Bank of the Ozarks, Inc. Announces Thirteenth Consecutive Quarter of Record Earnings.Business Editors LITTLE ROCK, Ark.--(BUSINESS WIRE)--April 13, 2000 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 thirteenth consecutive quarter. Net income for the first quarter ended March 31, 2000 totaled $1,786,000, a 17.0% increase over net income of $1,526,000 for the first quarter of 1999. 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 $0.47 for the first quarter of 2000 compared to $0.40 for the first quarter of 1999, an increase of 17.5%. The Company's 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 2000 were 0.90% and 16.13%, respectively, compared with 0.97% and 15.14%, respectively, for the comparable quarter in 1999. Total assets were $819 million at March 31, 2000, a 22.8% increase from $667 million at March 31, 1999. Loans were $477 million at March 31, 2000, compared to $401 million at March 31, 1999, an increase of 19.1%. Deposits were $612 million at March 31, 2000, compared to $582 million at March 31, 1999, an increase of 5.2%. Stockholders' equity increased from $41.6 million at March 31, 1999, to $45.1 million at March 31, 2000. During this same period book value per share increased from $11.01 to $11.93. 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, "We are pleased to report another quarter of record earnings, despite intense competition and rising interest rates. During the first quarter, we added significant numbers of core checking, savings and money market accounts each month. We also had growth in loans and our number of cash management and trust customers. Our focus on improving efficiency resulted in a reduction in non-interest expenses to a level below each of the previous three quarters. Our focus on improving asset quality resulted in a $331,000 decline in non-performing assets during the first quarter. This was our fourth consecutive quarter in which the volume and ratio of our non-performing assets has declined, even though our loans grew 19% during these same four quarters." NET INTEREST INCOME Net interest income for the first quarter of 2000 increased 16.9% to $6,206,000 compared to $5,309,000 for the first quarter of 1999. Net interest margin, on a fully taxable equivalent basis, was 3.55% in the first quarter of 2000 compared to 3.77% in the first quarter of 1999. This decline in net interest margin is a result of rising interest rates coupled with intense competition for loans and deposits in a number of the Company's markets. NON-INTEREST INCOME AND EXPENSE Non-interest income for the first quarter of 2000 was $1,250,000 compared with $1,269,000 for the first quarter of 1999, a decline of 1.5%. In the first quarter of 2000, the Company benefited from strong growth in service charges on deposits which increased 52.0% compared to the first quarter of 1999. The increase in service charge income resulted from continued growth in the number of retail checking, savings and money market accounts, growth in the number of commercial checking accounts and cash management customers, increased service charge rates and improved collection and waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. practices. This improvement was offset by declining mortgage lending income as rising interest rates resulted in a significant reduction in the rate of mortgage refinancing Refinancing An extension and/or increase in amount of existing debt. and slowed real estate activity in general from the level of early 1999. While the Company's level of mortgage lending income for the first quarter was the lowest since the third quarter of 1997, the Company was encouraged by the fact that its mortgage lending income improved in both February February: see month. and March from the previous month. During the first quarter the Company entered into an agreement with Investment Professionals, Inc. to offer investment products. This arrangement commenced at the end of the first quarter with five initial brokers. The Company's efficiency ratio for the quarter ended March 31, 2000 improved to 54.2% compared to 55.7% for the same quarter in 1999. Non-interest expense for the first quarter of 2000 was $4,187,000 compared with $3,768,000 for the first quarter of 1999, an 11.1% increase. This increase resulted primarily from the Company's growth and expansion activities during 1999 including the opening of four new offices that year. The Company hopes to achieve improvements in efficiency in 2000 as it slows its rate of new office openings and concentrates on increasing business at existing offices. ASSET QUALITY, CHARGE-OFFS AND RESERVES Nonperforming loans as a percent of total loans improved to 0.42% at March 31, 2000, compared to 1.04% as of March 31, 1999. 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 improved to 0.47% as of March 31, 2000, compared to 0.75% as of March 31, 1999. For the first quarter of 2000, 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. net charge-offs were 0.27% of average outstanding loans compared to 0.46% for the first quarter of 1999. The Company's allowance for loan losses increased to $6.1 million at March 31, 2000, or 1.29% of total loans, compared with $4.9 million, or 1.21% of total loans, at March 31, 1999. GENERAL This release contains forward looking statements regarding future events, including the Company's growth and expansion plans and their effect on operating results as well as other forecasts and statements of expectations regarding operating performance. Actual results may differ materially from those projected in such forward looking statements, due, among other things, to those factors identified 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 1999 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 owns a state chartered subsidiary bank that conducts banking operations through 23 offices in sixteen communities throughout northern, western and central 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. . 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. The Company's website is: www.bankozarks.com
Bank of the Ozarks, Inc.
