EX-99.1 2 a5374320-ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 Bank of the Ozarks, Inc. Announces First Quarter 2007 Earnings LITTLE ROCK, Ark.--(BUSINESS WIRE)--April 11, 2007--Bank of the Ozarks, Inc. (NASDAQ: OZRK) today announced that net income for the quarter ended March 31, 2007 was $7,521,000, a decrease of 10.4% compared to its record net income of $8,397,000 in the first quarter of 2006. Diluted earnings per share were $0.45 for the first quarter of 2007 compared to $0.50 for the first quarter of 2006, a decrease of 10.0%. The Company's annualized returns on average assets and average stockholders' equity for the first quarter of 2007 were 1.20% and 17.11%, respectively, compared to 1.57% and 22.31%, respectively, for the first quarter of 2006. Loans and leases were $1.72 billion at March 31, 2007 compared to $1.42 billion at March 31, 2006, an increase of 21.0%. Deposits were $2.17 billion at March 31, 2007 compared to $1.74 billion at March 31, 2006, an increase of 24.9%. Total assets were $2.54 billion at March 31, 2007, a 13.7% increase from $2.24 billion at March 31, 2006. Stockholders' equity increased 19.2% to $182 million at March 31, 2007 compared to $153 million at March 31, 2006. Book value per share increased 18.9% to $10.88 at March 31, 2007 compared to $9.15 at March 31, 2006. The Company's ratio of common equity to assets was 7.17% as of March 31, 2007 compared to 6.84% as of March 31, 2006, and its ratio of tangible common equity to tangible assets was 6.94% as of March 31, 2007 compared to 6.57% as of March 31, 2006. In commenting on these results, George Gleason, Chairman and Chief Executive Officer, stated, "Our priorities for 2007 include accelerating our rate of revenue growth and decelerating our rate of overhead growth compared to 2006. During the quarter just ended, we achieved record net interest income, record income from service charges on deposit accounts and the first quarter-to-quarter improvement in our net interest margin in ten quarters. In addition income from mortgage lending and trust improved compared to the first quarter of 2006. While non-interest expense for the quarter just ended increased 8.8% compared to the first quarter of 2006, this rate of growth was less than the year-over-year growth rate of non-interest expense during any quarter of 2006. In fact non-interest expense for the quarter just ended decreased compared to the fourth quarter of 2006. These results suggest that we are off to a good start on our goals of accelerating our rate of revenue growth and decelerating our rate of overhead growth in 2007." NET INTEREST INCOME Net interest income for the first quarter of 2007 increased 4.7% to $18,249,000 compared to $17,438,000 for 2006. Net interest margin, on a fully taxable equivalent basis, was 3.35% in the first quarter of 2007, a decrease of 49 basis points from 3.84% in the first quarter of 2006. Compared to the fourth quarter of 2006, first quarter 2007 net interest margin improved 13 basis points. Mr. Gleason stated, "The inversion of the yield curve between short-term and long-term interest rates and intense competition continue to provide a challenging interest margin environment. Despite these conditions, our growth in loans and leases and the improvement in our net interest margin compared to the fourth quarter of 2006 allowed us to achieve record net interest income in the quarter just ended. Our goals for 2007 include improving net interest income each quarter by maintaining, and hopefully improving, our net interest margin and achieving good growth in earning assets, primarily loans and leases." NON-INTEREST INCOME Non-interest income for the first quarter of 2007 was $5,959,000 compared to $6,164,000 for the first quarter of 2006, a 3.3% decrease. Income from service charges on deposit accounts, mortgage lending and trust all increased in the first quarter of 2007 compared to the first quarter of 2006, but the combined gains from sales on investment securities and other assets decreased. Service charges on deposit accounts, the Company's largest source of non-interest income, were a record $2,834,000 in the first quarter of 2007 and increased 22.0% compared to $2,322,000 in the first quarter of 2006. Mortgage lending income increased 21.2% to $731,000 in the first quarter of 2007 compared to $603,000 in the first quarter of 2006, but was down