Bank OZK Announces First Quarter 2022 Earnings

Rhea-AI Summary

Bank OZK (Nasdaq: OZK) reported a net income of $128.0 million for Q1 2022, a 13.7% decline from Q1 2021’s $148.4 million. Diluted earnings per share decreased by 10.5% to $1.02. The provision for credit losses was $4.2 million, contrasting with a negative provision of $31.6 million last year. Total loans rose 1.2% to $18.93 billion, but deposits fell 4.5% to $20.33 billion. The bank repurchased approximately 2.9 million shares totaling $131.6 million.

Positive

• Pre-tax pre-provision net revenue (PPNR) increased by 7.7% to $173.1 million compared to Q1 2021.
• Book value per common share rose by 5.0% to $35.47.

Negative

• Net income decreased by 13.7% year-over-year.
• Diluted earnings per share fell by 10.5% compared to the prior year.
• Deposits decreased by 4.5% year-over-year.

LITTLE ROCK, Ark., April 21, 2022 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income available to common shareholders for the first quarter of 2022 was $128.0 million, a 13.7% decrease from $148.4 million for the first quarter of 2021. Diluted earnings per common share for the first quarter of 2022 were $1.02, a 10.5% decrease from $1.14 for the first quarter of 2021.

The Bank’s provision for credit losses was $4.2 million for the first quarter of 2022 compared to negative provision for credit losses of $31.6 million for the first quarter of 2021. Its total allowance for credit losses (“ACL”) was $293.5 million at March 31, 2022. The calculations of the Bank’s provision expense for the first quarter of 2022 and its total ACL at March 31, 2022 were based on a number of key estimates, assumptions and economic forecasts. The Bank’s provision for the first quarter of 2022 and its ACL at March 31, 2022 included certain qualitative adjustments to capture risks that management thought were not fully reflected in its modeled results.

During the fourth quarter of 2021, the Bank completed its public offering of 4.625% Series A Non-Cumulative Perpetual Preferred Stock (“Series A Preferred Stock”) and, during the first quarter of 2022, the Bank paid a Series A Preferred Stock dividend of $4.5 million.

Non-interest income for the first quarter of 2022 included gains on sales of other assets of $7.0 million, of which $1.8 million was a gain from the sale of the Bank’s Magnolia, Arkansas branch. The Bank had $0.3 million of Bank Owned Life Insurance (“BOLI”) death benefits in the first quarter of 2022. Non-interest income for the first quarter of 2021 included gains on sales of other assets of $5.8 million, of which $4.4 million was from the sale of the Bank’s South Carolina branches. The Bank had $1.4 million in BOLI death benefits in the first quarter of 2021.

Pre-tax pre-provision net revenue (“PPNR”) was $173.1 million for the first quarter of 2022, a 7.7% increase from $160.7 million for the first quarter of 2021. The calculation of PPNR and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first quarter of 2022 were 1.97%, 11.67% and 13.73%, respectively, compared to 2.23%, 13.97% and 16.57%, respectively, for the first quarter of 2021. The calculation of the Bank’s returns on average common stockholders’ equity and average tangible common stockholders’ equity and the reconciliations to GAAP are included in the schedules accompanying this release.

George Gleason, Chairman and Chief Executive Officer stated, “We are pleased to report our excellent results for the first quarter of 2022. Our results were highlighted by our second consecutive quarter of record RESG loan originations, reflecting the importance of organic growth in our long-term strategy. Our strong capital and liquidity, disciplined credit culture and outstanding team have us well positioned for the future.”

KEY BALANCE SHEET METRICS

Total loans were $18.93 billion at March 31, 2022, a 1.2% increase from $18.72 billion at March 31, 2021. Non-purchased loans were $18.45 billion at March 31, 2022, a 2.6% increase from $17.98 billion at March 31, 2021. Purchased loans, which consist of loans acquired in previous acquisitions, were $0.48 billion at March 31, 2022, a 34.6% decrease from $0.74 billion at March 31, 2021.

Deposits were $20.33 billion at March 31, 2022, a 4.5% decrease from $21.30 billion at March 31, 2021. Total assets were $26.56 billion at March 31, 2022, a 2.6% decrease from $27.28 billion at March 31, 2021.

Common stockholders’ equity was $4.35 billion at March 31, 2022, a 0.7% decrease from $4.38 billion at March 31, 2021. Tangible common stockholders’ equity was $3.68 billion at March 31, 2022, a 0.7% decrease from $3.71 billion at March 31, 2021. Book value per common share was $35.47 at March 31, 2022, a 5.0% increase from $33.79 at March 31, 2021. Tangible book value per common share was $30.03 at March 31, 2022, a 5.0% increase from $28.60 at March 31, 2021. The calculations of the Bank’s common stockholders’ equity, 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 was 16.38% at March 31, 2022, compared to 16.07% at March 31, 2021. Its ratio of total tangible common stockholders’ equity to total tangible assets was 14.22% at March 31, 2022, compared to 13.94% at March 31, 2021. 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.

