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CST: 26/08/2019 00:33:18   

Bank OZK Announces First Quarter 2019 Earnings

130 Days ago

LITTLE ROCK, Ark., April 17, 2019 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income for the first quarter of 2019 was $110.7 million, a 2.2% decrease from net income of $113.1 million for the first quarter of 2018. The Bank’s net income for the first quarter of 2019 included no tax-exempt bank owned life insurance (“BOLI”) death benefits compared to $2.7 million in the first quarter of 2018. Diluted earnings per common share for the first quarter of 2019 were $0.86, a 2.3% decrease from $0.88 for the first quarter of 2018.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first quarter of 2019 were 1.99%, 11.77% and 14.40%, respectively, compared to 2.16%, 13.17% and 16.53%, respectively, for the first quarter of 2018. The calculation of the Bank’s return on average tangible common stockholders’ equity and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release. 

George Gleason, Chairman and Chief Executive Officer, stated, “We are pleased with our first quarter results. Our $110.7 million net income, 1.99% annualized return on average assets, 4.53% net interest margin and 38.5% efficiency ratio provide an excellent start for 2019. Our team of industry and technology professionals is well-positioned to capitalize on opportunities throughout 2019 and beyond.”

KEY BALANCE SHEET METRICS

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

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

Common stockholders’ equity was $3.88 billion at March 31, 2019, a 10.1% increase from $3.53 billion at March 31, 2018. Tangible common stockholders’ equity was $3.19 billion at March 31, 2019, a 13.1% increase from $2.82 billion at March 31, 2018. Book value per common share was $30.11 at March 31, 2019, a 9.8% increase from $27.42 at March 31, 2018. Tangible book value per common share was $24.73 at March 31, 2019, a 12.8% increase from $21.93 at March 31, 2018. The calculations of the Bank’s tangible common stockholders’ equity and tangible book value per common share and the reconciliations to GAAP are included in the schedules accompanying this release.

The Bank’s ratio of total common stockholders’ equity to total assets increased to 16.88% at March 31, 2019 compared to 16.00% at March 31, 2018. Its ratio of total tangible common stockholders’ equity to total tangible assets increased to 14.29% at March 31, 2019 compared to 13.22% at March 31, 2018. The calculation of the Bank’s ratio of total tangible common stockholders’ equity to total tangible assets and the reconciliation to GAAP are included in the schedules accompanying this release. 

MANAGEMENT’S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS

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

Management will conduct a conference call to take questions on these quarterly results and management’s comments at 3:00 p.m. CT (4:00 p.m. ET) on April 18, 2019. Interested parties may listen to this call by dialing 1-844-818-5110 (U.S. and Canada) or 210-229-8841 (internationally) and asking for the Bank OZK conference call. A recorded playback of the call will be available for one week following the call at 1-855-859-2056 (U.S. and Canada) or 404-537-3406 (internationally). The passcode for this playback is 3885035. The call will be available live or in a recorded version on the Bank’s Investor Relations website at ir.ozk.com under “Company News/Webcasts.” The Bank will also provide a transcript of the conference call on its Investor Relations website.

The Bank files annual, quarterly and current reports, proxy materials and other information required by the Securities Exchange Act of 1934 with the Federal Deposit Insurance Corporation (“FDIC”), copies of which are available electronically at the FDIC’s website at https://efr.fdic.gov/fcxweb/efr/index.html and are also available on the Bank’s Investor Relations website at http://ir.ozk.com. To receive automated email alerts for these materials, please visit http://ir.ozk.com/EmailNotification to sign up.

NON-GAAP FINANCIAL MEASURES

This release contains certain non-GAAP financial measures. The Bank uses these non-GAAP financial measures, specifically return on average tangible common stockholders’ equity, tangible book value per common share, total tangible common stockholders’ equity and the ratio of total tangible common stockholders’ equity to total tangible assets, as important measures of the strength of its capital and its ability to generate earnings on its tangible capital invested by its shareholders. These measures typically adjust GAAP financial measures to exclude intangible assets. Management believes presentation of these non-GAAP financial measures provides useful supplemental information which contributes to a proper understanding of the financial results and capital levels of the Bank. These non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release under the caption “Reconciliation of Non-GAAP Financial Measures.”

FORWARD-LOOKING STATEMENTS

This release and other communications by the Bank include certain “forward-looking statements” regarding the Bank’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time. Those statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: potential delays or other problems implementing the Bank’s growth, expansion and acquisition strategies, including delays in identifying sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices; the ability to enter into and/or close additional acquisitions; problems with, or additional expenses relating to, integrating acquisitions; the inability to realize expected cost savings and/or synergies from acquisitions; problems with managing acquisitions; the effect of the announcements of any future acquisition on customer relationships and operating results; the availability of and access to capital; possible downgrades in the Bank’s credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing or acquired deposits or to retain or grow loans, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and long-term interest rates or changes in the relative relationships of various interest rate indices; competitive factors and pricing pressures, including their effect on the Bank’s net interest margin or core spread; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions; changes in U.S. government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank or its customers; adoption of new accounting standards or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this press release or as detailed from time to time in the other public reports the Bank files with the FDIC, including those factors included in the disclosures under the headings “Forward-Looking Information” and “Item 1A. Risk Factors” in the Bank’s most recent Annual Report on Form 10-K for the year ended December 31, 2018 and its quarterly reports on Form 10-Q. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those projected in, or implied by, such forward-looking statements. The Bank disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.

GENERAL INFORMATION

Bank OZK (Nasdaq: OZK) is a regional bank providing innovative financial solutions delivered by expert bankers with a relentless pursuit of excellence. Bank OZK has been recognized as the top performing bank in the nation in its asset size 13 times in the past eight years. Headquartered in Little Rock, Arkansas, Bank OZK conducts operations through 254 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, California, New York and Mississippi. Bank OZK can be found at www.ozk.com and on Facebook, Twitter and LinkedIn or contacted at (501) 978-2265 or P. O. Box 8811, Little Rock, Arkansas 72231-8811. 

 

Bank OZK
Consolidated Balance Sheets

Unaudited

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

 

Bank OZK
Consolidated Statements of Income
Unaudited

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

 

Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited

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

 

Bank OZK
Summary of Non-Interest Expense
Unaudited

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

 

Bank OZK
Summary of Total Loans Outstanding
Unaudited

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

 

Summary of Deposits
Unaudited

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

 

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

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

(1)Calculations of tangible book value per common share and return on average tangible common stockholders’ equity and the
    reconciliations to GAAP are included in the schedules accompanying this release.
(2)Ratios for interim periods annualized based on actual days.
(3)Excludes purchased loans and net charge-offs related to such loans.
(4)Excludes purchased loans, except for their inclusion in total assets.
(5)Excludes purchased loans and any allowance for such loans.

 

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

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

(1)Ratios for interim periods annualized based on actual days.
(2)Excludes purchased loans and net charge-offs related to such loans.
(3)Excludes purchased loans, except for their inclusion in total assets.
(4)Excludes purchased loans and any allowance for such loans.


Bank OZK

Average Consolidated Balance Sheets and Net Interest Analysis – FTE
Unaudited

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

 

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

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

 

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

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

 

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

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

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

 

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