Bank of the Ozarks (the "Bank") OZRK today announced that net income for the first quarter of 2018 was $113.1 million, a 26.9% increase from $89.2 million for the first quarter of 2017. Diluted earnings per common share for the first quarter of 2018 were $0.88, a 20.5% increase from $0.73 for the first quarter of 2017.
The Bank's annualized returns on average assets, average common stockholders' equity and average tangible common stockholders' equity for the first quarter of 2018 were 2.16%, 13.17% and 16.53%, respectively, compared to 1.93%, 12.80% and 17.17%, respectively, for the first quarter of 2017. The calculation of the Bank's return on average tangible common stockholders' equity and the reconciliation to generally accepted accounting principles ("GAAP") are included in the schedules accompanying this release.
George Gleason, Chairman and Chief Executive Officer, stated, "We are very pleased to report our results for the first quarter of 2018, including record net interest income, an annualized return on average assets of 2.16%, $941 million growth in the funded balance of non-purchased loans, a 4.69% net interest margin and excellent asset quality metrics."
KEY BALANCE SHEET METRICS
Total loans, including purchased loans, were $16.61 billion at March 31, 2018, a 12.2% increase from $14.80 billion at March 31, 2017. Non-purchased loans, which exclude loans acquired in previous acquisitions, were $13.67 billion at March 31, 2018, a 33.8% increase from $10.22 billion at March 31, 2017. Purchased loans, which consist of loans acquired in previous acquisitions, were $2.93 billion at March 31, 2018, a 35.9% decrease from $4.58 billion at March 31, 2017. The unfunded balance of closed loans totaled $12.55 billion at March 31, 2018, an 11.5% increase from $11.26 billion at March 31, 2017, but a 4.9% decrease from $13.19 billion at December 31, 2017.
Deposits were $17.83 billion at March 31, 2018, a 13.5% increase from $15.71 billion at March 31, 2017. Total assets were $22.04 billion at March 31, 2018, a 15.1% increase from $19.15 billion at March 31, 2017.
Common stockholders' equity was $3.53 billion at March 31, 2018, a 22.7% increase from $2.87 billion at March 31, 2017. Tangible common stockholders' equity was $2.82 billion at March 31, 2018, a 30.9% increase from $2.15 billion at March 31, 2017. Book value per common share was $27.42 at March 31, 2018, a 16.0% increase from $23.63 at March 31, 2017. Tangible book value per common share was $21.93 at March 31, 2018, a 23.8% increase from $17.72 at March 31, 2017. 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 16.00% at March 31, 2018 compared to 15.00% at March 31, 2017. Its ratio of total tangible common stockholders' equity to total tangible assets was 13.22% at March 31, 2018 compared to 11.69% at March 31, 2017. 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.
NET INTEREST INCOME
Net interest income for the first quarter of 2018 was a record $217.8 million, a 14.2% increase from $190.8 million for the first quarter of 2017. Net interest margin, on a fully taxable equivalent ("FTE") basis, was 4.69% for the first quarter of 2018, a decrease of 19 basis points from 4.88% for the first quarter of 2017. Average earning assets were $18.92 billion for the first quarter of 2018, a 17.2% increase from $16.14 billion for the first quarter of 2017.
NON-INTEREST INCOME
Non-interest income for the first quarter of 2018 decreased 1.2% to $28.7 million compared to $29.1 million for the first quarter of 2017. The Bank's non-interest income for the first quarter of 2018 included $2.73 million of tax-exempt bank owned life insurance ("BOLI") death benefits, which increased the Bank's diluted earnings per common share by $0.02. There were no such benefits in the first quarter of 2017. The Bank's service charges on deposit accounts declined from $11.3 million for the first quarter of 2017 to $9.5 million for the first quarter of 2018 primarily due to the Durbin Amendment's impact on the Bank's interchange revenue effective as of July 1, 2017. The Bank's mortgage lending income declined from $1.6 million for the first quarter of 2017 to $0.5 million for the first quarter of 2018. This was a result of the Bank's decision in December 2017 to exit the secondary market mortgage lending business and the substantial wind down of that business in the quarter just ended. The Bank expects only a nominal amount of mortgage lending income in the second quarter of 2018 and none thereafter.
NON-INTEREST EXPENSE
Non-interest expense for the first quarter of 2018 increased 19.9% to $93.8 million compared to $78.3 million for the first quarter of 2017.
The Bank's efficiency ratio (non-interest expense divided by the sum of net interest income FTE and non-interest income) for the first quarter of 2018 was 37.9% compared to 35.0% for the first quarter of 2017.
ASSET QUALITY, CHARGE-OFFS AND ALLOWANCE
Excluding purchased loans, the Bank's ratio of nonperforming loans as a percent of total loans was 0.09% at March 31, 2018 compared to 0.11% at March 31, 2017.
Excluding purchased loans, the Bank's ratio of nonperforming assets as a percent of total assets was 0.16% at March 31, 2018 compared to 0.25% at March 31, 2017.
Excluding purchased loans, the Bank's ratio of loans past due 30 days or more, including past due non-accrual loans, to total loans was 0.14% at March 31, 2018 compared to 0.16% at March 31, 2017.
