BANK OF THE OZARKS (Exact name of registrant as specified in its charter)

Transcription

1 UNITED STATES FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, DC 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): April 12, 2018 BANK OF THE OZARKS (Exact name of registrant as specified in its charter) Arkansas (State or other jurisdiction of incorporation) (FDIC Certificate Number) (IRS Employer Identification No.) Chenal Parkway, Little Rock, Arkansas (Address of principal executive offices) (Zip Code) (501) (Registrant s telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.): ( ) Written communications pursuant to Rule 425 under the Securities Act (17 CFR ) ( ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR a-12) ( ) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) ( ) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR ) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR b-2). Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

2 Item 2.02 Results of Operations and Financial Condition. On April 12, 2018, Bank of the Ozarks (the Bank ) issued a press release announcing its financial results for the first quarter ended March 31, 2018 and made available management comments on the results for the first quarter of The press release and management comments are available on the Bank s investor relations website. A copy of the press release announcing the Bank s results for the first quarter ended March 31, 2018 and management comments on the first quarter results are furnished as Exhibits 99.1and 99.2, respectively, to this Current Report on Form 8-K. On April 12, 2018, the Bank will hold an investor conference call and webcast to answer questions regarding the Bank s financial results for the first quarter ended March 31, The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act ), or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any filing of the Bank under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing. Item 7.01 Regulation FD Disclosures. See Item 2.02 Results of Operations and Financial Condition. Item 9.01 Financial Statements and Exhibits. (d) Exhibits: The following exhibits are being furnished to this Current Report on Form 8-K Press Release dated April 12, 2018: Bank of the Ozarks Announces First Quarter 2018 Earnings 99.2 First Quarter 2018 Management Comments dated April 12, 2018

3 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 OF THE OZARKS Date: April 12, 2018 By: /s/ Greg L. McKinney Name: Greg L. McKinney Title: Chief Financial Officer and Chief Accounting Officer Exhibit No. Document Description 99.1 Press Release dated April 12, 2018: Bank of the Ozarks Announces First Quarter 2018 Earnings 99.2 First Quarter 2018 Management Comments dated April 12, 2018

4 NEWS RELEASE Exhibit 99.1 Date: April 12, 2018 Release Time: 6:00 a.m. (CT) Media Contact: Susan Blair (501) Investor Contact: Tim Hicks (501) Bank of the Ozarks Announces First Quarter 2018 Earnings LITTLE ROCK, ARKANSAS: Bank of the Ozarks (the Bank ) (NASDAQ: OZRK) today announced that net income for the first quarter of 2018 was $113.1 million, a 26.9% increase from $89.2 million for the first quarter of Diluted earnings per common share for the first quarter of 2018 were $0.88, a 20.5% increase from $0.73 for the first quarter of The Bank s annualized returns on average assets, average common stockholders equity and average tangible common stockholders equity for the first quarter of 2018 were 2.16%, 13.17% and 16.53%, respectively, compared to 1.93%, 12.80% and 17.17%, respectively, for the first quarter of The calculation of the Bank s return on average tangible common stockholders equity and the reconciliation to generally accepted accounting principles ( GAAP ) are included in the schedules accompanying this release. George Gleason, Chairman and Chief Executive Officer, stated, We are very pleased to report our results for the first quarter of 2018, including record net interest income, an annualized return on average assets of 2.16%, $941 million growth in the funded balance of non-purchased loans, a 4.69% net interest margin and excellent asset quality metrics. KEY BALANCE SHEET METRICS Total loans, including purchased loans, were $16.61 billion at March 31, 2018, a 12.2% increase from $14.80 billion at March 31, Non-purchased loans, which exclude loans acquired in previous acquisitions, were $13.67 billion at March 31, 2018, a 33.8% increase from $10.22 billion at March 31, Purchased loans, which consist of loans acquired in previous acquisitions, were $2.93 billion at March 31, 2018, a 35.9% decrease from $4.58 billion at March 31, The unfunded balance of closed loans totaled $12.55 billion at March 31, 2018, an 11.5% increase from $11.26 billion at March 31, 2017, but a 4.9% decrease from $13.19 billion at December 31,

5 Deposits were $17.83 billion at March 31, 2018, a 13.5% increase from $15.71 billion at March 31, Total assets were $22.04 billion at March 31, 2018, a 15.1% increase from $19.15 billion at March 31, Common stockholders equity was $3.53 billion at March 31, 2018, a 22.7% increase from $2.87 billion at March 31, Tangible common stockholders equity was $2.82 billion at March 31, 2018, a 30.9% increase from $2.15 billion at March 31, Book value per common share was $27.42 at March 31, 2018, a 16.0% increase from $23.63 at March 31, Tangible book value per common share was $21.93 at March 31, 2018, a 23.8% increase from $17.72 at March 31, 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 16.00% at March 31, 2018 compared to 15.00% at March 31, Its ratio of total tangible common stockholders equity to total tangible assets was 13.22% at March 31, 2018 compared to 11.69% at March 31, 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. NET INTEREST INCOME Net interest income for the first quarter of 2018 was a record $217.8 million, a 14.2% increase from $190.8 million for the first quarter of Net interest margin, on a fully taxable equivalent ( FTE ) basis, was 4.69% for the first quarter of 2018, a decrease of 19 basis points from 4.88% for the first quarter of Average earning assets were $18.92 billion for the first quarter of 2018, a 17.2% increase from $16.14 billion for the first quarter of NON-INTEREST INCOME Non-interest income for the first quarter of 2018 decreased 1.2% to $28.7 million compared to $29.1 million for the first quarter of The Bank s non-interest income for the first quarter of 2018 included $2.73 million of tax-exempt bank owned life insurance ( BOLI ) death benefits, which increased the Bank s diluted earnings per common share by $0.02. There were no such benefits in the first quarter of The Bank s service charges on deposit accounts declined from $11.3 million for the first quarter of 2017 to $9.5 million for the first quarter of 2018 primarily due to the Durbin Amendment s impact on the Bank s interchange revenue effective as of July 1, The Bank s mortgage lending income declined from $1.6 million for the first quarter of 2017 to $0.5 million for 2

6 the first quarter of This was a result of the Bank s decision in December 2017 to exit the secondary market mortgage lending business and the substantial wind down of that business in the quarter just ended. The Bank expects only a nominal amount of mortgage lending income in the second quarter of 2018 and none thereafter. NON-INTEREST EXPENSE Non-interest expense for the first quarter of 2018 increased 19.9% to $93.8 million compared to $78.3 million for the first quarter of The Bank s efficiency ratio (non-interest expense divided by the sum of net interest income FTE and non-interest income) for the first quarter of 2018 was 37.9% compared to 35.0% for the first quarter of ASSET QUALITY, CHARGE-OFFS AND ALLOWANCE Excluding purchased loans, the Bank s ratio of nonperforming loans as a percent of total loans was 0.09% at March 31, 2018 compared to 0.11% at March 31, Excluding purchased loans, the Bank s ratio of nonperforming assets as a percent of total assets was 0.16% at March 31, 2018 compared to 0.25% at March 31, Excluding purchased loans, the Bank s ratio of loans past due 30 days or more, including past due non-accrual loans, to total loans was 0.14% at March 31, 2018 compared to 0.16% at March 31, The Bank s annualized net charge-off ratio for non-purchased loans was 0.04% for the first quarter of 2018 compared to 0.05% for the first quarter of The Bank s annualized net charge-off ratio for purchased loans was 0.05% for the first quarter of 2018 compared to 0.16% for the first quarter of The Bank s annualized net charge-off ratio for all loans was 0.04% for the first quarter of 2018 compared to 0.09% for the first quarter of The Bank s allowance for loan losses for its non-purchased loans was $96.5 million, or 0.71% of total non-purchased loans, at March 31, 2018 compared to $76.6 million, or 0.75% of total nonpurchased loans, at March 31, 2017 and $92.5 million, or 0.73% of total non-purchased loans, at December 31, The Bank had $1.6 million of allowance for loan losses for its purchased loans at March 31, 2018 and 2017 and at December 31,

