Bank OZK released results for the fourth quarter and full year of 2021 on Thursday. Highlights include:
- Strong Net Income. Bank officials said the $149.8 million of net income for the fourth quarter was among its best ever, and the $1.17 diluted earnings per common share was a quarterly record. For the full year of 2021, Bank OZK’s $579.0 million net income and $4.47 diluted earnings per common share were record results.
- Record Quarterly Origination Volume. Bank OZK’s Real Estate Specialties Group (RESG) originated a quarterly record $2.99 billion of loans during the quarter. This contributed to the $1.23 billion increase in the bank’s unfunded loan commitments to a record $13.62 billion at Dec. 31, 2021.
- Record Net Interest Income. Reports showed a record net interest income of $266.4 million, an increase of $18.4 million from the third quarter of 2021. In the quarter just ended, Bank OZK’s core spread increased 51 basis points and its net interest margin increased 25 bps compared to the third quarter of 2021.
- Asset Quality. The bank’s focus was reflected in its annualized net charge-off ratios for the quarter just ended of 0.05 percent for non-purchased loans and 0.04 percent for total loans. Our December 31, 2021 ratios of nonperforming non-purchased loans to total non-purchased loans and nonperforming assets to total assets1 were just 0.19 percent and 0.15 percent, respectively.
- Efficiency. Bank OZK’s efficiency ratio for the quarter was 37.1 percent.
- Share Repurchases & Dividend Growth. During the quarter just ended, Bank OZK repurchased 3.4 million shares of its common stock for a total of $156.4 million. The bank recently increased its regular quarterly common stock dividend for the 46th consecutive quarter.
- Preferred Stock Issuance. In October, the bank issued $350 million of 4.625 percent Series A Non-Cumulative Perpetual Preferred Stock, and its Board of Directors approved an equivalent increase in its common stock repurchase program. Bank OZK’s Stock Repurchase Program now totals $650 million (less the $193.4 million in repurchases made since the program was authorized in July 2021).
- Multiple Options for Increasing Shareholder Value. Bank OZK reported its combination of strong earnings and robust capital gives it great optionality to increase shareholder value. Options for deploying its excess capital include organic loan growth, adding new business lines, continuing to increase its common stock dividend, financially attractive acquisitions for cash or some combination of cash and stock, and continued stock repurchases pursuant to its Stock Repurchase Program.
“We are pleased to report our excellent results for the fourth quarter and full year of 2021 – results that were record setting in many respects,” said George Gleason, Bank OZK Chairman and CEO in a comment. “We were particularly pleased to report our highest ever level of quarterly RESG loan originations, as organic growth is an important component of our long-term strategy to increase shareholder value. Our strong capital and liquidity, disciplined credit culture and outstanding team have us well positioned for the future.”
Full Bank OZK’s Earnings Release and Management Comments for the 4th Quarter and full year 2021 are available here.