Bank of the Ozarks Announces Record Second Quarter 2017 Earnings

7/12/2017 at 7:00 AM EDT

LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Bank of the Ozarks (the “Bank”) (NASDAQ: OZRK) today announced that net income for the second quarter of 2017 was a record $90.5 million, a 66.2% increase from $54.5 million for the second quarter of 2016. Diluted earnings per common share for the second quarter of 2017 were $0.73, a 21.7% increase from $0.60 for the second quarter of 2016.

For the six months ended June 30, 2017, net income totaled $179.7 million, a 69.3% increase from net income of $106.2 million for the first six months of 2016. Diluted earnings per common share for the first six months of 2017 were $1.46, a 25.9% increase from $1.16 for the first six months of 2016.

On June 26, 2017, the Bank merged with its former parent holding company, Bank of the Ozarks, Inc., with the Bank as the surviving corporation. All prior period financial data in this news release and accompanying schedules gives effect to this merger transaction.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the second quarter of 2017 were 1.90%, 12.05% and 15.81%, respectively, compared to 1.91%, 14.35% and 15.92%, respectively, for the second quarter of 2016. The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first six months of 2017 were 1.92%, 12.41% and 16.45%, respectively, compared to 1.95%, 14.18% and 15.76%, respectively, for the first six months of 2016.

George Gleason, Chairman and Chief Executive Officer, stated, “We are very pleased to report our results for the second quarter of 2017, including quarterly records in net income, net interest income and service charge income, a 4.99% net interest margin, a 35.3% efficiency ratio and excellent asset quality and growth in non-purchased loans and leases.”

KEY BALANCE SHEET METRICS

Total loans and leases, including purchased loans, were $15.2 billion at June 30, 2017, a 56.1% increase from $9.7 billion at June 30, 2016. Non-purchased loans and leases were $11.0 billion at June 30, 2017, a 34.2% increase from $8.2 billion at June 30, 2016. Purchased loans were $4.16 billion at June 30, 2017, a 174.5% increase from $1.52 billion at June 30, 2016, but a 9.2% decrease from $4.58 billion at March 31, 2017. The unfunded balance of closed loans totaled $11.9 billion at June 30, 2017, a 61.7% increase from $7.3 billion at June 30, 2016.

Deposits were $16.2 billion at June 30, 2017, a 59.3% increase from $10.2 billion at June 30, 2016. Total assets were $20.1 billion at June 30, 2017, a 63.4% increase from $12.3 billion at June 30, 2016.

Common stockholders’ equity was $3.26 billion at June 30, 2017, a 109.4% increase from $1.56 billion at June 30, 2016. Tangible common stockholders’ equity was $2.54 billion at June 30, 2017, an 80.9% increase from $1.41 billion at June 30, 2016. Book value per common share was $25.43 at June 30, 2017, a 48.2% increase from $17.16 at June 30, 2016. Tangible book value per common share was $19.85 at June 30, 2017, a 28.0% increase from $15.51 at June 30, 2016. The calculations of the Bank’s tangible common stockholders’ equity and tangible book value per common share and the reconciliations to accounting principles generally accepted in the United States (“GAAP”) are included in the schedules accompanying this release.

The Bank’s ratio of common stockholders’ equity to total assets was 16.25% at June 30, 2017 compared to 12.68% at June 30, 2016. Its ratio of tangible common stockholders’ equity to total tangible assets was 13.15% at June 30, 2017 compared to 11.60% at June 30, 2016. 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.

NET INTEREST INCOME

Net interest income for the second quarter of 2017 was $202.1 million, a 69.8% increase from $119.0 million for the second quarter of 2016. Net interest margin, on a fully taxable equivalent (“FTE”) basis, was 4.99% for the second quarter of 2017, an increase of 17 basis points from 4.82% for the second quarter of 2016. Average earning assets were $16.5 billion for the second quarter of 2017, a 63.3% increase from $10.1 billion for the second quarter of 2016.

Net interest income for the first six months of 2017 was $392.9 million, a 69.7% increase from $231.6 million for the first six months of 2016. Net interest margin, on a FTE basis, was 4.93% for the first six months of 2017, an increase of six basis points from 4.87% for the first six months of 2016. Average earning assets were $16.3 billion for the first six months of 2017, a 68.0% increase from $9.7 billion for the first six months of 2016.

