Bank OZK Announces First Quarter 2020 Earnings

LITTLE ROCK, Ark., April 23, 2020 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income for the first quarter of 2020 was $11.9 million, an 89.3% decrease from $110.7 million for the first quarter of 2019.  Diluted earnings per common share for the first quarter of 2020 were $0.09, an 89.5% decrease from $0.86 for the first quarter of 2019.

The COVID-19 pandemic significantly impacted the global economy in what was the first quarter of implementation of the current expected credit losses (“CECL”) method to calculate the Bank’s allowance for credit losses (“ACL”).  During the quarter just ended, the sudden and severe economic downturn in tandem with the adoption of CECL resulted in the Bank incurring provision for credit losses of $117.7 million, resulting in a total ACL of $316.4 million at March 31, 2020.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the first quarter of 2020 were 0.20%, 1.16% and 1.39%, respectively, compared to 1.99%, 11.77% and 14.40%, respectively, for the first quarter 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, “During the first quarter of 2020, we continued our long-standing focus on our team members, meeting the needs of our customers, serving the communities in which we operate and delivering favorable returns for our shareholders.  As we navigate the various challenges created by the current economic environment, we will continue to seek to capitalize on investment and other opportunities which may arise from such turbulent conditions.  We believe our team of industry and technology professionals is well-positioned to lead the Bank to continued success.”

KEY BALANCE SHEET METRICS

Total loans were $18.23 billion at March 31, 2020, a 4.3% increase from $17.48 billion at March 31, 2019.  Non-purchased loans, which exclude loans acquired in previous acquisitions, were $17.03 billion at March 31, 2020, a 9.1% increase from $15.61 billion at March 31, 2019.  Purchased loans, which consist of loans acquired in previous acquisitions, were $1.20 billion at March 31, 2020, a 35.8% decrease from $1.86 billion at March 31, 2019.

Deposits were $18.81 billion at March 31, 2020, a 1.8% increase from $18.48 billion at March 31, 2019.  Total assets were $24.57 billion at March 31, 2020, a 6.8% increase from $23.01 billion at March 31, 2019.

Common stockholders’ equity was $4.08 billion at March 31, 2020, a 5.2% increase from $3.88 billion at March 31, 2019, but a 1.6% decrease from $4.15 billion at December 31, 2019.  Tangible common stockholders’ equity was $3.40 billion at March 31, 2020, a 6.6% increase from $3.19 billion at March 31, 2019, but a 1.9% decrease from $3.47 billion at December 31, 2019.  Book value per common share was $31.57 at March 31, 2020, a 4.8% increase from $30.11 at March 31, 2019, but a 1.9% decrease from $32.19 at December 31, 2019.  Tangible book value per common share was $26.30 at March 31, 2020, a 6.3% increase from $24.73 at March 31, 2019, but a 2.2% decrease from $26.88 at December 31, 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 16.62% at March 31, 2020 compared to 16.88% at March 31, 2019.  Its ratio of total tangible common stockholders’ equity to total tangible assets was 14.24% at March 31, 2020 compared to 14.29% at March 31, 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 April 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 5272316.  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 and the ratio of total tangible common stockholders’ equity to total tangible assets, as important measures of the strength of its capital and its ability to generate earnings on its tangible capital invested by its shareholders. These measures typically adjust GAAP financial measures to exclude intangible assets.  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.”

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 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 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 such as the Coronavirus Aid, Relief and Economic Security Act and any similar or related rules and regulations; changes in U.S. Government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, 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 banks by asset size, based on Tier 1 Leverage Capital Ratio at December 31, 2019, 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 [phone] or P. O. Box 8811, Little Rock, Arkansas 72231-8811.

