Bank Ozk · NASDAQ:OZK
Bank Ozk — Investor Presentation (May 2024)
42 slides from Bank Ozk's investor presentation, May 2024
Slide 1: Bank OZK
<> Bank OZK Nasdaq: OZK | May 2024
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation and other communications by Bank OZK (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 Securiti
Slide 3: Bank OZK (Nasdaq: OZK) – At a Glance
Bank OZK (Nasdaq: OZK) – At a Glance Bank OZK is a high-performing regional bank with deep expertise in specialized lending businesses nationwide. It operates through 228 retail branches in Arkansas, Georgia, Florida, North Carolina and Texas and 12 loan production offices. Recent Financial Highligh
Slide 4: 1st Quarter 2024 Key Highlights
1st Quarter 2024 Key Highlights Record Quarterly Net Income Available to Common Stockholders of $171.5 million, an increase of 3.4% compared to the first quarter of 2023. Record Quarterly Diluted Earnings Per Common Share of $1.51, an increase of 7.1% compared to the first quarter of 2023. Record Qu
Slide 5: Expertise in Key Lending Verticals Contributes to Our Favorable Asset Quality
Expertise in Key Lending Verticals Contributes to Our Favorable Asset Quality We conduct extensive lending operations through our network of 228 branches and 12 loan production offices: ➢ Real Estate Specialties Group (“RESG”) is a nationally recognized leader in commercial real estate construction
Slide 6: Loans Are Our Largest Category of Earning Assets
Loans Are Our Largest Category of Earning Assets $30,000 $28,031 12.00% $26,459 Strong Loan Portfolio Growth $23,607 $25,332 $25,000 $20,779 $22,062 10.00% Combined with Excellent Yields Total Loan Yield $18,931 $18,743 $19,514 $20,000 8.00% Total Loans* 8.70% ($ millions) 8.44% 8.58% 8.64% $15,000
Slide 7: Expert Lending Teams Driving Diversified Growth
Expert Lending Teams Driving Diversified Growth Non-purchased Loans by $30,000 Lending Group $1,189 $56 $204 $137 $27,500 $27,781 $25,000 $26,195 RESG was the largest 1st Quarter $22,500 contributor to non- of 2024 purchased loan growth for $20,000 ($ millions) the first quarter of 2024. $17,500 Com
Slide 8: Growth, Growth & Diversification
Growth, Growth & Diversification We want to continue to grow our RESG portfolio while also achieving greater Our “growth, growth and portfolio diversification through growth in our Community Banking, Indirect RV & diversification” strategy is intended to capitalize on RESG’s unique Marine, and CIB p
Slide 9: RESG – Nationally Recognized Industry Leader
RESG – Nationally Recognized Industry Leader Started in 2003, RESG is a nationally recognized industry RESG Business Model Reduces Credit Risk leader in construction, land & development (“CL&D”) lending and handles our largest and most complex loans. It ▪ RESG is always the sole senior secured lende
Slide 10: Recent Trends in RESG Loan Originations and Repayments
Recent Trends in RESG Loan Originations and Repayments Figure 11: RESG Quarterly Loan Repayments & Figure 10: RESG Quarterly Quarterly Loan Originations RESG Originations ($ billions) OtherRESG Quarterly Activity Loan Repayments & Other Activity ($ billions) ($ billions) ($ billions) Q1 Q2 Q3 Q4 Tot
Slide 11: Cadence of RESG Originations and Repayments by Year of Origination
Cadence of RESG Originations and Repayments - by Year of Origination The illustration below shows the amount of each year’s originations which have been repaid and which remain as outstanding commitments, both funded and unfunded, as of March 31, 2024. $15.00 $15.00 $13.82 $14.00 $$ Amount Repaid To
Slide 12: Changes in Funded Balance of RESG Loans and Total Unfunded Balance
Changes in the Funded Balance of RESG Loans and Our Total Unfunded Balance for the First Quarter of 2024 and the Last Four Quarters First Quarter of 2024 Last Four Quarters $25.00 $25.00 $20.00 $20.00 ($3.89) Activity in $1.98 $8.63 ($0.79) RESG $15.00 $15.00 Funded $10.00 $18.11 $10.00 $18.11 $16.9
Slide 13: RESG Portfolio By Origination Date & LTV
RESG Portfolio By Origination Date & LTV (As of March 31, 2024) The loan-to-value (“LTV”) metrics on individual loans within the RESG portfolio as of March 31, 2024, are illustrated below. As of March 31, 2024, the RESG portfolio has three credits that are rated substandard and no credits rated spec
Slide 14: RESG's Portfolio Diversification by Product Type