The Bank's annualized net charge-off ratio for non-purchased loans was 0.04% for the first quarter of 2018 compared to 0.05% for the first quarter of 2017. The Bank's annualized net charge-off ratio for purchased loans was 0.05% for the first quarter of 2018 compared to 0.16% for the first quarter of 2017. The Bank's annualized net charge-off ratio for all loans was 0.04% for the first quarter of 2018 compared to 0.09% for the first quarter of 2017.
The Bank's allowance for loan losses for its non-purchased loans was $96.5 million, or 0.71% of total non-purchased loans, at March 31, 2018 compared to $76.6 million, or 0.75% of total non-purchased loans, at March 31, 2017 and $92.5 million, or 0.73% of total non-purchased loans, at December 31, 2017. The Bank had $1.6 million of allowance for loan losses for its purchased loans at March 31, 2018 and 2017 and at December 31, 2017.
MANAGEMENT'S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS
In connection with this release, the Bank released management's comments on the results for the quarter just ended. Management will conduct a conference call to take questions on these quarterly results and management's comments on the first quarter at 10:00 a.m. CT (11:00 a.m. ET) on Thursday, April 12, 2018. 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 of the Ozarks 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 9078203. The call will be available live or in a recorded version on the Bank's Investor Relations website at ir.bankozarks.com under "Company News." 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 and 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.bankozarks.com.
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 sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices; the ability to enter into and/or close additional acquisitions; problems with, or additional expenses relating to, integrating acquisitions; the inability to realize expected cost savings and/or synergies from acquisitions; problems with managing acquisitions; the effect of the announcements of any future acquisition on customer relationships and operating results; the availability 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; competitive factors and pricing pressures, including their effect on the Bank's net interest margin; 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; failure to receive approval of our pending applications for change in accounting methods with the Internal Revenue Service; 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; 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, our operational or security systems or infrastructure, or those of third parties with whom we do 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; 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 our public filings, including those factors included 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, 2017. 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 of the Ozarks OZRK is a regional bank providing innovative financial solutions delivered by expert bankers with a relentless pursuit of excellence. Bank of the Ozarks has been recognized as the #1 bank in the nation in its asset size for eight consecutive years.
Headquartered in Little Rock, Arkansas, Bank of the Ozarks conducts operations through 254 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, California, New York, and Mississippi. Bank of the Ozarks can be found at www.bankozarks.com and on Facebook, Twitter and LinkedIn or contacted at (501) 978-2265 or P.O. Box 8811, Little Rock, Arkansas 72231-8811.
|
Bank of the Ozarks Consolidated Balance Sheets |
||||||||||
| Unaudited | ||||||||||
| March 31, | December 31, | |||||||||
| 2018 | 2017 | |||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||
| ASSETS | ||||||||||
| Cash and cash equivalents | $ | 632,873 | $ | 440,388 | ||||||
| Investment securities - available for sale | 2,612,961 | 2,622,796 | ||||||||
| Non-purchased loans | 13,674,561 | 12,733,937 | ||||||||
| Purchased loans | 2,934,535 | 3,309,092 | ||||||||
| Allowance for loan losses | (98,097 | ) | (94,120 | ) | ||||||
| Net loans | 16,510,999 | 15,948,909 | ||||||||
| Premises and equipment, net | 532,263 | 519,811 | ||||||||
| Foreclosed assets | 21,931 | 25,357 | ||||||||
| Accrued interest receivable | 69,126 | 64,608 | ||||||||
| Bank owned life insurance ("BOLI") | 691,067 | 658,147 | ||||||||
