Bank OZK Announces Record Fourth Quarter and Full Year 2023 Earnings
LITTLE ROCK, Ark., Jan. 18, 2024 (GLOBE NEWSWIRE) -- Bank OZK (the "Bank") (Nasdaq: OZK) today announced that net income available to common stockholders for the fourth quarter of 2023 was a record $171.1 million, a 7.7% increase from $158.8 million for the fourth quarter of 2022. Diluted earnings per common share for the fourth quarter of 2023 were a record $1.50, an 11.9% increase from $1.34 for the fourth quarter of 2022.
For the full year of 2023, net income available to common stockholders was $674.6 million, a 23.2% increase from $547.5 million for the full year of 2022. Diluted earnings per common share for the full year of 2023 were $5.87, a 29.3% increase from $4.54 for the full year of 2022.
Pre-tax pre-provision net revenue ("PPNR") was $262.6 million for the fourth quarter of 2023, an 8.9% increase from $241.0 million for the fourth quarter of 2022. For the full year of 2023, PPNR was $1.03 billion, a 28.3% increase from $0.81 billion for the full year of 2022. The calculation of PPNR and the reconciliation to generally accepted accounting principles ("GAAP") are included in the schedules accompanying this release.
The Bank's annualized returns on average assets, average common stockholders' equity and average tangible common stockholders' equity for the fourth quarter of 2023 were 2.04%, 14.58% and 16.99%, respectively, compared to 2.35%, 14.76% and 17.48%, respectively, for the fourth quarter of 2022. The Bank's returns on average assets, average common stockholders' equity and average tangible common stockholders' equity for the full year of 2023 were 2.20%, 14.93% and 17.50%, respectively, compared to 2.08%, 12.66% and 14.97%, respectively, for the full year of 2022. The results for the fourth quarter and full year of 2023 include the impact of a $9.9 million FDIC special assessment recorded during the fourth 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, "We are pleased to have reported record net income and record diluted earnings per share in each quarter of 2023, resulting in net income available to common stockholders for the year of $674.6 million and diluted earnings per common share of $5.87. Our goal for 2024 is to continue to improve our record annual net income and diluted earnings per common share achieved in 2023, and we believe that is a reasonable goal, notwithstanding what appears likely to remain a challenging macroeconomic environment. We feel that we are well positioned for the coming year, and we look forward to capitalizing on new opportunities."
KEY BALANCE SHEET METRICS
Total loans were $26.46 billion at December 31, 2023, a 27.3% increase from $20.78 billion at December 31, 2022. Deposits were $27.41 billion at December 31, 2023, a 27.5% increase from $21.50 billion at December 31, 2022. Total assets were $34.24 billion at December 31, 2023, a 23.8% increase from $27.66 billion at December 31, 2022.
Common stockholders' equity was $4.80 billion at December 31, 2023, a 10.3% increase from $4.35 billion at December 31, 2022. Tangible common stockholders' equity was $4.14 billion at December 31, 2023, a 12.3% increase from $3.69 billion at December 31, 2022. The Bank did not repurchase any shares during the three months ended December 31, 2023. During the full year of 2023, the Bank repurchased 4.3 million shares for $151.5 million, which equates to a weighted average cost of approximately $35.19 per share.
Book value per common share was $42.42 at December 31, 2023, a 14.2% increase from $37.13 at December 31, 2022. Tangible book value per common share was $36.58 at December 31, 2023, a 16.2% increase from $31.47 at December 31, 2022.
The Bank's ratio of total common stockholders' equity to total assets was 14.02% at December 31, 2023, compared to 15.73% at December 31, 2022. Its ratio of total tangible common stockholders' equity to total tangible assets was 12.33% at December 31, 2023, compared to 13.66% at December 31, 2022. The calculations of the Bank's total common stockholders' equity, tangible common stockholders' equity, tangible book value per common share, and ratio of total tangible common stockholders' equity to total tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.
ASSET QUALITY
The Bank's ratio of nonperforming non-purchased loans to total loans (excluding purchased loans) was 0.23% at December 31, 2023, compared to 0.22% as of December 31, 2022. The Bank's ratio of nonperforming assets to total assets (excluding purchased loans, except for their inclusion in total assets) was 0.36% at December 31, 2023, compared to 0.19% as of December 31, 2022. The Bank's annualized ratio of net charge-offs of total loans to average total loans was 0.06% for the fourth quarter and 0.13% for the twelve months ended December 31, 2023, compared to 0.06% for the fourth quarter and 0.04% for the twelve months ended December 31, 2022.
