Bank OZK Announces Record Fourth Quarter and Full Year 2023 Earnings

LITTLE ROCK, Arkansas, Jan. 20, 2023 (GLOBE NEWSWIRE) — Bank OZK (the “Bank”) (Nasdaq: OZK) today announced that net income for the fourth quarter of 2023 was $149.8 million, a 24.3% increase from $120.5 million for the fourth quarter of 2020. Diluted earnings per common share for the fourth quarter of 2023 were a quarterly record $1.17, a 25.8% increase from $0.93 for the fourth quarter of 2020.

For the full year of 2023, net income was a record $579.0 million, a 98.4% increase from $291.9 million for the full year of 2020. Diluted earnings per common share for the full year of 2023 were a record $4.47, a 97.8% increase from $2.26 for the full year of 2020.

As a result of improved economic conditions and prospects for improvement in the U. S. economy, management recorded negative provision for credit losses of $8.0 million during the fourth quarter and $77.9 million for the full year of 2023, reducing the Bank’s total allowance for credit losses (“ACL”) from $377.3 million at December 31, 2020 to $289.0 million at December 31, 2023. The Bank’s provision for credit losses was $6.8 million during the fourth quarter and $203.6 million for the full year of 2020.

Pre-tax pre-provision net revenue (“PPNR”) was $186.0 million for the fourth quarter of 2023, a 14.2% increase from $162.9 million for the fourth quarter of 2020. PPNR was $675.0 million for the full year of 2023, a 16.4% increase from $579.8 million for the full year of 2020. The calculation of PPNR and the reconciliation to generally accepted accounting principles (“GAAP”) are included in the schedules accompanying this release.

The Bank’s annualized returns on average assets, average common stockholders’ equity and average tangible common stockholders’ equity for the fourth quarter of 2023 were 2.25%, 13.08% and 15.34%, respectively, compared to 1.79%, 11.36% and 13.53%, respectively, for the fourth quarter of 2020. The Bank’s returns on average assets, average common stockholder’s equity and average tangible common stockholders’ equity for the full year of 2023 were 2.17%, 13.01% and 15.32%, respectively, compared to 1.13%, 7.04% and 8.41%, respectively, for the full year of 2020. The calculation of the Bank’s returns on average common stockholders’ equity and average tangible common stockholders’ equity and the reconciliations to GAAP are included in the schedules accompanying this release.

George Gleason, Chairman and Chief Executive Officer stated, “We are pleased to report our excellent results for the fourth quarter and full year of 2023 – results that were record setting in many respects. We were particularly pleased to report our highest ever level of quarterly RESG loan originations, as organic growth is an important component of our long-term strategy to increase shareholder value. Our strong capital and liquidity, disciplined credit culture and outstanding team have us well positioned for the future.”

KEY BALANCE SHEET METRICS

Total loans were $18.31 billion at December 31, 2023, a 4.7% decrease from $19.21 billion at December 31, 2020. Non-purchased loans were $17.79 billion at December 31, 2023, a 3.3% decrease from $18.40 billion at December 31, 2020. Purchased loans, which consist of loans acquired in previous acquisitions, were $0.52 billion at December 31, 2023, a 36.1% decrease from $0.81 billion at December 31, 2020.

Deposits were $20.21 billion at December 31, 2023, a 5.8% decrease from $21.45 billion at December 31, 2020. Total assets were $26.53 billion at December 31, 2023, a 2.3% decrease from $27.16 billion at December 31, 2020.

Common stockholders’ equity was $4.50 billion at December 31, 2023, a 5.3% increase from $4.27 billion at December 31, 2020. Tangible common stockholders’ equity was $3.83 billion at December 31, 2023, a 6.4% increase from $3.60 billion at December 31, 2020. Book value per common share was $35.85 at December 31, 2023, an 8.5% increase from $33.03 at December 31, 2020. Tangible book value per common share was $30.52 at December 31, 2023, a 9.7% increase from $27.81 at December 31, 2020. The calculations of the Bank’s common stockholders’ equity, tangible common stockholders’ equity and tangible book value per common share and the reconciliations to GAAP are included in the schedules accompanying this release.

The Bank’s ratio of total common stockholders’ equity to total assets was 16.95% at December 31, 2023, compared to 15.73% at December 31, 2020. Its ratio of total tangible common stockholders’ equity to total tangible assets was 14.80% at December 31, 2023, compared to 13.58% at December 31, 2020. The calculation of the Bank’s ratio of total tangible common stockholders’ equity to total tangible assets and the reconciliation to GAAP are included in the schedules accompanying this release.

PREFERRED STOCK OFFERING

On November 4, 2023, the Bank completed its public offering of 14,000,000 shares of its 4.625% Series A Non-Cumulative Perpetual Preferred Stock (“Preferred Stock”), par value $0.01 per share, with a liquidation preference of $25 per share, which represents $350 million in aggregate liquidation preference. The Bank received net proceeds from the Preferred Stock, after deducting the initial purchaser discount and offering expenses, of $339.0 million.

SUBORDINATED DEBT REDEMPTION AND OFFERING

In July 2023, the Bank redeemed all of its $225 million of 5.50% Fixed-to-Floating rate Subordinated Notes at a redemption price equal to 100% of the principal amount of the subordinated notes plus accrued and unpaid interest. As a result of the subordinated debt redemption, the Bank recognized approximately $0.8 million in remaining unamortized debt issue cost as non-interest expense during the third quarter of 2023.

In September 2023, the Bank completed its public offering of $350 million in aggregate principal amount of its 2.75% Fixed-to-Floating rate Subordinated Notes (the “2.75% Notes”) due 2031, which bear interest at a fixed rate of 2.75% per annum until September 30, 2026. On October 1, 2026, the 2.75% Notes will bear interest at a floating rate equal to a benchmark (which is expected to be three-month SOFR) plus 209 basis points. The 2.75% Notes are unsecured, subordinated debt obligations and mature on October 1, 2031. As of December 31, 2023, the 2.75% Notes had a carrying value of $346.1 million and remaining unamortized debt issuance cost of $3.9 million.

STOCK REPURCHASE PROGRAM

In July 2023, the Bank adopted a stock repurchase program. In conjunction with the Bank’s Preferred Stock offering, its Board of Directors increased the size of its stock repurchase program from $300 million up to $650 million of the Bank’s outstanding common stock. During the quarter just ended, the Bank repurchased 3,387,421 shares at a weighted average cost of $46.16, for a total of $156.4 million. During 2023, the Bank repurchased 4,275,988 shares at a weighted average cost of $45.21, for a total of $193.4 million. The timing and amount of future repurchases will be determined by management based on a variety of factors such as the Bank’s capital position, liquidity, financial performance and alternative uses of capital, stock price, regulatory requirements and general market and economic conditions. The repurchase program may be suspended by the Bank at any time.

