Financial Data and Key Metrics Changes - Bank OZK reported a strong performance with nearly $700 million in earnings, nearly matching the record from the previous year [66] - The tangible common equity increased by 35 basis points during the quarter, despite buying back $100 million of common stock [49] - The company bought back 2.25 million shares at an average price of $44.45, which was below the tangible book value [48] Business Line Data and Key Metrics Changes - The loan syndication and corporate services business line within Corporate and Institutional Banking (CIB) continues to grow, with services including interest rate hedging and loan syndications [14][15] - The mortgage business is expected to gain traction as it enters its third year, contributing to fee income growth [16] - The trust and wealth business is expanding beyond fiduciary trust services, with a focus on private banking and treasury management services [17] Market Data and Key Metrics Changes - The office market is showing positive trends, with good leasing activity and refinancing opportunities, particularly in high-quality buildings [26][28] - Life sciences projects are facing challenges due to macroeconomic factors, but there is no new speculative supply being added, which may help stabilize the market [22][23] - The company is seeing a normalization of supply-demand metrics in various markets, which is providing opportunities for life science projects [29] Company Strategy and Development Direction - The company aims to diversify its earning assets and increase fee income as a larger part of its revenue over the long term [14] - There is a focus on managing assets prudently, especially in the context of the current credit cycle, with a well-prepared allowance for credit losses [60] - The management is optimistic about the potential for growth in 2027, anticipating improvements in market conditions [12] Management's Comments on Operating Environment and Future Outlook - Management believes that 2026 will be similar to 2025 in terms of credit trends, with expectations of a gradual resolution of non-performing assets [55][62] - The company is cautiously optimistic about the life sciences market, noting that while some sponsors may struggle, many are still committed to their projects [30] - The management has indicated that the prolonged challenges faced by sponsors are nearing an end, with signs of recovery in leasing and property sales [11] Other Important Information - The company has built its allowance for credit losses (ACL) from $300 million to $632 million in anticipation of potential credit losses [35] - The management has emphasized the importance of sponsor support in the life sciences sector, with ongoing engagement from many sponsors [30][31] Q&A Session Summary Question: Outlook on credit charge-offs and loan sales - Management confirmed that the recent loan sale was at par and does not reflect a change in strategy, emphasizing that it was a unique case [6][7] Question: Fee income growth potential - Management indicated that while fee income has not been a significant part of the story, there are long-term tailwinds expected from investments in CIB [14] Question: Life sciences market recovery timeline - Management noted that the life sciences market is facing headwinds but is seeing some positive developments, with no new speculative projects being added [22][23] Question: Non-performing asset resolution timeline - Management discussed various strategies for resolving non-performing assets, including potential sales and ongoing negotiations with sponsors [36][41] Question: Margin performance and buyback outlook - Management highlighted that the margin performed well due to effective deposit cost management and indicated plans for opportunistic buybacks [48][50]

Draft v4.5 1/21/24 Investor Presentation First Quarter 2025 Results Forward-Looking Statements and Other Matters First Quarter 2025 Earnings | 2 Financial Highlights 1Q25 results reflect 6% annualized loan growth, NIM expansion and YoY lower noninterest expense | | | | | | | | Change | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | 1Q25 | 4Q24 | 1Q24 | QoQ D | YoY D | | | | | Operating results | | | | | | | EPS | NIM | | PTPP(1) EPS | $82.4mm | $82.9mm | $52.4mm | -0.7% | 57.2% $0.14 | ...

Financial Data and Key Metrics Changes - Net interest income increased to $160.5 million, up $1.8 million from the prior quarter, driven by lower deposit costs and investment portfolio restructuring [12][7] - Total loans declined by $115 million or 0.8% from the prior quarter, primarily due to commercial real estate loans [9] - Total deposits slightly declined, with retail deposits increasing by $105 million while commercial deposits fell by $167 million [10] Business Line Data and Key Metrics Changes - Noninterest income was stable at $50.5 million, while noninterest expenses were $123.6 million, with no significant nonrecurring items [14] - The bank maintained strong credit performance, with classified assets decreasing by $3 million and year-to-date net charge-offs at $3.8 million [15][16] Market Data and Key Metrics Changes - The statewide unemployment rate remained stable at 3%, compared to the national rate of 4.1% [6] - Visitor arrivals increased by 1% and spending rose by 4.5% compared to 2024 levels, with Maui seeing the largest increases [6] Company Strategy and Development Direction - The company remains well-capitalized with ample liquidity and plans to continue supporting customers while managing expenses [8][7] - The management is focused on maintaining strong relationships with customers and is optimistic about loan growth despite market uncertainties [24][63] Management's Comments on Operating Environment and Future Outlook - Management noted increased uncertainty in the macroeconomic environment but remains optimistic about opportunities for growth [24][63] - The company is closely monitoring the impact of tariffs and economic conditions on its loan portfolios, particularly in the consumer and commercial sectors [68][70] Other Important Information - The bank repurchased approximately 974,000 shares at a total cost of $25 million, with $75 million remaining under the 2025 stock repurchase plan [8] - The allowance for credit losses increased to $166.6 million, reflecting a more pessimistic economic forecast [17] Q&A Session Summary Question: Insights on loan performance and economic pulse - Management indicated that average loans for the quarter were up over Q4, with a strong pipeline despite some uncertainty in the market [23][24] Question: Competitive landscape on deposit costs - Management expressed confidence in further reducing deposit costs as rates decline, but noted limited room for significant reductions beyond current levels [26][32] Question: Expense trajectory and investment plans - Management reiterated guidance for expenses and indicated a commitment to investing in the business while remaining cautious about the economic outlook [36][38] Question: Allowance for credit losses and consumer exposure - The increase in the allowance was driven by the economic forecasting model, with management noting stable performance in the consumer portfolio [42][94] Question: Impact of tariffs on loan portfolios - Management is closely monitoring the impact of tariffs on various loan portfolios, particularly in the C&I sector, but has not observed significant concerns yet [68][70] Question: Margin outlook and rate cuts - Management indicated that the ability to offset rate cuts will depend on loan growth, with potential for margins to remain stable if growth is strong [80][81]