LITTLE ROCK, Ark., Oct. 17, 2019 (GLOBE NEWSWIRE) — Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income for the third quarter of 2019 was $103.9 million, a 40.1% increase from $74.2 million for the third quarter of 2018, but a 6.0% decrease from $110.5 million for the second quarter of 2019.  Diluted earnings per common share for the third quarter of 2019 were $0.81, a 39.7% increase from $0.58 for the third quarter of 2018, but a 5.8% decrease from $0.86 for the second quarter of 2019.

The Bank’s results for the third quarter of 2018 included (i) pretax expenses of $10.8 million as a result of its name change and strategic rebranding and (ii) net charge-offs of $45.5 million on two unrelated credits.

For the first nine months of 2019, net income totaled $325.1 million, a 7.6% increase from $302.1 million for the first nine months of 2018.  Diluted earnings per common share for the first nine months of 2019 were $2.52, a 7.2% increase from $2.35 for the first nine months of 2018.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the third quarter of 2019 were 1.81%, 10.22% and 12.33%, respectively, compared to 1.33%, 8.07% and 9.99%, respectively, for the third quarter of 2018.  The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first nine months of 2019 were 1.92%, 11.07%, and 13.44%, respectively, compared to 1.85%, 11.32%, and 14.11%, respectively, for the first nine months of 2018. The calculation of the Bank’s annualized 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 very pleased to have once again delivered financial metrics among the best in the industry for the quarter just ended.  We continue to maintain our focus on our strong credit culture and consistent discipline, which are paramount in this interest rate and competitive environment.  Our excellent team of bankers have us well positioned for continued success as we remain focused on delivering long-term value for our shareholders.”

KEY BALANCE SHEET METRICS

Total loans were $17.73 billion at September 30, 2019, a 6.0% increase from $16.73 billion at September 30, 2018.  Non-purchased loans, which exclude loans acquired in previous acquisitions, were $16.31 billion at September 30, 2019, a 12.9% increase from $14.44 billion at September 30, 2018.  Purchased loans, which consist of loans acquired in previous acquisitions, were $1.43 billion at September 30, 2019, a 37.5% decrease from $2.29 billion at September 30, 2018.  The unfunded balance of closed loans was $11.43 billion at September 30, 2019, a 3.9% decrease from $11.89 billion at September 30, 2018, but a 2.4% increase from $11.17 billion at June 30, 2019.

Deposits were $18.44 billion at September 30, 2019, a 3.5% increase from $17.82 billion at September 30, 2018.  Total assets were $23.40 billion at September 30, 2019, a 6.0% increase from $22.09 billion at September 30, 2018.

Common stockholders’ equity was $4.08 billion at September 30, 2019, an 11.6% increase from $3.65 billion at September 30, 2018.  Tangible common stockholders’ equity was $3.39 billion at September 30, 2019, a 14.8% increase from $2.95 billion at September 30, 2018.  Book value per common share was $31.63 at September 30, 2019, an 11.3% increase from $28.41 at September 30, 2018.  Tangible book value per common share was $26.30 at September 30, 2019, a 14.5% increase from $22.97 at September 30, 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 17.43% at September 30, 2019 compared to 16.54% at September 30, 2018.  Its ratio of total tangible common stockholders’ equity to total tangible assets increased to 14.93% at September 30, 2019 compared to 13.81% at September 30, 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 third quarter of 2019. 

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 October 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 7188336.  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 satisfactory sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices or relocating 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 change in the method for determining 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; 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; adoption of new accounting standards, including the estimated effects from the adoption of the current expected credit loss (“CECL”) model on January 1, 2020, 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, 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 more than 250 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. 

