Bank OZK Announces Record First Quarter 2024 Earnings

Rhea-AI Summary

Bank OZK reported record first-quarter earnings for 2024 with net income available to common stockholders reaching $171.5 million, a 3.4% increase from the previous year. Diluted earnings per common share also saw a 7.1% increase. The Bank's total loans, deposits, assets, common stockholders' equity, and tangible common stockholders' equity all showed significant growth. Despite an increase in provision for credit losses, the Bank's returns on average assets, common stockholders' equity, and tangible common stockholders' equity slightly declined. Asset quality metrics remained stable with a slight increase in nonperforming loans. Management expressed confidence in the Bank's performance and highlighted new opportunities.

Positive

• Record net income of $171.5 million for the first quarter of 2024, a 3.4% increase from the previous year.
• Diluted earnings per common share reached a record $1.51, up by 7.1% from the first quarter of 2023.
• Pre-tax pre-provision net revenue (PPNR) was a record $272.7 million, a 10.7% increase year-over-year.
• Total loans, deposits, assets, common stockholders' equity, and tangible common stockholders' equity all showed significant growth.
• Provision for credit losses increased to $42.9 million in the first quarter of 2024.
• Returns on average assets, common stockholders' equity, and tangible common stockholders' equity slightly declined compared to the previous year.
• Asset quality metrics remained stable with a slight increase in nonperforming loans.
• Management expressed confidence in the Bank's performance and highlighted new opportunities.

Negative

• None.

Insights

Financial Analyst

Bank OZK's announcement of increased net income and diluted earnings per share signifies a positive trend in profitability, which is essential for stakeholders seeking growth. The 3.4% increase in net income, although modest, indicates a steady upward trajectory. However, it's also important to note that the return on average assets and equity metrics have seen a decline. This could imply that while the bank's absolute earnings are growing, the efficiency of using assets and equity to generate profits might be witnessing a slight dip compared to the previous year.

Additionally, the substantial growth in total loans and deposits, by 27.1% and 32.0% respectively, suggests aggressive expansion activities which can be both an opportunity and a risk. The increased provision for credit losses aligns with this expansion, as more lending typically requires higher loss allowances. Investors should consider the balance between growth and the potential for increased defaults.

From a valuation perspective, the increase in book value and tangible book value per common share is encouraging. It highlights an improvement in the intrinsic value of the shares, which is a positive indicator for investors concerned with fundamental analysis.

Risk Management Expert

While Bank OZK's asset growth is a demonstration of vigor, it's not without risk implications. Diligent investors should scrutinize the bank's asset quality metrics. The slight uptick in the ratio of nonperforming non-purchased loans indicates that there might be a marginal increase in loan defaults. Although these numbers are still relatively low, they warrant attention as they could foretell future credit quality issues, especially in an aggressively expanding loan portfolio.

Moreover, the declined annualized ratio of net charge-offs indicates an improved quality of the loan book over the short term. It's worthwhile for investors to track this metric over subsequent quarters for indications of the bank's credit management efficacy.

Lastly, the ratios of total common stockholders' equity and total tangible common stockholders' equity to total assets have decreased, which points to a higher leverage ratio. While not alarming in themselves, these figures should be looked at in the context of the bank's overall capital adequacy and regulatory requirements.

LITTLE ROCK, Ark., April 17, 2024 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income available to common stockholders for the first quarter of 2024 was a record $171.5 million, a 3.4% increase from $165.9 million for the first quarter of 2023. Diluted earnings per common share for the first quarter of 2024 were a record $1.51, a 7.1% increase from $1.41 for the first quarter of 2023.

Pre-tax pre-provision net revenue (“PPNR”) was a record $272.7 million for the first quarter of 2024, a 10.7% increase from $246.4 million for the first quarter of 2023. 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 $42.9 million for the first quarter of 2024 compared to $35.8 million for the first quarter of 2023. The Bank’s total allowance for credit losses (“ACL”) was $536.9 million at March 31, 2024 compared to $393.8 million at March 31, 2023.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first quarter of 2024 were 1.96%, 14.16% and 16.38%, respectively, compared to 2.41%, 15.24% and 17.94%, respectively, for the first quarter of 2023. 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, “Our record net income and record diluted earnings per share in the quarter just ended are an excellent start to 2024. We feel that we are well positioned for the year, and we look forward to capitalizing on new opportunities.”

