-----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, QJpbskwJOccuvfc+z8+PFGmvSdeztsv9gyvoiospmuxXUFwjv0MDmP3CexYSOopW Jfo/PAERfGJcamKpaAAtbw== 0001157523-06-009832.txt : 20061013 0001157523-06-009832.hdr.sgml : 20061013 20061012180022 ACCESSION NUMBER: 0001157523-06-009832 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061012 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061013 DATE AS OF CHANGE: 20061012 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: 061142917 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 a5247408.txt BANK OF THE OZARKS, INC. 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) October 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)) Item 2.02 Results of Operations and Financial Condition. The Registrant hereby furnishes its press release announcing Third 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: Bank of the Ozarks, Inc. Announces Third Quarter 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: October 12, 2006 /s/ Paul Moore ----------------------------------- Paul Moore Chief Financial Officer and Chief Accounting Officer Exhibit No. Document Description 99.1 Press Release: Bank of the Ozarks, Inc. Announces Third Quarter Earnings EX-99.1 2 a5247408ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Bank of the Ozarks, Inc. Announces Third Quarter Earnings LITTLE ROCK, Ark.--(BUSINESS WIRE)--Oct. 12, 2006--Bank of the Ozarks, Inc. (NASDAQ: OZRK) today announced that net income for the quarter ended September 30, 2006 was $8,010,000 compared to $8,071,000 for the third quarter of 2005, a 0.8% decrease. Diluted earnings per share were $0.48 for both the third quarter of 2006 and the third quarter of 2005. For the nine months ended September 30, 2006, net income totaled $24,338,000 compared to $23,106,000 for the first nine months of 2005, a 5.3% increase. Diluted earnings per share for the first nine months of 2006 were $1.45 compared to $1.38 for the first nine months of 2005, an increase of 5.1%. The Company's annualized returns on average assets and average stockholders' equity for the third quarter of 2006 were 1.29% and 20.18%, respectively, compared to 1.65% and 22.62%, respectively, for the third quarter of 2005. Annualized returns on average assets and average stockholders' equity for the nine months ended September 30, 2006 were 1.40% and 21.19%, respectively, compared to 1.66% and 22.93%, respectively, for the nine months ended September 30, 2005. Loans and leases were $1.59 billion at September 30, 2006 compared to $1.33 billion at September 30, 2005, an increase of 19.9%. Deposits were $2.01 billion at September 30, 2006 compared to $1.49 billion at September 30, 2005, an increase of 34.7%. Total assets were $2.52 billion at September 30, 2006 compared to $2.02 billion at September 30, 2005, a 24.6% increase. Stockholders' equity was $167 million at September 30, 2006 compared to $143 million at September 30, 2005, an increase of 16.5%. Book value per share was $9.96 at September 30, 2006 compared to $8.59 at September 30, 2005, a 15.9% increase. Changes in stockholders' equity and book value per share reflect earnings, dividends paid, exercise of stock options and changes in unrealized gains and losses on investment securities available for sale. The Company's ratio of common equity to assets was 6.62% as of September 30, 2006 compared to 7.08% as of September 30, 2005, and its ratio of tangible common equity to tangible assets was 6.39% as of September 30, 2006 compared to 6.79% as of September 30, 2005. In commenting on these results, George Gleason, Chairman and Chief Executive Officer, stated, "This year we have pursued several previously announced initiatives intended to position us for continued long-term growth. Our initiative to grow and diversify deposits, both from retail and wholesale sources, resulted in record third quarter deposit growth of $190 million. Our 2006 initiatives also include plans for a record number of new offices. During the third quarter we added four new banking offices, relocated a temporary office to a new permanent facility and established