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Bank OZK Announces Record First Quarter 2023 Earnings
来源: Nasdaq GlobeNewswire / 20 4月 2023 15:01:01 America/Chicago
LITTLE ROCK, Ark., April 20, 2023 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income available to common stockholders for the first quarter of 2023 was a record $165.9 million, a 29.5% increase from $128.0 million for the first quarter of 2022. Diluted earnings per common share for the first quarter of 2023 were a record $1.41, a 38.2% increase from $1.02 for the first quarter of 2022.
Provision for credit losses was $35.8 million for the first quarter of 2023 compared to $4.2 million for the first quarter of 2022 and $32.5 million for the fourth quarter of 2022. The Bank’s total allowance for credit losses (“ACL”) was $393.8 million at March 31, 2023 compared to $293.5 million at March 31, 2022.
Pre-tax pre-provision net revenue (“PPNR”) was a record $246.4 million for the first quarter of 2023, a 42.4% increase from $173.1 million for the first quarter of 2022. The calculation of PPNR and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release.
The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first quarter of 2023 were 2.41%, 15.24% and 17.94%, respectively, compared to 1.97%, 11.67% and 13.73%, respectively, for the first quarter 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 first quarter. These results could not be achieved without the outstanding performance of our teammates. Our strong capital, liquidity and profitability have us well-positioned for the future.”KEY BALANCE SHEET METRICS
Total loans were $22.06 billion at March 31, 2023, a 16.5% increase from $18.93 billion at March 31, 2022. Deposits were $22.28 billion at March 31, 2023, a 9.6% increase from $20.33 billion at March 31, 2022. Total assets were $28.97 billion at March 31, 2023, a 9.1% increase from $26.56 billion at March 31, 2022.
Common stockholders’ equity was $4.42 billion at March 31, 2023, a 1.7% increase from $4.35 billion at March 31, 2022. Tangible common stockholders’ equity was $3.76 billion at March 31, 2023, a 2.1% increase from $3.68 billion at March 31, 2022. During the four quarters ended March 31, 2023, the Bank repurchased approximately 7.84 million shares of its common stock at a weighted average cost of $38.75, for a total of $303.7 million, including 2.35 million shares at a weighted average cost of $38.59, for a total of $85.34 million, during the quarter just ended.
Book value per common share was $38.43 at March 31, 2023, an 8.3% increase from $35.47 at March 31, 2022. Tangible book value per common share was $32.68 at March 31, 2023, a 8.8% increase from $30.03 at March 31, 2022.
The Bank’s ratio of total common stockholders’ equity to total assets was 15.27% at March 31, 2023, compared to 16.38% at March 31, 2022. Its ratio of total tangible common stockholders’ equity to total tangible assets was 13.28% at March 31, 2023, compared to 14.22% at March 31, 2022.
The calculations of the Bank’s 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 March 31, 2023, compared to 0.21% as of March 31, 2022. The Bank’s ratio of nonperforming assets to total assets (excluding purchased loans, except for their inclusion in total assets) was 0.34% at March 31, 2023, compared to 0.16% as of March 31, 2022. The Bank’s annualized ratio of net charge-offs of non-purchased loans to average non-purchased loans was 0.15% for the quarter ended March 31, 2023 compared to 0.08% for the quarter ended March 31, 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 on these quarterly results and management’s comments at 10:00 a.m. CT (11:00 a.m. ET) on April 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, common stockholders’ equity, 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 schedules accompanying 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 