7 MANAGEMENT S COMMENTS, CONFERENCE CALL, TRANSCRIPT AND FILINGS In connection with this release, the Bank released management s comments on the results for the quarter just ended. Management will conduct a conference call to take questions on these quarterly results and management s comments on the first quarter at 10:00 a.m. CT (11:00 a.m. ET) on Thursday, April 12, Interested parties may listen to this call by dialing (U.S. and Canada) or (internationally) and asking for the Bank of the Ozarks conference call. A recorded playback of the call will be available for one week following the call at (U.S. and Canada) or (internationally). The passcode for this playback is The call will be available live or in a recorded version on the Bank s Investor Relations website at ir.bankozarks.com under Company News. The Bank will also provide a transcript of the conference call on its Investor Relations website. The Bank files annual, quarterly and current reports, proxy materials, and other information required by the Securities and Exchange Act of 1934 with the Federal Deposit Insurance Corporation ( FDIC ), copies of which are available electronically at the FDIC s website at and are also available on the Bank s Investor Relations website at NON-GAAP FINANCIAL MEASURES This release contains certain non-gaap financial measures. The Bank uses these non-gaap financial measures, specifically return on average tangible common stockholders equity, tangible book value per common share, total tangible common stockholders equity and the ratio of total tangible common stockholders equity to total tangible assets, as important measures of the strength of its capital and its ability to generate earnings on its tangible capital invested by its shareholders. These measures typically adjust GAAP financial measures to exclude intangible assets. Management believes presentation of these non-gaap financial measures provides useful supplemental information which contributes to a proper understanding of the financial results and capital levels of the Bank. These non-gaap disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-gaap performance measures that may be presented by other banks. Reconciliations of these non-gaap financial measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release under the caption Reconciliation of Non-GAAP Financial Measures. 4

8 FORWARD-LOOKING STATEMENTS This release and other communications by 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 Securities Litigation Reform Act of Forward-looking statements are based on management s expectations as well as certain assumptions and estimates made by, and information available to, management at the time. Those statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: potential delays or other problems implementing the Bank s growth, expansion and acquisition strategies including delays in identifying sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices; the ability to enter into and/or close additional acquisitions; problems with, or additional expenses relating to, integrating acquisitions; the inability to realize expected cost savings and/or synergies from acquisitions; problems with managing acquisitions; the effect of the announcements of any future acquisition on customer relationships and operating results; the availability and access to capital; possible downgrades in the Bank s credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing or acquired deposits or to retain or grow loans, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and longterm interest rates; competitive factors and pricing pressures, including their effect on the Bank s net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; failure to receive approval of our pending applications for change in accounting methods with the Internal Revenue Service; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions; changes in U.S. government monetary and fiscal policy; FDIC special assessments or changes to regular assessments; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; the impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyber- 5

9 attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank or its customers; adoption of new accounting standards or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this press release or as detailed from time to time in our public filings, including those factors included in the disclosures under the headings Forward- Looking Information and Item 1A. Risk Factors in our most recent Annual Report on Form 10-K for the year ended December 31, Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those projected in, or implied by, such forward-looking statements. The Bank disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise. GENERAL INFORMATION Bank of the Ozarks (NASDAQ: OZRK) is a regional bank providing innovative financial solutions delivered by expert bankers with a relentless pursuit of excellence. Bank of the Ozarks has been recognized as the #1 bank in the nation in its asset size for eight consecutive years. Headquartered in Little Rock, Arkansas, Bank of the Ozarks conducts operations through 254 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, California, New York, and Mississippi. Bank of the Ozarks can be found at and on Facebook, Twitter and LinkedIn or contacted at (501) or P. O. Box 8811, Little Rock, Arkansas

10 Bank of the Ozarks Consolidated Balance Sheets Unaudited March 31, December 31, (Dollars in thousands, except per share amounts) ASSETS Cash and cash equivalents $ 632,873 $ 440,388 Investment securities - available for sale 2,612,961 2,622,796 Non-purchased loans 13,674,561 12,733,937 Purchased loans 2,934,535 3,309,092 Allowance for loan losses (98,097) (94,120) Net loans 16,510,999 15,948,909 Premises and equipment, net 532, ,811 Foreclosed assets 21,931 25,357 Accrued interest receivable 69,126 64,608 Bank owned life insurance ( BOLI ) 691, ,147 Intangible assets, net 705, ,040 Other, net 262, ,591 Total assets $ 22,039,439 $ 21,275,647 LIABILITIES AND STOCKHOLDERS EQUITY Deposits: Demand non-interest bearing $ 2,783,095 $ 2,726,623 Savings and interest bearing transaction 10,513,959 10,051,122 Time 4,536,618 4,414,600 Total deposits 17,833,672 17,192,345 Repurchase agreements with customers 149,075 69,331 Other borrowings 1,942 22,320 Subordinated notes 222, ,899 Subordinated debentures 118, ,800 Accrued interest payable and other liabilities 183, ,164 Total liabilities 18,509,785 17,811,859 Commitments and contingencies Stockholders equity: Preferred stock; $0.01 par value; 100,000,000 shares authorized; no shares issued or outstanding at March 31, 2018 or December 31, 2017 Common stock; $0.01 par value; 300,000,000 shares authorized; 128,611,611 and 128,287,550 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively 1,286 1,283 Additional paid-in capital 2,227,178 2,221,844 Retained earnings 1,339,049 1,250,313 Accumulated other comprehensive loss (40,908) (12,712) Total stockholders equity before noncontrolling interest 3,526,605 3,460,728 Noncontrolling interest 3,049 3,060 Total stockholders equity 3,529,654 3,463,788 Total liabilities and stockholders equity $ 22,039,439 $ 21,275,647 7

11 Bank of the Ozarks Consolidated Statements of Income Unaudited Three Months Ended March 31, (Dollars in thousands, except per share amounts) Interest income: Non-purchased loans $ 190,426 $ 127,428 Purchased loans 50,977 75,994 Investment securities: Taxable 11,431 3,816 Tax-exempt 4,160 6,512 Deposits with banks and federal funds sold Total interest income 257, ,770 Interest expense: Deposits 34,392 18,378 Repurchase agreements with customers Other borrowings Subordinated notes 3,146 3,188 Subordinated debentures 1,386 1,181 Total interest expense 39,716 22,999 Net interest income 217, ,771 Provision for loan losses 5,567 4,933 Net interest income after provision for loan losses 212, ,838 Non-interest income: Service charges on deposit accounts 9,525 11,301 Mortgage lending income 492 1,574 Trust income 1,793 1,631 BOLI income 7,580 4,464 Other income from purchased loans, net 1,251 3,737 Loan service, maintenance and other fees 4,743 2,706 Net gains on investment securities 17 Gains on sales of other assets 1,426 1,619 Other 1,880 2,026 Total non-interest income 28,707 29,058 Non-interest expense: Salaries and employee benefits 45,499 38,554 Net occupancy and equipment 14,150 13,192 Other operating expenses 34,161 26,522 Total non-interest expense 93,810 78,268 Income before taxes 147, ,628 Provision for income taxes 33,973 47,417 Net income 113,133 89,211 Earnings attributable to noncontrolling interest 11 (23) Net income available to common stockholders $ 113,144 $ 89,188 Basic earnings per common share $ 0.88 $ 0.73 Diluted earnings per common share $ 0.88 $ 0.73 Dividends declared per common share $ 0.19 $