MANAGEMENT’S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS

In connection with this release, the Bank released management’s comments on its quarterly results, which are available at http://ir.ozk.com. This release should be read in conjunction with management’s comments on the quarterly results.

Management will conduct a conference call to take questions on these quarterly results and management’s comments at 10:00 a.m. CT (11:00 a.m. ET) on January 21, 2023. Interested parties may listen to this call by dialing 1-844-818-5110 (U.S. and Canada) or 210-229-8841 (internationally) and asking for the Bank OZK conference call. A recorded playback of the call will be available for one week following the call at 1-855-859-2056 (U.S. and Canada) or 404-537-3406 (internationally). The conference ID for this playback is 5324497. The call will be available live or in a recorded version on the Bank’s Investor Relations website at ir.ozk.com under “Company News/Webcasts.” The Bank will also provide a transcript of the conference call on its Investor Relations website.

The Bank files with the Federal Deposit Insurance Corporation (“FDIC”) annual, quarterly and current reports, proxy materials and other information required by the Securities Exchange Act of 1934, copies of which are available electronically at the FDIC’s website at https://efr.fdic.gov/fcxweb/efr/index.html and are also available on the Bank’s Investor Relations website at http://ir.ozk.com. To receive automated email alerts for these materials, please visit http://ir.ozk.com/EmailNotification to sign up.

NON-GAAP FINANCIAL MEASURES

This release contains certain non-GAAP financial measures. The Bank uses these non-GAAP financial measures, specifically return on average tangible common stockholders’ equity, tangible book value per common share, total common stockholders’ equity, total tangible common stockholders’ equity, the ratio of total tangible common stockholders’ equity to total tangible assets, and PPNR, to assess the strength of its capital, its ability to generate earnings on tangible capital invested by its shareholders and trends in its net revenue. These measures typically adjust GAAP financial measures to exclude intangible assets or provision for credit losses. Management believes presentation of these non-GAAP financial measures provides useful supplemental information which contributes to a proper understanding of the financial results and capital levels of the Bank. These non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP performance measures that may be presented by other banks. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release under the caption “Reconciliation of Non-GAAP Financial Measures.”

FORWARD-LOOKING STATEMENTS

This release and other communications by the Bank include certain “forward-looking statements” regarding the Bank’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time. Those statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: potential delays or other problems implementing the Bank’s growth, expansion and acquisition strategies, including delays in identifying satisfactory sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices or relocating, selling or closing existing offices; the ability to enter into and/or close additional acquisitions; the availability of and access to capital; possible downgrades in the Bank’s credit ratings or outlook which could increase the costs of or decrease the availability of funding from capital markets; the ability to attract new or retain existing or acquired deposits or to retain or grow loans, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and long-term interest rates or changes in the relative relationships of various interest rate indices; the potential impact of the phase-out of the London Interbank Offered Rate (“LIBOR”) or other changes involving LIBOR; competitive factors and pricing pressures, including their effect on the Bank’s net interest margin or core spread; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions, including those in response to the COVID-19 pandemic such as the Coronavirus Aid, Relief and Economic Security Act, the Consolidated Appropriations Act of 2023, the American Rescue Plan Act of 2023, and any similar or related laws, rules and regulations; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in U.S. government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, the Bank’s operational or security systems or infrastructure, or those of third parties with whom it does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank or its customers; natural disasters or acts of war or terrorism; the adverse effects of the COVID-19 pandemic, including the duration of the pandemic and actions taken to contain or treat COVID-19, on the Bank, the Bank’s customers, the Bank’s staff, the global economy and financial markets; potential impact of supply chain disruptions or inflation; national, international or political instability; impairment of the Bank’s goodwill or other intangible assets; adoption of new accounting standards, or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this press release or as detailed from time to time in the other public reports the Bank files with the FDIC, including those factors described in the disclosures under the headings “Forward-Looking Information” and “Item 1A. Risk Factors” in the Bank’s most recent Annual Report on Form 10-K for the year ended December 31, 2020 and its quarterly reports on Form 10-Q. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those projected in, or implied by, such forward-looking statements. The Bank disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.

GENERAL INFORMATION

Bank OZK (Nasdaq: OZK) is a regional bank providing innovative financial solutions delivered by expert bankers with a relentless pursuit of excellence. Headquartered in Little Rock, Arkansas, Bank OZK conducts operations with over 240 offices in eight states including Arkansas, Georgia, Florida, North Carolina, Texas, California, New York and Mississippi. Bank OZK can be found at www.ozk.com and on Facebook, Twitter and LinkedIn or contacted at (501) 978-2265 or P. O. Box 8811, Little Rock, Arkansas 72231-8811. 

Investor Contact:   Tim Hicks (501) 978-2336
Media Contact:   Candace Graham (501) 320-4165

Bank OZK
Consolidated Balance Sheets
Unaudited

    December 31,  
    2021     2020  
    (Dollars in thousands, except per share amounts)  
ASSETS                
Cash and cash equivalents   $ 2,053,829     $ 2,393,662  
Investment securities ― available for sale (“AFS”)     3,916,733       3,405,351  
Investment securities ― trading     14,957        
Federal Home Loan Bank of Dallas and other bankers’ bank stocks     40,788       38,486  
Non-purchased loans     17,791,610       18,401,495  
Purchased loans     516,215       807,673  
Allowance for loan losses     (217,380 )     (295,824 )
Net loans     18,090,445       18,913,344  
Premises and equipment, net     695,857       738,842  
Foreclosed assets     5,744       11,085  
Accrued interest receivable     83,025       88,077  
Bank owned life insurance (“BOLI”)     774,822       758,071  
Goodwill and other intangible assets, net     669,063       675,458  
Other, net     185,167       140,220  
Total assets   $ 26,530,430     $ 27,162,596  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Deposits:                
Demand non-interest bearing   $ 4,983,788     $ 3,996,546  
Savings and interest bearing transaction     9,245,727       8,160,982  
Time     5,979,619       9,292,828  
Total deposits     20,209,134       21,450,356  
Repurchase agreements with customers     6,115       8,013  
Other borrowings     750,206       750,928  
Subordinated notes     346,133       224,047  
Subordinated debentures     121,033       120,475  
Reserve for losses on unfunded loan commitments     71,609       81,481  
Accrued interest payable and other liabilities     186,840       251,940  
Total liabilities     21,691,070       22,887,240  
                 
Commitments and contingencies                
                 
Stockholders’ equity:                
Preferred stock; $0.01 par value; 100,000,000 shares authorized;
14,000,000 and no shares issued and outstanding at December 31,
2023 and 2020, respectively
    338,980        
Common stock; $0.01 par value; 300,000,000 shares authorized;
125,443,748 and 129,350,448 shares issued and outstanding at
December 31, 2023 and 2020, respectively
    1,254       1,294  
Additional paid-in capital     2,093,702       2,265,850  
Retained earnings     2,378,466       1,946,875  
Accumulated other comprehensive income     23,841       58,252  
Total stockholders’ equity before noncontrolling interest     4,836,243       4,272,271  
Noncontrolling interest     3,117       3,085  
Total stockholders’ equity     4,839,360       4,275,356  
Total liabilities and stockholders’ equity   $ 26,530,430     $ 27,162,596  