Investor Contact: Tim Hicks (501) 978-2336
Media Contact: Susan Blair (501) 978-2217
Bank OZK
Consolidated Balance Sheets
Unaudited
September 30, December 31,
2019 2018
(Dollars in thousands, except per share amounts)
ASSETS
Cash and cash equivalents $ 1,029,946 $ 290,672
Investment securities – available for sale (“AFS”) 2,414,722 2,862,340
Federal Home Loan Bank of Dallas and other banker’s bank stocks 13,656 25,941
Non-purchased loans 16,307,621 15,073,791
Purchased loans 1,427,230 2,044,032
Allowance for loan losses (109,001 ) (102,264 )
Net loans 17,625,850 17,015,559
Premises and equipment, net 687,511 567,189
Foreclosed assets 33,319 16,171
Accrued interest receivable 76,218 81,968
Bank owned life insurance (“BOLI”) 735,531 721,238
Goodwill and other intangible assets, net 687,397 696,461
Other, net 98,529 110,491
Total assets $ 23,402,679 $ 22,388,030
LIABILITIES AND STOCKHOLDERS EQUITY
Deposits:
Demand non-interest bearing $ 2,793,369 $ 2,748,273
Savings and interest bearing transaction 8,441,339 9,682,713
Time 7,205,370 5,507,429
Total deposits 18,440,078 17,938,415
Repurchase agreements with customers 12,156 20,564
Other borrowings 301,421 96,692
Subordinated notes 223,567 223,281
Subordinated debentures 119,775 119,358
Accrued interest payable and other liabilities 224,234 216,355
Total liabilities 19,321,231 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 September 30, 2019 or December 31, 2018
Common stock; $0.01 par value; 300,000,000 shares authorized;
128,946,359 and 128,611,049 shares issued and outstanding at
September 30, 2019 and December 31, 2018, respectively
1,289 1,286
Additional paid-in capital 2,247,973 2,237,948
Retained earnings 1,801,414 1,565,201
Accumulated other comprehensive income (loss) 27,648 (34,105 )
Total stockholders’ equity before noncontrolling interest 4,078,324 3,770,330
Noncontrolling interest 3,124 3,035
Total stockholders’ equity 4,081,448 3,773,365
Total liabilities and stockholders’ equity $ 23,402,679 $ 22,388,030
Bank OZK
Consolidated Statements of Income
Unaudited
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans $ 244,954 $ 219,847 $ 740,900 $ 620,659
Purchased loans 26,042 40,173 84,756 138,012
Investment securities:
Taxable 12,511 12,472 40,992 35,380
Tax-exempt 3,363 3,991 10,930 12,252
Deposits with banks and federal funds sold 2,647 1,112 4,001 2,448
Total interest income 289,517 277,595 881,579 808,751
Interest expense:
Deposits 66,248 51,785 196,727 130,009
Repurchase agreements with customers 5 215 39 759
Other borrowings 90 144 1,497 824
Subordinated notes 3,216 3,216 9,542 9,542
Subordinated debentures 1,178 1,621 4,570 4,567
Total interest expense 70,737 56,981 212,375 145,701
Net interest income 218,780 220,614 669,204 663,050
Provision for loan losses 7,854 41,949 21,303 57,126
Net interest income after provision for loan losses 210,926 178,665 647,901 605,924
Non-interest income:
Service charges on deposit accounts 10,827 9,730 30,841 28,959
Trust income 1,975 1,730 5,544 5,114
BOLI income 5,414 5,321 15,753 18,160
Other income from purchased loans 674 1,418 2,925 5,413
Loan service, maintenance and other fees 4,197 4,724 13,636 15,108
Gains (losses) on sales of other assets 189 (518 ) 875 1,753
Net gains on investment securities 713 17
Other 3,170 1,716 6,834 5,691
Total non-interest income 26,446 24,121 77,121 80,215
Non-interest expense:
Salaries and employee benefits 48,376 41,477 140,801 128,641
Net occupancy and equipment 14,825 14,358 44,163 42,335
Other operating expenses 37,713 47,107 111,760 114,883
Total non-interest expense 100,914 102,942 296,724 285,859
Income before taxes 136,458 99,844 428,298 400,280
Provision for income taxes 32,574 25,665 103,189 98,227
Net income 103,884 74,179 325,109 302,053
Earnings attributable to noncontrolling interest 7 1 (9 ) 22
Net income available to common stockholders $ 103,891 $ 74,180 $ 325,100 $ 302,075
Basic earnings per common share $ 0.81 $ 0.58 $ 2.52 $ 2.35
Diluted earnings per common share $ 0.81 $ 0.58 $ 2.52 $ 2.35
Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Non-
Controlling
Interest
Total
(Dollars in thousands, except per share amounts)
Three months ended September 30, 2019:
