Bank OZK (NASDAQ:OZK) Q3 2021 Earnings Conference Call October 22, 2021 11:00 AM ET Company Participants Tim Hicks - Chief Credit and Administrative Officer George Gleason - Chairman and CEO Brannon Hamblen - President Greg McKinney - CFO Cindy Wolfe - Chief Banking Officer Conference Call Participants Ken Zerbe - Morgan Stanley Brock Vandervliet - UBS Timur Braziler - Wells Fargo Michael Rose - Raymond James Catherine Mealor - KBW Matt Olney - Stephens Stephen Scouten - Piper Sandler Brian Martin - Janney ...

Bank OZK (NASDAQ:OZK) Q2 2021 Earnings Conference Call July 23, 2021 11:00 AM ET Company Participants Timothy Hicks - Chief Credit and Administrative Officer George Gleason - Chairman and Chief Executive Officer Gregory McKinney - Chief Financial Officer Brannon Hamblen - President and Chief Operating Officer Cynthia Wolfe - Chief Banking Officer Conference Call Participants Kenneth Zerbe - Morgan Stanley Timur Braziler - Wells Fargo Securities, LLC Brock Vandervliet - UBS Investment Bank Catherine Mealor - ...

Financial Data and Key Metrics Changes - The company recognized approximately $3.6 million in fees from the forgiveness of $160 million in PPP loans, contributing about 8 basis points to the yield on non-purchase loans [11][12] - The company ended the quarter with about $280 million for PPP1 and about $110 million for PPP2 [103] Business Line Data and Key Metrics Changes - The Real Estate Specialties Group (RESG) closed about twice as many loans in Q1 2021 compared to Q1 2020, although the average loan size was approximately 60% smaller [37] - The company expects significant impacts from paydowns in Q2, but is optimistic about the pipeline for originations in the second half of the year [25][44] Market Data and Key Metrics Changes - The company has seen a diverse deposit base, with the top 10 depositors now accounting for roughly 7% of total deposits, down from the high teens [19] - The Southeast and Southwest regions have dominated originations in the past two quarters, with increased activity in the Northeast as well [90] Company Strategy and Development Direction - The company is focused on organic growth as its number one priority, with plans to explore new business lines and potential M&A opportunities [55][58] - The company is optimistic about growth in the community bank segment and the new ABL business line, expecting contributions in the back half of the year [42][62] Management's Comments on Operating Environment and Future Outlook - Management noted that competition is expected to increase as non-banks re-enter the lending market, but the company believes it can compete effectively due to its experience and relationships [15][38] - The company maintains a cautious optimism regarding the New York market, with expectations for future opportunities as construction and development resume [81][86] Other Important Information - The company is actively monitoring its expenses and expects them to remain relatively flat in the near term, while continuing to evaluate branch closures and talent acquisition [71][74] Q&A Session Summary Question: What drove the increase in non-purchased loan yields this quarter? - The increase was driven by the recognition of fees from PPP loans, with $3.6 million contributing to the yield [11][12] Question: Should competition from non-banks be expected to pick up again? - Yes, competition is expected to increase, but the company believes it can compete effectively due to its experience and relationships [15][38] Question: Can you speak to deposit trends? - The company has improved the quality and diversity of its deposit base, with a focus on consumer and commercial business accounts [19][20] Question: What is the outlook for the RESG? - The company expects a ramp-up in originations later in the year, with a healthy pipeline emerging [25][44] Question: How is the company addressing competition and pricing pressures? - The company will not sacrifice credit quality for business but may negotiate on pricing to meet return standards [39] Question: What are the growth expectations for the new ABL business? - The ABL business is expected to take time to ramp up, with material moves anticipated in the following year [62]