a new loan production office. While our 2006 initiatives have increased both overhead and interest expense, and thus impacted 2006 earnings, we believe they will result in meaningful future balance sheet and income growth." NET INTEREST INCOME Net interest income for the third quarter of 2006 increased 1.8% to $17,774,000 compared to $17,460,000 for the third quarter of 2005 but declined slightly from the record $17,985,000 for the second quarter of 2006. Net interest margin, on a fully taxable equivalent basis, was 3.34% in the third quarter of 2006, a decrease of 85 basis points from 4.19% in the third quarter of 2005 and a decrease of 27 basis points from the second quarter of 2006. Net interest income for the nine months ended September 30, 2006 increased 4.9% to $53,197,000 compared to $50,731,000 for the nine months ended September 30, 2005. The Company's net interest margin for the first nine months of 2006 was 3.59%, a decrease of 65 basis points from 4.24% for the first nine months of 2005. Mr. Gleason stated, "The relatively flat yield curve between short-term and long-term rates, a challenging competitive environment for pricing both loans and deposits and our decisions to aggressively pursue and price deposits in 2006 have contributed to the decline in our net interest margin and put pressure on earnings. However, we believe the additions of new customers we have achieved and expect to achieve are important in accomplishing our long-term goals." NON-INTEREST INCOME Non-interest income for the third quarter of 2006 was $5,680,000 compared to $5,164,000 for the third quarter of 2005, a 10.0% increase. Non-interest income for the nine months ended September 30, 2006 was $16,798,000 compared to $14,448,000 for the nine months ended September 30, 2005, a 16.3% increase. Third quarter 2006 income from service charges on deposit accounts was $2,540,000, a decrease of 1.2% from $2,570,000 in the third quarter of 2005, and a decline of 1.8% from the record $2,587,000 in the second quarter of 2006. For the first nine months of 2006, income from service charges on deposit accounts was $7,449,000, a 1.5% increase from $7,338,000 in the first nine months of 2005. Mortgage lending income decreased 10.8% to $792,000 in the third quarter of 2006 compared to $888,000 in the third quarter of 2005. Mortgage lending income for the first nine months of 2006 was $2,174,000, a 4.2% decrease from $2,270,000 for the first nine months of 2005. Trust income for the quarter just ended was $486,000, an increase of 8.5% from $448,000 in the third quarter of 2005. Trust income for the nine months ended September 30, 2006 was $1,397,000, a 13.5% increase from $1,231,000 for the first nine months of 2005. Net gains from sales of investment securities and other assets were $760,000 in the third quarter of 2006 compared to $244,000 in the third quarter of 2005. Net gains from sales of investment securities and other assets were $2,631,000 in the first nine months of 2006 compared to $710,000 for the first nine months of 2005. NON-INTEREST EXPENSE Non-interest expense for the third quarter of 2006 was $11,707,000 compared to $10,270,000 for the third quarter of 2005, an increase of 14.0%. The Company's efficiency ratio for the quarter ended September 30, 2006 was 47.5% compared to 43.0% for the third quarter of 2005. Non-interest expense for the first nine months of 2006 was $33,884,000 compared to $29,774,000 for the first nine months of 2005, an increase of 13.8%. The Company's efficiency ratio for the first nine months of 2006 was 46.0% compared to 43.6% for the first nine months of 2005. During the quarter just ended, the Company opened four new banking offices including offices in Texarkana, Springdale and Hot Springs, Arkansas and Texarkana, Texas. The Company also opened a new Fayetteville banking office to replace its temporary office there and established a loan production office in Tulsa, Oklahoma. Throughout 2006 the Company has added staff in existing offices and in various corporate positions as part of its previously announced plans to accelerate growth in many existing