Balances – June 30, 2019 $ 1,289 $ 2,243,779 $ 1,728,486 $ 19,693 $ 3,131 $ 3,996,378
Net income 103,884 103,884
Earnings attributable to noncontrolling interest 7 (7 )
Total other comprehensive income 7,955 7,955
Common stock dividends paid, $0.24 per
share
(30,963 ) (30,963 )
Issuance of 10,800 shares of common
stock for exercise of stock options
214 214
Stock-based compensation expense 3,980 3,980
Forfeitures of 11,157 shares of unvested
restricted common stock
Balances – September 30, 2019 $ 1,289 $ 2,247,973 $ 1,801,414 $ 27,648 $ 3,124 $ 4,081,448
Nine months ended September 30, 2019:
Balances – December 31, 2018 $ 1,286 $ 2,237,948 $ 1,565,201 $ (34,105 ) $ 3,035 $ 3,773,365
Net income 325,109 325,109
Earnings attributable to noncontrolling
interest
(9 ) 9
Total other comprehensive income 61,753 61,753
Common stock dividends paid, $0.69
per share
(88,887 ) (88,887 )
Noncontrolling interest cash contribution 80 80
Issuance of 67,350 shares of common
stock for exercise of stock options
1 1,090 1,091
Issuance of 406,074 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 10,584 10,584
Forfeiture of 75,372 shares of unvested
restricted common stock
(1 ) 1
Balances – September 30, 2019 $ 1,289 $ 2,247,973 $ 1,801,414 $ 27,648 $ 3,124 $ 4,081,448
Bank OZK
Consolidated Statements of Stockholders’ Equity (continued)
Unaudited
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Non-
Controlling
Interest
Total
(Dollars in thousands, except per share amounts)
Three months ended September 30, 2018:
Balances – June 30, 2018 $ 1,286 $ 2,230,809 $ 1,428,721 $ (46,913 ) $ 3,039 $ 3,616,942
Net income 74,179 74,179
Earnings attributable to noncontrolling interest 1 (1 )
Total other comprehensive loss (12,338 ) (12,338 )
Common stock dividends paid, $0.20 per
share
(25,723 ) (25,723 )
Issuance of 6,100 shares of common
stock for exercise of stock options
92 92
Issuance of 5,511 shares of unvested
restricted common stock
Stock-based compensation expense 3,482 3,482
Forfeitures of 18,791 shares of unvested
restricted common stock
Balances – September 30, 2018 $ 1,286 $ 2,234,383 $ 1,477,178 $ (59,251 ) $ 3,038 $ 3,656,634
Nine months ended September 30, 2018:
Balances – December 31, 2017 $ 1,283 $ 2,221,844 $ 1,250,313 $ (12,712 ) $ 3,060 $ 3,463,788
Net income 302,053 302,053
Earnings attributable to noncontrolling interest 22 (22 )
Total other comprehensive loss (46,539 ) (46,539 )
Common stock dividends paid, $0.585 per
share
(75,210 ) (75,210 )
Issuance of 216,990 shares of common
stock for exercise of stock options
2 5,677 5,679
Issuance of 220,102 shares of unvested
restricted common stock
2 (2 )
Repurchase and cancellation of 71,750 shares
of common stock
(1 ) (3,769 ) (3,770 )
Stock-based compensation expense 10,633 10,633
Forfeitures of 43,655 shares of unvested
restricted common stock
Balances – September 30, 2018 $ 1,286 $ 2,234,383 $ 1,477,178 $ (59,251 ) $ 3,038 $ 3,656,634
Bank OZK
Summary of Non-Interest Expense
Unaudited
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
(Dollars in thousands)
Salaries and employee benefits $ 48,376 $ 41,477 $ 140,801 $ 128,641
Net occupancy and equipment 14,825 14,358 44,163 42,335
Other operating expenses:
Professional and outside services 9,204 9,725 25,874 27,542
Software and data processing 5,095 3,336 14,561 9,786
Deposit insurance and assessments 2,505 3,948 9,645 11,068
Travel and meals 2,777 2,517 8,385 7,168
Telecommunication services 2,094 3,373 8,248 10,056
Postage and supplies 2,040 2,517 6,201 6,930
Advertising and public relations 2,067 6,977 5,421 10,084
ATM expense 1,277 1,202 3,363 3,683
Loan collection and repossession expense 317 932 2,218 2,225
Writedowns of foreclosed and other assets 354 544 1,509 1,156
Writedown of signage due to strategic rebranding 4,915 4,915
Amortization of intangibles 2,907 3,145 9,064 9,435
Other 7,076 3,976 17,271 10,835
Total non-interest expense $ 100,914 $ 102,942 $ 296,724 $ 285,859
Bank OZK
Summary of Total Loans Outstanding
Unaudited
September 30, 2019 December 31, 2018
(Dollars in thousands)
Real estate:
Residential 1-4 family $ 1,016,834 5.7 % $ 1,049,460 6.1 %
Non-farm/non-residential 3,883,113 21.9 4,319,388 25.2
