Bank OZK Announces Record Fourth Quarter and Full Year 2023 Earnings

Bay Street

11 months ago

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

	Three Months Ended December 31,								Year Ended December 31,
		2023			2022		% Change			2023			2022		% Change
	(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income	$	370,548		$	332,488		11.4	%	$	1,439,485		$	1,142,242		26.0	%
Provision for credit losses		43,832			32,508		34.8			165,470			83,494		98.2
Non-interest income		37,027			27,544		34.4			122,549			114,503		7.0
Non-interest expense		145,011			119,013		21.8			529,561			451,721		17.2
Net income		175,132			162,825		7.6			690,839			564,090		22.5
Preferred stock dividends		4,047			4,047		—			16,187			16,621		(2.6	)
Net income available to common stockholders		171,079			158,832		7.7			674,596			547,520		23.2
Pre-tax pre-provision net revenue ⁽¹⁾		262,564			241,019		8.9			1,032,473			805,024		28.3
Common share and per common share data:
Diluted earnings per common share	$	1.50		$	1.34		11.9	%	$	5.87		$	4.54		29.3	%
Basic earnings per common share		1.51			1.35		11.9			5.89			4.55		29.5
Common stock dividends per share		0.37			0.33		12.1			1.42			1.26		12.7
Book value per share		42.42			37.13		14.2			42.42			37.13		14.2
Tangible book value per common share ⁽¹⁾		36.58			31.47		16.2			36.58			31.47		16.2
Weighted-average diluted shares outstanding (thousands)		113,756			118,201		(3.8	)		114,833			120,700		(4.9	)
End of period shares outstanding (thousands)		113,149			117,177		(3.4	)		113,149			117,177		(3.4	)
Balance sheet data at period end:
Total assets	$	34,237,457		$	27,656,568		23.8	%	$	34,237,457		$	27,656,568		23.8	%
Total loans		26,459,075			20,778,791		27.3			26,459,075			20,778,791		27.3
Non-purchased loans		26,195,030			20,400,154		28.4			26,195,030			20,400,154		28.4
Purchased loans		264,045			378,637		(30.3	)		264,045			378,637		(30.3	)
Allowance for loan losses		339,394			208,858		62.5			339,394			208,858		62.5
Foreclosed assets		61,720			6,616		832.9			61,720			6,616		832.9
Investment securities – AFS		3,244,371			3,491,613		(7.1	)		3,244,371			3,491,613		(7.1	)
Goodwill and other intangible assets, net		660,789			663,543		(0.4	)		660,789			663,543		(0.4	)
Deposits		27,405,143			21,500,143		27.5			27,405,143			21,500,143		27.5
Other borrowings		805,318			606,666		32.7			805,318			606,666		32.7
Subordinated notes		347,761			346,947		0.2			347,761			346,947		0.2
Subordinated debentures		121,652			121,591		0.1			121,652			121,591		0.1
Unfunded balance of closed loans		20,573,029			21,062,733		(2.3	)		20,573,029			21,062,733		(2.3	)
Reserve for losses on unfunded loan commitments		161,834			156,419		3.5			161,834			156,419		3.5
Preferred stock		338,980			338,980		—			338,980			338,980		—
Total common stockholders’ equity ⁽¹⁾		4,800,021			4,350,599		10.3			4,800,021			4,350,599		10.3
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

	Three Months Ended
	December 31, 2023			September 30, 2023			% Change
	(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income	$	370,548		$	367,261		0.9	%
Provision for credit losses		43,832			44,036		(0.5	)
Non-interest income		37,027			25,727		43.9
Non-interest expense		145,011			128,978		12.4
Net income		175,132			173,830		0.7
Preferred stock dividends		4,047			4,047		—
Net income available to common stockholders		171,079			169,746		0.8
Pre-tax pre-provision net revenue ⁽¹⁾		262,564			264,010		(0.5	)
Common share and per common share data:
Diluted earnings per common share	$	1.50		$	1.49		0.7	%
Basic earnings per common share		1.51			1.50		0.7
Common stock dividends per share		0.37			0.36		2.8
Book value per share		42.42			40.35		5.1
Tangible book value per common share ⁽¹⁾		36.58			34.50		6.0
Weighted-average diluted shares outstanding (thousands)		113,756			113,770		—
End of period shares outstanding (thousands)		113,149			113,136		—
Balance sheet data at period end:
Total assets	$	34,237,457		$	32,767,328		4.5	%
Total loans		26,459,075			25,331,740		4.5
Non-purchased loans		26,195,030			25,051,214		4.6
Purchased loans		264,045			280,526		(5.9	)
Allowance for loan losses		339,394			303,358		11.9
Foreclosed assets		61,720			68,738		(10.2	)
Investment securities – AFS		3,244,371			3,153,817		2.9
Goodwill and other intangible assets, net		660,789			660,789		—
Deposits		27,405,143			25,552,856		7.2
Other borrowings		805,318			1,430,192		(43.7	)
Subordinated notes		347,761			347,556		0.1
Subordinated debentures		121,652			121,652		—
Unfunded balance of closed loans		20,573,029			20,625,371		(0.3	)
Reserve for losses on unfunded loan commitments		161,834			158,128		2.3
Preferred stock		338,980			338,980		—
Total common stockholders’ equity ⁽¹⁾		4,800,021			4,564,524		5.2
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⁾		—			—


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

	Three Months Ended											Year Ended
	Dec 31,		Sept 30,		June 30,		March 31,		Dec 31,			December 31,
		2023		2023		2023		2023		2022			2023		2022
	(Dollars in thousands)
Net income available to common stockholders	$	171,079	$	169,746	$	167,917	$	165,853	$	158,832		$	674,596	$	547,520
Preferred stock dividends		4,047		4,047		4,047		4,047		4,047			16,187		16,621
Earnings attributable to noncontrolling interest		6		37		1		12		(54	)		56		(51	)
Provision for income taxes		43,600		46,144		45,717		40,703		45,686			176,164		157,440
Provision for credit losses		43,832		44,036		41,774		35,829		32,508			165,470		83,494
Pre-tax pre-provision net revenue	$	262,564	$	264,010	$	259,456	$	246,444	$	241,019		$	1,032,473	$	805,024


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

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