Financial Data and Key Metrics Changes - The company reported a strong net interest margin (NIM) for the quarter, with some unusual positive items contributing to this figure, including approximately $1.7 million from previously charged-off loans being collected [7][8][9] - The company anticipates a record level of payoffs in 2021 due to delayed projects from 2020, which will create challenges for loan growth [12][13] - The liquidity position is strong, with cash and securities significantly higher than the previous year, although this may weigh on margins due to low interest rates [28][30] Business Line Data and Key Metrics Changes - The Real Estate Specialties Group (RESG) saw originations end the year at a good level, with 2020 originations slightly better than in 2019, indicating a healthy pipeline going into 2021 [13][20] - The company is cautious in the multifamily sector due to high competition and is focusing on quality over quantity in loan origination [23] Market Data and Key Metrics Changes - The Southeast and Southwest markets are showing strong activity, with demographic trends driving demand for new developments [19][20] - The company has seen a decline in New York market activity, down approximately $1.3 billion from previous levels, while other markets like Boston, Philadelphia, and Washington D.C. are emerging as active geographies [25][26] Company Strategy and Development Direction - The company is focused on maintaining high credit standards and not sacrificing quality for growth, especially in the community bank segment where competition is aggressive [36] - The management emphasizes the importance of asset quality and is expanding the team to ensure growth while maintaining standards [93] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by elevated payoffs in 2021 but remains optimistic about finding quality loans to offset these payoffs [12][42] - The company is exploring ways to utilize excess capital, including potential share buybacks, but is cautious about the current economic environment [46] Other Important Information - The company has successfully navigated challenges related to COVID-19, maintaining a strong credit quality with low charge-offs and non-performing assets [77][78] - The management highlighted the importance of loan structures and protections in maintaining asset quality, particularly in challenging markets [92][96] Q&A Session Summary Question: Sustainability of NIM - Management indicated that some of the NIM increase was due to unusual items, making it difficult to determine sustainability going forward [7][8] Question: Loan Growth Headwinds - Management expects significant payoffs in 2021 due to delays from 2020, creating challenges for loan growth [12][13] Question: Growth in Unfunded Commitments - Management noted that sponsors are becoming more comfortable and re-engaging, particularly in the Southeast and Southwest markets [19][20] Question: Liquidity Deployment - Management expressed confidence in their liquidity position but acknowledged that it may weigh on margins due to low interest rates [28][30] Question: Organic Loan Growth - Management discussed the challenges in various segments, indicating that total non-purchase loan growth could be flat in 2021 [35][36] Question: Expense Management - Management highlighted a focus on internal resources to reduce expenses and maintain efficiency [86][88] Question: Loan Structure Protections - Management emphasized the importance of loan structures and protections in maintaining asset quality, particularly in challenging markets [92][96]

Bank OZK (NASDAQ:OZK) Q3 2020 Earnings Conference Call October 23, 2020 11:00 AM ET Company Participants Tim Hicks - Chief Administrative Officer & Executive Director, Investor Relations George Gleason - Chairman & Chief Executive Officer Greg McKinney - Chief Financial Officer Brannon Hamblen - President & Chief Operating Officer, Real Estate Specialties Group Conference Call Participants Ken Zerbe - Morgan Stanley Timur Braziler - Wells Fargo Catherine Mealor - KBW Michael Rose - Raymond James Stephen Sco ...

Nasdaq: OZK | August 2020 Forward-Looking Information This presentation and other communications by Bank OZK (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 1995. Forward-looking statements are based on management's expectations as well as certain assumptions and estimates made by, and information available to, m ...

Financial Data and Key Metrics Changes - The company reported stronger loan growth in Q2 2020, driven by lower repayments, although management expressed caution about future trends due to potential increases in repayments in Q4 [7][9] - Net interest income improved in Q2 compared to Q1, attributed to good origination volume and quality deals [10] Business Line Data and Key Metrics Changes - The Real Estate Specialties Group (RESG) is seeing a significant number of deals in the multifamily sector, with ongoing evaluations of other property types like hotels and offices [25][26] - The company has pushed for tighter loan-to-value (LTV) ratios, with attempts to reduce leverage by 5% to 10% depending on the property type and market conditions [30] Market Data and Key Metrics Changes - Construction delays were widespread but have begun to normalize across major markets, allowing for a return to near-normal development levels [59] - The geographic distribution of new originations shows strong activity in less dense urban settings, with notable markets including Los Angeles, Philadelphia, and Miami [63][64] Company Strategy and Development Direction - The company remains disciplined in credit and pricing, focusing on maintaining appropriate returns on loans despite competitive pressures [32][33] - Management emphasized the importance of maintaining a strong reputation for reliability and discipline in lending, which is expected to enhance market share in the current environment [55][56] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about loan growth and net interest margin (NIM) stability, citing a constructive outlook for margin expansion due to lower costs of interest-bearing deposits and wider spreads on new loans [11][18] - The company is actively monitoring economic conditions and adjusting reserves based on conservative models, acknowledging the unprecedented nature of the current economic environment [70][71] Other Important Information - The company has been aggressive in building its allowance for credit losses (ACL), increasing from 50 basis points to nearly 2%, reflecting a conservative approach to potential economic impacts [66][68] - Interest reserves are structured conservatively, with sponsors incentivized to protect their equity, which provides a buffer against uncertainties [76][78] Q&A Session Summary Question: Loan growth trends in the upcoming quarters - Management is cautiously optimistic about loan growth, noting a positive pipeline but acknowledging uncertainties regarding repayments [8][9] Question: Factors driving NIM compression - NIM compression was influenced by PPP loans and liquidity builds, but management sees potential for margin improvement through lower deposit costs and wider spreads on new loans [12][14] Question: Current transactions in the pipeline - The majority of transactions are in the multifamily space, with ongoing evaluations of other property types despite market uncertainties [25][26] Question: Geographic distribution of new originations - Strong activity is noted in less dense urban settings, with significant originations in markets like Los Angeles and Philadelphia [63][64] Question: Reserve levels and future provisions - Management indicated that future reserve builds will depend on economic conditions, with a focus on conservative modeling [66][71] Question: Interest reserves and structural buffers - Interest reserves are structured conservatively, with sponsors required to contribute equity upfront, providing a buffer against uncertainties [76][78]

