Bank OZK Announces Record Fourth Quarter and Full Year 2021 Earnings

·28 min read
GlobeNewswire Inc.

LITTLE ROCK, Arkansas, Jan. 20, 2022 (GLOBE NEWSWIRE) -- Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income for the fourth quarter of 2021 was $149.8 million, a 24.3% increase from $120.5 million for the fourth quarter of 2020. Diluted earnings per common share for the fourth quarter of 2021 were a quarterly record $1.17, a 25.8% increase from $0.93 for the fourth quarter of 2020.

For the full year of 2021, net income was a record $579.0 million, a 98.4% increase from $291.9 million for the full year of 2020. Diluted earnings per common share for the full year of 2021 were a record $4.47, a 97.8% increase from $2.26 for the full year of 2020.

As a result of improved economic conditions and prospects for improvement in the U. S. economy, management recorded negative provision for credit losses of $8.0 million during the fourth quarter and $77.9 million for the full year of 2021, reducing the Bank’s total allowance for credit losses (“ACL”) from $377.3 million at December 31, 2020 to $289.0 million at December 31, 2021. The Bank’s provision for credit losses was $6.8 million during the fourth quarter and $203.6 million for the full year of 2020.

Pre-tax pre-provision net revenue (“PPNR”) was $186.0 million for the fourth quarter of 2021, a 14.2% increase from $162.9 million for the fourth quarter of 2020. PPNR was $675.0 million for the full year of 2021, a 16.4% increase from $579.8 million for the full year of 2020. 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 2021 were 2.25%, 13.08% and 15.34%, respectively, compared to 1.79%, 11.36% and 13.53%, respectively, for the fourth quarter of 2020. The Bank’s returns on average assets, average common stockholder’s equity and average tangible common stockholders’ equity for the full year of 2021 were 2.17%, 13.01% and 15.32%, respectively, compared to 1.13%, 7.04% and 8.41%, respectively, for the full year of 2020. 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 report our excellent results for the fourth quarter and full year of 2021 – results that were record setting in many respects. We were particularly pleased to report our highest ever level of quarterly RESG loan originations, as organic growth is an important component of our long-term strategy to increase shareholder value. Our strong capital and liquidity, disciplined credit culture and outstanding team have us well positioned for the future.”

KEY BALANCE SHEET METRICS

Total loans were $18.31 billion at December 31, 2021, a 4.7% decrease from $19.21 billion at December 31, 2020. Non-purchased loans were $17.79 billion at December 31, 2021, a 3.3% decrease from $18.40 billion at December 31, 2020. Purchased loans, which consist of loans acquired in previous acquisitions, were $0.52 billion at December 31, 2021, a 36.1% decrease from $0.81 billion at December 31, 2020.

Deposits were $20.21 billion at December 31, 2021, a 5.8% decrease from $21.45 billion at December 31, 2020. Total assets were $26.53 billion at December 31, 2021, a 2.3% decrease from $27.16 billion at December 31, 2020.

Common stockholders’ equity was $4.50 billion at December 31, 2021, a 5.3% increase from $4.27 billion at December 31, 2020. Tangible common stockholders’ equity was $3.83 billion at December 31, 2021, a 6.4% increase from $3.60 billion at December 31, 2020. Book value per common share was $35.85 at December 31, 2021, an 8.5% increase from $33.03 at December 31, 2020. Tangible book value per common share was $30.52 at December 31, 2021, a 9.7% increase from $27.81 at December 31, 2020. The calculations of the Bank’s common stockholders’ equity, 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 16.95% at December 31, 2021, compared to 15.73% at December 31, 2020. Its ratio of total tangible common stockholders’ equity to total tangible assets was 14.80% at December 31, 2021, compared to 13.58% at December 31, 2020. 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.

PREFERRED STOCK OFFERING

On November 4, 2021, the Bank completed its public offering of 14,000,000 shares of its 4.625% Series A Non-Cumulative Perpetual Preferred Stock (“Preferred Stock”), par value $0.01 per share, with a liquidation preference of $25 per share, which represents $350 million in aggregate liquidation preference. The Bank received net proceeds from the Preferred Stock, after deducting the initial purchaser discount and offering expenses, of $339.0 million.