slightly from $744,000 in the fourth quarter of 2006. Trust income increased 7.4% to $465,000 in the first quarter of 2007 compared to $433,000 in the first quarter of 2006, but decreased from the quarterly record of $550,000 in the fourth quarter of 2006. Net gains from sales of investment securities and other assets decreased to $372,000 in the first quarter of 2007 compared to $1,833,000 in the first quarter of 2006. During the first quarter of 2007, the Company sold a site previously acquired for a Jacksonville, Arkansas branch to First Arkansas Bank and Trust and subsequently withdrew its contested branch application for this site. The Company recognized a gain of $17,000 on the sale of such site and $500,000 of other non-interest income related to the settlement of the contested branch application. Among other things, this settlement and payment reimbursed the Company for its expenses incurred in previous quarters related to such branch application and included an agreement by the Company not to pursue any future branch application in the present city limits of Jacksonville. NON-INTEREST EXPENSE Non-interest expense for the first quarter of 2007 was $12,138,000 compared to $11,160,000 for the first quarter of 2006, an increase of 8.8%, but was slightly lower than the $12,506,000 in non-interest expense recorded in the fourth quarter of 2006. The Company's efficiency ratio for the quarter ended March 31, 2007 was 48.4% compared to 44.7% for the first quarter of 2006. A number of factors contributed to the Company's growth in non-interest expense in the first quarter of 2007 compared to the first quarter of 2006. These factors are primarily related to ongoing costs of facilities and staff added as part of the Company's 2006 branching and corporate growth initiatives. The Company expects to continue its growth and de novo branching strategy in 2007, although at a slower pace than in 2006. The Company opened no new offices during the quarter just ended, but in the remainder of 2007 it now expects to add three or four new banking offices and replace one temporary banking office with a new permanent facility. Opening new offices and replacing existing temporary offices with permanent facilities 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 accurately predict with certainty. ASSET QUALITY, CHARGE-OFFS AND ALLOWANCE Nonperforming loans and leases as a percent of total loans and leases were 0.25% as of March 31, 2007 compared to 0.24% as of March 31, 2006 and 0.34% as of December 31, 2006. Nonperforming assets as a percent of total assets were 0.27% as of March 31, 2007 compared to 0.17% as of March 31, 2006 and 0.24% as of December 31, 2006. 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 0.84% as of March 31, 2007 compared to 0.63% as of March 31, 2006 and 0.60% as of December 31, 2006. The Company's annualized net charge-off ratio for the first quarter 2007 was 0.16% compared to 0.10% in the first quarter of 2006 and 0.12% for the full year of 2006. The Company's allowance for loan and lease losses was $18.1 million at March 31, 2007, or 1.05% of total loans and leases, compared to $17.2 million, or 1.21% of total loans and leases, at March 31, 2006. As of March 31, 2007, the Company's allowance for loan and lease losses equaled 421% of its total nonperforming loans and leases. 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 12, 2007. 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 4206110. The telephone playback will be available through April 30, 2007, and the website recording of the call will be available for 12 months. FORWARD LOOKING STATEMENTS This release contains forward looking statements regarding the Company's plans, expectations, goals and outlook for the future, including the Company's goals to accelerate its rate of revenue growth and decelerate its rate of overhead growth, the Company's goals and expectations for net interest margin, growth in earning assets, growth in loans and leases, continuation of its growth and de novo branching strategy, plans to replace a temporary banking office with a new permanent facility and plans to add new banking 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 and 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 2006 Annual Report to Stockholders and the most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. GENERAL INFORMATION Bank of the