Construction/land development 6,682,143 37.7 6,562,185 38.4
Agricultural 207,801 1.2 165,088 1.0
Multifamily residential 1,358,127 7.6 1,116,026 6.5
Total real estate 13,148,018 74.1 13,212,147 77.2
Commercial and industrial 706,048 4.0 823,417 4.8
Consumer 2,921,307 16.5 2,345,863 13.7
Other 959,478 5.4 736,396 4.3
Total loans 17,734,851 100.0 % 17,117,823 100.0 %
Allowance for loan losses (109,001 ) (102,264 )
Net loans $ 17,625,850 $ 17,015,559
Summary of Deposits
Unaudited
September 30, 2019 December 31, 2018
(Dollars in thousands)
Non-interest bearing $ 2,793,369 15.1 % $ 2,748,273 15.3 %
Interest bearing:
Transaction (NOW) 2,730,018 14.8 2,359,299 13.2
Savings and money market 5,711,321 31.0 7,323,414 40.8
Time deposits less than $100 3,445,873 18.7 2,297,101 12.8
Time deposits of $100 or more 3,759,497 20.4 3,210,328 17.9
Total deposits $ 18,440,078 100.0 % $ 17,938,415 100.0 %
Bank OZK
Selected Consolidated Financial Data
Unaudited
Three Months Ended
September 30,
Nine Months Ended
September 30,
2019 2018 % Change 2019 2018 % Change
(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income $ 218,780 $ 220,614 (0.8 )% $ 669,204 $ 663,050 0.9 %
Provision for loan losses 7,854 41,949 (81.3 ) 21,303 57,126 (62.7 )
Non-interest income 26,446 24,121 9.6 77,121 80,215 (3.9 )
Non-interest expense 100,914 102,942 (2.0 ) 296,724 285,859 3.8
Net income available to common stockholders 103,891 74,180 40.1 325,100 302,075 7.6
Common stock data:
Net income per share – diluted $ 0.81 $ 0.58 39.7 % $ 2.52 $ 2.35 7.2 %
Net income per share – basic 0.81 0.58 39.7 2.52 2.35 7.2
Cash dividends per share 0.24 0.20 20.0 0.69 0.585 17.9
Book value per share 31.63 28.41 11.3 31.63 28.41 11.3
Tangible book value per share(1) 26.30 22.97 14.5 26.30 22.97 14.5
Diluted shares outstanding (thousands) 129,012 128,744 128,995 128,771
End of period shares outstanding (thousands) 128,946 128,609 128,946 128,609
Balance sheet data at period end:
Total assets $ 23,402,679 $ 22,086,539 6.0 % $ 23,402,679 $ 22,086,539 6.0 %
Total loans 17,734,851 16,725,791 6.0 17,734,851 16,725,791 6.0
Non-purchased loans 16,307,621 14,440,623 12.9 16,307,621 14,440,623 12.9
Purchased loans 1,427,230 2,285,168 (37.5 ) 1,427,230 2,285,168 (37.5 )
Allowance for loan losses 109,001 98,200 11.0 109,001 98,200 11.0
Foreclosed assets 33,319 18,470 80.4 33,319 18,470 80.4
Investment securities – AFS 2,414,722 2,669,877 (9.6 ) 2,414,722 2,669,877 (9.6 )
Goodwill and other intangible assets, net 687,397 699,606 (1.7 ) 687,397 699,606 (1.7 )
Deposits 18,440,078 17,822,915 3.5 18,440,078 17,822,915 3.5
Repurchase agreements with customers 12,156 51,891 (76.6 ) 12,156 51,891 (76.6 )
Other borrowings 301,421 1,729 NM 301,421 1,729 NM
Subordinated notes 223,567 223,185 0.2 223,567 223,185 0.2
Subordinated debentures 119,775 119,217 0.5 119,775 119,217 0.5
Unfunded balance of closed loans 11,429,918 11,891,247 (3.9 ) 11,429,918 11,891,247 (3.9 )
Total common stockholders’ equity 4,078,324 3,653,596 11.6 4,078,324 3,653,596 11.6
Net unrealized gains (losses) on investment securities AFS
included in common stockholders’ equity
27,648 (59,251 ) 27,648 (59,251 )
Loan (including purchased loans) to deposit ratio 96.18 % 93.84 % 96.18 % 93.84 %
Selected ratios:
Return on average assets(2) 1.81 % 1.33 % 1.92 % 1.85 %
Return on average common stockholders’ equity(2) 10.22 8.07 11.07 11.32
Return on average tangible common stockholders’ equity(1) (2) 12.33 9.99 13.44 14.11
Average common equity to total average assets 17.69 16.47 17.31 16.38
Net interest margin – FTE(2) 4.26 4.47 4.41 4.60
Efficiency ratio 40.98 41.87 39.58 38.28
Net charge-offs to average non-purchased loans(2) (3) 0.07 1.32 0.08 0.49
Net charge-offs to average total loans(2) 0.12 1.14 0.11 0.43
Nonperforming loans to total loans(4) 0.17 0.23 0.17 0.23
Nonperforming assets to total assets(4) 0.26 0.23 0.26 0.23
Allowance for loan losses to non-purchased loans(5) 0.66 0.67 0.66 0.67
Other information:
Non-accrual loans(4) $ 25,552 $ 32,960 $ 25,552 $ 32,960
Accruing loans – 90 days past due(4)
Troubled and restructured non-purchased loans – accruing (4) 1,510 1,510
Impaired purchased loans 12,969 5,064 12,969 5,064