Bank OZK Consolidated Balance Sheets Unaudited
		March 31,				December 31,
		2020				2019
		(Dollars in thousands, except per share amounts)
ASSETS
Cash and cash equivalents		$	1,347,729			$	1,495,757
Investment securities - available for sale ("AFS")			2,816,556				2,277,389
Federal Home Loan Bank of Dallas and other banker's bank stocks			50,614				21,855
Non-purchased loans			17,030,378				16,224,539
Purchased loans			1,197,826				1,307,504
Allowance for loan losses			(238,737	)			(108,525	)
Net loans			17,989,467				17,423,518
Premises and equipment, net			723,371				711,541
Foreclosed assets			20,616				19,096
Accrued interest receivable			82,827				75,208
Bank owned life insurance (“BOLI”)			743,406				738,860
Goodwill and intangible assets, net			681,747				684,542
Other, net			109,477				107,962
Total assets		$	24,565,810			$	23,555,728
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing		$	3,003,305			$	2,795,251
Savings and interest bearing transaction			7,465,757				8,307,607
Time			8,340,128				7,371,401
Total deposits			18,809,190				18,474,259
Repurchase agreements with customers			3,821				11,249
Other borrowings			1,051,353				351,387
Subordinated notes			223,759				223,663
Subordinated debentures			120,055				119,916
Reserve for losses on loan commitments			77,672				—
Accrued interest payable and other liabilities			193,701				221,786
Total liabilities			20,479,551				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 March 31, 2020 or December 31, 2019			—				—
Common stock; $0.01 par value; 300,000,000 shares authorized; 129,324,435 and 128,951,024 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively			1,293				1,289
Additional paid-in capital			2,253,991				2,251,824
Retained earnings			1,772,978				1,869,983
Accumulated other comprehensive income			54,888				27,255
Total stockholders’ equity before noncontrolling interest			4,083,150				4,150,351
Noncontrolling interest			3,109				3,117
Total stockholders’ equity			4,086,259				4,153,468
Total liabilities and stockholders’ equity		$	24,565,810			$	23,555,728

Bank OZK Consolidated Statements of Income Unaudited
	Three Months Ended March 31,
	2020				2019
	(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans	$	231,853			$	245,864
Purchased loans		21,387				30,195
Investment securities:
Taxable		10,760				14,897
Tax-exempt		3,597				3,873
Deposits with banks and federal funds sold		4,376				414
Total interest income		271,973				295,243
Interest expense:
Deposits		57,682				63,087
Repurchase agreements with customers		6				22
Other borrowings		50				1,389
Subordinated notes		3,172				3,146
Subordinated debentures		1,288				1,711
Total interest expense		62,198				69,355
Net interest income		209,775				225,888
Provision for loan losses		117,663				6,681
Net interest income after provision for loan losses		92,112				219,207
Non-interest income:
Service charges on deposit accounts		10,009				9,722
Trust income		1,939				1,730
BOLI income:
Increase in cash surrender value		5,067				5,162
Death benefits		608				—
Other income from purchased loans		—				795
Loan service, maintenance and other fees		3,716				4,874
Gains on sales of other assets		161				284
Net gains on investment securities		2,223				—
Other		3,957				1,505
Total non-interest income		27,680				24,072
Non-interest expense:
Salaries and employee benefits		51,473				44,868
Net occupancy and equipment		15,330				14,750
Other operating expenses		36,622				37,060
Total non-interest expense		103,425				96,678
Income before taxes		16,367				146,601
Provision for income taxes		4,509				35,889
Net income		11,858				110,712
Earnings attributable to noncontrolling interest		8				(6	)
Net income available to common stockholders	$	11,866			$	110,706
Basic earnings per common share	$	0.09			$	0.86
Diluted earnings per common share	$	0.09			$	0.86