KEY BALANCE SHEET METRICS

Total loans were $28.03 billion at March 31, 2024, a 27.1% increase from $22.06 billion at March 31, 2023. Deposits were $29.41 billion at March 31, 2024, a 32.0% increase from $22.28 billion at March 31, 2023. Total assets were $36.03 billion at March 31, 2024, a 24.4% increase from $28.97 billion at March 31, 2023.

Common stockholders’ equity was $4.93 billion at March 31, 2024, an 11.4% increase from $4.42 billion at March 31, 2023. Tangible common stockholders’ equity was $4.27 billion at March 31, 2024, a 13.5% increase from $3.76 billion at March 31, 2023. The Bank’s ratio of total common stockholders’ equity to total assets was 13.68% at March 31, 2024, compared to 15.27% at March 31, 2023. The Bank's ratio of total tangible common stockholders’ equity to total tangible assets was 12.06% at March 31, 2024, compared to 13.28% at March 31, 2023.

Book value per common share was $43.44 at March 31, 2024, a 13.0% increase from $38.43 at March 31, 2023. Tangible book value per common share was $37.62 at March 31, 2024, a 15.1% increase from $32.68 at March 31, 2023.

The calculations of the Bank’s total common stockholders’ equity, tangible common stockholders’ equity, ratio of total tangible common stockholders’ equity to total tangible assets and tangible book value per common share, 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 0.20% at March 31, 2024, compared to 0.15% as of March 31, 2023. The Bank’s ratio of nonperforming assets to total assets (excluding purchased loans, except for their inclusion in total assets) was 0.33% at March 31, 2024, compared to 0.34% as of March 31, 2023. The Bank's annualized ratio of net charge-offs to average total loans was 0.11% for the quarter ended March 31, 2024, compared to 0.14% for the quarter ended March 31, 2023.

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 9:00 a.m. CT (10:00 a.m. ET) on Thursday, April 18, 2024. 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 obtaining regulatory or other approvals, delays in acquiring satisfactory sites, obtaining permits and designing, constructing and opening new offices, 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; recently enacted and potential new 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 any 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 cyberattacks 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; competition for and costs of recruiting and retaining qualified personnel; 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, 2023 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 in approximately 240 offices in eight states including Arkansas, Georgia, Florida, North Carolina, Texas, New York, California and Mississippi and had $36.03 billion in total assets as of March 31, 2024. For more information, visit www.ozk.com.

Bank OZK Consolidated Balance Sheets Unaudited
		March 31, 2024				December 31, 2023
		(Dollars in thousands)
ASSETS
Cash and cash equivalents		$	2,323,813			$	2,149,529
Investment securities – available for sale (“AFS”)			3,072,391				3,244,371
Federal Home Loan Bank of Dallas (“FHLB”) and other bankers’ bank stocks			14,484				50,400
Non-purchased loans			27,781,091				26,195,030
Purchased loans			250,257				264,045
Allowance for loan losses			(365,935	)			(339,394	)
Net Loans			27,665,413				26,119,681
Premises and equipment, net			681,865				676,821
Foreclosed assets			60,782				61,720
Accrued interest receivable			175,201				170,110
Bank owned life insurance (“BOLI”)			813,996				808,490
Goodwill			660,789				660,789
Other, net			561,170				295,546
Total assets		$	36,029,904			$	34,237,457
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing		$	4,046,054			$	4,095,874
Savings and interest bearing transaction			9,504,445				9,074,296
Time			15,855,571				14,234,973
Total deposits			29,406,070				27,405,143
Other borrowings			202,009				805,318
Subordinated notes			347,961				347,761
Subordinated debentures			121,652				121,652
Reserve for losses on unfunded loan commitments			170,952				161,834
Accrued interest payable and other liabilities			513,420				255,773
Total liabilities		$	30,762,064			$	29,097,481
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, 2024 and December 31, 2023			338,980				338,980
Common Stock: $0.01 par value; 300,000,000 shares authorized; 113,434,816 and 113,148,672 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively			1,134				1,131
Additional paid-in capital			1,609,268				1,612,446
Retained earnings			3,424,672				3,283,818
Accumulated other comprehensive loss			(107,207	)			(97,374	)
Total stockholders’ equity before noncontrolling interest			5,266,847				5,139,001
Noncontrolling interest			993				975
Total stockholders’ equity			5,267,840				5,139,976
Total liabilities and stockholders’ equity		$	36,029,904			$	34,237,457

