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Bank OZK Bank OZK Announces Third Quarter 2021 Earnings October 21 , 2021 LITTLE ROCK , Ark . , Oct. 21 , 2021 ( GLOBE NEWSWIRE ) -- Bank OZK ( the " Bank " ) ( Nasdaq : OZK ) today announced that net income for the third quarter of 2021 was $ 130.3 million , a 19.3 % increase from $ 109.3 million for the third quarter of 2020. Diluted earnings per common share for the third quarter of 2021 were $ 1.00 , a 19.0 % increase from $ 0.84 for the third quarter of 2020 . For the nine months ended September 30 , 2021 , net income was $ 429.2 million , a 150.5 % increase from $ 171.4 million for the first nine months of 2020. Diluted earnings per common share for the first nine months of 2021 were $ 3.30 , a 150.0 % increase from $ 1.32 for the first nine months of 2020 . As a result of improved economic conditions and prospects for improvement in the U.S. economy , management recorded negative provision for credit losses of $ 7.5 million during the third quarter and $ 69.9 million during the first nine months of 2021 , reducing the Bank's total allowance for credit losses ( " ACL " ) from $ 377.3 million at December 31 , 2020 to $ 298.8 million at September 30 , 2021. The Bank's provision for credit losses was $ 7.2 million during the third quarter and $ 196.9 million during the first nine months of 2020 , reflecting significant economic uncertainty at that time . The Bank's results for the first nine months of 2021 included pretax gains of $ 4.4 million from the sale of its South Carolina branches and $ 1.4 million of tax - exempt bank - owned life insurance ( " BOLI " ) death benefits , both of which were recognized during the first quarter of 2021. The Bank had no gains from branch sales and had $ 0.6 million of tax - exempt BOLI death benefits during the first nine months of 2020 . Pre - tax pre - provision net revenue ( " PPNR " ) was $ 163.5 million for the third quarter of 2021 , a 12.3 % increase from $ 145.7 million for the third quarter of 2020. For the nine months ended September 30 , 2021 , PPNR was $ 489.0 million , a 17.3 % increase from $ 417.0 million for the first nine months of 2020. The calculation of PPNR and the reconciliation to generally accepted accounting principles ( " GAAP " ) are included in the schedules accompanying this release . The Bank's annualized returns on average assets , average common stockholders ' equity and average tangible common stockholders ' equity for the third quarter of 2021 were 1.98 % , 11.41 % and 13.39 % , respectively , compared to 1.63 % , 10.48 % and 12.52 % , respectively , for the third quarter of 2020. The Bank's annualized returns on average assets , average common stockholder's equity and average tangible common stockholders ' equity for the first nine months of 2021 were 2.15 % , 12.98 % and 15.31 % , respectively , compared to 0.90 % , 5.55 % , and 6.65 % , respectively , for the first nine months of 2020. The calculation of the Bank's return on average tangible common stockholders ' equity and the reconciliation to GAAP are included in the schedules accompanying this release . George Gleason , Chairman and Chief Executive Officer stated , " We are pleased to report our highest level of quarterly RESG loan originations since 2017 along with record net interest income for the quarter just ended . Our strong capital and liquidity , disciplined credit culture and outstanding team have us well positioned for the future . " KEY BALANCE SHEET METRICS Total loans were $ 18.31 billion at September 30 , 2021 , a 5.4 % decrease from $ 19.36 billion at September 30 , 2020. Non - purchased loans were $ 17.71 billion at September 30 , 2021 , a 3.9 % decrease from $ 18.42 billion at September 30 , 2020 , but a 0.5 % increase from $ 17.61 billion at June 30 , 2021. Purchased loans , which consist of loans acquired in previous acquisitions , were $ 0.60 billion at September 30 , 2021 , a 36.3 % decrease from $ 0.94 billion at September 30 , 2020 . Deposits were $ 20.10 billion at September 30 , 2021 , a 5.6 % decrease from $ 21.29 billion at September 30 , 2020. Total assets were $ 26.14 billion at September 30 , 2021 , a 2.8 % decrease from $ 26.89 billion at September 30 , 2020 . Common stockholders ' equity was $ 4.55 billion at September 30 , 2021 , an 8.8 % increase from $ 4.19 billion at September 30 , 2020. Tangible common