RESG’s Portfolio Diversification by Product Type – as of March 31, 2024 Funded Balance Unfunded Commitment Loan-to-Cost* Loan-to-Value* $10,000 120% $9,000 95% 100% $8,000 Total Commitment by Product Type LTC & LTV Ratios 80% $7,000 89% 80% $6,000 ($ millions) 53% $5,000 54% 52% 53% 54% 60% 47% 49%
Slide 15: RESG Portfolio by Metropolitan Area
Total Commitment ($ millions) $- $1,000 $2,000 $3,000 $5,000 $6,000 $4,000 Miami-Fort Lauderdale-West Palm Beach, FL $4,467 New York-Newark-Jersey City, NY-NJ-PA $4,209 San Diego-Carlsbad, CA $2,000 Los Angeles-Long Beach-Anaheim, CA $1,880 San Francisco-Oakland-Hayward, CA $1,642 Chicago-Naperville
Slide 16: The RESG Portfolio Includes Loans of Many Different Sizes
The RESG Portfolio Includes Loans of Many Different Sizes ($ millions) Commitment Distribution by Size No. of Total Funded Tranche Loans Funded & Unfunded $20,000 100% $0 - $125mm 257 $ 8,399 $ 14,743 Funded ($ millions) Unfunded ($ millions) $125+ mm - $250mm 59 4,892 10,282 LTV Ratio* (%) LTC Rati
Slide 17: Community Bank Lending – An Important & Well-Established Business
Community Bank Lending – An Important & Well-Established Business • Community Banking accounted for 18% of the funded balance of non-purchased loans as of March 31, 2024, and included consumer and small business loans, business banking loans, loans originated by our commercial (generalist) lenders,
Slide 18: Indirect RV & Marine Lending
Indirect RV & Marine Lending Indirect RV & Marine lending (“ILD”) is a nationwide business that ILD Trends has allowed us to originate consumer loans while maintaining our conservative credit-quality standards. $3,500 $3,063 • This portfolio accounted for 11% $3,000 $2,717 $2,831 $2,859 of the funde
Slide 19: Corporate & Institutional Banking
Corporate & Institutional Banking • Corporate and Institutional Banking (“CIB”) includes our Asset Based Lending Group (“ABLG”), Fund Finance, and Equipment Finance & Capital Solutions (“EFCS”) teams. These teams focus on non-real estate lending within our footprint and nationwide. • CIB accounted f
Slide 20: Asset Quality Consistently Better than the Industry Average
Asset Quality Consistently Better than the Industry Average Since going public in 1997, our net charge-off ratio has outperformed the industry in every year, and it has averaged approximately one-third of the industry’s net charge-off ratio. Net Charge-Off Ratio (%) 2.52 2.55 Net Charge-off Ratios:
Slide 21: Favorable Ratios of Nonperforming Loans, Assets and Loans Past Due
Our Favorable Ratios of Nonperforming Loans, Nonperforming Assets and Loans Past Due Provide Meaningful Data Points on our Asset Quality OZK NPLs ($) OZK NPLs / Non-purchased Loans (%) FDIC Industry Data (%)* Asset Quality Overview $100 6% $80 5% 4% $60 ($ millions) ($ millions) 3% NPLs Our ratios f
Slide 22: Allowance for Credit Losses Build Over the Last Seven Quarters
Allowance for Credit Losses (“ACL”) Build Over the Last Seven Quarters Over the last seven quarters we have increased our total ACL by a net $237 million. This large increase reflects both our $12.38 billion combined growth in total funded and unfunded loan commitments and our cautious outlook on ma
Slide 23: Robust Stress Testing
Robust Stress Testing Even though the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 repealed portions of the Dodd-Frank Act stress testing requirements, we continue to conduct robust stress tests. Capital stress testing, Liquidity stress testing Commercial Real including the
Slide 24: High Performing Regional Branch Network Provides Diverse and Stable Deposits
High Performing Regional Branch Network Provides Diverse and Stable Deposits Substantial and Diverse Sources of Liquidity Well-Positioned Securities Portfolio 24
Slide 25: Diverse & Stable Deposit Base and Liquidity Sources
Diverse & Stable Deposit Base and Liquidity Sources In recent years, we have worked to improve the mix and quality of our deposit base by focusing significant efforts on growing our core relationships. This groundwork has been very helpful in the current environment, allowing us to continue to grow
Slide 26: Well-Positioned Investment Securities Portfolio
Well-Positioned Investment Securities Portfolio • We have a well-positioned investment securities portfolio. ➢ We have no held-to-maturity (“HTM”) securities ➢ Our securities portfolio has a short effective duration ➢ Securities are a low percentage of total assets • We have long believed that holdi
Slide 27: Industry Leading Net Interest Margin and Efficiency Ratio Result in Dominant Profitability
