UNITED STATES
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C. 20429
FORM 10-Q
(Mark One)
- QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024
- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from | to | . |
FDIC Certificate No. 110
BANK OZK
(Exact name of registrant as specified in its charter)
ARKANSAS | 71-0130170 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification Number) |
18000 CANTRELL ROAD, LITTLE ROCK, ARKANSAS | 72223 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (501) 978-2265
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.01 par value per share | OZK | Nasdaq Global Select Market |
4.625% Series A Non-Cumulative Perpetual | OZKAP | Nasdaq Global Select Market |
Preferred Stock, $0.01 par value per share | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☒ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Emerging growth company | ☐ |
Smaller reporting 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.
Class | Outstanding at April 30, 2024 | |
Common Stock, $0.01 par value per share | 113,431,898 |
BANK OZK
FORM 10-Q
March 31, 2024
INDEX
PART I. | ||
Item 1. | ||
Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (Unaudited) | ||
Consolidated Statements of Income for the Three Months Ended March 31, 2024 and 2023 | ||
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and | ||
2023 (Unaudited) | ||
Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2024 and | ||
2023 (Unaudited) | ||
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 27 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 62 |
Item 4 | Controls and Procedures | 62 |
PART II | Other Information | 63 |
Item 1. | Legal Proceedings | 63 |
Item 1A. | Risk Factors | 63 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 63 |
Item 3. | Defaults Upon Senior Securities | 63 |
Item 4. | Mine Safety Disclosures | 63 |
Item 5. | Other Information | 64 |
Item 6. | Exhibits | 64 |
Signatures | 65 | |
Exhibit Index | 66 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BANK OZK
CONSOLIDATED BALANCE SHEETS
Unaudited
March 31, | December 31, | ||||
2024 | 2023 | ||||
(Dollars in thousands, except per share amounts) | |||||
ASSETS | |||||
Cash and cash equivalents | $ | 2,323,813 | $ | 2,149,529 | |
Investment securities - available for sale ("AFS") | 3,072,391 | 3,244,371 | |||
Federal Home Loan Bank of Dallas ("FHLB") and other bankers' bank stocks | 14,484 | 50,400 | |||
Non-purchased loans | 27,781,091 | 26,195,030 | |||
Purchased loans | 250,257 | 264,045 | |||
Allowance for loan losses | (365,935) | (339,394) | |||
Net Loans | 27,665,413 | 26,119,681 | |||
Premises and equipment, net | 681,865 | 676,821 | |||
Foreclosed assets | 60,782 | 61,720 | |||
Accrued interest receivable | 175,201 | 170,110 | |||
Bank owned life insurance ("BOLI") | 813,996 | 808,490 | |||
Goodwill | 660,789 | 660,789 | |||
Other, net | 561,170 | 295,546 | |||
Total assets | $ | 36,029,904 | $ | 34,237,457 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Deposits: | |||||
Demand non-interest bearing | $ | 4,046,054 | $ | 4,095,874 | |
Savings and interest bearing transaction | 9,504,445 | 9,074,296 | |||
Time | 15,855,571 | 14,234,973 | |||
Total deposits | 29,406,070 | 27,405,143 | |||
Other borrowings | 202,009 | 805,318 | |||
Subordinated notes | 347,961 | 347,761 | |||
Subordinated debentures | 121,652 | 121,652 | |||
Reserve for losses on unfunded credit commitments | 170,952 | 161,834 | |||
Accrued interest payable and other liabilities | 513,420 | 255,773 | |||
Total liabilities | 30,762,064 | 29,097,481 | |||
Commitments and contingencies | |||||
Stockholders' equity: | |||||
Preferred stock, $0.01 par value; 100,000,000 shares authorized; 14,000,000 shares | |||||
issued and outstanding as of March 31, 2024 and December 31, 2023 | 338,980 | 338,980 | |||
Common stock, $0.01 par value; 300,000,000 shares authorized; 113,434,816 and | |||||
113,148,672 shares issued and outstanding, as of March 31, 2024 and December 31, | |||||
2023, respectively | 1,134 | 1,131 | |||
Additional paid-in capital | 1,609,268 | 1,612,446 | |||
Retained earnings | 3,424,672 | 3,283,818 | |||
Accumulated other comprehensive loss | (107,207) | (97,374) | |||
Total stockholders' equity before noncontrolling interest | 5,266,847 | 5,139,001 | |||
Noncontrolling interest | 993 | 975 | |||
Total stockholders' equity | 5,267,840 | 5,139,976 | |||
Total liabilities and stockholders' equity | $ | 36,029,904 | $ | 34,237,457 | |
See accompanying notes to the consolidated financial statements.