offices and to build the personnel infrastructure necessary to support future growth. Mr. Gleason again 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 have or will 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 these initiatives." ASSET QUALITY, CHARGE-OFFS AND RESERVES Nonperforming loans and leases as a percent of total loans and leases were 0.21% as of September 30, 2006 compared to 0.18% as of September 30, 2005. Nonperforming assets as a percent of total assets were 0.15% as of September 30, 2006 compared to 0.13% as of September 30, 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 0.60% at September 30, 2006 compared to 0.38% at September 30, 2005. The Company's annualized net charge-off ratio for the third quarter of 2006 was 0.14% compared to 0.20% for the third quarter of 2005. The Company's annualized net charge-off ratio was 0.11% for both the first nine months of 2006 and the first nine months of 2005. The Company's allowance for loan and lease losses increased to $17.3 million at September 30, 2006, or 1.09% of total loans and leases, from $16.9 million, or 1.27% of total loans and leases, at September 30, 2005. As of September 30, 2006, the Company's allowance for loan and lease losses equaled 513% of its total nonperforming loans and leases. GROWTH AND EXPANSION The seven banking offices the Company added in the first nine months of 2006 and the four additional offices it expects to add in the fourth quarter of 2006 are intended to provide a substantial presence in important new markets. By year-end 2006 the Company expects to grow from its present five to eight banking offices in Benton and Washington counties in northwest Arkansas, open its first permanent banking office in Frisco, Texas and relocate the retail banking activities at its main Ozark, Arkansas office to a new permanent facility. Late in the third quarter, the Company established a loan production office in Tulsa, Oklahoma. The Company plans to file an application to begin full-service banking operations in Oklahoma by establishing a new Oklahoma bank subsidiary in 2007. Oklahoma and North Carolina, among other states, permit reciprocal interstate branching, and the Company plans to utilize this new bank subsidiary to expand its North Carolina loan production office to a full-service banking operation, most likely in 2008. The Company plans to continue its growth and de novo branching strategy and currently expects to add approximately eight new banking offices, including the new Oklahoma office, during 2007. Opening new offices, replacing existing banking offices, converting loan production offices to full service operations and establishing a new Oklahoma bank subsidiary are 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. ISSUANCE OF TRUST PREFERRED SECURITIES On September 29, 2006 the Company, through a wholly-owned subsidiary, issued $20 million of adjustable rate trust preferred securities bearing an interest rate of 90-day LIBOR plus 1.60%, adjustable quarterly. The initial rate is 6.97%. These securities have a December 15, 2036 final maturity and are prepayable at par by the Company on or after the fifth anniversary date or earlier in certain circumstances. This transaction provided the Company additional regulatory capital to support its expected future growth and expansion and for other general corporate purposes. CONFERENCE CALL Management will conduct a conference call to review announcements made in this press release at 10:00 a.m. CDT (11:00 a.m. EDT) on Friday, October 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 8011921. The telephone playback will be available through October 31, 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 opening new offices, replacing existing banking offices, converting loan production offices to full service operations, establishing a new Oklahoma bank subsidiary, balance sheet and income growth, addition of new customers, and growth in deposits, loans and leases. 