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 transition from the London Interbank Offered Rate (“LIBOR”) as a reference rate; 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 the U.S. government’s debt limit or 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; natural disasters or acts of war or terrorism; the potential impact of continuing inflationary pressures; the potential impact of supply chain disruptions; national, international or 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 or other intangible assets; adoption of new accounting standards, or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this 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 $28.97 billion in total assets as of March 31, 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
UnauditedMarch 31, December 31, 2023 2022 (Dollars in thousands, except per share amounts) ASSETS Cash and cash equivalents $ 1,039,400 $ 1,033,454 Investment securities ― available for sale (“AFS”) 3,422,031 3,491,613 Investment securities ― trading 4,477 8,817 Federal Home Loan Bank of Dallas and other bankers’ bank stocks 62,304 42,406 Non-purchased loans 21,700,941 20,400,154 Purchased loans 361,065 378,637 Allowance for loan losses (222,025 ) (208,858 ) Net loans 21,839,981 20,569,933 Premises and equipment, net 677,061 678,405 Foreclosed assets 66,227 6,616 Accrued interest receivable 135,314 125,130 Bank owned life insurance (“BOLI”) 794,542 789,805 Goodwill and other intangible assets, net 662,354 663,543 Other, net 267,479 246,846 Total assets $ 28,971,170 $ 27,656,568 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits: Demand non-interest bearing $ 4,419,754 $ 4,658,451 Savings and interest bearing transaction 9,446,120 9,905,717 Time 8,417,109 6,935,975 Total deposits 22,282,983 21,500,143 Other borrowings 994,079 606,666 Subordinated notes 347,147 346,947 Subordinated debentures 121,652 121,591 Reserve for losses on unfunded loan commitments 171,742 156,419 Accrued interest payable and other liabilities 290,269 233,864 Total liabilities 24,207,872 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 March 31, 2023 and
December 31, 2022338,980 338,980 Common stock: $0.01 par value; 300,000,000 shares authorized;
115,080,108 and 117,176,928 shares issued and outstanding at
March 31, 2023 and December 31, 2022, respectively1,151 1,172 Additional paid-in capital 1,664,569 1,753,941 Retained earnings 2,898,904 2,773,135 Accumulated other comprehensive (loss) income (141,677 ) (177,649 ) Total stockholders’ equity before noncontrolling interest 4,761,927 4,689,579 Noncontrolling interest 1,371 1,359 Total stockholders’ equity 4,763,298 4,690,938 Total liabilities and stockholders’ equity $ 28,971,170 $ 27,656,568 Bank OZK
Consolidated Statements of Income
UnauditedThree Months Ended
March 31,2023 2022 (Dollars in thousands, except per share amounts) Interest income: Non-purchased loans $ 414,896 $ 239,995 Purchased loans 6,518 8,170 Investment securities: Taxable 10,171 10,611 Tax-exempt 9,264 2,986 Deposits with banks and federal funds sold 7,870 609 Total interest income 448,719 262,371 Interest expense: Deposits 93,632 8,492 Other borrowings 5,422 998 Subordinated notes 2,574 2,574 Subordinated debentures 2,239 964 Total interest expense 103,867 13,028 Net interest income 344,852 249,343 Provision for credit losses 35,829 4,190 Net interest income after provision for credit losses 309,023 245,153 Non-interest income: Service charges on deposit accounts: NSF and overdraft fees 4,278 4,201 All other service charges 6,502 6,690 Trust income 2,033 2,094 BOLI income: Increase in cash surrender value 4,974 4,793 Death benefits — 297 Loan service, maintenance and other fees 4,076 3,018 Gains on sales of other assets 343 6,992 Net gains (losses) on investment securities 1,716 (90 ) Other 3,887 3,480 Total non-interest income 27,809 31,475 Non-interest expense: Salaries and employee benefits 63,249 54,648 Net occupancy and equipment 17,870 17,215 Other operating expenses 45,098 35,852 Total non-interest expense 126,217 107,715 Income before taxes 210,615 168,913 Provision for income taxes 40,703 36,410 Net income 169,912 132,503 Earnings attributable to noncontrolling interest (12 ) 5 Preferred stock dividends 4,047 4,480 Net income available to common stockholders $ 165,853 $ 128,028 Basic earnings per common share $ 1.42 $ 1.03 Diluted earnings per common share $ 1.41 $ 1.02 Bank OZK