STOCK REPURCHASES

During the quarter just ended, the Bank repurchased approximately 2.9 million of its common shares at a weighted average repurchase price of $45.61, for a total of $131.6 million. In evaluating its plans for future stock repurchases, the Bank considers a variety of factors including its capital position, alternative uses of capital, liquidity, financial performance, stock price, regulatory requirements and other factors. The Bank may suspend its stock repurchase program at any time.

MANAGEMENT’S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS

In connection with this release, the Bank released management’s comments on its quarterly results, which are available at http://ir.ozk.com. This release should be read in conjunction with management’s comments on the quarterly results.

Management will conduct a conference call to take questions on these quarterly results and management’s comments at 10:00 a.m. CT (11:00 a.m. ET) on April 22, 2022. 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 conference ID for this playback is 8028109. 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 with the Federal Deposit Insurance Corporation (“FDIC”) annual, quarterly and current reports, proxy materials and other information required by the Securities Exchange Act of 1934, 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 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 presentation 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 delays in identifying satisfactory sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices or relocating, selling or closing existing offices; the ability to enter into and/or close additional 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 or acquired deposits or to retain or grow loans, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and long-term interest rates or changes in the relative relationships of various interest rate indices; the potential impact of the transition from the London Interbank Offered Rate (“LIBOR”) as a reference rate; competitive factors and pricing pressures, including their effect on the Bank’s net interest margin or core spread; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; 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, including those actions in response to the coronavirus (“COVID-19”) pandemic such as the Coronavirus Aid, Relief and Economic Security Act, the Consolidated Appropriations Act of 2021, the American Rescue Plan Act of 2021, and any similar or related laws, rules and regulations; changes in U.S. government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank or its customers; natural disasters or acts of war or terrorism; the adverse effects of the ongoing global COVID-19 pandemic, including the duration of the pandemic and actions taken to contain or treat COVID-19, on the Bank, the Bank’s customers, the Bank’s staff, the global economy and the financial markets; potential impact of supply chain disruptions or inflation; national, international or political instability or military conflict, including the ongoing war in Ukraine; the competition and costs of recruiting and retaining human talent; impairment of our goodwill or other intangible assets; adoption of new accounting standards, or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this communication or as detailed from time to time in our public filings, including those factors described in the disclosures under the headings “Forward-Looking Information” and “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, 2021 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. Headquartered in Little Rock, Arkansas, Bank OZK conducts operations with over 240 offices in eight states including Arkansas, Georgia, Florida, North Carolina, Texas, 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,
		2022				2021
		(Dollars in thousands, except per share amounts)
ASSETS
Cash and cash equivalents		$	1,605,812			$	2,053,829
Investment securities ― available for sale (“AFS”)			3,728,284				3,916,733
Investment securities ― trading			—				14,957
Federal Home Loan Bank of Dallas and other bankers’ bank stocks			40,876				40,788
Non-purchased loans			18,449,723				17,791,610
Purchased loans			481,299				516,215
Allowance for loan losses			(204,213	)			(217,380	)
Net loans			18,726,809				18,090,445
Premises and equipment, net			693,748				695,857
Foreclosed assets			3,417				5,744
Accrued interest receivable			83,114				83,025
Bank owned life insurance (“BOLI”)			779,271				774,822
Goodwill and other intangible assets, net			667,546				669,063
Other, net			233,476				185,167
Total assets		$	26,562,353			$	26,530,430
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing		$	5,008,742			$	4,983,788
Savings and interest bearing transaction			9,753,148				9,245,727
Time			5,567,772				5,979,619
Total deposits			20,329,662				20,209,134
Other borrowings			756,347				756,321
Subordinated notes			346,333				346,133
Subordinated debentures			121,171				121,033
Reserve for losses on unfunded loan commitments			89,327				71,609
Accrued interest payable and other liabilities			226,344				186,840
Total liabilities			21,869,184				21,691,070
Commitments and contingencies
Stockholders’ equity:
Preferred stock; $0.01 par value; 100,000,000 shares authorized; 14,000,000 issued and outstanding at March 31, 2022 and December 31, 2021			338,980				338,980
Common stock; $0.01 par value; 300,000,000 shares authorized; 122,677,195 and 125,443,748 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively			1,227				1,254
Additional paid-in capital			1,962,126				2,093,702
Retained earnings			2,468,652				2,378,466
Accumulated other comprehensive (loss) income			(80,928	)			23,841
Total stockholders’ equity before noncontrolling interest			4,690,057				4,836,243
Noncontrolling interest			3,112				3,117
Total stockholders’ equity			4,693,169				4,839,360
Total liabilities and stockholders’ equity		$	26,562,353			$	26,530,430