MANAGEMENT'S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS
In connection with this release, the Bank released management's comments on its quarterly results, which are available at https://ir.ozk.com. This release should be read in conjunction with management's comments on the fourth quarter and full year 2023 results.
Management will conduct a conference call to take questions at 10:00 a.m. CT (11:00 a.m. ET) on Friday, January 19, 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 hiring or retaining qualified personnel, obtaining regulatory or other approvals, delays in acquiring satisfactory sites, obtaining permits and designing, constructing and opening new offices or relocating, selling or closing existing offices; integrating any acquisitions; the availability of and access to capital; possible downgrades in the Bank's credit ratings or outlook which could increase the costs of or decrease the availability of funding from capital markets; the ability to attract new or retain existing deposits or to retain or grow loans, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and long-term interest rates or changes in the relative relationships of various interest rate indices; competitive factors and pricing pressures, including their effect on the Bank's net interest margin or core spread; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; conditions within the banking industry, including the effects of recent failures of other financial institutions; recently enacted and potential laws and regulatory requirements or changes to existing laws and regulatory requirements, including changes affecting oversight of the financial services industry, changes intended to manage or mitigate climate and related environmental risks or changes in the interpretation and enforcement of such laws and requirements, and the costs and expenses to comply with new and/or existing legislation and regulatory requirements; uncertainty regarding changes in U.S. government monetary and fiscal policy; the impact of any U.S. federal government shutdown or budgetary crisis; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding artificial intelligence and maintaining cybersecurity; the impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business or others, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank, its customers or others; natural disasters; acts of war or terrorism; the potential impact of continuing inflationary pressures; the potential impact of supply chain disruptions; national or international political instability or military conflict, including the conflict in the Middle East and the ongoing war in Ukraine; the competition and costs of recruiting and retaining human talent; impairment of our goodwill; adoption of new accounting standards, or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this communication or as detailed from time to time in our public filings, including those factors described in the disclosures under the headings "Forward-Looking Information" and "Item 1A. Risk Factors" in our most recent Annual Report on Form 10-K for the year ended December 31, 2022 and our quarterly reports on Form 10-Q. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described in, or implied by, such forward-looking statements. The Bank disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.
GENERAL INFORMATION
Bank OZK (Nasdaq: OZK) is a regional bank providing innovative financial solutions delivered by expert bankers with a relentless pursuit of excellence. Established in 1903, Bank OZK conducts banking operations in approximately 240 offices in eight states including Arkansas, Georgia, Florida, North Carolina, Texas, New York, California and Mississippi and had $34.24 billion in total assets as of December 31, 2023. For more information, visit www.ozk.com.
Bank OZK Consolidated Balance Sheets Unaudited
December 31,
2023
2022
(Dollars in thousands)
ASSETS
Cash and cash equivalents
$
2,149,529
$
1,033,454
Investment securities – available for sale ("AFS")