(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.
NM – Not meaningful

Bank OZK
Selected Consolidated Financial Data
Unaudited
Three Months Ended
September 30, June 30,
2019 2019 % Change
(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income $ 218,780 $ 224,536 (2.6 )%
Provision for loan losses 7,854 6,769 16.0
Non-interest income 26,446 26,603 (0.6 )
Non-interest expense 100,914 99,131 1.8
Net income available to common stockholders 103,891 110,503 (6.0 )
Common stock data:
Net income per share – diluted $ 0.81 $ 0.86 (5.8 )%
Net income per share – basic 0.81 0.86 (5.8 )
Cash dividends per share 0.24 0.23 4.3
Book value per share 31.63 30.97 2.1
Tangible book value per share (1) 26.30 25.61 2.7
Diluted shares outstanding (thousands) 129,012 129,079
End of period shares outstanding (thousands) 128,946 128,947
Balance sheet data at period end:
Total assets $ 23,402,679 $ 22,960,731 1.9 %
Total loans 17,734,851 17,485,205 1.4
Non-purchased loans 16,307,621 15,786,809 3.3
Purchased loans 1,427,230 1,698,396 (16.0 )
Allowance for loan losses 109,001 106,642 2.2
Foreclosed assets 33,319 33,467 (0.4 )
Investment securities – AFS 2,414,722 2,548,489 (5.2 )
Goodwill and other intangible assets, net 687,397 690,304 (0.4 )
Deposits 18,440,078 18,186,215 1.4
Repurchase agreements with customers 12,156 10,909 11.4
Other borrowings 301,421 201,455 49.6
Subordinated notes 223,567 223,471 0.1
Subordinated debentures 119,775 119,635 0.1
Unfunded balance of closed loans 11,429,918 11,167,055 2.4
Total common stockholders’ equity 4,078,324 3,993,247 2.1
Net unrealized gains on investment securities AFS
included in common stockholders’ equity
27,648 19,693
Loan (including purchased loans) to deposit ratio 96.18 % 96.15 %
Selected ratios:
Return on average assets(2) 1.81 % 1.95 %
Return on average common stockholders’ equity(2) 10.22 11.29
Return on average tangible common stockholders’ equity(1) (2) 12.33 13.70
Average common equity to total average assets 17.69 17.31
Net interest margin – FTE(2) 4.26 4.45
Efficiency ratio 40.98 39.30
Net charge-offs to average non-purchased loans(2) (3) 0.07 0.12
Net charge-offs to average total loans(2) 0.12 0.14
Nonperforming loans to total loans(4) 0.17 0.15
Nonperforming assets to total assets(4) 0.26 0.25
Allowance for loan losses to non-purchased loans(5) 0.66 0.67
Other information:
Non-accrual loans(4) $ 25,552 $ 22,860
Accruing loans – 90 days past due(4)
Troubled and restructured non-purchased loans – accruing(4) 1,510 1,399
Impaired purchased loans 12,969 15,440

