-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Hu++/jOTj4e1ZppF/Ag3mwx29cZNkHfb6P9/iOyBdsNPQcVcpKANrbjNSKHwhnMY AwSiiBXy/nc71ppcN26QoA== 0001157523-06-003574.txt : 20060413 0001157523-06-003574.hdr.sgml : 20060413 20060412180104 ACCESSION NUMBER: 0001157523-06-003574 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060412 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060413 DATE AS OF CHANGE: 20060412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK OF THE OZARKS INC CENTRAL INDEX KEY: 0001038205 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 710556208 STATE OF INCORPORATION: AR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-27641 FILM NUMBER: 06756917 BUSINESS ADDRESS: STREET 1: 12615 CHENAL PARKWAY STREET 2: SUITE 3100 CITY: LITTLE ROCK STATE: AR ZIP: 72211 BUSINESS PHONE: 5019782265 MAIL ADDRESS: STREET 1: 12615 CHENAL PARKWAY CITY: LITTLE ROCK STATE: AR ZIP: 72211 8-K 1 a5122723.txt BANK OF THE OZARKS 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) April 12, 2006 Bank of the Ozarks, Inc. (Exact name of registrant as specified in its charter) Arkansas (State or other jurisdiction of incorporation) 0-22759 71-0556208 (Commission File Number) (IRS Employer Identification No.) 12615 Chenal Parkway, Little Rock, Arkansas 72211 (Address of principal executive offices) (Zip Code) (501) 978-2265 (Registrant's telephone number, including area code) Not Applicable (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): ( ) Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ( ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ( ) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ( ) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) - -------------------------------------------------------------------------------- 1 Item 2.02 Results of Operations and Financial Condition. The Registrant hereby furnishes its press release announcing First Quarter 2006 Earnings which is attached hereto as Exhibit 99.1 and incorporated herein by reference. Item 7.01 Regulation FD Disclosure See Item 2.02. Results of Operations and Financial Condition Item 9.01 Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release Announcing First Quarter 2006 Earnings 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BANK OF THE OZARKS, INC. ------------------------- (Registrant) Date: April 12, 2006 /s/ Paul Moore -------------------------- Paul Moore Chief Financial Officer and Chief Accounting Officer Exhibit No. Document Description 99.1 Press Release Announcing First Quarter 2006 Earnings 3 EX-99.1 2 a5122723ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Bank of the Ozarks, Inc. Announces First Quarter Earnings LITTLE ROCK, Ark.--(BUSINESS WIRE)--April 12, 2006--Bank of the Ozarks, Inc. (NASDAQ: OZRK) today announced that net income for the quarter ended March 31, 2006 was $8,397,000, a 14.7% increase over net income of $7,322,000 for the first quarter of 2005, and up slightly from the record level of the fourth quarter of 2005. Diluted earnings per share were $0.50 for the first quarter of 2006, an increase of 13.6% from $0.44 in the first quarter of 2005 and essentially flat with the fourth quarter of 2005. The Company's annualized returns on average assets and average stockholders' equity for the first quarter of 2006 were 1.57% and 22.31%, respectively, compared with 1.68% and 23.69%, respectively, for the first quarter of 2005. Loans and leases were $1.42 billion at March 31, 2006 compared to $1.18 billion at March 31, 2005, an increase of 21.2%. Deposits were $1.74 billion at March 31, 2006 compared to $1.39 billion at March 31, 2005, an increase of 24.6%. Total assets were $2.24 billion at March 31, 2006, a 24.5% increase from $1.80 billion at March 31, 2005. First quarter 2006 deposit growth totaled $145 million and was the Company's largest quarterly deposit growth ever, surpassing the previous quarterly record of $118 million. Although the Company's loan and lease growth is typically slower in the first quarter, the first quarter 2006 loan and lease growth of $54 million was its best ever first quarter growth. Stockholders' equity was $153 million at March 31, 2006 compared to $127 million at March 31, 2005, an increase of 20.8%. Book value per share was $9.15 at March 31, 2006 compared to $7.62 at March 31, 2005, a 20.1% increase. The Company's ratio of common equity to assets was 6.84% as of March 31, 2006 compared to 7.05% as of March 31, 2005, and its ratio of tangible common equity to tangible assets was 6.57% as of March 31, 2006 compared to 6.70% as of March 31, 2005. In commenting on these results, George