Bank OZK Consolidated Statements of Stockholders’ Equity Unaudited
		Common Stock				Additional Paid-In Capital				Retained Earnings				Accumulated Other Comprehensive Income				Non- Controlling Interest				Total
		(Dollars in thousands, except per share amounts)
Three months ended March 31, 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			—				—				11,858				—				—				11,858
Earnings attributable to noncontrolling interest			—				—				8				—				(8	)			—
Total other comprehensive income			—				—				—				27,633				—				27,633
Common stock dividends paid, $0.26 per share			—				—				(33,527	)			—				—				(33,527	)
Issuance of 4,300 shares of common stock for exercise of stock options			—				45				—				—				—				45
Issuance of 447,085 shares of unvested restricted common stock			4				(4	)			—				—				—				—
Repurchase and cancellation of 61,873 shares of common stock			—				(1,853	)			—				—				—				(1,853	)
Stock-based compensation expense			—				3,979				—				—				—				3,979
Forfeitures of 16,101 shares of unvested restricted common stock			—				—				—				—				—				—
Balances – March 31, 2020		$	1,293			$	2,253,991			$	1,772,978			$	54,888			$	3,109			$	4,086,259

Bank OZK Consolidated Statements of Stockholders’ Equity (continued) Unaudited
		Common Stock				Additional Paid-In Capital				Retained Earnings				Accumulated Other Comprehensive Loss				Non- Controlling Interest				Total
		(Dollars in thousands, except per share amounts)
Three months ended March 31, 2019:
Balances – December 31, 2018		$	1,286			$	2,237,948			$	1,565,201			$	(34,105	)		$	3,035			$	3,773,365
Net income			—				—				110,712				—				—				110,712
Earnings attributable to noncontrolling interest			—				—				(6	)			—				6				—
Total other comprehensive income			—				—				—				28,429				—				28,429
Common stock dividends paid, $0.22 per share			—				—				(28,281	)			—				—				(28,281	)
Noncontrolling interest cash contribution			—				—				—				—				80				80
Issuance of 29,300 shares of common stock for exercise of stock options			—				387				—				—				—				387
Issuance of 383,874 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			—				2,719				—				—				—				2,719
Forfeiture of 13,953 shares of unvested restricted common stock			—				—				—				—				—				—
Balances – March 31, 2019		$	1,289			$	2,239,404			$	1,647,626			$	(5,676	)		$	3,121			$	3,885,764

Bank OZK Summary of Non-Interest Expense Unaudited
		Three Months Ended March 31,
		2020				2019
		(Dollars in thousands)
Salaries and employee benefits		$	51,473			$	44,868
Net occupancy and equipment expense			15,330				14,750
Other operating expenses:
Professional and outside services			7,043				8,564
Software and data processing			4,974				4,709
Deposit insurance and assessments			3,420				3,652
Telecommunication services			2,177				3,344
Travel and meals			2,102				2,669
Postage and supplies			2,053				2,103
Advertising and public relations			1,703				1,683
ATM expense			1,160				987
Loan collection and repossession expense			694				984
Writedowns of foreclosed assets			879				562
Amortization of intangibles			2,795				3,145
Other			7,622				4,658
Total non-interest expense		$	103,425			$	96,678

Bank OZK Summary of Total Loans Outstanding Unaudited
		March 31, 2020								December 31, 2019
		(Dollars in thousands)
Real estate:
Residential 1-4 family		$	1,009,547				5.6	%		$	998,632				5.7	%
Non-farm/non-residential			4,510,484				24.7				3,956,579				22.6
Construction/land development			6,380,341				35.0				6,391,429				36.4
Agricultural			235,650				1.3				230,076				1.3
Multifamily residential			1,334,763				7.3				1,194,192				6.8
Total real estate			13,470,785				73.9				12,770,908				72.8
Commercial and industrial			690,396				3.8				661,952				3.8
Consumer			2,950,055				16.2				2,934,534				16.8
Other			1,116,968				6.1				1,164,649				6.6
Total loans			18,228,204				100.0	%			17,532,043				100.0	%
Allowance for loan losses			(238,737	)							(108,525	)
Net loans		$	17,989,467							$	17,423,518