NON-INTEREST INCOME

Non-interest income for the second quarter of 2017 increased 40.1% to $31.8 million compared to $22.7 million for the second quarter of 2016. Non-interest income for the first six months of 2017 increased 43.0% to $60.9 million compared to $42.6 million for the first six months of 2016.

NON-INTEREST EXPENSE

Non-interest expense for the second quarter of 2017 increased 64.6% to $83.8 million compared to $50.9 million for the second quarter of 2016. Non-interest expense for the first six months of 2017 increased 64.4% to $162.1 million compared to $98.6 million for the first six months of 2016.

The Bank’s efficiency ratio (non-interest expense divided by the sum of net interest income FTE and non-interest income) for the second quarter of 2017 was 35.3% compared to 35.4% for the second quarter of 2016. The Bank’s efficiency ratio for the first six months of 2017 was 35.2% compared to 35.5% for the first six months of 2016.

ASSET QUALITY, CHARGE-OFFS AND ALLOWANCE

Excluding purchased loans, the Bank’s ratio of nonperforming loans and leases as a percent of total loans and leases was 0.11% at June 30, 2017 compared to 0.09% at June 30, 2016.

Excluding purchased loans, the Bank’s ratio of nonperforming assets as a percent of total assets was 0.23% at June 30, 2017 compared to 0.25% at June 30, 2016.

Excluding purchased loans, the Bank’s ratio of loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases was a record 0.15% at June 30, 2017 compared to 0.22% at June 30, 2016.

The Bank’s annualized net charge-off ratio for all loans and leases was 0.05% for the second quarter of 2017 compared to 0.06% for the second quarter of 2016. The Bank’s annualized net charge-off ratio for all loans and leases was 0.07% for the first six months of 2017 compared to 0.06% for the first six months of 2016.

The Bank’s allowance for loan and lease losses for its non-purchased loans and leases was $80.7 million, or 0.73% of total non-purchased loans and leases, at June 30, 2017 compared to $63.9 million, or 0.78% of total non-purchased loans and leases, at June 30, 2016. The Bank had $1.6 million of allowance for loan and lease losses for its purchased loans at June 30, 2017 compared to $1.2 million at June 30, 2016.

CONFERENCE CALL, TRANSCRIPT AND FILINGS

Management will conduct a conference call to discuss its quarterly results at 10:00 a.m. CT (11:00 a.m. ET) on July 12, 2017. Interested parties may listen to this call by dialing (844) 818-5110 (U.S. and Canada) or (210) 229-8841 (internationally) and asking for the Bank of the Ozarks conference call. A recorded playback of the call will be available for one week following the call at (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (internationally). The passcode for this playback is 38548410. The call will be available live or in a recorded version on the Bank’s Investor Relations website at http://ir.bankozarks.com under “Company News.” The Bank will also provide a transcript of the conference call on its Investor Relations website, which will be available for 90 days.

The Bank files certain reports, proxy materials, and other information required by the Securities and Exchange Act of 1934 with the Federal Deposit Insurance Corporation (“FDIC”), copies of which are available electronically at the FDIC’s website at http://www.fdic.gov and are also available on the Bank’s Investor Relations website at http://ir.bankozarks.com under “Filings.”

NON-GAAP FINANCIAL MEASURES

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

FORWARD-LOOKING STATEMENTS

This release and other communications by the Bank include certain “forward-looking statements” regarding the Bank’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time. Those statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: potential delays or other problems implementing the Bank’s growth, expansion and acquisition strategies including delays in identifying sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices; the ability to enter into and/or close additional acquisitions; problems with, or additional expenses relating to, integrating acquisitions; the inability to realize expected cost savings and/or synergies from acquisitions; problems with managing acquisitions; the effect of the announcements of any future acquisition on customer relationships and operating results; the availability 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 and leases, 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; competitive factors and pricing pressures, including their effect on the Bank’s net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers and lessees, collateral values, the value of investment securities and asset recovery values; changes in legal and regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new legislation and regulatory actions; changes in U.S. government monetary and fiscal policy; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank or its customers; adoption of new accounting standards or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions as well as other factors identified in this press release or as detailed from time to time in our public filings, including those factors included 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, 2016 or 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 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 of the Ozarks (NASDAQ: OZRK) is a regional bank providing innovative financial solutions delivered by expert bankers with a relentless pursuit of excellence. Bank of the Ozarks has been recognized as the #1 bank in the nation in its asset size for seven consecutive years. Headquartered in Little Rock, Arkansas, Bank of the Ozarks conducts operations through 251 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, New York and California and had $20.1 billion in total assets at June 30, 2017. Bank of the Ozarks can be found at www.bankozarks.com and on Facebook, Twitter and LinkedIn or contacted at (501) 978-2265 or P.O. Box 8811, Little Rock, Arkansas 72231-8811.


