Bank of the Ozarks, Inc. Announces Record Second Quarter Earnings.Business Editors Bank of the Ozarks, Inc. (NASDAQ:OZRK) today announced record earnings for the quarter ended June 30, 2002. Net income for the quarter was $3,435,000, a 55.2% increase over net income of $2,213,000 for the second quarter of 2001. Diluted earnings per share were $0.44 for the second quarter of 2002 compared to $0.29 for the second quarter of 2001, an increase of 51.7%. For the six months ended June 30, 2002, net income totaled $6,529,000, a 60.2% increase over net income of $4,075,000 for the first six months of 2001. Diluted earnings per share for the first six months of 2002 were $0.84, compared to $0.54 for the same period in 2001, an increase of 55.6%. On June 17, 2002, the Company completed a 2-for-1 stock split, in the form of a stock dividend, effected by issuing one share of common stock for each share of such stock outstanding on June 3, 2002. All share and per share information contained in this release has been adjusted to give effect to this stock split. The Company's annualized returns on average assets and average stockholders' equity for the second quarter of 2002 were 1.55% and 22.41%, respectively, compared with 1.11% and 17.17%, respectively, for the comparable quarter in 2001. Annualized returns on average assets and average stockholders' equity for the six months ended June 30, 2002 were 1.50% and 22.15%, respectively, compared with 1.01% and 16.31%, respectively, for the six months ended June 30, 2001. Loans were $647 million at June 30, 2002, compared to $548 million at June 30, 2001, an increase of 18.2%. Deposits were $707 million at June 30, 2002, compared to $642 million at June 30, 2001, an increase of 10.1%. Total assets were $896 million at June 30, 2002, a 9.3% increase from $820 million at June 30, 2001. Stockholders' equity increased 23.1% from $52.7 million at June 30, 2001, to $64.9 million at June 30, 2002, resulting in book value per share increasing 21.7% from $6.97 to $8.48. In commenting on these results, George Gleason, Chairman and Chief Executive Officer, stated, "We are very pleased with our excellent second quarter results. This was our sixth consecutive quarter of record net income. Revenue growth was strong as net interest income and non-interest income both set new records. Growth in core deposit customers continued throughout the quarter and we also achieved good loan growth. Our asset quality ratios for the quarter were favorable, especially considering current economic conditions." NET INTEREST INCOME Net interest income for the second quarter of 2002 increased 47.1% to $10,194,000 compared to $6,929,000 for the second quarter of 2001. Net interest margin, on a fully taxable equivalent basis, was 4.97% in the second quarter of 2002 compared to 3.86% in the second quarter of 2001, an increase of 111 basis points. Net interest income for the six months ended June 30, 2002 increased 50.9% to $19,528,000 compared to $12,941,000 for the six months ended June 30, 2001. Net interest margin, on a fully taxable equivalent basis, was 4.88% for the first six months in 2002, an increase of 128 basis points from the comparable six month period in 2001. The growth in net interest income and the continued expansion in net interest margin for the second quarter and six months ended June 30, 2002 are primarily attributable to two factors. First, earning assets have grown in the 2002 periods from the comparable prior year periods with increases in loans more than offsetting decreases in the balances of lower yielding securities. Second, yields on total earning assets have declined 97 and 100 basis points respectively for the second quarter and six months ended June 30, 2002, but these were more than offset by declines of 227 and 247 basis points on interest bearing deposit and liability costs for these periods. In commenting on the improved net interest income, Mr. Gleason stated, "We continue to actively manage and target our mix of earning assets and deposits with the goal of maintaining or improving net interest income while maintaining or reducing interest rate risk." NON-INTEREST INCOME AND EXPENSE Non-interest income for the second quarter