Consolidated Statements of Stockholders’ Equity
UnauditedPreferred
StockCommon
StockAdditional
Paid-In
CapitalRetained
EarningsAccumulated
Other
Comprehensive
(Loss) IncomeNon-
Controlling
InterestTotal (Dollars in thousands, except per share amounts) Three months ended March 31, 2023: Balances – December 31, 2022 $ 338,980 $ 1,172 $ 1,753,941 $ 2,773,135 $ (177,649 ) $ 1,359 $ 4,690,938 Net income — — — 169,912 — — 169,912 Earnings attributable to noncontrolling
interest— — — (12 ) — 12 — Total other comprehensive income — — — — 35,972 — 35,972 Preferred stock dividends, $0.28906 per
share— — — (4,047 ) — — (4,047 ) Common stock dividends, $0.34 per
share— — — (40,084 ) — — (40,084 ) Issuance of 473,039 shares of common
stock pursuant to stock-based
compensation plans— 5 518 — — — 523 Repurchase and cancellation of 2,348,138
shares of common stock under share
repurchase program— (24 ) (85,315 ) — — — (85,339 ) 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 — — 4,097 — — — 4,097 Forfeitures of 6,359 shares of unvested
restricted common stock— — — — — — — Balances – March 31, 2023 $ 338,980 $ 1,151 $ 1,664,569 $ 2,898,904 $ (141,677 ) $ 1,371 $ 4,763,298 Three months ended March 31, 2022: Balances – December 31, 2021 $ 338,980 $ 1,254 $ 2,093,702 $ 2,378,466 $ 23,841 $ 3,117 $ 4,839,360 Net income — — — 132,503 — — 132,503 Earnings attributable to noncontrolling
interest— — — 5 — (5 ) — Total other comprehensive loss — — — — (104,769 ) — (104,769 ) Preferred stock dividends, $0.32 per
share— — — (4,480 ) — — (4,480 ) Common stock dividends, $0.30 per
share— — — (37,842 ) — — (37,842 ) Issuance of 248,426 shares of common
stock pursuant to stock-based
compensation plans— 3 1,484 — — — 1,487 Repurchase and cancellation of 2,883,013
shares of common stock under share
repurchase program— (29 ) (131,536 ) — — — (131,565 ) 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 — — 3,874 — — — 3,874 Forfeitures of 18,992 shares of unvested
restricted common stock— — — — — — — Balances – March 31, 2022 $ 338,980 $ 1,227 $ 1,962,126 $ 2,468,652 $ (80,928 ) $ 3,112 $ 4,693,169 Bank OZK
Summary of Non-Interest Expense
UnauditedThree Months Ended
March 31,2023 2022 (Dollars in thousands) Salaries and employee benefits $ 63,249 $ 54,648 Net occupancy and equipment 17,870 17,215 Other operating expenses: Software and data processing 9,283 8,186 Professional and outside services 5,105 4,817 Deposit insurance and assessments 4,148 2,150 Advertising and public relations 4,036 1,259 Telecommunication services 2,273 2,010 ATM expense 2,139 1,509 Postage and supplies 1,926 1,698 Travel and meals 1,815 1,758 Amortization of intangibles 1,189 1,517 Writedowns of foreclosed and other assets 941 258 Loan collection and repossession expense 386 325 Amortization of CRA and tax credit investments 6,414 5,102 Other 5,443 5,263 Total non-interest expense $ 126,217 $ 107,715 Bank OZK
Summary of Total Loans Outstanding
UnauditedMarch 31, 2023 December 31, 2022 (Dollars in thousands) Real estate: Residential 1-4 family $ 950,730 4.3 % $ 981,567 4.7 % Non-farm/non-residential 4,868,670 22.1 4,665,268 22.5 % Construction/land development 8,666,053 39.3 8,215,056 39.5 % Agricultural 237,852 1.1 239,689 1.2 % Multifamily residential 1,911,260 8.7 1,503,398 7.2 % Total real estate 16,634,565 75.5 15,604,978 75.1 Commercial and industrial 1,089,991 4.9 902,321 4.3 Consumer 2,598,036 11.8 2,445,851 11.8 Other 1,739,414 7.8 1,825,641 8.8 Total loans 22,062,006 100.0 % 20,778,791 100.0 % Allowance for loan losses (222,025 ) (208,858 ) Net loans $ 21,839,981 $ 20,569,933 Bank OZK