3,244,371
3,491,613
Investment securities – trading
—
8,817
Federal Home Loan Bank of Dallas ("FHLB") and other bankers' bank stocks
50,400
42,406
Non-purchased loans
26,195,030
20,400,154
Purchased loans
264,045
378,637
Allowance for loan losses
(339,394
)
(208,858
)
Net Loans
26,119,681
20,569,933
Premises and equipment, net
676,821
678,405
Foreclosed assets
61,720
6,616
Accrued interest receivable
170,110
125,130
Bank owned life insurance ("BOLI")
808,490
789,805
Goodwill and other intangible assets, net
660,789
663,543
Other, net
295,546
246,846
Total assets
$
34,237,457
$
27,656,568
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand non-interest bearing
$
4,095,874
$
4,658,451
Savings and interest bearing transaction
9,074,296
9,905,717
Time
14,234,973
6,935,975
Total deposits
27,405,143
21,500,143
Other borrowings
805,318
606,666
Subordinated notes
347,761
346,947
Subordinated debentures
121,652
121,591
Reserve for losses on unfunded loan commitments
161,834
156,419
Accrued interest payable and other liabilities
255,773
233,864
Total liabilities
$
29,097,481
$
22,965,630
Commitments and contingencies
Stockholders' equity:
Preferred Stock: $0.01 par value; 100,000,000 shares authorized; 14,000,000 issued and outstanding at December 31, 2023 and December 31, 2022
338,980
338,980
Common Stock: $0.01 par value; 300,000,000 shares authorized; 113,148,672 and 117,176,928 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively
1,131
1,172
Additional paid-in capital
1,612,446
1,753,941
Retained earnings
3,283,818
2,773,135
Accumulated other comprehensive loss
(97,374
)
(177,649
)
Total stockholders' equity before noncontrolling interest
5,139,001
4,689,579
Noncontrolling interest
975
1,359
Total stockholders' equity
5,139,976
4,690,938
Total liabilities and stockholders' equity
$
34,237,457
$
27,656,568
Bank OZK Consolidated Statements of Income Unaudited
Three Months Ended December 31,
Year Ended December 31,
2023
2022
2023
2022
(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans
$
557,844
$
367,019
$
1,968,289
$
1,158,332
Purchased loans
5,412
7,141
23,257
31,441
Investment securities:
Taxable
9,667
10,280
39,429
41,526
Tax-exempt
10,670
8,521
38,957
22,653
Deposits with banks
21,901
5,961
58,241
12,116
Total interest income
605,494
398,922
2,128,173
1,266,068
Interest expense:
Deposits
218,474
53,230
627,050
94,574
Other borrowings
11,329
8,534
41,669
13,033
Subordinated notes
2,631
2,631
10,439
10,439
Subordinated debentures
2,512
2,039
9,530
5,780
Total interest expense
234,946
66,434
688,688
123,826
Net interest income
370,548
332,488
1,439,485
1,142,242
Provision for credit losses
43,832
32,508
165,470
83,494
Net interest income after provision for credit losses
326,716
299,980
1,274,015
1,058,748
Non-interest income:
Service charges on deposit accounts:
NSF and overdraft fees
4,700
4,467
18,059
17,724
All other service charges
7,333
7,138
27,995
28,102
Trust income
2,165
1,977
8,524
7,990
BOLI income:
Increase in cash surrender value
5,401
4,953
20,696
19,532
Death benefits
2,966
—
2,966
807
Loan service, maintenance and other fees
6,755
3,780
18,920
13,819
Gains on sales of other assets
3,288
510
9,029
11,467
Net gains on investment securities
1,177
1,256
3,243
2,019
Other
3,242
3,463
13,117
13,043
Total non-interest income
37,027
27,544
122,549
114,503
Non-interest expense:
Salaries and employee benefits
66,270
59,946
258,846
226,373
Net occupancy and equipment
17,234
17,584
72,591
70,058
Other operating expenses
61,507
41,483
198,124
155,290
Total non-interest expense
145,011
119,013
529,561
451,721
Income before taxes
218,732
208,511
867,003
721,530
Provision for income taxes
43,600
45,686
176,164
157,440
Net income
175,132
162,825
690,839
564,090
Earnings attributable to noncontrolling interest
(6
)
54
(56
)
51
Preferred stock dividends
4,047
4,047
16,187
16,621
Net income available to common stockholders
$
171,079
$
158,832
$
674,596
$
547,520
Basic earnings per common share
$
1.51
$
1.35
$
5.89
$
4.55
Diluted earnings per common share
$
1.50