| Intangible assets, net | 705,896 | 709,040 | ||||||||
| Other, net | 262,323 | 286,591 | ||||||||
| Total assets | $ | 22,039,439 | $ | 21,275,647 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Deposits: | ||||||||||
| Demand non-interest bearing | $ | 2,783,095 | $ | 2,726,623 | ||||||
| Savings and interest bearing transaction | 10,513,959 | 10,051,122 | ||||||||
| Time | 4,536,618 | 4,414,600 | ||||||||
| Total deposits | 17,833,672 | 17,192,345 | ||||||||
| Repurchase agreements with customers | 149,075 | 69,331 | ||||||||
| Other borrowings | 1,942 | 22,320 | ||||||||
| Subordinated notes | 222,993 | 222,899 | ||||||||
| Subordinated debentures | 118,938 | 118,800 | ||||||||
| Accrued interest payable and other liabilities | 183,165 | 186,164 | ||||||||
| Total liabilities | 18,509,785 | 17,811,859 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders' equity: | ||||||||||
|
Preferred stock; $0.01 par value; 100,000,000 shares authorized; no shares issued or outstanding at March 31, 2018 or December 31, 2017 |
— | — | ||||||||
|
Common stock; $0.01 par value; 300,000,000 shares authorized; 128,611,611 and 128,287,550 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively |
1,286 | 1,283 | ||||||||
| Additional paid-in capital | 2,227,178 | 2,221,844 | ||||||||
| Retained earnings | 1,339,049 | 1,250,313 | ||||||||
| Accumulated other comprehensive loss | (40,908 | ) | (12,712 | ) | ||||||
| Total stockholders' equity before noncontrolling interest | 3,526,605 | 3,460,728 | ||||||||
| Noncontrolling interest | 3,049 | 3,060 | ||||||||
| Total stockholders' equity | 3,529,654 | 3,463,788 | ||||||||
| Total liabilities and stockholders' equity | $ | 22,039,439 | $ | 21,275,647 | ||||||
|
Bank of the Ozarks Consolidated Statements of Income Unaudited |
|||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| 2018 | 2017 | ||||||||
| (Dollars in thousands, except per share amounts) | |||||||||
| Interest income: | |||||||||
| Non-purchased loans | $ | 190,426 | $ | 127,428 | |||||
| Purchased loans | 50,977 | 75,994 | |||||||
| Investment securities: | |||||||||
| Taxable | 11,431 | 3,816 | |||||||
| Tax-exempt | 4,160 | 6,512 | |||||||
| Deposits with banks and federal funds sold | 498 | 20 | |||||||
| Total interest income | 257,492 | 213,770 | |||||||
| Interest expense: | |||||||||
| Deposits | 34,392 | 18,378 | |||||||
| Repurchase agreements with customers | 159 | 30 | |||||||
| Other borrowings | 633 | 222 | |||||||
| Subordinated notes | 3,146 | 3,188 | |||||||
| Subordinated debentures | 1,386 | 1,181 | |||||||
| Total interest expense | 39,716 | 22,999 | |||||||
| Net interest income | 217,776 | 190,771 | |||||||
| Provision for loan losses | 5,567 | 4,933 | |||||||
| Net interest income after provision for loan losses | 212,209 | 185,838 | |||||||
| Non-interest income: | |||||||||
| Service charges on deposit accounts | 9,525 | 11,301 | |||||||
| Mortgage lending income | 492 | 1,574 | |||||||
| Trust income | 1,793 | 1,631 | |||||||
| BOLI income | 7,580 | 4,464 | |||||||
| Other income from purchased loans, net | 1,251 | 3,737 | |||||||
| Loan service, maintenance and other fees | 4,743 | 2,706 | |||||||
| Net gains on investment securities | 17 | — | |||||||
| Gains on sales of other assets | 1,426 | 1,619 | |||||||
| Other | 1,880 | 2,026 | |||||||
| Total non-interest income | 28,707 | 29,058 | |||||||
| Non-interest expense: | |||||||||
| Salaries and employee benefits | 45,499 | 38,554 | |||||||
| Net occupancy and equipment | 14,150 | 13,192 | |||||||
| Other operating expenses | 34,161 | 26,522 | |||||||
| Total non-interest expense | 93,810 | 78,268 | |||||||
| Income before taxes | 147,106 | 136,628 | |||||||
| Provision for income taxes | 33,973 | 47,417 | |||||||
| Net income | 113,133 | 89,211 | |||||||
| Earnings attributable to noncontrolling interest | 11 | (23 | ) | ||||||
| Net income available to common stockholders | $ | 113,144 | $ | 89,188 | |||||
| Basic earnings per common share | $ | 0.88 | $ | 0.73 | |||||
| Diluted earnings per common share | $ | 0.88 | $ | 0.73 | |||||
| Dividends declared per common share | $ | 0.19 | $ | 0.17 | |||||
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Bank of the Ozarks Consolidated Statements of Stockholders' Equity Unaudited |
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|
Common |
Additional |
Retained |