(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
Unaudited
12/31/17 3/31/18 6/30/18 9/30/18 12/31/18 3/31/19 6/30/19 9/30/19
(Dollars in thousands, except per share amounts)
Earnings Summary:
Net interest income $ 214,831 $ 217,776 $ 224,661 $ 220,614 $ 228,382 $ 225,888 $ 224,536 $ 218,780
Federal tax (FTE) adjustment 2,450 1,166 1,151 1,132 1,219 1,207 1,136 1,038
Net interest income (FTE) 217,281 218,942 225,812 221,746 229,601 227,095 225,672 219,818
Provision for loan losses (9,279 ) (5,567 ) (9,610 ) (41,949 ) (7,271 ) (6,681 ) (6,769 ) (7,854 )
Non-interest income 30,213 28,707 27,386 24,121 27,560 24,072 26,603 26,446
Non-interest expense (86,177 ) (93,810 ) (89,107 ) (102,942 ) (94,893 ) (96,678 ) (99,131 ) (100,914 )
Pretax income (FTE) 152,038 148,272 154,481 100,976 154,997 147,808 146,375 137,496
FTE adjustment (2,450 ) (1,166 ) (1,151 ) (1,132 ) (1,219 ) (1,207 ) (1,136 ) (1,038 )
Provision for income taxes (3,434 ) (33,973 ) (38,589 ) (25,665 ) (38,750 ) (35,889 ) (34,726 ) (32,574 )
Noncontrolling interest 10 11 10 1 3 (6 ) (10 ) 7
Net income available to
common stockholders
$ 146,164 $ 113,144 $ 114,751 $ 74,180 $ 115,031 $ 110,706 $ 110,503 $ 103,891
Earnings per common share – diluted $ 1.14 $ 0.88 $ 0.89 $ 0.58 $ 0.89 $ 0.86 $ 0.86 $ 0.81
Non-interest Income:
Service charges on deposit accounts $ 10,058 $ 9,525 $ 9,704 $ 9,730 $ 10,585 $ 9,722 $ 10,291 $ 10,827
Trust income 1,729 1,793 1,591 1,730 1,821 1,730 1,839 1,975
BOLI income 5,166 7,580 5,259 5,321 5,751 5,162 5,178 5,414
Other income from purchased loans 2,009 1,251 2,744 1,418 2,370 795 1,455 674
Loan service, maintenance and
other fees
4,289 4,743 5,641 4,724 5,245 4,874 4,565 4,197
Net gains on investment securities 1,201 17 713
Gains (losses) on sales of other assets 1,899 1,426 844 (518 ) 465 284 402 189
Other 3,862 2,372 1,603 1,716 1,323 1,505 2,160 3,170
Total non-interest income $ 30,213 $ 28,707 $ 27,386 $ 24,121 $ 27,560 $ 24,072 $ 26,603 $ 26,446
Non-interest Expense:
Salaries and employee benefits $ 38,417 $ 45,499 $ 41,665 $ 41,477 $ 41,837 $ 44,868 $ 47,558 $ 48,376
Net occupancy expense 13,474 14,150 13,827 14,358 14,027 14,750 14,587 14,825
Other operating expenses 34,286 34,161 33,615 47,107 39,029 37,060 36,986 37,713
Total non-interest expense $ 86,177 $ 93,810 $ 89,107 $ 102,942 $ 94,893 $ 96,678 $ 99,131 $ 100,914
Balance Sheet Data:
Total assets $ 21,275,647 $ 22,039,439 $ 22,220,380 $ 22,086,539 $ 22,388,030 $ 23,005,652 $ 22,960,731 $ 23,402,679
Non-purchased loans 12,733,937 13,674,561 14,183,533 14,440,623 15,073,791 15,610,681 15,786,809 16,307,621
Purchased loans 3,309,092 2,934,535 2,580,341 2,285,168 2,044,032 1,864,715 1,698,396 1,427,230
Investment securities – AFS 2,593,873 2,603,600 2,608,439 2,669,877 2,862,340 2,769,602 2,548,489 2,414,722
Deposits 17,192,345 17,833,672 17,897,085 17,822,915 17,938,415 18,476,868 18,186,215 18,440,078
Unfunded balance of closed loans 13,192,439 12,551,032 11,999,661 11,891,247 11,364,975 11,544,218 11,167,055 11,429,918
Common stockholders’ equity 3,460,728 3,526,605 3,613,903 3,653,596 3,770,330 3,882,643 3,993,247 4,078,324
Allowance for Loan Losses:
Balance at beginning of period $ 86,784 $ 94,120 $ 98,097 $ 104,638 $ 98,200 $ 102,264 $ 105,954 $ 106,642
Net charge-offs (1,943 ) (1,590 ) (3,069 ) (48,387 ) (3,207 ) (2,991 ) (6,081 ) (5,495 )
Provision for loan losses 9,279 5,567 9,610 41,949 7,271 6,681 6,769 7,854
Balance at end of period $ 94,120 $ 98,097 $ 104,638 $ 98,200 $ 102,264 $ 105,954 $ 106,642 $ 109,001
Selected Ratios:
Net interest margin – FTE(1) 4.72 % 4.69 % 4.66 % 4.47 % 4.55 % 4.53 % 4.45 % 4.26 %
Efficiency ratio 34.82 37.88 35.19 41.87 36.90 38.49 39.30 40.98
Net charge-offs to average
non-purchased loans(1) (2)
0.08 0.04 0.05 1.32 0.06 0.05 0.12 0.07
Net charge-offs to average
total loans(1)
0.05 0.04 0.07 1.14 0.07 0.07 0.14 0.12
Nonperforming loans
to total loans(3)
0.10 0.09 0.10 0.23 0.23 0.22 0.15 0.17
Nonperforming assets to total assets(3) 0.18 0.16 0.15 0.23 0.23 0.21 0.25 0.26
Allowance for loan losses to
total non-purchased loans(4)
0.73 0.71 0.73 0.67 0.67 0.67 0.67 0.66
Loans past due 30 days or
more, including past due non-
accrual loans, to total loans(3)
0.15 0.14 0.12 0.17 0.28 0.28 0.13 0.14