$
1.34
$
5.87
$
4.54
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 December 31, 2023:
Balances - September 30, 2023
$
338,980
$
1,131
$
1,607,510
$
3,154,869
$
(198,986
)
$
1,409
$
4,904,913
Net income
—
—
—
175,132
—
—
175,132
Earnings attributable to noncontrolling interest
—
—
—
(6
)
—
6
—
Total other comprehensive income
—
—
—
—
101,612
—
101,612
Preferred stock dividends, $0.28906 per share
—
—
—
(4,047
)
—
—
(4,047
)
Common stock dividends, $0.37 per share
—
—
—
(42,130
)
—
—
(42,130
)
Return of capital paid to non-controlling interest
—
—
—
—
—
(440
)
(440
)
Issuance of 17,018 shares of common stock pursuant to stock-based compensation plans
—
—
547
—
—
—
547
Stock-based compensation expense
—
—
4,389
—
—
—
4,389
Forfeitures of 4,578 shares of unvested restricted common stock
—
—
—
—
—
—
—
Balances - December 31, 2023
$
338,980
$
1,131
$
1,612,446
$
3,283,818
$
(97,374
)
$
975
$
5,139,976
Year ended December 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
—
—
—
690,839
—
—
690,839
Earnings attributable to noncontrolling interest
—
—
—
(56
)
—
56
—
Total other comprehensive income
—
—
—
—
80,275
—
80,275
Preferred stock dividends, $1.15624 per share
—
—
—
(16,187
)
—
—
(16,187
)
Common stock dividends, $1.42 per share
—
—
—
(163,913
)
—
—
(163,913
)
Return of capital paid to non-controlling interest
(440
)
(440
)
Issuance of 522,651 shares of common stock pursuant to stock-based compensation plans
—
5
1,166
—
—
—
1,171
Repurchase and cancellation of 4,304,239 shares of common stock under share repurchase program, including excise taxes
—
(44
)
(151,421
)
—
—
—
(151,465
)
Repurchase and cancellation of 215,362 shares of common stock withheld for tax pursuant to stock-based compensation plans
—
(2
)
(8,672
)
—
(8,674
)
Stock-based compensation expense
—
—
17,432
—
—
—
17,432
Forfeitures of 31,306 shares of unvested restricted common stock
—
—
—
—
—
—
—
Balances - December 31, 2023
$
338,980
$
1,131
$
1,612,446
$
3,283,818
$
(97,374
)
$
975
$
5,139,976
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 December 31, 2022:
Balances - September 30, 2022
$
338,980
$
1,178
$
1,773,562
$
2,653,377
$
(227,673
)
$
3,120
$
4,542,544
Net income
—
—
—
162,825
—
—
162,825
Earnings attributable to noncontrolling interest
—
—
—
54
—
(54
)
—
Total other comprehensive income
—
—
—
—
50,024
—
50,024
Preferred stock dividends, $0.28906 per share
—
—
—
(4,047
)
—
—
(4,047
)
Common stock dividends, $0.33 per share
—
—
—
(39,074
)
—
—
(39,074
)
Return of capital to non-controlling interest
—
—
—
—
—
(1,707
)
(1,707
)
Issuance of 10,496 shares of common stock pursuant to stock-based compensation plans
—
—
241
—
—
—
241
Repurchase and cancellation of 574,878 shares of common stock under share repurchase program
—
(6
)
(23,219
)
—
—
—
(23,225
)
Repurchase and cancellation of 3,890 shares of common stock withheld for tax pursuant to restricted stock vesting
—
—
(174
)
—
—
—
(174
)
Stock-based compensation expense
—
—
3,531
—
—
—
3,531
Forfeitures of 16,405 shares of unvested restricted common stock
—
—
—
—
—
—
—
Balances - December 31, 2022
$
338,980
$
1,172
$
1,753,941
$
2,773,135
$
(177,649
)
$
1,359
$
4,690,938
Year ended December 31, 2022:
Balances - December 31, 2021
$
338,980
$
1,254
$
2,093,702
$
2,378,466
$
23,841
$
3,117
$
4,839,360
Net income
—
—
—
564,090
—
—
564,090
Earnings attributable to noncontrolling interest
—
—
—
51
—
(51
)
—
Total other comprehensive loss
—
—
—
—
(201,490
)
—
(201,490
)
Preferred stock dividends, $1.187 per share
—
—
—
(16,621
)
—
—
(16,621
)
Common stock dividends, $1.26 per share
—
—
—
(152,851
)
—
—
(152,851
)
Return of capital to non-controlling interest
—
—
—
—
—
(1,707
)
(1,707
)
Issuance of 305,839 shares of common stock pursuant to stock-based compensation plans
—
3
2,490
—
—
—
2,493
Repurchase and cancellation of 8,373,398 shares of common stock under share repurchase program
—
(83
)
(349,886
)
—
—
—
(349,969
)
Repurchase and cancellation of 116,864 shares of common stock withheld for tax pursuant to stock-based compensation plans.