Ozarks, Inc. trades on the NASDAQ Global Select Market under the symbol "OZRK". The Company owns a state-chartered subsidiary bank that conducts banking operations through 62 offices in 34 communities throughout northern, western and central Arkansas, five 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 March 31, ---------------------------------- 2007 2006 % Change ----------- ----------- ---------- Income statement data: ----------------------------------- Net interest income $ 18,249 $ 17,438 4.7 % Provision for loan and lease losses 1,100 500 120.0 Non-interest income 5,959 6,164 (3.3) Non-interest expense 12,138 11,160 8.8 Net income 7,521 8,397 (10.4) Common stock data: ----------------------------------- Net income per share - diluted $ 0.45 $ 0.50 (10.0)% Net income per share - basic 0.45 0.50 (10.0) Cash dividends per share 0.10 0.10 - Book value per share 10.88 9.15 18.9 Diluted shares outstanding (thousands) 16,828 16,812 End of period shares outstanding (thousands) 16,764 16,714 Balance sheet data at period end: ----------------------------------- Total assets $2,544,205 $2,238,084 13.7 % Total loans and leases 1,723,882 1,424,373 21.0 Allowance for loan and lease losses 18,128 17,175 5.5 Total investment securities 590,605 614,933 (4.0) Goodwill 5,243 5,243 - Other intangibles - net of amortization 831 1,093 (24.0) Total deposits 2,169,916 1,736,886 24.9 Repurchase agreements with customers 50,028 43,207 15.8 Other borrowings 64,258 243,192 (73.6) Subordinated debentures 64,950 44,331 46.5 Stockholders' equity 182,315 153,000 19.2 Loan and lease to deposit ratio 79.44% 82.01% Selected ratios: ----------------------------------- Return on average assets(a) 1.20% 1.57% Return on average stockholders' equity(a) 17.11 22.31 Average equity to total average assets 7.02 7.02 Net interest margin - FTE(a) 3.35 3.84 Overhead ratio(a) 1.94 2.08 Efficiency ratio 48.44 44.71 Allowance for loan and lease losses to total loans and leases 1.05 1.21 Nonperforming loans and leases to total loans and leases 0.25 0.24 Nonperforming assets to total assets 0.27 0.17 Net charge-offs to average loans and leases(a) 0.16 0.10 Other information: ----------------------------------- Non-accrual loans and leases $ 4,304 $ 3,369 Accruing loans and leases - 90 days past due - - ORE and repossessions 2,656 448 (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 6/30/05 9/30/05 12/31/05 3/31/06 --------- --------- ---------- --------- Earnings Summary: ----------------------------- Net interest income $ 16,811 $ 17,460 $ 17,845 $ 17,438 Federal tax (FTE) adjustment 1,095 1,247 1,357 1,357 --------- --------- ---------- --------- Net interest income (FTE) 17,906 18,707 19,202 18,795 Provision for loan and lease losses (500) (800) (500) (500) Non-interest income 4,913 5,164 4,804 6,164 Non-interest expense (10,008) (10,270) (10,306) (11,160) --------- --------- ---------- --------- Pretax income (FTE) 12,311 12,801 13,200 13,299 FTE adjustment (1,095) (1,247) (1,357) (1,357) Provision for income taxes (3,503) (3,483) (3,460) (3,545) --------- --------- ---------- --------- Net income $ 7,713 $ 8,071 $ 8,383 $ 8,397 ========= ========= ========== ========= Earnings per share - diluted $ 0.46 $ 0.48 $ 0.50 $ 0.50 Non-interest Income: ----------------------------- Service charges on deposit accounts $ 2,564 $ 2,570 $ 2,537 $ 2,322 Mortgage lending income 712 888 763 603 Trust income 394 448 442 433 Bank owned life insurance income 455 465 446 443 Gains on sales of investment securities - 211 3 1,831 Gains (losses) on sales of other assets 335 33 68 2 Other 453 549 545 530 --------- --------- ---------- --------- Total non-interest income $ 4,913 $ 5,164 $ 4,804 $ 6,164 Non-interest Expense: ----------------------------- Salaries and employee benefits $ 5,866 $ 6,221 $ 5,945 $ 6,584 Net occupancy expense 1,502 1,632 1,673 1,660 Other operating expenses 2,574 2,351 2,622 2,850 Amortization of intangibles 66 66 66 66 --------- --------- ---------- --------- Total non-interest expense $ 10,008 $ 10,270 $ 10,306 $ 11,160 Allowance for Loan and Lease Losses: ----------------------------- Balance at beginning of period $ 16,437 $ 16,745 $ 16,915 $ 17,007 Net charge-offs (192) (630) (408) (332) Provision for loan and lease losses 500 800 500 500 --------- --------- ---------- --------- Balance at end of period $ 16,745 $ 16,915 $ 17,007 $ 17,175 Selected