Bank OZK Consolidated Statements of Income Unaudited
		Three Months Ended March 31,
			2024				2023
		(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans		$	586,981			$	414,896
Purchased loans			4,960				6,518
Investment securities:
Taxable			9,333				10,171
Tax-exempt			11,173				9,264
Deposits with banks			24,606				7,870
Total interest income			637,053				448,719
Interest expense:
Deposits			254,323				93,632
Other borrowings			750				5,422
Subordinated notes			2,574				2,574
Subordinated debentures			2,472				2,239
Total interest expense			260,119				103,867
Net interest income			376,934				344,852
Provision for credit losses			42,923				35,829
Net interest income after provision for credit losses			334,011				309,023
Non-interest income:
Service charges on deposit accounts:
NSF fees			—				991
Overdraft fees			3,427				3,287
All other service charges			6,839				6,502
Trust income			2,324				2,033
BOLI income			5,506				4,974
Loan service, maintenance and other fees			6,343				4,076
Gains on sales of other assets			459				343
Net gains on investment securities			410				1,716
Other			3,776				3,887
Total non-interest income			29,084				27,809
Non-interest expense:
Salaries and employee benefits			69,564				63,249
Net occupancy and equipment			17,974				17,870
Other operating expenses			45,776				45,098
Total non-interest expense			133,314				126,217
Income before taxes			229,781				210,615
Provision for income taxes			54,226				40,703
Net income			175,555				169,912
Earnings attributable to noncontrolling interest			(18	)			(12	)
Preferred stock dividends			4,047				4,047
Net income available to common stockholders		$	171,490			$	165,853
Basic earnings per common share		$	1.51			$	1.42
Diluted earnings per common share		$	1.51			$	1.41

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, 2024:
Balances - December 31, 2023		$	338,980		$	1,131			$	1,612,446			$	3,283,818			$	(97,374	)		$	975		$	5,139,976
Cumulative effect of change in accounting principle														12,690											12,690
Balances - January 1, 2024			338,980			1,131				1,612,446				3,296,508				(97,374	)			975			5,152,666
Net income			—			—				—				175,555				—				—			175,555
Earnings attributable to noncontrolling interest			—			—				—				(18	)			—				18			—
Total other comprehensive loss			—			—				—				—				(9,833	)			—			(9,833	)
Preferred stock dividends, $0.28906 per share			—			—				—				(4,047	)			—				—			(4,047	)
Common stock dividends, $0.38 per share			—			—				—				(43,326	)			—				—			(43,326	)
Issuance of 484,818 shares of common stock pursuant to stock-based compensation plans			—			5				179				—				—				—			184
Repurchase and cancellation of 184,415 shares of common stock withheld for tax pursuant to stock-based compensation plans			—			(2	)			(8,008	)			—				—				—			(8,010	)
Stock-based compensation expense			—			—				4,651				—				—				—			4,651
Forfeitures of 14,259 shares of unvested restricted common stock			—			—				—				—				—				—			—
Balances - March 31, 2024		$	338,980		$	1,134			$	1,609,268			$	3,424,672			$	(107,207	)		$	993		$	5,267,840