—
(1
)
(5,572
)
—
—
—
(5,573
)
Stock-based compensation expense
—
—
13,206
—
—
—
13,206
Forfeitures of 82,397 shares of unvested restricted common stock
—
(1
)
1
—
—
—
—
Balances - December 31, 2022
$
338,980
$
1,172
$
1,753,941
$
2,773,135
$
(177,649
)
$
1,359
$
4,690,938
Bank OZK Summary of Non-Interest Expense Unaudited
Three Months Ended December 31,
Year Ended December 31,
2023
2022
2023
2022
(Dollars in thousands)
Salaries and employee benefits
$
66,270
$
59,946
$
258,846
$
226,373
Net occupancy and equipment
17,234
17,584
72,591
70,058
Other operating expenses:
Deposit insurance and assessments
15,803
2,710
30,351
9,610
Software and data processing
10,577
9,512
39,212
35,373
Professional and outside services
6,233
5,652
21,423
21,581
Advertising and public relations
5,153
2,987
16,150
8,797
Telecommunication services
2,251
2,134
8,865
7,986
Postage and supplies
2,121
1,906
7,981
7,146
ATM expense
1,957
1,834
7,681
6,331
Travel and meals
1,938
1,755
7,582
7,661
Amortization of CRA and tax credit investments
7,618
5,408
27,768
20,293
Other
7,856
7,585
31,111
30,512
Total non-interest expense
$
145,011
$
119,013
$
529,561
$
451,721
Bank OZK Summary of Total Loans Outstanding Unaudited
December 31,
2023
2022
(Dollars in thousands)
Real estate:
Residential 1-4 family
$
961,338
3.6
%
$
981,567
4.7
%
Non-farm/non-residential
5,309,239
20.1
4,665,268
22.5
Construction/land development
11,653,487
44.0
8,215,056
39.5
Agricultural
256,423
1.0
239,689
1.2
Multifamily residential
2,064,106
7.8
1,503,398
7.2
Total real estate
20,244,593
76.5
15,604,978
75.1
Commercial and industrial
1,269,610
4.8
902,321
4.3
Consumer
2,965,042
11.2
2,445,851
11.8
Other
1,979,830
7.5
1,825,641
8.8
Total loans
26,459,075
100.0
%
20,778,791
100.0
%
Allowance for loan losses
(339,394
)
(208,858
)
Net loans
$
26,119,681
$
20,569,933
Bank OZK Allowance for Credit Losses Unaudited
Allowance for Loan Losses
Reserve for Losses on Unfunded Loan Commitments
Total Allowance for Credit Losses
(Dollars in thousands)
Three months ended December 31, 2023:
Balances – September 30, 2023
$
303,358
$
158,128
$
461,486
Net charge-offs
(4,090
)
—
(4,090
)
Provision for credit losses
40,126
3,706
43,832
Balances – December 31, 2023
$
339,394
$
161,834
$
501,228
Year ended December 31, 2023:
Balances – December 31, 2022
$
208,858
$
156,419
$
365,277
Net charge-offs
(29,519
)
—
(29,519
)
Provision for credit losses
160,055
5,415
165,470
Balances – December 31, 2023
$
339,394
$
161,834
$
501,228
Three months ended December 31, 2022:
Balances – September 30, 2022
$
200,098
$
135,537
$
335,635
Net charge-offs
(2,866
)
—
(2,866
)
Provision for credit losses
11,626
20,882
32,508
Balances – December 31, 2022
$
208,858
$
156,419
$
365,277
Year ended December 31, 2022:
Balances – December 31, 2021
$
217,380
$
71,609
$
288,989
Net charge-offs
(7,206
)
—
(7,206
)
Provision for credit losses
(1,316
)
84,810
83,494
Balances – December 31, 2022
$
208,858
$
156,419
$
365,277
Bank OZK Summary of Deposits – By Account Type Unaudited
December 31,
2023
2022
(Dollars in thousands)
Non-interest bearing
$
4,095,874
14.9
%
$
4,658,451
21.7
%
Interest bearing:
Transaction (NOW)
4,486,372
16.4
4,097,532
19.1
Savings and money market
4,587,924
16.7
5,808,185
27.0
Time deposits
14,234,973
52.0
6,935,975
32.2
Total deposits
$
27,405,143
100.0
%
$
21,500,143
100.0
%
Bank OZK Summary of Deposits – By Customer Type Unaudited
December 31,
2023
2022
(Dollars in thousands)
Non-interest bearing
$
4,095,874
14.9
%
$
4,658,451
21.7
%
Interest bearing:
Consumer and commercial:
Consumer – Non-Time
2,792,199
