Bank of the Ozarks, Inc. Announces Record First Quarter Earnings.LITTLE ROCK, Ark. -- Bank of the Ozarks, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : OZRK) today announced record earnings for the quarter ended March 31, 2005. Net income for the quarter was $7,322,000, a 22.7% increase over net income of $5,965,000 for the first quarter of 2004. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.44 for the first quarter of 2005 compared to $0.36 for the first quarter of 2004, an increase of 22.2%. The Company's annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. returns on average assets and average stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. for the first quarter of 2005 were 1.68% and 23.69%, respectively, compared with 1.70% and 23.45%, respectively, for the first quarter of 2004. Loans and leases were $1.176 billion at March 31, 2005 compared to $951 million at March 31, 2004, an increase of 23.6%. Deposits were $1.394 billion at March 31, 2005 compared to $1.147 billion at March 31, 2004, an increase of 21.6%. Total assets were $1.797 billion at March 31, 2005, a 26.0% increase from $1.427 billion at March 31, 2004. Stockholders' equity increased 19.2% to $126.7 million at March 31, 2005 compared to $106.3 million at March 31, 2004, resulting in book value per share increasing 17.2%, from $6.50 to $7.62. The Company's ratio of common equity to assets was 7.05% as of March 31, 2005 compared to 7.45% as of March 31, 2004, and its ratio of tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. common equity to tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. was 6.70% as of March 31, 2005 compared to 7.04% as of March 31, 2004. In commenting on these results, George George, river, c.345 mi (560 km) long, rising in a lake on the Quebec-Labrador boundary, E Canada. It flows N through Indian Lake (125 sq mi/324 sq km) to Ungava Bay (an arm of Hudson Strait). Gleason Glea·son , Herbert John Known as "Jackie." 1916-1987. American entertainer best remembered for his portrayal of Ralph Kramden on the television comedy The Honeymooners (1952-1957). , Chairman and Chief Executive Officer, stated, "The quarter just ended was our 17th consecutive quarter of record net income and earnings per share. We have now reported record net income in 31 of the last 33 quarters. Record net interest income, a record efficiency ratio and excellent asset quality all contributed to this quarter's excellent results. This gives us a great start to 2005." NET INTEREST INCOME Net interest income for the first quarter of 2005 increased 18.2% to $16,459,000 compared to $13,919,000 for the first quarter of 2004. The Company has now achieved 16 consecutive quarters of record net interest income. Net interest margin, on a fully taxable equivalent basis, was 4.33% in the quarter just ended compared to 4.48% in the first quarter of 2004, a decrease of 15 basis points. The Company's net interest margin for the first quarter of 2005 decreased by one basis point from the Company's net interest margin of 4.34% in the fourth quarter of 2004. NON-INTEREST INCOME Non-interest income for the first quarter of 2005 was $4,371,000 compared with $3,993,000 for the first quarter of 2004, a 9.5% increase. First quarter 2005 income from service charges on deposit accounts, trust services and bank owned life insurance all increased compared to the first quarter of 2004, while income from mortgage lending declined in the first quarter of 2005 compared to the comparable quarter last year. NON-INTEREST EXPENSE Non-interest expense for the first quarter of 2005 was $9,495,000 compared with $8,384,000 for the first quarter of 2004, an increase of 13.3%. The Company's efficiency ratio for the quarter ended March 31, 2005 improved to a record 44.0% compared to 45.3% for the first quarter of 2004. A number of factors contributed to the Company's growth in non-interest expense in the first quarter of 2005 compared to the first quarter of 2004, but the most significant was the Company's continued growth and expansion. From March 31, 2004 to March 31, 2005, the Company continued to pursue its growth and de novo [Latin, Anew.] A second time; afresh. A trial or a hearing that is ordered by an appellate court that has reviewed the record of a hearing in a lower court and sent the matter back to the original court for a new trial, as if it had not been previously heard nor decided. branching strategy, resulting in the addition of 12 new banking offices during that 12 month period. Mr. Gleason stated, "Along with our brisk Brisk as a proper name may refer to:
