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Bank OZK Announces Record Third Quarter 2023 Earnings
المصدر: Nasdaq GlobeNewswire / 19 أكتوبر 2023 15:01:37 America/Chicago
LITTLE ROCK, Ark., Oct. 19, 2023 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income available to common stockholders for the third quarter of 2023 was a record $169.7 million, a 32.3% increase from $128.3 million for the third quarter of 2022. Diluted earnings per common share for the third quarter of 2023 were a record $1.49, a 38.0% increase from $1.08 for the third quarter of 2022.
For the nine months ended September 30, 2023, net income available to common stockholders was $503.5 million, a 29.5% increase from $388.7 million for the first nine months of 2022. Diluted earnings per common share for the first nine months of 2023 were $4.37, a 36.6% increase from $3.20 for the first nine months of 2022.
Pre-tax pre-provision net revenue (“PPNR”) was $264.0 million for the third quarter of 2023, a 26.9% increase from $208.1 million for the third quarter of 2022. For the first nine months of 2023, PPNR was $769.9 million, a 36.5% increase from $564.0 million for the first nine months of 2022. The calculation of PPNR and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release.
Provision for credit losses was $44.0 million for the third quarter and $121.6 million for the first nine months of 2023 compared to $39.8 million for the third quarter of 2022 and $51.0 million for the first nine months of 2022. The Bank’s total allowance for credit losses (“ACL”) was $461.5 million at September 30, 2023 compared to $335.6 million at September 30, 2022.
The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the third quarter of 2023 were 2.13%, 14.81% and 17.33%, respectively, compared to 1.97%, 11.85% and 14.02%, respectively, for the third quarter of 2022. The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first nine months of 2023 were 2.26%, 15.06% and 17.68%, respectively, compared to 1.99%, 11.97% and 14.14%, respectively, for the first nine months 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 have been well positioned for rising interest rates and the turbulent environment of the last six quarters, and our preparation has been reflected in our record results. We believe we are well positioned for the coming quarters, and we look forward to capitalizing on new opportunities.”
KEY BALANCE SHEET METRICS
Total loans were $25.33 billion at September 30, 2023, a 29.8% increase from $19.51 billion at September 30, 2022. Deposits were $25.55 billion at September 30, 2023, a 25.2% increase from $20.40 billion at September 30, 2022. Total assets were $32.77 billion at September 30, 2023, a 24.9% increase from $26.23 billion at September 30, 2022.
Common stockholders’ equity was $4.56 billion at September 30, 2023, an 8.7% increase from $4.20 billion at September 30, 2022. Tangible common stockholders’ equity was $3.90 billion at September 30, 2023, a 10.4% increase from $3.54 billion at September 30, 2022. The Bank did not repurchase any shares during the three months ended September 30, 2023. During the first nine months of 2023, the Bank repurchased 4.3 million shares for $151.5 million, which equates to a weighted average cost of approximately $35.19 per share.
Book value per common share was $40.35 at September 30, 2023, a 13.1% increase from $35.67 at September 30, 2022. Tangible book value per common share was $34.50 at September 30, 2023, a 14.9% increase from $30.02 at September 30, 2022.
The Bank’s ratio of total common stockholders’ equity to total assets was 13.93% at September 30, 2023, compared to 16.01% at September 30, 2022. Its ratio of total tangible common stockholders’ equity to total tangible assets was 12.16% at September 30, 2023, compared to 13.83% at September 30, 2022. The calculations of the Bank’s total 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 0.25% at September 30, 2023, compared to 0.14% as of September 30, 2022. The Bank’s ratio of nonperforming assets to total assets (excluding purchased loans, except for their inclusion in total assets) was 0.40% at September 30, 2023, compared to 0.13% as of September 30, 2022. The Bank's annualized ratio of net charge-offs of total loans to average total loans was 0.15% for the third quarter and nine months ended September 30, 2023, compared to 0.09% for the third quarter and 0.03% for the first nine months of September 30, 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 at 10:00 a.m. CT (11:00 a.m. ET) on Friday, October 20, 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, total common stockholders’ equity, total 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 tables at the end of 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, expansion and acquisition strategies, including hiring or retaining qualified personnel, obtaining regulatory or other approvals, delays in acquiring satisfactory sites, obtaining permits and designing, constructing and opening new offices or relocating, selling or closing existing offices; or integrating any acquisitions; 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 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; 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 changes in U.S. government monetary and fiscal policy; the impact of any U.S. federal government shutdown or budgetary crisis; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding artificial intelligence and 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 or others, 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, its customers or others; natural disasters; acts of war or terrorism; the potential impact of continuing inflationary pressures; the potential impact of supply chain disruptions; national or international political instability or military conflict, including the conflict in the Middle East and the ongoing war in Ukraine; the competition and costs of recruiting and retaining human talent; impairment of our goodwill; 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 $32.77 billion in total assets as of September 30, 2023. For more information, visit www.ozk.com.