Bank OZK
Consolidated Statements of Income
Unaudited

	Three Months Ended March 31,
	2022				2021
	(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans	$	239,995			$	239,827
Purchased loans		8,170				11,935
Investment securities:
Taxable		10,611				8,083
Tax-exempt		2,986				3,681
Deposits with banks and federal funds sold		609				538
Total interest income		262,371				264,064
Interest expense:
Deposits		8,492				24,350
Other borrowings		998				990
Subordinated notes		2,574				3,146
Subordinated debentures		964				942
Total interest expense		13,028				29,428
Net interest income		249,343				234,636
Provision for credit losses		4,190				(31,559	)
Net interest income after provision for credit losses		245,153				266,195
Non-interest income:
Service charges on deposit accounts:
NSF/Overdraft fees		4,201				3,323
All other service charges		6,690				6,342
Trust income		2,094				2,206
BOLI income:
Increase in cash surrender value		4,793				4,881
Death benefits		297				1,409
Loan service, maintenance and other fees		3,018				3,551
Gains on sales of other assets		6,992				5,828
Net (losses) gains on investment securities		(90	)			—
Other		3,480				4,577
Total non-interest income		31,475				32,117
Non-interest expense:
Salaries and employee benefits		54,648				53,645
Net occupancy and equipment		17,215				16,468
Other operating expenses		35,852				35,946
Total non-interest expense		107,715				106,059
Income before taxes		168,913				192,253
Provision for income taxes		36,410				43,818
Net income		132,503				148,435
Earnings attributable to noncontrolling interest		5				(19	)
Preferred stock dividends		4,480				—
Net income available to common stockholders	$	128,028			$	148,416
Basic earnings per common share	$	1.03			$	1.15
Diluted earnings per common share	$	1.02			$	1.14

Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited

	Preferred Stock				Common Stock				Additional Paid-In Capital				Retained Earnings				Accumulated Other Comprehensive (Loss) Income				Non- Controlling Interest				Total
	(Dollars in thousands, except per share amounts)
Three months ended March 31, 2022:
Balances – December 31, 2021	$	338,980			$	1,254			$	2,093,702			$	2,378,466			$	23,841			$	3,117			$	4,839,360
Net income		—				—				—				132,503				—				—				132,503
Earnings attributable to noncontrolling interest		—				—				—				5				—				(5	)			—
Total other comprehensive loss		—				—				—				—				(104,769	)			—				(104,769	)
Preferred stock dividends, $0.32 per share		—				—				—				(4,480	)			—				—				(4,480	)
Common stock dividends, $0.30 per share		—				—				—				(37,842	)			—				—				(37,842	)
Issuance of 49,020 shares of common stock for exercise of stock options		—				1				1,486				—				—				—				1,487
Issuance of 199,406 shares of unvested restricted common stock		—				2				(2	)			—				—				—				—
Repurchase and cancellation of 2,883,013 shares of common stock under share repurchase program		—				(29	)			(131,536	)			—				—				—				(131,565	)
Repurchase and cancellation of 112,974 shares of common stock withheld for taxes pursuant to restricted stock vesting		—				(1	)			(5,398	)			—				—				—				(5,399	)
Stock-based compensation expense		—				—				3,874				—				—				—				3,874
Forfeitures of 18,992 shares of unvested restricted common stock		—				—				—				—				—				—				—
Balances – March 31, 2022	$	338,980			$	1,227			$	1,962,126			$	2,468,652			$	(80,928	)		$	3,112			$	4,693,169
Three months ended March 31, 2021:
Balances – December 31, 2020	$	—			$	1,294			$	2,265,850			$	1,946,875			$	58,252			$	3,085			$	4,275,356
Net income		—				—				—				148,435				—				—				148,435
Earnings attributable to noncontrolling interest		—				—				—				(19	)			—				19				—
Total other comprehensive loss		—				—				—				—				(7,788	)			—				(7,788	)
Common stock dividends, $0.2775 per share		—				—				—				(35,893	)			—				—				(35,893	)
Issuance of 128,100 shares of common stock for exercise of stock options		—				1				4,492				—				—				—				4,493
Issuance of 312,503 shares of unvested restricted common stock		—				3				(3	)			—				—				—				—
Repurchase and cancellation of 55,740 shares of common stock withheld for taxes pursuant to restricted stock vesting		—				(1	)			(1,970	)			—				—				—				(1,971	)
Stock-based compensation expense		—				—				3,677				—				—				—				3,677
Forfeitures of 16,405 shares of unvested restricted common stock		—				—				—				—				—				—				—
Balances – March 31, 2021	$	—			$	1,297			$	2,272,046			$	2,059,398			$	50,464			$	3,104			$	4,386,309

