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TheStreet Open House

Bank Of The Ozarks, Inc. Announces Second Quarter 2012 Earnings

GENERAL INFORMATION

Bank of the Ozarks, Inc. common stock trades on the NASDAQ Global Select Market under the symbol “OZRK”. The Company owns a state-chartered subsidiary bank that conducts banking operations through 115 offices, including 66 Arkansas offices, 28 Georgia offices, 13 Texas offices, four Florida offices, two North Carolina offices, and one office each in South Carolina and Alabama. The Company may be contacted at (501) 978-2265 or P. O. Box 8811, Little Rock, Arkansas 72231-8811. The Company’s website is: www.bankozarks.com.

   

Bank of the Ozarks, Inc.

Selected Consolidated Financial Data

(Dollars in Thousands, Except Per Share Amounts )

Unaudited

 
Quarters Ended Six Months Ended
June 30, June 30,

2012

 

2011

 

%

Change

2012

 

2011

 

%

Change

Income statement data:

Net interest income $ 42,298 $ 42,476 (0.4 )% $ 86,132 $ 78,559 9.6 %
Provision for loan and lease losses 3,055 3,750 (18.5 ) 6,131 6,000 2.2
Non-interest income 15,710 75,058 (79.1 ) 29,520 88,048 (66.5 )
Non-interest expense 27,282 35,200 (22.5 ) 55,889 61,392 (9.0 )
Net income available to common stockholders 19,092 50,217 (62.0 ) 37,102 64,847 (42.8 )
 

Common stock data:*

Net income per share – diluted $ 0.55 $ 1.46 (62.3 )% $ 1.06 $ 1.88 (43.6 )%
Net income per share – basic 0.55 1.47 (62.6 ) 1.07 1.90 (43.7 )
Cash dividends per share 0.12 0.09 33.3 0.23 0.175 31.4
Book value per share 13.29 11.27 17.9 13.29 11.27 17.9
Diluted shares outstanding (thousands) 34,887 34,464 34,851 34,406
End of period shares outstanding (thousands) 34,594 34,237 34,594 34,237
 

Balance sheet data at period end:

Assets $ 3,764,860 $ 4,028,339 (6.5 )% $ 3,764,860 $ 4,028,339 (6.5 )%
Loans and leases not covered by loss share 1,981,684 1,802,127 10.0 1,981,684 1,802,127 10.0
Allowance for loan and lease losses 38,862 39,124 (0.7 ) 38,862 39,124 (0.7 )
Loans covered by loss share 711,723 902,832 (21.2 ) 711,723 902,832 (21.2 )
Foreclosed assets covered by loss share 65,405 77,538 (15.6 ) 65,405 77,538 (15.6 )
FDIC loss share receivable 208,758 357,449 (41.6 ) 208,758 357,449 (41.6 )
Investment securities 414,898 499,244 (16.9 ) 414,898 499,244 (16.9 )
Goodwill 5,243 5,243 - 5,243 5,243 -
Other intangibles – net of amortization 5,946 7,977 (25.5 ) 5,946 7,977 (25.5 )
Deposits 2,808,986 3,170,483 (11.4 ) 2,808,986 3,170,483 (11.4 )
Repurchase agreements with customers 31,600 39,403 (19.8 ) 31,600 39,403 (19.8 )
Other borrowings 339,703 292,682 16.1 339,703 292,682 16.1
Subordinated debentures 64,950 64,950 - 64,950 64,950 -
Common stockholders’ equity 459,590 385,683 19.2 459,590 385,683 19.2
Net unrealized gains (losses) on investment securities AFS included in common stockholders’ equity

11,452

3,330

 

11,452

3,330

 

Loan and lease, including covered loans, to deposit ratio

95.89

%

85.32

%

95.89

%

85.32

%

 

Selected ratios:

Return on average assets** 2.04 % 5.24 % 1.97 % 3.63 %
Return on average common stockholders’ equity** 17.07 55.88 16.91 38.05
Average common equity to total average assets 11.95 9.38 11.66 9.55
Net interest margin – FTE** 5.84 5.80 5.91 5.71
Efficiency ratio 45.35 29.39 46.54 35.87
Net charge-offs to average loans and leases**(1)(2) 0.18 0.85 0.31 0.79
Nonperforming loans and leases to total loans and leases(1)

0.50

1.09

0.50

1.09

Nonperforming assets to total assets(1) 0.63 1.39 0.63 1.39
Allowance for loan and lease losses to total loans and leases(1)

1.96

2.17

 

1.96

2.17

 

 

Other information:

Non-accrual loans and leases(1) $ 9,832 $ 19,599 $ 9,832 $ 19,599
Accruing loans and leases – 90 days past due(1) - - - -
Troubled and restructured loans and leases(1) - - - -
ORE and repossessions(1) 13,898 36,348 13,898 36,348
Impaired covered loans 22,758 - 22,758 -
 
* Adjusted to give effect to 2-for-1 stock split effective August 16, 2011.
** Ratios for interim periods annualized based on actual days.
(1) Excludes loans and/or foreclosed assets covered by FDIC loss share agreements, except for their inclusion in total assets.
(2) Excludes net charge-offs related to loans covered by FDIC loss share agreements.