Three months ended March 31, 2023:
Balances - December 31, 2022		$	338,980		$	1,172			$	1,753,941			$	2,773,135			$	(177,649	)		$	1,359		$	4,690,938
Net income			—			—				—				169,912				—				—			169,912
Earnings attributable to noncontrolling interest			—			—				—				(12	)			—				12			—
Total other comprehensive income			—			—				—				—				35,972				—			35,972
Preferred stock dividends, $0.28906 per share			—			—				—				(4,047	)			—							(4,047	)
Common stock dividends, $0.34 per share			—			—				—				(40,084	)			—				—			(40,084	)
Issuance of 473,039 shares of common stock pursuant to stock-based compensation plans			—			5				518				—				—				—			523
Repurchase and cancellation of 2,348,138 shares of common stock under share repurchase program			—			(24	)			(85,315	)			—				—				—			(85,339	)
Repurchase and cancellation of 215,362 shares of common stock withheld for tax pursuant to stock-based compensation plans.			—			(2	)			(8,672	)			—				—				—			(8,674	)
Stock-based compensation expense			—			—				4,097				—				—				—			4,097
Forfeitures of 6,359 shares of unvested restricted common stock			—			—				—				—				—				—			—
Balances - March 31, 2023		$	338,980		$	1,151			$	1,664,569			$	2,898,904			$	(141,677	)		$	1,371		$	4,763,298

Bank OZK Summary of Non-Interest Expense Unaudited
	Three Months Ended March 31,
		2024				2023
	(Dollars in thousands)
Salaries and employee benefits	$	69,564			$	63,249
Net occupancy and equipment		17,974				17,870
Other operating expenses:
Software and data processing		11,115				9,283
Deposit insurance and assessments		8,250				4,148
Professional and outside services		5,970				5,105
Advertising and public relations		3,897				4,036
Amortization of CRA and tax credit investments (1)		—				6,414
Other		16,544				16,112
Total non-interest expense	$	133,314			$	126,217

(1) Effective January 1, 2024, the Bank adopted ASU 2023-02, Investments-Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which resulted in the amortization of the Bank's CRA and tax credit investments being included in income tax expense instead of non-interest expense.

Bank OZK Summary of Total Loans Outstanding Unaudited
	March 31, 2024							December 31, 2023
	(Dollars in thousands)
Real estate:
Residential 1-4 family	$	967,941			3.5	%		$	961,338			3.6	%
Non-farm/non-residential		5,590,632			19.9				5,309,239			20.1
Construction/land development		12,322,321			44.0				11,653,487			44.0
Agricultural		252,232			0.9				256,423			1.0
Multifamily residential		2,408,875			8.6				2,064,106			7.8
Total real estate		21,542,001			76.9				20,244,593			76.5
Commercial and industrial		1,355,125			4.8				1,269,610			4.8
Consumer		3,169,016			11.3				2,965,042			11.2
Other		1,965,206			7.0				1,979,830			7.5
Total loans		28,031,348			100.0	%			26,459,075			100.0	%
Allowance for loan losses		(365,935	)						(339,394	)
Net loans	$	27,665,413						$	26,119,681

Bank OZK Allowance for Credit Losses Unaudited
	Allowance for Loan Losses				Reserve for Losses on Outstanding Credit Commitments			Total Allowance for Credit Losses
	(Dollars in thousands)
Three months ended March 31, 2024:
Balances – December 31, 2023	$	339,394			$	161,834		$	501,228
Net charge-offs		(7,264	)			—			(7,264	)
Provision for credit losses		33,805				9,118			42,923
Balances – March 31, 2024	$	365,935			$	170,952		$	536,887
Three months ended March 31, 2023:
Balances – December 31, 2022	$	208,858			$	156,419		$	365,277
Net charge-offs		(7,339	)			—			(7,339	)
Provision for credit losses		20,506				15,323			35,829
Balances – March 31, 2023	$	222,025			$	171,742		$	393,767

Bank OZK Deposits – By Customer Type Unaudited
	March 31, 2024						December 31, 2023
	(Dollars in thousands)
Non-interest bearing	$	4,046,054		13.8	%		$	4,095,874		14.9	%
Interest bearing:
Consumer and commercial:
Consumer – Non-Time		2,807,465		9.5				2,792,199		10.2
Consumer – Time		11,545,695		39.3				10,216,217		37.3
Commercial – Non-Time		2,860,322		9.7				2,439,175		8.9
Commercial – Time		868,118		3.0				767,566		2.8
Public funds		3,631,328		12.3				3,725,766		13.6
Brokered		2,842,124		9.7				2,655,317		9.7
Reciprocal		804,964		2.7				713,029		2.6
Total deposits	$	29,406,070		100.0	%		$	27,405,143		100.0	%