3
BANK OZK
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
Interest income:
Non-purchased loans
Purchased loans
Investment securities:
Taxable
Tax-exempt
Deposits with banks
Total interest income
Interest expense:
Deposits
Other borrowings
Subordinated notes
Subordinated debentures
Total interest expense
Net interest income Provision for credit losses
Net interest income after provision for credit losses
Non-interest income:
Service charges on deposit accounts:
Three Months Ended
March 31,
20242023
(Dollars in thousands, except per share
$ | 586,981 | $ | 414,896 | |
4,960 | 6,518 | |||
9,333 | 10,171 | |||
11,173 | 9,264 | |||
24,606 | 7,870 | |||
637,053 | 448,719 | |||
254,323 | 93,632 | |||
750 | 5,422 | |||
2,574 | 2,574 | |||
2,472 | 2,239 | |||
260,119 | 103,867 | |||
376,934 | 344,852 | |||
42,923 | 35,829 | |||
334,011 | 309,023 |
NSF fees | - | 991 | |||
Overdraft fees | 3,427 | 3,287 | |||
All other service charges | 6,839 | 6,502 | |||
Trust income | 2,324 | 2,033 | |||
BOLI income | 5,506 | 4,974 | |||
Loan service, maintenance and other fees | 6,343 | 4,076 | |||
Gains on sales of other assets | 459 | 343 | |||
Net gains on investment securities | 410 | 1,716 | |||
Other | 3,776 | 3,887 | |||
Total non-interest income | 29,084 | 27,809 | |||
Non-interest expense: | |||||
Salaries and employee benefits | 69,564 | 63,249 | |||
Net occupancy and equipment | 17,974 | 17,870 | |||
Other operating expenses | 45,776 | 45,098 | |||
Total non-interest expense | 133,314 | 126,217 | |||
Income before taxes | 229,781 | 210,615 | |||
Provision for income taxes | 54,226 | 40,703 | |||
Net income | 175,555 | 169,912 | |||
Earnings attributable to noncontrolling interest | (18) | (12) | |||
Preferred stock dividends | 4,047 | 4,047 | |||
Net income available to common stockholders | $ | 171,490 | $ | 165,853 | |
Basic earnings per common share | $ | 1.51 | $ | 1.42 | |
Diluted earnings per common share | $ | 1.51 | $ | 1.41 | |
See accompanying notes to the consolidated financial statements.
4
BANK OZK
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
Three Months Ended
March 31,
2024 | 2023 | ||||
(Dollars in thousands) | |||||
Net income | $ | 175,555 | $ | 169,912 | |
Other comprehensive income (loss): | |||||
Unrealized gains and (losses) on investment securities AFS | (12,815) | 47,777 | |||
Tax effect of unrealized gains and losses on investment securities AFS | 2,982 | (11,805) | |||
Total other comprehensive income (loss) | (9,833) | 35,972 | |||
Total comprehensive income | $ | 165,722 | $ | 205,884 | |
See accompanying notes to the consolidated financial statements.