Bank OZK
Summary of Non-Interest Expense
Unaudited

		Three Months Ended March 31,
		2022				2021
		(Dollars in thousands)
Salaries and employee benefits		$	54,648			$	53,645
Net occupancy and equipment			17,215				16,468
Other operating expenses:
Professional and outside services			7,082				6,326
Software and data processing			5,921				5,792
Deposit insurance and assessments			2,150				3,520
Telecommunication services			2,010				2,232
Travel and meals			1,758				774
Postage and supplies			1,698				1,645
ATM expense			1,509				1,283
Advertising and public relations			1,259				308
Loan collection and repossession expense			325				509
Writedowns of foreclosed and other assets			258				1,363
Amortization of intangibles			1,517				1,730
Amortization of CRA and tax credit investments			5,102				4,125
Other			5,263				6,339
Total non-interest expense		$	107,715			$	106,059

Bank OZK
Summary of Total Loans Outstanding
Unaudited

		March 31, 2022								December 31, 2021
		(Dollars in thousands)
Real estate:
Residential 1-4 family		$	921,310				4.9	%		$	887,024				4.8	%
Non-farm/non-residential			3,942,133				20.8				3,782,892				20.7
Construction/land development			8,752,873				46.2				8,246,674				45.0
Agricultural			256,462				1.4				247,727				1.4
Multifamily residential			761,634				4.0				934,845				5.1
Total real estate			14,634,412				77.3				14,099,162				77.0
Commercial and industrial			440,203				2.3				510,784				2.8
Consumer			2,257,909				11.9				2,185,429				11.9
Other			1,598,498				8.5				1,512,450				8.3
Total loans			18,931,022				100.0	%			18,307,825				100.0	%
Allowance for loan losses			(204,213	)							(217,380	)
Net loans		$	18,726,809							$	18,090,445

Bank OZK
Allowance for Credit Losses
Unaudited

		Allowance for Loan Losses				Reserve for Losses on Unfunded Loan Commitments				Total Allowance for Credit Losses
		(Dollars in thousands)
Three months ended March 31, 2022:
Balances – December 31, 2021		$	217,380			$	71,609			$	288,989
Net charge-offs			361				—				361
Provision for credit losses			(13,528	)			17,718				4,190
Balances – March 31, 2022		$	204,213			$	89,327			$	293,540
Three months ended March 31, 2021:
Balances – December 31, 2020		$	295,824			$	81,481			$	377,305
Net charge-offs			(3,439	)			—				(3,439	)
Provision for credit losses			(24,308	)			(7,251	)			(31,559	)
Balances – March 31, 2021		$	268,077			$	74,230			$	342,307

Bank OZK
Summary of Deposits – By Account Type
Unaudited

		March 31, 2022								December 31, 2021
		(Dollars in thousands)
Non-interest bearing		$	5,008,742				24.6	%		$	4,983,788				24.7	%
Interest bearing:
Transaction (NOW)			3,434,321				16.9				3,412,369				16.9
Savings and money market			6,318,827				31.1				5,833,358				28.9
Time deposits			5,567,772				27.4				5,979,619				29.5
Total deposits		$	20,329,662				100.0	%		$	20,209,134				100.0	%

Summary of Deposits – By Customer Type
Unaudited

		March 31, 2022								December 31, 2021
		(Dollars in thousands)
Non-Interest Bearing		$	5,008,742				24.6	%		$	4,983,788				24.7	%
Interest Bearing:
Consumer and Commercial:
Consumer – Non-Time			4,491,178				22.1				4,334,378				21.4
Consumer – Time			4,089,074				20.1				4,318,742				21.4
Commercial – Non-Time			2,645,789				13.0				2,634,817				13.0
Commercial – Time			792,562				3.9				905,347				4.5
Public Funds			2,043,667				10.1				2,094,800				10.4
Brokered			754,979				3.7				452,137				2.2
Reciprocal			503,671				2.5				485,125				2.4
Total deposits		$	20,329,662				100.0	%		$	20,209,134				100.0	%