SUBORDINATED DEBT REDEMPTION AND OFFERING

In July 2021, the Bank redeemed all of its $225 million of 5.50% Fixed-to-Floating rate Subordinated Notes at a redemption price equal to 100% of the principal amount of the subordinated notes plus accrued and unpaid interest. As a result of the subordinated debt redemption, the Bank recognized approximately $0.8 million in remaining unamortized debt issue cost as non-interest expense during the third quarter of 2021.

In September 2021, the Bank completed its public offering of $350 million in aggregate principal amount of its 2.75% Fixed-to-Floating rate Subordinated Notes (the “2.75% Notes”) due 2031, which bear interest at a fixed rate of 2.75% per annum until September 30, 2026. On October 1, 2026, the 2.75% Notes will bear interest at a floating rate equal to a benchmark (which is expected to be three-month SOFR) plus 209 basis points. The 2.75% Notes are unsecured, subordinated debt obligations and mature on October 1, 2031. As of December 31, 2021, the 2.75% Notes had a carrying value of $346.1 million and remaining unamortized debt issuance cost of $3.9 million.

STOCK REPURCHASE PROGRAM

In July 2021, the Bank adopted a stock repurchase program. In conjunction with the Bank’s Preferred Stock offering, its Board of Directors increased the size of its stock repurchase program from $300 million up to $650 million of the Bank’s outstanding common stock. During the quarter just ended, the Bank repurchased 3,387,421 shares at a weighted average cost of $46.16, for a total of $156.4 million. During 2021, the Bank repurchased 4,275,988 shares at a weighted average cost of $45.21, for a total of $193.4 million. The timing and amount of future repurchases will be determined by management based on a variety of factors such as the Bank’s capital position, liquidity, financial performance and alternative uses of capital, stock price, regulatory requirements and general market and economic conditions. The repurchase program may be suspended by the Bank at any time.

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 January 21, 2022. 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 conference ID for this playback is 5324497. 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 with the Federal Deposit Insurance Corporation (“FDIC”) annual, quarterly and current reports, proxy materials and other information required by the Securities Exchange Act of 1934, 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 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 release and other communications by the Bank include certain “forward-looking statements” regarding the Bank’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time. Those statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: potential delays or other problems implementing the Bank’s growth, expansion and acquisition strategies, including delays in identifying satisfactory sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices or relocating, selling or closing existing offices; the ability to enter into and/or close additional acquisitions; the availability of and access to capital; possible downgrades in the Bank’s credit ratings or outlook which could increase the costs of or decrease the 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 phase-out of the London Interbank Offered Rate (“LIBOR”) or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Bank’s net interest margin or core spread; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief and Economic Security Act, the Consolidated Appropriations Act of 2021, the American Rescue Plan Act of 2021, and any similar or related laws, rules and regulations; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit or 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 COVID-19 pandemic, including the duration of the pandemic and actions taken to contain or treat COVID-19, on the Bank, the Bank’s customers, the Bank’s staff, the global economy and financial markets; potential impact of supply chain disruptions or inflation; national, international or political instability; impairment of the Bank’s goodwill or other intangible assets; 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 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, 2020 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. Headquartered in Little Rock, Arkansas, Bank OZK conducts operations with over 240 offices in eight states including Arkansas, Georgia, Florida, North Carolina, Texas, California, New York and Mississippi. Bank OZK can be found at www.ozk.com and on Facebook, Twitter and LinkedIn or contacted at (501) 978-2265 or P. O. Box 8811, Little Rock, Arkansas 72231-8811.

Investor Contact:

Tim Hicks (501) 978-2336

Media Contact:

Candace Graham (501) 320-4165


Bank OZK
Consolidated Balance Sheets
Unaudited

December 31,

2021

2020

(Dollars in thousands, except per share amounts)

ASSETS

Cash and cash equivalents

$

2,053,829

$

2,393,662

Investment securities ― available for sale ("AFS")

3,916,733

3,405,351

Investment securities ― trading

14,957

Federal Home Loan Bank of Dallas and other bankers' bank stocks

40,788

38,486

Non-purchased loans

17,791,610

18,401,495

Purchased loans

516,215

807,673

Allowance for loan losses

(217,380

)

(295,824

)