Bank of the Ozarks
Selected Consolidated Financial Data
(Dollars in Thousands, Except Per Share Amounts)
Unaudited

	Three Months Ended June 30,									Six Months Ended June 30,
	2017			2016			% Change			2017			2016			% Change
Income statement data:
Net interest income	$	202,105		$	119,038			69.8	%	$	392,876		$	231,555			69.7	%
Provision for loan and lease losses		6,103			4,834			26.3			11,036			6,851			61.1
Non-interest income		31,840			22,733			40.1			60,898			42,597			43.0
Non-interest expense		83,828			50,928			64.6			162,095			98,614			64.4
Net income available to common stockholders		90,532			54,474			66.2			179,720			106,162			69.3
Common stock data:
Net income per share - diluted	$	0.73		$	0.60			21.7	%	$	1.46		$	1.16			25.9	%
Net income per share - basic		0.73			0.60			21.7			1.47			1.17			25.6
Cash dividends per share		0.175			0.155			12.9			0.345			0.305			13.1
Book value per share		25.43			17.16			48.2			25.43			17.16			48.2
Tangible book value per share⁽¹⁾		19.85			15.51			28.0			19.85			15.51			28.0
Diluted shares outstanding (thousands)		124,198			91,288						123,084			91,268
End of period shares outstanding (thousands)		128,190			90,745						128,190			90,745
Balance sheet data at period end:
Assets	$	20,064,589		$	12,279,579			63.4	%	$	20,064,589		$	12,279,579			63.4	%
Non-purchased loans and leases		11,025,203			8,214,900			34.2			11,025,203			8,214,900			34.2
Purchased loans		4,159,139			1,515,104			174.5			4,159,139			1,515,104			174.5
Allowance for loan and lease losses		82,320			65,133			26.4			82,320			65,133			26.4
Foreclosed assets		34,000			23,328			45.7			34,000			23,328			45.7
Investment securities		2,101,751			824,399			154.9			2,101,751			824,399			154.9
Goodwill		660,789			126,289			423.2			660,789			126,289			423.2
Other intangibles - net of amortization		54,541			23,615			131.0			54,541			23,615			131.0
Deposits		16,241,440			10,195,072			59.3			16,241,440			10,195,072			59.3
Repurchase agreements with customers		68,502			53,997			26.9			68,502			53,997			26.9
Other borrowings		42,486			42,053			1.0			42,486			42,053			1.0
Subordinated notes		222,706			222,324			0.2			222,706			222,324			0.2
Subordinated debentures		118,519			117,962			0.5			118,519			117,962			0.5
Common stockholders’ equity		3,260,123			1,556,921			109.4			3,260,123			1,556,921			109.4
Net unrealized (losses) gains on investment securities AFS included in common stockholders' equity		(4,992	)		15,106						(4,992	)		15,106
Loan and lease (including purchased loans) to deposit ratio		93.49	%		95.44	%					93.49	%		95.44	%
Selected ratios:
Return on average assets ⁽²⁾		1.90	%		1.91	%					1.92	%		1.95	%
Return on average common stockholders’ equity ⁽²⁾		12.05			14.35						12.41			14.18
Return on average tangible common stockholders’ equity^{(1) (2)}		15.81			15.92						16.45			15.76
Average common equity to total average assets		15.81			13.34						15.45			13.74
Net interest margin – FTE ⁽²⁾		4.99			4.82						4.93			4.87
Efficiency ratio		35.32			35.41						35.18			35.46
Net charge-offs to average non-purchased loans and leases^{(2) (3)}		0.03			0.05						0.04			0.06
Net charge-offs to average total loans and leases⁽²⁾		0.05			0.06						0.07			0.06
Nonperforming loans and leases to total loans and leases⁽⁴⁾		0.11			0.09						0.11			0.09
Nonperforming assets to total assets⁽⁴⁾		0.23			0.25						0.23			0.25
Allowance for loan and lease losses to non-purchased loans and leases⁽⁴⁾		0.73			0.78					0.73				0.78
Other information:
Non-accrual loans and leases⁽⁴⁾	$	11,628		$	7,700					$	11,628		$	7,700
Accruing loans and leases - 90 days past due⁽⁴⁾		—			—						—			—
Troubled and restructured loans and leases⁽⁴⁾		—			—						—			—
Impaired purchased loans		11,679			6,387						11,679			6,387


