Bank Ozk · NASDAQ:OZK
Bank Ozk — Investor Presentation (May 2021)
42 slides from Bank Ozk's investor presentation, May 7, 2021
Slide 1: Form 8-K Current Report
UNITED STATES FEDERAL DEPOSIT INSURANCE CORPORATION Washington, D.C. 20429 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): May 7, 2021 BANK OZK (Exact name of registrant as specified in its charter) Arka
Slide 2: Item 7.01 Regulation FD Disclosure
Item 7.01 Regulation FD Disclosure Bank OZK (the “Company”) has updated its Investor Presentation to reflect First Quarter 2021 financial information and other data. A copy of the Company’s Investor Presentation is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information furnish
Slide 3: Signatures and Exhibit Index
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 OZK Date: May 7, 2021 By: /s/ Greg McKinney Name: Greg McKinney Title: Chief Financial Officer EXHIB
Slide 4: Bank OZK Investor Presentation May 2021
Exhibit 99.1 Nasdaq: OZK | May 2021
Slide 5: Forward-Looking Information
Forward-Looking Information 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 Securit
Slide 6: Bank OZK – At a Glance
Bank OZK (Nasdaq: OZK) – At a Glance Financial Highlights* Provide Exceptional Total assets $27.3 billion Pursue Excellence Customer Total loans $18.7 billion Experiences Total deposits $21.3 billion Total equity $ 4.4 billion 3M21 Net Interest Margin 3.86% The OZK Way 3M21 Efficiency Ra
Slide 7: Key Investment Considerations
Key Investment Considerations Asset Quality Profitability Diversification & Liquidity & Capital Growth Maintaining excellent Our profitability is Our loan portfolio is We maintain diverse asset quality through powered by our high- broadly diversified, and abundant disciplined application quality por
Slide 8: Asset Quality Consistently Better than the Industry Average
Asset Quality Consistently Better than the Industry Average Net Charge-Off Ratio (%) (All data annualized where appropriate) 2.52 2.55 Net Charge-off Ratios: 1Q21 ● Non-purchased loans: 0.08% ● Purchased loans: 0.04% 1.75 ● Total loans: 0.07% 1.55 1.29 1.10 0.97 0.83 0.78 0.81 0.69 0.69 0.57 0.59 0.
Slide 9: Favorable Ratios of Nonperforming Loans and Assets
Our Favorable Ratios of Nonperforming Loans and Nonperforming Assets Provide Meaningful Data Points on Our Excellent Asset Quality Nonperforming Non-purchased Loans (“NPLs”) The dollar volumes of our OZK NPLs ($) OZK NPLs / Non-purchased Loans (%) FDIC Industry Data (%)* nonperforming non-purchased
Slide 10: Favorable Ratios for Loans Past Due and Substandard
Our Favorable Ratios for Loans Past Due and Substandard Non-purchased Loans Provide Additional Data Points on Our Excellent Asset Quality Non-purchased Loans Past Due 30+ Days, Including Past Due Nonaccrual Non- The dollar volume of our loans past purchased Loans (“Loans Past Due”) due has been rela
Slide 11: Long-term Trends in Capital and NPAs
Long-term Trends in Capital and NPAs ($ millions) $5,000 OZK Common Equity ($) At March 31, 2021, our total NPAs 30% were 1.22% of our TRBC $4,500 OZK TRBC ($) 25% $4,000 OZK NPAs ($) $3,500 OZK NPAs / TRBC (%) 20% $3,000 $2,500 15% $2,000 10% $1,500 $1,000 5% $500 $- 0% 2Q09 3Q09 4Q09 1Q10 2Q10 3Q1
Slide 12: Net Interest Income Is Our Largest Category of Revenue
Net Interest Income Is Our Largest Category of Revenue Net interest income is our largest category of revenue. It is affected by many factors, including our volume and mix of earning assets; volume and mix of deposits and other liabilities; net interest margin; core spread; and other factors. As
Slide 13: Loans Are Our Largest Category of Earning Assets
Loans Are Our Largest Category of Earning Assets $20,000 $18,247 $18,420 $18,401 $17,979 7.50% Loan Portfolio Overview Non-Purchased Loans* $16,308 $16,225 $17,030 $15,611 $15,787 Non-Purchased Loan Yield 7.00% $15,000 6.50% ($ millions) $10,000 6.44% 6.37% 6.00% Our loan portfolio is the largest 6.