Bank OZK
Selected Consolidated Financial Data
Unaudited

		Three Months Ended March 31,
		2022				2021				% Change
		(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income		$	249,343			$	234,636				6.3	%
Provision for credit losses			4,190				(31,559	)		NM
Non-interest income			31,475				32,117				(2.0	)
Non-interest expense			107,715				106,059				1.6
Net income			132,503				148,435				(10.7	)
Preferred stock dividends			4,480				—			NM
Net income available to common stockholders			128,028				148,416				(13.7	)
Pre-tax pre-provision net revenue (1)			173,103				160,694				7.7
Common share and per common share data:
Diluted earnings per common share		$	1.02			$	1.14				(10.5	)%
Basic earnings per common share			1.03				1.15				(10.4	)
Common stock dividends per share			0.30				0.2775				8.1
Book value per share			35.47				33.79				5.0
Tangible book value per share (1)			30.03				28.60				5.0
Weighted-average diluted shares outstanding (thousands)			125,004				129,816				(3.7	)
End of period shares outstanding (thousands)			122,677				129,719				(5.4	)
Balance sheet data at period end:
Total assets		$	26,562,353			$	27,276,892				(2.6	)%
Total loans			18,931,022				18,715,065				1.2
Non-purchased loans			18,449,723				17,979,435				2.6
Purchased loans			481,299				735,630				(34.6	)
Allowance for loan losses			204,213				268,077				(23.8	)
Foreclosed assets			3,417				8,436				(59.5	)
Investment securities − AFS			3,728,284				4,162,479				(10.4	)
Goodwill and other intangible assets, net			667,546				673,728				(0.9	)
Deposits			20,329,662				21,296,442				(4.5	)
Other borrowings			756,347				756,297				0.0
Subordinated notes			346,333				224,141				54.5
Subordinated debentures			121,171				120,613				0.5
Unfunded balance of closed loans			14,954,367				11,780,099				26.9
Reserve for losses on unfunded loan commitments			89,327				74,230				20.3
Preferred stock			338,980				—			NM
Total common stockholders’ equity (1)			4,351,077				4,383,205				(0.7	)
Net unrealized (losses) gains on investment securities AFS included in stockholders’ equity			(80,928	)			50,464
Loan (including purchased loans) to deposit ratio			93.12	%			87.88	%
Selected ratios:
Return on average assets (2)			1.97	%			2.23	%
Return on average common stockholders’ equity (1) (2)			11.67				13.97
Return on average tangible common stockholders’ equity (1) (2)			13.73				16.57
Average common equity to total average assets			16.86				15.93
Net interest margin – FTE (2)			4.24				3.86
Efficiency ratio			38.22				39.57
Net charge-offs to average non-purchased loans (2) (3)			0.08				0.08
Net charge-offs to average total loans (2)			(0.01	)			0.07
Nonperforming loans to total loans (4)			0.21				0.25
Nonperforming assets to total assets (4)			0.16				0.19
Allowance for loan losses to total loans (5)			1.08				1.43
Other information:
Non-accrual loans (4)		$	37,363			$	43,059
Accruing loans − 90 days past due (4)			—				—
Troubled and restructured non-purchased loans − accruing (4)			1,263				1,380

(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.
NM – Not meaningful

      

Selected Consolidated Financial Data (continued)
Unaudited

		Three Months Ended
		March 31,				December 31,
		2022				2021				% Change
	(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income		$	249,343			$	266,381				(6.4	)%
Provision for credit losses			4,190				(7,992	)		NM
Non-interest income			31,475				29,695				6.0
Non-interest expense			107,715				110,106				(2.2	)
Net income			132,503				149,765				(11.5	)
Preferred stock dividends			4,480				—			NM
Net income available to common stockholders			128,028				149,760				(14.5	)
Pre-tax pre-provision net revenue (1)			173,103				185,970				(6.9	)
Common share and per common share data:
Diluted earnings per common share		$	1.02			$	1.17				(12.8	)%
Basic earnings per common share			1.03				1.17				(12.0	)
Dividends per share			0.30				0.290				3.4
Book value per share			35.47				35.85				(1.1	)
Tangible book value per share (1)			30.03				30.52				(1.6	)
Weighted-average diluted shares outstanding (thousands)			125,004				128,246				(2.5	)
End of period shares outstanding (thousands)			122,677				125,444				(2.2	)
Balance sheet data at period end:
Total assets		$	26,562,353			$	26,530,430				0.1	%
Total loans			18,931,022				18,307,825				3.4
Non-purchased loans			18,449,723				17,791,610				3.7
Purchased loans			481,299				516,215				(6.8	)
Allowance for loan losses			204,213				217,380				(6.1	)
Foreclosed assets			3,417				5,744				(40.5	)
Investment securities − AFS			3,728,284				3,916,733				(4.8	)
Goodwill and other intangible assets, net			667,546				669,063				(0.2	)
Deposits			20,329,662				20,209,134				0.6
Other borrowings			756,347				756,321				0.0
Subordinated notes			346,333				346,133				0.1
Subordinated debentures			121,171				121,033				0.1
Unfunded balance of closed loans			14,954,367				13,619,578				9.8
Reserve for losses on unfunded loan commitments			89,327				71,609				24.7
Preferred stock			338,980				338,980				—
Total common stockholders’ equity (1)			4,351,077				4,497,263				(3.3	)
Net unrealized gains on investment securities AFS included in stockholders’ equity			(80,928	)			23,841
Loan (including purchased loans) to deposit ratio			93.12	%			90.59	%
Selected ratios:
Return on average assets (2)			1.97	%			2.25	%
Return on average common stockholders’ equity (1) (2)			11.67				13.08
Return on average tangible common stockholders’ equity (1) (2)			13.73				15.34
Net interest margin – FTE (2)			4.24				4.41
Efficiency ratio			38.22				37.06
Net charge-offs to average non-purchased loans (2) (3)			0.08				0.05
Net charge-offs to average total loans (2)			(0.01	)			0.04
Nonperforming loans to total loans (4)			0.21				0.19
Nonperforming assets to total assets (4)			0.16				0.15
Allowance for loan losses to total loans (5)			1.08				1.19
Other information:
Non-accrual loans (4)		$	37,363			$	33,274
Accruing loans − 90 days past due (4)			—				—
Troubled and restructured non-purchased loans − accruing (4)			1,263				1,285