Bank OZK Selected Consolidated Financial Data Unaudited
	Three Months Ended March 31,
		2024				2023			% Change
	(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income	$	376,934			$	344,852			9.3	%
Provision for credit losses		42,923				35,829			19.8
Non-interest income		29,084				27,809			4.6
Non-interest expense		133,314				126,217			5.6
Net income		175,555				169,912			3.3
Preferred stock dividends		4,047				4,047			—
Net income available to common stockholders		171,490				165,853			3.4
Pre-tax pre-provision net revenue (1)		272,704				246,444			10.7
Common share and per common share data:
Diluted earnings per common share	$	1.51			$	1.41			7.1	%
Basic earnings per common share		1.51				1.42			6.3
Common stock dividends per share		0.38				0.34			11.8
Book value per share		43.44				38.43			13.0
Tangible book value per common share (1)		37.62				32.68			15.1
Weighted-average diluted shares outstanding (thousands)		113,883				117,405			(3.0	)
End of period shares outstanding (thousands)		113,435				115,080			(1.4	)
Balance sheet data at period end:
Total assets	$	36,029,904			$	28,971,170			24.4	%
Total loans		28,031,348				22,062,006			27.1
Non-purchased loans		27,781,091				21,700,941			28.0
Purchased loans		250,257				361,065			(30.7	)
Allowance for loan losses		365,935				222,025			64.8
Foreclosed assets		60,782				66,227			(8.2	)
Investment securities – AFS		3,072,391				3,422,031			(10.2	)
Goodwill and intangibles		660,789				662,354			(0.2	)
Deposits		29,406,070				22,282,983			32.0
Other borrowings		202,009				994,079			(79.7	)
Subordinated notes		347,961				347,147			0.2
Subordinated debentures		121,652				121,652			—
Unfunded balance of outstanding credit commitments		20,458,796				20,965,040			(2.4	)
Reserve for losses on unfunded loan commitments		170,952				171,742			(0.5	)
Preferred stock		338,980				338,980			—
Total common stockholders’ equity (1)		4,927,867				4,422,947			11.4
Net unrealized losses on investment securities AFS included in stockholders' equity		(107,207	)			(141,677	)
Loan (including purchased loans) to deposit ratio		95.33	%			99.01	%
Selected ratios:
Return on average assets (2)		1.96	%			2.41	%
Return on average common stockholders' equity (1) (2)		14.16				15.24
Return on average tangible common stockholders' equity (1) (2)		16.38				17.94
Average common equity to total average assets		13.84				15.78
Net interest margin – FTE (2)		4.71				5.54
Efficiency ratio		32.59				33.63
Net charge-offs to average non-purchased loans (2) (3)		0.11				0.15
Net charge-offs to average total loans (2)		0.11				0.14
Nonperforming loans to total loans (4)		0.20				0.15
Nonperforming assets to total assets (4)		0.33				0.34
Allowance for loan losses to total loans (5)		1.31				1.01
Allowance for credit losses to total loans and unfunded credit commitments		1.11				0.92
Other information:
Non-accrual loans (4)	$	56,341			$	33,371
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
	March 31, 2024				December 31, 2023				% Change
	(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income	$	376,934			$	370,548			1.7	%
Provision for credit losses		42,923				43,832			(2.1	)
Non-interest income		29,084				37,027			(21.5	)
Non-interest expense		133,314				145,011			(8.1	)
Net income		175,555				175,132			0.2
Preferred stock dividends		4,047				4,047			—
Net income available to common stockholders		171,490				171,079			0.2
Pre-tax pre-provision net revenue (1)		272,704				262,564			3.9
Common share and per common share data:
Diluted earnings per common share	$	1.51			$	1.50			0.7	%
Basic earnings per common share		1.51				1.51			—
Common stock dividends per share		0.38				0.37			2.7
Book value per share		43.44				42.42			2.4
Tangible book value per common share (1)		37.62				36.58			2.8
Weighted-average diluted shares outstanding (thousands)		113,883				113,756			0.1
End of period shares outstanding (thousands)		113,435				113,149			0.3
Balance sheet data at period end:
Total assets	$	36,029,904			$	34,237,457			5.2	%
Total loans		28,031,348				26,459,075			5.9
Non-purchased loans		27,781,091				26,195,030			6.1
Purchased loans		250,257				264,045			(5.2	)
Allowance for loan losses		365,935				339,394			7.8
Foreclosed assets		60,782				61,720			(1.5	)
Investment securities – AFS		3,072,391				3,244,371			(5.3	)
Goodwill and intangibles		660,789				660,789			—
Deposits		29,406,070				27,405,143			7.3
Other borrowings		202,009				805,318			(74.9	)
Subordinated notes		347,961				347,761			0.1
Subordinated debentures		121,652				121,652			—
