Bank OZK Announces Second Quarter 2020 Earnings

Rhea-AI Summary

Bank OZK (OZK) reported a net income of $50.3 million for Q2 2020, marking a 54.5% decline year-over-year. Diluted earnings per share (EPS) fell to $0.39, down 54.7% from Q2 2019. For the first half of 2020, net income was $62.1 million, a 71.9% drop compared to the same period last year, with diluted EPS at $0.48. The COVID-19 pandemic severely impacted the financial results, leading to a $72.0 million provision for credit losses in Q2. Despite this, total assets grew 14.9% year-over-year to $26.38 billion.

Positive

• Total loans increased by 10.4% to $19.31 billion year-over-year.
• Deposits grew 14.0% to $20.72 billion compared to June 2019.
• Total assets rose 14.9% to $26.38 billion.
• Common stockholders' equity increased 2.9% to $4.11 billion.

Negative

• Net income dropped 54.5% from Q2 2019, indicating a significant decline in profitability.
• EPS decreased 54.7% year-over-year, reflecting reduced earnings capacity.
• Provision for credit losses reached $72.0 million in Q2, raising concerns about asset quality.
• Annualized return on average assets fell to 0.78% from 1.95% in Q2 2019.

LITTLE ROCK, Ark., July 23, 2020 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income for the second quarter of 2020 was $50.3 million, a 54.5% decrease from $110.5 million for the second quarter of 2019.  Diluted earnings per common share for the second quarter of 2020 were $0.39, a 54.7% decrease from $0.86 for the second quarter of 2019.

For the six months ended June 30, 2020, net income was $62.1 million, a 71.9% decrease from $221.2 million for the first six months of 2019.  Diluted earnings per common share for the first six months of 2020 were $0.48, a 71.9% decrease from $1.71 for the first six months of 2019.

The COVID-19 pandemic significantly affected the global economy in the first half of 2020.  The sudden and severe economic downturn, combined with the implementation of the current expected credit losses (“CECL”) method to calculate the Bank’s allowance for credit losses (“ACL”) and uncertain future economic projections, resulted in the Bank incurring provision for credit losses of $72.0 million in the second quarter and $189.7 million in the first six months of 2020, resulting in a total ACL of $374.5 million at June 30, 2020.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the second quarter of 2020 were 0.78%, 4.92% and 5.89%, respectively, compared to 1.95%, 11.29% and 13.70%, respectively, for the second quarter of 2019.  The Bank’s annualized returns on average assets, average common stockholder’s equity and average tangible stockholders’ equity for the first six months of 2020 were 0.50%, 3.04% and 3.64%, respectively, compared to 1.97%, 11.52%, and 14.04%, respectively, for the first six months of 2019.  The calculation of the Bank’s return on average tangible common stockholders’ equity and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release. 

George Gleason, Chairman and Chief Executive Officer stated, “We have continued our long-standing focus on our team members, our customers, serving the communities in which we operate and delivering favorable returns for shareholders. Our strong credit culture and consistent discipline have been important ingredients in our success, and we believe they have positioned us well for the current economic environment.”

KEY BALANCE SHEET METRICS

Total loans were $19.31 billion at June 30, 2020, a 10.4% increase from $17.49 billion at June 30, 2019.  Non-purchased loans, which exclude loans acquired in previous acquisitions, were $18.25 billion at June 30, 2020, a 15.6% increase from $15.79 billion at June 30, 2019.  Purchased loans, which consist of loans acquired in previous acquisitions, were $1.06 billion at June 30, 2020, a 37.4% decrease from $1.70 billion at June 30, 2019. 

Deposits were $20.72 billion at June 30, 2020, a 14.0% increase from $18.19 billion at June 30, 2019.  Total assets were $26.38 billion at June 30, 2020, a 14.9% increase from $22.96 billion at June 30, 2019.

Common stockholders’ equity was $4.11 billion at June 30, 2020, a 2.9% increase from $3.99 billion at June 30, 2019. Tangible common stockholders’ equity was $3.43 billion at June 30, 2020, a 3.9% increase from $3.30 billion at June 30, 2019.  Book value per common share was $31.78 at June 30, 2020, a 2.6% increase from $30.97 at June 30, 2019.  Tangible book value per common share was $26.53 at June 30, 2020, a 3.6% increase from $25.61 at June 30, 2019.  The calculations of the Bank’s tangible common stockholders’ equity and tangible book value per common share and the reconciliations to GAAP are included in the schedules accompanying this release.

The Bank’s ratio of total common stockholders’ equity to total assets was 15.58% at June 30, 2020 compared to 17.39% at June 30, 2019.  Its ratio of total tangible common stockholders’ equity to total tangible assets was 13.35% at June 30, 2020 compared to 14.83% at June 30, 2019.  The calculation of the Bank’s ratio of total tangible common stockholders’ equity to total tangible assets and the reconciliation to GAAP are included in the schedules accompanying this release. 

MANAGEMENT’S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS

In connection with this release, the Bank released management’s comments on 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 July 24, 2020.  Interested parties may listen to this call by dialing 1-844-818-5110 (U.S. and Canada) or 210-229-8841 (internationally) and asking for the Bank OZK conference call.  A recorded playback of the call will be available for one week following the call at 1-855-859-2056 (U.S. and Canada) or 404-537-3406 (internationally).  The passcode for this playback is 4695153.  The call will be available live or in a recorded version on the Bank’s Investor Relations website at ir.ozk.com under “Company News/Webcasts.”  The Bank will also provide a transcript of the conference call on its Investor Relations website.

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

NON-GAAP FINANCIAL MEASURES

This release contains certain non-GAAP financial measures.  The Bank uses these non-GAAP financial measures, specifically return on average tangible common stockholders’ equity, tangible book value per common share, total tangible common stockholders’ equity, the ratio of total tangible common stockholders’ equity to total tangible assets and pre-tax pre-provision net revenue, to assess the strength of its capital, its ability to generate earnings on tangible capital invested by its shareholders and trends in its core earnings. These measures typically adjust GAAP financial measures to exclude intangible assets and 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, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks.  Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release under the caption “Reconciliation of Non-GAAP Financial Measures.”