Slide 14: Variable Rate Loans and Their Floors
Variable Rate Loans and Their Floors At March 31, 2021, 99% of our funded variable rate loans (non-purchased and purchased) had floor Funded Balance of rates. As of March 31, 2021, 93% of the funded balance of total variable rate loans and 96% of the total Variable Rate Loan commitments of variable
Slide 15: Our Core Spread and Cost of Interest Bearing Deposits
Our Core Spread and Cost of Interest Bearing Deposits Our core spread improved further in the quarter just ended to 4.78%, increasing 59 bps from the first quarter of 2020 and 21 bps from the fourth quarter of 2020. As reflected below, in the quarter just ended, our cost of interest bearing deposi
Slide 16: Investment Securities Are Our Second Largest Category of Earning Assets
Investment Securities Are Our Second Largest Category of Earning Assets At March 31, 2021, our investment securities portfolio was $4.16 billion, which was an increase of Investment Securities $1.35 billion, or 47.8%, as compared to March 31, 2020, and an increase of $0.76 billion, or 22.2% Portfo
Slide 17: Net Interest Margin Trends
Net Interest Margin Trends Net Interest Margin vs. the Industry Favorable 120 Basis Point Variance vs 5.00% Industry* 4.53% 4.45% 4.50% 4.26% 4.15% 3.96% 4.00% 3.88% 3.86% 3.74% 3.69% 3.42% 3.39% 3.35% 3.50% 3.28% 3.13% 3.00% 2.81% 2.68% 2.68% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 1Q19 2Q19 3Q19 4Q19
Slide 18: Efficiency Ratio Trends
Efficiency Ratio Trends Efficiency Ratio (%) vs. the Industry 70.0% 60.6 61.4 59.2 58.5 58.7 55.9 55.6 56.2 60.0% 50.0% 42.4 43.4 41.0 42.1 41.8 39.3 39.6 38.5 38.6 40.0% 30.0% 20.0% 10.0% 0.0% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 Bank OZK FDIC Insured Institutions* We have consistently been
Slide 19: Earning Asset Growth Engines & Diversification
Earning Asset Growth Engines & Diversification 16
Slide 20: Real Estate Specialties Group – Our Largest Growth Engine
Real Estate Specialties Group (“RESG”) – Our Largest Growth Engine Portfolio Importance Portfolio Statistics – as of March 31, 2021 RESG Loans at March 31, 2021 accounted for: Total funded balance $11.42 Billion • 64% of our funded non-purchased loans Total funded & unfunded commitment $22.06 Billio
Slide 21: Recent Trends in RESG Loan Originations and Repayments
Recent Trends in RESG Loan Originations and Repayments The table below illustrates the typical cadence of RESG loan originations Quarterly RESG Repayments ($ billions) and repayments and shows the amount of each year’s originations which Q1 Q2 Q3 Q4 Total* have been repaid and the amount of each yea
Slide 22: Changes in RESG Funded Balance and Unfunded Balance
Changes in the Funded Balance of RESG Loans and Our Total Unfunded Balance for the First Quarter of 2021 and Last Four Quarters First Quarter of 2021 Last Four Quarters $16.00 $16.00 $14.00 $14.00 ($4.03) Activity in $12.00 $1.31 ($1.48) $12.00 $5.47 RESG $10.00 $10.00 $8.00 $8.00 Funded $6.00 $11.5
Slide 23: RESG Nationwide Influence Across Multiple Product Types
RESG’s Nationwide Influence Across Multiple Product Types Provides Exceptional Portfolio Diversification RESG Portfolio Details By Product Type RESG Portfolio Details by Geography As of March 31, 2021 As of March 31, 2021 Total Commitment ($ millions) and Leverage Total Commitment ($ millions) and L
Slide 24: RESG Total Commitment by Metropolitan Area
Total Commitment* ($ millions) $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 New York-Newark-Jersey City, NY-NJ-PA $4,870 Los Angeles-Long Beach-Anaheim, CA $2,385 Miami-Fort Lauderdale-West Palm Beach, FL $2,272 Chicago-Naperville-Elgin, IL-IN-WI $1,115 San Francisco-Oakland-Hayward, CA $1,090 Bosto
Slide 25: Hotels Were the Fifth Largest Component of RESG's Portfolio
Hotels Were the Fifth Largest Component of RESG’s Portfolio at March 31, 2021, Comprising About 8.9% of RESG’s Total Commitments RESG Hotel Portfolio by RESG Portfolio By Origination Date & LTV (As of March 31, 2021) Geography • Bubble Size As of March 31, 2021 Reflects Total Funded and Unfunded Com
Slide 26: Offices Were the Fourth Largest Component of RESG's Portfolio
Offices Were the Fourth Largest Component of RESG’s Portfolio at March 31, 2021, Comprising About 14.1% of RESG’s Total Commitments RESG Office Portfolio by RESG Portfolio By Origination Date & LTV (As of March 31, 2021) Geography • Bubble Size As of March 31, 2021 Reflects Total Funded and Unfunded
Slide 27: RESG Portfolio By Origination Date & LTV
RESG Portfolio By Origination Date & LTV (As of March 31, 2021) Other Than The One Substandard-Accruing Credit Specifically Referenced Below, And The One Hotel Loan (81.7% LTV) And One Office Loan (71.0% LTV) Previously Discussed, All Other Credits In The RESG Portfolio Have LTV Ratios Less Than 67%