Unfunded balance of outstanding credit commitments		20,458,796				20,561,029			(0.5	)
Reserve for losses on unfunded loan commitments		170,952				161,834			5.6
Preferred stock		338,980				338,980			—
Total common stockholders’ equity (1)		4,927,867				4,800,021			2.7
Net unrealized losses on investment securities AFS included in stockholders' equity		(107,207	)			(97,374	)
Loan (including purchased loans) to deposit ratio		95.33	%			96.55	%
Selected ratios:
Return on average assets (2)		1.96	%			2.04	%
Return on average common stockholders' equity (1) (2)		14.16				14.58
Return on average tangible common stockholders' equity (1) (2)		16.38				16.99
Average common equity to total average assets		13.84				13.99
Net interest margin – FTE (2)		4.71				4.82
Efficiency ratio		32.59				35.33
Net charge-offs to average non-purchased loans (2) (3)		0.11				0.07
Net charge-offs to average total loans (2)		0.11				0.06
Nonperforming loans to total loans (4)		0.20				0.23
Nonperforming assets to total assets (4)		0.33				0.36
Allowance for loan losses to total loans (5)		1.31				1.28
Allowance for credit losses to total loans and unfunded credit commitments		1.11				1.07
Other information:
Non-accrual loans (4)	$	56,341			$	60,982
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
	3/31/24				12/31/23				9/30/23				6/30/23				3/31/23
	(Dollars in thousands)
Earnings summary:
Net interest income	$	376,934			$	370,548			$	367,261			$	356,824			$	344,852
Federal tax (FTE) adjustment		3,030				2,925				2,632				2,602				2,603
Net interest income (FTE)		379,964				373,473				369,893				359,426				347,455
Provision for credit losses		(42,923	)			(43,832	)			(44,036	)			(41,774	)			(35,829	)
Non-interest income		29,084				37,027				25,727				31,987				27,809
Non-interest expense		(133,314	)			(145,011	)			(128,978	)			(129,355	)			(126,217	)
Pre-tax income (FTE)		232,811				221,657				222,606				220,284				213,218
FTE adjustment		(3,030	)			(2,925	)			(2,632	)			(2,602	)			(2,603	)
Provision for income taxes		(54,226	)			(43,600	)			(46,144	)			(45,717	)			(40,703	)
Noncontrolling interest		(18	)			(6	)			(37	)			(1	)			(12	)
Preferred stock dividend		(4,047	)			(4,047	)			(4,047	)			(4,047	)			(4,047	)
Net income available to common stockholders	$	171,490			$	171,079			$	169,746			$	167,917			$	165,853
Earnings per common share – diluted	$	1.51			$	1.50			$	1.49			$	1.47			$	1.41
Pre-tax pre-provision net revenue (1)	$	272,704			$	262,564			$	264,010			$	259,456			$	246,444
Selected balance sheet data at period end:
Total assets	$	36,029,904			$	34,237,457			$	32,767,328			$	30,761,870			$	28,971,170
Non-purchased loans		27,781,091				26,195,030				25,051,214				23,291,785				21,700,941
Purchased loans		250,257				264,045				280,526				315,661				361,065
Investment securities – AFS		3,072,391				3,244,371				3,153,817				3,262,366				3,422,031
Deposits		29,406,070				27,405,143				25,552,856				23,983,397				22,282,983
Unfunded balance of outstanding credit commitments		20,458,796				20,561,029				20,625,371				21,119,761				20,965,040
Allowance for credit losses:
Balance at beginning of period	$	501,228			$	461,486			$	426,820			$	393,767			$	365,277
Net charge-offs		(7,264	)			(4,090	)			(9,370	)			(8,721	)			(7,339	)
Provision for credit losses		42,923				43,832				44,036				41,774				35,829
Balance at end of period	$	536,887			$	501,228			$	461,486			$	426,820			$	393,767
Allowance for loan losses	$	365,935			$	339,394			$	303,358			$	263,188			$	222,025
Reserve for losses on unfunded loan commitments		170,952				161,834				158,128				163,632				171,742
Total allowance for credit losses	$	536,887			$	501,228			$	461,486			$	426,820			$	393,767
Selected ratios:
Net interest margin – FTE (2)		4.71	%			4.82	%			5.05	%			5.32	%			5.54	%
Efficiency ratio		32.59				35.33				32.60				33.05				33.63
Net charge-offs to average non-purchased loans (2) (3)		0.11				0.07				0.17				0.03				0.15
Net charge-offs to average total loans (2)		0.11				0.06				0.15				0.15				0.14
Nonperforming loans to total loans (4)		0.20				0.23				0.25				0.15				0.15
Nonperforming assets to total assets (4)		0.33				0.36				0.40				0.32				0.34
Allowance for loan losses to total loans (5)		1.31				1.28				1.20				1.11				1.01
Allowance for credit losses to total loans and unfunded credit commitments		1.11				1.07				1.00				0.95				0.92
Loans past due 30 days or more, including past due non-accrual loans, to total loans (4)		0.17				0.20				0.21				0.14				0.15