(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.
NM – Not meaningful

Bank OZK
Supplemental Quarterly Financial Data
Unaudited

		6/30/20				9/30/20				12/31/20				3/31/21				6/30/21				9/30/21				12/31/21				03/31/22
		(Dollars in thousands, except per share amounts)
Earnings Summary:
Net interest income		$	216,593			$	224,657			$	237,600			$	234,636			$	240,746			$	247,957			$	266,381			$	249,343
Federal tax (FTE) adjustment			1,753				1,605				1,533				1,275				1,355				1,106				1,009				1,017
Net interest income (FTE)			218,346				226,262				239,133				235,911				242,101				249,063				267,390				250,360
Provision for credit losses			(72,026	)			(7,200	)			(6,750	)			31,559				30,932				7,454				7,992				(4,190	)
Non-interest income			21,591				26,676				28,661				32,117				27,742				25,984				29,695				31,475
Non-interest expense			(100,953	)			(105,641	)			(103,394	)			(106,059	)			(103,711	)			(110,397	)			(110,106	)			(107,715	)
Pretax income (FTE)			66,958				140,097				157,650				193,528				197,064				172,104				194,971				169,930
FTE adjustment			(1,753	)			(1,605	)			(1,533	)			(1,275	)			(1,355	)			(1,106	)			(1,009	)			(1,017	)
Provision for income taxes			(14,948	)			(29,251	)			(35,607	)			(43,818	)			(45,161	)			(40,713	)			(44,197	)			(36,410	)
Noncontrolling interest			9				12				3				(19	)			(13	)			5				(5	)			5
Preferred stock dividend			—				—				—				—				—				—				—				(4,480	)
Net income available to common stockholders		$	50,266			$	109,253			$	120,513			$	148,416			$	150,535			$	130,290			$	149,760			$	128,028
Earnings per common share – diluted		$	0.39			$	0.84			$	0.93			$	1.14			$	1.16			$	1.00			$	1.17			$	1.02
PPNR		$	137,231			$	145,692			$	162,867			$	160,694			$	164,777			$	163,544			$	185,970			$	173,103
Non-interest Income:
Service charges on deposit accounts:
NSF/Overdraft fees		$	2,702			$	3,494			$	4,024			$	3,323			$	3,244			$	4,080			$	4,315			$	4,201
All other service charges			5,579				5,933				5,959				6,342				7,067				7,097				7,149				6,690
Trust income			1,759				1,936				1,909				2,206				1,911				2,247				2,141				2,094
BOLI income:
Increase in cash surrender value			5,057				5,081				5,034				4,881				4,919				4,940				4,901				4,793
Death benefits			—				—				—				1,409				—				—				618				297
Loan service, maintenance and other fees			3,394				3,351				3,797				3,551				3,953				3,307				3,148				3,018
Gains on sales of other assets			621				891				5,189				5,828				2,341				463				1,330				6,992
Net gains (losses) on investment securities			—				2,244				—				—				—				—				504				(90	)
Other			2,479				3,746				2,749				4,577				4,307				3,850				5,589				3,480
Total non-interest income		$	21,591			$	26,676			$	28,661			$	32,117			$	27,742			$	25,984			$	29,695			$	31,475
Non-interest Expense:
Salaries and employee benefits		$	48,410			$	53,119			$	53,832			$	53,645			$	52,119			$	53,769			$	55,034			$	54,648
Net occupancy and equipment			15,756				16,676				15,617				16,468				16,168				17,161				17,004				17,215
Other operating expenses			36,787				35,846				33,945				35,946				35,424				39,467				38,068				35,852
Total non-interest expense		$	100,953			$	105,641			$	103,394			$	106,059			$	103,711			$	110,397			$	110,106			$	107,715
Balance Sheet Data:
Total assets		$	26,380,409			$	26,888,308			$	27,162,596			$	27,276,892			$	26,605,938			$	26,143,367			$	26,530,430			$	26,562,353
Non-purchased loans			18,247,431				18,419,958				18,401,495				17,979,435				17,611,848				17,707,452				17,791,610				18,449,723
Purchased loans			1,063,647				938,485				807,673				735,630				659,822				597,851				516,215				481,299
Investment securities – AFS			3,299,944				3,468,243				3,405,351				4,162,479				4,693,396				3,846,496				3,916,733				3,728,284
Deposits			20,723,598				21,287,405				21,450,356				21,296,442				20,706,777				20,102,440				20,209,134				20,329,662
Unfunded balance of closed loans			11,411,441				11,604,614				11,847,117				11,780,099				11,709,818				12,385,369				13,619,578				14,954,367
Preferred stock			—				—				—				—				—				—				338,980				338,980
Total stockholders' equity before noncontrolling interest			4,110,666				4,186,285				4,272,271				4,383,205				4,501,676				4,553,240				4,836,243				4,690,057