5
BANK OZK
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Unaudited
Accumulated | ||||||||||||||||||
Additional | Other | Non- | ||||||||||||||||
Preferred | Common | Paid-in | Retained | Comprehensive | Controlling | |||||||||||||
Stock | Stock | Capital | Earnings | (Loss) Income | Interest | Total | ||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||
Three months ended March 31, 2024 | ||||||||||||||||||
Balances - December 31, 2023 | $ | 338,980 | $ | 1,131 | $1,612,446 | $3,283,818 | $ | (97,374) | $ | 975 | $ | 5,139,976 | ||||||
Cumulative effect of change in accounting | - | - | - | 12,690 | - | - | 12,690 | |||||||||||
Balances - January 1, 2024 | 338,980 | 1,131 | 1,612,446 | 3,296,508 | (97,374) | 975 | 5,152,666 | |||||||||||
Net income | - | - | - | 175,555 | - | - | 175,555 | |||||||||||
Earnings attributable to noncontrolling interest | - | - | - | (18) | - | 18 | - | |||||||||||
Total other comprehensive loss | - | - | - | - | (9,833) | - | (9,833) | |||||||||||
Preferred stock dividends, $0.28906 per share | - | - | - | (4,047) | - | - | (4,047) | |||||||||||
Common stock dividends, $0.38 per share | - | - | - | (43,326) | - | - | (43,326) | |||||||||||
Issuance of 484,818 shares of common stock | ||||||||||||||||||
pursuant to stock-based compensation plans | - | 5 | 179 | - | - | - | 184 | |||||||||||
Repurchase and cancellation of 184,415 shares of | ||||||||||||||||||
common stock withheld for tax pursuant to | ||||||||||||||||||
stock-based compensation plans | - | (2) | (8,008) | - | - | - | (8,010) | |||||||||||
Stock-based compensation expense | - | - | 4,651 | - | - | - | 4,651 | |||||||||||
Forfeitures of 14,259 shares of unvested | ||||||||||||||||||
restricted common stock | - | - | - | - | - | - | - | |||||||||||
Balances - March 31, 2024 | $ | 338,980 | $ | 1,134 | $1,609,268 | $3,424,672 | $ | (107,207) | $ | 993 | $ | 5,267,840 | ||||||
Three months ended March 31, 2023 | ||||||||||||||||||
Balances - December 31, 2022 | $ | 338,980 | $ | 1,172 | $1,753,941 | $2,773,135 | $ | (177,649) | $ | 1,359 | $ | 4,690,938 | ||||||
Net income | - | - | - | 169,912 | - | - | 169,912 | |||||||||||
Earnings attributable to noncontrolling interest | - | - | - | (12) | - | 12 | - | |||||||||||
Total other comprehensive income | - | - | - | - | 35,972 | - | 35,972 | |||||||||||
Preferred stock dividends, $0.28906 per share | - | - | - | (4,047) | - | (4,047) | ||||||||||||
Common stock dividends, $0.34 per share | - | - | - | (40,084) | - | - | (40,084) | |||||||||||
Issuance of 473,039 shares of common stock | ||||||||||||||||||
pursuant to stock-based compensation plans | - | 5 | 518 | - | - | - | 523 | |||||||||||
Repurchase and cancellation of 2,348,138 shares | ||||||||||||||||||
of common stock under share repurchase | ||||||||||||||||||
program | - | (24) | (85,315) | - | - | - | (85,339) | |||||||||||
Repurchase and cancellation of 215,362 | ||||||||||||||||||
shares of common stock withheld for tax | ||||||||||||||||||
pursuant to stock-based compensation | - | (2) | (8,672) | - | - | - | (8,674) | |||||||||||
plans. | - | - | 4,097 | - | - | - | 4,097 | |||||||||||
Stock-based compensation expense | ||||||||||||||||||
Forfeitures of 6,359 shares of unvested restricted | ||||||||||||||||||
common stock | - | - | - | - | - | - | - | |||||||||||
Balances - March 31, 2023 | $ | 338,980 | $ | 1,151 | 1,664,569 | $2,898,904 | $ | (141,677) | $ | 1,371 | $ | 4,763,298 | ||||||
See accompanying notes to the consolidated financial statements.