12 Bank of the Ozarks Consolidated Statements of Stockholders Equity Unaudited Common Stock Additional Paid-In Capital Accumulated Other Retained Comprehensive Earnings Loss (Dollars in thousands, except per share amounts) Non- Controlling Interest Total Balances December 31, 2016 $ 1,213 $1,901,880 $ 914,434 $ (25,920) $ 3,264 $2,794,871 Cumulative effect of change in accounting principals 1,133 2,720 (3,408) 445 Balances January 1, 2017, as adjusted 1,213 1,903, ,154 (29,328) 3,264 2,795,316 Net income 89,211 89,211 Earnings attributable to noncontrolling interest (23) 23 Total other comprehensive income 7,853 7,853 Common stock dividends paid, $0.17 per share (20,659) (20,659) Issuance of 69,655 shares of common stock for exercise of stock options 1 1,170 1,171 Issuance of 238,794 shares of unvested restricted common stock 2 (2) Stock-based compensation expense 3,712 3,712 Forfeiture of 1,018 shares of unvested restricted common stock Balances March 31, 2017 $ 1,216 $1,907,893 $ 985,683 $ (21,475) $ 3,287 $2,876,604 Balances December 31, 2017 $ 1,283 $2,221,844 $1,250,313 $ (12,712) $ 3,060 $3,463,788 Net income 113, ,133 Earnings attributable to noncontrolling interest 11 (11) Total other comprehensive loss (28,196) (28,196) Common stock dividends paid, $0.19 per share (24,408) (24,408) Issuance of 200,025 shares of common stock for exercise of stock options 2 5,323 5,325 Issuance of 198,268 shares of unvested restricted common stock 2 (2) Repurchase and cancellation of 70,931 shares of common stock (1) (3,729) (3,730) Stock-based compensation expense 3,742 3,742 Forfeitures of 3,301 shares of unvested restricted common stock Balances March 31, 2018 $ 1,286 $2,227,178 $1,339,049 $ (40,908) $ 3,049 $3,529,654 9

13 Bank of the Ozarks Summary of Non-Interest Expense Unaudited Three Months Ended March 31, (Dollars in thousands) Salaries and employee benefits $ 45,499 $ 38,554 Net occupancy and equipment 14,150 13,192 Other operating expenses: Professional and outside services 8,705 5,338 Postage and supplies 2,195 1,919 Advertising and public relations 1,331 1,190 Telecommunication services 3,197 3,970 Software and data processing 3,340 2,473 ATM expense 1,363 1,138 Travel and meals 2,153 1,855 FDIC insurance 2,700 1,000 FDIC and state assessments Loan collection and repossession expense 790 1,302 Writedowns of foreclosed and other assets Amortization of intangibles 3,145 3,145 Other 4,229 1,854 Total non-interest expense $ 93,810 $ 78,268 10

14 Bank of the Ozarks Summary of Total Loans Outstanding Unaudited March 31, 2018 December 31, 2017 (Dollars in thousands) Real estate: Residential 1-4 family $ 1,099, % $ 1,174, % Non-farm/non-residential 4,347, ,478, Construction/land development 7,187, ,648, Agricultural 156, , Multifamily residential 556, , Total real estate 13,347, ,959, Commercial and industrial 786, , Consumer 1,651, ,472, Other 822, , Total loans $ 16,609, % $ 16,043, % 11

15 Bank of the Ozarks Selected Consolidated Financial Data Unaudited Three Months Ended March 31, % Change (Dollars in thousands, except per share amounts) Income statement data: Net interest income $ 217,776 $ 190, % Provision for loan losses 5,567 4, Non-interest income 28,707 29,058 (1.2) Non-interest expense 93,810 78, Net income available to common stockholders 113,144 89, Common share and per common share data: Earnings - diluted $ 0.88 $ % Earnings - basic Cash dividends Book value Tangible book value (1) Weighted-average diluted shares outstanding (thousands) 128, ,954 End of period shares outstanding (thousands) 128, ,575 Balance sheet data at period end: Total assets $ 22,039,439 $ 19,152, % Total loans 16,609,096 14,796, Non-purchased loans 13,674,561 10,216, Purchased loans 2,934,535 4,580,047 (35.9) Allowance for loan losses 98,097 78, Foreclosed assets 21,931 36,899 (40.6) Investment securities 2,612,961 1,470, Goodwill and other intangible assets 705, ,475 (1.8) Deposits 17,833,672 15,713, Repurchase agreements with customers 149,075 80, Other borrowings 1,942 42,291 (95.4) Subordinated notes 222, , Subordinated debentures 118, , Unfunded balance of closed loans 12,551,032 11,258, Total common stockholders equity 3,526,605 2,873, Selected ratios: Return on average assets (2) 2.16% 1.93% Return on average common stockholders equity (2) Return on average tangible common stockholders equity (1) (2) Loan, including purchased loans, to deposit ratio Average common equity to total average assets Net interest margin FTE (2) Efficiency ratio Net charge-offs to average non-purchased loans (2) (3) Net charge-offs to average total loans (2) Nonperforming loans to total loans (4) Nonperforming assets to total assets (4) Allowance for loan losses to non-purchased loans (5) Other information: Non-accrual loans (4) $ 12,471 $ 11,069 Accruing loans - 90 days past due (4) Troubled and restructured loans (4) Impaired purchased loans 6,849 13,869 (1) Calculations of tangible book value per common share and return on average tangible common stockholders equity and the reconciliations to GAAP are included in the schedules accompanying this release. (2) Ratios for interim periods annualized based on actual days. (3) Excludes purchased loans and net charge-offs related to such loans. (4) Excludes purchased loans, except for their inclusion in total assets. (5) Excludes purchased loans and any allowance for such loans. 12