Bank OZK Consolidated Balance Sheets Unaudited September 30, 2023 December 31, 2022 (Dollars in thousands) ASSETS Cash and cash equivalents $ 1,864,300 $ 1,033,454 Investment securities – available for sale (“AFS”) 3,153,817 3,491,613 Investment securities – trading — 8,817 Federal Home Loan Bank of Dallas (“FHLB”) and other bankers’ bank stocks 63,722 42,406 Non-purchased loans 25,051,214 20,400,154 Purchased loans 280,526 378,637 Allowance for loan losses (303,358 ) (208,858 ) Net Loans 25,028,382 20,569,933 Premises and equipment, net 665,806 678,405 Foreclosed assets 68,738 6,616 Accrued interest receivable 154,244 125,130 Bank owned life insurance (“BOLI”) 804,394 789,805 Goodwill and other intangible assets, net 660,789 663,543 Other, net 303,136 246,846 Total assets $ 32,767,328 $ 27,656,568 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits: Demand non-interest bearing $ 4,283,925 $ 4,658,451 Savings and interest bearing transaction 9,029,610 9,905,717 Time 12,239,321 6,935,975 Total deposits 25,552,856 21,500,143 Other borrowings 1,430,192 606,666 Subordinated notes 347,556 346,947 Subordinated debentures 121,652 121,591 Reserve for losses on unfunded loan commitments 158,128 156,419 Accrued interest payable and other liabilities 252,031 233,864 Total liabilities $ 27,862,415 $ 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 September 30, 2023 and December 31, 2022 338,980 338,980 Common Stock: $0.01 par value; 300,000,000 shares authorized; 113,136,232 and 117,176,928 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively 1,131 1,172 Additional paid-in capital 1,607,510 1,753,941 Retained earnings 3,154,869 2,773,135 Accumulated other comprehensive (loss) income (198,986 ) (177,649 ) Total stockholders’ equity before noncontrolling interest 4,903,504 4,689,579 Noncontrolling interest 1,409 1,359 Total stockholders’ equity 4,904,913 4,690,938 Total liabilities and stockholders’ equity $ 32,767,328 $ 27,656,568 Bank OZK Consolidated Statements of Income Unaudited Three Months Ended
September 30,Nine Months Ended
September 30,2023 2022 2023 2022 (Dollars in thousands, except per share amounts) Interest income: Non-purchased loans $ 523,026 $ 295,054 $ 1,410,446 $ 791,313 Purchased loans 6,005 7,148 17,845 24,300 Investment securities: Taxable 9,887 10,269 29,761 31,246 Tax-exempt 9,534 7,126 28,288 14,132 Deposits with banks and federal funds sold 17,061 3,690 36,338 6,155 Total interest income 565,513 323,287 1,522,678 867,146 Interest expense: Deposits 178,823 21,997 408,577 41,343 Other borrowings 14,326 2,460 30,339 4,500 Subordinated notes 2,631 2,631 7,808 7,808 Subordinated debentures 2,472 1,582 7,017 3,741 Total interest expense 198,252 28,670 453,741 57,392 Net interest income 367,261 294,617 1,068,937 809,754 Provision for credit losses 44,036 39,771 121,638 50,986 Net interest income after provision for credit losses 323,225 254,846 947,299 758,768 Non-interest income: Service charges on deposit accounts: NSF and overdraft fees 4,708 4,808 13,359 13,257 All other service charges 6,973 7,089 20,662 20,963 Trust income 2,213 2,007 6,358 6,012 BOLI income: Increase in cash surrender value 5,252 4,940 15,295 14,579 Death benefits — 510 — 807 Loan service, maintenance and other fees 3,995 3,418 12,165 10,039 Gains on sales of other assets 364 3,182 5,740 10,957 Net gains (loss) on investment securities (270 ) 321 2,066 762 Other 2,492 2,888 9,877 9,583 Total non-interest income 25,727 29,163 85,522 86,959 Non-interest expense: Salaries and employee benefits 64,107 57,367 192,576 166,427 Net occupancy and equipment 17,797 18,244 55,357 52,474 Other operating expenses 47,074 40,080 136,616 113,807 Total non-interest expense 128,978 115,691 384,549 332,708 Income before taxes 219,974 168,318 648,272 513,019 Provision for income taxes 46,144 35,969 132,564 111,754 Net income 173,830 132,349 515,708 401,265 Earnings attributable to noncontrolling interest (37 ) — (50 ) (3 ) Preferred stock dividends 4,047 4,047 12,141 12,574 Net income available to common stockholders $ 169,746 $ 128,302 $ 503,517 $ 388,688 Basic earnings per common share $ 1.50 $ 1.08 $ 4.39 $ 3.21 Diluted earnings per common share $ 1.49 $ 1.08 $ 4.37 $ 3.20 Bank OZK Consolidated Statements of Stockholders’ Equity Unaudited Preferred