Gleason, Chairman and Chief Executive Officer, stated, "During the first quarter we aggressively pursued a number of initiatives as part of our plans for long-term growth. These initiatives contributed to the strong growth in deposits, loans and leases during the first quarter, and they are expected to result in significant future balance sheet and income growth. However, they also significantly increased first quarter overhead and interest expense. These initiatives included growth in staff needed to accomplish our planned opening of a record number of new offices in 2006 and to position our Company for substantial growth in years to come. They also included increased marketing expense and repricing of a number of deposit products as part of our previously announced plan for more aggressive deposit growth in 2006." NET INTEREST INCOME Net interest income for the first quarter of 2006 increased 5.9% to $17,438,000 compared to $16,459,000 for the first quarter of 2005. Net interest margin, on a fully taxable equivalent basis, was 3.84% in the first quarter of 2006, a decrease of 49 basis points from 4.33% in the first quarter of 2005 and a decrease of 18 basis points from the fourth quarter of 2005. Mr. Gleason stated, "We expected some pressure on net interest margin in 2006 due to the continued effects of a relatively flat yield curve between short-term and long-term rates and continued intense competition. Our late January repricing of a number of deposit products also contributed significantly to the lower first quarter net interest margin. We had expected growth in earning assets in the first quarter to offset any pressure on our net interest margin, however much of our first quarter earning asset growth occurred late in the quarter. As a result net interest income for the quarter declined compared to the fourth quarter of 2005. However, we are pleased to report that our current loan and lease pipeline appears to be our best ever. Based on our current expectations for loan and lease growth, we believe second quarter net interest income will once again reach a record level." NON-INTEREST INCOME Non-interest income for the first quarter of 2006 was $6,164,000 compared with $4,371,000 for the first quarter of 2005, a 41.0% increase. During the first quarter of 2006, the Company generated net gains from sales of investment securities and other assets of $1,833,000, compared to net gains of $131,000 during the first quarter of 2005. The net gains in the quarter just ended were primarily from the sale of $76 million of investment securities. While the Company sold a substantial volume of investment securities in the first quarter of 2006, it purchased a larger volume of investment securities. The Company invests in securities it believes offer good relative value at the time of purchase and will, from time to time, reposition its portfolio. During the first quarter, the Company primarily sold certain municipal bonds which it believed were near their maximum value and reinvested in other municipal bonds and U.S. government agency securities which it believed offered better relative value. Mr. Gleason stated, "With the additional pressure from our various growth initiatives on this year's first quarter earnings, we benefited greatly by having our securities portfolio positioned to be a strong contributor to first quarter earnings." First quarter 2006 income from service charges on deposit accounts was $2,322,000, an increase of 5.4% from $2,204,000 in the first quarter of 2005. Trust income for the quarter just ended was $433,000, an increase of 11.3% from $389,000 in the first quarter of 2005. Mortgage lending income declined 10.1% to $603,000 in the first quarter of 2006 compared to $671,000 in the first quarter of 2005. NON-INTEREST EXPENSE Non-interest expense for the first quarter of 2006 was $11,160,000 compared with $9,495,000 for the first quarter of 2005, an increase of 17.5%. The Company's efficiency ratio for the quarter ended March 31, 2006 was 44.7% compared to 44.0% for the first quarter of 2005 and 42.9% for the fourth quarter of 2005. A number of factors contributed to the Company's growth in non-interest expense in the quarter just ended. These included the opening of new offices in Rogers (Benton County) and Hot Springs (Garland County), Arkansas and the Company's addition of staff for new offices to open later in 2006. In addition, the Company added a number of staff members in existing offices and in various corporate positions as part of the Company's plans to accelerate growth in many existing offices and to build the personnel