Allowance for Credit Losses
UnauditedAllowance for
Loan LossesReserve for
Losses on
Unfunded
Loan
CommitmentsTotal
Allowance for
Credit Losses(Dollars in thousands) Three months ended March 31, 2023: Balances – December 31, 2022 $ 208,858 $ 156,419 $ 365,277 Net charge-offs (7,339 ) — (7,339 ) Provision for credit losses 20,506 15,323 35,829 Balances – March 31, 2023 $ 222,025 $ 171,742 $ 393,767 Three months ended March 31, 2022: Balances – December 31, 2021 $ 217,380 $ 71,609 $ 288,989 Net charge-offs 361 — 361 Provision for credit losses (13,528 ) 17,718 4,190 Balances – March 31, 2022 $ 204,213 $ 89,327 $ 293,540 Bank OZK
Summary of Deposits – By Account Type
UnauditedMarch 31, 2023 December 31, 2022 (Dollars in thousands) Non-interest bearing $ 4,419,754 19.8 % $ 4,658,451 21.7 % Interest bearing: Transaction (NOW) 4,343,384 19.5 4,097,532 19.1 Savings and money market 5,102,736 22.9 5,808,185 27.0 Time deposits 8,417,109 37.8 6,935,975 32.2 Total deposits $ 22,282,983 100.0 % $ 21,500,143 100.0 % Bank OZK
Summary of Deposits – By Customer Type
UnauditedMarch 31, 2023 December 31, 2022 (Dollars in thousands) Non-interest bearing $ 4,419,754 19.8 % $ 4,658,451 21.7 % Interest bearing: Consumer and commercial: Consumer – non-time 3,489,601 15.7 3,916,078 18.2 Consumer – time 6,154,802 27.6 4,936,061 23.0 Commercial – non-time 2,487,083 11.2 2,741,007 12.7 Commercial – time 560,223 2.5 516,477 2.4 Public funds 2,324,654 10.4 2,103,392 9.8 Brokered 2,104,023 9.5 2,050,294 9.5 Reciprocal 742,843 3.3 578,383 2.7 Total deposits $ 22,282,983 100.0 % $ 21,500,143 100.0 % Bank OZK
Selected Consolidated Financial Data
UnauditedThree Months Ended
March 31,2023 2022 % Change (Dollars in thousands, except per share amounts) Income statement data: Net interest income $ 344,852 $ 249,343 38.3 % Provision for credit losses 35,829 4,190 755.1 % Non-interest income 27,809 31,475 (11.6 ) Non-interest expense 126,217 107,715 17.2 Net income 169,912 132,503 28.2 Preferred stock dividends 4,047 4,480 (9.7 ) Net income available to common stockholders 165,853 128,028 29.5 Pre-tax pre-provision net revenue (1) 246,444 173,103 42.4 Common share and per common share data: Diluted earnings per common share $ 1.41 $ 1.02 38.2 % Basic earnings per common share 1.42 1.03 37.9 Common stock dividends per share 0.34 0.30 13.3 Book value per share 38.43 35.47 8.3 Tangible book value per common share (1) 32.68 30.03 8.8 Weighted-average diluted shares outstanding (thousands) 117,405 125,004 (6.1 ) End of period shares outstanding (thousands) 115,080 122,677 (6.2 ) Balance sheet data at period end: Total assets $ 28,971,170 $ 26,562,353 9.1 % Total loans 22,062,006 18,931,022 16.5 Non-purchased loans 21,700,941 18,449,723 17.6 Purchased loans 361,065 481,299 (25.0 ) Allowance for loan losses 222,025 204,213 8.7 Foreclosed assets 66,227 3,417 1,838.2 Investment securities − AFS 3,422,031 3,728,284 (8.2 ) Goodwill and other intangible assets, net 662,354 667,546 (0.8 ) Deposits 22,282,983 20,329,662 9.6 Other borrowings 994,079 756,347 31.4 Subordinated notes 347,147 346,333 0.2 Subordinated debentures 121,652 121,171 0.4 Unfunded balance of closed loans 20,965,040 14,954,367 40.2 Reserve for losses on unfunded loan commitments 171,742 89,327 92.3 Preferred stock 338,980 338,980 — Total common stockholders’ equity (1) 4,422,947 4,351,077 1.7 Net unrealized losses on investment securities AFS