6
BANK OZK
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
Three months ended March 31, | |||||
2024 | 2023 | ||||
(Dollars in thousands) | |||||
Cash flows from operating activities: | $ | 175,555 | $ | 169,912 | |
Net income | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation | 6,799 | 7,636 | |||
Amortization | 12,073 | 9,617 | |||
Earnings attributable to noncontrolling interest | (18) | (12) | |||
Provision for credit losses | 42,923 | 35,829 | |||
Provision for losses on foreclosed and other assets | 472 | 941 | |||
Net amortization of investment securities AFS | 4,135 | 5,663 | |||
Net gains on investment securities | (410) | (1,716) | |||
Accretion of purchased loans | (1,167) | (1,208) | |||
Gains on sales of other assets | (459) | (343) | |||
Deferred income tax (benefit) expense | 24,813 | (30,648) | |||
Increase in cash surrender value of BOLI | (5,506) | (4,974) | |||
Stock-based compensation expense | 4,651 | 4,097 | |||
Changes in assets and liabilities: | |||||
Trading account securities | 414 | 6,057 | |||
Accrued interest receivable | (5,091) | (10,185) | |||
Other assets, net | (5,089) | (9,834) | |||
Accrued interest payable and other liabilities | (14,559) | 72,311 | |||
Cash provided by operating activities | 239,536 | $ | 253,143 | ||
Cash flows from investing activities: | 36,859 | ||||
Proceeds from sales of FHLB and other bankers' bank stock | - | ||||
Purchases of FHLB and other bankers' bank stock | (944) | (19,898) | |||
Proceeds from maturities/calls/paydowns of investment securities AFS | 165,058 | 160,532 | |||
Purchases of investment securities AFS | (10,032) | (48,837) | |||
Proceeds from sale of loans | 143 | 88 | |||
Net increase of non-purchased loans | (1,594,783) | (1,369,099) | |||
Net payments received on purchased loans | 15,008 | 17,228 | |||
Purchases of premises and equipment | (15,087) | (5,727) | |||
Proceeds from BOLI death benefits | - | 236 | |||
Proceeds from sales of other assets | 2,199 | 2,610 | |||
Net cash invested in unconsolidated investments | (6,330) | (17,192) | |||
Net cash used by investing activities | (1,407,909) | (1,280,059) | |||
Cash flows from financing activities: | |||||
Net increase in deposits | 2,000,927 | 782,840 | |||
Net proceeds (repayments) of other borrowings | (603,309) | 387,413 | |||
Proceeds from issuance of common stock pursuant to stock-based compensation plans | 184 | 523 | |||
Cash dividends paid on common stock | (43,088) | (39,854) | |||
Cash dividends paid on preferred stock | (4,047) | (4,047) | |||
Repurchase and cancellation of shares of common stock - share repurchase program | - | (85,339) | |||
Repurchase and cancellation of shares of common stock - withheld for taxes | (8,010) | (8,674) | |||
Net cash provided by financing activities | 1,342,657 | 1,032,862 | |||
Net increase in cash and cash equivalents | 174,284 | 5,946 | |||
Cash and cash equivalents - beginning of period | 2,149,529 | 1,033,454 | |||
Cash and cash equivalents - end of period | $ | 2,323,813 | $ | 1,039,400 | |
See accompanying notes to the consolidated financial statements.
7
BANK OZK
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
1. Organization and Principles of Consolidation
Bank OZK ("the Bank") is headquartered in Little Rock, Arkansas and provides a wide range of retail and commercial banking services. At March 31, 2024, the Bank conducted operations through approximately 240 offices in eight states, including offices in Arkansas, Georgia, Florida, North Carolina, Texas, California, New York and Mississippi. The Bank owns 100% of eight finance subsidiary business trusts - Ozark Capital Statutory Trust II ("Ozark II"), Ozark Capital Statutory Trust III ("Ozark III"), Ozark Capital Statutory Trust IV ("Ozark IV"), Ozark Capital Statutory Trust V ("Ozark V"), Intervest Statutory Trust II ("Intervest II"), Intervest Statutory Trust III ("Intervest III"), Intervest Statutory Trust IV ("Intervest IV") and Intervest Statutory Trust V ("Intervest V") (collectively, the "Trusts"). In addition, the Bank owns a subsidiary that holds its investment securities, a subsidiary engaged in the development of real estate, a subsidiary that holds an ownership interest in a private aircraft, a subsidiary that owns a renewable energy facility and various other entities that hold foreclosed assets or tax credits or engage in other activities.
The Bank is an Arkansas state banking corporation and is subject to regulation by the Arkansas State Bank Department. Because the Bank is an insured depository institution that is not a member bank of the Board of Governors of the Federal Reserve System, its primary federal regulator is the Federal Deposit Insurance Corporation ("FDIC").