of 2002 was $2,709,000 compared with $1,920,000 for the second quarter of 2001, a 41.1% increase. Non-interest income for the six months ended June 30, 2002 was $4,901,000 compared to $3,577,000 for the six months ended June 30, 2001, a 37.0% increase. During the first six months of 2002 the Company benefited from record levels of service charges on deposit accounts. The Company's efficiency ratio for the quarter ended June 30, 2002 was 46.6% compared to 52.4% for the second quarter of 2001. Non-interest expense for the second quarter of 2002 was $6,058,000 compared with $4,746,000 for the second quarter of 2001, an increase of 27.6%. The Company's efficiency ratio for the six months ended June 30, 2002 was 47.4% compared to 53.2% for the first six months of 2001. Non-interest expense for the six months ended June 30, 2002 was $11,694,000 compared to $9,042,000 for the six months ended June 30, 2001, a 29.3% increase. The Company's continued growth and expansion contributed to the increase in non-interest expense. During 2001 the Company opened four new banking offices and one loan production office. The Company opened two new offices during the first six months of 2002 including its Maumelle office and a temporary office in Conway. ASSET QUALITY, CHARGE-OFFS AND RESERVES Nonperforming loans as a percent of total loans were 0.37% at June 30, 2002 compared to 0.30% as of June 30, 2001. Nonperforming assets as a percent of total assets were 0.31% as of June 30, 2002, compared to 0.37% as of June 30, 2001. The Company's ratio of loans past due 30 days or more, including non-accrual loans, to total loans was 0.69% at June 30, 2002 compared to 0.77% at June 30, 2001. This is the Company's best quarterly past due ratio since its initial public offering in 1997. The Company's allowance for loan losses increased to $9.6 million at June 30, 2002, or 1.49% of total loans, compared to $7.1 million, or 1.30% of total loans, at June 30, 2001. The increase in the allowance for loan losses in recent quarters reflects the Company's cautious outlook regarding the current uncertainty about economic conditions as well as the change in the mix and size of the Company's loan portfolio. The Company's annualized net charge-off ratio for the second quarter of 2002 was 0.16% compared to 0.20% for the second quarter of 2001. The Company's annualized net charge-off ratio was 0.18% for both the six month periods ended June 30, 2002 and 2001. CONFERENCE CALL Management will conduct a conference call to review announcements made in this press release at 10:00 a.m. CDT (11:00 a.m. EDT) on Friday, July 12, 2002. The call will be available live or in recorded version on the Company's website www.bankozarks.com under "Investor Relations" or interested parties calling from locations within the United States and Canada 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 of the entire call will be available on the Company's website or by telephone the afternoon of July 12, 2002 by calling 1-800-642-1687 in the United States and Canada or 706-645-9291 internationally. The passcode for this telephone playback is 4514547. The telephone and the website recordings will be available through July 31, 2002. GENERAL This release contains forward looking statements regarding future events including statements regarding the Company's goal of maintaining or improving net interest income and maintaining or reducing interest rate risk. 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, including the current economic slow down, and their effect on the credit worthiness of borrowers and collateral values, the ability to attract new deposits and loans, as well as, other factors identified in Management's Discussion and Analysis under the caption "Forward Looking Information" contained in the Company's 2001 Annual Report to Stockholders and the most recent Annual Report on Form 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 owns a state chartered subsidiary bank that conducts banking operations through 31 offices in 21 communities throughout northern, western and central Arkansas and a loan production office in Charlotte, North Carolina. 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.