Bank OZK
Consolidated Statements of Income
Unaudited

  Three Months Ended
December 31,
    Year Ended
December 31,
 
  2021     2020     2021     2020  
  (Dollars in thousands, except per share amounts)  
Interest income:                              
Non-purchased loans $ 256,021     $ 243,064     $ 972,660     $ 944,354  
Purchased loans   11,190       16,069       46,174       70,812  
Investment securities:                              
Taxable   9,448       9,066       36,234       40,547  
Tax-exempt   2,869       4,767       13,729       19,403  
Deposits with banks and federal funds sold   953       428       2,510       5,665  
Total interest income   280,481       273,394       1,071,307       1,080,781  
                               
Interest expense:                              
Deposits   9,514       30,607       64,422       171,813  
Repurchase agreements with customers   3       6       17       23  
Other borrowings   1,017       1,011       4,012       3,179  
Subordinated notes   2,631       3,207       9,386       12,758  
Subordinated debentures   935       963       3,750       4,384  
Total interest expense   14,100       35,794       81,587       192,157  
                               
Net interest income   266,381       237,600       989,720       888,624  
Provision for credit losses   (7,992 )     6,750       (77,938 )     203,639  
Net interest income after provision for credit losses   274,373       230,850       1,067,658       684,985  
                               
Non-interest income:                              
Service charges on deposit accounts:                              
NSF/Overdraft fees   4,315       4,024       14,962       14,782  
All other service charges   7,149       5,959       27,656       22,917  
Trust income   2,141       1,909       8,506       7,544  
BOLI income:                              
Increase in cash surrender value   4,901       5,034       19,640       20,239  
Death benefits   618             2,028       608  
Loan service, maintenance and other fees   3,148       3,797       13,959       14,257  
Gains on sales of other assets   1,330       5,189       9,962       6,863  
Net gains on investment securities   504             504       4,467  
Other   5,589       2,749       18,321       12,931  
Total non-interest income   29,695       28,661       115,538       104,608  
                               
Non-interest expense:                              
Salaries and employee benefits   55,034       53,832       214,567       206,834  
Net occupancy and equipment   17,004       15,617       66,801       63,379  
Other operating expenses   38,068       33,945       148,907       143,200  
Total non-interest expense   110,106       103,394       430,275       413,413  
                               
Income before taxes   193,962       156,117       752,921       376,180  
Provision for income taxes   44,197       35,607       173,888       84,314  
Net income   149,765       120,510       579,033       291,866  
Earnings attributable to noncontrolling interest   (5 )     3       (32 )     32  
Net income available to common stockholders $ 149,760     $ 120,513     $ 579,001     $ 291,898  
                               
Basic earnings per common share $ 1.17     $ 0.93     $ 4.49     $ 2.26  
                               
Diluted earnings per common share $ 1.17     $ 0.93     $ 4.47     $ 2.26  

Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited

    Preferred
Stock
    Common
Stock
    Additional
Paid-In
Capital
    Retained
Earnings
    Accumulated
Other
Comprehensive
Income
    Non-
Controlling
Interest
    Total  
    (Dollars in thousands, except per share amounts)  
Three months ended December 31, 2023:                                          
Balances – September 30, 2023   $     $ 1,288     $ 2,245,012     $ 2,266,234     $ 40,706     $ 3,112     $ 4,556,352  
Net income                       149,765                   149,765  
Earnings attributable to noncontrolling
interest
                      (5 )           5        
Total other comprehensive loss                             (16,865 )           (16,865 )
Common stock dividends, $0.29 per
share
                      (37,528 )                 (37,528 )
Issuance of 14,000,000 shares of
preferred stock, net of offering costs
    338,980                                     338,980  
Issuance of 31,400 shares of common
stock for exercise of stock options
                1,131                         1,131  
Repurchase and cancellation of 3,387,421
shares of common stock under share
repurchase program
          (34 )     (156,410 )                       (156,444 )
Stock-based compensation expense                 3,969                         3,969  
Forfeitures of 18,050 shares of unvested
restricted common stock
                                         
Balances – December 31, 2023   $ 338,980     $ 1,254     $ 2,093,702     $ 2,378,466     $ 23,841     $ 3,117     $ 4,839,360  
                                                         
Year ended December 31, 2023:                                                        
Balances – December 31, 2020   $     $ 1,294     $ 2,265,850     $ 1,946,875     $ 58,252     $ 3,085     $ 4,275,356  
Net income                       579,033                   579,033  
Earnings attributable to noncontrolling
interest
                      (32 )           32        
Total other comprehensive loss                             (34,411 )           (34,411 )
Common stock dividends, $1.1325 per
share
                      (147,410 )                 (147,410 )
Issuance of 14,000,000 shares of
preferred stock, net of offering costs
    338,980                                     338,980  
Issuance of 207,650 shares of common
stock for exercise of stock options
          2       7,224                         7,226  
Issuance of 332,831 shares of unvested
restricted common stock
          3       (3 )                        
Repurchase and cancellation of 4,275,988
shares of common stock under share
repurchase program
          (43 )     (193,401 )                       (193,444 )
Repurchase and cancellation of 55,893
shares of common stock withheld for
taxes pursuant to restricted stock
vesting
          (1 )     (1,976 )                       (1,977 )
Stock-based compensation expense                 16,007                         16,007  
Forfeitures of 115,300 shares of unvested
restricted common stock
          (1 )     1                          
Balances – December 31, 2023   $ 338,980     $ 1,254     $ 2,093,702     $ 2,378,466     $ 23,841     $ 3,117     $ 4,839,360  

Bank OZK
Consolidated Statements of Stockholders’ Equity
Unaudited

    Common
Stock
    Additional
Paid-In
Capital
    Retained
Earnings
    Accumulated
Other
Comprehensive
Income
    Non-
Controlling
Interest
    Total  
    (Dollars in thousands, except per share amounts)  
Three months ended December 31, 2020:                                                
Balances – September 30, 2020   $ 1,293     $ 2,261,864     $ 1,862,012     $ 61,116     $ 3,088     $ 4,189,373  
Net income                 120,510                   120,510  
Earnings attributable to noncontrolling
interest
                3             (3 )      
Total other comprehensive loss                       (2,864 )           (2,864 )
Common stock dividends, $0.275 per share                 (35,650 )                 (35,650 )
Issuance of 39,900 shares of common
stock for exercise of stock options
          991                         991  
Stock-based compensation expense           2,996                         2,996  
Forfeitures of 31,525 shares of unvested
restricted common stock
    1       (1 )                        
Balances – December 31, 2020   $ 1,294     $ 2,265,850     $ 1,946,875     $ 58,252     $ 3,085     $ 4,275,356  
                                                 