STATEMENT REGARDING IMPACT OF COVID-19 PANDEMIC

The Bank prioritizes the health and safety of its employees and customers, and it will continue to do so throughout the duration of the pandemic.  At the same time, the Bank remains focused on improving shareholder value, managing credit exposure, managing expenses, enhancing the customer experience and supporting the communities it serves.

In management’s comments on its quarterly results (released simultaneously with this news release) and in its earnings conference call, the Bank has sought and will seek to describe the historical and future impact of the COVID-19 pandemic on the Bank’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations, including the information and discussions regarding the increases in its provision and allowance for credit losses and the discussion regarding negative pressure to its net interest margin.  Although the Bank believes that the statements that pertain to future events, results and trends and their impact on the Bank’s business are reasonable at the present time, those statements are not historical facts and are based upon current assumptions, expectations, estimates and projections, many of which, by their nature, are beyond the Bank’s control.  Accordingly, all discussions regarding future events, results and trends and their impact on the Bank’s business, even in the near term, are necessarily uncertain given the fluid and evolving nature of the pandemic.

If the health, logistical or economic effects of the pandemic worsen, or if the assumptions, expectations, estimates or projections that underlie the Bank’s statements regarding future effects or trends prove to be incorrect, then the Bank’s actual assets, business, cash flows, financial condition, liquidity, prospects and results of operations may be materially and adversely impacted in ways that the Bank cannot reasonably forecast.  Accordingly, when reading this news release and the accompanying prepared remarks from management on its quarterly results and when listening to the earnings conference call, undue reliance should not be placed upon any statement pertaining to future events, results and trends and their impact on the Bank’s business in future periods.

FORWARD-LOOKING STATEMENTS

This release and other communications by the Bank include certain “forward-looking statements” regarding the Bank’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time.  Those statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements.  These risks, uncertainties and other factors include, but are not limited to: potential delays or other problems implementing the Bank’s growth, expansion and acquisition strategies, including delays in identifying 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 or availability of funding from capital markets; the ability to attract new or retain existing or acquired deposits or to retain or grow loans, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and long-term interest rates or changes in the relative relationships of various interest rate indices; the potential impact of the proposed phase-out of the London Interbank Offered Rate (“LIBOR”) or other changes involving LIBOR; 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 in response to the coronavirus (COVID-19) pandemic; 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, the Bank’s operational or security systems or infrastructure, or those of third parties with whom it does 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 magnitude and duration of the pandemic and actions taken to contain or treat COVID-19, on the Bank, the Bank’s customers, the global economy and financial markets; international or political instability; impairment of our goodwill or other intangible assets; adoption of new accounting standards, including the effects from the adoption of the CECL model on January 1, 2020, or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this press release or as detailed from time to time in the other public reports the Bank files with the FDIC, including those factors described in the disclosures under the headings “Forward-Looking Information” and “Item 1A. Risk Factors” in the Bank’s most recent Annual Report on Form 10-K for the year ended December 31, 2019 and its quarterly reports on Form 10-Q. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those projected in, or implied by, such forward-looking statements.  The Bank disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.

GENERAL INFORMATION

Bank OZK (Nasdaq: OZK) is a regional bank providing innovative financial solutions delivered by expert bankers with a relentless pursuit of excellence.  Bank OZK is the #1 capitalized bank among the nation’s top 100 largest publicly traded U.S. banks by asset size, based on Tier 1 Leverage Capital Ratio at March 31, 2020, according to data obtained from S&P Global Market Intelligence. Bank OZK was named Best Bank in the South for 2019-2020 by Money, the personal finance news and advice brand. Headquartered in Little Rock, Arkansas, Bank OZK conducts operations through more than 250 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, California, New York and Mississippi.  Bank OZK can be found at www.ozk.com and on Facebook, Twitter and LinkedIn or contacted at (501) 978-2265 or P. O. Box 8811, Little Rock, Arkansas 72231-8811. 

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

Bank OZK
Consolidated Balance Sheets
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		June 30,			December 31,
		2020			2019
		(Dollars in thousands, except per share amounts)
ASSETS
Cash and cash equivalents		$	1,646,070			$	1,495,757
Investment securities ― available for sale ("AFS")			3,299,944				2,277,389
Federal Home Loan Bank of Dallas and other banker's bank stocks			50,742				21,855
Non-purchased loans			18,247,431				16,224,539
Purchased loans			1,063,647				1,307,504
Allowance for loan losses			(306,196	)			(108,525	)
Net loans			19,004,882				17,423,518
Premises and equipment, net			732,674				711,541
Foreclosed assets			18,328				19,096
Accrued interest receivable			82,729				75,208
Bank owned life insurance (“BOLI”)			748,193				738,860
Goodwill and intangible assets, net			679,166				684,542
Other, net			117,681				107,962
Total assets		$	26,380,409			$	23,555,728
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing		$	3,696,306			$	2,795,251
Savings and interest bearing transaction			7,447,640				8,307,607
Time			9,579,652				7,371,401
Total deposits			20,723,598				18,474,259
Repurchase agreements with customers			9,277				11,249
Other borrowings			903,696				351,387
Subordinated notes			223,854				223,663
Subordinated debentures			120,194				119,916
Reserve for losses on unfunded loan commitments			68,298				—
Accrued interest payable and other liabilities			217,726				221,786
Total liabilities			22,266,643				19,402,260
Commitments and contingencies
Stockholders’ equity:
Preferred stock; $0.01 par value; 100,000,000 shares authorized; no shares issued or outstanding at June 30, 2020 or December 31, 2019			—				—
Common stock; $0.01 par value; 300,000,000 shares authorized; 129,350,301 and 128,951,024 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively			1,293				1,289
Additional paid-in capital			2,257,867				2,251,824
Retained earnings			1,788,329				1,869,983
Accumulated other comprehensive income			63,177				27,255
Total stockholders’ equity before noncontrolling interest			4,110,666				4,150,351
Noncontrolling interest			3,100				3,117
Total stockholders’ equity			4,113,766				4,153,468
Total liabilities and stockholders’ equity		$	26,380,409			$	23,555,728