16 Bank of the Ozarks Supplemental Quarterly Financial Data Unaudited 6/30/16 9/30/16 12/31/16 3/31/17 6/30/17 9/30/17 12/31/17 3/31/18 (Dollars in Thousands, Except Per Share Amounts) Earnings Summary: Net interest income $ 119,038 $ 175,150 $ 194,800 $ 190,771 $ 202,105 $ 209,722 $ 214,831 $ 217,776 Federal tax (FTE) adjustment 2,067 2,533 3,254 3,594 3,396 3,014 2,450 1,166 Net interest income (FTE) 121, , , , , , , ,942 Provision for loan losses (4,834) (7,086) (9,855) (4,933) (6,103) (7,777) (9,279) (5,567) Non-interest income 22,733 29,231 30,571 29,058 31,840 32,747 30,213 28,707 Non-interest expense (50,928) (78,781) (78,358) (78,268) (83,828) (84,399) (86,177) (93,810) Pretax income (FTE) 88, , , , , , , ,272 FTE adjustment (2,067) (2,533) (3,254) (3,594) (3,396) (3,014) (2,450) (1,166) Provision for income taxes (31,514) (42,470) (49,312) (47,417) (53,488) (54,246) (3,434) (33,973) Noncontrolling interest (21) (14) (59) (23) 6 (40) Net income available to common stockholders $ 54,474 $ 76,030 $ 87,787 $ 89,188 $ 90,532 $ 96,007 $ 146,164 $ 113,144 Earnings per common share diluted $ 0.60 $ 0.66 $ 0.72 $ 0.73 $ 0.73 $ 0.75 $ 1.14 $ 0.88 Non-interest Income: Service charges on deposit accounts $ 8,119 $ 10,926 $ 11,759 $ 11,301 $ 11,764 $ 9,729 $ 10,058 $ 9,525 Mortgage lending income 2,057 2,616 2,097 1,574 1,910 1,620 1, Trust income 1,574 1,564 1,623 1,631 1,577 1,755 1,729 1,793 BOLI income 2,745 4,638 4,564 4,464 4,594 4,453 5,166 7,580 Other income from purchased loans 4,599 4,635 4,993 3,737 4,777 2,933 2,009 1,251 Loan service, maintenance and other fees 1,238 1,687 2,962 2,706 3,427 5,274 4,289 4,743 Net gains on investment securities ,429 1, Gains on sales of other assets ,537 1, ,363 1,899 1,426 Other 1,403 2,571 1,032 2,026 2,715 3,191 2,568 1,880 Total non-interest income $ 22,733 $ 29,231 $ 30,571 $ 29,058 $ 31,840 $ 32,747 $ 30,213 $ 28,707 Non-interest Expense: Salaries and employee benefits $ 24,921 $ 38,069 $ 36,481 $ 38,554 $ 39,892 $ 35,331 $ 38,417 $ 45,499 Net occupancy expense 8,388 11,669 13,936 13,192 12,937 13,595 13,474 14,150 Other operating expenses 17,619 29,043 27,941 26,522 30,999 35,473 34,286 34,161 Total non-interest expense $ 50,928 $ 78,781 $ 78,358 $ 78,268 $ 83,828 $ 84,399 $ 86,177 $ 93,810 Balance Sheet Data: Total assets $12,279,579 $18,451,783 $18,890,142 $19,152,212 $20,064,589 $20,768,493 $21,275,647 $22,039,439 Non-purchased loans 8,214,900 8,759,766 9,605,093 10,216,875 11,025,203 12,047,094 12,733,937 13,674,561 Purchased loans 1,515,104 5,399,831 4,958,022 4,580,047 4,159,139 3,731,536 3,309,092 2,934,535 Deposits 10,195,072 15,123,804 15,574,878 15,713,427 16,241,440 16,823,359 17,192,345 17,833,672 Common stockholders' equity 1,556,921 2,756,346 2,791,607 2,873,317 3,260,123 3,334,740 3,460,728 3,526,605 Allowance for Loan Losses: Balance at beginning of period $ 61,760 $ 65,133 $ 69,760 $ 76,541 $ 78,224 $ 82,320 $ 86,784 $ 94,120 Net charge-offs (1,461) (2,459) (3,074) (3,250) (2,007) (3,313) (1,943) (1,590) Provision for loan losses 4,834 7,086 9,855 4,933 6,103 7,777 9,279 5,567 Balance at end of period $ 65,133 $ 69,760 $ 76,541 $ 78,224 $ 82,320 $ 86,784 $ 94,120 $ 98,097 Selected Ratios: Net interest margin FTE (1) 4.82% 4.90% 5.02% 4.88% 4.99% 4.84% 4.72% 4.69% Efficiency ratio Net charge-offs to average non-purchased loans (1) (2) Net charge-offs to average total loans (1) Nonperforming loans to total loans (3) Nonperforming assets to total assets (3) Allowance for loan losses to total non-purchased loans (4) Loans past due 30 days or more, including past due non-accrual loans, to total loans (3) (1) Ratios for interim periods annualized based on actual days. (2) Excludes purchased loans and net charge-offs related to such loans. (3) Excludes purchased loans, except for their inclusion in total assets. (4) Excludes purchased loans and any allowance for such loans. 13

17 Bank of the Ozarks Average Consolidated Balance Sheets and Net Interest Analysis FTE Unaudited Three Months Ended March 31, Average Balance Income/ Expense Yield/ Rate Average Balance Income/ Expense Yield/ Rate (Dollars in thousands) ASSETS Interest earning assets: Interest earning deposits and federal funds sold $ 110,085 $ % $ 41,806 $ % Investment securities: Taxable 2,062,358 11, ,153 3, Tax-exempt FTE 556,776 5, ,589 10, Non-purchased loans FTE 13,010, , ,827, , Purchased loans 3,181,740 50, ,807,080 75, Total earning assets FTE 18,921, , ,143, , Non-interest earning assets 2,359,796 2,603,381 Total assets $ 21,280,848 $ 18,746,726 LIABILITIES AND STOCKHOLDERS EQUITY Interest bearing liabilities: Deposits: Savings and interest bearing transaction $ 9,857,347 $ 22, % $ 7,862,653 $ 8, % Time deposits of $100 or more 3,036,123 8, ,241,587 7, Other time deposits 1,445,948 3, ,699,858 2, Total interest bearing deposits 14,339,418 34, ,804,098 18, Repurchase agreements with customers 112, , Other borrowings 165, , Subordinated notes 222,947 3, ,561 3, Subordinated debentures 118,864 1, ,300 1, Total interest bearing liabilities 14,959,606 39, ,266,980 22, Non-interest bearing liabilities: Non-interest bearing deposits 2,666,111 2,574,540 Other non-interest bearing liabilities 167,778 75,107 Total liabilities 17,793,495 15,916,627 Common stockholders equity 3,484,297 2,826,832 Noncontrolling interest 3,056 3,267 Total liabilities and stockholders equity $ 21,280,848 $ 18,746,726 Net interest income FTE $ 218,942 $ 194,365 Net interest margin FTE 4.69% 4.88% 14

18 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Bank of the Ozarks Calculation of Average Tangible Common Stockholders Equity and the Return on Average Tangible Common Stockholders Equity Unaudited Three Months Ended March 31, (Dollars in thousands) Net income available to common stockholders $ 113,144 $ 89,188 Average common stockholders equity before noncontrolling interest $ 3,484,297 $ 2,826,832 Less average intangible assets: Goodwill (660,789) (660,151) Core deposit and other intangibles, net of accumulated amortization (47,122) (59,596) Total average intangibles (707,911) (719,747) Average tangible common stockholders equity $ 2,776,386 $ 2,107,085 Return on average common stockholders equity (1) 13.17% 12.80% Return on average tangible common stockholders equity (1) 16.53% 17.17% (1) Ratios for interim periods annualized based on actual days. Bank of the Ozarks Calculation of Total Tangible Common Stockholders Equity and Tangible Book Value per Common Share Unaudited March 31, (In thousands, except per share amounts) Total common stockholders equity before noncontrolling interest $ 3,526,605 $ 2,873,317 Less intangible assets: Goodwill (660,789) (660,789) Core deposit and other intangibles, net of accumulated amortization (45,107) (57,686) Total intangibles (705,896) (718,475) Total tangible common stockholders equity $ 2,820,709 $ 2,154,842 Shares of common stock outstanding 128, ,575 Book value per common share $ $ Tangible book value per common share $ $

19 Bank of the Ozarks Calculation of Total Tangible Common Stockholders Equity and the Ratio of Total Tangible Common Stockholders Equity to Total Tangible Assets Unaudited March 31, (Dollars in thousands) Total common stockholders equity before noncontrolling interest $ 3,526,605 $ 2,873,317 Less intangible assets: Goodwill (660,789) (660,789) Core deposit and other intangibles, net of accumulated amortization (45,107) (57,686) Total intangibles (705,896) (718,475) Total tangible common stockholders equity $ 2,820,709 $ 2,154,842 Total assets $ 22,039,439 $ 19,152,212 Less intangible assets: Goodwill (660,789) (660,789) Core deposit and other intangibles, net of accumulated amortization (45,107) (57,686) Total intangibles (705,896) (718,475) Total tangible assets $ 21,333,543 $ 18,433,737 Ratio of total common stockholders equity to total assets 16.00% 15.00% Ratio of total tangible common stockholders equity to total tangible assets 13.22% 11.69% 16

