Bank OZK recently released results for the first quarter of 2022. Highlights include:
- Net Income. The bank’s $128.0 million of net income and $1.02 diluted earnings per common share for the quarter just ended provided a strong start for 2022.
- Quarterly Origination Volume. Bank OZK’s Real Estate Specialties Group posted its second consecutive quarter of record originations with $3.14 billion of loans originated during the quarter just ended. This contributed to the $1.33 billion increase in its unfunded loan commitments during the quarter to a record $14.95 billion at March 31, 2022.
- Net Interest Income. The bank’s net interest income for the quarter was $249.3 million, which was its second highest quarterly net interest income ever, only behind its strong results in the 4th quarter of 2021. In the quarter just ended, the bank’s core spread, which is how it describes the difference between its yield on non-purchased loans and its cost of interest bearing deposits (“COIBD”) was 5.14 percent and Bank OZK’s net interest margin was 4.24 percent.
- Asset Quality. Bank OZK’s focus on asset quality was again evident, as reflected in its annualized net charge-off ratios for the quarter just ended of 0.08 percent for non-purchased loans and -0.01 percent for total loans. The bank’s March 31, 2022 ratios of nonperforming non-purchased loans to total non-purchased loans and nonperforming assets to total assets were just 0.21 percent and 0.16 percent, respectively.
- Efficiency Ratio. The ban’s efficiency ratio for the quarter was 38.2 percent.
- Stock Repurchases & Dividend Growth. During the quarter just ended, Bank OZK repurchased 2.9 million shares of its common stock for a total of $131.6 million. The bank recently increased the quarterly dividend on its common stock for the 47th consecutive quarter.
- Multiple Options for Increasing Shareholder Value. The bank’s combination of strong earnings and robust capital gives it great optionality to increase shareholder value. Options for deploying our excess capital include organic loan growth, adding new business lines, continuing to increase the dividend on our common stock, financially attractive acquisitions for cash or some combination of cash and stock, and stock repurchases.
“We are pleased to report our excellent results for the first quarter of 2022,” said George Gleason, Bank OZK Chairman and CEO in a comment. “Our results were highlighted by our second consecutive quarter of record RESG loan originations, reflecting the importance of organic growth in our long-term strategy. Our strong capital and liquidity, disciplined credit culture and outstanding team have us well positioned for the future.”
Full Bank OZK Earnings Release and Management Comments for the 1st Quarter 2022 are available here.