Bank Ozk · NASDAQ:OZK
Bank Ozk — Bank of the Ozarks — Investor Presentation (November 2016)
37 slides from Bank Ozk's investor presentation, Nov 16, 2016
Slide 1: NASDAQ: OZRK | November 2016
Exhibit 99.1 NASDAQ: OZRK | NOVEMBER 2016
Slide 2: Forward-Looking Information
Forward-Looking Information This presentationand othercommunications by the Companyincludecertain“forwardlookingstatements”regardingthe Company’splans, expectations, thoughts,beliefs,estimates, goalsandoutlookforthefuturethatareintendedtobecoveredby thePrivateSecurities LitigationReform Act of 1995.
Slide 3: A Tradition of High Performance
Community Banker of the Year Top Performing Bank Top Performing Bank Top Performing Regional Bank Top Performing Bank American Banker ABA Banking Journal ABA Banking Journal SNL Financial Bank Director Magazine George Gleason Assets over $3 Billion Assets $1 Billion $10 - Billion Assets $1 Billion $
Slide 4: Consistent Profitability and Solid Earnings Growth
Consistent Profitability and Solid Earnings Growth 53.7% 39.3% Increase Increase Net Income ($ in Millions) 182.2 182.3 • Record net income in 16 of 19 years as a public company. Red bars denote record annual results. • 37 years under current leadership. 130.8 • 37 consecutive years (for company and
Slide 5: The Rewards of Discipline, Hard Work
The Rewards of: Discipline An Ability to Capitalize on Opportunities Hard Work ROAA (%) ROAE & ROATE (%) 27.87 2.70 27.04 2.13 2.14 2.11 21.6222.13 2.04 2.01 1.88 17.22 16.61 16.16 16.80 16.2816.73 16.63 17.02 15.88 14.05 15.08 14.97 13.75 13.27 1.23 1.14 1.07 1.00 1.01 1.04 1.02 8.90 9.54 9.01 9.30
Slide 6: Excellence in Three Disciplines
Excellence in Three Disciplines Superb Net Interest Margin Favorable Asset Quality Excellent Efficiency 6
Slide 7: Superb Net Interest Margin: Top Decile of Industry
Superb Net Interest Margin: Top Decile of Industry for 6 Consecutive Years* Favorable 1.74% Net Interest Margin (%) Variance vs 6.055.98 Industry at 3.08%** 5.61 5.80 5.90 5.84 5.97 5.84 5.83 5.56 5.55 5.63 5.46 5.62 5.49 5.53 5.42 5.31 5.35 5.37 5.10 5.07 4.98 4.99 4.92 4.82 4.90 3.83 3.76 3.75 3.7
Slide 8: Key Drivers of Net Interest Margin
Key Drivers of Net Interest Margin • Favorable Loan Yields on Legacy Portfolio • Favorable 0.75% Variance Financial vsIndustry 2012 2013 2014 2015 9M 2016 Institutions Nationwide** • Legacy Loan Yields have Loan Yield-Legacy 5.87% 5.48% 5.10% 5.00% 5.06% 4.31% been in a 22 bps range in COIBD 0.38% 0
Slide 9: Asset Quality 65% Better Than Industry Average
Asset Quality 65% Better Than Industry Average Net Charge-Off Ratio (%) Since going public in 1997, our annual net charge- 2.52 2.55 off ratio has been below the industry average every year. Over those 19 years, our net charge off ratio has been only 35% of industry average. 1.75 1.55 9M 2016 Net Ch
Slide 10: Excellent Efficiency: Top Decile of Industry
Excellent Efficiency: Top Decile of Industry for 14 Consecutive Years* • Favorable trend in efficiency ratio in recent years • Long term goal for further improvement Efficiency Ratio (%) 61.4 61.6 60.5 61.9 59.158.5 57.7 59.5 59.0 59.9 58.8 58.0 57.2 56.8 57.2 56.0 56.6 55.5 52.5 47.9 47.5 46.2 47.1
Slide 11: Extremely Conservative, Risk Averse Culture
Extremely Conservative, Risk Averse Culture A Constant Pursuit of Lower Credit Risk & Lower Interest Rate Risk 11
Slide 12: Real Estate Specialties Group (RESG)
Real Estate Specialties Group (RESG) Our Primary Engine for Loan Growth Dan Thomas, Vice Chairman, Chief Lending Officer, RESG President • Dan Thomas, CPA, JD, LLM (Taxation) • RESG established in 2003 by Dan Thomas 13 Year History of Annual Losses Ending Net charge-offs Team Members: 95 as of 10/07
Slide 13: RESG Business Model Reduces Credit Risk
