Bank OZK Announces Record First Quarter 2023 Earnings

 | Source: Bank OZK Bank OZK

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
Unaudited

  March 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, 2022		  338,980   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, respectively		  1,151   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
Unaudited

 Three 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
Unaudited

  Preferred
Stock		  Common
Stock		  Additional
Paid-In
Capital		  Retained
Earnings		  Accumulated
Other
Comprehensive
(Loss) Income		  Non-
Controlling
Interest		  Total 
  (Dollars in thousands, except per share amounts) 
Three months ended 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
Unaudited

  Three 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
Unaudited

  March 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
Unaudited

              
   Allowance for
Loan Losses		  Reserve for
Losses on
Unfunded
Loan
Commitments		  Total
Allowance for
Credit Losses		 
   (Dollars in thousands) 
Three months ended March 31, 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
Unaudited

    
  March 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
Unaudited

    
  March 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
Unaudited

  Three 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)
Unaudited

  Three 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 commitments		  0.92   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
Unaudited

  3/31/23  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 commitments		  0.92   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
Unaudited

  Three Months Ended March 31, 
  2023  2022 
  Average
Balance		  Income/
Expense		  Yield/
Rate		  Average
Balance		  Income/
Expense		  Yield/
Rate		 
  (Dollars in thousands) 
ASSETS                        
Interest earning assets:                        
Interest earning deposits and federal funds sold $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
Unaudited

 Three 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
Unaudited

  March 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
Unaudited

  March 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 assets		  13.28%  14.22%


Calculation of Pre-Tax Pre-Provision Net Revenue
Unaudited

  Three Months Ended 
  March 31,
2023		  December 31,
2022		  September 30,
2022		  June 30,
2022		  March 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
interest		  12   (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