20 Exhibit 99.2

21 FORWARD LOOKING STATEMENTS This presentation and other communications by Bank of the Ozarks (the Bank ) include certain forwardlooking 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 Securities Litigation Reform Act of Forward-looking statements are based on management s expectations as well as certain assumptions and estimates made by, and information available to, management at the time. Those statements are not guarantees of future results or performance and are subject to certain known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed in, or implied by, such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: potential delays or other problems implementing the Bank s growth, expansion and acquisition strategies including delays in identifying sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices; the ability to enter into and/or close additional acquisitions; problems with, or additional expenses relating to, integrating acquisitions; the inability to realize expected cost savings and/or synergies from acquisitions; problems with managing acquisitions; the effect of the announcements of any future acquisition on customer relationships and operating results; the availability and access to capital; possible downgrades in the Bank s credit ratings or outlook which could increase the costs or availability of funding from capital markets; the ability to attract new or retain existing or acquired deposits or to retain or grow loans, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and long-term interest rates; competitive factors and pricing pressures, including their effect on the Bank s net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers, collateral values, the value of investment securities and asset recovery values; failure to receive approval of our pending applications for change in accounting methods with the Internal Revenue Service; changes in legal, financial and/or regulatory requirements; recently enacted and potential legislation and regulatory actions and the costs and expenses to comply with new and/or existing legislation and regulatory actions; changes in U.S. government monetary and fiscal policy; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity; FDIC special assessments or changes to regular assessments; the impact of failure in, or breach of, our operational or security systems or infrastructure, or those of third parties with whom we do business, including as a result of cyberattacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Bank or its customers; adoption of new accounting standards or changes in existing standards; and adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions or rulings as well as other factors identified in this communication or as detailed from time to time in our public filings, including those factors included in the disclosures under the headings Forward-Looking Information and Item 1A. Risk Factors in our most recent Annual Report on Form 10-K for the year ended December 31, Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those projected in, or implied by, such forward-looking statements. The Bank disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise. 1

22 1 st Quarter 2018 Highlights We are pleased to report our excellent results for the quarter just ended, including net income of $113.1 million, record net interest income of $217.8 million, an annualized return on average assets of 2.16% and many other accomplishments. Our annualized returns on average common stockholders equity and average tangible common stockholders equity 1 for the first quarter of 2018 were 13.17% and 16.53%, respectively, compared to 12.80% and 17.17%, respectively, for the first quarter of In the quarter just ended, our total assets grew to $22.04 billion, a $764 million, or 3.6%, increase from December 31, Net Interest Income Net interest income is our largest category of revenue. It is affected by many factors including our volume of average earning assets; our mix of average earning assets between nonpurchased loans, purchased loans and investment securities; our volume and mix of deposits; our net interest margin; our core spread, which is the term we use to describe the difference between our yield on non-purchased loans and our cost of interest-bearing deposits; loan and deposit betas; and other factors. In light of the attention currently surrounding deposit betas, one might be wise to remember the old adage about not being able to see the forest for the trees. While the individual factors affecting net interest income are each important, improving net interest income is more important than improving any single factor. ultimate objective. Increasing net interest income is the Using this analogy, our forest is doing well. We have now achieved record net interest income in four consecutive quarters, and in 15 of the last 17 quarters. Achieving record net 1 The calculation of the Bank s return on average tangible common stockholders equity and the reconciliation to generally accepted accounting principles ( GAAP ) are included in the appendix to this disclosure. 2

23 ($ millions) interest income in the first quarter is always a satisfying accomplishment, because the first quarter has fewer days, except in leap years, than other quarters and is often our slowest growth quarter. As shown in Figure 1, the only quarters in the last 17 quarters in which we did not achieve record quarterly net interest income were two first quarters 2014 and Figure 1: Quarterly Net Interest Income Since 1Q14 $250 $200 Denotes record quarterly net interest income $195 $191 $202 $210 $215 $218 $175 $150 $100 $50 $52 $65 $75 $79 $85 $94 $96 $107 $113 $119 $- Obviously, we have maintained a healthy focus on our primary objective net interest income. Now, let s look at the various individual factors. Average Earning Assets Volume and Mix Our average earning assets for the quarter just ended totaled $18.92 billion, an increase of 17.2% compared to the first quarter of 2017 and an increase of 3.5% compared to the immediately preceding fourth quarter of That is a healthy growth rate in average earning assets, even though it was tempered by the ongoing pay-downs in our portfolio of purchased loans, which consists of the remaining loans from our 15 acquisitions since Non-purchased loans, which are all loans excluding the remaining loans acquired in our acquisitions, is the most significant contributor to our growth in average earning assets. In the quarter just ended, non-purchased loans accounted for 69% of our average earning assets. 3

24 ($ billions) During the quarter, the outstanding balance of our non-purchased loans grew $941 million, or 7.4%, from $12.73 billion at December 31, 2017 to $13.67 billion at March 31, In the last four quarters, the outstanding balance of our non-purchased loans grew $3.46 billion, or 33.8%. Figure 2: Funded Balance of Nonpurchased Loans $15.00 $10.00 $5.00 $- $2.63 $3.98 $6.53 $9.61 $12.73 $13.67 Non-purchased loan growth $ Billions % 2013 $ % 2014 $ % 2015 $ % 2016 $ % 2017 $ % 3/31/18 v. 3/31/17 $ % Real Estate Specialties Group ( RESG ) has been the primary contributor to our non-purchased Figure 3: Non-purchased Loan Growth Mix - 1Q18 loan growth for many years, as it was in the quarter just ended. We expect it will continue to 6% RESG be our largest single contributor to nonpurchased loan growth. On the other hand, in recent years, we have discussed the importance of achieving greater contributions to growth from our other loan 24% 13% 57% Community Banking Indirect RV & Marine CLSG (Corporate Loan Specialties Group) teams. In 2017, these other loan teams contributed 54% of our non-purchased loan growth. Although their contribution to our first quarter 2018 non-purchased loan growth, as shown in Figure 3, was slightly lower at 43%, this was still a very meaningful contribution to our excellent 4

25 first quarter growth. We expect these other loan teams to continue to build on their positive momentum. As we have stated in recent conference calls, we expect that our 2018 growth in non-purchased loans will exceed our record $3.13 billion annual growth in non-purchased loans in While it is early to make comments about 2019, based on our plans and our positive momentum, we expect our volume of non-purchased loan growth in 2019 to exceed 2018 s growth. Our unfunded balance of our loans already closed at March 31, 2018, was $12.55 billion, an increase of $1.29 billion from $11.26 billion at March 31, 2017, but a decrease of $0.64 billion from $13.19 billion at year-end We do not think this one-quarter decrease reflects a longer-term trend. Our second largest component of earning assets is purchased loans, which are the remaining loans from our 15 acquisitions since Over the last four quarters, that portfolio has declined $1.65 billion, or 35.9%, from $4.58 billion at March 31, 2017 to $2.93 billion at March 31, During the quarter just ended, our purchased loan portfolio decreased $375 million, or 11.3%. Purchased loan runoff was an expected headwind to our overall growth in the quarter just ended, and it will continue to be a headwind to overall growth until we make our next acquisition. In the interim, the magnitude of that headwind should diminish as the purchased loan portfolio continues to decrease as a percentage of our total earning assets. Our third largest component of earning assets is our investment securities portfolio. As we discussed in previous conference calls, we have made a number of strategic adjustments to this portfolio. Over the last four quarters, we have increased our investment securities portfolio by $1.14 billion, expanding it from $1.47 billion at March 31, 2017 to $2.61 billion at March 31, This growth was accomplished by purchasing highly liquid, short-duration government agency mortgage-backed pass through securities. Because of the high quality and short duration of these securities, they have relatively low yields. We have added these securities to 5