RESG Business Model Reduces Credit Risk – It starts with the right focus I. Strong and capable sponsors, preferred equity providers and mezzanine debt providers, as evidenced by • Strong liquidity • Strong capital Focus on some • Significant expertise and experience combination of II. Marquee projec
Slide 14: RESG Business Model Emphasizes Excellence throughout Life of Loan
RESG Business Model Emphasizes Industry-Leading Excellence throughout the Life of the Loan • Thorough underwriting including detailed modeling and stress testing for economic stress, interest rate stress, exit refinancing stress and cap rate stress. • Economic analysis including supply and demand me
Slide 15: Low Leverage and RESG Portfolio Diversification by Product Type
Low Leverage and Significant RESG Portfolio Diversification by Product Type Reduce Risk RESG Portfolio Details • No property type accounts for more than 21.3% of RESG’s portfolio Total Commitment (Funded and Percentage of Loan to Loan to Property Type Unfunded) RESG Portfolio Cost (LTC) Value (LTV)
Slide 16: Diversification by Geography and Product Type Reduces Credit Risk
Significant Diversification by both Geography and Product Type Reduces Credit Risk Total Real Estate Portfolio Outstanding Balances by State of Collateral Outstanding Balances by Product Type Total Location Total ($ in thousands) Non-Farm Non-Residential ($ in thousands) % New York $ 2,370,903 Retai
Slide 17: We Have Aggressively Lowered Loan Leverage in Recent Years
We Have Aggressively Lowered Loan Leverage in Recent Years to Reduce Credit Risk Non-Purchased Construction Loans with Interest Reserves Loan to Cost* (%) 66 66 65 65 65 63 62 63 62 61 59 59 60 59 55 53 56 55 54 56 53 54 54 52 54 51 50 50 50 50 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 18: Net Interest Margin Positioning if Rates Don't Change
With our Net Interest Margin in th thepercentile* 96 of the industry, we are well positioned if rates don’t change. We are well positioned to benefit from rising rates We are well positioned even if U.S. sovereign debt yields and Variable Rate Portion of Total Non-Purchased Loans and key Leases inde
Slide 19: A Proven Track Record of Growth
A Proven Track Record of Growth: Organic Growth through Existing Offices Substantial – Capacity Exists Organic Growth through De Novo Branching Acquisitions are “icing on the cake” 19
Slide 20: A Proven Track Record of Growth: De Novo Branching and Acquisitions
A Proven Track Record of Growth Organic Growth through De Novo Branching $28 Million $2.8 Billion Organic Growth In In continues to 1979 2009 be our #1 Augmented by Multiple Acquisitions since 2010 Growth Priority. 1. March 2010 Unity National Bank GA FDIC-assisted 2. July 2010 Woodlands Bank SC, NC
Slide 21: Organic Loan and Lease Growth is Always Growth Priority #1
Organic Loan and Lease Growth is Always Growth Priority #1 Non-Purchased Loans & Leases 8.76B Financial data ($ in billions)Our exceptional execution delivers to our customers 2.23B a compelling value proposition which has allowed us 34% to achieve our substantial growth in recent years, 6.53B Growt
Slide 22: Multiple Engines for Growth in Earning Assets
We Have Multiple Engines for Growth in Earning Assets with Significant Diversification Geographically and by Collateral Type Growth 2014 2015 2016 Non-purchased loans and leases Q1 and investment portfolio ($ in millions) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Cyclical Engines • Community Bank Lending $21 $5
Slide 23: Untapped Deposit Growth Potential in Existing Markets
Untapped Deposit Growth Potential in Existing Markets (Branch count includes deposit-gathering branches only as of June 30, 2016; adjusted to include deposit-gathering branches from recent acquisitions.) 7 States*, 156 Cities # Branches% of Branches** Deposit Balance % of Deposits** All FDIC Financi