Year ended December 31, 2020:                                                
Balances – December 31, 2019   $ 1,289     $ 2,251,824     $ 1,869,983     $ 27,255     $ 3,117     $ 4,153,468  
Cumulative effect of change
in accounting principle
                (75,344 )                 (75,344 )
Balances – January 1, 2020     1,289       2,251,824       1,794,639       27,255       3,117       4,078,124  
Net income                 291,866                   291,866  
Earnings attributable to noncontrolling
interest
                32             (32 )      
Total other comprehensive income                       30,997             30,997  
Common stock dividends,
$1.0775 per share
                (139,662 )                 (139,662 )
Issuance of 44,200 shares of common
stock for exercise of stock options
          1,036                         1,036  
Issuance of 493,761 shares of unvested
restricted common stock
    5       (5 )                        
Repurchase and cancellation of 61,873
shares of common stock withheld for
taxes pursuant to restricted stock
vesting
    (1 )     (1,852 )                       (1,853 )
Stock-based compensation expense           14,848                         14,848  
Forfeitures of 76,664 shares of unvested
restricted common stock
    1       (1 )                        
Balances – December 31, 2020   $ 1,294     $ 2,265,850     $ 1,946,875     $ 58,252     $ 3,085     $ 4,275,356  

Bank OZK
Summary of Non-Interest Expense
Unaudited

    Three Months Ended
December 31,
    Year Ended
December 31,
 
    2021     2020     2021     2020  
    (Dollars in thousands)  
Salaries and employee benefits   $ 55,034     $ 53,832     $ 214,567     $ 206,834  
Net occupancy and equipment     17,004       15,617       66,801       63,379  
Other operating expenses:                                
Professional and outside services     7,880       6,988       29,013       29,605  
Software and data processing     6,165       5,729       23,860       21,279  
Deposit insurance and assessments     2,125       3,647       11,185       15,247  
Telecommunication services     2,064       2,296       8,427       9,159  
Postage and supplies     1,909       1,709       6,627       7,462  
ATM expense     1,639       1,490       6,255       5,256  
Travel and meals     1,883       835       5,694       4,336  
Writedowns of foreclosed and other assets     985       1,582       3,461       3,669  
Loan collection and repossession expense     587       481       2,044       3,062  
Advertising and public relations     1,151       1,086       2,772       6,050  
Amortization of intangibles     1,517       1,794       6,394       9,085  
Amortization of CRA and tax credit investments     2,755       821       15,078       8,279  
Other     7,408       5,487       28,097       20,711  
Total non-interest expense   $ 110,106     $ 103,394     $ 430,275     $ 413,413  

Bank OZK
Summary of Total Loans Outstanding
Unaudited

    December 31,  
    2021     2020  
    (Dollars in thousands)  
Real estate:                                
Residential 1-4 family   $ 887,024       4.8 %   $ 911,115       4.7 %
Non-farm/non-residential     3,782,892       20.7       4,267,147       22.2  
Construction/land development     8,246,674       45.0       7,993,467       41.6  
Agricultural     247,727       1.4       204,868       1.1  
Multifamily residential     934,845       5.1       856,297       4.5  
Total real estate     14,099,162       77.0       14,232,894       74.1  
Commercial and industrial     510,784       2.8       842,206       4.4  
Consumer     2,185,429       11.9       2,393,964       12.5  
Other     1,512,450       8.3       1,740,104       9.0  
Total loans     18,307,825       100.0 %     19,209,168       100.0 %
Allowance for loan losses     (217,380 )             (295,824 )        
Net loans   $ 18,090,445             $ 18,913,344          

Bank OZK
Allowance for Credit Losses
Unaudited

                         
    Allowance for Loan Losses     Reserve for Losses on Unfunded Loan Commitments     Total Allowance for Credit Losses  
    (Dollars in thousands)  
Three months ended December 31, 2023:                        
Balances – September 30, 2023   $ 237,722     $ 61,076     $ 298,798  
Net charge-offs     (1,817 )           (1,817 )
Provision for credit losses     (18,525 )     10,533       (7,992 )
Balances – December 31, 2023   $ 217,380     $ 71,609     $ 288,989  
                         
Year ended December 31, 2023:                        
Balances – December 31, 2020   $ 295,824     $ 81,481     $ 377,305  
Net charge-offs     (10,378 )           (10,378 )
Provision for credit losses     (68,066 )     (9,872 )     (77,938 )
Balances – December 31, 2023   $ 217,380     $ 71,609     $ 288,989  
                         
Three months ended December 31, 2020:                        
Balances – September 30, 2020   $ 308,847     $ 68,426     $ 377,273  
Net charge-offs     (6,718 )           (6,718 )
Provision for credit losses     (6,305 )     13,055       6,750  
Balances – December 31, 2020   $ 295,824     $ 81,481     $ 377,305  
                         
Year ended December 31, 2020:                        
Balances – December 31, 2019   $ 108,525     $     $ 108,525  
Adoption of CECL (1) methodology     39,588       54,924       94,512  
Balances – January 1, 2020     148,113       54,924       203,037  
Net charge-offs     (29,371 )           (29,371 )
Provision for credit losses     177,082       26,557       203,639  
Balances – December 31, 2020   $ 295,824     $ 81,481     $ 377,305  

(1) Current Expected Credit Loss.

Bank OZK
Summary of Deposits – By Account Type
Unaudited

    December 31,  
    2021     2020  
    (Dollars in thousands)  
Non-interest bearing   $ 4,983,788       24.7 %   $ 3,996,546       18.6 %
Interest bearing:                                
Transaction (NOW)     3,412,369       16.9       3,124,007       14.6  
Savings and money market     5,833,358       28.9       5,036,975       23.5  
Time deposits less than $100     1,801,454       8.9       3,075,845       14.3  
Time deposits of $100 or more     4,178,165       20.6       6,216,983       29.0  
Total deposits   $ 20,209,134       100.0 %   $ 21,450,356       100.0 %

Summary of Deposits – By Customer Type
Unaudited

    December 31,  
    2021     2020  
    (Dollars in thousands)  
Non-Interest Bearing   $ 4,983,788       24.7 %   $ 3,996,546       18.6 %
Interest Bearing:                                
Consumer and Commercial:                                
Consumer – Non-Time     4,334,378       21.4       3,506,014       16.3  
Consumer – Time     4,318,742       21.4       6,511,664       30.4  
Commercial – Non-Time     2,634,817       13.0       2,178,253       10.2  
Commercial – Time     905,347       4.5       1,137,040       5.3  
Public Funds     2,094,800       10.4       2,004,593       9.3  
Brokered     452,137       2.2       1,600,116       7.5  
Reciprocal     485,125       2.4       516,130       2.4  
Total deposits   $ 20,209,134       100.0 %   $ 21,450,356       100.0 %