Allowance for Credit Losses Unaudited
		Allowance for Loan Losses				Reserve for Losses on Loan Commitments				Total Allowance for Credit Losses
		(Dollars in thousands)
Balances – December 31, 2019		$	108,525			$	—			$	108,525
Adoption of Current Expected Credit Loss (CECL) model			39,588				54,924				94,512
Balances – January 1, 2020			148,113				54,924				203,037
Net charge-offs			(4,291	)			—				(4,291	)
Provision			94,915				22,748				117,663
Balances – March 31, 2020		$	238,737			$	77,672			$	316,409

Bank OZK Summary of Deposits – By Account Type Unaudited
		March 31, 2020								December 31, 2019
		(Dollars in thousands)
Non-interest bearing		$	3,003,305				16.0	%		$	2,795,251				15.1	%
Interest bearing:
Transaction (NOW)			2,784,268				14.8				2,706,426				14.7
Savings and money market			4,681,489				24.9				5,601,181				30.3
Time deposits less than $100			3,574,062				19.0				3,321,446				18.0
Time deposits of $100 or more			4,766,066				25.3				4,049,955				21.9
Total deposits		$	18,809,190				100.0	%		$	18,474,259				100.0	%

Summary of Deposits – By Customer Type Unaudited
		March 31, 2020								December 31, 2019
		(Dollars in thousands)
Consumer		$	8,535,172				45.4	%		$	7,526,014				40.7	%
Commercial			4,657,851				24.8				4,334,366				23.5
Public Funds			2,667,234				14.2				3,782,415				20.5
Brokered			2,233,240				11.8				2,115,193				11.4
Reciprocal			715,693				3.8				716,271				3.9
Total deposits		$	18,809,190				100.0	%		$	18,474,259				100.0	%

Bank OZK Selected Consolidated Financial Data Unaudited
		Three Months Ended March 31,
		2020				2019				% Change
		(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income		$	209,775			$	225,888				(7.1	)%
Provision for loan losses			117,663				6,681				1,661.2
Non-interest income			27,680				24,072				15.0
Non-interest expense			103,425				96,678				7.0
Net income available to common stockholders			11,866				110,706				(89.3	)
Common share and per common share data:
Net income per share - diluted		$	0.09			$	0.86				(89.5	)%
Net income per share - basic			0.09				0.86				(89.5	)
Cash dividends per share			0.26				0.22				18.2
Book value per share			31.57				30.11				4.8
Tangible book value per share(1)			26.30				24.73				6.3
Weighted-average diluted shares outstanding (thousands)			129,307				128,964
End of period shares outstanding (thousands)			129,324				128,948
Balance sheet data at period end:
Total assets		$	24,565,810			$	23,005,652				6.8	%
Total loans			18,228,204				17,475,396				4.3
Non-purchased loans			17,030,378				15,610,681				9.1
Purchased loans			1,197,826				1,864,715				(35.8	)
Allowance for loan losses			238,737				105,954				125.3
Foreclosed assets			20,616				14,096				46.3
Investment securities - AFS			2,816,556				2,781,691				1.3
Goodwill and other intangible assets, net			681,747				693,316				(1.7	)
Deposits			18,809,190				18,476,868				1.8
Other borrowings			1,051,353				1,489				70,508.0
Subordinated notes			223,759				223,375				0.2
Subordinated debentures			120,055				119,496				0.5
Unfunded balance of closed loans			11,334,737				11,544,218				(1.8	)
Reserve for losses on loan commitments			77,672				—			NM
Total common stockholders’ equity			4,083,150				3,882,643				5.2
Net unrealized gains (losses) on investment securities AFS included in common stockholders' equity			54,888				(5,676	)
Loan (including purchased loans) to deposit ratio			96.91	%			94.58	%
Selected ratios:
Return on average assets(2)			0.20	%			1.99	%
Return on average common stockholders’ equity(2)			1.16				11.77
Return on average tangible common stockholders’ equity(1) (2)			1.39				14.40
Average common equity to total average assets			17.31				16.91
Net interest margin – FTE(2)			3.96				4.53
Efficiency ratio			43.35				38.49
Net charge-offs to average non-purchased loans(2) (3)			0.08				0.05
Net charge-offs to average total loans(2)			0.10				0.07
Nonperforming loans to total loans(4)			0.16				0.22
Nonperforming assets to total assets(4)			0.19				0.21
Allowance for loan losses to total loans			1.31				0.61
Other information:
Non-accrual loans(4)		$	25,681			$	33,405
Accruing loans - 90 days past due(4)			—				—
Troubled and restructured non-purchased loans - accruing(4)			757				470
(1)  Calculations of 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. NM – Not meaningful