Slide 24: A Potent Combination of Organic Growth and Acquisitions
A Potent Combination of Organic Growth and Acquisitions (Office count as of October 20, 2016; includes deposit-gathering branches and loan production offices.) We NowHave 255 Offices in Nine States 24
Slide 25: Maximizing Value of Our Extensive Branch Network
Maximizing Value of Our Extensive Branch Network Over the Next 12 1 –8 Months Closing Duplicative Growth in Selected Expansion Branches Legacy Markets with CRA focus • Planned consolidation of 5 • Strategically compelling • Significant commitment to branches in cities in Northwest opportunities to f
Slide 26: Organic Growth in Core Checking Accounts
Organic Growth in Core Checking Accounts 9M 2016 core Deposit Growth Priority #1 checking account Net Growth in Number of Core Checking Accounts growth suggests another record year Excluding Accounts Acquired from Acquisitions 12,232 11,299 9,370 7,218 6,478 4,347 3,239 2010 2011 2012 2013 2014 2015
Slide 27: Well Capitalized with Ample Sources of Liquidity
Well Capitalized with Ample Sources of Liquidity 27
Slide 28: Strong Capital Position
Strong Capital Position Minimum Capital Current MinimumRequired Basel – III CapitalRequired – Fully Phased-In Ratiosat 9-30-16 OZRK Basel III (1-1-19) Common equity tier 1 to risk-weighted assets: 10.15% 5.125% 7.00% Tier 1 capital to risk-weighted assets: 10.15% 6.625% 8.50% Totalcapital torisk-wei
Slide 29: Abundant Sources of Secondary Liquidity
Abundant Sources of Secondary Liquidity (1) FHLB Borrowing Availability $5,296,628,467 Unsecured Lines of Credit * 230,000,000 Investments Available for Secured Lines of Credit 565,189,993 Fed Funds Available through Fed Discount Window154,455,959 (1) Totalas of 9-30-2016 $ 6,246,274,419 * Approxima
Slide 30: We have Delivered for Shareholders
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Slide 31: YTD 2016 Financial Highlights
YTD 2016 Financial Highlights: (as of 9-30-16) • Net Income of $182.2 million • Net Interest Income of $406.7 million • Some of our Best Asset Quality Ratios as a Public Company including: o Record 0.08% Ratio of Nonperforming Loans and Leases as a Percent of Total Loans and Leases o Record 0.17% Ra
Slide 32: Building Capital for Shareholders
Building Capital for Shareholders 566% increase in tangible book value per common3/4 share in 9 years, resulting in a compounded annual growth rate of 21.5% 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/201312/31/2014 12/31/20159/30/2016 Tangible Book Value a b c
Slide 33: Solid Returns for Shareholders
Solid Returns for Shareholders • Increased our cash dividend in each of the last 25 quarters • Cash dividends increased every year since going public • Four 2-for-1 stock splits since going public in July 1997 • June 17, 2002 • December 10, 2003 • August 16, 2011 • June 23, 2014 33
Slide 34: Beating the Indexes
Beating the Indexes Bank of the Ozarks S&P 400 Mid Cap Index NASDAQ Financial Index 34
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation Calculation of Tangible Book Value Per Common Share Without Pro Forma 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 Genala Genala 6/30/2013 Shelby with Shelby Common Stockholders' Equity $ 174,633 $ 190,829 $ 252,302 $ 269,028 $ 320,355 $ 424,55
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation Calculation of Annualized Return on Average Tangible Common Stockholders' Equity Years Ended Nine Months Ended 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 9/30/2016 Net Income Available To Common Stockholders $ 34,474 $ 36,826 $ 64,
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Bank of the Ozarks — Investor Presentation (November 2016) on 6ix