Bank OZK
Consolidated Statements of Income
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	Three Months Ended June 30,			Six Months Ended June 30,
	2020			2019			2020			2019
	(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans	$	232,816			$	250,081			$	464,669			$	495,946
Purchased loans		17,087				28,519				38,474				58,714
Investment securities:
Taxable		11,055				13,585				21,814				28,481
Tax-exempt		5,846				3,693				9,443				7,567
Deposits with banks and federal funds sold		330				941				4,706				1,354
Total interest income		267,134				296,819				539,106				592,062
Interest expense:
Deposits		45,251				67,392				102,933				130,479
Repurchase agreements with customers		6				11				13				33
Other borrowings		963				19				1,013				1,408
Subordinated notes		3,172				3,181				6,344				6,326
Subordinated debentures		1,149				1,680				2,436				3,392
Total interest expense		50,541				72,283				112,739				141,638
Net interest income		216,593				224,536				426,367				450,424
Provision for credit losses		72,026				6,769				189,689				13,450
Net interest income after provision for loan losses		144,567				217,767				236,678				436,974
Non-interest income:
Service charges on deposit accounts		8,281				10,291				18,290				20,014
Trust income		1,759				1,839				3,698				3,569
BOLI income:
Increase in cash surrender value		5,057				5,178				10,124				10,340
Death benefits		—				—				608				—
Loan service, maintenance and other fees		3,394				4,565				7,110				9,438
Other income from purchased loans		—				1,455				—				2,251
Gains on sales of other assets		621				402				783				686
Net gains on investment securities		—				713				2,223				713
Other		2,479				2,160				6,435				3,664
Total non-interest income		21,591				26,603				49,271				50,675
Non-interest expense:
Salaries and employee benefits		48,410				47,558				99,883				92,425
Net occupancy and equipment		15,756				14,587				31,086				29,338
Other operating expenses		36,787				36,986				73,409				74,046
Total non-interest expense		100,953				99,131				204,378				195,809
Income before taxes		65,205				145,239				81,571				291,840
Provision for income taxes		14,948				34,726				19,456				70,615
Net income		50,257				110,513				62,115				221,225
Earnings attributable to noncontrolling interest		9				(10	)			17				(16	)
Net income available to common stockholders	$	50,266			$	110,503			$	62,132			$	221,209
Basic earnings per common share	$	0.39			$	0.86			$	0.48			$	1.72
Diluted earnings per common share	$	0.39			$	0.86			$	0.48			$	1.71

Bank OZK
Consolidated Statements of Stockholders’ Equity
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		Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non- Controlling Interest			Total
		(Dollars in thousands, except per share amounts)
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Balances – March 31, 2020		$	1,293			$	2,253,991			$	1,772,978			$	54,888			$	3,109			$	4,086,259
Net income			—				—				50,257				—				—				50,257
Earnings attributable to noncontrolling interest			—				—				9				—				(9	)			—
Total other comprehensive income			—				—				—				8,289				—				8,289
Common stock dividends paid, $0.27 per share			—				—				(34,915	)			—				—				(34,915	)
Issuance of 46,676 shares of unvested restricted common stock			—				—				—				—				—				—
Stock-based compensation expense			—				3,876				—				—				—				3,876
Forfeitures of 20,810 shares of unvested restricted common stock			—				—				—				—				—				—
Balances – June 30, 2020		$	1,293			$	2,257,867			$	1,788,329			$	63,177			$	3,100			$	4,113,766
Six months ended June 30, 2020:
Balances – December 31, 2019		$	1,289			$	2,251,824			$	1,869,983			$	27,255			$	3,117			$	4,153,468
Cumulative effect of change in accounting principle			—				—				(75,344	)			—				—				(75,344	)
Balances – January 1, 2020			1,289				2,251,824				1,794,639				27,255				3,117				4,078,124
Net income			—				—				62,115				—				—				62,115
Earnings attributable to noncontrolling interest			—				—				17				—				(17	)			—
Total other comprehensive income			—				—				—				35,922				—				35,922
Common stock dividends paid, $0.53 per share			—				—				(68,442	)			—				—				(68,442	)
Issuance of 4,300 shares of common stock for exercise of stock options			—				45				—				—				—				45
Issuance of 493,761 shares of unvested restricted common stock			5				(5	)			—				—				—				—
Repurchase and cancellation of 61,873 shares of common stock			(1	)			(1,852	)			—				—				—				(1,853	)
Stock-based compensation expense			—				7,855				—				—				—				7,855
Forfeitures of 36,911 shares of unvested restricted common stock			—				—				—				—				—				—
Balances – June 30, 2020		$	1,293			$	2,257,867			$	1,788,329			$	63,177			$	3,100			$	4,113,766

Bank OZK
Consolidated Statements of Stockholders’ Equity (Continued)
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		Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Non- Controlling Interest			Total
		(Dollars in thousands, except per share amounts)
34%; width:34%; min-width:34%;">Three months ended June 30, 2019:	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	8%; width:8%; min-width:8%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	8%; width:8%; min-width:8%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	8%; width:8%; min-width:8%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	8%; width:8%; min-width:8%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	8%; width:8%; min-width:8%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	8%; width:8%; min-width:8%;">	1%; width:1%; min-width:1%;">
Balances – March 31, 2019		$	1,289			$	2,239,404			$	1,647,626			$	(5,676	)		$	3,121			$	3,885,764
Net income			—				—				110,513				—				—				110,513
Earnings attributable to noncontrolling interest			—				—				(10	)			—				10				—
Total other comprehensive income			—				—				—				25,369				—				25,369
Common stock dividends paid, $0.23 per share			—				—				(29,643	)			—				—				(29,643	)
Issuance of 27,250 shares of common stock for exercise of stock options			1				489				—				—				—				490
Issuance of 22,200 shares of unvested restricted common stock			—				—				—				—				—				—
Stock-based compensation expense			—				3,885				—				—				—				3,885
Forfeiture of 50,262 shares of unvested restricted common stock			(1	)			1				—				—				—				—
Balances – June 30, 2019		$	1,289			$	2,243,779			$	1,728,486			$	19,693			$	3,131			$	3,996,378
Six months ended June 30, 2019:
Balances – December 31, 2018		$	1,286			$	2,237,948			$	1,565,201			$	(34,105	)		$	3,035			$	3,773,365
Net income			—				—				221,225				—				—				221,225
Earnings attributable to noncontrolling interest			—				—				(16	)			—				16				—
Total other comprehensive income			—				—				—				53,798				—				53,798
Common stock dividends paid, $0.45 per share			—				—				(57,924	)			—				—				(57,924	)
Noncontrolling interest cash contribution			—				—				—				—				80				80
Issuance of 56,550 shares of common stock for exercise of stock options			1				876				—				—				—				877
Issuance of 406,074 shares of unvested restricted common stock			4				(4	)			—				—				—				—
Repurchase and cancellation of 62,742 shares of common stock			(1	)			(1,646	)			—				—				—				(1,647	)
Stock-based compensation expense			—				6,604				—				—				—				6,604
Forfeiture of 64,215 shares of unvested restricted common stock			(1	)			1				—				—				—				—
Balances – June 30, 2019		$	1,289			$	2,243,779			$	1,728,486			$	19,693			$	3,131			$	3,996,378