⁽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 March 31,
		2024									2023
	Average Balance			Income/ Expense			Yield/Rate			Average Balance			Income/ Expense			Yield/Rate
	(Dollars in thousands)
ASSETS
Interest earning assets:
Interest earning deposits	$	1,861,871		$	24,606		5.32	%		$	739,521		$	7,870		4.32	%
Investment securities:
Taxable		2,052,980			9,333		1.83				2,450,756			10,171		1.68
Tax-exempt – FTE		1,172,116			14,144		4.85				1,027,806			11,727		4.63
Non-purchased loans – FTE		27,116,207			587,040		8.71				20,850,529			415,037		8.07
Purchased loans		257,788			4,960		7.74				370,887			6,518		7.13
Total earning assets – FTE		32,460,962			640,083		7.93				25,439,499			451,323		7.19
Non-interest earning assets		2,747,337									2,517,047
Total assets	$	35,208,299								$	27,956,546
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction	$	9,182,745		$	66,902		2.93	%		$	9,733,499		$	42,515		1.77	%
Time deposits		15,476,373			187,421		4.87				7,563,013			51,117		2.74
Total interest bearing deposits		24,659,118			254,323		4.15				17,296,512			93,632		2.20
Other borrowings		85,041			750		3.55				467,098			5,422		4.71
Subordinated notes		347,864			2,574		2.98				347,049			2,574		3.01
Subordinated debentures		121,652			2,472		8.18				121,638			2,239		7.47
Total interest bearing liabilities		25,213,675			260,119		4.15				18,232,297			103,867		2.31
Non-interest bearing liabilities:
Non-interest bearing deposits		4,100,769									4,471,407
Other non-interest bearing liabilities		682,455									499,997
Total liabilities		29,996,899									23,203,701
Total stockholders’ equity before noncontrolling interest		5,210,418									4,751,481
Noncontrolling interest		982									1,364
Total liabilities and stockholders’ equity	$	35,208,299								$	27,956,546
Net interest income – FTE				$	379,964								$	347,456
Net interest margin – FTE							4.71	%								5.54	%
Core spread (1)							4.56	%								5.87	%