Accumulated |
Non- |
Total | |||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||||||||||||||||||
| Balances – December 31, 2016 | $ | 1,213 | $ | 1,901,880 | $ | 914,434 | $ | (25,920 | ) | $ | 3,264 | $ | 2,794,871 | |||||||||||||||||
|
Cumulative effect of change in accounting principals |
— | 1,133 | 2,720 | (3,408 | ) | — | 445 | |||||||||||||||||||||||
| Balances – January 1, 2017, as adjusted | 1,213 | 1,903,013 | 917,154 | (29,328 | ) | 3,264 | 2,795,316 | |||||||||||||||||||||||
| Net income | — | — | 89,211 | — | — | 89,211 | ||||||||||||||||||||||||
| Earnings attributable to noncontrolling interest | — | — | (23 | ) | — | 23 | — | |||||||||||||||||||||||
| Total other comprehensive income | — | — | — | 7,853 | — | 7,853 | ||||||||||||||||||||||||
| Common stock dividends paid, $0.17 per share | — | — | (20,659 | ) | — | — | (20,659 | ) | ||||||||||||||||||||||
|
Issuance of 69,655 shares of common stock for exercise of stock options |
1 | 1,170 | — | — | — | 1,171 | ||||||||||||||||||||||||
|
Issuance of 238,794 shares of unvested restricted common stock |
2 | (2 | ) | — | — | — | — | |||||||||||||||||||||||
| Stock-based compensation expense | — | 3,712 | — | — | — | 3,712 | ||||||||||||||||||||||||
|
Forfeiture of 1,018 shares of unvested restricted common stock |
— | — | — | — | — | — | ||||||||||||||||||||||||
| Balances – March 31, 2017 | $ | 1,216 | $ | 1,907,893 | $ | 985,683 | $ | (21,475 | ) | $ | 3,287 | $ | 2,876,604 | |||||||||||||||||
| Balances – December 31, 2017 | $ | 1,283 | $ | 2,221,844 | $ | 1,250,313 | $ | (12,712 | ) | $ | 3,060 | $ | 3,463,788 | |||||||||||||||||
| Net income | — | — | 113,133 | — | — | 113,133 | ||||||||||||||||||||||||
| Earnings attributable to noncontrolling interest | — | — | 11 | — | (11 | ) | — | |||||||||||||||||||||||
| Total other comprehensive loss | — | — | — | (28,196 | ) | — | (28,196 | ) | ||||||||||||||||||||||
| Common stock dividends paid, $0.19 per share | — | — | (24,408 | ) | — | — | (24,408 | ) | ||||||||||||||||||||||
|
Issuance of 200,025 shares of common stock for exercise of stock options |
2 | 5,323 | — | — | — | 5,325 | ||||||||||||||||||||||||
|
Issuance of 198,268 shares of unvested restricted common stock |
2 | (2 | ) | — | — | — | — | |||||||||||||||||||||||
|
Repurchase and cancellation of 70,931 shares of common stock |
(1 | ) | (3,729 | ) | — | — | — | (3,730 | ) | |||||||||||||||||||||
| Stock-based compensation expense | — | 3,742 | — | — | — | 3,742 | ||||||||||||||||||||||||
|
Forfeitures of 3,301 shares of unvested restricted common stock |
— | — | — | — | — | — | ||||||||||||||||||||||||
| Balances – March 31, 2018 | $ | 1,286 | $ | 2,227,178 | $ | 1,339,049 | $ | (40,908 | ) | $ | 3,049 | $ | 3,529,654 | |||||||||||||||||
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Bank of the Ozarks Summary of Non-Interest Expense Unaudited |
||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2018 | 2017 | |||||||
| (Dollars in thousands) | ||||||||
| Salaries and employee benefits | $ | 45,499 | $ | 38,554 | ||||
| Net occupancy and equipment | 14,150 | 13,192 | ||||||
| Other operating expenses: | ||||||||
| Professional and outside services | 8,705 | 5,338 | ||||||
| Postage and supplies | 2,195 | 1,919 | ||||||
| Advertising and public relations | 1,331 | 1,190 | ||||||
| Telecommunication services | 3,197 | 3,970 | ||||||
| Software and data processing | 3,340 | 2,473 | ||||||
| ATM expense | 1,363 | 1,138 | ||||||
| Travel and meals | 2,153 | 1,855 | ||||||
| FDIC insurance | 2,700 | 1,000 | ||||||
| FDIC and state assessments | 862 | 742 | ||||||
| Loan collection and repossession expense | 790 | 1,302 | ||||||
| Writedowns of foreclosed and other assets | 151 | 596 | ||||||
| Amortization of intangibles | 3,145 | 3,145 | ||||||
| Other | 4,229 | 1,854 | ||||||
| Total non-interest expense | $ | 93,810 | $ | 78,268 | ||||
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Bank of the Ozarks Summary of Total Loans Outstanding Unaudited |
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| March 31, 2018 | December 31, 2017 | |||||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Real estate: | ||||||||||||||||
| Residential 1-4 family | $ | 1,099,699 | 6.6 | % | $ | 1,174,427 | 7.3 | % | ||||||||
| Non-farm/non-residential | 4,347,791 | 26.2 | 4,478,876 | 27.9 | ||||||||||||
| Construction/land development | 7,187,863 | 43.3 | 6,648,061 | 41.5 | ||||||||||||