Ratios: ----------------------------- Net interest margin - FTE(a) 4.22% 4.19% 4.02% 3.84% Overhead ratio(a) 2.15 2.10 1.97 2.08 Efficiency ratio 43.86 43.02 42.93 44.71 Nonperforming loans and leases/total loans and leases 0.26 0.18 0.25 0.24 Nonperforming assets/total assets 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 0.45 0.38 0.39 0.63 6/30/06 9/30/06 12/31/06 3/31/07 --------- --------- ---------- --------- Earnings Summary: ---------------------------- Net interest income $ 17,985 $ 17,774 $ 17,523 $ 18,249 Federal tax (FTE) adjustment 1,130 1,196 912 848 --------- --------- ---------- --------- Net interest income (FTE) 19,115 18,970 18,435 19,097 Provision for loan and lease losses (500) (550) (900) (1,100) Non-interest income 4,954 5,680 6,434 5,959 Non-interest expense (11,017) (11,707) (12,506) (12,138) --------- --------- ---------- --------- Pretax income (FTE) 12,552 12,393 11,463 11,818 FTE adjustment (1,130) (1,196) (912) (848) Provision for income taxes (3,491) (3,187) (3,196) (3,449) --------- --------- ---------- --------- Net income $ 7,931 $ 8,010 $ 7,355 $ 7,521 ========= ========= ========== ========= Earnings per share - diluted $ 0.47 $ 0.48 $ 0.44 $ 0.45 Non-interest Income: ---------------------------- Service charges on deposit accounts $ 2,587 $ 2,540 $ 2,768 $ 2,834 Mortgage lending income 779 792 744 731 Trust income 478 486 550 465 Bank owned life insurance income 455 463 471 465 Gains on sales of investment securities 27 718 1,341 337 Gains (losses) on sales of other assets 11 42 (145) 35 Other 617 639 705 1,092 --------- --------- ---------- --------- Total non-interest income $ 4,954 $ 5,680 $ 6,434 $ 5,959 Non-interest Expense: ---------------------------- Salaries and employee benefits $ 6,569 $ 6,993 $ 7,360 $ 7,310 Net occupancy expense 1,738 1,732 1,900 1,971 Other operating expenses 2,644 2,917 3,182 2,792 Amortization of intangibles 66 65 65 65 --------- --------- ---------- --------- Total non-interest expense $ 11,017 $ 11,707 $ 12,507 $ 12,138 Allowance for Loan and Lease Losses: ---------------------------- Balance at beginning of period $ 17,175 $ 17,332 $ 17,340 $ 17,699 Net charge-offs (343) (542) (541) (671) Provision for loan and lease losses 500 550 900 1,100 --------- --------- ---------- --------- Balance at end of period $ 17,332 $ 17,340 $ 17,699 $ 18,128 Selected Ratios: ---------------------------- Net interest margin - FTE(a) 3.61% 3.34% 3.22% 3.35% Overhead ratio(a) 1.90 1.88 1.99 1.94 Efficiency ratio 45.77 47.49 50.29 48.44 Nonperforming loans and leases/total loans and leases 0.18 0.21 0.34 0.25 Nonperforming assets/total assets 0.13 0.15 0.24 0.27 Loans and leases past due 30 days or more, including past due non- accrual loans and leases, to total loans and leases 0.45 0.60 0.60 0.84 (a) Annualized based on actual days Bank of the Ozarks, Inc. Average Consolidated Balance Sheet and Net Interest Analysis (Dollars in Thousands) Unaudited Quarter Ended March 31, 2007 --------------------------- Average Income/ Yield/ Balance Expense Rate ----------- -------- ------ ASSETS Earnings assets: Interest earning deposits and federal funds sold $ 249 $ 6 10.58% Investment securities: Taxable 478,664 6,595 5.59 Tax-exempt - FTE 134,227 2,377 7.18 Loans and leases - FTE 1,696,999 34,698 8.29 ----------- -------- Total earnings assets - FTE 2,310,139 43,676 7.67 Non-earning assets 228,923 ----------- Total assets $2,539,062 =========== LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: Deposits: Savings and interest bearing transaction $ 506,882 $ 3,347 2.68% Time deposits of $100,000 or more 913,527 11,615 5.16 Other time deposits 486,197 5,863 4.89 ----------- -------- Total interest bearing deposits 1,906,606 20,825 4.43 Repurchase agreements with customers 47,655 462 3.93 Other borrowings 169,694 2,042 4.88 Subordinated debentures 64,950 1,250 7.81 ----------- -------- Total interest bearing liabilities 2,188,905 24,579 4.55 Non-interest bearing liabilities: Non-interest bearing deposits 161,431 Other non-interest bearing liabilities 10,423 ----------- Total liabilities 2,360,759 Stockholders' equity 178,303 ----------- Total liabilities and stockholders' equity $2,539,062 =========== Interest rate spread - FTE 3.12% -------- Net interest income - FTE $19,097 ======== Net interest margin - FTE 3.35% CONTACT: Bank of the Ozarks, Inc. Susan Blair, 501-978-2217