StockCommon
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
(Loss) IncomeNon-
Controlling
InterestTotal (Dollars in thousands, except per share amounts) Three months ended September 30, 2023: Balances - June 30, 2023 $ 338,980 $ 1,131 $ 1,602,964 $ 3,026,247 $ (159,431 ) $ 1,372 $ 4,811,263 Net income — — — 173,830 — — 173,830 Earnings attributable to noncontrolling interest — — — (37 ) — 37 — Total other comprehensive loss — — — — (39,555 ) — (39,555 ) Preferred stock dividends, $0.28906 per share — — — (4,047 ) — — (4,047 ) Common stock dividends, $0.36 per share — — — (41,124 ) — — (41,124 ) Issuance of 2,446 shares of common stock pursuant to stock-based compensation plans — — 77 — — — 77 Stock-based compensation expense — — 4,469 — — — 4,469 Forfeitures of 11,663 shares of unvested restricted common stock — — — — — — — Balances - September 30, 2023 $ 338,980 $ 1,131 $ 1,607,510 $ 3,154,869 $ (198,986 ) $ 1,409 $ 4,904,913 Nine months ended September 30, 2023: Balances - December 31, 2022 $ 338,980 $ 1,172 $ 1,753,941 $ 2,773,135 $ (177,649 ) $ 1,359 $ 4,690,938 Net income — — — 515,708 — — 515,708 Earnings attributable to noncontrolling interest — — — (50 ) — 50 — Total other comprehensive loss — — — — (21,337 ) — (21,337 ) Preferred stock dividends, $0.86718 per share — — — (12,141 ) — — (12,141 ) Common stock dividends, $1.05 per share — — — (121,783 ) — — (121,783 ) Issuance of 505,633 shares of common stock pursuant to stock-based compensation plans — 5 618 — — — 623 Repurchase and cancellation of 4,304,239 shares of common stock under share repurchase program, including excise taxes — (44 ) (151,421 ) — — — (151,465 ) 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 — — 13,044 — — — 13,044 Forfeitures of 26,728 shares of unvested restricted common stock — — — — — — — Balances - September 30, 2023 $ 338,980 $ 1,131 $ 1,607,510 $ 3,154,869 $ (198,986 ) $ 1,409 $ 4,904,913 Bank OZK Consolidated Statements of Stockholders’ Equity Unaudited Preferred
StockCommon
StockAdditional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
(Loss) IncomeNon-
Controlling
InterestTotal (Dollars in thousands, except per share amounts) Three months ended September 30, 2022: Balances - June 30, 2022 $ 338,980 $ 1,190 $ 1,817,650 $ 2,563,130 $ (114,168 ) $ 3,120 $ 4,609,902 Net income — — — 132,349 — — 132,349 Earnings attributable to noncontrolling interest — — — — — — — Total other comprehensive loss — — — — (113,505 ) — (113,505 ) Preferred stock dividends, $0.28906 per share — — — (4,047 ) — (4,047 ) Common stock dividends, $0.32 per share — — — (38,055 ) — — (38,055 ) Issuance of 5,414 shares of common stock pursuant to stock-based compensation plans — — 172 — — — 172 Repurchase and cancellation of 1,225,688 shares of common stock under share repurchase program — (12 ) (47,735 ) — — — (47,747 ) Stock-based compensation expense — — 3,475 — — — 3,475 Forfeitures of 14,142 shares of unvested restricted common stock — — — — — — — Balances - September 30, 2022 $ 338,980 $ 1,178 $ 1,773,562 $ 2,653,377 $ (227,673 ) $ 3,120 $ 4,542,544 Nine months ended September 30, 2022: Balances - December 31, 2021 $ 338,980 $ 1,254 $ 2,093,702 $ 2,378,466 $ 23,841 $ 3,117 $ 4,839,360 Net income — — — 401,265 — — 401,265 Earnings attributable to noncontrolling interest — — — (3 ) — 3 — Total other comprehensive loss — — — — (251,514 ) — (251,514 ) Preferred stock dividends, $0.89812 per share — — — (12,574 ) — (12,574 ) Common stock dividends, $0.93 per share — — — (113,777 ) — — (113,777 ) Issuance of 295,343 shares of common stock pursuant to stock-based compensation plans — 3 2,249 — — — 2,252 Repurchase and cancellation of 7,798,520 shares of common stock under share repurchase program — (77 ) (326,667 ) — — — (326,744 ) 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 — — 9,675 — — — 9,675 Forfeitures of 65,992 shares of unvested restricted common stock — (1 ) 1 — — — — Balances - September 30, 2022 $ 338,980 $ 1,178 $ 1,773,562 $ 2,653,377 $ (227,673 ) $ 3,120 $ 4,542,544 Bank OZK Summary of Non-Interest Expense Unaudited Three Months Ended