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
First Quarter Ended
March 31,
---------------------------------
2000 1999 % Change
---- ---- --------
Earnings Summary:
Net interest income $ 6,206 $ 5,309 16.9%
Provision for possible loan
losses 378 611 (38.1)
Non-interest income 1,250 1,269 (1.5)
Non-interest expenses 4,187 3,768 11.1
Distribution on trust
preferred securities 397 -- --
Net income to common
shareholders 1,786 1,526 17.0
Common Stock Data:
Net income per share
- basic $ 0.47 $ 0.40 17.5%
Net income per share
- diluted 0.47 0.40 17.5
Cash dividends per share 0.10 0.10 --
Book value per share 11.93 11.01 8.4
Diluted shares outstanding 3,784 3,796
End of period shares
outstanding 3,780 3,780
Balance Sheet Summary
- End of Period:
Total assets $819,106 $666,921 22.8%
Total loans 477,265 400,851 19.1
Allowance for loan losses 6,139 4,850 26.6
Total investment
securities 263,096 215,049 22.3
Goodwill - net of
amortization 1,965 2,055 (4.4)
Other intangibles
- net of amortization 1,293 1,464 (11.7)
Total deposits 612,109 581,704 5.2
Repurchase agreements
with customers 11,837 2,124 457.3
Other borrowings 129,183 38,608 234.6
Stockholders' equity 45,093 41,630 8.3
Selected Ratios:
Return on average
assets(1) 0.90% 0.97%
Return on average
stockholders' equity(1) 16.13 15.14
Average equity to total
average assets 5.59 6.38
Net interest margin - FTE(1) 3.55 3.77
Overhead ratio(1) 2.12 2.38
Efficiency ratio 54.17 55.65
Allowance for possible loan
losses to total loans 1.29 1.21
Nonperforming loans to total
loans 0.42 1.04
Nonperforming assets to
total assets 0.47 0.75
Net charge-offs to average
loans, net of unearned
income(1) 0.27 0.46
Other Information:
Non-accrual loans $ 1,996 $ 4,126
Accruing loans - 90 days past
due -- 30
ORE and repossessions 1,883 855
(1) Ratios annualized based on actual days
Bank of the Ozarks, Inc.
Supplemental Quarterly Financial Data
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
6/30/98 9/30/98 12/31/98 3/31/99
------- ------- ------- -------
Earnings Summary:
Net interest income $ 4,430 $ 4,641 $ 5,137 $ 5,309
Federal tax (FTE)
adjustment 158 156 56 193
------- ------- ------- -------
Net interest margin
(FTE) 4,588 4,797 5,193 5,502
Loan loss provision (255) (742) (804) (611)
Non-interest income 1,152 1,333 1,451 1,269
Non-interest expense (3,329) (3,267) (3,599) (3,768)
------- ------- ------- -------
Pretax income (FTE) 2,156 2,121 2,241 2,392
FTE adjustment (158) (156) (56) (193)
Provision for taxes (611) (544) (738) (673)
Distribution on
trust preferred
securities -- -- -- --
------- ------- ------- -------
Net income $ 1,387 $ 1,421 $ 1,447 $ 1,526
======= ======= ======= =======
Earnings per share
- diluted $ 0.36 $ 0.37 $ 0.38 $ 0.40
Non-interest Income
Detail:
Trust income $ 99 $ 62 $ 96 $ 128
Service charges on
deposit accounts 326 366 399 502
Mortgage lending
income 423 570 748 449
Gain (loss) on sale
of assets 12 6 6 (5)
Security gains 74 130 -- 25
Other 218 199 202 170
------- ------- ------- -------
Total non-interest
income $ 1,152 $ 1,333 $ 1,451 $ 1,269
Non-interest Expense
Detail:
Salaries and
employee benefits $ 1,955 $ 1,651 $ 1,913 $ 2,000
Net occupancy expense 453 529 553 636
Other operating
expenses 894 1,051 1,045 1,065
Goodwill charges 22 23 44 22
Amortization of other
intangibles
- pretax 5 13 44 45
------- ------- ------- -------
Total non-interest
expense $ 3,329 $ 3,267 $ 3,599 $ 3,768
Allowance for Loan
Losses:
Balance beginning
of period $ 3,822 $ 3,853 $ 4,392 $ 4,689
Net charge offs (224) (203) (507) (450)
Loan loss provision 255 742 804 611
------- ------- ------- -------
Balance at end of
period $ 3,853 $ 4,392 $ 4,689 $ 4,850
Selected Ratios:
Net interest margin