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 building 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 section and the description of certain Risk Factors contained in the Company's 2005 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Bank of the Ozarks, Inc. trades on the NASDAQ Global Select Market under the symbol "OZRK". The Company owns an Arkansas-state-chartered subsidiary bank that conducts banking operations through 59 offices in 33 communities throughout northern, western and central Arkansas, four Texas banking offices, and loan production offices in Little Rock, Arkansas, Charlotte, North Carolina and Tulsa, Oklahoma. 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 September 30, --------------------------------- 2006 2005 % Change ----------- ----------- --------- Income statement data: - ------------------------------------- Net interest income $17,774 $17,460 1.8% Provision for loan and lease losses 550 800 (31.3) Non-interest income 5,680 5,164 10.0 Non-interest expense 11,707 10,270 14.0 Net income 8,010 8,071 (0.8) Share and per share data: - ------------------------------------- Net income - diluted $0.48 $0.48 -% Net income - basic 0.48 0.48 - Cash dividends 0.10 0.10 - Book value 9.96 8.59 15.9 Weighted-average diluted shares outstanding (thousands) 16,809 16,780 End of period shares outstanding (thousands) 16,733 16,653 Balance sheet data at period end: - ------------------------------------- Total assets $2,515,761 $2,019,711 24.6% Total loans and leases 1,594,942 1,330,724 19.9 Allowance for loan and lease losses 17,340 16,915 2.5 Total investment securities 675,815 514,299 31.4 Goodwill 5,243 5,243 - Other intangibles - net of amortization 962 1,224 (21.4) Total deposits 2,008,145 1,491,310 34.7 Repurchase agreements with customers 50,992 25,422 100.6 Other borrowings 218,995 307,567 (28.8) Subordinated debentures 64,950 44,331 46.5 Stockholders' equity 166,629 143,082 16.5 Loan and lease to deposit ratio 79.42% 89.23% Selected ratios: - ------------------------------------- Return on average assets(a) 1.29% 1.65% Return on average stockholders' equity(a) 20.18 22.62 Average equity to average assets 6.38 7.29 Net interest margin - FTE(a) 3.34 4.19 Overhead ratio(a) 1.88 2.10 Efficiency ratio 47.49 43.02 Allowance for loan and lease losses to total loans and leases 1.09 1.27 Nonperforming loans and leases to total loans and leases 0.21 0.18 Nonperforming assets to total assets 0.15 0.13 Net charge-offs to average loans and leases(a) 0.14 0.20 Other information: - ------------------------------------- Non-accrual loans and leases $3,379 $2,416 Accruing loans and leases - 90 days past due - - ORE and repossessions 371 271 Nine Months Ended September 30, --------------------------------- 2006 2005 % Change ----------- ----------- --------- Income statement data: - ------------------------------------- Net interest income $53,197 $50,731 4.9% Provision for loan and lease losses 1,550 1,800 (13.9) Non-interest income 16,798 14,448 16.3 Non-interest expense 33,884 29,774 13.8 Net income 24,338 23,106 5.3 Share and per share data: - ------------------------------------- Net income - diluted $1.45 $1.38 5.1% Net income - basic 1.46 1.39 5.0 Cash dividends 0.30 0.27 11.1 Book value 9.96 8.59 15.9 Weighted-average diluted shares outstanding (thousands) 16,800 16,759 End of period shares outstanding (thousands) 16,733 16,653 Balance sheet data at period end: - ------------------------------------- Total assets $2,515,761 $2,019,711 24.6% Total loans and leases 1,594,942 1,330,724 19.9 Allowance for loan and lease losses 17,340 16,915 2.5 Total investment securities 675,815 514,299 31.4 Goodwill 5,243 5,243 - Other intangibles - net of amortization 962 1,224 (21.4) Total deposits 2,008,145 1,491,310 34.7 Repurchase agreements with customers 50,992 25,422 100.6 Other borrowings 218,995 307,567 (28.8) Subordinated debentures 64,950 44,331 46.5 Stockholders' equity 166,629 143,082 16.5 Loan and lease to deposit ratio 79.42% 89.23% Selected ratios: - ------------------------------------- Return on average assets(a) 1.40% 1.66% Return on average stockholders' equity(a) 21.19 22.93 Average equity to average assets 6.61 7.25 Net interest margin - FTE(a) 3.59 4.24 Overhead ratio(a) 