A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. in the first quarter of 2005." ASSET QUALITY, CHARGE-OFFS AND RESERVES Nonperforming loans and leases as a percent of total loans and leases were 0.36% at both March 31, 2005 and March 31, 2004. Nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. as a percent of total assets were 0.39% as of March 31, 2005 compared to 0.28% as of March 31, 2004. The Company's ratio of loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases, was 0.49% at March 31, 2005 compared to 0.46% at March 31, 2004. The Company's annualized net charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. ratio for the first quarter of 2005 was 0.07% compared to 0.05% for the first quarter of 2004. Mr. Gleason stated, "Our asset quality ratios were excellent in the first quarter. Our 0.07% annualized net charge-off ratio for the first quarter was the second best we have reported as a public company and just two basis points from the best. Our 0.49% 30-day past due ratio was our fourth best as a public company and just five basis points from the best. We have made asset quality a high priority and our results in recent quarters reflect that emphasis." The Company's allowance for loan and lease losses increased to $16.4 million at March 31, 2005, or 1.40% of total loans and leases, compared to $14.5 million, or 1.52% of total loans and leases, at March 31, 2004. The increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2 million in the allowance for loan and lease losses over the past twelve months is a result of the growth in the Company's loan and lease portfolio. As of March 31, 2005, the Company's allowance for loan and lease losses equaled 384% of its total nonperforming loans and leases. GROWTH AND EXPANSION During the first quarter of 2005, the Company relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. its temporary banking office in Mountain Home, Arkansas Mountain Home is a city located in Baxter County, Arkansas, a wet county, and is the county seat.GR6 It was incorporated in 1888. The city sprang up around the Male and Female Academy which Professor J.S. Howard founded during the 1850s. to its first permanent office there. The Company also added three new Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. banking offices including its fourth office in North Little Rock, its second office in Mountain Home and its first office in Bentonville Bentonville, city (2000 pop. 19,730), seat of Benton co., extreme NW Ark., in the Ozark Mts.; settled 1837 and named for Senator Thomas Hart Benton. Local industries produce fabricated metal products, plastic molding, electronic equipment, textiles, cutting tools, . All of these offices are in permanent facilities except the Bentonville office which is in a temporary facility until a permanent banking office is completed. Early in the second quarter of 2005, the Company opened a loan production office in Fayetteville, Arkansas
Charlotte is the largest city in the state of North Carolina and the 20th largest city in the United States. . The Company expects to continue its growth and de novo branching strategy. For the full year of 2005, it expects to open between eight and eleven new banking offices, depending, among other factors, on the time required to obtain permits and approvals and to design, construct, equip e·quip tr.v. e·quipped, e·quip·ping, e·quips 1. a. To supply with necessities such as tools or provisions. b. and staff such offices. Later in the second quarter, the Company plans to convert its recently opened Fayetteville Fayetteville (fā`ĕtvĭl). 1 City (1990 pop. 42,099), seat of Washington co., NW Ark., in the Ozarks; inc. 1836. It is an agricultural trade center with canneries and food processors. The Univ. loan production office to a temporary banking office. The Company also expects to add its second permanent banking office in Benton, Arkansas Benton is the largest city and county seat of Saline CountyGR6, Arkansas, United States. According to 2006 Census Bureau estimates, the population of the city is 27,700, ranking it as the state's 15th largest city, behind West Memphis. during the second quarter. Opening new offices or converting existing loan production offices to banking offices is subject to availability of suitable sites, hiring qualified personnel, obtaining regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and other approvals and many other conditions and contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. that the Company cannot predict with certainty CERTAINTY, UNCERTAINTY, contracts. In matters of obligation, a thing is certain, when its essence, quality, and quantity, are described, distinctly set forth, Dig. 12, 1, 6. It is uncertain, when the