Bank OZK
Supplemental Quarterly Financial Data (Continued)
Unaudited

		6/30/20				9/30/20				12/31/20				3/31/21				6/30/21				9/30/21				12/31/21				03/31/22
		(Dollars in thousands, except per share amounts)
Allowance for Credit Losses:
Balance at beginning of period		$	316,409			$	374,494			$	377,273			$	377,305			$	342,307			$	307,564			$	298,798			$	288,989
Net charge-offs			(13,941	)			(4,421	)			(6,718	)			(3,439	)			(3,811	)			(1,312	)			(1,817	)			361
Provision for credit losses			72,026				7,200				6,750				(31,559	)			(30,932	)			(7,454	)			(7,992	)			4,190
Balance at end of period		$	374,494			$	377,273			$	377,305			$	342,307			$	307,564			$	298,798			$	288,989			$	293,540
Allowance for loan losses		$	306,196			$	308,847			$	295,824			$	268,077			$	248,753			$	237,722			$	217,380			$	204,213
Reserve for losses on unfunded loan commitments			68,298				68,426				81,481				74,230				58,811				61,076				71,609				89,327
Total allowance for credit losses		$	374,494			$	377,273			$	377,305			$	342,307			$	307,564			$	298,798			$	288,989			$	293,540
Selected Ratios:
Net interest margin – FTE (1)			3.74	%			3.69	%			3.88	%			3.86	%			3.95	%			4.16	%			4.41	%			4.24	%
Efficiency ratio			42.07				41.77				38.61				39.57				38.43				40.14				37.06				38.22
Net charge-offs to average non-purchased loans (1) (2)			0.05				0.09				0.14				0.08				0.09				0.04				0.05				0.08
Net charge-offs to average total loans (1)			0.29				0.09				0.14				0.07				0.08				0.03				0.04				(0.01	)
Nonperforming loans to total loans (3)			0.18				0.15				0.25				0.25				0.22				0.20				0.19				0.21
Nonperforming assets to total assets (3)			0.19				0.17				0.21				0.19				0.18				0.17				0.15				0.16
Allowance for loan losses to total loans (4)			1.59				1.60				1.54				1.43				1.36				1.30				1.19				1.08
Loans past due 30 days or more, including past due non-accrual loans, to total loans (3)			0.13				0.13				0.16				0.13				0.10				0.13				0.15				0.14

         (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 reserve for losses on unfunded loan commitments.

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

		Three Months Ended March 31,
		2022												2021
		Average Balance				Income/ Expense				Yield/ Rate				Average Balance				Income/ Expense				Yield/ Rate
		(Dollars in thousands)
ASSETS
Interest earning assets:
Interest earning deposits and federal funds sold		$	1,359,510			$	609				0.18	%		$	2,212,680			$	538				0.10	%
Investment securities:
Taxable			3,378,613				10,611				1.27				2,422,127				8,083				1.35
Tax-exempt – FTE			570,987				3,779				2.68				1,167,827				4,659				1.62
Non-purchased loans – FTE			18,154,626				240,219				5.37				18,188,269				240,124				5.35
Purchased loans			499,418				8,170				6.63				776,097				11,935				6.24
Total earning assets – FTE			23,963,154				263,388				4.46				24,767,000				265,339				4.34
Non-interest earning assets			2,421,122												2,279,477
Total assets		$	26,384,276											$	27,046,477
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction		$	9,522,195			$	2,783				0.12	%		$	8,337,990			$	3,616				0.18	%
Time deposits			5,760,998				5,709				0.40				8,996,193				20,734				0.93
Total interest bearing deposits			15,283,193				8,492				0.23				17,334,183				24,350				0.57
Other borrowings			756,115				998				0.54				756,184				990				0.53
Subordinated notes			346,227				2,574				3.02				224,092				3,146				5.69
Subordinated debentures			121,097				964				3.23				120,540				942				3.17
Total interest bearing liabilities			16,506,632				13,028				0.32				18,434,999				29,428				0.65
Non-interest bearing liabilities:
Non-interest bearing deposits			4,773,827												3,972,815
Other non-interest bearing liabilities			312,408												328,401
Total liabilities			21,592,867												22,736,215
Total stockholders’ equity before noncontrolling interest			4,788,294												4,307,174
Noncontrolling interest			3,114												3,088
Total liabilities and stockholders’ equity		$	26,384,275											$	27,046,477
Net interest income – FTE						$	250,360											$	235,911
Net interest margin – FTE											4.24	%											3.86	%
Core spread (1)											5.14	%											4.78	%