stockholders ' equity was $ 3.88 billion at September 30 , 2021 , a 10.6 % increase from $ 3.51 billion at September 30 , 2020. Book value per common share was $ 35.35 at September 30 , 2021 , a 9.2 % increase from $ 32.37 at September 30 , 2020. Tangible book value per common share was $ 30.14 at September 30 , 2021 , an 11.1 % increase from $ 27.13 at September 30 , 2020. The calculations of the Bank's tangible common stockholders ' equity and tangible book value per common share and the reconciliations to GAAP are included in the schedules accompanying this release . The Bank's ratio of total common stockholders ' equity to total assets was 17.42 % at September 30 , 2021 compared to 15.57 % at September 30 , 2020. Its ratio of total tangible common stockholders ' equity to total tangible assets was 15.24 % at September 30 , 2021 compared to 13.39 % at September 30 , 2020. The calculation of the Bank's ratio of total tangible common stockholders ' equity to total tangible assets and the reconciliation to GAAP are included in the schedules accompanying this release . SUBORDINATED DEBT REDEMPTION AND OFFERING On July 1 , 2021 , the Bank redeemed all of its $ 225 million of 5.50 % Fixed - to - Floating rate Subordinated Notes at a redemption price equal to 100 % of the principal amount of the subordinated notes plus accrued and unpaid interest . As a result of the subordinated debt redemption , the Bank recognized approximately $ 0.8 million in remaining unamortized debt issue cost as non - interest expense during the third quarter of 2021 . On September 16 , 2021 , the Bank completed its public offering of $ 350 million in aggregate principal amount of its 2.75 % Fixed - to - Floating rate Subordinated Notes ( the " 2.75 % Notes " ) due 2031 , which will initially bear interest at a fixed rate of 2.75 % per annum until September 30 , 2026. On October 1 , 2026 , the 2.75 % Notes will bear interest at a floating rate equal to a benchmark ( which is expected to be three - month SOFR ) plus 209 basis points . The 2.75 % Notes are unsecured , subordinated debt obligations and mature on October 1 , 2031 , and the Bank expects to use the net proceeds from the offering for general corporate purposes , which may include , among other things , financing organic growth or strategic acquisitions , repurchase of shares of the Bank's common stock , supporting the Bank's regulatory capital levels and ongoing working capital needs . As of September 30 , 2021 , the Bank's subordinated debt had a carrying value of $ 345.9 million and remaining unamortized debt issuance cost of $ 4.1 million . STOCK REPURCHASE PROGRAM In July 2021 , the Bank adopted a stock repurchase program authorizing the purchase of up to $ 300 million of the Bank's outstanding shares of common stock . During the quarter just ended , the Bank repurchased 888,567 shares at a weighted average cost of $ 41.61 , for a total of $ 37.0 million . The timing and amount of future repurchases will be determined by management based on a variety of factors such as the Bank's capital position , liquidity , financial performance and alternative uses of capital , stock price , regulatory requirements and general market and economic conditions . The repurchase program may be suspended by the Bank at any time . MANAGEMENT'S COMMENTS , CONFERENCE CALL , TRANSCRIPT AND FILINGS In connection with this release , the Bank released management's comments on its quarterly results , which are available at http://ir.ozk.com . This release should be read in conjunction with management's comments on the quarterly results . Management will conduct a conference call to take questions on these quarterly results and management's comments at 10:00 a.m. CT ( 11:00 a.m. ET ) on October 22 , 2021 . Interested parties may listen to this call by dialing 1-844-818-5110 ( U.S. and Canada ) or 210-229-8841 ( internationally ) and asking for the Bank OZK conference call . A recorded playback of the call will be available for one week following the call at 1-855-859-2056 ( U.S. and Canada ) or 404-537-3406 ( internationally ) . The conference ID for this playback is 8870579. The call will be available live or in a recorded version on the Bank's Investor Relations website at ir.ozk.com under " Company News / Webcasts . " The Bank will also provide a transcript of the conference call on its Investor Relations website .