Our Industry Leading Net Interest Margin and Efficiency Ratio Result in Dominant Profitability 27
Slide 28: Net Interest Income Is Our Largest Category of Revenue
Net Interest Income Is Our Largest Category of Revenue Our net interest income for the first quarter of 2024 was a record $376.9 million, a 9.3% increase from $344.9 million for the first quarter of 2023. $400 $371 $377 $367 $357 $345 $350 $332 $295 $300 $266 Net Interest Income $249 $250 ($ million
Slide 29: Net Interest Margin Trends
Net Interest Margin Trends • During the quarter just ended, our net interest margin was 4.71%, decreasing 11 bps and 83 bps from the fourth quarter of 2023 and first quarter of 2023, respectively. Favorable 1.54% Net Interest Margin vs. the Industry Variance vs Industry* 6.00% 5.46% 5.54% 5.32% 5.03
Slide 30: Our Core Spread and Cost of Interest Bearing Deposits
Our Core Spread and Cost of Interest Bearing Deposits (“COIBD”) • During the quarter just ended, our core spread, which is how we describe the difference between our yield on non-purchased loans and our COIBD, was 4.56%, decreases of 20 bps and 131 bps from the fourth quarter of 2023 and first quart
Slide 31: Variable Rate Loans at Floors as Rates Decline
Variable Rate Loans at Floors as Rates Decline – Total Commitments Variable Rate Loan Floors Overview The following chart illustrates the percentage of our total commitment of variable rate loans that would be at their floor rate following various At March 31, 2024, 82% of our decreases in the appli
Slide 32: Efficiency Ratio Among the Best in the Industry
Efficiency Ratio Among the Best in the Industry • Most banks with a good efficiency ratio focus relentlessly on controlling costs. We take a different approach. We achieve our excellent efficiency ratio by pursuing a business model that generates strong revenue. This allows us to be highly efficient
Slide 33: Our Strong Capital Provides Significant Optionality and Shareholder Returns
Our Strong Capital Provides Significant Optionality and Shareholder Returns 33
Slide 34: Strong Capital Position Provides Significant Optionality
Strong Capital Position Provides Significant Optionality CET 1 Capital Ratio Tier 1 Capital Ratio 20.00% 20.00% 18.00% 18.00% 16.00% 16.00% 14.00% 14.00% 11.45% 12.00% 10.63% 12.00% 10.00% 10.00% 8.00% 8.00% 6.00% 6.00% 4.00% 4.00% 2.00% 2.00% 0.00% 0.00% 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19
Slide 35: Building Capital and Delivering for Shareholders
Building Capital and Delivering for Shareholders $43.44 $50.00 Over the last 10 years, we have increased book $37.62 BVPS TBVPS $45.00 $40.00 value and tangible book value per common Book Value $35.00 share by a cumulative 391% and 340%, and Tangible $30.00 respectively, resulting in compound annual
Slide 36: Strong Results, Driven by Strong Leadership
Strong Results, Driven by Strong Leadership 36
Slide 37: Deep and Talented Executive Management Team
Deep and Talented Executive Management Team Our management team has on average 15 years of experience with Bank OZK. Executive Name | Title | Years of OZK Service | Years of Relevant Experience George Gleason Brannon Hamblen Tim Hicks Cindy Wolfe Chairman & CEO President Chief Financial Officer Chie
Slide 38: We Have a Strong and Diverse Board of Directors
We Have a Strong and Diverse Board of Directors Our Board of Directors consists of 13 members, 12 of whom are independent. Our directors possess high levels of technical skill and significant and diverse business experience. Active engagement creates an atmosphere of effective challenge and collabor
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations 39
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations Calculation of Total Common Stockholders’ Equity, Total Tangible Common Stockholders’ Equity and Tangible Book Value per Share Unaudited (Dollars in Thousands, Except per Share) As of March 31, 2014 2015 2016 2017 2018 2019 Total stockholders' equity before noncontrolling in
Slide 41: Non-GAAP Reconciliations
Non-GAAP Reconciliations Calculation of Total Common Stockholders’ Equity, Calculation of Average Common Stockholders’ Equity, Average Tangible Total Tangible Common Stockholders’ Equity and Common Stockholders’ Equity and the Annualized Returns on Average the Ratio of Total Tangible Common Stockhol
Slide 42: Bank OZK
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