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
Second Quarter Ended
June 30,
-------------------------------
2002 2001 % Change
------- ------- --------
Earnings Summary:
-----------------
Net interest income $10,194 $ 6,929 47.1%
Provision for possible loan losses 945 658 43.6
Non-interest income 2,709 1,920 41.1
Non-interest expenses 6,058 4,746 27.6
Distribution on trust preferred
securities 397 397 --
Net income to common shareholders 3,435 2,213 55.2
Common Stock Data: (1)
----------------------
Net income per share - diluted $0.44 $0.29 51.7%
Net income per share - basic 0.45 0.29 55.2
Cash dividends per share 0.07 0.055 27.3
Book value per share 8.48 6.97 21.7
Diluted shares outstanding 7,821 7,604
End of period shares outstanding 7,648 7,560
Balance Sheet Summary - End of Period:
--------------------------------------
Total assets $896,153 $819,643 9.3%
Total loans 647,113 547,520 18.2
Allowance for loan losses 9,649 7,139 35.2
Total investment securities 189,968 204,426 (7.1)
Goodwill - net of amortization 1,808 1,853 (2.4)
Other intangibles - net of
amortization 939 1,091 (13.9)
Total deposits 706,876 642,214 10.1
Repurchase agreements with
customers 18,076 17,789 1.6
Other borrowings 85,318 86,145 (0.9)
Stockholders' equity 64,869 52,709 23.1
Loan to deposit ratio 91.55% 85.26%
Selected Ratios:
----------------
Return on average assets(2) 1.55% 1.11%
Return on average stockholders'
equity(2) 22.41 17.17
Average equity to total average
assets 6.91 6.44
Net interest margin - FTE(2) 4.97 3.86
Overhead ratio(2) 2.73 2.37
Efficiency ratio 46.60 52.35
Allowance for possible loan
losses to total loans 1.49 1.30
Nonperforming loans to total loans 0.37 0.30
Nonperforming assets to total
assets 0.31 0.37
Net charge-offs to average loans,
net of unearned income(2) 0.16 0.20
Other Information:
------------------
Non-accrual loans $ 2,388 $ 1,645
Accruing loans - 90 days past due -- --
ORE and repossessions 428 1,370
Six Months Ended
June 30,
-------------------------------
2002 2001 % Change
------- ------- --------
Earnings Summary:
-----------------
Net interest income $19,528 $12,941 50.9%
Provision for possible loan losses 1,495 1,012 47.7
Non-interest income 4,901 3,577 37.0
Non-interest expenses 11,694 9,042 29.3
Distribution on trust preferred
securities 793 793 --
Net income to common shareholders 6,529 4,075 60.2
Common Stock Data: (1)
----------------------
Net income per share - basic $0.84 $0.54 55.6%
Net income per share - diluted 0.86 0.54 59.3
Cash dividends per share 0.13 0.11 18.2
Book value per share 8.48 6.97 21.7
Diluted shares outstanding 7,775 7,588
End of period shares outstanding 7,648 7,560
Balance Sheet Summary - End of Period:
--------------------------------------
Total assets $896,153 $819,643 9.3%
Total loans 647,113 547,520 18.2
Allowance for loan losses 9,649 7,139 35.2
Total investment securities 189,968 204,426 (7.1)
Goodwill - net of amortization 1,808 1,853 (2.4)
Other intangibles - net of
amortization 939 1,091 (13.9)
Total deposits 706,876 642,214 10.1
Repurchase agreements with
customers 18,076 17,789 1.6
Other borrowings 85,318 86,145 (0.9)
Stockholders' equity 64,869 52,709 23.1
Loan to deposit ratio 91.55% 85.26%
Selected Ratios:
----------------
Return on average assets(2) 1.50% 1.01%
Return on average stockholders'
equity(2) 22.15 16.31
Average equity to total average
assets 6.89 6.22
Net interest margin - FTE(2) 4.88 3.60
Overhead ratio(2) 2.69 2.25
Efficiency ratio 47.42 53.19
Allowance for possible loan
losses to total loans 1.49 1.30
Nonperforming loans to total loans 0.37 0.30
Nonperforming assets to total
assets 0.31 0.37
Net charge-offs to average loans,
net of unearned income(2) 0.18 0.18
Other Information:
------------------
Non-accrual loans $2,388 $1,645
Accruing loans - 90 days past due -- --
ORE and repossessions 428 1,370
(1) Adjusted to give effect to 2-for-1 stock split effective June 17,
2002
(2) Ratios annualized based on actual days
Bank of the Ozarks, Inc.