2. Basis of Presentation and Significant Accounting Policy Changes
The accompanying interim consolidated financial statements have been prepared by the Bank, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") in Article 10 of Regulation S-X and in accordance with the instructions to Form 10-Q and accounting principles generally accepted in the United States ("GAAP") for interim financial information. Certain information, accounting policies and footnote disclosures normally included in complete financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Bank's Annual Report on Form 10-K filed with the FDIC for the year ended December 31, 2023.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. In the opinion of management, all adjustments considered necessary, consisting of normal recurring items, have been included for a fair statement of the accompanying consolidated financial statements. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the full year or future periods. Certain reclassifications of prior year amounts have been made to conform to the 2024 financial statements presentation. These reclassifications had no impact on prior year net income, as previously reported.
3. Earnings Per Common Share ("EPS")
Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the applicable period. Diluted EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding after consideration of the dilutive effect, if any, using the treasury stock method, of the Bank's common stock options and the non-vested performance stock units ("PSUs") under its long-term incentive agreements. Options to purchase 345,107 shares and 600,524 shares, respectively, of the Bank's common stock for the three months ended March 31, 2024 and 2023 were excluded from the diluted EPS calculations as inclusion of such options would have been anti-dilutive. There were no anti-dilutive PSUs for the three months ended March 31, 2024. There were 40,561 PSU's excluded from the diluted EPS calculations for the three months ended March 31, 2023 as inclusion would have been anti-dilutive.
8
The following table presents the computation of basic and diluted EPS for the periods indicated.
Three Months Ended
March 31,
2024 | 2023 | ||||
(In thousands, except per share amounts) | |||||
Numerator: | |||||
Net income available to common stockholders | $ | 171,490 | $ | 165,853 | |
Denominator: | |||||
Denominator for basic EPS - weighted-average common shares | 113,559 | 117,078 | |||
Effect of dilutive securities - stock options and PSUs | 324 | 327 | |||
Denominator for diluted EPS - weighted-average common shares and assumed | |||||
conversions | 113,883 | 117,405 | |||
Basic EPS | |||||
$ | 1.51 | $ | 1.42 | ||
Diluted EPS | |||||
$ | 1.51 | $ | 1.41 | ||
4. Investment Securities
The Bank's investment securities AFS are stated at estimated fair value in the consolidated financial statements with unrealized gains and losses, that do not include a credit component, reported net of related income tax as a separate component of stockholders' equity and included in accumulated other comprehensive income. Unrealized losses that include a credit component are considered in determining the Bank's allowance for credit losses ("ACL"). The Bank believes that the vast majority of unrealized losses on individual investment securities at March 31, 2024 and December 31, 2023 are the result of fluctuations in interest rates.
The following table presents the amortized cost and estimated fair value of investment securities AFS as of the dates indicated.
Gross Unrealized | Gross Unrealized | Estimated Fair | |||||||||
Amortized Cost | Gains | Losses | Value | ||||||||
(Dollars in thousands) | |||||||||||
March 31, 2024: | |||||||||||
U.S. Government agency mortgage-backed securities | $ | 1,181,249 | $ | 1 | $ | (99,926) | $ | 1,081,324 | |||
Obligations of state and political subdivisions | 1,402,752 | 13,942 | (34,587) | 1,382,107 | |||||||
Other U.S. Government agency securities | 594,998 | - | (16,420) | 578,578 | |||||||
Corporate obligations | 33,660 | 2 | (3,280) | 30,382 | |||||||
Total investment securities AFS | $ | 3,212,659 | $ | 13,945 | $ | (154,213) | $ | 3,072,391 | |||
December 31, 2023: | |||||||||||
U.S. Government agency mortgage-backed securities | $ | 1,272,015 | $ | 1 | $ | (97,587) | $ | 1,174,429 | |||
Obligations of state and political subdivisions | 1,406,617 | 22,727 | (28,456) | 1,400,888 | |||||||
Other U.S. Government agency securities | 658,851 | - | (20,579) | 638,272 | |||||||
Corporate obligations | 34,341 | - | (3,559) | 30,782 | |||||||
Total investment securities AFS | $ | 3,371,824 | $ | 22,728 | $ | (150,181) | $ | 3,244,371 | |||
9
The following table shows the estimated fair value of investment securities AFS having gross unrealized losses and the amount of such unrealized losses, aggregated by investment category and length of time that individual investment securities have been in a continuous unrealized loss position, as of the dates indicated.