infrastructure necessary to support significant future growth. Mr. Gleason stated, "The current yield curve and competitive conditions do not provide the ideal environment in which to pursue major growth initiatives. However, considering the opportunities in the markets we plan to enter in 2006 and future years, the financial and competitive position we presently enjoy and the talent now available to us, we believe it is in the best long-term interests of our shareholders to aggressively pursue a number of initiatives intended to contribute to our future growth and expansion." The Company expects to continue its growth and de novo branching strategy. Including the offices opened in the first quarter, it currently plans to open a record 12 new banking offices and replace two banking offices with new facilities in 2006. While adding these offices will increase its non-interest expense, the Company believes these offices are important elements of its plans for future growth. ASSET QUALITY, CHARGE-OFFS AND RESERVES Nonperforming loans and leases as a percent of total loans and leases were 0.24% as of March 31, 2006 compared to 0.36% as of March 31, 2005. Nonperforming assets as a percent of total assets were 0.17% as of March 31, 2006 compared to 0.39% as of March 31, 2005. The Company's ratio of loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases, was 0.63% at March 31, 2006 compared to 0.49% at March 31, 2005. The Company's annualized net charge-off ratio for the first quarter of 2006 was 0.10% compared to 0.07% for the first quarter of 2005. The Company's allowance for loan and lease losses increased to $17.2 million at March 31, 2006, or 1.21% of total loans and leases, from $16.4 million, or 1.40% of total loans and leases, at March 31, 2005. The increase in the allowance for loan and lease losses since March 31, 2005 is a result of the growth in the Company's loan and lease portfolio. As of March 31, 2006, the Company's allowance for loan and lease losses equaled 510% of its total nonperforming loans and leases. GROWTH AND EXPANSION The two offices opened in the first quarter of 2006 and the ten additional offices the Company expects to add in 2006 are intended to give the Company a presence in four important new markets. By year-end 2006 the Company expects to grow from its present three offices to nine banking offices in Benton and Washington counties in northwest Arkansas, the state's second and third largest counties in terms of bank deposits and among the state's fastest growing counties. In addition to the initial Hot Springs office opened in the first quarter, during 2006 the Company expects to open a second office in Hot Springs in Garland County, which is Arkansas' sixth largest county in terms of bank deposits. The Company also expects to expand from its current one office to three banking offices in the Texarkana market (both Bowie County, Texas and Miller County, Arkansas) and open its first permanent banking office in Frisco, Texas. During the first quarter of 2006, the Company closed its Wal-Mart SuperCenter office in Bryant, Arkansas and consolidated those operations with a nearby banking office. Opening new offices and replacing existing temporary banking offices with permanent facilities is subject to availability of suitable sites, designing, constructing, equipping and staffing such offices, obtaining regulatory and other approvals and many other conditions and contingencies that the Company cannot predict with certainty. 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 Thursday, April 13, 2006. 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 by calling 1-800-642-1687 in the United States and Canada or 706-645-9291 internationally. The passcode for this telephone playback is 7346674. The telephone playback will be available through April 30, 2006, and the website recording of the call will be available for 12 months. GENERAL This release contains forward looking statements regarding the Company's plans, expectations, goals and outlook for the future, including expectations for future growth in deposits, loans, leases and income, growth in second quarter net interest income and opening new offices. Actual results may differ materially from those projected in such forward looking statements, due to, among other things, continued interest rate changes including changes in the shape of the yield curve, competitive factors, general economic conditions and their effects on the creditworthiness of borrowers, collateral values and the value of investment securities, the ability to attract new deposits, loans and leases, delays