September 30,Nine Months Ended
September 30,2023 2022 2023 2022 (Dollars in thousands) Salaries and employee benefits $ 64,107 $ 57,367 $ 192,576 $ 166,427 Net occupancy and equipment 17,797 18,244 55,357 52,474 Other operating expenses: Software and data processing 9,584 8,700 28,634 25,861 Deposit insurance and assessments 5,500 2,650 14,548 6,900 Professional and outside services 4,640 5,403 15,190 15,929 Advertising and public relations 3,779 3,448 10,998 5,810 Telecommunication services 1,943 1,921 6,614 5,852 ATM expense 1,927 1,500 5,725 4,497 Travel and meals 1,926 1,962 5,644 5,906 Postage and supplies 1,716 2,035 5,859 5,240 Loan collection and repossession expense 1,210 402 2,113 1,081 Amortization of intangibles 376 1,298 2,754 4,331 Writedowns of foreclosed and other assets 141 87 1,106 345 Amortization of CRA and tax credit investments 8,171 5,155 20,151 14,885 Other 6,161 5,519 17,280 17,170 Total non-interest expense $ 128,978 $ 115,691 $ 384,549 $ 332,708 Bank OZK Summary of Total Loans Outstanding Unaudited September 30, 2023 December 31, 2022 (Dollars in thousands) Real estate: Residential 1-4 family $ 960,262 3.8 % $ 981,567 4.7 % Non-farm/non-residential 5,251,392 20.7 4,665,268 22.5 Construction/land development 10,743,850 42.4 8,215,056 39.5 Agricultural 254,147 1.0 239,689 1.2 Multifamily residential 2,045,927 8.1 1,503,398 7.2 Total real estate 19,255,578 76.0 15,604,978 75.1 Commercial and industrial 1,257,018 5.0 902,321 4.3 Consumer 2,936,455 11.6 2,445,851 11.8 Other 1,882,689 7.4 1,825,641 8.8 Total loans 25,331,740 100.0 % 20,778,791 100.0 % Allowance for loan losses (303,358 ) (208,858 ) Net loans $ 25,028,382 $ 20,569,933 Bank OZK Allowance for Credit Losses Unaudited Allowance for
Loan LossesReserve for
Losses on
Unfunded Loan
CommitmentsTotal Allowance
for Credit
Losses(Dollars in thousands) Three months ended September 30, 2023: Balances – June 30, 2023 $ 263,188 $ 163,632 $ 426,820 Net charge-offs (9,370 ) — (9,370 ) Provision for credit losses 49,540 (5,504 ) 44,036 Balances - September 30, 2023 $ 303,358 $ 158,128 $ 461,486 Nine months ended September 30, 2023: Balances – December 31, 2022 $ 208,858 $ 156,419 $ 365,277 Net charge-offs (25,429 ) — (25,429 ) Provision for credit losses 119,929 1,709 121,638 Balances - September 30, 2023 $ 303,358 $ 158,128 $ 461,486 Three months ended September 30, 2022: Balances – June 30, 2022 $ 190,795 $ 109,143 $ 299,938 Net charge-offs (4,074 ) — (4,074 ) Provision for credit losses 13,377 26,394 39,771 Balances - September 30, 2022 $ 200,098 $ 135,537 $ 335,635 Nine months ended September 30, 2022: Balances – December 31, 2021 $ 217,380 $ 71,609 $ 288,989 Net charge-offs (4,340 ) — (4,340 ) Provision for credit losses (12,942 ) 63,928 50,986 Balances - September 30, 2022 $ 200,098 $ 135,537 $ 335,635 Bank OZK Summary of Deposits – By Account Type Unaudited September 30, 2023 December 31, 2022 (Dollars in thousands) Non-interest bearing $ 4,283,925 16.8 % $ 4,658,451 21.7 % Interest bearing: Transaction (NOW) 4,319,285 16.9 4,097,532 19.1 Savings and money market 4,710,325 18.4 5,808,185 27.0 Time deposits 12,239,321 47.9 6,935,975 32.2 Total deposits $ 25,552,856 100.0 % $ 21,500,143 100.0 % Bank OZK Summary of Deposits – By Customer Type Unaudited September 30, 2023 December 31, 2022 (Dollars in thousands) Non-interest bearing $ 4,283,925 16.8 % $ 4,658,451 21.7 % Interest bearing: Consumer and commercial: Consumer – Non-Time 2,928,352 11.5 3,916,078 18.2 Consumer – Time 8,756,078 34.3 4,936,061 23.0 Commercial – Non-Time 2,320,691 9.1 2,741,007 12.7 Commercial – Time 683,849 2.7 516,477 2.4 Public funds 2,992,447 11.7 2,103,392 9.8 Brokered 2,774,888 10.9 2,050,294 9.5 Reciprocal 812,626 3.0 578,383 2.7 Total deposits $ 25,552,856 100.0 % $ 21,500,143 100.0 % Bank OZK Selected Consolidated Financial Data Unaudited Three Months Ended