Bank OZK
Summary of Non-Interest Expense
Unaudited

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		Three Months Ended June 30,			Six Months Ended June 30,
		2020			2019			2020			2019
		(Dollars in thousands)
Salaries and employee benefits		$	48,410			$	47,558			$	99,883			$	92,425
Net occupancy and equipment			15,756				14,587				31,086				29,338
Other operating expenses:
Professional and outside services			7,939				8,105				14,982				16,669
Software and data processing			5,145				4,757				10,119				9,466
Deposit insurance and assessments			4,585				3,488				8,005				7,140
Telecommunication services			2,334				2,810				4,511				6,154
Postage and supplies			1,892				2,058				3,945				4,161
Advertising and public relations			1,704				1,671				3,407				3,353
Travel and meals			710				2,939				2,812				5,608
ATM expense			1,002				1,099				2,162				2,086
Loan collection and repossession expense			857				918				1,551				1,901
Writedowns of foreclosed assets			720				594				1,599				1,155
Amortization of intangibles			2,582				3,012				5,377				6,157
Other			7,317				5,535				14,939				10,196
Total non-interest expense		$	100,953			$	99,131			$	204,378			$	195,809

Bank OZK
Summary of Total Loans Outstanding
Unaudited

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		June 30, 2020			December 31, 2019
		(Dollars in thousands)
Real estate:
Residential 1-4 family		$	1,002,627				5.2	%		$	998,632				5.7	%
Non-farm/non-residential			4,383,137				22.7				3,956,579				22.6
Construction/land development			7,030,963				36.4				6,391,429				36.4
Agricultural			232,121				1.2				230,076				1.3
Multifamily residential			1,371,449				7.1				1,194,192				6.8
Total real estate			14,020,297				72.6				12,770,908				72.8
Commercial and industrial			1,005,900				5.2				661,952				3.8
Consumer			2,843,396				14.7				2,934,534				16.8
Other			1,441,485				7.5				1,164,649				6.6
Total loans			19,311,078				100.0	%			17,532,043				100.0	%
Allowance for loan losses			(306,196	)							(108,525	)
Net loans		$	19,004,882							$	17,423,518

Bank OZK
Allowance for Credit Losses
Unaudited

100%; border-collapse:collapse !important;">

52%; width:52%; min-width:52%;">	1%; width:1%; min-width:1%;">	2%; width:2%; min-width:2%;">	12%; width:12%; min-width:12%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	2%; width:2%; min-width:2%;">	12%; width:12%; min-width:12%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	2%; width:2%; min-width:2%;">	12%; width:12%; min-width:12%;">	1%; width:1%; min-width:1%;">
		Allowance for Loan Losses			Reserve for Losses on Unfunded Loan Commitments			Total Allowance for Credit Losses
		(Dollars in thousands)
Three months ended June 30, 2020:
Balances – March 31, 2020		$	238,737			$	77,672			$	316,409
Net charge-offs			(13,941	)			—				(13,941	)
Provision for credit losses			81,400				(9,374	)			72,026
Balances – June 30, 2020		$	306,196			$	68,298			$	374,494
Six months ended June 30, 2020:
Balances – December 31, 2019		$	108,525			$	—			$	108,525
Adoption of Current Expected Credit Loss (CECL) methodology			39,588				54,924				94,512
Balances – January 1, 2020			148,113				54,924				203,037
Net charge-offs			(18,232	)			—				(18,232	)
Provision for credit losses			176,315				13,374				189,689
Balances – June 30, 2020		$	306,196			$	68,298			$	374,494
Three months ended June 30, 2019:
Balances – March 31, 2019		$	105,954			$	—			$	105,954
Net charge-offs			(6,081	)			—				(6,081	)
Provision for credit losses			6,769				—				6,769
Balances – June 30, 2019		$	106,642			$	—			$	106,642
Six months ended June 30, 2019:
Balances – December 31, 2018		$	102,264			$	—			$	102,264
Net charge-offs			(9,072	)			—				(9,072	)
Provision for credit losses			13,450				—				13,450
Balances – June 30, 2019		$	106,642			$	—			$	106,642

Bank OZK
Summary of Deposits – By Account Type
Unaudited

100%; border-collapse:collapse !important;">

40%; width:40%; min-width:40%;">	1%; width:1%; min-width:1%;">	2%; width:2%; min-width:2%;">	12%; width:12%; min-width:12%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;">	2%; width:2%; min-width:2%;">	1%; width:1%; min-width:1%;">	2%; width:2%; min-width:2%;">	12%; width:12%; min-width:12%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;">	2%; width:2%; min-width:2%;">
		June 30, 2020			December 31, 2019
		(Dollars in thousands)
Non-interest bearing		$	3,696,306				17.8	%		$	2,795,251				15.1	%
Interest bearing:
Transaction (NOW)			2,929,462				14.1				2,706,426				14.7
Savings and money market			4,518,178				21.8				5,601,181				30.3
Time deposits less than $100			3,783,621				18.3				3,321,446				18.0
Time deposits of $100 or more			5,796,031				28.0				4,049,955				21.9
Total deposits		$	20,723,598				100.0	%		$	18,474,259				100.0	%