                 

Bank of the Ozarks, Inc.

Supplemental Quarterly Financial Data

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

 
9/30/10 12/31/10 3/31/11 6/30/11 9/30/11 12/31/11 3/31/12 6/30/12

Earnings Summary:

Net interest income $ 32,768 $ 33,945 $ 36,083 $ 42,476 $ 44,336 $ 45,839 $ 43,833 $ 42,298
Federal tax (FTE) adjustment   2,447     2,341     2,318     2,235     2,256     2,210     2,288     2,151  
Net interest income (FTE) 35,215 36,286 38,401 44,711 46,592 48,049 46,121 44,449
Provision for loan and lease losses (4,300 ) (4,100 ) (2,250 ) (3,750 ) (1,500 ) (4,275 ) (3,076 ) (3,055 )
Non-interest income 25,183 18,646 12,990 75,058 16,071 12,964 13,810 15,710
Non-interest expense   (23,565 )   (25,274 )   (26,192 )   (35,200 )   (31,800 )   (29,339 )   (28,607 )   (27,282 )
Pretax income (FTE) 32,533 25,558 22,949 80,819 29,363 27,399 28,248 29,822
FTE adjustment (2,447 ) (2,341 ) (2,318 ) (2,235 ) (2,256 ) (2,210 ) (2,288 ) (2,151 )
Provision for income taxes (9,878 ) (6,303 ) (6,004 ) (28,380 ) (8,220 ) (7,604 ) (7,950 ) (8,584 )
Noncontrolling interest   17     17     3     13     17     (15 )   (1 )   5  
Net income available to common stockholders

$

20,225

 

$

16,931

 

$

14,630

 

$

50,217

 

$

18,904

 

$

17,570

 

$

18,009

 

$

19,092

 
 
Earnings per common share – diluted * $ 0.59 $ 0.49 $ 0.43 $ 1.46 $ 0.55 $ 0.51 $ 0.52 $ 0.55
 

Non-interest Income:

Service charges on deposit accounts

$ 4,002 $ 4,019 $ 3,838 $ 4,586 $ 4,734 $ 4,936 $ 4,693 $ 4,908

Mortgage lending income

1,024 1,495 681 634 815 1,147 1,101 1,328

Trust income

802 888 782 803 810 811 774 888

Bank owned life insurance income

580

574

568

575

585

580

576

567

Accretion of FDIC loss share receivable, net of amortization of FDIC clawback payable

906

1,252

1,998

2,923

2,861

2,359

2,305

2,035

Other loss share income, net 295 304 971 984 2,976 1,501 1,983 3,197
Gains (losses) on investment securities 570 226 152 199 638 (56 ) 1 402
Gains on sales of other assets 267 571 407 705 1,727 899 1,555 1,397
Gains on FDIC-assisted transactions 16,122 8,859 2,952 62,756 - - - -
Other   615     458     641     893     925     787     822     988  
Total non-interest income $ 25,183   $ 18,646   $ 12,990   $ 75,058   $ 16,071   $ 12,964   $ 13,810   $ 15,710  
 

Non-interest Expense:

Salaries and employee benefits $ 10,539 $ 12,351 $ 11,647 $ 14,817 $ 14,597 $ 15,202 $ 14,052 $ 14,574
Net occupancy expense 2,782 2,999 3,106 3,775 4,301 3,522 3,878 3,650
Other operating expenses 10,111 9,764 11,211 16,172 12,398 10,106 10,168 8,549
Amortization of intangibles   133     160     228     436     504     509     509     509  
Total non-interest expense $ 23,565   $ 25,274   $ 26,192   $ 35,200   $ 31,800   $ 29,339   $ 28,607   $ 27,282  
 

Allowance for Loan and Lease Losses:

Balance at beginning of period $ 40,176 $ 40,250 $ 40,230 $ 39,225 $ 39,124 $ 39,136 $ 39,169 $ 38,632
Net charge-offs (4,226 ) (4,120 ) (3,255 ) (3,851 ) (1,488 ) (4,242 ) (3,613 ) (2,825 )
Provision for loan and lease losses   4,300     4,100     2,250     3,750     1,500     4,275     3,076     3,055  
Balance at end of period $ 40,250   $ 40,230   $ 39,225   $ 39,124   $ 39,136   $ 39,169   $ 38,632   $ 38,862  
 