26 provide another tool for managing our balance sheet liquidity, while also trying to avoid any significant interest rate and market risks. We expect to continue to make adjustments in our investment securities portfolio during 2018 as market conditions allow or dictate. We think it is likely that we will continue to add more short-term, high quality securities in 2018 to continue to enhance our liquidity position. Net Interest Margin In the quarter just ended, our net interest margin continued to be among the best in the industry. In the first quarter of 2018, our net interest margin was 4.69%, down three basis points from the fourth quarter of 2017 and 19 basis points from the first quarter of There are a number of moving parts to our net interest margin. First, as shown in Figure 4, our yield on non-purchased loans has increased as the Federal Reserve has moved to increase interest rates. This has been beneficial to our net interest margin, and it is important because non-purchased loans are the largest component of our earning assets. Figure 4: Non-purchased Loan Yield Trends 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 4.96% 4.96% 5.00% 5.06% 5.12% 5.14% 5.26% 5.42% 5.63% 5.76% 5.94% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Non-purchased Loan Yield Fed Funds Rate Increases 6

27 Purchased Loans ($ millions) Purchased Loan Yield Our non-purchased loan portfolio is well positioned to benefit from rising rates, because 79% of these loans had variable rates as of March 31, Second, and conversely, as shown in Figure 5, our purchased loan portfolio is paying down every quarter, and this ongoing reduction in this higher yielding portfolio has put some downward pressure on our net interest margin. Figure 5: Quarterly Purchased Loan Average Balances and Yields Since Closing Two Latest Acquisitions in July 2016 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- $4, % $5, % $4, % $4,392 $3, % 6.81% $3,529 $3, % 6.50% 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q % 9.00% 8.00% 7.00% 6.00% 5.00% Average Purchased Loans Purchased Loan Yield As shown in Figure 6, the differential in the yield between our purchased loan portfolio and our non-purchased loan portfolio has diminished over time. Of course, purchased loan yields vary significantly from quarter-to-quarter based on the volume and mix of pre-payments within the purchased loan portfolio. Despite this significant variability from quarter to quarter, the yield on our purchased loan portfolio has declined only moderately when looked at on a year to year basis. Specifically, the yield on our purchased loans was 6.69% for 2016, declining 7 basis points to 6.62% for 2017, and declining another 12 basis points to 6.50% for the first quarter of Our purchased loan portfolio benefits, but to a lesser extent than our non-purchased loan portfolio, from rising rates, because 42% of our purchased loans had variable rates as of March 31,

28 Figure 6: Convergence of Non-purchased and Purchased Loan Yields 8.00% 7.50% 7.00% 6.50% 6.00% 5.50% 5.00% 4.50% 4.00% 6.85% 6.85% 6.71% 6.72% 6.84% 6.92% 6.81% 6.54% 6.41% 6.50% 6.33% 5.94% 5.63% 5.76% 5.42% 4.96% 4.96% 5.00% 5.06% 5.12% 5.14% 5.26% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Non-purchased Loan Yield Purchased Loan Yield If the Federal Reserve continues to increase rates, and with 79% of our non-purchased loans having variable rates, as compared to just 42% of our purchased loans having variable rates, we may reach a point where our yield on non-purchased loans surpasses our yield on purchased loans. Third, we have taken significant steps to more defensively position our investment securities portfolio in an environment with rising interest rates and lower effective income tax rates. These steps included trying to maintain or reduce average maturities, modified duration, and the portion of our investment portfolio invested in municipal securities, while also trying to increase convexity. As shown in Figure 7, the modified duration of our portfolio has declined and the convexity of our portfolio has increased, even as increases in market interest rates would have tended to push those metrics in the opposite direction. We believe these portfolio adjustments were prudent, even though they adversely impacted the yield on our investment portfolio, and, in turn, our net interest margin. 8

29 The yield on our investment portfolio was 2.59%, on a fully taxable equivalent ( FTE ) basis, in the quarter just ended, which is a 124 basis point decrease from 3.83% FTE in the first quarter of This decrease includes the effect of the reduction in the tax-equivalent yield on the tax-exempt portion of our investment portfolio because of the lower tax rates in the first quarter of As shown in Figure 7, the changing mix of the portfolio contributed to the reduced portfolio yield. Specifically, the average balance of tax-exempt securities decreased from $804 million yielding 5.06% FTE in the first quarter of 2017 to $557 million yielding 3.84% FTE in the first quarter of The average balance of taxable securities increased from $663 million yielding 2.33% in the first quarter of 2017 to $2.06 billion yielding 2.25% in the first quarter of Figure 7: Securities Portfolio Average Balance and FTE Yield Even with all the moving parts, our net interest margin has continued to be among the best in the industry. On the positive side, our core spread, which we will discuss later, has increased as the yield on our growing non-purchased loan portfolio has increased faster than our cost of 9

30 interest bearing deposits. On the other hand, the decreasing volume of our higher yielding purchased loan portfolio has weighed on our net interest margin, as has the larger volume and the more defensive posture of our investment securities portfolio. We have tried to capture the dynamic nature of all these moving parts in Figure 8. As you study the data in Figure 8, keep in mind that we have maintained a net interest margin in the top decile of the industry for the past eight years as shown in Figure 9. 10

31 Figure 9: Top-Decile Net Interest Margin (%) Core Spread Core spread is the term we use to describe the difference between our yield on nonpurchased loans, which are our largest category of earning assets, and our cost of interestbearing deposits. In the quarter just ended, our yield on non-purchased loans increased 18 basis points to 5.94%, while our cost of interest bearing deposits increased 14 basis points to 0.97%, resulting in a four basis point increase in our core spread. Over the last seven quarters, our core spread has increased 42 basis points as shown in the green box at the bottom of Figure

32 Figure 10: Fed Funds Target Rate Increases Have Contributed to an Improving Core Spread There are many factors which affect our core spread, but we expect that the most meaningful factor in coming quarters will be the Federal Reserve s actions related to the fed funds target rate. If the Federal Reserve continues to increase the fed funds target rate, this should tend to help us continue to increase our core spread, because 79% of our non-purchased loans at March 31, 2018 had variable rates. The benefit from the increased yield on these variable rate loans from an increase in the fed funds target rate should offset, and hopefully more than offset, the increased cost of interest bearing deposits resulting from our deposit gathering initiatives. Conversely, if the Federal Reserve were to discontinue increases in the fed funds target rate, this would likely put some downward pressure on our core spread. Loan and Deposit Betas Since the fourth quarter of 2015, when the Federal Reserve started the current round of interest rate increases, the fed funds target rate has increased six times. This has resulted in 12

33 Basis Points Basis Points increases in our yield on variable rate loans and newly originated loans as well as increases in our cost of interest bearing deposits and borrowings. Because of our substantial growth, our deposit beta has been higher than many other banks, but importantly our loan beta on non-purchased loans has been even higher, resulting in a 42 basis point increase in our core spread over the last seven quarters. Figure 11 shows our non-purchased loan and deposit betas over a slightly longer time period, specifically the last 11 quarters since the Federal Reserve commenced the current round of interest rate increases. During that period, our yield on non-purchased loans has increased 98 basis points, more than off-setting the 66 basis point increase in our cost of interest bearing deposits, and resulting in a 32 basis point increase in our core spread over those eleven quarters. Figure 11: Non-Purchased Loan and Deposit Betas During Rising Rate Cycle (3Q15 through 1Q18) bps Fed Funds Increase Implied Loan Beta = 65% 98 bps Yield on Non- Purchased Loans Increase bps Fed Funds Increase Implied Deposit Beta = 44% 66 bps Cost of Interest Bearing Deposit Increase 13