| Agricultural | 156,133 | 0.9 | 150,003 | 0.9 | ||||||||||||
| Multifamily residential | 556,133 | 3.4 | 508,514 | 3.2 | ||||||||||||
| Total real estate | 13,347,619 | 80.4 | 12,959,881 | 80.8 | ||||||||||||
| Commercial and industrial | 786,932 | 4.7 | 738,225 | 4.6 | ||||||||||||
| Consumer | 1,651,567 | 9.9 | 1,472,593 | 9.2 | ||||||||||||
| Other | 822,978 | 5.0 | 872,330 | 5.4 | ||||||||||||
| Total loans | $ | 16,609,096 | 100.0 | % | $ | 16,043,029 | 100.0 | % | ||||||||
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Bank of the Ozarks Selected Consolidated Financial Data Unaudited |
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|
Three Months Ended |
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| 2018 | 2017 | % Change | ||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||
|
Income statement data: |
||||||||||||||
| Net interest income | $ | 217,776 | $ | 190,771 | 14.2 | % | ||||||||
| Provision for loan losses | 5,567 | 4,933 | 12.9 | |||||||||||
| Non-interest income | 28,707 | 29,058 | (1.2 | ) | ||||||||||
| Non-interest expense | 93,810 | 78,268 | 19.9 | |||||||||||
| Net income available to common stockholders | 113,144 | 89,188 | 26.9 | |||||||||||
|
Common share and per common share data: |
||||||||||||||
| Earnings - diluted | $ | 0.88 | $ | 0.73 | 20.5 | % | ||||||||
| Earnings - basic | 0.88 | 0.73 | 20.5 | |||||||||||
| Cash dividends | 0.19 | 0.17 | 11.8 | |||||||||||
| Book value | 27.42 | 23.63 | 16.0 | |||||||||||
| Tangible book value(1) | 21.93 | 17.72 | 23.8 | |||||||||||
| Weighted-average diluted shares outstanding (thousands) | 128,762 | 121,954 | ||||||||||||
| End of period shares outstanding (thousands) | 128,612 | 121,575 | ||||||||||||
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Balance sheet data at period end: |
||||||||||||||
| Total assets | $ | 22,039,439 | $ | 19,152,212 | 15.1 | % | ||||||||
| Total loans | 16,609,096 | 14,796,922 | 12.2 | |||||||||||
| Non-purchased loans | 13,674,561 | 10,216,875 | 33.8 | |||||||||||
| Purchased loans | 2,934,535 | 4,580,047 | (35.9 | ) | ||||||||||
| Allowance for loan losses | 98,097 | 78,224 | 25.4 | |||||||||||
| Foreclosed assets | 21,931 | 36,899 | (40.6 | ) | ||||||||||
| Investment securities | 2,612,961 | 1,470,568 | 77.7 | |||||||||||
| Goodwill and other intangible assets | 705,896 | 718,475 | (1.8 | ) | ||||||||||
| Deposits | 17,833,672 | 15,713,427 | 13.5 | |||||||||||
| Repurchase agreements with customers | 149,075 | 80,609 | 84.9 | |||||||||||
| Other borrowings | 1,942 | 42,291 | (95.4 | ) | ||||||||||
| Subordinated notes | 222,993 | 222,611 | 0.2 | |||||||||||
| Subordinated debentures | 118,938 | 118,380 | 0.5 | |||||||||||
| Unfunded balance of closed loans | 12,551,032 | 11,258,762 | 11.5 | |||||||||||
| Total common stockholders' equity | 3,526,605 | 2,873,317 | 22.7 | |||||||||||
|
Selected ratios: |
||||||||||||||
| Return on average assets(2) | 2.16 | % | 1.93 | % | ||||||||||
| Return on average common stockholders' equity(2) | 13.17 | 12.80 | ||||||||||||
| Return on average tangible common stockholders' equity(1) (2) | 16.53 | 17.17 | ||||||||||||
| Loan, including purchased loans, to deposit ratio | 93.13 | 94.17 | ||||||||||||
| Average common equity to total average assets | 16.37 | 15.08 | ||||||||||||
| Net interest margin – FTE(2) | 4.69 | 4.88 | ||||||||||||
| Efficiency ratio | 37.88 | 35.03 | ||||||||||||
| Net charge-offs to average non-purchased loans(2) (3) | 0.04 | 0.05 | ||||||||||||
| Net charge-offs to average total loans(2) | 0.04 | 0.09 | ||||||||||||
| Nonperforming loans to total loans(4) | 0.09 | 0.11 | ||||||||||||
| Nonperforming assets to total assets(4) | 0.16 | 0.25 | ||||||||||||
| Allowance for loan losses to non-purchased loans(5) | 0.71 | 0.75 | ||||||||||||
|
Other information: |
||||||||||||||
| Non-accrual loans(4) | $ | 12,471 | $ | 11,069 | ||||||||||
| Accruing loans - 90 days past due(4) | — | — | ||||||||||||
| Troubled and restructured loans(4) | — | — | ||||||||||||
| Impaired purchased loans | 6,849 | 13,869 | ||||||||||||
|
(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. |
|
|
(5) |
Excludes purchased loans and any allowance for such loans. |
|
|
Bank of the Ozarks Supplemental Quarterly Financial Data Unaudited |
||||||||||||||||||||||||||||||||||||||||
| 6/30/16 | 9/30/16 | 12/31/16 | 3/31/17 | 6/30/17 | 9/30/17 | 12/31/17 | 3/31/18 | |||||||||||||||||||||||||||||||||