Selected Ratios:

Net interest margin - FTE** 5.31 % 5.35 % 5.61 % 5.80 % 5.90 % 6.05 % 5.98 % 5.84 %
Efficiency ratio 39.02 46.01 50.97 29.39 50.75 48.09 47.73 45.35
Net charge-offs to average loans and leases**(1)(2)

0.88

0.87

0.72

0.85

0.33

0.84

0.44

0.18

Nonperforming loans and leases to total loans and leases(1)

0.90

0.75

0.77

1.09

1.22

0.70

0.61

0.50

Nonperforming assets to total assets(1) 1.85 1.72 1.62 1.39 1.45 1.17 0.77 0.63
Allowance for loan and lease losses to total loans and leases(1)

2.13

2.17

2.17

2.17

2.10

2.08

2.04

1.96

Loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases(1)

1.90

2.02

2.19

2.47

1.89

1.56

0.86

0.75

 
* Adjusted to give effect to 2-for-1 stock split effective August 16, 2011.
** Ratios for interim periods annualized based on actual days.
(1) Excludes loans and/or foreclosed assets covered by FDIC loss share agreements, except for their inclusion in total assets.
(2) Excludes net charge-offs related to loans covered by FDIC loss share agreements.

 

Bank of the Ozarks, Inc.

Average Consolidated Balance Sheets and Net Interest Analysis – FTE

Unaudited

 
    Three Months Ended June 30,   Six Months Ended June 30,
2012   2011 2012   2011
Average   Income/   Yield/ Average   Income/   Yield/ Average   Income/   Yield/ Average   Income/   Yield/

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

(Dollars in thousands)
ASSETS
Earning assets:
Interest earning deposits and federal funds sold

$

1,361

$

1

0.44

%

$

3,178

$

25

3.16

%

$

1,094

$

3

0.58

%

$

2,092

$

28

2.66

%

Investment securities:
Taxable 82,434 705 3.44 131,223 1,057 3.23 84,170 1,420 3.39 86,977 1,484 3.44
Tax-exempt – FTE 337,208 6,127 7.31 340,696 6,368 7.50 343,573 12,644 7.40 346,103 12,972 7.56
Loans and leases – FTE 1,907,898 27,422 5.78 1,814,949 28,052 6.20 1,897,170 55,725 5.91 1,821,998 55,935 6.19
Covered loans   732,038   15,668 8.61   802,371   17,607 8.80   756,503   32,362 8.58   676,111   29,030 8.66
Total earning assets – FTE 3,060,939 49,923 6.56 3,092,417 53,109 6.89 3,082,510 102,154 6.66 2,933,281 99,449 6.84
Non-interest earning assets   704,404   751,287   700,967   665,309
Total assets $ 3,765,343 $ 3,843,704 $ 3,783,477 $ 3,598,590
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction

$

1,574,598

$

1,138

0.29

%

$

1,527,094

$

2,516

0.66

%

$

1,562,376

$

2,515

0.32

%

$

1,433,168

$

4,783

0.67

%

Time deposits of $100,000 or more

348,278 494 0.57 524,381 1,239 0.95 372,520 1,163 0.63 502,693 2,474 0.99
Other time deposits   455,629   679 0.60   581,600   1,436 0.99   475,043   1,548 0.66   522,541   2,715 1.05
Total interest bearing deposits 2,378,505 2,311 0.39 2,633,075 5,191 0.79 2,409,939 5,226 0.44 2,458,402 9,972 0.82
Repurchase agreements with customers

35,952

12

0.14

40,213

57

0.57

37,313

33

0.18

41,396

118

0.58

Other borrowings 285,210 2,691 3.79 294,042 2,718 3.71 292,142 5,391 3.71 295,683 5,389 3.68
Subordinated debentures   64,950   460 2.85   64,950   432 2.67   64,950   934 2.89   64,950   858 2.66
Total interest bearing liabilities 2,764,617 5,474 0.80 3,032,280 8,398 1.11 2,804,344 11,584 0.83 2,860,431 16,337 1.15
Non-interest bearing liabilities:
Non-interest bearing deposits 490,760 396,788 471,526 355,516
Other non-interest bearing liabilities   56,591   50,749   62,938   35,525
Total liabilities 3,311,968 3,479,817 3,338,808 3,251,472
Common stockholders’ equity 449,955 360,459 441,246 343,686
Noncontrolling interest   3,420   3,428   3,423   3,432
Total liabilities and stockholders’ equity

$

3,765,343

$

3,843,704

 

 

$

3,783,477

$

3,598,590

 

 

       
Net interest income – FTE $ 44,449 $ 44,711 $ 90,570 $ 83,112
Net interest margin – FTE 5.84 % 5.80 % 5.91 % 5.71 %




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