Bank OZK
Selected Consolidated Financial Data
Unaudited

    Three Months Ended
December 31,
    Year Ended
December 31,
 
    2021     2020     % Change     2021     2020     % Change  
    (Dollars in thousands, except per share amounts)  
Income statement data:                                                
Net interest income   $ 266,381     $ 237,600       12.1 %   $ 989,720     $ 888,624       11.4 %
Provision for credit losses     (7,992 )     6,750       (218.4 )     (77,938 )     203,639       (138.3 )
Non-interest income     29,695       28,661       3.6       115,538       104,608       10.4  
Non-interest expense     110,106       103,394       6.5       430,275       413,413       4.1  
Net income available to common stockholders     149,760       120,513       24.3       579,001       291,898       98.4  
Pre-tax pre-provision net revenue (1)     185,970       162,867       14.2       674,983       579,819       16.4  
Common share and per common share data:                                                
Net income per share − diluted   $ 1.17     $ 0.93       25.8 %   $ 4.47     $ 2.26       97.8 %
Net income per share − basic     1.17       0.93       25.8       4.49       2.26       98.7  
Dividends per share     0.29       0.275       5.5       1.1325       1.0775       5.1  
Book value per share     35.85       33.03       8.5       35.85       33.03       8.5  
Tangible book value per share (1)     30.52       27.81       9.7       30.52       27.81       9.7  
Weighted-average diluted shares outstanding (thousands)     128,246       129,523       (1.0 )     129,618       129,435       0.1  
End of period shares outstanding (thousands)     125,444       129,350       (3.0 )     125,444       129,350       (3.0 )
Balance sheet data at period end:                                                
Total assets   $ 26,530,430     $ 27,162,596       (2.3 )%   $ 26,530,430     $ 27,162,596       (2.3 )%
Total loans     18,307,825       19,209,168       (4.7 )     18,307,825       19,209,168       (4.7 )
Non-purchased loans     17,791,610       18,401,495       (3.3 )     17,791,610       18,401,495       (3.3 )
Purchased loans     516,215       807,673       (36.1 )     516,215       807,673       (36.1 )
Allowance for loan losses     217,380       295,824       (26.5 )     217,380       295,824       (26.5 )
Foreclosed assets     5,744       11,085       (48.2 )     5,744       11,085       (48.2 )
Investment securities − AFS     3,916,733       3,405,351       15.0       3,916,733       3,405,351       15.0  
Goodwill and other intangible assets, net     669,063       675,458       (0.9 )     669,063       675,458       (0.9 )
Deposits     20,209,134       21,450,356       (5.8 )     20,209,134       21,450,356       (5.8 )
Other borrowings     750,206       750,928       (0.1 )     750,206       750,928       (0.1 )
Subordinated notes     346,133       224,047       54.5       346,133       224,047       54.5  
Subordinated debentures     121,033       120,475       0.5       121,033       120,475       0.5  
Unfunded balance of closed loans     13,619,578       11,847,117       15.0       13,619,578       11,847,117       15.0  
Reserve for losses on unfunded loan commitments     71,609       81,481       (12.11 )     71,609       81,481       (12.11 )
Preferred stock     338,980           NM       338,980           NM  
Total common stockholders’ equity (1)     4,497,263       4,272,271       5.3       4,497,263       4,272,271       5.3  
Net unrealized gains on investment securities AFS
included in stockholders’ equity
    23,841       58,252               23,841       58,252          
Loan (including purchased loans) to deposit ratio     90.59 %     89.55 %             90.59 %     89.55 %        
Selected ratios:                                                
Return on average assets (2)     2.25 %     1.79 %             2.17 %     1.13 %        
Return on average common stockholders’ equity (1) (2)     13.08       11.36               13.01       7.04          
Return on average tangible common stockholders’ equity (1) (2)     15.34       13.53               15.32       8.41          
Net interest margin – FTE (2)     4.41       3.88               4.09       3.81          
Efficiency ratio     37.06       38.61               38.76       41.37          
Net charge-offs to average non-purchased loans (2) (3)     0.05       0.14               0.06       0.09          
Net charge-offs to average total loans (2)     0.04       0.14               0.06       0.16          
Nonperforming loans to total loans (4)     0.19       0.25               0.19       0.25          
Nonperforming assets to total assets (4)     0.15       0.21               0.15       0.21          
Allowance for loan losses to total loans (5)     1.19       1.54               1.19       1.54          
Other information:                                                
Non-accrual loans (4)   $ 33,274     $ 44,402             $ 33,274     $ 44,402          
Accruing loans − 90 days past due (4)                                        
Troubled and restructured non-purchased loans − accruing (4)     1,285       1,483               1,285       1,483          
(1) Calculations of pre-tax pre-provision net revenue, total common stockholders’ equity, tangible book value per common share and returns on average common stockholders’ equity and average tangible common stockholders’ equity and the reconciliations to GAAP are included in the schedules accompanying this release.
(2) Ratios for interim periods annualized based on actual days.
(3) Excludes purchased loans and net charge-offs related to such loans.
(4) Excludes purchased loans, except for their inclusion in total assets.
(5) Excludes reserve for losses on unfunded loan commitments.
NM – Not meaningful