⁽¹⁾   Core spread is the difference between the yield on the Bank’s non-purchased loans-FTE and the rate on its interest bearing deposits.

Bank OZK
Reconciliation of Non-GAAP Financial Measures

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

	Three Months Ended
	March 31,								December 31,
	2022				2021				2021
	(Dollars in thousands)
Net income available to common stockholders	$	128,028			$	148,416			$	149,760
Average stockholders’ equity before noncontrolling interest	$	4,788,294			$	4,307,174			$	4,755,706
Less average preferred stock		(338,980	)			—				(213,693	)
Total average common stockholders’ equity		4,449,314				4,307,174				4,542,013
Less average intangible assets:
Goodwill		(660,789	)			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization		(7,572	)			(13,828	)			(9,032	)
Total average intangibles		(668,361	)			(674,617	)			(669,821	)
Average tangible common stockholders’ equity	$	3,780,953			$	3,632,557			$	3,872,192
Return on average common stockholders’ equity (1)		11.67	%			13.97	%			13.08	%
Return on average tangible common stockholders’ equity (1)		13.73	%			16.57	%			15.34	%

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

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

		March 31,								December 31,
		2022				2021				2021
		(In thousands, except per share amounts)
Total stockholders’ equity before noncontrolling interest		$	4,690,057			$	4,383,205			$	4,836,243
Less preferred stock			(338,980	)			—				(338,980	)
Total common stockholders' equity			4,351,077				4,383,205				4,497,263
Less intangible assets:
Goodwill			(660,789	)			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(6,757	)			(12,939	)			(8,274	)
Total intangibles			(667,546	)			(673,728	)			(669,063	)
Total tangible common stockholders’ equity		$	3,683,531			$	3,709,477			$	3,828,200
Shares of common stock outstanding			122,677				129,719				125,444
Book value per common share		$	35.47			$	33.79			$	35.85
Tangible book value per common share		$	30.03			$	28.60			$	30.52

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

		March 31,
		2022				2021
		(Dollars in thousands)
Total stockholders’ equity before noncontrolling interest		$	4,690,057			$	4,383,205
Less preferred stock			(338,980	)			—
Total common stockholders’ equity			4,351,077				4,383,205
Less intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(6,757	)			(12,939	)
Total intangibles			(667,546	)			(673,728	)
Total tangible common stockholders’ equity		$	3,683,531			$	3,709,477
Total assets		$	26,562,353			$	27,276,892
Less intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(6,757	)			(12,939	)
Total intangibles			(667,546	)			(673,728	)
Total tangible assets		$	25,894,807			$	26,603,164
Ratio of total common stockholders’ equity to total assets			16.38	%			16.07	%
Ratio of total tangible common stockholders’ equity to total tangible assets			14.22	%			13.94	%

Calculation of Pre-Tax Pre-Provision Net Revenue
Unaudited

		Three Months Ended
		March 31,								December 31,
		2022				2021				2021
		(Dollars in thousands)
Income before taxes		$	168,913			$	192,253			$	193,962
Provision for credit losses			4,190				(31,559	)			(7,992	)
Pre-tax pre-provision net revenue		$	173,103			$	160,694			$	185,970

Investor Contact: Tim Hicks (501) 978-2336
Media Contact: Candace Graham (501) 320-4165

FAQ

What were Bank OZK's earnings for Q1 2022?

Bank OZK reported net income of $128.0 million for Q1 2022.

How much did Bank OZK's diluted earnings per share decrease in Q1 2022?

Diluted earnings per share decreased by 10.5% to $1.02 in Q1 2022.

What was the change in total loans for Bank OZK in Q1 2022?

Total loans increased by 1.2% to $18.93 billion compared to Q1 2021.

How did Bank OZK's deposits change in Q1 2022?

Deposits fell by 4.5% to $20.33 billion in Q1 2022.

What is the pre-tax pre-provision net revenue for Bank OZK in Q1 2022?

The pre-tax pre-provision net revenue was $173.1 million, an increase of 7.7% from the previous year.