September 30,Nine Months Ended
September 30,2023 2022 %
Change2023 2022 %
Change(Dollars in thousands, except per share amounts) Income statement data: Net interest income $ 367,261 $ 294,617 24.7 % $ 1,068,937 $ 809,754 32.0 % Provision for credit losses 44,036 39,771 10.7 121,638 50,986 138.6 Non-interest income 25,727 29,163 (11.8 ) 85,522 86,959 (1.7 ) Non-interest expense 128,978 115,691 11.5 384,549 332,708 15.6 Net income 173,830 132,349 31.3 515,708 401,265 28.5 Preferred stock dividends 4,047 4,047 — 12,141 12,574 (3.4 ) Net income available to common stockholders 169,746 128,302 32.3 503,517 388,688 29.5 Pre-tax pre-provision net revenue(1) 264,010 208,089 26.9 769,910 564,005 36.5 Common share and per common share data: Diluted earnings per common share $ 1.49 $ 1.08 38.0 % $ 4.37 $ 3.20 36.6 % Basic earnings per common share 1.50 1.08 38.9 4.39 3.21 36.8 Common stock dividends per share 0.36 0.32 12.5 1.05 0.93 12.9 Book value per share 40.35 35.67 13.1 40.35 35.67 13.1 Tangible book value per common share(1) 34.50 30.02 14.9 34.50 30.02 14.9 Weighted-average diluted shares outstanding (thousands) 113,770 118,856 (4.3 ) 115,226 121,539 (5.2 ) End of period shares outstanding (thousands) 113,136 117,762 (3.9 ) 113,136 117,762 (3.9 ) Balance sheet data at period end: Total assets $ 32,767,328 $ 26,232,119 24.9 % $ 32,767,328 $ 26,232,119 24.9 % Total loans 25,331,740 19,513,712 29.8 25,331,740 19,513,712 29.8 Non-purchased loans 25,051,214 19,103,546 31.1 25,051,214 19,103,546 31.1 Purchased loans 280,526 410,166 (31.6 ) 280,526 410,166 (31.6 ) Allowance for loan losses 303,358 200,098 51.6 303,358 200,098 51.6 Foreclosed assets 68,738 6,559 948.0 68,738 6,559 948.0 Investment securities – AFS 3,153,817 3,528,077 (10.6 ) 3,153,817 3,528,077 (10.6 ) Goodwill and other intangible assets, net 660,789 664,732 (0.6 ) 660,789 664,732 (0.6 ) Deposits 25,552,856 20,401,876 25.2 25,552,856 20,401,876 25.2 Other borrowings 1,430,192 456,466 213.3 1,430,192 456,466 213.3 Subordinated notes 347,556 346,741 0.2 347,556 346,741 0.2 Subordinated debentures 121,652 121,450 0.2 121,652 121,450 0.2 Unfunded balance of closed loans 20,625,371 20,091,101 2.7 20,625,371 20,091,101 2.7 Reserve for losses on unfunded loan commitments 158,128 135,537 16.7 158,128 135,537 16.7 Preferred stock 338,980 338,980 — 338,980 338,980 — Total common stockholders’ equity 4,564,524 4,200,444 8.7 4,564,524 4,200,444 8.7 Net unrealized losses on investment securities AFS included in stockholders' equity (198,986 ) (227,673 ) (198,986 ) (227,673 ) Loan (including purchased loans) to deposit ratio 99.13 % 95.65 % 99.13 % 95.65 % Selected ratios: Return on average assets(2) 2.13 % 1.97 % 2.26 % 1.99 % Return on average common stockholders' equity(1) (2) 14.81 11.85 15.06 11.97 Return on average tangible common stockholders' equity(1) (2) 17.33 14.02 17.68 14.14 Average common equity to total average assets 14.38 16.61 15.02 16.60 Net interest margin – FTE(2) 5.05 5.03 5.29 4.60 Efficiency ratio 32.60 35.50 33.09 36.92 Net charge-offs to average non-purchased loans(2) (3) 0.17 0.09 0.12 0.07 Net charge-offs to average total loans(2) 0.15 0.09 0.15 0.03 Nonperforming loans to total loans(4) 0.25 0.14 0.25 0.14 Nonperforming assets to total assets(4) 0.40 0.13 0.40 0.13 Allowance for loan losses to total loans(5) 1.20 1.03 1.20 1.03 Allowance for credit losses to total loans and unfunded loan commitments 1.00 0.85 1.00 0.85 Other information: Non-accrual loans(4) $ 62,648 $ 24,633 $ 62,648 $ 24,633 Accruing loans - 90 days past due(4) — — — — (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 Selected Consolidated Financial Data (continued) Unaudited Three Months Ended September 30, 2023 June 30, 2023 %