10.2
3,916,078
18.2
Consumer – Time
10,216,217
37.3
4,936,061
23.0
Commercial – Non-Time
2,439,175
8.9
2,741,007
12.7
Commercial – Time
767,566
2.8
516,477
2.4
Public funds
3,725,766
13.6
2,103,392
9.8
Brokered
2,655,317
9.7
2,050,294
9.5
Reciprocal
713,029
2.6
578,383
2.7
Total deposits
$
27,405,143
100.0
%
$
21,500,143
100.0
%
Bank OZK Selected Consolidated Financial Data Unaudited
Net unrealized losses on investment securities AFS included in stockholders' equity
(97,374
)
(177,649
)
(97,374
)
(177,649
)
Loan (including purchased loans) to deposit ratio
96.55
%
96.64
%
96.55
%
96.64
%
Selected ratios:
Return on average assets (2)
2.04
%
2.35
%
2.20
%
2.08
%
Return on average common stockholders' equity (1) (2)
14.58
14.76
14.93
12.66
Return on average tangible common stockholders' equity (1) (2)
16.99
17.48
17.50
14.97
Average common equity to total average assets
13.99
15.90
14.74
16.42
Net interest margin – FTE (2)
4.82
5.46
5.16
4.82
Efficiency ratio
35.33
32.84
33.67
35.75
Net charge-offs to average non-purchased loans (2) (3)
0.07
0.09
0.11
0.07
Net charge-offs to average total loans (2)
0.06
0.06
0.13
0.04
Nonperforming loans to total loans (4)
0.23
0.22
0.23
0.22
Nonperforming assets to total assets (4)
0.36
0.19
0.36
0.19
Allowance for loan losses to total loans (5)
1.28
1.01
1.28
1.01
Allowance for credit losses to total loans and unfunded loan commitments
1.07
0.87
1.07
0.87
Other information:
Non-accrual loans (4)
$
60,982
$
43,411
$
60,982
$
43,411
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
Net unrealized losses on investment securities AFS included in stockholders' equity
(97,374
)
(198,986
)
Loan (including purchased loans) to deposit ratio
96.55
%
99.13
%
Selected ratios:
Return on average assets (2)
2.04
%
2.13
%
Return on average common stockholders' equity (1) (2)
14.58
14.81
Return on average tangible common stockholders' equity (1) (2)
16.99
17.33
Average common equity to total average assets
13.99
14.38
Net interest margin – FTE (2)
4.82
5.05
Efficiency ratio
35.33
32.60
Net charge-offs to average non-purchased loans (2) (3)
0.07
0.17
Net charge-offs to average total loans (2)
0.06
0.15
Nonperforming loans to total loans (4)
0.23
0.25
Nonperforming assets to total assets (4)
0.36
0.40
Allowance for loan losses to total loans (5)
1.28
1.20
Allowance for credit losses to total loans and unfunded loan commitments
1.07
1.00
Other information:
Non-accrual loans (4)
$
60,982
$
62,648
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
12/31/23
9/30/23
6/30/23
3/31/23
12/31/22
(Dollars in thousands)
Earnings summary:
Net interest income
$
370,548
$
367,261
$
356,824
$
344,852
$
332,488
Federal tax (FTE) adjustment
2,925
2,632
2,602
2,603
2,383
Net interest income (FTE)
373,473
369,893
359,426
347,455
334,871
Provision for credit losses
(43,832
)
(44,036
)
(41,774
)
(35,829
)
(32,508
)
Non-interest income
37,027
25,727
31,987
27,809
27,544
Non-interest expense
(145,011
)
(128,978
)
(129,355
)
(126,217
)
(119,013
)
Pre-tax income (FTE)
221,657
222,606
220,284
213,218
210,894
FTE adjustment
(2,925
)
(2,632
)
(2,602
)
(2,603
)
(2,383
)
Provision for income taxes
(43,600
)
(46,144
)
(45,717
)
(40,703
)
(45,686
)
Noncontrolling interest
(6
)
(37
)
(1
)
(12
)
54
Preferred stock dividend
(4,047
)
(4,047
)
(4,047
)
(4,047
)
(4,047
)
Net income available to common stockholders
$
171,079
$
169,746
$
167,917
$
165,853
$
158,832
Earnings per common share – diluted
$
1.50
$
1.49
$
1.47
$
1.41
$
1.34
Pre-tax pre-provision net revenue (1)
$
262,564
$
264,010
$
259,456
$
246,444
$
241,019