Net loans

18,090,445

18,913,344

Premises and equipment, net

695,857

738,842

Foreclosed assets

5,744

11,085

Accrued interest receivable

83,025

88,077

Bank owned life insurance (“BOLI”)

774,822

758,071

Goodwill and other intangible assets, net

669,063

675,458

Other, net

185,167

140,220

Total assets

$

26,530,430

$

27,162,596

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits:

Demand non-interest bearing

$

4,983,788

$

3,996,546

Savings and interest bearing transaction

9,245,727

8,160,982

Time

5,979,619

9,292,828

Total deposits

20,209,134

21,450,356

Repurchase agreements with customers

6,115

8,013

Other borrowings

750,206

750,928

Subordinated notes

346,133

224,047

Subordinated debentures

121,033

120,475

Reserve for losses on unfunded loan commitments

71,609

81,481

Accrued interest payable and other liabilities

186,840

251,940

Total liabilities

21,691,070

22,887,240

Commitments and contingencies

Stockholders’ equity:

Preferred stock; $0.01 par value; 100,000,000 shares authorized;
14,000,000 and no shares issued and outstanding at December 31,
2021 and 2020, respectively

338,980

Common stock; $0.01 par value; 300,000,000 shares authorized;
125,443,748 and 129,350,448 shares issued and outstanding at
December 31, 2021 and 2020, respectively

1,254

1,294

Additional paid-in capital

2,093,702

2,265,850

Retained earnings

2,378,466

1,946,875

Accumulated other comprehensive income

23,841

58,252

Total stockholders’ equity before noncontrolling interest

4,836,243

4,272,271

Noncontrolling interest

3,117

3,085

Total stockholders’ equity

4,839,360

4,275,356

Total liabilities and stockholders’ equity

$

26,530,430

$

27,162,596


Bank OZK
Consolidated Statements of Income
Unaudited

Three Months Ended
December 31,

Year Ended
December 31,

2021

2020

2021

2020

(Dollars in thousands, except per share amounts)

Interest income:

Non-purchased loans

$

256,021

$

243,064

$

972,660

$

944,354

Purchased loans

11,190

16,069

46,174

70,812

Investment securities:

Taxable

9,448

9,066

36,234

40,547

Tax-exempt

2,869

4,767

13,729

19,403

Deposits with banks and federal funds sold

953

428

2,510

5,665

Total interest income

280,481

273,394

1,071,307

1,080,781

Interest expense:

Deposits

9,514

30,607

64,422

171,813

Repurchase agreements with customers

3

6

17

23

Other borrowings

1,017

1,011

4,012

3,179

Subordinated notes

2,631

3,207

9,386

12,758

Subordinated debentures

935

963

3,750

4,384

Total interest expense

14,100

35,794

81,587

192,157

Net interest income

266,381

237,600

989,720

888,624

Provision for credit losses

(7,992

)

6,750

(77,938

)

203,639

Net interest income after provision for credit losses

274,373

230,850

1,067,658

684,985

Non-interest income:

Service charges on deposit accounts:

NSF/Overdraft fees

4,315

4,024

14,962

14,782

All other service charges

7,149

5,959

27,656

22,917

Trust income

2,141

1,909

8,506

7,544

BOLI income:

Increase in cash surrender value

4,901

5,034

19,640

20,239

Death benefits

618

2,028

608

Loan service, maintenance and other fees

3,148

3,797

13,959

14,257

Gains on sales of other assets

1,330

5,189

9,962

6,863

Net gains on investment securities

504

504

4,467

Other

5,589

2,749

18,321

12,931

Total non-interest income

29,695

28,661

115,538

104,608

Non-interest expense:

Salaries and employee benefits

55,034

53,832

214,567

206,834

Net occupancy and equipment

17,004

15,617

66,801

63,379

Other operating expenses

38,068

33,945

148,907

143,200

Total non-interest expense

110,106

103,394

430,275

413,413

Income before taxes

193,962

156,117

752,921

376,180

Provision for income taxes

44,197

35,607

173,888

84,314

Net income

149,765

120,510

579,033

291,866

Earnings attributable to noncontrolling interest

(5

)

3

(32

)

32

Net income available to common stockholders

$

149,760

$

120,513

$

579,001

$

291,898

Basic earnings per common share

$

1.17

$

0.93

$

4.49

$

2.26

Diluted earnings per common share

$

1.17

$

0.93

$

4.47

$

2.26


Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited

Preferred
Stock

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 December 31, 2021:

Balances – September 30, 2021

$

$

1,288

$

2,245,012

$

2,266,234

$

40,706

$

3,112

$

4,556,352

Net income

149,765

149,765

Earnings attributable to noncontrolling
interest

(5

)

5

Total other comprehensive loss

(16,865

)

(16,865

)

Common stock dividends, $0.29 per
share

(37,528

)

(37,528

)

Issuance of 14,000,000 shares of
preferred stock, net of offering costs

338,980

338,980

Issuance of 31,400 shares of common
stock for exercise of stock options

1,131

1,131

Repurchase and cancellation of 3,387,421
shares of common stock under share
repurchase program

(34

)

(156,410

)

(156,444

)

Stock-based compensation expense

3,969

3,969

Forfeitures of 18,050 shares of unvested
restricted common stock

Balances – December 31, 2021

$

338,980

$

1,254

$

2,093,702

$

2,378,466

$

23,841

$

3,117

$

4,839,360

Year ended December 31, 2021:

Balances – December 31, 2020

$

$

1,294

$

2,265,850

$

1,946,875

$

58,252

$

3,085

$

4,275,356

Net income

579,033

579,033

Earnings attributable to noncontrolling
interest

(32

)

32

Total other comprehensive loss

(34,411

)

(34,411

)

Common stock dividends, $1.1325 per
share

(147,410

)

(147,410

)

Issuance of 14,000,000 shares of
preferred stock, net of offering costs

338,980

338,980

Issuance of 207,650 shares of common
stock for exercise of stock options

2

7,224

7,226

Issuance of 332,831 shares of unvested
restricted common stock

3

(3

)

Repurchase and cancellation of 4,275,988
shares of common stock under share
repurchase program

(43

)

(193,401

)

(193,444

)

Repurchase and cancellation of 55,893
shares of common stock withheld for
taxes pursuant to restricted stock
vesting

(1

)

(1,976

)

(1,977

)

Stock-based compensation expense

16,007

16,007

Forfeitures of 115,300 shares of unvested
restricted common stock

(1

)

1

Balances – December 31, 2021

$

338,980

$

1,254

$

2,093,702

$

2,378,466

$

23,841

$

3,117

$

4,839,360


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 December 31, 2020:

Balances – September 30, 2020

$

1,293

$

2,261,864

$

1,862,012

$

61,116

$

3,088

$

4,189,373

Net income

120,510

120,510

Earnings attributable to noncontrolling
interest

3

(3

)

Total other comprehensive loss

(2,864

)

(2,864

)

Common stock dividends, $0.275 per share

(35,650

)

(35,650

)

Issuance of 39,900 shares of common
stock for exercise of stock options

991

991

Stock-based compensation expense

2,996

2,996

Forfeitures of 31,525 shares of unvested
restricted common stock

1

(1

)

Balances – December 31, 2020

$

1,294

$

2,265,850

$

1,946,875

$

58,252

$

3,085

$

4,275,356

Year ended December 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

291,866

291,866

Earnings attributable to noncontrolling
interest

32

(32

)

Total other comprehensive income

30,997

30,997

Common stock dividends,
$1.0775 per share

(139,662

)

(139,662

)

Issuance of 44,200 shares of common
stock for exercise of stock options

1,036

1,036

Issuance of 493,761 shares of unvested
restricted common stock

5

(5

)

Repurchase and cancellation of 61,873
shares of common stock withheld for
taxes pursuant to restricted stock
vesting

(1

)

(1,852

)

(1,853

)

Stock-based compensation expense

14,848

14,848

Forfeitures of 76,664 shares of unvested
restricted common stock

1

(1

)

Balances – December 31, 2020

$

1,294

$

2,265,850

$

1,946,875

$

58,252

$

3,085

$

4,275,356


Bank OZK
Summary of Non-Interest Expense
Unaudited

Three Months Ended
December 31,

Year Ended
December 31,

2021

2020

2021

2020

(Dollars in thousands)

Salaries and employee benefits

$

55,034

$

53,832

$

214,567

$

206,834

Net occupancy and equipment

17,004

15,617

66,801

63,379

Other operating expenses:

Professional and outside services

7,880

6,988

29,013

29,605

Software and data processing

6,165

5,729

23,860

21,279

Deposit insurance and assessments

2,125

3,647

11,185

15,247

Telecommunication services

2,064

2,296

8,427

9,159

Postage and supplies

1,909

1,709

6,627

7,462

ATM expense

1,639

1,490

6,255

5,256

Travel and meals

1,883

835

5,694

4,336

Writedowns of foreclosed and other assets

985

1,582

3,461

3,669

Loan collection and repossession expense

587

481

2,044

3,062

Advertising and public relations

1,151

1,086

2,772

6,050

Amortization of intangibles

1,517

1,794

6,394

9,085

Amortization of CRA and tax credit investments

2,755

821

15,078

8,279

Other

7,408

5,487

28,097

20,711

Total non-interest expense

$

110,106

$

103,394

$

430,275

$

413,413


Bank OZK
Summary of Total Loans Outstanding
Unaudited

December 31,

2021

2020

(Dollars in thousands)

Real estate:

Residential 1-4 family

$

887,024

4.8

%

$

911,115

4.7

%

Non-farm/non-residential

3,782,892

20.7

4,267,147

22.2

Construction/land development

8,246,674

45.0

7,993,467

41.6

Agricultural

247,727

1.4

204,868

1.1

Multifamily residential

934,845

5.1

856,297

4.5

Total real estate

14,099,162

77.0

14,232,894

74.1

Commercial and industrial

510,784

2.8

842,206

4.4

Consumer

2,185,429

11.9

2,393,964

12.5

Other

1,512,450

8.3

1,740,104

9.0

Total loans

18,307,825

100.0

%

19,209,168

100.0

%

Allowance for loan losses

(217,380

)

(295,824

)

Net loans

$

18,090,445

$

18,913,344


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, 2021:

Balances – September 30, 2021

$

237,722

$

61,076

$

298,798

Net charge-offs

(1,817

)

(1,817

)

Provision for credit losses

(18,525

)

10,533

(7,992

)

Balances – December 31, 2021

$

217,380

$

71,609

$

288,989

Year ended December 31, 2021:

Balances – December 31, 2020

$

295,824

$

81,481

$

377,305

Net charge-offs

(10,378

)

(10,378

)

Provision for credit losses

(68,066

)

(9,872

)

(77,938

)

Balances – December 31, 2021

$

217,380

$

71,609

$

288,989

Three months ended December 31, 2020:

Balances – September 30, 2020

$

308,847

$

68,426

$

377,273

Net charge-offs

(6,718

)

(6,718

)

Provision for credit losses

(6,305

)

13,055

6,750

Balances – December 31, 2020

$

295,824

$

81,481

$

377,305

Year ended December 31, 2020:

Balances – December 31, 2019

$

108,525

$

$

108,525

Adoption of CECL (1) methodology

39,588

54,924

94,512

Balances – January 1, 2020

148,113

54,924

203,037

Net charge-offs

(29,371

)

(29,371

)

Provision for credit losses

177,082

26,557

203,639

Balances – December 31, 2020

$

295,824

$

81,481

$

377,305

(1) Current Expected Credit Loss.

Bank OZK
Summary of Deposits – By Account Type
Unaudited

December 31,

2021

2020

(Dollars in thousands)

Non-interest bearing

$

4,983,788

24.7

%

$

3,996,546

18.6

%

Interest bearing:

Transaction (NOW)

3,412,369

16.9

3,124,007

14.6

Savings and money market

5,833,358

28.9

5,036,975

23.5

Time deposits less than $100

1,801,454

8.9

3,075,845

14.3

Time deposits of $100 or more

4,178,165

20.6

6,216,983

29.0

Total deposits

$

20,209,134

100.0

%

$

21,450,356

100.0

%


Summary of Deposits – By Customer Type
Unaudited

December 31,

2021

2020

(Dollars in thousands)

Non-Interest Bearing

$

4,983,788

24.7

%

$

3,996,546

18.6

%

Interest Bearing:

Consumer and Commercial:

Consumer – Non-Time

4,334,378

21.4

3,506,014

16.3

Consumer – Time

4,318,742

21.4

6,511,664

30.4

Commercial – Non-Time

2,634,817

13.0

2,178,253

10.2

Commercial – Time

905,347

4.5

1,137,040

5.3

Public Funds

2,094,800

10.4

2,004,593

9.3

Brokered

452,137

2.2

1,600,116

7.5

Reciprocal

485,125

2.4

516,130

2.4

Total deposits

$

20,209,134

100.0

%

$

21,450,356

100.0

%


Bank OZK
Selected Consolidated Financial Data
Unaudited

Three Months Ended
December 31,

Year Ended
December 31,

2021

2020

% Change

2021

2020

% Change

(Dollars in thousands, except per share amounts)

Income statement data:

Net interest income

$

266,381

$

237,600

12.1

%

$

989,720

$

888,624

11.4

%

Provision for credit losses

(7,992

)

6,750

(218.4

)

(77,938

)

203,639

(138.3

)

Non-interest income

29,695

28,661

3.6

115,538

104,608

10.4

Non-interest expense

110,106

103,394

6.5

430,275

413,413

4.1

Net income available to common stockholders

149,760

120,513

24.3

579,001

291,898

98.4

Pre-tax pre-provision net revenue (1)

185,970

162,867

14.2

674,983

579,819

16.4

Common share and per common share data:

Net income per share − diluted

$

1.17

$

0.93

25.8

%

$

4.47

$

2.26

97.8

%

Net income per share − basic

1.17

0.93

25.8

4.49

2.26

98.7

Dividends per share

0.29

0.275

5.5

1.1325

1.0775

5.1

Book value per share

35.85

33.03

8.5

35.85

33.03

8.5

Tangible book value per share (1)

30.52

27.81

9.7

30.52

27.81

9.7

Weighted-average diluted shares outstanding (thousands)

128,246

129,523

(1.0

)

129,618

129,435

0.1

End of period shares outstanding (thousands)

125,444

129,350

(3.0

)

125,444

129,350

(3.0

)

Balance sheet data at period end:

Total assets

$

26,530,430

$

27,162,596

(2.3

)%

$

26,530,430

$

27,162,596

(2.3

)%

Total loans

18,307,825

19,209,168

(4.7

)

18,307,825

19,209,168

(4.7

)

Non-purchased loans

17,791,610

18,401,495

(3.3

)

17,791,610

18,401,495

(3.3

)

Purchased loans

516,215

807,673

(36.1

)

516,215

807,673

(36.1

)

Allowance for loan losses

217,380

295,824

(26.5

)

217,380

295,824

(26.5

)

Foreclosed assets

5,744

11,085

(48.2

)

5,744

11,085

(48.2

)

Investment securities − AFS

3,916,733

3,405,351

15.0

3,916,733

3,405,351

15.0

Goodwill and other intangible assets, net

669,063

675,458

(0.9

)

669,063

675,458

(0.9

)

Deposits

20,209,134

21,450,356

(5.8

)

20,209,134

21,450,356

(5.8

)

Other borrowings

750,206

750,928

(0.1

)

750,206

750,928

(0.1

)

Subordinated notes

346,133

224,047

54.5

346,133

224,047

54.5

Subordinated debentures

121,033

120,475

0.5

121,033

120,475

0.5

Unfunded balance of closed loans

13,619,578

11,847,117

15.0

13,619,578

11,847,117

15.0

Reserve for losses on unfunded loan commitments

71,609

81,481

(12.11

)

71,609

81,481

(12.11

)

Preferred stock

338,980

NM

338,980

NM

Total common stockholders’ equity (1)

4,497,263

4,272,271

5.3

4,497,263

4,272,271

5.3

Net unrealized gains on investment securities AFS
included in stockholders’ equity

23,841

58,252

23,841

58,252

Loan (including purchased loans) to deposit ratio

90.59

%

89.55

%

90.59

%

89.55

%

Selected ratios:

Return on average assets (2)

2.25

%

1.79

%

2.17

%

1.13

%

Return on average common stockholders’ equity (1) (2)

13.08

11.36

13.01

7.04

Return on average tangible common stockholders’ equity (1) (2)

15.34

13.53

15.32

8.41

Net interest margin – FTE (2)

4.41

3.88

4.09

3.81

Efficiency ratio

37.06

38.61

38.76

41.37

Net charge-offs to average non-purchased loans (2) (3)

0.05

0.14

0.06

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