(100,914

)

(104,406

)

(103,425

)

(100,953

)

(105,641

)

(103,394

)

(106,059

)

Pretax income (FTE)

146,375

137,496

137,067

17,500

66,958

140,097

157,650

193,528

FTE adjustment

(1,136

)

(1,038

)

(1,028

)

(1,133

)

(1,753

)

(1,605

)

(1,533

)

(1,275

)

Provision for income taxes

(34,726

)

(32,574

)

(35,240

)

(4,509

)

(14,948

)

(29,251

)

(35,607

)

(43,818

)

Noncontrolling interest

(10

)

7

7

8

9

12

3

(19

)

Net income available to common stockholders

$

110,503

$

103,891

$

100,806

$

11,866

$

50,266

$

109,253

$

120,513

$

148,416

Earnings per common share – diluted

$

0.86

$

0.81

$

0.78

$

0.09

$

0.39

$

0.84

$

0.93

$

1.14

Non-interest Income:

Service charges on deposit accounts

$

10,291

$

10,827

$

10,933

$

10,009

$

8,281

$

9,427

$

9,983

$

9,665

Trust income

1,839

1,975

2,010

1,939

1,759

1,936

1,909

2,206

BOLI income:

Increase in cash surrender value

5,178

5,208

5,167

5,067

5,057

5,081

5,034

4,881

Death benefits

206

2,989

608

1,409

Loan service, maintenance and other fees

4,565

4,197

4,282

3,716

3,394

3,351

3,797

3,551

Gains on sales of other assets

402

189

1,358

161

621

891

5,189

5,828

Net gains on investment securities

713

2,223

2,244

Other

3,615

3,844

3,667

3,957

2,479

3,746

2,749

4,577

Total non-interest income

$

26,603

$

26,446

$

30,406

$

27,680

$

21,591

$

26,676

$

28,661

$

32,117

Non-interest Expense:

Salaries and employee benefits

$

47,558

$

48,376

$

52,050

$

51,473

$

48,410

$

53,119

$

53,832

$

53,645

Net occupancy and equipment

14,587

14,825

14,855

15,330

15,756

16,676

15,617

16,468

Other operating expenses

36,986

37,713

37,501

36,622

36,787

35,846

33,945

35,946

Total non-interest expense

$

99,131

$

100,914

$

104,406

$

103,425

$

100,953

$

105,641

$

103,394

$

106,059

Balance Sheet Data:

Total assets

$

22,960,731

$

23,402,679

$

23,555,728

$

24,565,810

$

26,380,409

$

26,888,308

$

27,162,596

$

27,276,892

Non-purchased loans

15,786,809

16,307,621

16,224,539

17,030,378

18,247,431

18,419,958

18,401,495

17,979,435

Purchased loans

1,698,396

1,427,230

1,307,504

1,197,826

1,063,647

938,485

807,673

735,630

Investment securities – AFS

2,548,489

2,414,722

2,277,389

2,816,556

3,299,944

3,468,243

3,405,351

4,162,479

Deposits

18,186,215

18,440,078

18,474,259

18,809,190

20,723,598

21,287,405

21,450,356

21,296,442

Unfunded balance of closed loans

11,167,055

11,429,918

11,325,598

11,334,737

11,411,441

11,604,614

11,847,117

11,780,099

Common stockholders' equity

3,993,247

4,078,324

4,150,351

4,083,150

4,110,666

4,186,285

4,272,271

4,383,205


Bank OZK
Supplemental Quarterly Financial Data (Continued)
Unaudited

6/30/19

9/30/19

12/31/19

3/31/20

6/30/20

9/30/20

12/31/20

3/31/21

(Dollars in thousands, except per share amounts)

Allowance for Credit Losses:

Balance at beginning of period

$

105,954

$

106,642

$

109,001

$

108,525

$

316,409

$

374,494

$

377,273

$

377,305

Adoption of CECL(1) methodology

94,512

Net charge-offs

(6,081

)