Summary of Deposits – By Customer Type
Unaudited

100%; border-collapse:collapse !important;">

		June 30, 2020			December 31, 2019
		(Dollars in thousands)
40%; width:40%; min-width:40%;">Consumer	1%; width:1%; min-width:1%;">	2%; width:2%; min-width:2%;">$	12%; width:12%; min-width:12%;">10,083,452	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;">48.7	2%; width:2%; min-width:2%;">%	1%; width:1%; min-width:1%;">	2%; width:2%; min-width:2%;">$	12%; width:12%; min-width:12%;">7,526,014	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;">40.7	2%; width:2%; min-width:2%;">%
Commercial			5,439,295				26.2				4,334,366				23.5
Public Funds			2,545,778				12.3				3,782,415				20.5
Brokered			2,018,331				9.7				2,115,193				11.4
Reciprocal			636,742				3.1				716,271				3.9
Total deposits		$	20,723,598				100.0	%		$	18,474,259				100.0	%

Bank OZK
Selected Consolidated Financial Data
Unaudited

100%; border-collapse:collapse !important;">

		Three Months Ended June 30,			Six Months Ended June 30,
		2020			2019			% Change			2020			2019			% Change
		(Dollars in thousands, except per share amounts)
46%; width:46%; min-width:46%;">Income statement data:	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">
Net interest income		$	216,593			$	224,536				(3.5	)%		$	426,367			$	450,424				(5.3	)%
Provision for credit losses			72,026				6,769				964.1				189,689				13,450				1,310.3
Non-interest income			21,591				26,603				(18.8	)			49,271				50,675				(2.8	)
Non-interest expense			100,953				99,131				1.8				204,378				195,809				4.4
Net income available to common stockholders			50,266				110,503				(54.5	)			62,132				221,209				(71.9	)
Pre-tax pre-provision net revenue (1)			137,231				152,008				(9.7	)			271,260				305,290				(11.1	)
Common share and per common share data:
Net income per share − diluted		$	0.39			$	0.86				(54.7	)%		$	0.48			$	1.71				(71.9	)%
Net income per share − basic			0.39				0.86				(54.7	)			0.48				1.72				(72.1	)
Cash dividends per share			0.27				0.23				17.4				0.53				0.45				17.8
Book value per share			31.78				30.97				2.6				31.78				30.97				2.6
Tangible book value per share(1)			26.53				25.61				3.6				26.53				25.61				3.6
Weighted-average diluted shares outstanding (thousands)			129,399				129,079								129,349				129,022
End of period shares outstanding (thousands)			129,350				128,947								129,350				128,947
Balance sheet data at period end:
Total assets		$	26,380,409			$	22,960,731				14.9	%		$	26,380,409			$	22,960,731				14.9	%
Total loans			19,311,078				17,485,205				10.4				19,311,078				17,485,205				10.4
Non-purchased loans			18,247,431				15,786,809				15.6				18,247,431				15,786,809				15.6
Purchased loans			1,063,647				1,698,396				(37.4	)			1,063,647				1,698,396				(37.4	)
Allowance for loan losses			306,196				106,642				187.1				306,196				106,642				187.1
Foreclosed assets			18,328				33,467				(45.2	)			18,328				33,467				(45.2	)
Investment securities − AFS			3,299,944				2,548,489				29.5				3,299,944				2,548,489				29.5
Goodwill and other intangible assets, net			679,166				690,304				(1.6	)			679,166				690,304				(1.6	)
Deposits			20,723,598				18,186,215				14.0				20,723,598				18,186,215				14.0
Other borrowings			903,696				201,455				348.6				903,696				201,455				348.6
Subordinated notes			223,854				223,471				0.2				223,854				223,471				0.2
Subordinated debentures			120,194				119,635				0.5				120,194				119,635				0.5
Unfunded balance of closed loans			11,411,441				11,167,055				2.2				11,411,441				11,167,055				2.2
Reserve for losses on unfunded loan commitments			68,298				—			NM				68,298				—			NM
Total common stockholders’ equity			4,110,666				3,993,247				2.9				4,110,666				3,993,247				2.9
Net unrealized gains on investment securities AFS included in common stockholders' equity			63,177				19,693								63,177				19,693
Loan (including purchased loans) to deposit ratio			93.18	%			96.15	%							93.18	%			96.15	%
Selected ratios:
Return on average assets(2)			0.78	%			1.95	%							0.50	%			1.97	%
Return on average common stockholders’ equity(2)			4.92				11.29								3.04				11.52
Return on average tangible common stockholders’ equity(1) (2)			5.89				13.70								3.64				14.04
Average common equity to total average assets			15.93				17.31								16.59				17.12
Net interest margin – FTE(2)			3.74				4.45								3.84				4.49
Efficiency ratio			42.07				39.30								42.71				38.89
Net charge-offs to average non-purchased loans(2) (3)			0.05				0.12								0.06				0.09
Net charge-offs to average total loans(2)			0.29				0.14								0.20				0.10
Nonperforming loans to total loans(4)			0.18				0.15								0.18				0.15
Nonperforming assets to total assets(4)			0.19				0.25								0.19				0.25
Allowance for loan losses to total loans (5)			1.59				0.61							1.59			0.61
Other information:
Non-accrual loans(4)		$	31,083			$	22,860							$	31,083			$	22,860
Accruing loans − 90 days past due(4)			—				—								—				—
Troubled and restructured non-purchased loans − accruing(4)			934				1,399								934				1,399

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(1)  Calculations of pre-tax pre-provision net revenue, tangible book value per common share and return on average tangible common stockholders’ equity and the reconciliations to GAAP are included in the schedules accompanying this release. (2)  Ratios for interim periods annualized based on actual days. (3)  Excludes purchased loans and net charge-offs related to such loans. (4)  Excludes purchased loans, except for their inclusion in total assets. (5)  Excludes reserve for losses on unfunded loan commitments. NM – Not meaningful