(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 September 30, Nine Months Ended September 30,
2019 2018 2019 2018
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
Earning assets:
Interest earning deposits and federal funds sold $ 486,174 $ 2,647 2.16 % $ 240,665 $ 1,112 1.83 % $ 242,476 $ 4,001 2.21 % $ 179,429 $ 2,448 1.82 %
Investment securities:
Taxable 2,027,267 12,511 2.45 2,117,498 12,472 2.34 2,169,218 40,992 2.53 2,078,710 35,380 2.28
Tax-exempt – FTE 462,927 4,256 3.65 532,503 5,051 3.76 495,694 13,835 3.73 544,728 15,509 3.81
Non-purchased loans – FTE 15,934,033 245,099 6.10 14,363,015 219,919 6.07 15,727,447 741,375 6.30 13,760,166 620,851 6.03
Purchased loans 1,553,398 26,042 6.65 2,436,888 40,173 6.54 1,760,740 84,756 6.44 2,789,226 138,012 6.62
Total earning assets – FTE 20,463,799 290,555 5.63 19,690,569 278,727 5.62 20,395,575 884,959 5.80 19,352,259 812,200 5.61
Non-interest earning assets 2,323,028 2,457,577 2,277,584 2,421,623
Total assets $ 22,786,827 $ 22,148,146 $ 22,673,159 $ 21,773,882
LIABILITIES AND STOCKHOLDERS EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction $ 8,792,998 $ 30,108 1.36 % $ 10,231,569 $ 33,753 1.31 % $ 9,318,915 $ 103,721 1.49 % $ 10,113,882 $ 85,571 1.13 %
Time deposits of $100 or more 3,564,862 19,803 2.20 3,306,014 13,288 1.59 3,292,375 52,056 2.11 3,175,855 33,096 1.39
Other time deposits 3,069,997 16,337 2.11 1,580,886 4,744 1.19 2,697,660 40,950 2.03 1,492,575 11,342 1.02
Total interest bearing deposits 15,427,857 66,248 1.70 15,118,469 51,785 1.36 15,308,950 196,727 1.72 14,782,312 130,009 1.18
Repurchase agreements with customers 9,037 5 0.24 97,249 215 0.88 14,062 39 0.37 123,587 759 0.82
Other borrowings (1) 29,422 90 1.21 63,909 144 0.90 122,254 1,497 1.64 88,101 824 1.25
Subordinated notes 223,516 3,216 5.71 223,135 3,216 5.72 223,419 9,542 5.71 223,042 9,542 5.72
Subordinated debentures (1) 119,700 1,178 3.90 119,145 1,621 5.40 119,558 4,570 5.11 119,006 4,567 5.13
Total interest bearing liabilities 15,809,532 70,737 1.78 15,621,907 56,981 1.45 15,788,243 212,375 1.80 15,336,048 145,701 1.27
Non-interest bearing liabilities:
Non-interest bearing deposits 2,728,596 2,685,802 2,736,350 2,689,818
Other non-interest bearing liabilities 213,505 189,003 220,126 177,824
Total liabilities 18,751,633 18,496,712 18,744,719 18,203,690
Common stockholders’ equity 4,032,066 3,648,398 3,925,321 3,567,148
Noncontrolling interest 3,128 3,036 3,119 3,044
Total liabilities and stockholders’ equity $ 22,786,827 $ 22,148,146 $ 22,673,159 $ 21,773,882
Net interest income – FTE $ 219,818 $ 221,746 $ 672,584 $ 666,499
Net interest margin – FTE 4.26 % 4.47 % 4.41 % 4.60 %