included in stockholders’ equity(141,677 ) (80,928 ) Loan (including purchased loans) to deposit ratio 99.01 % 93.12 % Selected ratios: Return on average assets (2) 2.41 % 1.97 % Return on average common stockholders’ equity (1) (2) 15.24 11.67 Return on average tangible common stockholders’ equity (1) (2) 17.94 13.73 Average common equity to total average assets 15.78 16.86 Net interest margin – FTE (2) 5.54 4.24 Efficiency ratio 33.63 38.22 Net charge-offs to average non-purchased loans (2) (3) 0.15 0.08 Net charge-offs to average total loans (2) 0.14 (0.01 ) Nonperforming loans to total loans (4) 0.15 0.21 Nonperforming assets to total assets (4) 0.34 0.16 Allowance for loan losses to total loans (5) 1.01 1.08 Allowance for credit losses to total loans and unfunded loan commitments 0.92 0.87 Other information: Non-accrual loans (4) $ 33,371 $ 37,363 Accruing loans − 90 days past due — — (1) Calculations of pre-tax pre-provision net revenue, tangible book value per common share, total common stockholders’ equity 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)
UnauditedThree Months Ended March 31, 2023 December 31, 2022 %
Change(Dollars in thousands, except per share amounts) Income statement data: Net interest income $ 344,852 $ 332,488 3.7 % Provision for credit losses 35,829 32,508 10.2 Non-interest income 27,809 27,544 1.0 Non-interest expense 126,217 119,013 6.1 Net income 169,912 162,825 4.4 Preferred stock dividends 4,047 4,047 — Net income available to common stockholders 165,853 158,832 4.4 Pre-tax pre-provision net revenue (1) 246,444 241,019 2.3 Common share and per common share data: Diluted earnings per common share $ 1.41 $ 1.34 5.2 % Basic earnings per common share 1.42 1.35 5.2 Common stock dividends per share 0.34 0.33 3.0 Book value per share 38.43 37.13 3.5 Tangible book value per common share (1) 32.68 31.47 3.8 Weighted-average diluted shares outstanding (thousands) 117,405 118,201 (0.7 ) End of period shares outstanding (thousands) 115,080 117,177 (1.8 ) Balance sheet data at period end: Total assets $ 28,971,170 $ 27,656,568 4.8 % Total loans 22,062,006 20,778,791 6.2 Non-purchased loans 21,700,941 20,400,154 6.4 Purchased loans 361,065 378,637 (4.6 ) Allowance for loan losses 222,025 208,858 6.3 Foreclosed assets 66,227 6,616 901.0 Investment securities − AFS 3,422,031 3,491,613 (2.0 ) Goodwill and other intangible assets, net 662,354 663,543 (0.2 ) Deposits 22,282,983 21,500,143 3.6 Other borrowings 994,079 606,666 63.9 Subordinated notes 347,147 346,947 0.1 Subordinated debentures 121,652 121,591 0.1 Unfunded balance of closed loans 20,965,040 21,062,733 (0.5 ) Reserve for losses on unfunded loan commitments 171,742 156,419 9.8 Preferred stock 338,980 338,980 — Total common stockholders’ equity (1) 4,422,947 4,350,599 1.7 Net unrealized losses on investment securities AFS
included in stockholders’ equity(141,677 ) (177,649 ) Loan (including purchased loans) to deposit ratio 99.01 % 96.64 % Selected ratios: Return on average assets (2) 2.41 % 2.35 % Return on average common stockholders’ equity (1) (2) 15.24 14.76 Return on average tangible common stockholders’ equity (1) (2) 17.94 17.48 Average common equity to average assets 15.78 15.90 Net interest margin – FTE (2) 5.54 5.46 Efficiency ratio 33.63 32.84 Net charge-offs to average non-purchased loans (2) (3) 0.15 0.09 Net charge-offs to average total loans (2) 0.14 0.06 Nonperforming loans to total loans (4) 0.15 0.22 Nonperforming assets to total assets (4) 0.34 0.19 Allowance for loan losses to total loans (5) 1.01 1.01 Allowance for loan losses to total loans and
unfunded loan commitments0.92 0.87 Other information: Non-accrual loans (4) $ 33,371 $ 43,411 Accruing loans − 90 days past due — — (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