34 Basis Points Basis Points In the quarter just ended, our implied loan and deposit betas were more closely aligned, but still with a positive differential as shown in Figure 12. Figure 12: Non-Purchased Loan and Deposit Betas for First Quarter bps 1Q18 Fed Funds Increase Implied Loan Beta = 72% 18 bps Yield on Non- Purchased Loans Increase - 1Q bps 1Q18 Fed Funds Increase Implied Deposit Beta = 56% 14 bps Cost of Interest Bearing Deposit Increase - 1Q18 We will continue to work hard to manage each factor affecting net interest income, with the goal of maintaining a favorable net interest margin and achieving record net interest income each quarter. Asset Quality Asset quality was another highlight in the quarter just ended, with most of our asset quality ratios at or near record levels. These favorable ratios reflect our longstanding commitment to conservative underwriting standards and excellent asset quality. This has resulted in our having asset quality consistently better than the industry as a whole. As shown in Figure 13, in our 21 years as a public company, our net charge-off ratio has averaged about 34% of the industry s net charge-off ratio, and we have beaten the industry s 14

35 net charge-off ratio in every year. Recently, our outperformance has been even better, as evidenced by the fact that our net charge-off ratio was just 13% and 12% of the industry s net charge-off ratio in 2016 and 2017, respectively. Figure 13: Annualized Net Charge-off Ratio 2 vs. the Industry Q18 Net Charge-Off Ratios: Non-purchased loans: 0.04% Purchased loans: 0.05% Total loans: 0.04% Bank of the Ozarks (2) FDIC Insured Institutions (3) Our annualized net charge-off ratios for the first quarter of 2018 were four basis points for nonpurchased loans, five basis points for purchased loans, and four basis points for total loans. At quarter-end, excluding purchased loans, our nonperforming loans as a percent of total loans were just nine basis points, our nonperforming assets as a percent of total assets were just 16 basis points, and our loans past due 30 days or more, including past due non-accrual loans to total loans were just 14 basis points. The RESG portfolio is the largest component of our non-purchased loans. At March 31, 2018, the RESG portfolio accounted for 64% of the funded balance and 94% of the unfunded balance 2 Bank of the Ozarks data excludes purchased loans and net charge-offs related to such loans. 3 Data for all FDIC insured institutions from the FDIC Quarterly Banking Profile, last update fourth quarter Annualized when appropriate. 15

36 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 of our total non-purchased loans. At March 31, 2018, assuming each RESG loan is fully funded, our average loan-to-cost ( LTC ) for the RESG portfolio was a conservative 49% and our average loan-to-appraised-value ( LTV ) was even lower at just 42%. The very low leverage of this portfolio exemplifies our conservative credit culture and, along with the portfolio s substantial diversification by geography and product type, are among the many reasons we have such confidence in the quality of our loan portfolio. Over its fifteen year history, RESG s portfolio has had an average annual net charge-off ratio of just five basis points. Since the Great Recession, RESG has become even more conservative, having decreased the leverage of its portfolio as shown in Figure 14 depicting historical portfolio LTC and LTV ratios. Figure 14: RESG Leverage Trends, Assuming All Loans Are Fully Funded 70% 65% 60% 55% 50% 45% 40% 35% 30% 70% 60% 50% 40% 3/31/18: LTC 30% 49% LTV 20% 42% 10% 0% Loan to Cost Loan to Value Earnings Our net income for the first quarter of 2018 was $113.1 million, a 26.9% increase from the first quarter of Our diluted earnings per common share for the first quarter of 2018 were $0.88, a 20.5% increase compared to the first quarter of

37 Our annualized return on average assets for the first quarter of 2018 was 2.16%, compared to 1.93% for the first quarter of Our annualized returns on average common stockholders equity and average tangible common stockholders equity 4 for the first quarter of 2018 were 13.17% and 16.53%, respectively, compared to 12.80% and 17.17%, respectively, for the first quarter of As shown in Figures 15 and 16, our first quarter 2018 results continue a long tradition of excellent net income and returns. Figure 15: Consistent Profitability and Solid Earnings Growth 4 The calculation of the Bank s return on average tangible common stockholders equity and the reconciliation to GAAP are included in the appendix to this disclosure. 17

38 Figure 16: Consistent Earnings Metrics Among the Best in the Industry Efficiency Ratio As shown in Figure 17, our efficiency ratio has been among the top decile of the industry every year for 16 consecutive years. In the quarter just ended, our efficiency ratio was 37.9%, which was an increase of 285 basis points from the first quarter of As we said in our January conference call, we expected our efficiency ratio would increase in the first half of 2018 as we continue to build our infrastructure in many areas. Excluding the one-time expenses expected to be incurred in the third quarter of 2018 related to our proposed name change and strategic rebranding, we expect our efficiency ratio of 37.9% for the quarter just ended will be the high for the year. Excluding such one-time expenses, we expect to see an improving trend in our efficiency ratio throughout 2018, and we expect our efficiency ratio for the full year to be much closer to our efficiency ratio for 2017 than our first quarter results would suggest. 18

39 Figure 17: Excellent Efficiency Top Decile of the Industry for 16 Consecutive Years* Of course, as is the case for us every year, our increased cost of health insurance and a majority of our annual salary adjustments occurred at the first of the year, providing extra headwind to our efficiency ratio in the first quarter. As we noted previously, our net interest margin was reduced slightly because of the impact of lower effective federal income tax rates on our taxequivalent yield on tax-exempt investment securities. We estimate that this contributed approximately 18 basis points to the increase in our efficiency ratio in the quarter just ended. Non-interest Income Non-interest income for the first quarter of 2018 decreased 1.2% to $28.7 million compared to $29.1 million for the first quarter of 2017, as shown in Figure 18. Our non-interest income for the first quarter of 2018 included $2.73 million of tax-exempt bank owned life insurance ( BOLI ) death benefits. There were no such benefits in the first quarter of Service charges on deposit accounts declined from $11.3 million for the first quarter of 2017 to $9.5 million for the first quarter of 2018 primarily due to the Durbin Amendment s impact on our interchange revenue effective as of July 1, Mortgage lending income declined from $1.6 19

40 million for the first quarter of 2017 to $0.5 million for the first quarter of This was a result of our decision in December 2017 to exit the secondary market mortgage lending business and the substantial wind down of that business in the quarter just ended. We expect only a nominal amount of mortgage lending income in the second quarter of 2018 and none thereafter. Figure 18: Non-interest Income (Dollars in thousands) For the 3 months Ended 3/31/2017 6/30/2017 9/30/ /31/2017 3/31/2018 Service charges on deposit accounts $ 11,301 $ 11,764 $ 9,729 $ 10,058 $ 9,525 Mortgage lending income 1,574 1,910 1,620 1, Trust income 1,631 1,577 1,755 1,729 1,793 BOLI income 4,464 4,594 4,453 5,166 7,580 Other income from purchased loans 3,737 4,777 2,933 2,009 1,251 Loan service, maintenance and other fees 2,706 3,427 5,274 4,289 4,743 Net gains on investment securities ,429 1, Gains on sales of other assets 1, ,363 1,899 1,426 Other 2,026 2,715 3,191 2,568 1,880 Total non-interest income $ 29,058 $ 31,840 $ 32,747 $ 30,213 $ 28,707 Non-interest Expense Figure 19 summarizes non-interest expense for each of the last five quarters. Excluding the one-time expenses expected to be incurred in the third quarter of 2018 related to our name change and strategic rebranding, we expect our non-interest expense in the remaining quarters of 2018 to be less than our non-interest expense in the first quarter of In accordance with GAAP, we defer most loan origination fees and related loan origination costs, which are then amortized as yield adjustments over the life of the related loan. Because of our seasonally low volume of loan originations in the quarter just ended, we had a correspondingly low level of deferred loan origination costs, which contributed to the large quarter-overquarter increase in non-interest expense. Increased loan origination volume in the remaining quarters of 2018 should result in increased deferred loan origination costs contributing to the expected lower level of non-interest expense in the remaining quarters of