Selected balance sheet data at period end:
Total assets
$
34,237,457
$
32,767,328
$
30,761,870
$
28,971,170
$
27,656,568
Non-purchased loans
26,195,030
25,051,214
23,291,785
21,700,941
20,400,154
Purchased loans
264,045
280,526
315,661
361,065
378,637
Investment securities – AFS
3,244,371
3,153,817
3,262,366
3,422,031
3,491,613
Deposits
27,405,143
25,552,856
23,983,397
22,282,983
21,500,143
Unfunded balance of closed loans
20,573,029
20,625,371
21,119,761
20,965,040
21,062,733
Allowance for credit losses:
Balance at beginning of period
$
461,486
$
426,820
$
393,767
$
365,277
$
335,635
Net charge-offs
(4,090
)
(9,370
)
(8,721
)
(7,339
)
(2,866
)
Provision for credit losses
43,832
44,036
41,774
35,829
32,508
Balance at end of period
$
501,228
$
461,486
$
426,820
$
393,767
$
365,277
Allowance for loan losses
$
339,394
$
303,358
$
263,188
$
222,025
$
208,858
Reserve for losses on unfunded loan commitments
161,834
158,128
163,632
171,742
156,419
Total allowance for credit losses
$
501,228
$
461,486
$
426,820
$
393,767
$
365,277
Selected ratios:
Net interest margin – FTE (2)
4.82
%
5.05
%
5.32
%
5.54
%
5.46
%
Efficiency ratio
35.33
32.60
33.05
33.63
32.84
Net charge-offs to average non-purchased loans (2) (3)
0.07
0.17
0.03
0.15
0.09
Net charge-offs to average total loans (2)
0.06
0.15
0.15
0.14
0.06
Nonperforming loans to total loans (4)
0.23
0.25
0.15
0.15
0.22
Nonperforming assets to total assets (4)
0.36
0.40
0.32
0.34
0.19
Allowance for loan losses to total loans (5)
1.28
1.20
1.11
1.01
1.01
Allowance for credit losses to total loans and unfunded loan commitments
1.07
1.00
0.95
0.92
0.87
Loans past due 30 days or more, including past due non-accrual loans, to total loans (4)
0.20
0.21
0.14
0.15
0.13
(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 December 31,
Year Ended December 31,
2023
2022
2023
2022
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
Interest earning assets:
Interest earning deposits and federal funds sold
$
1,637,395
$
21,902
5.31
%
$
692,066
$
5,961
3.42
%
$
1,164,595
$
58,241
5.00
%
$
940,116
$
12,116
1.29
%
Investment securities:
Taxable
2,143,606
9,667
1.79
2,566,011
10,280
1.59
2,299,254
39,429
1.71
2,950,929
41,526
1.41
Tax-exempt – FTE
1,097,750
13,506
4.88
974,070
10,786
4.39
1,049,642
49,313
4.70
774,038
28,675
3.70
Non-purchased loans – FTE
25,590,389
557,932
8.65
19,728,477
367,136
7.38
23,258,595
1,968,696
8.46
18,744,652
1,159,161
6.18
Purchased loans
271,222
5,412
7.92
391,801
7,141
7.23
321,570
23,257
7.23
445,955
31,441
7.05
Total earning assets – FTE
30,740,362
608,419
7.85
24,352,425
401,304
6.54
28,093,656
2,138,936
7.61
23,855,690
1,272,919
5.34
Non-interest earning assets
2,538,592
2,508,505
2,550,276
2,472,672
Total assets
$
33,278,954
$
26,860,930
$
30,643,932
$
26,328,362
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction
$
9,004,724
$
64,165
2.83
%
$
9,519,104
$
26,543
1.11
%
$
9,152,060
$
211,498
2.31
%
$
9,588,372
$
48,344
0.50
%
Time deposits
13,280,889
154,309
4.61
6,321,731
26,687
1.67
10,543,800
415,552
3.94
5,680,395
46,229
0.81
Total interest bearing deposits
22,285,613
218,474
3.89
15,840,835
53,230
1.33
19,695,860
627,050
3.18
15,268,767
94,573
0.62
Other borrowings
863,828
11,329
5.20
753,605
8,533
4.49
803,797
41,669
5.18
673,932
13,034
1.93
Subordinated notes
347,661
2,631
3.00
346,847
2,631
3.01
347,356
10,439
3.01
346,538
10,439
3.01
Subordinated debentures
121,652
2,512
8.19
121,523
2,039
6.66
121,648
9,530
7.83
121,310
5,780
4.76
Total interest bearing liabilities
23,618,754
234,946
3.95
17,062,810
66,433
1.54
20,968,661
688,688
3.28
16,410,547
123,826
0.75
