Bank OZK Announces Record Second Quarter 2023 Earnings

Bank OZK

LITTLE ROCK, Ark., July 20, 2023 (GLOBE NEWSWIRE) -- 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				Additional Paid-in Capital					Retained Earnings				Accumulated Other Comprehensive (Loss) Income				Non-Controlling Interest			Total
		(Dollars in thousands, except per share amounts)
Three months ended 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				Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive (Loss) Income				Non-Controlling Interest			Total
		(Dollars in thousands, except per share amounts)
Three months ended 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’ Equity and 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

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