(5,495

)

(5,414

)

(4,291

)

(13,941

)

(4,421

)

(6,718

)

(3,439

)

Provision for credit losses

6,769

7,854

4,938

117,663

72,026

7,200

6,750

(31,559

)

Balance at end of period

$

106,642

$

109,001

$

108,525

$

316,409

$

374,494

$

377,273

$

377,305

$

342,307

Allowance for loan losses

$

106,642

$

109,001

$

108,525

$

238,737

$

306,196

$

308,847

$

295,824

$

268,077

Reserve for losses on unfunded loan commitments

77,672

68,298

68,426

81,481

74,230

Total allowance for credit losses

$

106,642

$

109,001

$

108,525

$

316,409

$

374,494

$

377,273

$

377,305

$

342,307

Selected Ratios:

Net interest margin – FTE(2)

4.45

%

4.26

%

4.15

%

3.96

%

3.74

%

3.69

%

3.88

%

3.86

%

Efficiency ratio

39.30

40.98

42.37

43.35

42.07

41.77

38.61

39.57

Net charge-offs to average non-purchased loans(2) (3)

0.12

0.07

0.10

0.08

0.05

0.09

0.14

0.08

Net charge-offs to average total loans(2)

0.14

0.12

0.12

0.10

0.29

0.09

0.14

0.07

Nonperforming loans to total loans(4)

0.15

0.17

0.15

0.16

0.18

0.15

0.25

0.25

Nonperforming assets to total assets(4)

0.25

0.26

0.18

0.19

0.19

0.17

0.21

0.19

Allowance for loan losses to total loans (5)

0.61

0.61

0.62

1.31

1.59

1.60

1.54

1.43

Loans past due 30 days or more, including
past due non-accrual loans, to total loans(4)

0.13

0.14

0.19

0.18

0.13

0.13

0.16

0.13

(1) Current Expected Credit Loss.
(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 March 31,

2021

2020

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

$

2,212,680

$

538

0.10

%

$

1,367,297

$

4,376

1.29

%

Investment securities:

Taxable

2,422,127

8,083

1.35

1,796,061

10,760

2.41

Tax-exempt – FTE

1,167,827

4,659

1.62

486,062

4,553

3.77

Non-purchased loans – FTE

18,188,269

240,124

5.35

16,526,270

232,030

5.65

Purchased loans

776,097

11,935

6.24

1,265,413

21,387

6.80

Total earning assets – FTE

24,767,000

265,339

4.34

21,441,103

273,106

5.12

Non-interest earning assets

2,279,477

2,353,330

Total assets

$

27,046,477

$

23,794,433

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest bearing liabilities:

Deposits:

Savings and interest bearing transaction

$

8,337,990

$

3,616

0.18

%

$

8,131,400

$

19,747

0.98

%

Time deposits of $100 or more

6,095,614

13,913

0.93

4,388,337

22,190

2.03

Other time deposits

2,900,579

6,821

0.95

3,333,529

15,745

1.90

Total interest bearing deposits

17,334,183

24,350

0.57

15,853,266

57,682

1.46

Repurchase agreements with customers

5,800

4

0.26

7,883

6

0.32

Other borrowings(1)

750,384

986

0.53

296,969

50

0.07

Subordinated notes

224,092

3,146

5.69

223,711

3,172

5.70

Subordinated debentures(1)

120,540

942

3.17

119,984

1,288

4.31

Total interest bearing liabilities

18,434,999

29,428

0.65

16,501,813

62,198

1.52

Non-interest bearing liabilities:

Non-interest bearing deposits

3,972,815

2,927,296

Other non-interest bearing liabilities

328,401

243,598

Total liabilities

22,736,215

19,672,707

Common stockholders’ equity

4,307,174

4,118,614

Noncontrolling interest

3,088

3,112

Total liabilities and stockholders’
equity

$

27,046,477

$

23,794,433

Net interest income – FTE

$

235,911

$

210,908

Net interest margin – FTE

3.86

%

3.96

%

Core spread(2)