⁽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 and any allowance for such loans, except for their inclusion in total assets.


Bank of the Ozarks
Supplemental Quarterly Financial Data
(Dollars in Thousands, Except Per Share Amounts)
Unaudited

	9/30/15			12/31/15			3/31/16			6/30/16			9/30/16			12/31/16			3/31/17			6/30/17
Earnings Summary:
Net interest income	$	96,387		$	106,518		$	112,517		$	119,038		$	175,150		$	194,800		$	190,771		$	202,105
Federal tax (FTE) adjustment		2,368			2,092			1,911			2,067			2,533			3,254			3,594			3,396
Net interest income (FTE)		98,755			108,610			114,428			121,105			177,683			198,054			194,365			205,501
Provision for loan and lease losses		(3,581	)		(5,211	)		(2,017	)		(4,834	)		(7,086	)		(9,855	)		(4,933	)		(6,103	)
Non-interest income		22,138			30,540			19,865			22,733			29,231			30,571			29,058			31,840
Non-interest expense		(45,428	)		(51,646	)		(47,686	)		(50,928	)		(78,781	)		(78,358	)		(78,268	)		(83,828	)
Pretax income (FTE)		71,884			82,293			84,590			88,076			121,047			140,412			140,222			147,410
FTE adjustment		(2,368	)		(2,092	)		(1,911	)		(2,067	)		(2,533	)		(3,254	)		(3,594	)		(3,396	)
Provision for income taxes		(23,385	)		(28,740	)		(30,984	)		(31,514	)		(42,470	)		(49,312	)		(47,417	)		(53,488	)
Noncontrolling interest		(3	)		(6	)		(7	)		(21	)		(14	)		(59	)		(23	)		6
Net income available to common stockholders	$	46,128		$	51,455		$	51,688		$	54,474		$	76,030		$	87,787		$	89,188		$	90,532
Earnings per common share – diluted	$	0.52		$	0.57		$	0.57		$	0.60		$	0.66		$	0.72		$	0.73		$	0.73
Non-interest Income:
Service charges on deposit accounts	$	7,425		$	7,558		$	7,657		$	8,119		$	10,926		$	11,759		$	11,301		$	11,764
Mortgage lending income		1,825			1,713			1,284			2,057			2,616			2,097			1,574			1,910
Trust income		1,500			1,508			1,507			1,574			1,564			1,623			1,631			1,577
BOLI income		2,264			2,412			2,861			2,745			4,638			4,564			4,464			4,594
Other income from purchased loans		5,456			4,790			3,052			4,599			4,635			4,993			3,737			4,777
Net gains on investment securities		—			2,863			—			—			—			4			—			404
Gains on sales of other assets		1,905			7,463			1,027			998			594			1,537			1,619			672
Other		1,763			2,233			2,477			2,641			4,258			3,994			4,732			6,142
Total non-interest income	$	22,138		$	30,540		$	19,865		$	22,733		$	29,231		$	30,571		$	29,058		$	31,840
Non-interest Expense:
Salaries and employee benefits	$	21,207		$	21,504		$	23,362		$	24,921		$	38,069		$	36,481		$	38,554		$	39,892
Net occupancy expense		8,076			8,537			8,531			8,388			11,669			13,936			13,192			12,937
Other operating expenses		14,448			19,879			14,067			16,062			26,447			24,783			23,377			27,854
Amortization of intangibles		1,697			1,726			1,726			1,557			2,596			3,158			3,145			3,145
Total non-interest expense	$	45,428		$	51,646		$	47,686		$	50,928		$	78,781		$	78,358		$	78,268		$	83,828
Allowance for Loan and Lease Losses:
Balance at beginning of period	$	56,749		$	59,017		$	60,854		$	61,760		$	65,133		$	69,760		$	76,541		$	78,224
Net charge-offs		(1,313	)		(3,374	)		(1,111	)		(1,461	)		(2,459	)		(3,074	)		(3,250	)		(2,007	)
Provision for loan and lease losses		3,581			5,211			2,017			4,834			7,086			9,855			4,933			6,103
Balance at end of period	$	59,017		$	60,854		$	61,760		$	65,133		$	69,760		$	76,541		$	78,224		$	82,320
Selected Ratios:
Net interest margin – FTE ⁽¹⁾		5.07	%		4.98	%		4.92	%		4.82	%		4.90	%		5.02	%		4.88	%		4.99	%
Efficiency ratio		37.58			37.12			35.51			35.41			38.07			34.27			35.03			35.32
Net charge-offs to average non-purchased loans and leases ^{(1) (2)}		0.05			0.22			0.06			0.05			0.06			0.08			0.05			0.03
Net charge-offs to average total loans and leases ⁽¹⁾		0.08			0.17			0.05			0.06			0.07			0.09			0.09			0.05
Nonperforming loans and leases to total loans and leases⁽³⁾		0.26			0.20			0.15			0.09			0.08			0.15			0.11			0.11
Nonperforming assets to total assets ⁽³⁾		0.41			0.37			0.29			0.25			0.28			0.31			0.25			0.23
Allowance for loan and lease losses to total non-purchased loans and leases⁽³⁾		1.08			0.91			0.80			0.78			0.78			0.78			0.75			0.73
Loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases⁽³⁾		0.41			0.28			0.23			0.22			0.17			0.16			0.16			0.15