41 Figure 19: Non-interest Expense (Dollars in thousands) For the 3 months Ended 3/31/2017 6/30/2017 9/30/ /31/2017 3/31/2018 Salaries & employee benefits $ 38,554 $ 39,892 $ 35,331 $ 38,417 $ 45,499 Net occupancy and equipment 13,192 12,937 13,595 13,474 14,150 Professional and outside services 5,338 6,816 10,018 10,269 8,705 Telecommunication services 3,970 3,107 3,321 3,537 3,197 Software and data processing 2,473 2,289 2,982 2,382 3,340 Travel and meals 1,855 2,061 2,223 2,338 2,153 FDIC insurance and state assessments 1,742 3,408 4,381 3,583 3,562 Amortization of inangibles 3,145 3,145 3,145 3,145 3,145 Other expenses 7,999 10,173 9,403 9,032 10,059 Total non-interest expense $ 78,268 $ 83,828 $ 84,399 $ 86,177 $ 93,810 While our efficiency ratio has been excellent in recent years, we have a longer-term goal of improving even further on the efficiency ratios of recent years. There are several key factors, among others, needed to accomplish our long-term efficiency goals. We expect to ultimately utilize a large amount of the excess capacity of our extensive branch network, tapping many billions of dollars of additional deposits through existing offices. That potential is very evident in the FDIC bank deposit market share data as of June 30, For the 156 cities and towns, excluding New York City, in which we had deposit gathering offices, we had 4.13% of the branches but only 1.40% of the deposits. We believe we can grow to, or near, market share parity. Our ability to achieve substantial deposit growth in many of these cities and towns while adding minimal amounts of overhead should have favorable implications for our efficiency ratio. We expect to achieve further efficiencies over time from our ongoing deployment of technology applications from OZRK Labs. Of course, our guidance regarding our improving efficiency ratio does not consider the potential impact of any future acquisitions. 21

42 Liquidity We have long expected that we can accelerate deposit growth as needed to fund our loan growth. Our experience in recent years has validated that expectation. At least monthly, and more often as needed, we update a comprehensive 36-month projection of our expected loan fundings, loan pay-downs and other sources and uses of funds. These detailed projections of needed deposit growth provide the goals for our deposit growth strategies. This has proven to be a very effective process. Net growth in core checking accounts is an important focus of our deposit strategy. During the quarter just ended, we increased core checking accounts by a record 7,553. This continued our tradition of favorable results in net core checking account growth as shown in Figure 20. Adding thousands of net new core checking customers each quarter will continue to be an important focus for our retail banking team. Figure 20: Organic Growth in Core Checking Accounts 6,478 3,239 12,232 13,196 9,370 7,218 22,013 7,553 At March 31, 2018, our total deposits were $17.83 billion, which was a $641 million increase from the previous quarter-end. This growth reflected an increase in our organic deposits of $654 million, partially offset by a $13 million decrease in brokered deposits. As shown in Figure 21, this continued 2017 s results which saw excellent growth in our organic deposits and a significant reduction in our brokered deposits. 22

43 Figure 21: Growth in Deposits (Dollars in millions) Deposits 12/31/ /31/ Δ in $ 3/31/2018 1Q18 Δ in $ New York City $ 378 $ 1,771 $ 1,393 $ 1,828 $ 57 Other 156 Cities $ 13,208 $ 14,260 $ 1,052 $ 14,857 $ 597 Organic Deposits $ 13,586 $ 16,031 $ 2,445 $ 16,686 $ 654 Brokered $ 1,989 $ 1,161 $ (828) $ 1,148 $ (13) Total Deposits $ 15,575 $ 17,192 $ 1,617 $ 17,834 $ 641 As we have discussed many times, as shown in Figure 22, we believe that we have tremendous capacity for future deposit growth in our existing branch network of 243 deposit gathering offices in eight states. Figure 22: Deposit Market Share Opportunity 5 6 % of Branches in Cities % of Deposits in Cities Deposit Market Share Comparison We have successfully tapped that capacity as needed to fund our loan growth. We do this by carefully managing our marketing initiatives and deposit pricing in selected markets. As Figures 23 and 24 illustrate, we have effectively utilized this strategy to consistently maintain our loan-to-deposit ratio and deposit mix, even in the midst of substantial balance sheet growth. 5 Data for all FDIC insured institutions from the FDIC Annual Market Share Report, last updated June 30, Deposits in our New York office and deposits for all FDIC financial institutions in New York are excluded from this analysis. 23

44 During the quarter just ended, our loan-to-deposit ratio was 93.1%, near the middle of our historical and target range of 89% to 99%. Whether we have robust loan growth or minimal loan growth in any particular quarter or year, we believe we have the tools, capacity and flexibility to maintain our loan-to-deposit ratio near the middle of this historical and target range. Figure 23 shows our consistent maintenance of our loan-to-deposit ratio within that range over the last six years, even as our total assets grew 474% from $3.84 billion at March 31, 2012 to $22.04 billion at March 31, Figure 23: Maintaining a Consistent Loan / Deposit Ratio While Achieving Substantial Growth 24

45 Even with our substantial 474% growth in total assets from March 31, 2012 to March 31, 2018, our deposit mix has been relatively stable as shown in Figure 24. Figure 24: Consistent Deposit Mix During 2017, we decreased brokered deposits by $828 million, or 42%. This trend of decreasing brokered deposits continued in the quarter just ended with brokered deposits decreasing by $13 million to $1.15 billion, or 6.4% of total deposits at March 31, 2018, as shown in Figure 25. Of course, we re not subject to any regulatory limitations on our volume of brokered deposits and our internal policy calls for a 15% of total deposits limit, and we are less than half of that, but we are nonetheless pleased to see both our volume and percentage of brokered deposits continue the downward trend of the past eight quarters. 25

46 Brokered Deposits as a % of Total Deposits Figure 25: Reduced Use of Brokered Deposits 19.0% 17.0% 17.0% 15.0% 14.8% 13.0% 13.1% 12.8% 12.8% 11.0% 9.7% 9.0% 7.0% 7.2% 6.8% 6.4% 5.0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Capital Tangible book value per common share is one of the metrics we consider in measuring our capital and our long-term creation of shareholder value. During the quarter just ended, our tangible book value per common share increased to $21.93, as shown in Figure 26. Over the last 10 1/4 years, we have increased tangible book value per common share by a cumulative 697%, resulting in a compound annual growth rate of 22.5%. 26

47 Figure 26: Tangible Book Value per Share (Period End) 7 $25.00 $21.45 $21.93 $20.00 $15.00 $10.00 $5.00 $2.75 $3.66 $3.90 $4.58 $5.98 $7.03 $8.27 $10.04 $17.08 $14.48 $ Q18 We expect to file our first Dodd-Frank Act Stress Test, or DFAST, submission in July of this year based on year-end 2017 financials. Although we have strong capital levels at March 31, 2018, we will continue to monitor our capital position, while considering our expected growth, expected performance under our initial and subsequent DFAST submissions, and other relevant factors. Effective Tax Rate Our effective tax rate during the quarter just ended was 23.1%, which was slightly lower than our expected effective tax rate for 2018 due to additional tax exempt BOLI income recognized during the quarter and other normal adjustments. We continue to expect that our effective tax rate for 2018 will be between 25% and 27%. Deferred Loan Origination Fees & Costs Non-Purchased Loans At March 31, 2018, we had $29.0 million more in unamortized deferred loan origination fees (credits) than unamortized deferred loan origination costs (debits) related to non-purchased loans. RESG loan originations tend to produce net deferred credits, since loan origination fees 7 See the appendix to this disclosure for the reconciliation of tangible book value per common share to the most directly comparable GAAP measure. 27