(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 $0.11 million for the third quarter and $0.86 million for the first nine months of 2019 and $0.20 million for the third quarter and $0.38 million for the first nine months of 2018.  In the absence of this interest capitalization, the rates on other borrowings would have been 2.69% for the third quarter and 2.57% for the first nine months of 2019 and 2.12% for the third quarter and 1.83% for the first nine months of 2018.  Capitalized interest included in subordinated debentures totaled $0.45 million for both the third quarter and the first nine months of 2019 and none in 2018.  In the absence of this interest capitalization, the rates on subordinated debentures would have been 5.39% for the third quarter and 5.61% for the first nine months of 2019

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 Nine Months Ended
September 30, June 30, September 30,
2019 2018 2019 2019 2018
(Dollars in thousands)
Net income available to common stockholders $ 103,891 $ 74,180 $ 110,503 $ 325,100 $ 302,075
Average common stockholders’ equity before
noncontrolling interest
$ 4,032,066 $ 3,648,398 $ 3,927,522 $ 3,925,321 $ 3,567,148
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
(28,275 ) (40,743 ) (31,225 ) (31,290 ) (43,886 )
Total average intangibles (689,064 ) (701,532 ) (692,014 ) (692,079 ) (704,675 )
Average tangible common stockholders’ equity $ 3,343,002 $ 2,946,866 $ 3,235,508 $ 3,233,242 $ 2,862,473
Return on average common stockholders’ equity(1) 10.22 % 8.07 % 11.29 % 11.07 % 11.32 %
Return on average tangible common stockholders’ equity(1) 12.33 % 9.99 % 13.70 % 13.44 % 14.11 %

(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
September 30, June 30,
2019 2018 2019
(In thousands, except per share amounts)
Total common stockholders’ equity before noncontrolling interest $ 4,078,324 $ 3,653,596 $ 3,993,247
Less intangible assets:
Goodwill (660,789 ) (660,789 ) (660,789 )
Core deposit and other intangible assets, net of accumulated amortization (26,608 ) (38,817 ) (29,515 )
Total intangibles (687,397 ) (699,606 ) (690,304 )
Total tangible common stockholders’ equity $ 3,390,927 $ 2,953,990 $ 3,302,943
Shares of common stock outstanding 128,946 128,609 128,947
Book value per common share $ 31.63 $ 28.41 $ 30.97
Tangible book value per common share $ 26.30 $ 22.97 $ 25.61
Calculation of Total Tangible Common Stockholders’
Equity and the Ratio of Total Tangible Common
Stockholders’ Equity to Total Tangible Assets
Unaudited
September 30,
2019 2018
(Dollars in thousands)
Total common stockholders’ equity before noncontrolling interest $ 4,078,324 $ 3,653,596
Less intangible assets:
Goodwill (660,789 ) (660,789 )
Core deposit and other intangible assets, net of accumulated amortization (26,608 ) (38,817 )
Total intangibles (687,397 ) (699,606 )
Total tangible common stockholders’ equity $ 3,390,927 $ 2,953,990
Total assets $ 23,402,679 $ 22,086,539
Less intangible assets:
Goodwill (660,789 ) (660,789 )
Core deposit and other intangible assets, net of accumulated amortization (26,608 ) (38,817 )
Total intangibles (687,397 ) (699,606 )
Total tangible assets $ 22,715,282 $ 21,386,933
Ratio of total common stockholders’ equity to total assets 17.43 % 16.54 %
Ratio of total tangible common stockholders’ equity to total
tangible assets
14.93 % 13.81 %
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