Change(Dollars in thousands, except per share amounts) Income statement data: Net interest income $ 367,261 $ 356,824 2.9 % Provision for credit losses 44,036 41,774 5.4 Non-interest income 25,727 31,987 (19.6 ) Non-interest expense 128,978 129,355 (0.3 ) Net income 173,830 171,965 1.1 Preferred stock dividends 4,047 4,047 — Net income available to common stockholders 169,746 167,917 1.1 Pre-tax pre-provision net revenue(1) 264,010 259,456 1.8 Common share and per common share data: Diluted earnings per common share $ 1.49 $ 1.47 1.4 % Basic earnings per common share 1.50 1.47 2.0 Common stock dividends per share 0.36 0.35 2.9 Book value per share 40.35 39.51 2.1 Tangible book value per common share(1) 34.50 33.67 2.5 Weighted-average diluted shares outstanding (thousands) 113,770 114,284 (0.4 ) End of period shares outstanding (thousands) 113,136 113,145 — Balance sheet data at period end: Total assets $ 32,767,328 $ 30,761,870 6.5 % Total loans 25,331,740 23,607,446 7.3 Non-purchased loans 25,051,214 23,291,785 7.6 Purchased loans 280,526 315,661 (11.1 ) Allowance for loan losses 303,358 263,188 15.3 Foreclosed assets 68,738 62,048 10.8 Investment securities – AFS 3,153,817 3,262,366 (3.3 ) Goodwill and other intangible assets, net 660,789 661,166 (0.1 ) Deposits 25,552,856 23,983,397 6.5 Other borrowings 1,430,192 1,104,478 29.5 Subordinated notes 347,556 347,350 0.1 Subordinated debentures 121,652 121,652 — Unfunded balance of closed loans 20,625,371 21,119,761 (2.3 ) Reserve for losses on unfunded loan commitments 158,128 163,632 (3.4 ) Preferred stock 338,980 338,980 — Total common stockholders’ equity 4,564,524 4,470,911 2.1 Net unrealized losses on investment securities AFS included in stockholders' equity (198,986 ) (159,431 ) Loan (including purchased loans) to deposit ratio 99.13 % 98.43 % Selected ratios: Return on average assets(2) 2.13 % 2.27 % Return on average common stockholders' equity(1) (2) 14.81 15.14 Return on average tangible common stockholders' equity(1) (2) 17.33 17.78 Average common equity to total average assets 14.38 15.00 Net interest margin – FTE(2) 5.05 5.32 Efficiency ratio 32.60 33.05 Net charge-offs to average non-purchased loans(2) (3) 0.17 0.03 Net charge-offs to average total loans(2) 0.15 0.15 Nonperforming loans to total loans(4) 0.25 0.15 Nonperforming assets to total assets(4) 0.40 0.32 Allowance for loan losses to total loans(5) 1.20 1.11 Allowance for credit losses to total loans and unfunded loan commitments 1.00 0.95 Other information: Non-accrual loans(4) $ 62,648 $ 35,320 Accruing loans - 90 days past due(4) — — (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 9/30/23 6/30/23 3/31/23 12/31/22 9/30/22 (Dollars in thousands) Earnings summary: Net interest income $ 367,261 $ 356,824 $ 344,852 $ 332,488 $ 294,617 Federal tax (FTE) adjustment 2,632 2,602 2,603 2,383 2,151 Net interest income (FTE) 369,893 359,426 347,455 334,871 296,768 Provision for credit losses (44,036 ) (41,774 ) (35,829 ) (32,508 ) (39,771 ) Non-interest income 25,727 31,987 27,809 27,544 29,163 Non-interest expense (128,978 ) (129,355 ) (126,217 ) (119,013 ) (115,691 ) Pre-tax income (FTE) 222,606 220,284 213,218 210,894 170,469 FTE adjustment (2,632 ) (2,602 ) (2,603 ) (2,383 ) (2,151 ) Provision for income taxes (46,144 ) (45,717 ) (40,703 ) (45,686 ) (35,969 ) Noncontrolling interest (37 ) (1 ) (12 ) 54 — Preferred stock dividend (4,047 ) (4,047 ) (4,047 ) (4,047 ) (4,047 ) Net income available to common stockholders $ 169,746 $ 167,917 $ 165,853 $ 158,832 $ 128,302 Earnings per common share – diluted $ 1.49 $ 1.47 $ 1.41 $ 1.34 $ 1.08 Pre-tax pre-provision net revenue(1) $ 264,010 $ 259,456 $ 246,444 $ 241,019 $ 208,089 Selected balance sheet data at period end: Total assets $ 32,767,328 $ 30,761,870 $ 28,971,170 $ 27,656,568 $ 26,232,119 Non-purchased loans 25,051,214 23,291,785 21,700,941 20,400,154 19,103,546 Purchased loans 280,526 315,661 361,065 