description is not that of one individual object, but designates only the kind. Louis. . CONFERENCE CALL Management will conduct a conference call to review announcements made in this press release at 10:00 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT (11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) on Wednesday Wednesday: see week. , April 13, 2005. The call will be available live or in recorded version on the Company's website www.bankozarks.com under "Investor Relations Investor relations The process by which the corporation communicates with its investors. " or interested parties calling from locations within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of may call 1-800-990-4845 up to ten minutes prior to the beginning of the conference and ask for the Bank of the Ozarks conference call. A recorded playback Playback could mean:
GENERAL This release contains forward looking statements regarding the Company's plans, expectations, goals and outlook for the future including, among others, statements regarding the Company's expectations for future growth, expansion, conversion and opening of new offices, plans to continue its growth and de novo branching strategy and goals for its efficiency ratio. Actual results may differ materially from those projected in such forward looking statements, due, among other things, to continued interest rate changes, competitive factors, general economic conditions and their effects on the creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. of borrowers, collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although values and the value of securities, the ability to attract new deposits and loans, delays in identifying, acquiring and opening satisfactory sites, delays in or inability to obtain required regulatory approvals, the ability to generate future revenue growth or to control future growth in non-interest expense, as well as other factors identified in this press release or in Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial under the caption "Forward Looking Information" contained in the Company's 2004 Annual Report to Stockholders and the most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission. Bank of the Ozarks, Inc. trades on the NASDAQ National Market under the symbol "OZRK". The Company may be contacted at (501) 978-2265 or P. O. Box 8811, Little Rock, Arkansas Little Rock, Arkansas required military intervention to desegregate schools (1957–1958). [Am. Hist.: Van Doren, 556–557] See : Bigotry 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
March 31,
-------------------------------
2005 2004 % Change
----------- ----------- -------
Income statement data:
---------------------------------------
Net interest income $ 16,459 $ 13,919 18.2%
Provision for loan and lease losses 500 745 (32.9)
Non-interest income 4,371 3,993 9.5
Non-interest expense 9,495 8,384 13.3
Net income 7,322 5,965 22.7
Common stock data:
---------------------------------------
Net income per share - diluted $ 0.44 $ 0.36 22.2%
Net income per share - basic 0.44 0.37 18.9
Cash dividends per share 0.08 0.07 14.3
Book value per share 7.62 6.50 17.2
Diluted shares outstanding (thousands) 16,739 16,583
End of period shares outstanding
(thousands) 16,625 16,356
Balance sheet data at period end:
---------------------------------------
Total assets $1,797,320 $1,426,636 26.0%
Total loans and leases 1,175,683 951,037 23.6
Allowance for loan and lease losses 16,437 14,460 13.7
Total investment securities 459,813 362,050 27.0
Goodwill 5,243 4,935 6.2
Other intangibles - net of amortization 1,355 1,378 (1.7)
Total deposits 1,394,225 1,147,001 21.6
Repurchase agreements with customers 30,619 31,967 (4.2)
Other borrowings 196,762 90,023 118.6
Subordinated debentures 44,331 46,651 (5.0)
Stockholders' equity 126,655 106,266 19.2
Loan and lease to deposit ratio 84.33% 82.92%
Selected ratios:
---------------------------------------
Return on average assets(a) 1.68% 1.70%
Return on average stockholders'
equity(a) 23.69 23.45
Average equity to total average assets 7.10 7.24
Net interest margin - FTE(a) 4.33 4.48
Overhead ratio(a) 2.18 2.39
Efficiency ratio 43.96 45.31
Allowance for loan and lease losses to
total loans and leases 1.40 1.52
Nonperforming loans and leases to
total loans and leases 0.36 0.36
Nonperforming assets to total assets 0.39 0.28
Net charge-offs to average loans and
leases(a) 0.07 0.05
Other information:
---------------------------------------
Non-accrual loans and leases $ 4,282 $ 3,405
Accruing loans and leases - 90 days
past due - -
ORE and repossessions 2,770 629
(a) Ratios annualized based on actual days
Bank of the Ozarks, Inc.