Bank OZK Selected Consolidated Financial Data (continued) Unaudited
		Three Months Ended
		March 31,				December 31,
		2020				2019				% Change
	(Dollars in thousands, except per share amounts)
Income statement data:
Net interest income		$	209,775			$	214,977				(2.4	)%
Provision for loan losses			117,663				4,938				2,282.8
Non-interest income			27,680				30,406				(9.0	)
Non-interest expense			103,425				104,406				(0.9	)
Net income available to common stockholders			11,866				100,806				(88.2	)
Common share and per common share data:
Net income per share - diluted		$	0.09			$	0.78				(88.5	)%
Net income per share - basic			0.09				0.78				(88.5	)
Cash dividends per share			0.26				0.25				4.0
Book value per share			31.57				32.19				(1.9	)
Tangible book value per share (1)			26.30				26.88				(2.2	)
Weighted-average diluted shares outstanding (thousands)			129,307				129,036
End of period shares outstanding (thousands)			129,324				128,951
Balance sheet data at period end:
Total assets		$	24,565,810			$	23,555,728				4.3	%
Total loans			18,228,204				17,532,043				4.0
Non-purchased loans			17,030,378				16,224,539				5.0
Purchased loans			1,197,826				1,307,504				(8.4	)
Allowance for loan losses			238,737				108,525				120.0
Foreclosed assets			20,616				19,096				8.0
Investment securities - AFS			2,816,556				2,277,389				23.7
Goodwill and other intangible assets, net			681,747				684,542				(0.4	)
Deposits			18,809,190				18,474,259				1.8
Other borrowings			1,051,353				351,387				199.2
Subordinated notes			223,759				223,663				0.1
Subordinated debentures			120,055				119,916				0.1
Unfunded balance of closed loans			11,334,737				11,325,598				0.1
Reserve for losses on loan commitments			77,672				—			NM
Total common stockholders’ equity			4,083,150				4,150,351				(1.6	)
Net unrealized gains on investment securities AFS included in common stockholders' equity			54,888				27,255
Loan (including purchased loans) to deposit ratio			96.91	%			94.90	%
Selected ratios:
Return on average assets(2)			0.20	%			1.74	%
Return on average common stockholders’ equity(2)			1.16				9.73
Return on average tangible common stockholders’ equity(1) (2)			1.39				11.68
Average common equity to total average assets			17.31				17.86
Net interest margin – FTE(2)			3.96				4.15
Efficiency ratio			43.35				42.37
Net charge-offs to average non-purchased loans(2) (3)			0.08				0.10
Net charge-offs to average total loans(2)			0.10				0.12
Nonperforming loans to total loans(4)			0.16				0.15
Nonperforming assets to total assets(4)			0.19				0.18
Allowance for loan losses to total loans			1.31				0.62
Other information:
Non-accrual loans(4)		$	25,681			$	23,221
Accruing loans - 90 days past due(4)			—				—
Troubled and restructured non-purchased loans - accruing(4)			757				656
(1)  Calculations of 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. NM – Not meaningful