4.78

%

4.19

%

(1) The interest expense and the rates for “other borrowings” and for “subordinated debentures” were affected by capitalized interest. Capitalized interest included in other borrowings totaled $0.03 million for the first quarter of 2021 compared to $0.36 million for the first quarter of 2020. In the absence of this interest capitalization, the rates on other borrowings would have been 0.55% for the first quarter of 2021 and 0.55% for the first quarter of 2020. Capitalized interest included in subordinated debentures totaled $0.14 million for the first quarter of 2020 (none in the first quarter of 2021). In the absence of this interest capitalization, the rate on subordinated debentures would have been 4.80% for the first quarter of 2020.

(2) Core spread is the difference between the yield on the Bank’s non-purchased loans-FTE and the cost of its interest bearing deposits.


Bank OZK
Reconciliation of Non-GAAP Financial Measures

Calculation of Average Tangible Common Stockholders’ Equity
and the Annualized Return on Average Tangible Common Stockholders’ Equity
Unaudited

Three Months Ended

March 31,

December 31,

2021

2020

2020

(Dollars in thousands)

Net income available to common stockholders

$

148,416

$

11,866

$

120,513

Average common stockholders’ equity before
noncontrolling interest

$

4,307,174

$

4,118,614

$

4,219,249

Less average intangible assets:

Goodwill

(660,789

)

(660,789

)

(660,789

)

Core deposit and other intangible assets, net of
accumulated amortization

(13,828

)

(22,412

)

(15,578

)

Total average intangibles

(674,617

)

(683,201

)

(676,367

)

Average tangible common stockholders’ equity

$

3,632,557

$

3,435,413

$

3,542,882

Return on average common stockholders’ equity(1)

13.97

%

1.16

%

11.36

%

Return on average tangible common stockholders'
equity(1)

16.57

%

1.39

%

13.53

%

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


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

March 31,

December 31,

2021

2020

2020

(In thousands, except per share amounts)

Total common stockholders’ equity before noncontrolling interest

$

4,383,205

$

4,083,150

$

4,272,271

Less intangible assets:

Goodwill

(660,789

)

(660,789

)

(660,789

)

Core deposit and other intangible assets, net of accumulated
amortization

(12,939

)

(20,958

)

(14,669

)

Total intangibles

(673,728

)

(681,747

)

(675,458

)

Total tangible common stockholders' equity

$

3,709,477

$

3,401,403

$

3,596,813

Shares of common stock outstanding

129,719

129,324

129,350

Book value per common share

$

33.79

$

31.57

$

33.03

Tangible book value per common share

$

28.60

$

26.30

$

27.81


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

March 31,

2021

2020

(Dollars in thousands)

Total common stockholders’ equity before noncontrolling interest

$

4,383,205

$

4,083,150

Less intangible assets:

Goodwill

(660,789

)

(660,789

)

Core deposit and other intangible assets, net of accumulated amortization

(12,939

)

(20,958

)

Total intangibles

(673,728

)

(681,747

)

Total tangible common stockholders' equity

$

3,709,477

$

3,401,403

Total assets

$

27,276,892

$

24,565,810

Less intangible assets:

Goodwill

(660,789

)

(660,789

)

Core deposit and other intangible assets, net of accumulated amortization

(12,939

)

(20,958

)

Total intangibles

(673,728

)

(681,747

)

Total tangible assets

$

26,603,164

$

23,884,063

Ratio of total common stockholders’ equity to total assets

16.07

%

16.62

%

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

13.94

%

14.24

%


Calculation of Pre-Tax Pre-Provision Net Revenue
Unaudited

Three Months Ended

March 31,

December 31,

2021

2020

2020

(Dollars in thousands)

Income before taxes

$

192,253

$

16,367

$

156,117

Provision for credit losses

(31,559

)

117,663

6,750

Pre-tax pre-provision net revenue

$

160,694

$

134,030

$

162,867