Supplemental Quarterly Financial Data
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
6/30/03 9/30/03 12/31/03 3/31/04 6/30/04
---------- -------- --------- -------- --------
Earnings Summary:
-----------------------
Net interest income $11,775 $12,658 $13,469 $13,919 $14,721
Federal tax (FTE)
adjustment 207 312 479 591 582
---------- -------- --------- -------- --------
Net interest income
(FTE) 11,982 12,970 13,948 14,510 15,303
Loan and lease loss
provision (1,095) (1,050) (970) (745) (1,045)
Non-interest income 4,582 5,147 4,128 3,993 5,204
Non-interest expense (7,754) (8,629) (8,855) (8,384) (9,610)
---------- -------- --------- -------- --------
Pretax income (FTE) 7,715 8,438 8,251 9,374 9,852
FTE adjustment (207) (312) (479) (591) (582)
Provision for taxes (2,668) (2,852) (2,160) (2,818) (3,010)
---------- -------- --------- -------- --------
Net income $ 4,840 $ 5,274 $ 5,612 $ 5,965 $ 6,260
========== ======== ========= ======== ========
Earnings per share -
diluted(a) $ 0.30 $ 0.32 $ 0.34 $ 0.36 $ 0.38
Non-interest Income:
-----------------------
Trust income $ 312 $ 493 $ 523 $ 301 $ 358
Service charges on
deposit accounts 1,981 2,043 2,063 2,107 2,441
Mortgage lending income 1,626 1,958 922 815 985
Gain (loss) on sales
of assets (8) 8 8 100 20
Security gains
(losses) 97 36 11 - 752
Bank owned life
insurance income 291 299 258 253 254
Other 283 310 343 417 394
---------- -------- --------- -------- --------
Total non-interest
income $ 4,582 $ 5,147 $ 4,128 $ 3,993 $ 5,204
Non-interest Expense:
-----------------------
Salaries and employee
benefits $ 4,511 $ 5,186 $ 4,647 $ 4,851 $ 4,973
Net occupancy expense 1,095 1,179 1,152 1,213 1,254
Write-off of deferred
debt costs - - - - 852
Other operating
expenses 2,105 2,202 2,994 2,258 2,466
Amortization of
intangibles 43 62 62 62 65
---------- -------- --------- -------- --------
Total non-interest
expense $ 7,754 $ 8,629 $ 8,855 $ 8,384 $ 9,610
Allowance for Loan and
Lease Losses:
-----------------------
Balance beginning of
period $11,124 $12,579 $13,100 $13,820 $14,460
Allowance added in
bank acquisition 660 - - - -
Net charge-offs (300) (529) (250) (105) (392)
Loan and lease loss
provision 1,095 1,050 970 745 1,045
---------- -------- --------- -------- --------
Balance at end of
period $12,579 $13,100 $13,820 $14,460 $15,113
Selected Ratios:
-----------------------
Net interest margin -
FTE(b) 4.54% 4.48% 4.45% 4.48% 4.43%
Overhead expense
ratio(b) 2.71 2.75 2.61 2.39 2.57
Efficiency ratio 46.81 47.63 48.99 45.31 46.86
Nonperforming loans
and leases/ total
loans and leases 0.53 0.50 0.47 0.36 0.25
Nonperforming
assets/total assets 0.42 0.41 0.36 0.28 0.21
Loans and leases past
due 30 days or more,
including past due
non-accrual loans and
leases, to total loans
and leases 0.76 0.64 0.77 0.46 0.44
9/30/04 12/31/04 3/31/05
-------- -------- --------
Earnings Summary:
-----------------------------
Net interest income $15,908 $16,075 $16,459
Federal tax (FTE) adjustment 625 702 767
-------- -------- --------
Net interest income (FTE) 16,533 16,777 17,226
Loan and lease loss
provision (1,040) (500) (500)
Non-interest income 4,631 4,397 4,371
Non-interest expense (9,766) (9,845) (9,495)
-------- -------- --------
Pretax income (FTE) 10,358 10,829 11,602
FTE adjustment (625) (702) (767)
