Bank OZK Reports Third Quarter 2021 EarningsOctober 21, 2021 in Corporate News
Bank OZK is pleased to report third quarter 2021 net income of $130.3 million and diluted earnings per common share of $1.00.
Highlights of the quarter include:
- Strong Net Income. Our $130.3 million of net income and our $1.00 of diluted earnings per common share for the quarter just ended were among our best quarterly results ever.
- Record Net Interest Income and Further Improvement in Core Spread and Net Interest Margin. Our net interest income for the quarter was a record $248.0 million. In the quarter just ended, our core spread, which is how we describe the difference between our yield on non-purchased loans and our cost of interest bearing deposits, increased 81 and six basis points, respectively, compared to the third quarter of 2020 and second quarter of 2021.
- Excellent Asset Quality. Our focus on asset quality was again evident, as reflected in our annualized net charge-off ratios for the quarter just ended of 0.04% for non-purchased loans and 0.03% for total loans.
- Efficiency Among the Industry’s Best. Our efficiency ratio for the quarter was 40.1%.
- Increased Loan Origination Volume. Our Real Estate Specialties Group (“RESG”) closed $2.21 billion of new loans during the quarter, which was the highest level of RESG originations since the fourth quarter of 2017. This contributed to the $0.68 billion increase in our unfunded loan commitments to $12.39 billion as of September 30, 2021, which was our highest quarter-end balance since March 31, 2018.
- Dividend Growth. We recently increased our regular quarterly dividend for the 45th consecutive quarter.
- Subordinated Debt. We issued $350 million of 2.75% Fixed-to-Floating Rate Subordinated Notes Due 2031 on September 16, 2021, which replaced our previously outstanding $225 million of 5.50% Subordinated Notes Due 2026 that we redeemed on July 1. These transactions should result in annual pre-tax interest savings of approximately $2.3 million, while also providing us an additional $125 million of Tier 2 capital.
- Multiple Options for Increasing Shareholder Value. Our combination of strong earnings and robust capital gives us great optionality to increase shareholder value. Options for deploying our excess capital include organic loan growth, adding new business lines, continuing to increase our cash dividend, financially attractive acquisitions for cash or some combination of cash and stock, and continued stock repurchases pursuant to our stock repurchase program.
George Gleason, Chairman and CEO Comment in Earnings Release
“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.”
Full Report and Management Comments
Bank OZK’s Earnings Release and Management Comments for the 3rd Quarter, 2021 are available here.