| (Dollars in Thousands, Except Per Share Amounts) | ||||||||||||||||||||||||||||||||||||||||
|
Earnings Summary: |
||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 119,038 | $ | 175,150 | $ | 194,800 | $ | 190,771 | $ | 202,105 | $ | 209,722 | $ | 214,831 | $ | 217,776 | ||||||||||||||||||||||||
| Federal tax (FTE) adjustment | 2,067 | 2,533 | 3,254 | 3,594 | 3,396 | 3,014 | 2,450 | 1,166 | ||||||||||||||||||||||||||||||||
| Net interest income (FTE) | 121,105 | 177,683 | 198,054 | 194,365 | 205,501 | 212,736 | 217,281 | 218,942 | ||||||||||||||||||||||||||||||||
| Provision for loan losses | (4,834 | ) | (7,086 | ) | (9,855 | ) | (4,933 | ) | (6,103 | ) | (7,777 | ) | (9,279 | ) | (5,567 | ) | ||||||||||||||||||||||||
| Non-interest income | 22,733 | 29,231 | 30,571 | 29,058 | 31,840 | 32,747 | 30,213 | 28,707 | ||||||||||||||||||||||||||||||||
| Non-interest expense | (50,928 | ) | (78,781 | ) | (78,358 | ) | (78,268 | ) | (83,828 | ) | (84,399 | ) | (86,177 | ) | (93,810 | ) | ||||||||||||||||||||||||
| Pretax income (FTE) | 88,076 | 121,047 | 140,412 | 140,222 | 147,410 | 153,307 | 152,038 | 148,272 | ||||||||||||||||||||||||||||||||
| FTE adjustment | (2,067 | ) | (2,533 | ) | (3,254 | ) | (3,594 | ) | (3,396 | ) | (3,014 | ) | (2,450 | ) | (1,166 | ) | ||||||||||||||||||||||||
| Provision for income taxes | (31,514 | ) | (42,470 | ) | (49,312 | ) | (47,417 | ) | (53,488 | ) | (54,246 | ) | (3,434 | ) | (33,973 | ) | ||||||||||||||||||||||||
| Noncontrolling interest | (21 | ) | (14 | ) | (59 | ) | (23 | ) | 6 | (40 | ) | 10 | 11 | |||||||||||||||||||||||||||
|
Net income available to common stockholders |
$ | 54,474 | $ | 76,030 | $ | 87,787 | $ | 89,188 | $ | 90,532 | $ | 96,007 | $ | 146,164 | $ | 113,144 | ||||||||||||||||||||||||
| Earnings per common share – diluted | $ | 0.60 | $ | 0.66 | $ | 0.72 | $ | 0.73 | $ | 0.73 | $ | 0.75 | $ | 1.14 | $ | 0.88 | ||||||||||||||||||||||||
|
Non-interest Income: |
||||||||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | $ | 8,119 | $ | 10,926 | $ | 11,759 | $ | 11,301 | $ | 11,764 | $ | 9,729 | $ | 10,058 | $ | 9,525 | ||||||||||||||||||||||||
| Mortgage lending income | 2,057 | 2,616 | 2,097 | 1,574 | 1,910 | 1,620 | 1,294 | 492 | ||||||||||||||||||||||||||||||||
| Trust income | 1,574 | 1,564 | 1,623 | 1,631 | 1,577 | 1,755 | 1,729 | 1,793 | ||||||||||||||||||||||||||||||||
| BOLI income | 2,745 | 4,638 | 4,564 | 4,464 | 4,594 | 4,453 | 5,166 | 7,580 | ||||||||||||||||||||||||||||||||
| Other income from purchased loans | 4,599 | 4,635 | 4,993 | 3,737 | 4,777 | 2,933 | 2,009 | 1,251 | ||||||||||||||||||||||||||||||||
|
Loan service, maintenance and other fees |
1,238 | 1,687 | 2,962 | 2,706 | 3,427 | 5,274 | 4,289 | 4,743 | ||||||||||||||||||||||||||||||||
| Net gains on investment securities | — | — | 4 | — | 404 | 2,429 | 1,201 | 17 | ||||||||||||||||||||||||||||||||
| Gains on sales of other assets | 998 | 594 | 1,537 | 1,619 | 672 | 1,363 | 1,899 | 1,426 | ||||||||||||||||||||||||||||||||
| Other | 1,403 | 2,571 | 1,032 | 2,026 | 2,715 | 3,191 | 2,568 | 1,880 | ||||||||||||||||||||||||||||||||
| Total non-interest income | $ | 22,733 | $ | 29,231 | $ | 30,571 | $ | 29,058 | $ | 31,840 | $ | 32,747 | $ | 30,213 | $ | 28,707 | ||||||||||||||||||||||||
|
Non-interest Expense: |
||||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | $ | 24,921 | $ | 38,069 | $ | 36,481 | $ | 38,554 | $ | 39,892 | $ | 35,331 | $ | 38,417 | $ | 45,499 | ||||||||||||||||||||||||
| Net occupancy expense | 8,388 | 11,669 | 13,936 | 13,192 | 12,937 | 13,595 | 13,474 | 14,150 | ||||||||||||||||||||||||||||||||
| Other operating expenses | 17,619 | 29,043 | 27,941 | 26,522 | 30,999 | 35,473 | 34,286 | 34,161 | ||||||||||||||||||||||||||||||||
| Total non-interest expense | $ | 50,928 | $ | 78,781 | $ | 78,358 | $ | 78,268 | $ | 83,828 | $ | 84,399 | $ | 86,177 | $ | 93,810 | ||||||||||||||||||||||||
|
Balance Sheet Data: |
||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 12,279,579 | $ | 18,451,783 | $ | 18,890,142 | $ | 19,152,212 | $ | 20,064,589 | $ | 20,768,493 | $ | 21,275,647 | $ | 22,039,439 | ||||||||||||||||||||||||
| Non-purchased loans | 8,214,900 | 8,759,766 | 9,605,093 | 10,216,875 | 11,025,203 | 12,047,094 | 12,733,937 | 13,674,561 | ||||||||||||||||||||||||||||||||