378,637 410,166 Investment securities – AFS 3,153,817 3,262,366 3,422,031 3,491,613 3,528,077 Deposits 25,552,856 23,983,397 22,282,983 21,500,143 20,401,876 Unfunded balance of closed loans 20,625,371 21,119,761 20,965,040 21,062,733 20,091,101 Allowance for credit losses: Balance at beginning of period $ 426,820 $ 393,767 $ 365,277 $ 335,635 $ 299,938 Net charge-offs (9,370 ) (8,721 ) (7,339 ) (2,866 ) (4,074 ) Provision for credit losses 44,036 41,774 35,829 32,508 39,771 Balance at end of period $ 461,486 $ 426,820 $ 393,767 $ 365,277 $ 335,635 Allowance for loan losses $ 303,358 $ 263,188 $ 222,025 $ 208,858 $ 200,098 Reserve for losses on unfunded loan commitments 158,128 163,632 171,742 156,419 135,537 Total allowance for credit losses $ 461,486 $ 426,820 $ 393,767 $ 365,277 $ 335,635 Selected ratios: Net interest margin – FTE(2) 5.05 % 5.32 % 5.54 % 5.46 % 5.03 % Efficiency ratio 32.60 33.05 33.63 32.84 35.50 Net charge-offs to average non-purchased loans(2) (3) 0.17 0.03 0.15 0.09 0.09 Net charge-offs to average total loans(2) 0.15 0.15 0.14 0.06 0.09 Nonperforming loans to total loans(4) 0.25 0.15 0.15 0.22 0.14 Nonperforming assets to total assets(4) 0.40 0.32 0.34 0.19 0.13 Allowance for loan losses to total loans(5) 1.20 1.11 1.01 1.01 1.03 Allowance for credit losses to total loans and unfunded loan commitments 1.00 0.95 0.92 0.87 0.85 Loans past due 30 days or more, including past due non-accrual loans, to total loans(4) 0.21 0.14 0.15 0.13 0.11 (1) Calculations of pre-tax pre-provision net revenue and the reconciliation 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 Average Consolidated Balance Sheets and Net Interest Analysis – FTE Unaudited Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Average
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Rate(Dollars in thousands) ASSETS Interest earning assets: Interest earning deposits and federal funds sold $ 1,312,533 $ 17,061 5.16 % $ 699,489 $ 3,690 2.09 % $ 1,005,263 $ 36,338 4.83 % $ 1,023,707 $ 6,155 0.80 % Investment securities: Taxable 2,243,378 9,887 1.75 2,809,479 10,269 1.45 2,351,707 29,761 1.69 3,080,645 31,246 1.36 Tax-exempt – FTE 1,031,685 12,068 4.64 907,955 9,020 3.94 1,033,430 35,807 4.63 706,628 17,889 3.38 Non-purchased loans – FTE 24,162,671 523,124 8.59 18,544,681 295,311 6.32 22,472,789 1,410,764 8.39 18,413,106 792,025 5.75 Purchased loans 298,817 6,005 7.97 429,312 7,148 6.61 338,537 17,845 7.05 464,205 24,300 7.00 Total earning assets – FTE 29,049,084 568,145 7.76 23,390,916 325,438 5.52 27,201,726 1,530,515 7.52 23,688,291 871,615 4.92 Non-interest earning assets 2,557,808 2,474,862 2,554,214 2,460,424 Total assets $ 31,606,892 $ 25,865,778 $ 29,755,940 $ 26,148,715 LIABILITIES AND STOCKHOLDERS’ EQUITY Interest bearing liabilities: Deposits: Savings and interest bearing transaction $ 8,806,690 $ 56,169 2.53 % $ 9,614,806 $ 13,639 0.56 % $ 9,201,712 $ 147,334 2.14 % $ 9,611,716 $ 21,801 0.30 % Time deposits 11,606,189 122,654 4.19 5,232,727 8,358 0.63 9,621,410 261,243 3.63 5,464,267 19,542 0.48 Total interest bearing deposits 20,412,879 178,823 3.48 14,847,533 21,997 0.59 18,823,122 408,577 2.90 15,075,983 41,343 0.37 Other borrowings 1,048,566 14,326 5.42 517,161 2,460 1.89 783,566 30,339 5.20 647,083 4,500 0.93 Subordinated notes 347,456 2,631 3.00 346,642 2,631 3.01 347,254 7,808 3.01 346,433 7,808 3.01 Subordinated debentures 121,652 2,472 8.06 121,382 1,582 5.17 121,647 7,017 7.71 121,239 3,741 4.13 Total interest bearing liabilities 21,930,553 198,252 3.59 15,832,718 28,670 0.72 20,075,589 453,741 3.02 16,190,738 57,392 0.47 Non-interest bearing liabilities: Non-interest bearing deposits 4,294,191 4,998,392 4,370,763 4,915,023 Other non-interest bearing liabilities 495,147 395,671 499,163 359,327 Total liabilities 26,719,891 21,226,781 24,945,515 21,465,088 Total stockholders’ equity before noncontrolling interest 4,885,620 4,635,887 4,809,053 4,680,513 Noncontrolling interest 1,381 3,110 1,372 3,114 Total liabilities