Selected Consolidated Financial Data (continued)
Unaudited

100%; border-collapse:collapse !important;">

		Three Months Ended
		June 30,			March 31,
		2020			2020			% Change
	(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income		$	216,593			$	209,775				3.3	%
Provision for credit losses			72,026				117,663				(38.8	)
Non-interest income			21,591				27,680				(22.0	)
Non-interest expense			100,953				103,425				(2.4	)
Net income available to common stockholders			50,266				11,866				323.6
Pre-tax pre-provision net revenue (1)			137,231				134,030				2.4
Common share and per common share data:
Net income per share − diluted		$	0.39			$	0.09				333.3	%
Net income per share − basic			0.39				0.09				333.3
Cash dividends per share			0.27				0.26				3.8
Book value per share			31.78				31.57				0.7
Tangible book value per share (1)			26.53				26.30				0.9
Weighted-average diluted shares outstanding (thousands)			129,399				129,307
End of period shares outstanding (thousands)			129,350				129,324
Balance sheet data at period end:
Total assets		$	26,380,409			$	24,565,810				7.4	%
Total loans			19,311,078				18,228,204				5.9
Non-purchased loans			18,247,431				17,030,378				7.1
Purchased loans			1,063,647				1,197,826				(11.2	)
Allowance for loan losses			306,196				238,737				28.3
Foreclosed assets			18,328				20,616				(11.1	)
Investment securities − AFS			3,299,944				2,816,556				17.2
Goodwill and other intangible assets, net			679,166				681,747				(0.4	)
Deposits			20,723,598				18,809,190				10.2
Other borrowings			903,696				1,051,353				(14.0	)
Subordinated notes			223,854				223,759				—
Subordinated debentures			120,194				120,055				0.1
Unfunded balance of closed loans			11,411,441				11,334,737				0.7
Reserve for losses on unfunded loan commitments			68,298				77,672				(12.1	)
Total common stockholders’ equity			4,110,666				4,083,150				0.7
Net unrealized gains on investment securities AFS included in common stockholders' equity			63,177				54,888
Loan (including purchased loans) to deposit ratio			93.18	%			96.91	%
Selected ratios:
Return on average assets(2)			0.78	%			0.20	%
Return on average common stockholders’ equity(2)			4.92				1.16
Return on average tangible common stockholders’ equity(1) (2)			5.89				1.39
Average common equity to total average assets			15.93				17.31
Net interest margin – FTE(2)			3.74				3.96
Efficiency ratio			42.07				43.35
Net charge-offs to average non-purchased loans(2) (3)			0.05				0.08
Net charge-offs to average total loans(2)			0.29				0.10
Nonperforming loans to total loans(4)			0.18				0.16
Nonperforming assets to total assets(4)			0.19				0.19
Allowance for loan losses to total loans (5)			1.59				1.31
Other information:
Non-accrual loans(4)		$	31,083			$	25,681
Accruing loans − 90 days past due(4)			—				—
Troubled and restructured non-purchased loans − accruing(4)			934				757

100%; border-collapse:collapse !important;">

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

Bank OZK
Supplemental Quarterly Financial Data
Unaudited

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		9/30/18			12/31/18			3/31/19			6/30/19			9/30/19			12/31/19			3/31/20			6/30/20
		(Dollars in thousands, except per share amounts)
28%; width:28%; min-width:28%;">Earnings Summary:	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	6%; width:6%; min-width:6%;">	1%; width:1%; min-width:1%;">
Net interest income		$	220,614			$	228,382			$	225,888			$	224,536			$	218,780			$	214,977			$	209,775			$	216,593
Federal tax (FTE) adjustment			1,132				1,219				1,207				1,136				1,038				1,028				1,133				1,753
Net interest income (FTE)			221,746				229,601				227,095				225,672				219,818				216,005				210,908				218,346
Provision for credit losses			(41,949	)			(7,271	)			(6,681	)			(6,769	)			(7,854	)			(4,938	)			(117,663	)			(72,026	)
Non-interest income			24,121				27,560				24,072				26,603				26,446				30,406				27,680				21,591
Non-interest expense			(102,942	)			(94,893	)			(96,678	)			(99,131	)			(100,914	)			(104,406	)			(103,425	)			(100,953	)
Pretax income (FTE)			100,976				154,997				147,808				146,375				137,496				137,067				17,500				66,958
FTE adjustment			(1,132	)			(1,219	)			(1,207	)			(1,136	)			(1,038	)			(1,028	)			(1,133	)			(1,753	)
Provision for income taxes			(25,665	)			(38,750	)			(35,889	)			(34,726	)			(32,574	)			(35,240	)			(4,509	)			(14,948	)
Noncontrolling interest			1				3				(6	)			(10	)			7				7				8				9
Net income available to common stockholders		$	74,180			$	115,031			$	110,706			$	110,503			$	103,891			$	100,806			$	11,866			$	50,266
Earnings per common share – diluted		$	0.58			$	0.89			$	0.86			$	0.86			$	0.81			$	0.78			$	0.09			$	0.39
Non-interest Income:
Service charges on deposit accounts		$	9,730			$	10,585			$	9,722			$	10,291			$	10,827			$	10,933			$	10,009			$	8,281
Trust income			1,730				1,821				1,730				1,839				1,975				2,010				1,939				1,759
BOLI income:
Increase in cash surrender value			5,321				5,269				5,162				5,178				5,208				5,167				5,067				5,057
Death benefits			—				482				—				—				206				2,989				608				—
Loan service, maintenance and other fees			4,724				5,245				4,874				4,565				4,197				4,282				3,716				3,394
Other income from purchased loans			1,418				2,370				795				1,455				674				759				—				—
Gains (losses) on sales of other assets			(518	)			465				284				402				189				1,358				161				621
Net gains on investment securities			—				—				—				713				—				—				2,223				—
Other			1,716				1,323				1,505				2,160				3,170				2,908				3,957				2,479
Total non-interest income		$	24,121			$	27,560			$	24,072			$	26,603			$	26,446			$	30,406			$	27,680			$	21,591
Non-interest Expense:
Salaries and employee benefits		$	41,477			$	41,837			$	44,868			$	47,558			$	48,376			$	52,050			$	51,473			$	48,410
Net occupancy and equipment			14,358				14,027				14,750				14,587				14,825				14,855				15,330				15,756
Other operating expenses			47,107				39,029				37,060				36,986				37,713				37,501				36,622				36,787
Total non-interest expense		$	102,942			$	94,893			$	96,678			$	99,131			$	100,914			$	104,406			$	103,425			$	100,953
Balance Sheet Data:
Total assets		$	22,086,539			$	22,388,030			$	23,005,652			$	22,960,731			$	23,402,679			$	23,555,728			$	24,565,810			$	26,380,409
Non-purchased loans			14,440,623				15,073,791				15,610,681				15,786,809				16,307,621				16,224,539				17,030,378				18,247,431
Purchased loans			2,285,168				2,044,032				1,864,715				1,698,396				1,427,230				1,307,504				1,197,826				1,063,647
Investment securities – AFS			2,669,877				2,862,340				2,769,602				2,548,489				2,414,722				2,277,389				2,816,556				3,299,944
Deposits			17,822,915				17,938,415				18,476,868				18,186,215				18,440,078				18,474,259				18,809,190				20,723,598
Unfunded balance of closed loans			11,891,247				11,364,975				11,544,218				11,167,055				11,429,918				11,325,598				11,334,737				11,411,441
Common stockholders' equity			3,653,596				3,770,330				3,882,643				3,993,247				4,078,324				4,150,351				4,083,150				4,110,666