Less than 12 Months | 12 Months or More | Total | |||||||||||||
Estimated | Unrealized | Estimated | Unrealized | Estimated | Unrealized | ||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | ||||||||||
(Dollars in thousands) | |||||||||||||||
March 31, 2024: | |||||||||||||||
U.S. Government agency mortgage-backed | |||||||||||||||
securities | $ | 163 | $ | 3 | $ 1,081,102 | $ | 99,923 | $ 1,081,265 | $ | 99,926 | |||||
Obligations of state and political subdivisions | 249,872 | 4,394 | 530,626 | 30,193 | 780,498 | 34,587 | |||||||||
Other U.S. Government agency securities | - | - | 578,578 | 16,420 | 578,578 | 16,420 | |||||||||
Corporate obligations | - | - | 29,813 | 3,280 | 29,813 | 3,280 | |||||||||
Total investment securities AFS | $ | 250,035 | $ | 4,397 | $ 2,220,119 | $ | 149,816 | $ 2,470,154 | $ | 154,213 | |||||
December 31, 2023: | |||||||||||||||
U.S. Government agency mortgage-backed | |||||||||||||||
securities | $ | 771 | $ | 8 | $ 1,173,593 | $ | 97,579 | $ 1,174,364 | $ | 97,587 | |||||
Obligations of state and political subdivisions | 218,365 | 2,822 | 455,862 | 25,634 | 674,227 | 28,456 | |||||||||
Other U.S. Government agency securities | - | - | 638,272 | 20,579 | 638,272 | 20,579 | |||||||||
Corporate obligations | - | - | 30,782 | 3,559 | 30,782 | 3,559 | |||||||||
Total investment securities AFS | $ | 219,136 | $ | 2,830 | $ 2,298,509 | $ | 147,351 | $ 2,517,645 | $ | 150,181 | |||||
In evaluating the Bank's unrealized loss positions for credit losses of its investment securities portfolio, management considers the credit quality, financial condition and near term prospects of the issuer, the nature and cause of the unrealized loss and other factors. While the Bank periodically evaluates its investment strategy relative to current economic and business conditions, at the present time, the Bank does not have the intent to sell these investment securities with unrealized losses and, more likely than not, will not sell these investment securities before fair value recovers to amortized cost. In addition, for the vast majority of investment securities AFS in an unrealized loss position, the Bank does not believe the unrealized losses are the result of issues with credit quality.
The following table shows the amortized cost and estimated fair value of investment securities AFS by maturity or estimated date of repayment as of March 31, 2024.
Maturity or Estimated Repayment | Amortized Costs | Estimated Fair Value | ||||
(Dollars in thousands) | ||||||
One year or less | $ | 1,016,026 | $ | 973,716 | ||
After one year to five years | 872,245 | 807,672 | ||||
After five years to ten years | 359,004 | 338,434 | ||||
After ten years | 965,384 | 952,569 | ||||
Total | $ | 3,212,659 | $ | 3,072,391 | ||
For purposes of this maturity or estimated repayment distribution, all investment securities AFS are shown based on their contractual maturity date or estimated date of repayment, except (i) U.S. Government agency mortgage-backed securities are allocated among various maturities or repayment categories based on an estimated repayment schedule utilizing third-party median prepayment speeds or other estimates of prepayment speeds and interest rate levels at the measurement date and (ii) callable investment securities for which the Bank has received notification of call are included in the maturity or repayment category in which the call occurs or is expected to occur. Expected maturities may differ from contractual maturities because issuers have the right to call or prepay obligations with or without call or prepayment penalties.
At March 31, 2024 the Bank had no trading securities compared to $4.5 million of trading securities at March 31, 2023. During the three months ended March 31, 2024, the Bank had net gains of $0.4 million from the sale of approximately $161.0 million of trading securities, compared to net gains of $1.7 million from the sale of approximately $425.0 million of trading securities for the three months ended March 31, 2023.
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Bank OZK published this content on 06 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2024 20:11:08 UTC.