Bank OZK Supplemental Quarterly Financial Data Unaudited
		6/30/18				9/30/18				12/31/18				3/31/19				6/30/19				9/30/19				12/31/19				3/31/20
	(Dollars in thousands, except per share amounts)
Earnings Summary:
Net interest income		$	224,661			$	220,614			$	228,382			$	225,888			$	224,536			$	218,780			$	214,977			$	209,775
Federal tax (FTE) adjustment			1,151				1,132				1,219				1,207				1,136				1,038				1,028				1,133
Net interest income (FTE)			225,812				221,746				229,601				227,095				225,672				219,818				216,005				210,908
Provision for loan losses			(9,610	)			(41,949	)			(7,271	)			(6,681	)			(6,769	)			(7,854	)			(4,938	)			(117,663	)
Non-interest income			27,386				24,121				27,560				24,072				26,603				26,446				30,406				27,680
Non-interest expense			(89,107	)			(102,942	)			(94,893	)			(96,678	)			(99,131	)			(100,914	)			(104,406	)			(103,425	)
Pretax income (FTE)			154,481				100,976				154,997				147,808				146,375				137,496				137,067				17,500
FTE adjustment			(1,151	)			(1,132	)			(1,219	)			(1,207	)			(1,136	)			(1,038	)			(1,028	)			(1,133	)
Provision for income taxes			(38,589	)			(25,665	)			(38,750	)			(35,889	)			(34,726	)			(32,574	)			(35,240	)			(4,509	)
Noncontrolling interest			10				1				3				(6	)			(10	)			7				7				8
Net income available to common stockholders		$	114,751			$	74,180			$	115,031			$	110,706			$	110,503			$	103,891			$	100,806			$	11,866
Earnings per common share – diluted		$	0.89			$	0.58			$	0.89			$	0.86			$	0.86			$	0.81			$	0.78			$	0.09
Non-interest Income:
Service charges on deposit accounts		$	9,704			$	9,730			$	10,585			$	9,722			$	10,291			$	10,827			$	10,933			$	10,009
Trust income			1,591				1,730				1,821				1,730				1,839				1,975				2,010				1,939
BOLI income:
Increase in cash surrender value			5,259				5,321				5,269				5,162				5,178				5,208				5,167				5,067
Death benefits			—				—				482				—				—				206				2,989				608
Other income from purchased loans			2,744				1,418				2,370				795				1,455				674				759				—
Loan service, maintenance and other fees			5,641				4,724				5,245				4,874				4,565				4,197				4,282				3,716
Gains (losses) on sales of other assets			844				(518	)			465				284				402				189				1,358				161
Net gains on investment securities			—				—				—				—				713				—				—				2,223
Other			1,603				1,716				1,323				1,505				2,160				3,170				2,908				3,957
Total non-interest income		$	27,386			$	24,121			$	27,560			$	24,072			$	26,603			$	26,446			$	30,406			$	27,680
Non-interest Expense:
Salaries and employee benefits		$	41,665			$	41,477			$	41,837			$	44,868			$	47,558			$	48,376			$	52,050			$	51,473
Net occupancy expense			13,827				14,358				14,027				14,750				14,587				14,825				14,855				15,330
Other operating expenses			33,615				47,107				39,029				37,060				36,986				37,713				37,501				36,622
Total non-interest expense		$	89,107			$	102,942			$	94,893			$	96,678			$	99,131			$	100,914			$	104,406			$	103,425
Balance Sheet Data:
Total assets		$	22,220,380			$	22,086,539			$	22,388,030			$	23,005,652			$	22,960,731			$	23,402,679			$	23,555,728			$	24,565,810
Non-purchased loans			14,183,533				14,440,623				15,073,791				15,610,681				15,786,809				16,307,621				16,224,539				17,030,378
Purchased loans			2,580,341				2,285,168				2,044,032				1,864,715				1,698,396				1,427,230				1,307,504				1,197,826
Investment securities – AFS			2,608,439				2,669,877				2,862,340				2,769,602				2,548,489				2,414,722				2,277,389				2,816,556
Deposits			17,897,085				17,822,915				17,938,415				18,476,868				18,186,215				18,440,078				18,474,259				18,809,190
Unfunded balance of closed loans			11,999,661				11,891,247				11,364,975				11,544,218				11,167,055				11,429,918				11,325,598				11,334,737
Common stockholders' equity			3,613,903				3,653,596				3,770,330				3,882,643				3,993,247				4,078,324				4,150,351				4,083,150