| Purchased loans | 1,515,104 | 5,399,831 | 4,958,022 | 4,580,047 | 4,159,139 | 3,731,536 | 3,309,092 | 2,934,535 | ||||||||||||||||||||||||||||||||
| Deposits | 10,195,072 | 15,123,804 | 15,574,878 | 15,713,427 | 16,241,440 | 16,823,359 | 17,192,345 | 17,833,672 | ||||||||||||||||||||||||||||||||
|
Common stockholders' equity |
1,556,921 | 2,756,346 | 2,791,607 | 2,873,317 | 3,260,123 | 3,334,740 | 3,460,728 | 3,526,605 | ||||||||||||||||||||||||||||||||
|
Allowance for Loan Losses: |
||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 61,760 | $ | 65,133 | $ | 69,760 | $ | 76,541 | $ | 78,224 | $ | 82,320 | $ | 86,784 | $ | 94,120 | ||||||||||||||||||||||||
| Net charge-offs | (1,461 | ) | (2,459 | ) | (3,074 | ) | (3,250 | ) | (2,007 | ) | (3,313 | ) | (1,943 | ) | (1,590 | ) | ||||||||||||||||||||||||
| Provision for loan losses | 4,834 | 7,086 | 9,855 | 4,933 | 6,103 | 7,777 | 9,279 | 5,567 | ||||||||||||||||||||||||||||||||
| Balance at end of period | $ | 65,133 | $ | 69,760 | $ | 76,541 | $ | 78,224 | $ | 82,320 | $ | 86,784 | $ | 94,120 | $ | 98,097 | ||||||||||||||||||||||||
|
Selected Ratios: |
||||||||||||||||||||||||||||||||||||||||
| Net interest margin – FTE(1) | 4.82 | % | 4.90 | % | 5.02 | % | 4.88 | % | 4.99 | % | 4.84 | % | 4.72 | % | 4.69 | % | ||||||||||||||||||||||||
| Efficiency ratio | 35.41 | 38.07 | 34.27 | 35.03 | 35.32 | 34.38 | 34.82 | 37.88 | ||||||||||||||||||||||||||||||||
|
Net charge-offs to average
non-purchased loans(1) (2) |
0.05 | 0.06 | 0.08 | 0.05 | 0.03 | 0.08 | 0.08 | 0.04 | ||||||||||||||||||||||||||||||||
|
Net charge-offs to average
total loans(1) |
0.06 | 0.07 | 0.09 | 0.09 | 0.05 | 0.09 | 0.05 | 0.04 | ||||||||||||||||||||||||||||||||
|
Nonperforming loans
to total loans(3) |
0.09 | 0.08 | 0.15 | 0.11 | 0.11 | 0.11 | 0.10 | 0.09 | ||||||||||||||||||||||||||||||||
| Nonperforming assets to total assets(3) | 0.25 | 0.28 | 0.31 | 0.25 | 0.23 | 0.20 | 0.18 | 0.16 | ||||||||||||||||||||||||||||||||
|
Allowance for loan losses to
total non-purchased loans(4) |
0.78 | 0.78 | 0.78 | 0.75 | 0.73 | 0.71 | 0.73 | 0.71 | ||||||||||||||||||||||||||||||||
|
Loans past due 30 days or more, including past due non-accrual loans, to total loans(3) |
0.22 | 0.17 | 0.16 | 0.16 | 0.15 | 0.12 | 0.15 | 0.14 | ||||||||||||||||||||||||||||||||
|
(1) |
Ratios for interim periods annualized based on actual days. |
|
|
(2) |
Excludes purchased loans and net charge-offs related to such loans. |
|
|
(3) |
Excludes purchased loans, except for their inclusion in total assets. |
|
|
(4) |
Excludes purchased loans and any allowance for such loans. |
|
|
Bank of the Ozarks Average Consolidated Balance Sheets and Net Interest Analysis – FTE Unaudited |
||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||||||
|
Average |
Income/ |
Yield/ |
Average |
Income/ |
Yield/ |
|||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||||
|
Interest earning deposits and federal funds sold |
$ | 110,085 | $ | 498 | 1.83 | % | $ | 41,806 | $ | 20 | 0.19 | % | ||||||||||||
| Investment securities: | ||||||||||||||||||||||||
| Taxable | 2,062,358 | 11,431 | 2.25 | 663,153 | 3,816 | 2.33 | ||||||||||||||||||
| Tax-exempt – FTE | 556,776 | 5,265 | 3.84 | 803,589 | 10,019 | 5.06 | ||||||||||||||||||
| Non-purchased loans – FTE | 13,010,093 | 190,487 | 5.94 | 9,827,717 | 127,515 | 5.26 | ||||||||||||||||||
| Purchased loans | 3,181,740 | 50,977 | 6.50 | 4,807,080 | 75,993 | 6.41 | ||||||||||||||||||
| Total earning assets – FTE | 18,921,052 | 258,658 | 5.54 | 16,143,345 | 217,363 | 5.46 | ||||||||||||||||||
| Non-interest earning assets | 2,359,796 | 2,603,381 | ||||||||||||||||||||||
| Total assets | $ | 21,280,848 | $ | 18,746,726 | ||||||||||||||||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
|
Savings and interest bearing transaction |
$ | 9,857,347 | $ | 22,570 | 0.93 | % | $ | 7,862,653 | $ | 8,458 | 0.44 | % | ||||||||||||
| Time deposits of $100 or more | 3,036,123 | 8,781 | 1.17 | 3,241,587 | 7,132 | 0.89 | ||||||||||||||||||
| Other time deposits | 1,445,948 | 3,041 | 0.85 | 1,699,858 | 2,787 | 0.66 | ||||||||||||||||||
| Total interest bearing deposits | 14,339,418 | 34,392 | 0.97 | 12,804,098 | 18,377 | 0.58 | ||||||||||||||||||
| Repurchase agreements with customers | 112,434 | 159 | 0.57 | 79,884 | 30 | 0.15 | ||||||||||||||||||
| Other borrowings | 165,943 | 633 | 1.55 | 42,137 | 222 | 2.14 | ||||||||||||||||||
| Subordinated notes | 222,947 | 3,146 | 5.72 | 222,561 | 3,188 | 5.81 | ||||||||||||||||||