⁽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 and any allowance for such loans, except for their inclusion in total assets.


Bank of the Ozarks
Average Consolidated Balance Sheets and Net Interest Analysis – FTE
Unaudited

	Three Months Ended June 30,														Six Months Ended June 30,
	2017							2016							2017								2016
	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	$	87,025	$	115		0.53	%	$	6,048	$	13		0.85	%		$	83,302	$	135		0.33	%	$	4,517	$	19		0.82	%
Investment securities:
Taxable		739,184		4,181		2.27			293,981		2,442		3.34				701,378		7,997		2.30			279,040		4,712		3.40
Tax-exempt – FTE		774,837		9,458		4.90			415,473		5,733		5.55				789,134		19,477		4.98			377,127		11,014		5.87
Non-purchased loans and leases – FTE		10,517,666		142,071		5.42			7,794,654		98,096		5.06				10,174,598		269,586		5.34			7,401,860		185,168		5.03
Purchased loans		4,391,894		75,729		6.92			1,599,013		26,711		6.72				4,598,340		151,723		6.65			1,669,920		55,734		6.71
Total earning assets – FTE		16,510,606		231,554		5.63			10,109,169		132,995		5.29				16,346,752		448,918		5.54			9,732,464		256,647		5.30
Non-interest earning assets		2,558,960							1,338,147								2,562,131							1,225,357
Total assets	$	19,069,566						$	11,447,316							$	18,908,883						$	10,957,821
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction	$	8,084,021	$	10,912		0.54	%	$	4,742,475	$	4,063		0.34	%		$	7,973,949	$	19,370		0.49	%	$	4,668,940	$	7,780		0.34	%
Time deposits of $100,000 or more		3,211,778		7,737		0.97			1,935,241		4,139		0.86				3,226,600		14,869		0.93			1,778,972		7,087		0.80
Other time deposits		1,572,703		2,830		0.72			1,312,153		2,011		0.62				1,635,929		5,617		0.69			1,149,692		3,196		0.56
Total interest bearing deposits		12,868,502		21,479		0.67			7,989,869		10,213		0.51				12,836,478		39,856		0.63			7,597,604		18,063		0.48
Repurchase agreements with customers		76,610		30		0.16			58,284		22		0.15				78,238		60		0.16			63,293		42		0.13
Other borrowings		42,365		255		2.41			42,021		293		2.80				42,251		477		2.27			46,537		595		2.57
Subordinated notes		222,660		3,052		5.50			19,557		283		5.83				222,611		6,240		5.65			9,778		283		5.83
Subordinated debentures		118,449		1,237		4.19			117,887		1,079		3.68				118,375		2,418		4.12			117,818		2,132		3.64
Total interest bearing liabilities		13,328,586		26,053		0.78			8,227,618		11,890		0.58				13,297,953		49,051		0.74			7,835,030		21,115		0.54
Non-interest bearing liabilities:
Non-interest bearing deposits		2,643,836							1,635,697								2,609,420							1,572,247
Other non-interest bearing liabilities		79,331							53,987								77,195							41,625
Total liabilities		16,051,753							9,917,302								15,984,568							9,448,902
Common stockholders’ equity		3,014,462							1,526,828								2,921,165							1,505,742
Noncontrolling interest		3,351							3,186								3,150							3,177
Total liabilities and stockholders’ equity	$	19,069,566						$	11,447,316							$	18,908,883						$	10,957,821
Net interest income – FTE			$	205,501						$	121,105							$	399,867						$	235,532
Net interest margin – FTE						4.99	%						4.82	%							4.93	%						4.87	%


RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Bank of the Ozarks
Calculation of Average Tangible Common
Stockholders’ Equity and the Return on
Average Tangible Common Stockholders’ Equity
Unaudited

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
	(Dollars in thousands)
Net income available to common stockholders	$	90,532		$	54,474		$	179,720		$	106,162
Average common stockholders’ equity before noncontrolling interest	$	3,014,462		$	1,526,828		$	2,921,165		$	1,505,742
Less average intangible assets:
Goodwill		(660,789	)		(125,873	)		(660,472	)		(125,660	)
Core deposit and other intangibles, net of accumulated amortization		(56,281	)		(24,468	)		(57,929	)		(25,317	)
Total average intangibles		(717,070	)		(150,341	)		(718,401	)		(150,977	)
Average tangible common stockholders’ equity	$	2,297,392		$	1,376,487		$	2,202,764		$	1,354,765
Return on average common stockholders’ equity⁽¹⁾		12.05	%		14.35	%		12.41	%		14.18	%
Return on average tangible common stockholders’ equity⁽¹⁾		15.81	%		15.92	%		16.45	%		15.76	%

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


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

	June 30,
	2017			2016
	(In thousands, except per share amounts)
Total common stockholders’ equity before noncontrolling interest	$	3,260,123		$	1,556,921
Less intangible assets:
Goodwill		(660,789	)		(126,289	)
Core deposit and other intangibles, net of accumulated amortization		(54,541	)		(23,615	)
Total intangibles		(715,330	)		(149,904	)
Total tangible common stockholders’ equity	$	2,544,793		$	1,407,017
Shares of common stock outstanding		128,190			90,745
Book value per common share	$	25.43		$	17.16
Tangible book value per common share	$	19.85		$	15.51


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

	June 30,
	2017			2016
	(Dollars in thousands)
Total common stockholders’ equity before noncontrolling interest	$	3,260,123		$	1,556,921
Less intangible assets:
Goodwill		(660,789	)		(126,289	)
Core deposit and other intangibles, net of accumulated amortization		(54,541	)		(23,615	)
Total intangibles		(715,330	)		(149,904	)
Total tangible common stockholders’ equity	$	2,544,793		$	1,407,017
Total assets	$	20,064,589		$	12,279,579
Less intangible assets:
Goodwill		(660,789	)		(126,289	)
Core deposit and other intangibles, net of accumulated amortization		(54,541	)		(23,615	)
Total intangibles		(715,330	)		(149,904	)
Total tangible assets	$	19,349,259		$	12,129,675
Ratio of total common stockholders’ equity to total assets		16.25	%		12.68	%
Ratio of total tangible common stockholders’ equity to total tangible assets		13.15	%		11.60	%

View source version on businesswire.com: http://www.businesswire.com/news/home/20170712005193/en/

Bank of the Ozarks
Media Contact:
Susan Blair, 501-978-2217
or
Investor Contact:
Tim Hicks, 501-978-2336

Source: Bank of the Ozarks

Bank of the Ozarks Announces Record Second Quarter 2017 Earnings

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Bank of the Ozarks Announces Record Second Quarter 2017 Earnings

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