Non-interest bearing liabilities:
Non-interest bearing deposits
4,150,323
4,751,644
4,315,200
4,873,842
Other non-interest bearing liabilities
513,326
435,108
502,732
378,471
Total liabilities
28,282,403
22,249,562
25,786,593
21,662,860
Total stockholders' equity before noncontrolling interest
4,995,217
4,608,570
4,855,976
4,662,467
Noncontrolling interest
1,334
2,798
1,363
3,035
Total liabilities and stockholders' equity
$
33,278,954
$
26,860,930
$
30,643,932
$
26,328,362
Net interest income – FTE
$
373,473
$
334,871
$
1,450,248
$
1,149,093
Net interest margin – FTE
4.82
%
5.46
%
5.16
%
4.82
%
Core spread (1)
4.76
%
6.05
%
5.28
%
5.56
%
(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
December 31,
September 30,
Year Ended December 31,
2023
2022
2023
2023
2022
(Dollars in thousands)
Net income available to common stockholders
$
171,079
$
158,832
$
169,746
$
674,596
$
547,520
Average stockholders' equity before noncontrolling interest
$
4,995,217
$
4,608,570
$
4,885,620
$
4,855,976
$
4,662,467
Less average preferred stock
(338,980
)
(338,980
)
(338,980
)
(338,980
)
(338,980
)
Total average common stockholders' equity
4,656,237
4,269,590
4,546,640
4,516,996
4,323,487
Less average intangible assets:
Goodwill
(660,789
)
(660,789
)
(660,789
)
(660,789
)
(660,789
)
Core deposit and other intangible assets, net of accumulated amortization
—
(3,421
)
—
(821
)
(5,443
)
Total average intangibles
(660,789
)
(664,210
)
(660,789
)
(661,610
)
(666,232
)
Average tangible common stockholders' equity
$
3,995,448
$
3,605,380
$
3,885,851
$
3,855,386
$
3,657,255
Return on average common stockholders' equity(1)
14.58
%
14.76
%
14.81
%
14.93
%
12.66
%
Return on average tangible common stockholders' equity(1)
16.99
%
17.48
%
17.33
%
17.50
%
14.97
%
(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
December 31,
September 30,
2023
2022
2023
(In thousands, except per share amounts)
Total stockholders' equity before noncontrolling interest
$
5,139,001
$
4,689,579
$
4,903,504
Less preferred stock
(338,980
)
(338,980
)
(338,980
)
Total common stockholders' equity
$
4,800,021
$
4,350,599
$
4,564,524
Less intangible assets:
Goodwill
(660,789
)
(660,789
)
(660,789
)
Core deposit and other intangible assets, net of accumulated amortization
—
(2,754
)
—
Total intangibles
(660,789
)
(663,543
)
(660,789
)
Total tangible common stockholders' equity
$
4,139,232
$
3,687,056
$
3,903,735
Shares of common stock outstanding
113,149
117,177
113,136
Book value per common share
$
42.42
$
37.13
$
40.35
Tangible book value per common share
$
36.58
$
31.47
$
34.50
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
December 31,
2023
2022
(Dollars in thousands)
Total stockholders' equity before noncontrolling interest
$
5,139,001
$
4,689,579
Less preferred stock
(338,980
)
(338,980
)
Total common stockholders' equity
$
4,800,021
$
4,350,599
Less intangible assets:
Goodwill
(660,789
)
(660,789
)
Core deposit and other intangible assets, net of accumulated amortization
—
(2,754
)
Total intangibles
(660,789
)
(663,543
)
Total tangible common stockholders' equity
4,139,232
3,687,056
Total assets
$
34,237,457
$
27,656,568
Less intangible assets:
Goodwill
$
(660,789
)
$
(660,789
)
Core deposit and other intangible assets, net of accumulated amortization
—
(2,754
)
Total intangibles
(660,789
)
(663,543
)
Total tangible assets
$
33,576,668
$
26,993,025
Ratio of total common stockholders' equity to total assets
14.02
%
15.73
%
Ratio of total tangible common stockholders' equity to total tangible assets
12.33
%
13.66
%
Calculation of Pre-Tax Pre-Provision Net Revenue Unaudited