Bank OZK Supplemental Quarterly Financial Data (Continued) Unaudited
		6/30/18				9/30/18				12/31/18				3/31/19				6/30/19				9/30/19				12/31/19				3/31/20
	(Dollars in thousands, except per share amounts)
Allowance for Credit Losses:
Balance at beginning of period		$	98,097			$	104,638			$	98,200			$	102,264			$	105,954			$	106,642			$	109,001			$	108,525
Adoption of CECL(1) model			—				—				—				—				—				—				—				94,512
Net charge-offs			(3,069	)			(48,387	)			(3,207	)			(2,991	)			(6,081	)			(5,495	)			(5,414	)			(4,291	)
Provision for loan losses			9,610				41,949				7,271				6,681				6,769				7,854				4,938				117,663
Balance at end of period		$	104,638			$	98,200			$	102,264			$	105,954			$	106,642			$	109,001			$	108,525			$	316,409
Allowance for loan losses		$	104,638			$	98,200			$	102,264			$	105,954			$	106,642			$	109,001			$	108,525			$	238,737
Reserve for unfunded balance of closed loans			—				—				—				—				—				—				—				77,672
Total allowance for credit losses		$	104,638			$	98,200			$	102,264			$	105,954			$	106,642			$	109,001			$	108,525			$	316,409
Selected Ratios:
Net interest margin – FTE(2)			4.66	%			4.47	%		4.55					4.53	%			4.45	%			4.26	%			4.15	%			3.96	%
Efficiency ratio			35.19				41.87				36.90	%			38.49				39.30				40.98				42.37				43.35
Net charge-offs to average non-purchased loans(2) (3)			0.05				1.32				0.06				0.05				0.12				0.07				0.10				0.08
Net charge-offs to average total loans(2)			0.07				1.14				0.07				0.07				0.14				0.12				0.12				0.10
Nonperforming loans to total loans(4)			0.10				0.23				0.23				0.22				0.15				0.17				0.15				0.16
Nonperforming assets to total assets(4)			0.15				0.23				0.23				0.21				0.25				0.26				0.18				0.19
Allowance for loan losses to total loans			0.62				0.59				0.60				0.61				0.61				0.61				0.62				1.31
Loans past due 30 days or more, including past due non-accrual loans, to total loans(4)			0.12				0.17				0.28				0.28				0.13				0.14				0.19				0.18
(1) Current Expected Credit Loss model. (2) Ratios for interim periods annualized based on actual days. (3) Excludes purchased loans and net charge-offs related to such loss. (4) Excludes purchased loans, except for their inclusion in total assets.