Bank OZK
Supplemental Quarterly Financial Data (Continued)
Unaudited

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		9/30/18			12/31/18			3/31/19			6/30/19			9/30/19			12/31/19			3/31/20			6/30/20
	(Dollars in thousands, except per share amounts)
Allowance for Credit Losses:
Balance at beginning of period		$	104,638			$	98,200			$	102,264			$	105,954			$	106,642			$	109,001			$	108,525			$	316,409
Adoption of CECL(1) methodology			—				—				—				—				—				—				94,512				—
Net charge-offs			(48,387	)			(3,207	)			(2,991	)			(6,081	)			(5,495	)			(5,414	)			(4,291	)			(13,941	)
Provision for credit losses			41,949				7,271				6,681				6,769				7,854				4,938				117,663				72,026
Balance at end of period		$	98,200			$	102,264			$	105,954			$	106,642			$	109,001			$	108,525			$	316,409			$	374,494
Allowance for loan losses		$	98,200			$	102,264			$	105,954			$	106,642			$	109,001			$	108,525			$	238,737			$	306,196
Reserve for losses on unfunded loan commitments			—				—				—				—				—				—				77,672				68,298
Total allowance for credit losses		$	98,200			$	102,264			$	105,954			$	106,642			$	109,001			$	108,525			$	316,409			$	374,494
Selected Ratios:
Net interest margin – FTE(2)			4.47	%			4.55	%			4.53	%			4.45	%			4.26	%			4.15	%			3.96	%			3.74	%
Efficiency ratio			41.87				36.90				38.49				39.30				40.98				42.37				43.35				42.07
Net charge-offs to average non-purchased loans(2) (3)			1.32				0.06				0.05				0.12				0.07				0.10				0.08				0.05
Net charge-offs to average total loans(2)			1.14				0.07				0.07				0.14				0.12				0.12				0.10				0.29
Nonperforming loans to total loans(4)			0.23				0.23				0.22				0.15				0.17				0.15				0.16				0.18
Nonperforming assets to total assets(4)			0.23				0.23				0.21				0.25				0.26				0.18				0.19				0.19
Allowance for loan losses to total loans (5)			0.59				0.60				0.61				0.61				0.61				0.62				1.31				1.59
Loans past due 30 days or more, including   past due non-accrual loans, to total loans(4)			0.17				0.28				0.28				0.13				0.14				0.19				0.18				0.13

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(1) Current Expected Credit Loss methodology. (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
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		Three Months Ended June 30,			Six Months Ended June 30,
		2020			2019			2020			2019
		Average Balance			Income/ Expense			Yield/ Rate			Average Balance			Income/ Expense			Yield/ Rate			Average Balance			Income/ Expense			Yield/ Rate			Average Balance			Income/ Expense			Yield/ Rate
		(Dollars in thousands)
ASSETS
Earning assets:
Interest earning deposits and federal funds sold		$	1,303,791			$	330				0.10	%		$	118,761			$	941				3.18	%		$	1,335,544			$	4,706				0.71	%		$	93,031			$	1,354				2.94	%
Investment securities:
Taxable			1,923,362				11,055				2.31				2,172,732				13,585				2.51				1,859,711				21,814				2.36				2,241,370				28,481				2.56
Tax-exempt – FTE			1,151,492				7,400				2.58				509,119				4,675				3.68				818,777				11,953				2.94				512,348				9,579				3.77
Non-purchased loans – FTE			17,963,230				233,015				5.22				15,760,582				250,235				6.37				17,244,750				465,046				5.42				15,622,442				496,276				6.41
Purchased loans			1,133,611				17,087				6.06				1,785,374				28,519				6.41				1,199,512				38,474				6.45				1,866,130				58,714				6.34
Total earning assets – FTE			23,475,486				268,887				4.61				20,346,568				297,955				5.87				22,458,294				541,993				4.85				20,335,321				594,404				5.89
Non-interest earning assets			2,318,334												2,342,995												2,335,832												2,280,063
Total assets		$	25,793,820											$	22,689,563											$	24,794,126											$	22,615,384
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction		$	7,517,260			$	7,702				0.41	%		$	9,640,727			$	37,510				1.56	%		$	7,824,330			$	27,449				0.71	%		$	9,586,233			$	73,613				1.55	%
Time deposits of $100 or more			5,279,716				23,765				1.81				3,137,419				16,698				2.13				4,834,026				45,955				1.91				3,153,873				32,252				2.06
Other time deposits			3,752,793				13,784				1.48				2,580,584				13,184				2.05				3,543,161				29,529				1.68				2,508,405				24,614				1.98
Total interest bearing deposits			16,549,769				45,251				1.10				15,358,730				67,392				1.76				16,201,517				102,933				1.28				15,248,511				130,479				1.73
Repurchase agreements with customers			8,087				6				0.30				11,101				11				0.41				7,985				13				0.31				16,616				33				0.40
Other borrowings (1)			1,043,004				963				0.37				70,390				19				0.11				669,987				1,013				0.30				169,439				1,408				1.68
Subordinated notes			223,793				3,172				5.70				223,419				3,181				5.71				223,752				6,344				5.70				223,370				6,326				5.71
Subordinated debentures (1)			120,120				1,149				3.85				119,559				1,680				5.64				120,052				2,436				4.08				119,486				3,392				5.72
Total interest bearing liabilities			17,944,773				50,541				1.13				15,783,199				72,283				1.84				17,223,293				112,739				1.32				15,777,422				141,638				1.81
Non-interest bearing liabilities:
Non-interest bearing deposits			3,478,030												2,723,657												3,202,663												2,740,291
Other non-interest bearing liabilities			257,874												252,062												251,026												223,491
Total liabilities			21,680,677												18,758,918												20,676,982												18,741,204
Common stockholders’ equity			4,110,038												3,927,522												4,114,035												3,871,065
Noncontrolling interest			3,105												3,123												3,109												3,115
Total liabilities and stockholders’ equity		$	25,793,820											$	22,689,563											$	24,794,126											$	22,615,384
Net interest income – FTE						$	218,346											$	225,672											$	429,254											$	452,766
Net interest margin – FTE											3.74	%											4.45	%											3.84	%											4.49	%

