Bank of the Ozarks, Inc. (NASDAQ: OZRK) today announced that net income for the first quarter of 2014 was $25.3 million, a 26.4% increase from $20.0 million for the first quarter of 2013. Diluted earnings per common share for the first quarter of 2014 were $0.68, a 21.4% increase from $0.56 for the first quarter of 2013.
The Company’s results for the first quarter of 2014 included three significant unusual items. First, on March 5, 2014 the Company completed its acquisition in Texas of Bancshares, Inc. (“Bancshares”) and its wholly-owned OMNIBANK, N.A. subsidiary. This acquisition resulted in a tax-exempt bargain purchase gain of $4.7 million. Second, the Company incurred acquisition-related costs, net of applicable taxes, of approximately $0.4 million. Third, the Company, after entering into an agreement for its newly acquired core banking software, incurred charges, net of applicable taxes, of $3.1 million as a result of providing notices of termination to existing core banking software providers. Collectively, the net effect of these items added approximately $1.2 million, or approximately $0.03 of diluted earnings per share, to the Company’s after tax net income for the first quarter of 2014.
The Company’s returns on average assets and average common stockholders’ equity for the first quarter of 2014 were 2.12% and 16.06%, respectively, compared to 2.06% and 15.77%, respectively, for the first quarter of 2013.
Loans and leases, excluding loans covered by FDIC loss share agreements (“covered loans”) and purchased loans not covered by loss share (“purchased non-covered loans”), were $2.78 billion at March 31, 2014, a 28.8% increase from $2.16 billion at March 31, 2013. Including covered loans and purchased non-covered loans, total loans and leases were $3.57 billion at March 31, 2014, a 30.4% increase from $2.74 billion at March 31, 2013.In commenting on these results, George Gleason, Chairman and Chief Executive Officer, stated, “We are pleased to report our excellent first quarter results. While our results reflect some of the headwinds typically encountered during the first quarter, our excellent loan and lease growth, our favorable asset quality as shown by our net charge-off ratio, and our record trust income provided a great start for 2014. Our balance of loans and leases outstanding, excluding covered loans and purchased non-covered loans, increased $146 million in the quarter just ended, reflecting unusually strong growth for the first quarter, which has been a quarter of minimal growth in most years. Additionally, our unfunded balance of closed loans increased $206 million during the first quarter, growing to $1.42 billion at March 31, 2014 compared to $1.21 billion at December 31, 2013. Further, the completion of our Bancshares acquisition late in the first quarter is an important step in positioning us for future growth in Texas.”