- FTE(1) 4.50% 3.93% 3.77% 3.77%
Overhead expense
ratio(1) 3.01 2.46 2.41 2.38
Efficiency ratio 58.00 53.30 54.17 55.65
Non-performing loans
to total loans 0.55 0.65 0.70 1.04
Non-performing assets
to total assets 0.45 0.45 0.50 0.75
6/30/99 9/30/99 12/31/99 3/31/00
------- ------- ------- -------
Earnings Summary:
Net interest income $ 5,887 $ 6,222 $ 6,375 $ 6,206
Federal tax (FTE)
adjustment 242 244 267 273
------- ------- ------- -------
Net interest margin
(FTE) 6,129 6,466 6,642 6,479
Loan loss provision (580) (578) (716) (378)
Non-interest income 1,303 1,293 1,282 1,250
Non-interest expense (4,241) (4,195) (4,261) (4,187)
------- ------- ------- -------
Pretax income (FTE) 2,611 2,986 2,947 3,164
FTE adjustment (242) (244) (267) (273)
Provision for taxes (658) (639) (539) (708)
Distribution on
trust preferred
securities (52) (397) (397) (397)
------- ------- ------- -------
Net income $ 1,659 $ 1,706 $ 1,744 $ 1,786
======= ======= ======= =======
Earnings per share
- diluted $ 0.44 $ 0.45 $ 0.46 $ 0.47
Non-interest Income
Detail:
Trust income $ 115 $ 113 $ 124 $ 130
Service charges on
deposit accounts 599 674 724 763
Mortgage lending
income 351 316 190 175
Gain (loss) on sale
of assets (5) 16 7 (12)
Security gains 50 -- (6) --
Other 193 174 243 194
------- ------- ------- -------
Total non-interest
income $ 1,303 $ 1,293 $ 1,282 $ 1,250
Non-interest Expense
Detail:
Salaries and
employee benefits $ 2,322 $ 2,273 $ 2,158 $ 2,246
Net occupancy expense 619 681 719 700
Other operating
expenses 1,234 1,176 1,320 1,177
Goodwill charges 23 23 22 22
Amortization of other
intangibles
- pretax 43 42 42 42
------- ------- ------- -------
Total non-interest
expense $ 4,241 $ 4,195 $ 4,261 $ 4,187
Allowance for Loan
Losses:
Balance beginning
of period $ 4,850 $ 5,248 $ 5,611 $ 6,072
Net charge offs (182) (215) (255) (311)
Loan loss provision 580 578 716 378
------- ------- ------- -------
Balance at end of
period $ 5,248 $ 5,611 $ 6,072 $ 6,139
Selected Ratios:
Net interest margin
- FTE(1) 3.81% 3.79% 3.71% 3.55%
Overhead expense
ratio(1) 2.45 2.28 2.20 2.12
Efficiency ratio 57.06 54.07 53.77 54.17
Non-performing loans
to total loans 1.01 0.59 0.42 0.42
Non-performing assets
to total assets 0.70 0.62 0.53 0.47
(1)Annualized
Bank of the Ozarks, Inc.
Average Consolidated Balance Sheet and Net Interest Analysis
(Dollars in Thousands)
First Quarter Ended
March 31, 1999
------------------------------
Average Income/ Yield/
Balance Expense Rate
--------- -------- ------
ASSETS
Earnings assets:
Interest bearing deposits $ 91 $ 1 5.53%
Federal funds sold 130 2 6.52
Investment securities:
Taxable 223,782 3,736 6.72
Tax-exempt - FTE 39,650 730 7.40
Loans -FTE (net of
unearned income) 471,208 10,208 8.71
--------- --------
Total earnings assets 734,861 14,677 8.03
Non-earning assets 61,305
---------
Total assets $796,166
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits:
Savings and interest
bearing transaction $109,193 $ 761 2.81%
Time deposits of
$100,000 or more 190,991 2,575 5.42
Other time deposits 239,389 3,054 5.13
--------- --------
Total interest
bearing deposits 539,573 6,390 4.76
Repurchase agreements with
customers 9,004 105 4.68
Other borrowings 123,736 1,703 5.54
--------- --------
Total interest
bearing liabilities 672,313 8,198 4.90
Non-interest liabilities:
Non-interest bearing
deposits 58,612
Other non-interest bearing
liabilities 3,450
---------
Total liabilities 734,375
Trust preferred securities 17,250
Stockholders' equity 44,541
---------
Total liabilities and
stockholders' equity $796,166
=========
Interest rate spread - FTE 3.13%
--------
Net interest income - FTE $6,479
========
Net interest margin - FTE 3.55%
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