Slide 28: RESG First Quarter 2021 Loan Appraisal Update
RESG First Quarter 2021 Loan Appraisal Update During the first quarter of 2021, updated appraisals were obtained by RESG on 22 loans with a total commitment of $1.38 billion, which were mostly loans for which a renewal or an extension was being considered. The distribution of such loans based on
Slide 29: The RESG Portfolio Includes Loans of Many Different Sizes
The RESG Portfolio Includes Loans of Many Different Sizes ($ millions) No. of Funded Total Commitment Size Tranches Tranche Loans Balance Commitment $600mm + 1 $ 256 $ 664 $7,000 100% $500mm - $599mm 1 183 539 Funded Balance ($ millions) Unfunded Commitment ($ millions) $400mm - $499mm 3 935 1,373 L
Slide 30: Community Bank Lending – An Important & Well-Established Growth Engine
Community Bank Lending – An Important & Well-Established Growth Engine Community Banking Business Model Community Bank Lending is our oldest and most established Consumer & Small Business Lending loan growth engine. In recent years, we have developed a Commercial (Generalist) Lending number of s
Slide 31: Additional Lending Verticals
Additional Lending Verticals • To continue to increase diversification of our loan portfolio and expand our lending team, we recently hired a seasoned banking leader to build a new lending unit focused on Asset Based Lending (“ABL”). • This individual has previously developed a strong ABL unit chara
Slide 32: Indirect RV & Marine Lending – A Nationwide Business
Indirect RV & Marine Lending – A Nationwide Business Indirect RV & Marine lending (“ILD”) is a nationwide business that ILD Trends has allowed us to originate consumer loans, while maintaining our • ILD was the largest contributor to our loan conservative credit-quality standards. growth in 2018 and
Slide 33: Greater Loan Diversification and Declining CRE Concentration Ratios
Our Greater Loan Diversification, Combined With Our Growth in TRBC, has Contributed to Generally Declining CRE Concentration Ratios Last Four Quarters First Quarter 2021 $20,000 $19,000 $182 * $18,000 Non- $17,000 $1,442 ( $576 ) ( $99 ) $17,979 $18,401 ( $172 ) ( $101 )* ($100) ( $48 ) $17,979 Purc
Slide 34: Deposit Growth, Abundant Sources of Liquidity and Strong Capital Position
Deposit Growth, Abundant Sources of Liquidity and Strong Capital Position 31
Slide 35: Deposit Trends
Deposit Trends Total Deposits ($ billions) and Loan / Deposit Ratio (%) $25B 110% High L/D ratio due to management strategies to restrain balance sheet under $10B at YE2015. 100% $20B Loan / Deposit Ratio 90% Total Deposits $15B 88% Despite significant quarter-to-quarter variations 80% in net loan g
Slide 36: Strong Capital and Liquidity
Strong Capital and Liquidity CET 1 & Tier 1 Capital Ratios Total Risk Based Capital Ratio 18.00% 18.00% 16.38% 16.00% 16.00% 13.93% 14.00% 14.00% 12.00% 12.00% 10.00% Basel III 10.00% Tier 1 8.00% 8.00% Basel III 6.00% CET1 6.00% 4.00% 4.00% 2.00% 2.00% 0.00% 0.00% 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
Slide 37: Building Capital and Delivering for Shareholders
Building Capital and Delivering for Shareholders $33.79 $40.00 As of March 31, 2021, our book value and Book $28.60 $35.00 tangible book value per share were $33.79 Value and $30.00 and $28.60, respectively. Tangible $25.00 Over the last 10 years, we have increased $20.00 book value and tangible boo
Slide 38: COVID-19 Pandemic Response
COVID-19 Pandemic Response Our exceptional team continues to implement our long-standing pandemic plan, while focusing on our employees, customers and communities. Employees Customers Paycheck Protection Program (“PPP”) • Adopted a new COVID-19 paid leave policy • Redesigned customer / branch • As o
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations 36
Slide 40: Calculation of Tangible Book Value Per Common Share
Non-GAAP Reconciliations Calculation of Tangible Book Value Per Common Share Represents ending balances, as determined in accordance with accounting principles generally accepted in the U.S., ending shares outstanding and tangible book value per share as of the date indicated. Unaudited, financial d
Slide 41: Average Tangible Common Stockholders' Equity and Return
Non-GAAP Reconciliations Calculation of Average Tangible Common Stockholders’ Equity and Annualized Return on Average Tangible Common Stockholders’ Equity Three Months Ended * 3/31/2020 3/31/2021 Net Income Available To Common Stockholders $ 11,866 $ 148,416 Average Common Stockholders' Equity Befor
Slide 42: Bank OZK
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