Bank OZK Announces First Quarter 2019 Earnings

4/17/2019 at 4:01 PM EDT

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

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

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

KEY BALANCE SHEET METRICS

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

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

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

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

MANAGEMENT’S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS

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

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

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

NON-GAAP FINANCIAL MEASURES

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

FORWARD-LOOKING STATEMENTS

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

GENERAL INFORMATION

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

Bank OZK
Consolidated Balance Sheets
Unaudited


	March 31,			December 31,
	2019			2018

	(Dollars in thousands, except per share amounts)
ASSETS
Cash and cash equivalents	$	607,698		$	290,672
Investment securities - available for sale ("AFS")		2,769,602			2,862,340
Federal Home Loan Bank of Dallas and other banker's bank stocks		12,089			25,941
Non-purchased loans		15,610,681			15,073,791
Purchased loans		1,864,715			2,044,032
Allowance for loan losses		(105,954	)		(102,264	)
Net loans		17,369,442			17,015,559
Premises and equipment, net		647,032			567,189
Foreclosed assets		14,096			16,171
Accrued interest receivable		85,545			81,968
Bank owned life insurance (“BOLI”)		726,165			721,238
Intangible assets, net		693,316			696,461
Other, net		80,667			110,491
Total assets	$	23,005,652		$	22,388,030

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing	$	2,865,213		$	2,748,273
Savings and interest bearing transaction		9,874,987			9,682,713
Time		5,736,668			5,507,429
Total deposits		18,476,868			17,938,415
Repurchase agreements with customers		25,517			20,564
Other borrowings		1,489			96,692
Subordinated notes		223,375			223,281
Subordinated debentures		119,496			119,358
Accrued interest payable and other liabilities		273,143			216,355
Total liabilities		19,119,888			18,614,665

Commitments and contingencies

Stockholders’ equity:
Preferred stock; $0.01 par value; 100,000,000 shares authorized; no shares issued or outstanding at March 31, 2019 or December 31, 2018		—			—
Common stock; $0.01 par value; 300,000,000 shares authorized; 128,947,528 and 128,611,049 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively		1,289			1,286
Additional paid-in capital		2,239,404			2,237,948
Retained earnings		1,647,626			1,565,201
Accumulated other comprehensive loss		(5,676	)		(34,105	)
Total stockholders’ equity before noncontrolling interest		3,882,643			3,770,330
Noncontrolling interest		3,121			3,035
Total stockholders’ equity		3,885,764			3,773,365
Total liabilities and stockholders’ equity	$	23,005,652		$	22,388,030

Bank OZK
Consolidated Statements of Income
Unaudited

	Three Months Ended
	March 31,
	2019			2018

	(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans	$	245,864		$	190,426
Purchased loans		30,195			50,977
Investment securities:
Taxable		14,897			11,431
Tax-exempt		3,873			4,160
Deposits with banks and federal funds sold		414			498
Total interest income		295,243			257,492

Interest expense:
Deposits		63,087			34,392
Repurchase agreements with customers		22			159
Other borrowings		1,389			633
Subordinated notes		3,146			3,146
Subordinated debentures		1,711			1,386
Total interest expense		69,355			39,716

Net interest income		225,888			217,776
Provision for loan losses		6,681			5,567
Net interest income after provision for loan losses		219,207			212,209

Non-interest income:
Service charges on deposit accounts		9,722			9,525
Trust income		1,730			1,793
BOLI income		5,162			7,580
Other income from purchased loans		795			1,251
Loan service, maintenance and other fees		4,874			4,743
Net gains on investment securities		—			17
Gains on sales of other assets		284			1,426
Other		1,505			2,372
Total non-interest income		24,072			28,707

Non-interest expense:
Salaries and employee benefits		44,868			45,499
Net occupancy and equipment		14,750			14,150
Other operating expenses		37,060			34,161
Total non-interest expense		96,678			93,810

Income before taxes		146,601			147,106
Provision for income taxes		35,889			33,973
Net income		110,712			113,133
Earnings attributable to noncontrolling interest		(6	)		11
Net income available to common stockholders	$	110,706		$	113,144

Basic earnings per common share	$	0.86		$	0.88

Diluted earnings per common share	$	0.86		$	0.88

Dividends declared per common share	$	0.22		$	0.19

Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited

	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Non- Controlling Interest			Total

	(Dollars in thousands, except per share amounts)

Balances – December 31, 2018	$	1,286		$	2,237,948		$	1,565,201		$	(34,105	)	$	3,035		$	3,773,365
Net income		—			—			110,712			—			—			110,712
Earnings attributable to noncontrolling interest		—			—			(6	)		—			6			—
Total other comprehensive income		—			—			—			28,429			—			28,429
Common stock dividends paid, $0.22 per share		—			—			(28,281	)		—			—			(28,281	)
Noncontrolling interest cash contribution		—			—			—			—			80			80
Issuance of 29,300 shares of common stock for exercise of stock options		—			387			—			—			—			387
Issuance of 383,874 shares of unvested restricted common stock		4			(4	)		—			—			—			—
Repurchase and cancellation of 62,742 shares of common stock		(1	)		(1,646	)		—			—			—			(1,647	)
Stock-based compensation expense		—			2,719			—			—			—			2,719
Forfeiture of 13,953 shares of unvested restricted common stock		—			—			—			—			—			—
Balances – March 31, 2019	$	1,289		$	2,239,404		$	1,647,626		$	(5,676	)	$	3,121		$	3,885,764

Balances – December 31, 2017	$	1,283		$	2,221,844		$	1,250,313		$	(12,712	)	$	3,060		$	3,463,788
Net income		—			—			113,133			—			—			113,133
Earnings attributable to noncontrolling interest		—			—			11			—			(11	)		—
Total other comprehensive loss		—			—			—			(28,196	)		—			(28,196	)
Common stock dividends paid, $0.19 per share		—			—			(24,408	)		—			—			(24,408	)
Issuance of 200,025 shares of common stock for exercise of stock options		2			5,323			—			—			—			5,325
Issuance of 198,268 shares of unvested restricted common stock		2			(2	)		—			—			—			—
Repurchase and cancellation of 70,931 shares of common stock		(1	)		(3,729	)		—			—			—			(3,730	)
Stock-based compensation expense		—			3,742			—			—			—			3,742
Forfeitures of 3,301 shares of unvested restricted common stock		—			—			—			—			—			—
Balances – March 31, 2018	$	1,286		$	2,227,178		$	1,339,049		$	(40,908	)	$	3,049		$	3,529,654

Bank OZK
Summary of Non-Interest Expense
Unaudited

	Three Months Ended
	March 31,
	2019		2018

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

Bank OZK
Summary of Total Loans Outstanding
Unaudited


	March 31, 2019				December 31, 2018

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

Summary of Deposits
Unaudited


	March 31, 2019				December 31, 2018

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

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

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

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

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

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

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

Bank OZK
Average Consolidated Balance Sheets and Net Interest Analysis – FTE
Unaudited

	Three Months Ended March 31,
	2019							2018
	Average Balance		Income/ Expense		Yield/ Rate			Average Balance		Income/ Expense		Yield/ Rate

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

Bank OZK
Reconciliation of Non-GAAP Financial Measures

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

	Three Months Ended
	March 31,
	2019			2018

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

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

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

	March 31,
	2019			2018

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

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

	March 31,
	2019			2018

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

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

Source: Bank OZK

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