Bank OZK Average Consolidated Balance Sheets and Net Interest Analysis – FTE Unaudited
		Three Months Ended March 31,
		2020												2019
		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		$	1,367,297			$	4,376				1.29	%		$	67,015			$	414				2.50	%
Investment securities:
Taxable			1,796,061				10,760				2.41				2,310,770				14,897				2.61
Tax-exempt – FTE			486,062				4,553				3.77				515,613				4,903				3.86
Non-purchased loans – FTE			16,526,270				232,030				5.65				15,482,768				246,041				6.44
Purchased loans			1,265,413				21,387				6.80				1,947,783				30,195				6.29
Total earning assets – FTE			21,441,103				273,106				5.12				20,323,949				296,450				5.92
Non-interest earning assets			2,353,330												2,232,416
Total assets		$	23,794,433											$	22,556,365
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction		$	8,131,400			$	19,747				0.98	%		$	9,531,133			$	36,103				1.54	%
Time deposits of $100 or more			4,388,337				22,190				2.03				3,170,510				15,555				1.99
Other time deposits			3,333,529				15,745				1.90				2,435,425				11,429				1.90
Total interest bearing deposits			15,853,266				57,682				1.46				15,137,068				63,087				1.69
Repurchase agreements with customers			7,883				6				0.32				22,192				22				0.40
Other borrowings (1)			296,969				50				0.07				269,588				1,389				2.09
Subordinated notes			223,711				3,172				5.70				223,321				3,146				5.71
Subordinated debentures (1)			119,984				1,288				4.31				119,412				1,711				5.81
Total interest bearing liabilities			16,501,813				62,198				1.52				15,771,581				69,355				1.78
Non-interest bearing liabilities:
Non-interest bearing deposits			2,927,296												2,757,110
Other non-interest bearing liabilities			243,598												210,588
Total liabilities			19,672,707												18,739,279
Common stockholders’ equity			4,118,614												3,813,979
Noncontrolling interest			3,112												3,107
Total liabilities and stockholders’ equity		$	23,794,433											$	22,556,365
Net interest income – FTE						$	210,908											$	227,095
Net interest margin – FTE											3.96	%											4.53	%
(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 $0.4 million for the first quarter of 2020 and $0.3 million for the first quarter of 2019.  In the absence of this interest capitalization, the rates on other borrowings would have been 0.55% for the first quarter of 2020 and 2.62% for the first quarter of 2019.  Capitalized interest included in subordinated debentures totaled $0.1 million for the first quarter of 2020 (none in the first quarter of 2019).  In the absence of this interest capitalization, the rate on subordinated debentures would have been 4.80% for the first quarter 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
		Three Months Ended
		March 31,								December 31,
		2020				2019				2019
		(Dollars in thousands)
Net income available to common stockholders		$	11,866			$	110,706			$	100,806
Average common stockholders’ equity before noncontrolling interest		$	4,118,614			$	3,813,979			$	4,110,322
Less average intangible assets:
Goodwill			(660,789	)			(660,789	)			(660,789	)
Core deposit and other intangibles, net of accumulated amortization			(22,412	)			(34,437	)			(25,315	)
Total average intangibles			(683,201	)			(695,226	)			(686,104	)
Average tangible common stockholders’ equity		$	3,435,413			$	3,118,753			$	3,424,218
Return on average common stockholders’ equity(1)			1.16	%			11.77	%			9.73	%
Return on average tangible common stockholders’ equity(1)			1.39	%			14.40	%			11.68	%
(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
		March 31,								December 31,
		2020				2019				2019
		(In thousands, except per share amounts)
Total common stockholders’ equity before noncontrolling interest		$	4,083,150			$	3,882,643			$	4,150,351
Less intangible assets:
Goodwill			(660,789	)			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(20,958	)			(32,527	)			(23,753	)
Total intangibles			(681,747	)			(693,316	)			(684,542	)
Total tangible common stockholders’ equity		$	3,401,403			$	3,189,327			$	3,465,809
Shares of common stock outstanding			129,324				128,948				128,951
Book value per common share		$	31.57			$	30.11			$	32.19
Tangible book value per common share		$	26.30			$	24.73			$	26.88

Calculation of Total Tangible Common Stockholders’ Equity and the Ratio of Total Tangible Common Stockholders’ Equity to Total Tangible Assets Unaudited
		March 31,
		2020				2019
		(Dollars in thousands)
Total common stockholders’ equity before noncontrolling interest		$	4,083,150			$	3,882,643
Less intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(20,958	)			(32,527	)
Total intangibles			(681,747	)			(693,316	)
Total tangible common stockholders’ equity		$	3,401,403			$	3,189,327
Total assets		$	24,565,810			$	23,005,652
Less intangible assets:
Goodwill			(660,789	)			(660,789	)
Core deposit and other intangible assets, net of accumulated amortization			(20,958	)			(32,527	)
Total intangibles			(681,747	)			(693,316	)
Total tangible assets		$	23,884,063			$	22,312,336
Ratio of total common stockholders’ equity to total assets			16.62	%			16.88	%
Ratio of total tangible common stockholders’ equity to total tangible assets			14.24	%			14.29	%

Investor Contact:		Tim Hicks [phone]
Media Contact:		Susan Blair [phone]