⁽¹⁾       The interest expense and the rates for “other borrowings” and for “subordinated debentures” were affected by capitalized interest.  Capitalized interest included in other borrowings totaled $0.27 million for the second quarter and $0.62 million for the first six months of 2020 compared to $0.40 million for the second quarter and $0.75 million for the first six months of 2019.  In the absence of this interest capitalization, the rates on other borrowings would have been 0.47% for the second quarter and 0.49% for the first six months of 2020 compared to 2.36% for the second quarter and 2.56% for the first six months of 2019.  Capitalized interest included in subordinated debentures totaled $0.03 million for the second quarter and $0.18 million for the first six months of 2020 (none in the second quarter or first six months of 2019).  In the absence of this interest capitalization, the rates on subordinated debentures would have been 3.95% for the second quarter and 4.37% for the first six months of 2020.

Bank OZK
Reconciliation of Non-GAAP Financial Measures

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

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		Three Months Ended			Six Months Ended
		June 30,			June 30,
		2020			2019			2020			2019
		(Dollars in thousands)
Net income available to common stockholders		$	50,266			$	110,503			$	62,132			$	221,209
Average common stockholders’ equity before noncontrolling interest		$	4,110,038			$	3,927,522			$	4,114,035			$	3,871,065
Less average intangible assets:
Goodwill			(660,789	)			(660,789	)			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(19,563	)			(31,225	)			(20,987	)			(32,822	)
Total average intangibles			(680,352	)			(692,014	)			(681,776	)			(693,611	)
Average tangible common stockholders’ equity		$	3,429,686			$	3,235,508			$	3,432,259			$	3,177,454
Return on average common stockholders’ equity(1)			4.92	%			11.29	%			3.04	%			11.52	%
Return on average tangible common stockholders’ equity(1)			5.89	%			13.70	%			3.64	%			14.04	%

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

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

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		June 30,			March 31,
		2020			2019			2020
		(In thousands, except per share amounts)
Total common stockholders’ equity before noncontrolling interest		$	4,110,666			$	3,993,247			$	4,083,150
Less intangible assets:
Goodwill			(660,789	)			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated   amortization			(18,377	)			(29,515	)			(20,958	)
Total intangibles			(679,166	)			(690,304	)			(681,747	)
Total tangible common stockholders' equity		$	3,431,500			$	3,302,943			$	3,401,403
Shares of common stock outstanding			129,350				128,947				129,324
Book value per common share		$	31.78			$	30.97			$	31.57
Tangible book value per common share		$	26.53			$	25.61			$	26.30

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

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		June 30,
		2020			2019
		(Dollars in thousands)
Total common stockholders’ equity before noncontrolling interest		$	4,110,666			$	3,993,247
Less intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(18,377	)			(29,515	)
Total intangibles			(679,166	)			(690,304	)
Total tangible common stockholders' equity		$	3,431,500			$	3,302,943
Total assets		$	26,380,409			$	22,960,731
Less intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(18,377	)			(29,515	)
Total intangibles			(679,166	)			(690,304	)
Total tangible assets		$	25,701,243			$	22,270,427
Ratio of total common stockholders’ equity to total assets			15.58	%			17.39	%
Ratio of total tangible common stockholders’ equity to total tangible assets			13.35	%			14.83	%

Calculation of Pre-Tax Pre-Provision Net Revenue
Unaudited

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		Three Months Ended			Six Months Ended
		June 30, 2020			June 30, 2019			March 31, 2020			June 30, 2020			June 30, 2019
		(Dollars in thousands)
Income before taxes		$	65,205			$	145,239			$	16,367			$	81,571			$	291,840
Provision for credit losses			72,026				6,769				117,663				189,689				13,450
Pre-tax pre-provision net revenue		$	137,231			$	152,008			$	134,030			$	271,260			$	305,290

 

FAQ

What were Bank OZK's Q2 2020 earnings results?

Bank OZK reported a net income of $50.3 million for Q2 2020, a 54.5% decline from Q2 2019.

What is the EPS for Bank OZK for Q2 2020?

The diluted earnings per share for Q2 2020 were $0.39, down 54.7% from the previous year.

How did the COVID-19 pandemic affect Bank OZK's financial performance?

The pandemic led to a significant decline in net income and a $72.0 million provision for credit losses.

What is Bank OZK's outlook after the Q2 2020 results?

The Bank indicated uncertainty in future projections due to the ongoing effects of the COVID-19 pandemic.