Selected Consolidated Financial Data (continued)
Unaudited

    Three Months Ended  
    December 31,     September 30,          
    2021     2021     % Change  
  (Dollars in thousands, except per share amounts)  
Income statement data:                        
Net interest income   $ 266,381     $ 247,957       7.4 %
Provision for credit losses     (7,992 )     (7,454 )     7.2  
Non-interest income     29,695       25,984       14.3  
Non-interest expense     110,106       110,397       (0.3 )
Net income available to common stockholders     149,760       130,290       14.9  
Pre-tax pre-provision net revenue (1)     185,970       163,544       13.7  
Common share and per common share data:                        
Earnings per share − diluted   $ 1.17     $ 1.00       17.0 %
Earnings per share − basic     1.17       1.01       15.8  
Dividends per share     0.29       0.285       1.8  
Book value per share     35.85       35.35       1.4  
Tangible book value per share (1)     30.52       30.14       1.3  
Weighted-average diluted shares outstanding (thousands)     128,246       129,929       (1.3 )
End of period shares outstanding (thousands)     125,444       128,818       (2.6 )
Balance sheet data at period end:                        
Total assets   $ 26,530,430     $ 26,143,367       1.5 %
Total loans     18,307,825       18,305,303       0.1  
Non-purchased loans     17,791,610       17,707,452       0.5  
Purchased loans     516,215       597,851       (13.7 )
Allowance for loan losses     217,380       237,722       (8.6 )
Foreclosed assets     5,744       9,444       (39.2 )
Investment securities − AFS     3,916,733       3,846,496       1.8  
Goodwill and other intangible assets, net     669,063       670,580       (0.2 )
Deposits     20,209,134       20,102,440       0.5  
Other borrowings     750,206       750,217       (0.1 )
Subordinated notes     346,133       345,927       0.1  
Subordinated debentures     121,033       120,892       0.1  
Unfunded balance of closed loans     13,619,578       12,385,369       10.0  
Reserve for losses on unfunded loan commitments     71,609       61,076       17.2  
Preferred stock     338,980           NM  
Total common stockholders’ equity (1)     4,497,263       4,553,240       (1.2 )
Net unrealized gains on investment securities AFS
included in stockholders’ equity
    23,841       40,706          
Loan (including purchased loans) to deposit ratio     90.59 %     91.06 %        
Selected ratios:                        
Return on average assets (2)     2.25 %     1.98 %        
Return on average common stockholders’ equity (1) (2)     13.08       11.41          
Return on average tangible common stockholders’ equity (1) (2)     15.34       13.39          
Net interest margin – FTE (2)     4.41       4.16          
Efficiency ratio     37.06       40.14          
Net charge-offs to average non-purchased loans (2) (3)     0.05       0.04          
Net charge-offs to average total loans (2)     0.04       0.03          
Nonperforming loans to total loans (4)     0.19       0.20          
Nonperforming assets to total assets (4)     0.15       0.17          
Allowance for loan losses to total loans (5)     1.19       1.30          
Other information:                        
Non-accrual loans (4)   $ 33,274     $ 34,920          
Accruing loans − 90 days past due (4)                    
Troubled and restructured non-purchased loans − accruing (4)     1,285       1,253          

(1)  Calculations of pre-tax pre-provision net revenue, total common stockholders’ equity, tangible book value per common share and returns on average common stockholders’ equity and average tangible common stockholders’ equity and the reconciliations to GAAP are included in the schedules accompanying this release.
(2)  Ratios for interim periods annualized based on actual days.
(3)  Excludes purchased loans and net charge-offs related to such loans.
(4)  Excludes purchased loans, except for their inclusion in total assets.
(5)  Excludes reserve for losses on unfunded loan commitments.
NM – Not meaningful  

Bank OZK
Supplemental Quarterly Financial Data
Unaudited

    3/31/20     6/30/20     9/30/20     12/31/20     3/31/21     6/30/21     9/30/21     12/31/21  
    (Dollars in thousands)  
Earnings Summary:                                                                
Net interest income   $ 209,775     $ 216,593     $ 224,657     $ 237,600     $ 234,636     $ 240,746     $ 247,957     $ 266,381  
Federal tax (FTE) adjustment     1,133       1,753       1,605       1,533       1,275       1,355       1,106       1,009  
Net interest income (FTE)     210,908       218,346       226,262       239,133       235,911       242,101       249,063       267,390  
Provision for credit losses     (117,663 )     (72,026 )     (7,200 )     (6,750 )     31,559       30,932       7,454       7,992  
Non-interest income     27,680       21,591       26,676       28,661       32,117       27,742       25,984       29,695  
Non-interest expense     (103,425 )     (100,953 )     (105,641 )     (103,394 )     (106,059 )     (103,711 )     (110,397 )     (110,106 )
Pretax income (FTE)     17,500       66,958       140,097       157,650       193,528       197,064       172,104       194,971  
FTE adjustment     (1,133 )     (1,753 )     (1,605 )     (1,533 )     (1,275 )     (1,355 )     (1,106 )     (1,009 )
Provision for income taxes     (4,509 )     (14,948 )     (29,251 )     (35,607 )     (43,818 )     (45,161 )     (40,713 )     (44,197 )
Noncontrolling interest     8       9       12       3       (19 )     (13 )     5       (5 )
Net income available to common stockholders   $ 11,866     $ 50,266     $ 109,253     $ 120,513     $ 148,416     $ 150,535     $ 130,290     $ 149,760  
Earnings per common share – diluted   $ 0.09     $ 0.39     $ 0.84     $ 0.93     $ 1.14     $ 1.16     $ 1.00     $ 1.17  
PPNR     134,030       137,231       145,692       162,867       160,694       164,777       163,544       185,970  
Non-interest Income:                                                                
Service charges on deposit accounts:                                                                
            NSF/Overdraft fees   $ 4,562     $ 2,702     $ 3,494     $ 4,024     $ 3,323     $ 3,244     $ 4,080     $ 4,315  
             All other service charges     5,447       5,579       5,933       5,959       6,342       7,067       7,097       7,149  
Trust income     1,939       1,759       1,936       1,909       2,206       1,911       2,247       2,141  
BOLI income:                                                                
Increase in cash surrender value     5,067       5,057       5,081       5,034       4,881       4,919       4,940       4,901  
Death benefits     608                         1,409                   618  
Loan service, maintenance and other fees     3,716       3,394       3,351       3,797       3,551       3,953       3,307       3,148  
Gains on sales of other assets     161       621       891       5,189       5,828       2,341       463       1,330  
Net gains on investment securities     2,223             2,244                               504  
Other     3,957       2,479       3,746       2,749       4,577       4,307       3,850       5,589  
Total non-interest income   $ 27,680     $ 21,591     $ 26,676     $ 28,661     $ 32,117     $ 27,742     $ 25,984     $ 29,695  
Non-interest Expense:                                                                
Salaries and employee benefits   $ 51,473     $ 48,410     $ 53,119     $ 53,832     $ 53,645     $ 52,119     $ 53,769     $ 55,034  
Net occupancy and equipment     15,330       15,756       16,676       15,617       16,468       16,168       17,161       17,004  
Other operating expenses     36,622       36,787       35,846       33,945       35,946       35,424       39,467       38,068  
Total non-interest expense   $ 103,425     $ 100,953     $ 105,641     $ 103,394     $ 106,059     $ 103,711     $ 110,397     $ 110,106  
Balance Sheet Data:                                                                
Total assets   $ 24,565,810     $ 26,380,409     $ 26,888,308     $ 27,162,596     $ 27,276,892     $ 26,605,938     $ 26,143,367     $ 26,530,430  
Non-purchased loans     17,030,378       18,247,431       18,419,958       18,401,495       17,979,435       17,611,848       17,707,452       17,791,610  
Purchased loans     1,197,826       1,063,647       938,485       807,673       735,630       659,822       597,851       516,215  
Investment securities – AFS     2,816,556       3,299,944       3,468,243       3,405,351       4,162,479       4,693,396       3,846,496       3,916,733  
Deposits     18,809,190       20,723,598       21,287,405       21,450,356       21,296,442       20,706,777       20,102,440       20,209,134  
Unfunded balance of closed loans     11,334,737       11,411,441       11,604,614       11,847,117       11,780,099       11,709,818       12,385,369       13,619,578  
Preferred stock                                               338,980  
Total stockholders’ equity before noncontrolling interest     4,083,150       4,110,666       4,186,285       4,272,271       4,383,205       4,501,676       4,553,240       4,836,243  