Supplemental Quarterly Financial Data
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
9/30/00 12/31/00 3/31/01 6/30/01
-------- -------- -------- --------
Earnings Summary:
-----------------
Net interest income $5,569 $5,795 $6,012 $6,929
Federal tax (FTE)
adjustment 274 279 263 217
-------- -------- -------- --------
Net interest margin (FTE) 5,843 6,074 6,275 7,146
Loan loss provision (1,225) (398) (354) (658)
Non-interest income 1,552 1,323 1,657 1,920
Non-interest expense (4,351) (4,182) (4,296) (4,746)
-------- -------- -------- --------
Pretax income (FTE) 1,819 2,817 3,282 3,662
FTE adjustment (274) (279) (263) (217)
Provision for taxes (255) (596) (760) (835)
Distribution on trust
preferred securities (397) (396) (397) (397)
-------- -------- -------- --------
Net income $ 893 $1,546 $1,862 $2,213
======== ======== ======== ========
Earnings per share -
diluted(1) $0.12 $0.20 $0.25 $0.29
Non-interest Income Detail:
--------------------------
Trust income $ 162 $ 168 $ 173 $ 174
Service charges on
deposit accounts 868 872 842 919
Mortgage lending income 278 188 347 516
Gain (loss) on sale of
assets 30 (58) (11) 2
Security gains (losses) -- -- 113 6
Other 214 153 193 303
-------- -------- -------- --------
Total non-interest
income $1,552 $1,323 $1,657 $1,920
Non-interest Expense Detail:
----------------------------
Salaries and employee
benefits $2,220 $2,178 $2,359 $2,582
Net occupancy expense 748 759 728 783
Other operating expenses 1,319 1,179 1,149 1,321
Goodwill charges 22 23 22 22
Amortization of other
intangibles - pretax 42 43 38 38
-------- -------- -------- --------
Total non-interest
expense $4,351 $4,182 $4,296 $4,746
Allowance for Loan Losses:
--------------------------
Balance beginning of
period $6,310 $6,447 $6,606 $6,740
Net charge offs (1,088) (239) (220) (259)
Loan loss provision 1,225 398 354 658
-------- -------- -------- --------
Balance at end of
period $6,447 $6,606 $6,740 $7,139
Selected Ratios:
----------------
Net interest margin -
FTE(2) 3.04% 3.10% 3.35% 3.86%
Overhead expense ratio(2) 2.09 1.98 2.13 2.37
Efficiency ratio 58.84 56.54 54.16 52.35
Nonperforming loans to
total loans 0.34 0.37 0.25 0.30
Nonperforming assets to
total assets 0.61 0.42 0.33 0.37
Loans past due 30 days or
more, including non-accrual
loans, to total loans 0.90 0.88 0.79 0.77
9/30/01 12/31/01 3/31/02 6/30/02
-------- -------- -------- --------
Earnings Summary:
-----------------
Net interest income $7,825 $8,939 $9,334 $10,194
Federal tax (FTE)
adjustment 187 145 138 95
-------- -------- -------- --------
Net interest margin (FTE) 8,012 9,084 9,472 10,289
Loan loss provision (910) (1,479) (550) (945)
Non-interest income 1,737 2,039 2,192 2,709
Non-interest expense (4,816) (5,171) (5,636) (6,058)
-------- -------- -------- --------
Pretax income (FTE) 4,023 4,473 5,478 5,995
FTE adjustment (187) (145) (138) (95)
Provision for taxes (1,138) (1,348) (1,849) (2,068)
Distribution on trust
preferred securities (397) (397) (397) (397)
-------- -------- -------- --------
Net income $2,301 $2,583 $3,094 $3,435
======== ======== ======== ========
Earnings per share -
diluted(1) $0.30 $0.34 $0.40 $0.44
Non-interest Income Detail:
---------------------------
Trust income $ 142 $ 116 $ 162 $ 163
Service charges on
deposit accounts 979 1,035 1,505 1,806
Mortgage lending income 410 647 494 498
Gain (loss) on sale of
assets 19 (9) 9 21
Security gains (losses) (16) 51 (217) --
Other 203 199 239 221
-------- -------- -------- --------
Total non-interest
income $1,737 $2,039 $2,192 $2,709
Non-interest Expense Detail:
----------------------------
Salaries and employee
benefits $2,716 $2,894 $3,202 $3,461
Net occupancy expense 792 795 859 878
Other operating expenses 1,247 1,422 1,537 1,681
Goodwill charges 23 22 -- --
Amortization of other
intangibles - pretax 38 38 38 38
-------- -------- -------- --------
Total non-interest
expense $4,816 $5,171 $5,636 $6,058
Allowance for Loan Losses:
--------------------------
Balance beginning of
period $7,139 $7,754 $8,712 $8,963
Net charge offs (295) (521) (299) (259)
Loan loss provision 910 1,479 550 945
-------- -------- -------- --------
Balance at end of
period $7,754 $8,712 $8,963 $9,649
Selected Ratios:
----------------
Net interest margin -
FTE(2) 4.35% 4.62% 4.78% 4.97%
Overhead expense ratio(2) 2.41 2.43 2.65 2.73
Efficiency ratio 49.40 46.49 48.32 46.60
Nonperforming loans to
total loans 0.21 0.29 0.22 0.37
Nonperforming assets to
total assets 0.27 0.28 0.22 0.31
Loans past due 30 days or
more, including non-accrual
loans, to total loans 0.74 0.72 0.79 0.69
(1) Adjusted to give effect to 2-for-1 stock split effective June 17,
2002
(2) Annualized
Bank of the Ozarks, Inc.