| Subordinated debentures | 118,864 | 1,386 | 4.73 | 118,300 | 1,181 | 4.05 | ||||||||||||||||||
| Total interest bearing liabilities | 14,959,606 | 39,716 | 1.08 | 13,266,980 | 22,998 | 0.70 | ||||||||||||||||||
| Non-interest bearing liabilities: | ||||||||||||||||||||||||
| Non-interest bearing deposits | 2,666,111 | 2,574,540 | ||||||||||||||||||||||
| Other non-interest bearing liabilities | 167,778 | 75,107 | ||||||||||||||||||||||
| Total liabilities | 17,793,495 | 15,916,627 | ||||||||||||||||||||||
| Common stockholders' equity | 3,484,297 | 2,826,832 | ||||||||||||||||||||||
| Noncontrolling interest | 3,056 | 3,267 | ||||||||||||||||||||||
|
Total liabilities and stockholders' equity |
$ | 21,280,848 | $ | 18,746,726 | ||||||||||||||||||||
| Net interest income – FTE | $ | 218,942 | $ | 194,365 | ||||||||||||||||||||
| Net interest margin – FTE | 4.69 | % | 4.88 | % | ||||||||||||||||||||
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
||||||||||
|
Bank of the Ozarks Calculation of Average Tangible Common Stockholders' Equity and the Return on Average Tangible Common Stockholders' Equity Unaudited |
||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2018 | 2017 | |||||||||
| (Dollars in thousands) | ||||||||||
| Net income available to common stockholders | $ | 113,144 | $ | 89,188 | ||||||
|
Average common stockholders' equity before
noncontrolling interest |
$ | 3,484,297 | $ | 2,826,832 | ||||||
| Less average intangible assets: | ||||||||||
| Goodwill | (660,789 | ) | (660,151 | ) | ||||||
|
Core deposit and other intangibles, net of accumulated amortization |
(47,122 | ) | (59,596 | ) | ||||||
| Total average intangibles | (707,911 | ) | (719,747 | ) | ||||||
| Average tangible common stockholders' equity | $ | 2,776,386 | $ | 2,107,085 | ||||||
| Return on average common stockholders' equity(1) | 13.17 | % | 12.80 | % | ||||||
| Return on average tangible common stockholders' equity(1) | 16.53 | % | 17.17 | % | ||||||
| (1) | Ratios for interim periods annualized based on actual days. | |
|
Bank of the Ozarks Calculation of Total Tangible Common Stockholders' Equity and Tangible Book Value per Common Share Unaudited |
||||||||||
| March 31, | ||||||||||
| 2018 | 2017 | |||||||||
| (In thousands, except per share amounts) | ||||||||||
| Total common stockholders' equity before noncontrolling interest | $ | 3,526,605 | $ | 2,873,317 | ||||||
| Less intangible assets: | ||||||||||
| Goodwill | (660,789 | ) | (660,789 | ) | ||||||
|
Core deposit and other intangibles, net of accumulated amortization |
(45,107 | ) | (57,686 | ) | ||||||
| Total intangibles | (705,896 | ) | (718,475 | ) | ||||||
| Total tangible common stockholders' equity | $ | 2,820,709 | $ | 2,154,842 | ||||||
| Shares of common stock outstanding | 128,612 | 121,575 | ||||||||
| Book value per common share | $ | 27.42 | $ | 23.63 | ||||||
| Tangible book value per common share | $ | 21.93 | $ | 17.72 | ||||||
|
Bank of the Ozarks Calculation of Total Tangible Common Stockholders' Equity and the Ratio of Total Tangible Common Stockholders' Equity to Total Tangible Assets Unaudited |
||||||||||
| March 31, | ||||||||||
| 2018 | 2017 | |||||||||
| (Dollars in thousands) | ||||||||||
| Total common stockholders' equity before noncontrolling interest | $ | 3,526,605 | $ | 2,873,317 | ||||||
| Less intangible assets: | ||||||||||
| Goodwill | (660,789 | ) | (660,789 | ) | ||||||
|
Core deposit and other intangibles, net of accumulated amortization |
(45,107 | ) | (57,686 | ) | ||||||
| Total intangibles | (705,896 | ) | (718,475 | ) | ||||||
| Total tangible common stockholders' equity | $ | 2,820,709 | $ | 2,154,842 | ||||||
| Total assets | $ | 22,039,439 | $ | 19,152,212 | ||||||
| Less intangible assets: | ||||||||||
| Goodwill | (660,789 | ) | (660,789 | ) | ||||||
|
Core deposit and other intangibles, net of accumulated amortization |
(45,107 | ) | (57,686 | ) | ||||||
| Total intangibles | (705,896 | ) | (718,475 | ) | ||||||
| Total tangible assets | $ | 21,333,543 | $ | 18,433,737 | ||||||
| Ratio of total common stockholders' equity to total assets | 16.00 | % | 15.00 | % | ||||||
|
Ratio of total tangible common stockholders' equity to total tangible assets |
13.22 | % | 11.69 | % | ||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180412005246/en/
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