⁽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,								Three Months Ended December 31,
		2024				2023				2023
	(Dollars in thousands)
Net income available to common stockholders	$	171,490			$	165,853			$	171,079
Average stockholders’ equity before noncontrolling interest	$	5,210,418			$	4,751,481			$	4,995,217
Less average preferred stock		(338,980	)			(338,980	)			(338,980	)
Total average common stockholders’ equity		4,871,438				4,412,501				4,656,237
Less average intangible assets:
Goodwill		(660,789	)			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization		—				(2,243	)			—
Total average intangibles		(660,789	)			(663,032	)			(660,789	)
Average tangible common stockholders’ equity	$	4,210,649			$	3,749,469			$	3,995,448
Return on average common stockholders’ equity(1)		14.16	%			15.24	%			14.58	%
Return on average tangible common stockholders’ equity(1)		16.38	%			17.94	%			16.99	%

⁽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,
		2024				2023				2023
	(In thousands, except per share amounts)
Total stockholders’ equity before noncontrolling interest	$	5,266,847			$	4,761,927			$	5,139,001
Less preferred stock		(338,980	)			(338,980	)			(338,980	)
Total common stockholders’ equity	$	4,927,867			$	4,422,947			$	4,800,021
Less intangible assets:
Goodwill		(660,789	)			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization		—				(1,565	)			—
Total intangibles		(660,789	)			(662,354	)			(660,789	)
Total tangible common stockholders’ equity	$	4,267,078			$	3,760,593			$	4,139,232
Shares of common stock outstanding		113,435				115,080				113,149
Book value per common share	$	43.44			$	38.43			$	42.42
Tangible book value per common share	$	37.62			$	32.68			$	36.58

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,
		2024				2023
	(Dollars in thousands)
Total stockholders’ equity before noncontrolling interest	$	5,266,847			$	4,761,927
Less preferred stock		(338,980	)			(338,980	)
Total common stockholders’ equity	$	4,927,867			$	4,422,947
Less intangible assets:
Goodwill		(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization		—				(1,565	)
Total intangibles		(660,789	)			(662,354	)
Total tangible common stockholders’ equity		4,267,078				3,760,593
Total assets	$	36,029,904			$	28,971,170
Less intangible assets:
Goodwill	$	(660,789	)		$	(660,789	)
Core deposit and other intangible assets, net of accumulated amortization		—				(1,565	)
Total intangibles		(660,789	)			(662,354	)
Total tangible assets	$	35,369,115			$	28,308,816
Ratio of total common stockholders’ equity to total assets		13.68	%			15.27	%
Ratio of total tangible common stockholders’ equity to total tangible assets		12.06	%			13.28	%

Calculation of Pre-Tax Pre-Provision Net Revenue Unaudited
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2024			2023			2023			2023			2023
	(Dollars in thousands)
Net income available to common stockholders	$	171,490		$	171,079		$	169,746		$	167,917		$	165,853
Preferred stock dividends		4,047			4,047			4,047			4,047			4,047
Earnings attributable to noncontrolling interest		18			6			37			1			12
Provision for income taxes		54,226			43,600			46,144			45,717			40,703
Provision for credit losses		42,923			43,832			44,036			41,774			35,829
Pre-tax pre-provision net revenue	$	272,704		$	262,564		$	264,010		$	259,456		$	246,444

Investor Contact:	Jay Staley (501) 906-7842
Media Contact:	Michelle Rossow (501) 906-3922

FAQ

What was Bank OZK's net income available to common stockholders for the first quarter of 2024?

Bank OZK reported a record net income of $171.5 million for the first quarter of 2024.

What was the percentage increase in diluted earnings per common share for the first quarter of 2024 compared to the first quarter of 2023?

Diluted earnings per common share saw a 7.1% increase in the first quarter of 2024 from the previous year.

How much was the pre-tax pre-provision net revenue (PPNR) for the first quarter of 2024?

The pre-tax pre-provision net revenue (PPNR) was a record $272.7 million for the first quarter of 2024.

What was the total loans amount at the end of March 31, 2024?

Total loans were $28.03 billion at March 31, 2024, showing a 27.1% increase from the previous year.

What was the provision for credit losses in the first quarter of 2024?

The provision for credit losses was $42.9 million for the first quarter of 2024.