in identifying and acquiring satisfactory sites and opening new offices, delays in or inability to obtain required regulatory approvals, the ability to generate future revenue growth or to control future growth in non-interest expense, as well as other factors identified in this press release or in Management's Discussion and Analysis under the caption "Forward Looking Information" contained in the Company's 2005 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 55 offices in 31 communities throughout northern, western and central Arkansas, three Texas banking offices, and loan production offices in Bentonville and Little Rock, Arkansas and 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. Selected Consolidated Financial Data (Dollars in Thousands, Except Per Share Amounts) Unaudited Quarters Ended March 31, --------------------------------- 2006 2005 % Change ---------- ---------- --------- Income statement data: - ---------------------- Net interest income $ 17,438 $ 16,459 5.9% Provision for loan and lease losses 500 500 - Non-interest income 6,164 4,371 41.0 Non-interest expense 11,160 9,495 17.5 Net income 8,397 7,322 14.7 Common stock data: - ------------------ Net income per share - diluted $ 0.50 $ 0.44 13.6% Net income per share - basic 0.50 0.44 13.6 Cash dividends per share 0.10 0.08 25.0 Book value per share 9.15 7.62 20.1 Diluted shares outstanding (thousands) 16,812 16,739 End of period shares outstanding (thousands) 16,714 16,625 Balance sheet data at period end: - --------------------------------- Total assets $2,238,084 $1,797,320 24.5% Total loans and leases 1,424,373 1,175,683 21.2 Allowance for loan and lease losses 17,175 16,437 4.5 Total investment securities 614,933 459,813 33.7 Goodwill 5,243 5,243 - Other intangibles - net of amortization 1,093 1,355 (19.3) Total deposits 1,736,886 1,394,225 24.6 Repurchase agreements with customers 43,207 30,619 41.1 Other borrowings 243,192 196,762 23.6 Subordinated debentures 44,331 44,331 - Stockholders' equity 153,000 126,655 20.8 Loan and lease to deposit ratio 82.01% 84.33% Selected ratios: - ---------------- Return on average assets(a) 1.57% 1.68% Return on average stockholders' equity(a) 22.31 23.69 Average equity to total average assets 7.02 7.10 Net interest margin - FTE(a) 3.84 4.33 Overhead ratio(a) 2.08 2.18 Efficiency ratio 44.71 43.96 Allowance for loan and lease losses to total loans and leases 1.21 1.40 Nonperforming loans and leases to total loans and leases 0.24 0.36 Nonperforming assets to total assets 0.17 0.39 Net charge-offs to average loans and leases(a) 0.10 0.07 Other information: - ------------------ Non-accrual loans and leases $ 3,369 $ 4,282 Accruing loans and leases - 90 days past due - - ORE and repossessions 448 2,770 (a) Ratios for interim periods annualized based on actual days Bank of the Ozarks, Inc. Supplemental Quarterly Financial Data (Dollars in Thousands, Except Per Share Amounts) Unaudited 6/30/04 9/30/04 12/31/04 -------- -------- --------- Earnings Summary: - ----------------- Net interest income $ 14,721 $ 15,908 $ 16,075 Federal tax (FTE) adjustment 582 625 702 -------- -------- --------- Net interest income (FTE) 15,303 16,533 16,777 Loan and lease loss provision (1,045) (1,040) (500) Non-interest income 5,204 4,631 4,397 Non-interest expense (9,610) (9,766) (9,845) -------- -------- --------- Pretax income (FTE) 9,852 10,358 10,829 FTE adjustment (582) (625) (702) Provision for taxes (3,010) (3,086) (3,116) -------- -------- --------- Net income $ 6,260 $ 6,647 $ 7,011 ======== ======== ========= Earnings per share - diluted $ 0.38 $ 0.40 $ 0.42 Non-interest Income: - -------------------- Trust income $ 358 $ 390 $ 427 Service charges on deposit accounts 2,441 2,520 2,411 Mortgage lending income 985 863 629 Gains (losses) on sales of assets 20 108 13 Investment security gains (losses) 752 22 - Bank owned life insurance income 254 258 448 Other 394 470 469 -------- -------- --------- Total non-interest income $ 5,204 $ 4,631 $ 4,397 Non-interest Expense: - --------------------- Salaries and employee benefits $ 5,023 $ 5,550 $ 5,358 Net occupancy expense 1,254 1,286 1,436 Write-off of deferred debt costs 852 - - Other operating expenses 2,416 2,865 2,985 Amortization of intangibles 65 65 66 -------- -------- --------- Total non-interest expense $ 9,610 $ 9,766 $ 9,845 Allowance for Loan and Lease Losses - ----------------------------------- Balance beginning of period $ 14,460 $ 15,113 $ 15,888 Net charge-offs (392) (265) (255) Loan and lease loss provision 1,045 1,040 500 -------- -------- --------- Balance at end of period $ 15,113 $ 15,888 $ 16,133 Selected Ratios: - ---------------- Net interest margin - FTE(b) 4.43% 4.47% 4.34% Overhead expense ratio(b) 2.57 2.44 2.33 Efficiency ratio 46.86 46.14 46.50 Nonperforming loans and leases/total loans and leases 0.25 0.27 0.57 Nonperforming assets/total assets 0.21 0.23 0.39 Loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases 0.44 0.46 0.76 (b) Annualized 3/31/05 6/30/05 9/30/05 12/31/05 3/31/06 -------- -------- -------- --------- -------- Earnings Summary: - ----------------- Net interest income $16,459 $16,811 $17,460 $17,845 $17,438 Federal tax (FTE) adjustment 767 1,095 1,247 1,357 1,357 -------- -------- -------- --------- -------- Net interest income (FTE) 17,226 17,906 18,707 19,202 18,795 Loan and lease loss provision (500) (500) (800) (500) (500) Non-interest income 4,371 4,913 5,164 4,804 6,164 Non-interest expense (9,495) (10,008) (10,270) (10,306) (11,160) -------- -------- -------- --------- -------- Pretax income (FTE) 11,602 12,311 12,801 13,200 13,299 FTE adjustment (767) (1,095) (1,247) (1,357) (1,357) Provision for taxes (3,513) (3,503) (3,483) (3,460) (3,545) -------- -------- -------- --------- -------- Net income $7,322 $7,713 $8,071 $8,383 $8,397 ======== ======== ======== ========= ======== Earnings per share - diluted $0.44 $0.46 $0.48 $0.50 $0.50 Non-interest Income: - -------------------- Trust income $389 $394 $448 $442 $433 Service charges on deposit accounts 2,204 2,564 2,570 2,537 2,322 Mortgage lending income 671 712 888 763 603 Gains (losses) on sales of assets 131 335 33 68 2 Investment security gains (losses) - - 211 3 1,831 Bank owned life insurance income 449 455 465 446 443 Other 527 453 549 545 530 -------- -------- -------- --------- -------- Total non-interest income $4,371 $4,913 $5,164 $4,804 $6,164 Non-interest Expense: - --------------------- Salaries and employee benefits $5,445 $5,866 $6,221 $5,945 $6,584 Net occupancy expense 1,447 1,502 1,632 1,673 1,660 Write-off of deferred debt costs - - - - - Other operating expenses 2,538 2,574 2,351 2,622 2,850 Amortization of intangibles 65 66 66 66 66 -------- -------- -------- --------- -------- Total non-interest expense $9,495 $10,008 $10,270 $10,306 $11,160 Allowance for Loan and Lease Losses - ----------------------------------- Balance beginning of period $16,133 $16,437 $16,745 $16,915 $17,007 Net charge-offs (196) (192) (630) (408) (332) Loan and lease loss provision 500 500 800 500 500 -------- -------- -------- --------- -------- Balance at end of period $16,437 $16,745 $16,915 $17,007 $17,175 Selected Ratios: - ---------------- Net interest margin - FTE(b) 4.33% 4.22% 4.19% 4.02% 3.84% Overhead expense ratio(b) 2.18 2.15 2.10 1.97 2.08 Efficiency ratio 43.96 43.86 43.02 42.93 44.71 Nonperforming loans and leases/total loans and leases 0.36 0.26 0.18 0.25 0.24 Nonperforming assets/total assets 0.39 0.21 0.13 0.18 0.17 Loans and leases past due 30 days or more, including past due non- accrual loans and leases, to total loans and leases 0.49 0.45 0.38 0.39 0.63 (b) Annualized Bank of the Ozarks, Inc. Average Consolidated Balance Sheet and Net Interest Analysis (Dollars in Thousands) Unaudited Quarter Ended March 31, 2006 -------------------------- Average Income/ Yield/ Balance Expense Rate ----------- ------- ------ ASSETS Earnings assets: Interest earning deposits and federal funds sold $239 $2 2.70% Investment securities: Taxable 380,747 5,136 5.47 Tax-exempt - FTE 219,480 3,809 7.04 Loans and leases - FTE 1,382,612 26,191 7.68 ----------- ------- Total earnings assets 1,983,078 35,138 7.19 Non-earning assets 189,689 ----------- Total assets $2,172,767 =========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: Deposits: Savings and interest bearing transaction $501,397 $2,716 2.20% Time deposits of $100,000 or more 652,819 6,432 4.00 Other time deposits 333,255 2,724 3.32 ----------- -------- Total interest bearing deposits 1,487,471 11,872 3.24 Repurchase agreements with customers 34,748 237 2.77 Other borrowings 299,359 3,435 4.65 Subordinated debentures 44,331 800 7.32 ----------- -------- Total interest bearing liabilities 1,865,909 16,344 3.55 Non-interest bearing liabilities: Non-interest bearing deposits 143,982 Other non-interest bearing liabilities 10,267 ----------- Total liabilities 2,020,158 Stockholders' equity 152,609 ----------- Total liabilities and stockholders' equity $2,172,767 =========== Interest rate spread - FTE 3.64% -------- Net interest income - FTE $18,794 ======== Net interest margin - FTE 3.84% CONTACT: Bank of the Ozarks, Inc. Susan Blair, 501-978-2217 -----END PRIVACY-ENHANCED MESSAGE-----