Bank OZK
Supplemental Quarterly Financial Data (Continued)
Unaudited

    3/31/20     6/30/20     9/30/20     12/31/20     3/31/21     6/30/21     9/30/21     12/31/21  
  (Dollars in thousands)  
Allowance for Credit Losses:                                                                
Balance at beginning of period   $ 108,525     $ 316,409     $ 374,494     $ 377,273     $ 377,305     $ 342,307     $ 307,564     $ 298,798  
Adoption of CECL (1) methodology     94,512                                            
Net charge-offs     (4,291 )     (13,941 )     (4,421 )     (6,718 )     (3,439 )     (3,811 )     (1,312 )     (1,817 )
Provision for credit losses     117,663       72,026       7,200       6,750       (31,559 )     (30,932 )     (7,454 )     (7,992 )
Balance at end of period   $ 316,409     $ 374,494     $ 377,273     $ 377,305     $ 342,307     $ 307,564     $ 298,798     $ 288,989  
Allowance for loan losses   $ 238,737     $ 306,196     $ 308,847     $ 295,824     $ 268,077     $ 248,753     $ 237,722     $ 217,380  
Reserve for losses on unfunded loan commitments     77,672       68,298       68,426       81,481       74,230       58,811       61,076       71,609  
Total allowance for credit losses   $ 316,409     $ 374,494     $ 377,273     $ 377,305     $ 342,307     $ 307,564     $ 298,798     $ 288,989  
Selected Ratios:                                                                
Net interest margin – FTE (2)     3.96 %     3.74 %     3.69 %     3.88 %     3.86 %     3.95 %     4.16 %     4.41 %
Efficiency ratio     43.35       42.07       41.77       38.61       39.57       38.43       40.14       37.06  
Net charge-offs to average non-purchased loans (2) (3)     0.08       0.05       0.09       0.14       0.08       0.09       0.04       0.05  
Net charge-offs to average total loans (2)     0.10       0.29       0.09       0.14       0.07       0.08       0.03       0.04  
Nonperforming loans to total loans (4)     0.16       0.18       0.15       0.25       0.25       0.22       0.20       0.19  
Nonperforming assets to total assets (4)     0.19       0.19       0.17       0.21       0.19       0.18       0.17       0.15  
Allowance for loan losses to total loans (5)     1.31       1.59       1.60       1.54       1.43       1.36       1.30       1.19  
Loans past due 30 days or more, including
past due non-accrual loans, to total loans (4)
    0.18       0.13       0.13       0.16       0.13       0.10       0.13       0.15  

(1) Current Expected Credit Loss.
(2) Ratios for interim periods annualized based on actual days.
(3) Excludes purchased loans and net charge-offs related to such loans.
(4) Excludes purchased loans, except for their inclusion in total assets.
(5) Excludes reserve for losses on unfunded loan commitments.

Bank OZK
Average Consolidated Balance Sheets and Net Interest Analysis – FTE
Unaudited

    Three Months Ended December 31,     Year Ended December 31,  
    2021     2020     2021     2020  
    Average
Balance
  Income/
Expense
  Yield/
Rate
    Average
Balance
  Income/
Expense
  Yield/
Rate
    Average
Balance
  Income/
Expense
  Yield/
Rate
    Average
Balance
  Income/
Expense
  Yield/
Rate
 
    (Dollars in thousands)  
ASSETS                                                                            
Interest earning assets:                                                                            
Interest earning deposits and federal
funds sold
  $ 2,106,395   $ 953   0.18 %   $ 1,762,810   $ 428     0.10 %   $ 1,871,388   $ 2,510     0.13 %   $ 1,535,977   $ 5,665   0.37 %
Investment securities:                                                                            
Taxable     3,375,895     9,448   1.11       2,036,253     9,066     1.77       3,207,485     36,234     1.13       1,993,667     40,547   2.03  
Tax-exempt – FTE     593,242     3,632   2.43       1,485,224     6,034     1.62       864,432     17,378     2.01       1,080,459     24,561   2.27  
Non-purchased loans – FTE     17,449,281     256,267   5.83       18,378,050     243,330     5.27       17,683,033     973,755     5.51       17,797,684     945,222   5.31  
Purchased loans     551,917     11,190   8.04       881,372     16,069     7.25       662,434     46,174     6.97       1,069,250     70,812   6.62  
Total earning assets – FTE     24,076,730     281,490   4.64       24,543,709     274,927     4.46       24,288,772     1,076,051     4.43       23,477,037     1,086,807   4.63  
Non-interest earning assets     2,370,349                 2,258,105                   2,335,412                   2,291,135            
Total assets   $ 26,447,079               $ 26,801,814                 $ 26,624,184                 $ 25,768,172            
LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                            
Interest bearing liabilities:                                                                            
Deposits:                                                                            
Savings and interest bearing
transaction
  $ 9,178,225   $ 2,641   0.11 %   $ 7,669,913   $ 4,483     0.23 %   $ 8,788,200   $ 12,481     0.14 %   $ 7,724,528   $ 37,428   0.48 %
Time deposits of $100 or more     4,358,217     4,638   0.42       6,314,394     17,144     1.08       5,218,981     35,375     0.68       5,524,751     83,956   1.52  
Other time deposits     1,898,687     2,235   0.47       3,294,323     8,980     1.08       2,315,263     16,566     0.72       3,511,220     50,429   1.44  
Total interest bearing deposits     15,435,129     9,514   0.24       17,278,630     30,607     0.70       16,322,444     64,422     0.39       16,760,499     171,813   1.03  
Repurchase agreements with customers     7,558     3   0.16       8,239     6     0.29       7,027     17     0.24       7,825     23   0.29  
Other borrowings (1)     750,226     1,017   0.54       750,961     1,011     0.54       750,276     4,012     0.53       721,350     3,179   0.44  
Subordinated notes     346,025     2,631   3.02       223,996     3,207     5.70       212,600     9,386     4.42       223,850     12,758   5.70  
Subordinated debentures (1)     120,956     935   3.07       120,400     963     3.18       120,751     3,750     3.11       120,190     4,384   3.65  
Total interest bearing liabilities     16,659,894     14,100   0.34       18,382,226     35,794     0.77       17,413,098     81,587     0.47       17,833,714     192,157   1.08  
Non-interest bearing liabilities:                                                                            
Non-interest bearing deposits     4,651,656                 3,907,955                   4,380,850                   3,521,066            
Other non-interest bearing liabilities     376,706                 289,298                   321,583                   261,169            
Total liabilities     21,688,256                 22,579,479                   22,115,531                   21,615,949            
Total common stockholders’ equity before
noncontrolling interest
    4,755,706                 4,219,249                   4,505,544                   4,149,123            
Noncontrolling interest     3,117                 3,086                   3,109                   3,100            
Total liabilities and stockholders’
equity
  $ 26,447,079               $ 26,801,814                 $ 26,624,184                 $ 25,768,172            
Net interest income – FTE         $ 267,390               $ 239,133                 $ 994,464                 $ 894,650      
Net interest margin – FTE               4.41 %                 3.88 %                 4.09 %               3.81 %
Core spread (2)               5.59 %                 4.57 %                 5.12 %               4.28 %