Provision for taxes (3,086) (3,116) (3,513)
-------- -------- --------
Net income $ 6,647 $ 7,011 $ 7,322
======== ======== ========
Earnings per share - diluted(a) $ 0.40 $ 0.42 $ 0.44
Non-interest Income:
-----------------------------
Trust income $ 390 $ 427 $ 389
Service charges on deposit accounts 2,520 2,411 2,204
Mortgage lending income 863 629 671
Gain (loss) on sales of assets 108 13 131
Security gains (losses) 22 - -
Bank owned life insurance income 258 448 449
Other 470 469 527
-------- -------- --------
Total non-interest income $ 4,631 $ 4,397 $ 4,371
Non-interest Expense:
-----------------------------
Salaries and employee benefits $ 5,526 $ 5,316 $ 5,333
Net occupancy expense 1,286 1,436 1,447
Write-off of deferred debt costs - - -
Other operating expenses 2,889 3,027 2,650
Amortization of intangibles 65 66 65
-------- -------- --------
Total non-interest expense $ 9,766 $ 9,845 $ 9,495
Allowance for Loan and Lease Losses:
-----------------------------
Balance beginning of period $15,113 $15,888 $16,133
Allowance added in bank
acquisition - - -
Net charge-offs (265) (255) (196)
Loan and lease loss
provision 1,040 500 500
-------- -------- --------
Balance at end of period $15,888 $16,133 $16,437
Selected Ratios:
-----------------------------
Net interest margin - FTE(b) 4.47% 4.34% 4.33%
Overhead expense ratio(b) 2.44 2.33 2.18
Efficiency ratio 46.14 46.50 43.96
Nonperforming loans and
leases/total loans and leases 0.27 0.57 0.36
Nonperforming assets/total
assets 0.23 0.39 0.39
Loans and leases past due 30
days or more, including past due
non-accrual loans and
leases, to total loans and leases 0.46 0.76 0.49
(a) Adjusted to give effect to 2-for-1 stock split effective
December 10, 2003
(b) Annualized
Note: All data adjusted to comply to FASB Interpretation No. 46
Bank of the Ozarks, Inc.
Average Consolidated Balance Sheet and Net Interest Analysis
(Dollars in Thousands)
Unaudited
Quarter Ended
March 31, 2005
--------------------------
Average Income/ Yield/
Balance Expense Rate
----------- ------- ------
ASSETS
Earnings assets:
Interest bearing deposits and federal funds
sold $ 428 $ 5 4.32%
Investment securities:
Taxable 331,499 4,414 5.40
Tax-exempt - FTE 123,106 2,122 6.99
Loans and leases - FTE 1,157,924 18,989 6.65
----------- -------
Total earnings assets 1,612,957 25,530 6.42
Non-earning assets 152,769
-----------
Total assets $1,765,726
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing transaction $ 440,974 $ 1,330 1.22%
Time deposits of $100,000 or more 510,210 2,974 2.36
Other time deposits 282,061 1,593 2.29
----------- -------
Total interest bearing deposits 1,233,245 5,897 1.94
Repurchase agreements with customers 32,768 117 1.45
Other borrowings 194,885 1,706 3.55
Subordinated debentures 44,331 584 5.34
----------- -------
Total interest bearing liabilities 1,505,229 8,304 2.24
Non-interest bearing liabilities:
Non-interest bearing deposits 131,650
Other non-interest bearing liabilities 3,517
-----------
Total liabilities 1,640,396
Stockholders' equity 125,330
-----------
Total liabilities and stockholders'
equity $1,765,726
===========
Interest rate spread - FTE 4.18%
-------
Net interest income - FTE $17,226
=======
Net interest margin - FTE 4.33%
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