<> Bank OZK MANAGEMENT COMMENTS FOR THE SECOND QUARTER & FIRST SIX MONTHS OF 2020 JULY 23, 2020 FORWARD LOOKING STATEMENTS This presentation and other communications by Bank OZK (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 1995. Forward-looking statements are based on management's expectations as well as certa ...

Financial Highlights - Total assets were $246 billion[6] - Total loans amounted to $183 billion[6] - Total deposits reached $188 billion[6] - Total equity stood at $41 billion[6] - Net Interest Margin was 396%[6] - Efficiency Ratio was 434%[6] - Net Charge-off Ratio was 010%[6] - Tier 1 Leverage Ratio of 1462% was the highest among the 100 largest US Banks[6] COVID-19 Pandemic Response - The bank provided short-term payment deferrals on 2689 loans totaling $594 million, representing 31% of portfolio balances[9] - The bank funded 5753 loans with a balance of $477 million under the SBA's Paycheck Protection Program[9]

Financial Data and Key Metrics Changes - The company reported a total loan deferral of $356 million, which is approximately 2% of the total loan portfolio as of April 22, 2020 [19][56] - The company has maintained strong capital levels, with Tier 1 leverage being among the highest as of March 31, 2020 [83] Business Line Data and Key Metrics Changes - The Real Estate Specialties Group (RESG) portfolio is expected to see a net positive impact despite a slowdown in refinancing activity, as loans will remain on the books longer, benefiting margin and yield [30][31] - The hotel portfolio has a loan-to-value (LTV) ratio of 40% based on the most recent appraisals, indicating a strong position despite current market stress [24][50] Market Data and Key Metrics Changes - The company has seen a relatively low deferral rate in its Marine and RV portfolio, with only about 3.7% of the indirect portfolio currently having a deferral [55][57] - The company has reduced its exposure in the retail sector to 0.6% of its portfolio, indicating a strategic shift away from this property type [105] Company Strategy and Development Direction - The company aims to diversify its deposit funding sources and reduce concentration among its largest depositors, which has been successful in lowering risk [65][66] - The company is focused on maintaining low leverage points across its portfolios to provide a buffer against economic downturns [26][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the current economic situation, while challenging, will allow the company to maintain strong performance due to conservative underwriting and quality sponsorships [57][99] - The company anticipates that the demand for new construction will eventually return, as properties age and become less desirable, creating opportunities for development [96][97] Other Important Information - The company has engaged in opportunistic buying of short-term, high-quality securities during market disruptions, enhancing liquidity without impairing its financial position [71][74] - Management indicated that they may slow the rate of dividend increases in response to the current economic environment, while still maintaining strong capital levels [84] Q&A Session Summary Question: Can you expand on the qualitative overlays used to increase allowance? - Management discussed using qualitative overlays to adjust model outputs based on the rapid economic deterioration observed [11][15] Question: How has deferral activity trended post quarter-end? - As of April 22, 2020, 1,675 loans had deferrals totaling $356 million, primarily from the indirect lending portfolio [19][18] Question: What are the LTVs across different portfolios? - The hotel portfolio has an LTV of 40% based on recent appraisals, while the office portfolio has an LTV of 38% [24][25] Question: How does the company view the future of the RESG portfolio? - Management believes the RESG portfolio will be net positive due to slower refinancing and reduced competition [30][31] Question: What is the company's approach to deferral requests? - The company has been responsive to customer inquiries regarding deferrals, adhering to federal guidelines [56][119]