(1)   The interest expense and the rates for “other borrowings” and for “subordinated debentures” were affected by capitalized interest. Capitalized interest included in other borrowings for the fourth quarter and for the full year of 2023 was not material compared to $0.03 million for the fourth quarter and $0.68 million for the full year of 2020. In the absence of this interest capitalization, the rates on other borrowings would have been 0.55% for the fourth quarter and 0.53% for the full year of 2020. Capitalized interest included in subordinated debentures totaled $0.01 million for the fourth quarter and $0.18 million for the full year of 2020 (none in the fourth quarter or full year of 2023). In the absence of this interest capitalization, the rates on subordinated debentures would have been 3.20% for the fourth quarter and 3.80% for the full year of 2020.

(2)   Core spread is the difference between the yield on the Bank’s non-purchased loans-FTE and the rate on its interest bearing deposits.

Bank OZK
Reconciliation of Non-GAAP Financial Measures

Calculation of Average Common Stockholders’ Equity,
Average Tangible Common Stockholders’ Equity
and the Annualized Returns on Average Common Stockholders’ Equity and
Average Tangible Common Stockholders’ Equity
Unaudited

  Three Months Ended        
  December 31,     September 30,     Year Ended December 31,  
  2021     2020     2021     2021     2020  
  (Dollars in thousands)  
Net income available to common
stockholders
$ 149,760     $ 120,513     $ 130,290     $ 579,001     $ 291,898  
Average stockholders’ equity before
noncontrolling interest
$ 4,755,706     $ 4,219,249     $ 4,530,995     $ 4,505,544     $ 4,149,123  
Less average preferred stock   (213,693 )                 (53,862 )      
Total average common stockholders’
equity
  4,542,013       4,219,249       4,530,995       4,451,682       4,149,123  
Less average intangible assets:                                      
Goodwill   (660,789 )     (660,789 )     (660,789 )     (660,789 )     (660,789 )
Core deposit and other intangible assets,
net of accumulated amortization
  (9,032 )     (15,578 )     (10,617 )     (11,398 )     (18,741 )
Total average intangibles   (669,821 )     (676,367 )     (671,406 )     (672,187 )     (679,530 )
Average tangible common stockholders’
equity
$ 3,872,192     $ 3,542,882     $ 3,859,589     $ 3,779,495     $ 3,469,593  
Return on average common stockholders’
    equity (1)
  13.08 %     11.36 %     11.41 %     13.01 %     7.04 %
Return on average tangible common
stockholders’ equity (1)
  15.34 %     13.53 %     13.39 %     15.32 %     8.41 %

(1) Ratios for interim periods annualized based on actual days.

Calculation of Total Common Stockholders’ Equity,
Total Tangible Common Stockholders’ Equity
and Tangible Book Value per Common Share
Unaudited

    December 31,     September 30,  
    2021     2020     2021  
    (In thousands, except per share amounts)  
Total stockholders’ equity before noncontrolling interest   $ 4,836,243     $ 4,272,271     $ 4,553,240  
Less preferred stock     (338,980 )            
Total common stockholders’ equity     4,497,263       4,272,271       4,553,240  
Less intangible assets:                        
Goodwill     (660,789 )     (660,789 )     (660,789 )
Core deposit and other intangible assets, net of
accumulated amortization
    (8,274 )     (14,669 )     (9,791 )
Total intangibles     (669,063 )     (675,458 )     (670,580 )
Total tangible common stockholders’ equity   $ 3,828,200     $ 3,596,813     $ 3,882,660  
Shares of common stock outstanding     125,444       129,350       128,818  
Book value per common share   $ 35.85     $ 33.03     $ 35.35  
Tangible book value per common share   $ 30.52     $ 27.81     $ 30.14  

Calculation of Total Common Stockholders’ Equity,
Total Tangible Common Stockholders’ Equity
and the Ratio of Total Tangible Common Stockholders’ Equity
to Total Tangible Assets
Unaudited

    December 31,  
    2021     2020  
    (Dollars in thousands)  
Total stockholders’ equity before noncontrolling interest   $ 4,836,243     $ 4,272,271  
Less preferred stock     (338,980 )      
Total common stockholders’ equity     4,497,263       4,272,271  
Less intangible assets:                
Goodwill     (660,789 )     (660,789 )
Core deposit and other intangible assets, net of
accumulated amortization
    (8,274 )     (14,669 )
Total intangibles     (669,063 )     (675,458 )
Total tangible common stockholders’ equity   $ 3,828,200     $ 3,596,813  
Total assets   $ 26,530,430     $ 27,162,596  
Less intangible assets:                
Goodwill     (660,789 )     (660,789 )
Core deposit and other intangible assets, net of
accumulated amortization
    (8,274 )     (14,669 )
Total intangibles     (669,063 )     (675,458 )
Total tangible assets   $ 25,861,367     $ 26,487,138  
Ratio of total common stockholders’ equity to total assets     16.95 %     15.73 %
Ratio of total tangible common stockholders’ equity to total
tangible assets
    14.80 %     13.58 %

Calculation of Pre-Tax Pre-Provision Net Revenue
Unaudited

    Three Months Ended  
    December 31,
2021
    September 30,
2021
    June 30,
2021
    March 31,
2021
    December 31,
2020
 
    (Dollars in thousands)  
Income before taxes   $ 193,962     $ 170,998     $ 195,709     $ 192,253     $ 156,117  
Provision for credit losses     (7,992 )     (7,454 )     (30,932 )     (31,559 )     6,750  
Pre-tax pre-provision net revenue   $ 185,970     $ 163,544     $ 164,777     $ 160,694     $ 162,867  
                                         
    Three Months Ended     Year Ended December 31,  
    September 30,
2020
    June 30,
2020
    March 31,
2020
    2021     2020  
    (Dollars in thousands)  
Income before taxes   $ 138,492     $ 65,205     $ 16,367     $ 752,921     $ 376,180  
Provision for credit losses     7,200       72,026       117,663       (77,938 )     203,639  
Pre-tax pre-provision net revenue   $ 145,692     $ 137,231     $ 134,030     $ 674,983     $ 579,819  

Bank OZK