Unaudited3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 (Dollars in thousands, except per share amounts) Earnings summary: Net interest income $ 344,852 $ 332,488 $ 294,617 $ 265,793 $ 249,343 Federal tax (FTE) adjustment 2,603 2,383 2,151 1,300 1,017 Net interest income (FTE) 347,455 334,871 296,768 267,093 250,360 Provision for credit losses (35,829 ) (32,508 ) (39,771 ) (7,025 ) (4,190 ) Non-interest income 27,809 27,544 29,163 26,320 31,475 Non-interest expense (126,217 ) (119,013 ) (115,691 ) (109,300 ) (107,715 ) Pre-tax income (FTE) 213,218 210,894 170,469 177,088 169,930 FTE adjustment (2,603 ) (2,383 ) (2,151 ) (1,300 ) (1,017 ) Provision for income taxes (40,703 ) (45,686 ) (35,969 ) (39,375 ) (36,410 ) Noncontrolling interest (12 ) 54 — (8 ) 5 Preferred stock dividend (4,047 ) (4,047 ) (4,047 ) (4,047 ) (4,480 ) Net income available to common stockholders $ 165,853 $ 158,832 $ 128,302 $ 132,358 $ 128,028 Earnings per common share – diluted $ 1.41 $ 1.34 $ 1.08 $ 1.10 $ 1.02 Pre-tax pre-provision net revenue (1) $ 246,444 $ 241,019 $ 208,089 $ 182,813 $ 173,103 Selected balance sheet data at period end: Total assets $ 28,971,170 $ 27,656,568 $ 26,232,119 $ 25,919,965 $ 26,562,353 Non-purchased loans 21,700,941 20,400,154 19,103,546 18,297,638 18,449,723 Purchased loans 361,065 378,637 410,166 445,080 481,299 Investment securities – AFS 3,422,031 3,491,613 3,528,077 3,705,807 3,728,284 Deposits 22,282,983 21,500,143 20,401,876 19,984,187 20,329,662 Unfunded balance of closed loans 20,965,040 21,062,733 20,091,101 17,369,767 14,954,367 Allowance for credit losses: Balance at beginning of period $ 365,277 $ 335,635 $ 299,938 $ 293,540 $ 288,989 Net charge-offs (7,339 ) (2,866 ) (4,074 ) (627 ) 361 Provision for credit losses 35,829 32,508 39,771 7,025 4,190 Balance at end of period $ 393,767 $ 365,277 $ 335,635 $ 299,938 $ 293,540 Allowance for loan losses $ 222,025 $ 208,858 $ 200,098 $ 190,795 $ 204,213 Reserve for losses on unfunded loan commitments 171,742 156,419 135,537 109,143 89,327 Total allowance for credit losses $ 393,767 $ 365,277 $ 335,635 $ 299,938 $ 293,540 Selected ratios: Net interest margin – FTE (2) 5.54 % 5.46 % 5.03 % 4.52 % 4.24 % Efficiency ratio 33.63 32.84 35.50 37.25 38.22 Net charge-offs to average non-purchased loans (2) (3) 0.15 0.09 0.09 0.03 0.08 Net charge-offs to average total loans (2) 0.14 0.06 0.09 0.01 (0.01 ) Nonperforming loans to total loans (4) 0.15 0.22 0.14 0.16 0.21 Nonperforming assets to total assets (4) 0.34 0.19 0.13 0.12 0.16 Allowance for loan losses to total loans (5) 1.01 1.01 1.03 1.02 1.08 Allowance for credit losses to total loans and
unfunded commitments0.92 0.87 0.85 0.83 0.87 Loans past due 30 days or more, including past due
non-accrual loans, to total loans (4)0.15 0.13 0.11 0.11 0.14 (1) Calculations of pre-tax pre-provision net revenue and the reconciliation to GAAP are included in the schedules that follow under the caption “Reconciliation of Non-GAAP Financial Measures.”
(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
UnauditedThree Months Ended March 31, 2023 2022 Average
BalanceIncome/
ExpenseYield/
RateAverage
BalanceIncome/
ExpenseYield/
Rate(Dollars in thousands) ASSETS Interest earning assets: Interest earning deposits and federal funds sold $ 739,521 $ 7,870 4.32 % $ 1,359,510 $ 609 0.18 % Investment securities: Taxable 2,450,756 10,171 1.68 3,378,613 10,611 1.27 Tax-exempt – FTE 1,027,806 11,727 4.63 570,987 3,779 2.68 Non-purchased loans – FTE 20,850,529 415,037 8.07 18,154,626 240,219 5.37 Purchased loans 370,887 6,518 7.13 499,418 8,170 6.63 Total earning assets – FTE 25,439,499 451,323 7.19 23,963,154 263,388 4.46 Non-interest earning assets 2,517,047 2,421,122 Total assets $ 27,956,546 $ 26,384,276 LIABILITIES AND STOCKHOLDERS’ EQUITY Interest bearing liabilities: Deposits: Savings and interest bearing transaction $ 9,733,499 $ 42,515 1.77 % $ 9,522,195 $ 2,783 0.12 % Time deposits 7,563,013 51,117 2.74 5,760,998 5,709 0.40 Total interest bearing deposits 17,296,512 93,632 2.20 15,283,193 8,492 0.23 Other borrowings 467,098 5,422 4.71 756,115 998 0.54 Subordinated notes 347,049 2,574 3.01 346,227 2,574 3.02 Subordinated debentures 121,638 