and stockholders’ equity $ 31,606,892 $ 25,865,778 $ 29,755,940 $ 26,148,715 Net interest income – FTE $ 369,893 $ 296,768 $ 1,076,774 $ 814,223 Net interest margin – FTE 5.05 % 5.03 % 5.29 % 4.60 % Core spread(1) 5.11 % 5.73 % 5.49 % 5.38 % (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 Nine Months Ended September 30, September 30, June 30, September 30, September 30, 2023 2022 2023 2023 2022 (Dollars in thousands) Net income available to common stockholders $ 169,746 $ 128,302 $ 167,917 $ 503,517 $ 388,688 Average stockholders’ equity before noncontrolling interest $ 4,885,620 $ 4,635,887 $ 4,788,584 $ 4,809,053 $ 4,680,513 Less average preferred stock (338,980 ) (338,980 ) (338,980 ) (338,980 ) (338,980 ) Total average common stockholders’ equity 4,546,640 4,296,907 4,449,604 4,470,073 4,341,533 Less average intangible assets: Goodwill (660,789 ) (660,789 ) (660,789 ) (660,789 ) (660,789 ) Core deposit and other intangible assets, net of accumulated amortization — (4,747 ) (999 ) (1,098 ) (6,124 ) Total average intangibles (660,789 ) (665,536 ) (661,788 ) (661,887 ) (666,913 ) Average tangible common stockholders’ equity $ 3,885,851 $ 3,631,371 $ 3,787,816 $ 3,808,186 $ 3,674,620 Return on average common stockholders’ equity(1) 14.81 % 11.85 % 15.14 % 15.06 % 11.97 % Return on average tangible common stockholders’ equity(1) 17.33 % 14.02 % 17.78 % 17.68 % 14.14 % (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 September 30, December 31, 2023 2022 2022 (In thousands, except per share amounts) Total stockholders’ equity before noncontrolling interest $ 4,903,504 $ 4,539,424 $ 4,689,579 Less preferred stock (338,980 ) (338,980 ) (338,980 ) Total common stockholders’ equity $ 4,564,524 $ 4,200,444 $ 4,350,599 Less intangible assets: Goodwill (660,789 ) (660,789 ) (660,789 ) Core deposit and other intangible assets, net of accumulated amortization — (3,943 ) (2,754 ) Total intangibles (660,789 ) (664,732 ) (663,543 ) Total tangible common stockholders’ equity $ 3,903,735 $ 3,535,712 $ 3,687,056 Shares of common stock outstanding 113,136 117,762 117,177 Book value per common share $ 40.35 $ 35.67 $ 37.13 Tangible book value per common share $ 34.50 $ 30.02 $ 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 September 30, 2023 2022 (Dollars in thousands) Total stockholders’ equity before noncontrolling interest $ 4,903,504 $ 4,539,424 Less preferred stock (338,980 ) (338,980 ) Total common stockholders’ equity $ 4,564,524 $ 4,200,444 Less intangible assets: Goodwill (660,789 ) (660,789 ) Core deposit and other intangible assets, net of accumulated amortization — (3,943 ) Total intangibles (660,789 ) (664,732 ) Total tangible common stockholders’ equity 3,903,735 3,535,712 Total assets $ 32,767,328 $ 26,232,119 Less intangible assets: Goodwill $ (660,789 ) $ (660,789 ) Core deposit and other intangible assets, net of accumulated amortization — (3,943 ) Total intangibles (660,789 ) (664,732 ) Total tangible assets $ 32,106,539 $ 25,567,387 Ratio of total common stockholders’ equity to total assets 13.93 % 16.01 % Ratio of total tangible common stockholders’ equity to total tangible assets 12.16 % 13.83 % Calculation of Pre-Tax Pre-Provision Net Revenue Unaudited Three Months Ended Nine Months Ended Sept 30, June 30, March 31, December 31, Sept 30, September 30, 2023 2023 2023 2022 2022 2023 2022 (Dollars in thousands) Net income available to common stockholders $ 169,746 $ 167,917 $ 165,853 $ 158,832 $ 128,302 $ 503,517 $ 388,688 Preferred stock dividends 4,047 4,047 4,047 4,047 4,047 12,141 12,574 Earnings attributable to noncontrolling interest 37 1 12 (54 ) — 50 3 Provision for income taxes 46,144 45,717 40,703 45,686 35,969 132,564 111,754 Provision for credit losses 44,036 41,774 35,829 32,508 39,771 121,638 50,986 Pre-tax pre-provision net revenue $ 264,010 $ 259,456 $ 246,444 $ 241,019 $ 208,089 $ 769,910 $ 564,005 Investor Contact: Jay Staley (501) 906-7842 Media Contact: Michelle Rossow (501) 906-3922 