Average Consolidated Balance Sheet and Net Interest Analysis
(Dollars in Thousands)
Unaudited
Three Months Ended
June 30, 2002
--------------------------------
Average Income/ Yield/
Balance Expense Rate
---------- ---------- --------
ASSETS
Earnings assets:
Interest bearing deposits and federal
funds sold $ 355 $ 5 5.68%
Investment securities:
Taxable 187,783 2,793 5.97
Tax-exempt - FTE 11,319 211 7.48
Loans -FTE (net of unearned income) 630,153 12,023 7.65
---------- ----------
Total earnings assets 829,610 15,032 7.27
Non-earning assets 59,650
----------
Total assets $889,260
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits:
Savings and interest bearing
transaction $276,386 $ 1,139 1.65%
Time deposits of $100,000 or more 177,590 1,178 2.66
Other time deposits 164,846 1,194 2.91
---------- ----------
Total interest bearing deposits 618,822 3,511 2.28
Repurchase agreements with customers 20,123 80 1.59
Other borrowings 90,789 1,152 5.09
---------- ----------
Total interest bearing liabilities 729,734 4,743 2.61
Non-interest liabilities:
Non-interest bearing deposits 76,657
Other non-interest bearing
liabilities 4,136
----------
Total liabilities 810,527
Trust preferred securities 17,250
Stockholders' equity 61,483
----------
Total liabilities and
stockholders' equity $889,260
==========
Interest rate spread - FTE 4.66%
----------
Net interest income - FTE $10,289
==========
Net interest margin - FTE 4.97%
Six Months Ended
June 30, 2002
--------------------------------
Average Income/ Yield/
Balance Expense Rate
---------- ---------- --------
ASSETS
Earnings assets:
Interest bearing deposits and federal
funds sold $ 289 $ 9 6.38%
Investment securities:
Taxable 180,540 5,154 5.76
Tax-exempt - FTE 14,336 540 7.59
Loans -FTE (net of unearned income) 621,210 23,848 7.74
--------- ----------
Total earnings assets 816,375 29,551 7.30
Non-earning assets 59,556
---------
Total assets $875,931
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits:
Savings and interest bearing
transaction $259,985 $ 2,077 1.61%
Time deposits of $100,000 or more 182,362 2,584 2.86
Other time deposits 167,502 2,683 3.23
--------- ----------
Total interest bearing deposits 609,849 7,344 2.43
Repurchase agreements with customers 17,828 136 1.54
Other borrowings 91,966 2,310 5.06
--------- ----------
Total interest bearing liabilities 719,643 9,790 2.74
Non-interest liabilities:
Non-interest bearing deposits 75,249
Other non-interest bearing
liabilities 4,346
---------
Total liabilities 799,238
Trust preferred securities 17,250
Stockholders' equity 59,443
---------
Total liabilities and
stockholders' equity $875,931
=========
Interest rate spread - FTE 4.56%
----------
Net interest income - FTE $19,761
==========
Net interest margin - FTE 4.88%
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