2,239 7.47 121,097 964 3.23 Total interest bearing liabilities 18,232,297 103,867 2.31 16,506,632 13,028 0.32 Non-interest bearing liabilities: Non-interest bearing deposits 4,471,407 4,773,827 Other non-interest bearing liabilities 499,997 312,409 Total liabilities 23,203,701 21,592,868 Total stockholders’ equity before noncontrolling interest 4,751,481 4,788,294 Noncontrolling interest 1,364 3,114 Total liabilities and stockholders’ equity $ 27,956,546 $ 26,384,276 Net interest income – FTE $ 347,456 $ 250,360 Net interest margin – FTE 5.54 % 4.24 % Core spread (1) 5.87 % 5.14 % (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
UnauditedThree Months Ended March 31, December 31, 2023 2022 2022 (Dollars in thousands) Net income available to common stockholders $ 165,853 $ 128,028 $ 158,832 Average stockholders’ equity before noncontrolling interest $ 4,751,481 $ 4,788,294 $ 4,608,570 Less average preferred stock (338,980 ) (338,980 ) (338,980 ) Total average common stockholders’ equity 4,412,501 4,449,314 4,269,590 Less average intangible assets: Goodwill (660,789 ) (660,789 ) (660,789 ) Core deposit and other intangible assets,
net of accumulated amortization(2,243 ) (7,572 ) (3,421 ) Total average intangibles (663,032 ) (668,361 ) (664,210 ) Average tangible common stockholders’ equity $ 3,749,469 $ 3,780,953 $ 3,605,380 Return on average common stockholders’ equity (1) 15.24 % 11.67 % 14.76 % Return on average tangible common stockholders’ equity (1) 17.94 % 13.73 % 17.48 % (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
UnauditedMarch 31, December 31, 2023 2022 2022 (In thousands, except per share amounts) Total stockholders’ equity before noncontrolling interest $ 4,761,927 $ 4,690,057 $ 4,689,579 Less preferred stock (338,980 ) (338,980 ) (338,980 ) Total common stockholders' equity 4,422,947 4,351,077 4,350,599 Less intangible assets: Goodwill (660,789 ) (660,789 ) (660,789 ) Core deposit and other intangible assets, net of
accumulated amortization(1,565 ) (6,757 ) (2,754 ) Total intangibles (662,354 ) (667,546 ) (663,543 ) Total tangible common stockholders’ equity $ 3,760,593 $ 3,683,531 $ 3,687,056 Shares of common stock outstanding 115,080 122,677 117,177 Book value per common share $ 38.43 $ 35.47 $ 37.13 Tangible book value per common share $ 32.68 $ 30.03 $ 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
UnauditedMarch 31, 2023 2022 (Dollars in thousands) Total stockholders’ equity before noncontrolling interest $ 4,761,927 $ 4,690,057 Less preferred stock (338,980 ) (338,980 ) Total common stockholders’ equity 4,422,947 4,351,077 Less intangible assets: Goodwill (660,789 ) (660,789 ) Core deposit and other intangible assets, net of
accumulated amortization(1,565 ) (6,757 ) Total intangibles (662,354 ) (667,546 ) Total tangible common stockholders’ equity $ 3,760,593 $ 3,683,531 Total assets $ 28,971,170 $ 26,562,353 Less intangible assets: Goodwill (660,789 ) (660,789 ) Core deposit and other intangible assets, net of
accumulated amortization(1,565 ) (6,757 ) Total intangibles (662,354 ) (667,546 ) Total tangible assets $ 28,308,816 $ 25,894,807 Ratio of total common stockholders’ equity to total assets 15.27 % 16.38 % Ratio of total tangible common stockholders’ equity to total
tangible assets13.28 % 14.22 % Calculation of Pre-Tax Pre-Provision Net Revenue
UnauditedThree Months Ended March 31,
2023December 31,
2022September 30,
2022June 30,
2022March 31,
2022(Dollars in thousands) Net income available to common
stockholders$ 165,853 $ 158,832 $ 128,302 $ 132,358 $ 128,028 Preferred stock dividends 4,047 4,047 4,047 4,047 4,480 Earnings attributable to noncontrolling
interest12 (54 ) — 8 (5 ) Provision for income taxes 40,703 45,686 35,969 39,375 36,410 Provision for credit losses 35,829 32,508 39,771 7,025 4,190 Pre-tax pre-provision net revenue $ 246,444 $ 241,019 $ 208,089 $ 182,813 $ 173,103