1.95 2.14 Efficiency ratio 45.99 43.60 Allowance for loan and lease losses to total loans and leases 1.09 1.27 Nonperforming loans and leases to total loans and leases 0.21 0.18 Nonperforming assets to total assets 0.15 0.13 Net charge-offs to average loans and leases(a) 0.11 0.11 Other information: - ------------------------------------- Non-accrual loans and leases $3,379 $2,416 Accruing loans and leases - 90 days past due - - ORE and repossessions 371 271 (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 12/31/04 3/31/05 6/30/05 9/30/05 --------- -------- -------- -------- Earnings Summary: - ---------------------------------- Net interest income $16,075 $16,459 $16,811 $17,460 Federal tax (FTE) adjustment 702 767 1,095 1,247 --------- -------- -------- -------- Net interest income (FTE) 16,777 17,226 17,906 18,707 Provision for loan and lease losses (500) (500) (500) (800) Non-interest income 4,397 4,371 4,913 5,164 Non-interest expense (9,845) (9,495) (10,008) (10,270) --------- -------- -------- -------- Pretax income (FTE) 10,829 11,602 12,311 12,801 FTE adjustment (702) (767) (1,095) (1,247) Provision for income taxes (3,116) (3,513) (3,503) (3,483) --------- -------- -------- -------- Net income $7,011 $7,322 $7,713 $8,071 ========= ======== ======== ======== Earnings per share - diluted $0.42 $0.44 $0.46 $0.48 Non-interest Income: - ---------------------------------- Service charges on deposit accounts $2,411 $2,204 $2,564 $2,570 Mortgage lending income 629 671 712 888 Trust income 427 389 394 448 Bank owned life insurance income 448 449 455 465 Gains on sales of investment securities - - - 211 Gains on sales of other assets 13 131 335 33 Other 469 527 453 549 --------- -------- -------- -------- Total non-interest income $4,397 $4,371 $4,913 $5,164 Non-interest Expense: - ---------------------------------- Salaries and employee benefits $5,358 $5,445 $5,866 $6,221 Net occupancy expense 1,436 1,447 1,502 1,632 Other operating expenses 2,985 2,538 2,574 2,351 Amortization of intangibles 66 65 66 66 --------- -------- -------- -------- Total non-interest expense $9,845 $9,495 $10,008 $10,270 Allowance for Loan and Lease Losses: - ---------------------------------- Balance at beginning of period $15,888 $16,133 $16,437 $16,745 Net charge-offs (255) (196) (192) (630) Provision for loan and lease losses 500 500 500 800 --------- -------- -------- -------- Balance at end of period $16,133 $16,437 $16,745 $16,915 Selected Ratios: - ---------------------------------- Net interest margin - FTE(a) 4.34% 4.33% 4.22% 4.19% Overhead expense ratio(a) 2.33 2.18 2.15 2.10 Efficiency ratio 46.50 43.96 43.86 43.02 Nonperforming loans and leases/total loans and leases 0.57 0.36 0.26 0.18 Nonperforming assets/total assets 0.39 0.39 0.21 0.13 Loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases 0.76 0.49 0.45 0.38 12/31/05 3/31/06 6/30/06 9/30/06 --------- -------- -------- -------- Earnings Summary: - ---------------------------------- Net interest income $17,845 $17,438 $17,985 $17,774 Federal tax (FTE) adjustment 1,357 1,357 1,130 1,196 --------- -------- -------- -------- Net interest income (FTE) 19,202 18,795 19,115 18,970 Provision for loan and lease losses (500) (500) (500) (550) Non-interest income 4,804 6,164 4,954 5,680 Non-interest expense (10,306) (11,160) (11,017) (11,707) --------- -------- -------- -------- Pretax income (FTE) 13,200 13,299 12,552 12,393 FTE adjustment (1,357) (1,357) (1,130) (1,196) Provision for income taxes (3,460) (3,545) (3,491) (3,187) --------- -------- -------- -------- Net income $8,383 $8,397 $7,931 $8,010 ========= ======== ======== ======== Earnings per share - diluted $0.50 $0.50 $0.47 $0.48 Non-interest Income: - ---------------------------------- Service charges on deposit accounts $2,537 $2,322 $2,587 $2,540 Mortgage lending income 763 603 779 792 Trust income 442 433 478 486 Bank owned life insurance income 446 443 455 463 Gains on sales of investment securities 3 1,831 27 718 Gains on sales of other assets 68 2 11 42 Other 545 530 617 639 --------- -------- -------- -------- Total non-interest income $4,804 $6,164 $4,954 $5,680 Non-interest Expense: - ---------------------------------- Salaries and employee benefits $5,945 $6,584 $6,569 $6,993 Net occupancy expense 1,673 1,660 1,738 1,732 Other operating expenses 2,622 2,850 2,644 2,917 Amortization of intangibles 66 66 66 65 --------- -------- -------- -------- Total non-interest expense $10,306 $11,160 $11,017 $11,707 Allowance for Loan and Lease Losses: - ---------------------------------- Balance at beginning of period $16,915 $17,007 $17,175 $17,332 Net charge-offs (408) (332) (343) (542) Provision for loan and lease losses 500 500 500 550 --------- -------- -------- -------- Balance at end of period $17,007 $17,175 $17,332 $17,340 Selected Ratios: - ---------------------------------- Net interest margin - FTE(a) 4.02% 3.84% 3.61% 3.34% Overhead expense ratio(a) 1.97 2.08 1.90 1.88 Efficiency ratio 42.93 44.71 45.77 47.49 Nonperforming loans and leases/total loans and leases 0.25 0.24 0.18 0.21 Nonperforming assets/total assets 0.18 0.17 0.13 0.15 Loans and leases past due 30 days or more, including past due non-accrual loans and leases, to total loans and leases 0.39 0.63 0.45 0.60 (a) Annualized Bank of the Ozarks, Inc. Average Consolidated Balance Sheet and Net Interest Analysis (Dollars in Thousands) Unaudited Quarter Ended September 30, 2006 --------------------------- Average Income/ Yield/ Balance Expense Rate ----------- -------- ------ ASSETS Earning assets: Interest earning deposits and federal funds sold $242 $3 5.35% Investment securities: Taxable 481,593 6,838 5.63 Tax-exempt - FTE 189,553 3,360 7.03 Loans and leases - FTE 1,578,630 32,462 8.16 ----------- -------- Total earning assets - FTE 2,250,018 42,663 7.52 Non-earning assets 218,075 ----------- Total assets $2,468,093 =========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: Deposits: Savings and interest bearing transaction $522,238 $3,624 2.75% Time deposits of $100,000 or more 798,886 9,880 4.91 Other time deposits 414,651 4,604 4.41 ----------- -------- Total interest bearing deposits 1,735,775 18,108 4.14 Repurchase agreements with customers 42,103 387 3.65 Other borrowings 327,193 4,270 5.18 Subordinated debentures 44,779 928 8.22 ----------- -------- Total interest bearing liabilities 2,149,850 23,693 4.37 Non-interest bearing liabilities: Non-interest bearing deposits 152,427 Other non-interest bearing liabilities 8,375 ----------- Total liabilities 2,310,652 Stockholders' equity 157,441 ----------- Total liabilities and stockholders' equity $2,468,093 =========== Interest rate spread - FTE 3.15% -------- Net interest income - FTE $18,970 ======== Net interest margin - FTE 3.34% Nine Months Ended September 30, 2006 --------------------------- Average Income/ Yield/ Balance Expense Rate ----------- -------- ------ ASSETS Earning assets: Interest earning deposits and federal funds sold $235 $7 3.71% Investment securities: Taxable 439,583 18,356 5.58 Tax-exempt - FTE 196,517 10,339 7.03 Loans and leases - FTE 1,482,682 88,083 7.94 ----------- -------- Total earning assets - FTE 2,119,017 116,785 7.37 Non-earning assets 204,680 ----------- Total assets $2,323,697 =========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: Deposits: Savings and interest bearing transaction $522,300 $9,918 2.54% Time deposits of $100,000 or more 719,351 24,125 4.48 Other time deposits 375,783 10,976 3.91 ----------- -------- Total interest bearing deposits 1,617,434 45,019 3.72 Repurchase agreements with customers 38,350 931 3.24 Other borrowings 309,268 11,368 4.91 Subordinated debentures 44,482 2,587 7.77 ----------- -------- Total interest bearing liabilities 2,009,534 59,905 3.99 Non-interest bearing liabilities: Non-interest bearing deposits 151,430 Other non-interest bearing liabilities 9,189 ----------- Total liabilities 2,170,153 Stockholders' equity 153,544 ----------- Total liabilities and stockholders' equity $2,323,697 =========== Interest rate spread - FTE 3.38% -------- Net interest income - FTE $56,880 ======== Net interest margin - FTE 3.59% CONTACT: Bank of the Ozarks, Inc. Susan Blair, 501-978-2217 -----END PRIVACY-ENHANCED MESSAGE-----