Bank of Ozarks : Announces Second Quarter 2016 Earnings

e5a6f58f-a524-4748-8d4f-f5eb769d8a9a.pdf NEWS RELEASE

Date: July 11, 2016 Release Time: 5:00 a.m. CDT

Contact: Susan Blair (501) 978-2217

Bank of the Ozarks, Inc. Announces Record Second Quarter 2016 Earnings

LITTLE ROCK, ARKANSAS: Bank of the Ozarks, Inc. (NASDAQ: OZRK) today announced that net income for the second quarter of 2016 was a record $54.5 million, a 21.7% increase from $44.8 million for the second quarter of 2015. Diluted earnings per common share for the second quarter of 2016 were a record $0.60, a 17.6% increase from $0.51 for the second quarter of 2015.

The Company's results for the quarter just ended included approximately $0.8 million of acquisition-related and systems conversion expenses. Net of applicable income taxes, these items had no impact on reported diluted earnings per common share.

For the six months ended June 30, 2016, net income totaled $106.2 million, a 25.4% increase from net income of $84.7 million for the first six months of 2015. Diluted earnings per common share for the first six months of 2016 were $1.16, an 18.4% increase from $0.98 for the first six months of 2015.

The Company's results for the first six months of 2016 included approximately $1.3 million of acquisition-related and systems conversion expenses and $0.1 million of software and contract termination charges. Net of applicable income taxes, these items, in the aggregate, reduced the Company's diluted earnings per common share by approximately $0.01 in the first six months of 2016.

The Company's annualized returns on average assets, average common stockholders' equity and average tangible common stockholders' equity for the second quarter of 2016 decreased to 1.91%, 14.35% and 15.92%, respectively, compared to 2.17%, 15.07% and 17.24%, respectively, for the second quarter of 2015. The Company's annualized returns on average assets, average common stockholders' equity and average tangible common stockholders' equity for the first six months of 2016 decreased to 1.95%, 14.18% and 15.76%, respectively, compared to 2.15%, 15.23% and 17.40%, respectively, for the first six months of 2015. The calculation of the Company's annualized return on average tangible common stockholders' equity and the reconciliation to generally accepted accounting principles ("GAAP") are included in the schedules accompanying this release.

KEY BALANCE SHEET METRICS

Total loans and leases, including purchased loans, were $9.73 billion at June 30, 2016, a 47.5% increase from $6.60 billion at June 30, 2015. Non-purchased loans and leases were $8.21 billion at June 30, 2016, a 72.3% increase from $4.77 billion at June 30, 2015. The unfunded balance of closed loans increased 83.5% to $7.35 billion at June 30, 2016, compared to $4.01 billion at June 30, 2015.

George Gleason, Chairman and Chief Executive Officer, stated, "We are very pleased with our excellent second quarter results, highlighted by quarterly records for net income, earnings per share, net interest income, service charge income, mortgage income and trust income. Combined with our 4.82% net interest margin, 35.4% efficiency ratio, excellent growth in both the funded and unfunded balances of closed loans, and some of our best asset quality ratios as a public company, we are clearly hitting on all cylinders."

Deposits were $10.20 billion at June 30, 2016, a 43.8% increase from $7.09 billion at June 30, 2015. Total assets were $12.28 billion at June 30, 2016, a 41.0% increase from $8.71 billion at June 30, 2015.

Common stockholders' equity was $1.56 billion at June 30, 2016, a 28.8% increase from

$1.21 billion at June 30, 2015. Tangible common stockholders' equity was $1.41 billion at June 30, 2016, a 32.7% increase from $1.06 billion at June 30, 2015. Book value per common share was $17.16 at June 30, 2016, a 23.2% increase from $13.93 at June 30, 2015. Tangible book value per common share was $15.51 at June 30, 2016, a 27.0% increase from $12.21 at June 30, 2015. The calculations of the Company'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 Company's ratio of common stockholders' equity to total assets decreased to 12.68% at June 30, 2016, compared to 13.88% at June 30, 2015. Its ratio of tangible common stockholders' equity to total tangible assets decreased to 11.60% at June 30, 2016, compared to 12.38% at June 30, 2015. The calculation of the Company's ratio of 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 second quarter of 2016 was a record $119.0 million, a 27.0% increase from $93.8 million for the second quarter of 2015. Net interest margin, on a fully taxable equivalent ("FTE") basis, was 4.82% for the second quarter of 2016, a decrease of 55

basis points from 5.37% for the second quarter of 2015 and a decrease of 10 basis points from 4.92% for the first quarter of this year. Average earning assets were $10.11 billion for the second quarter of 2016, a 40.5% increase from $7.20 billion for the second quarter of 2015 and an 8.1% increase from $9.36 billion for the first quarter of this year.

Net interest income for the first six months of 2016 was $231.6 million, a 29.2% increase from $179.2 million for the first six months of 2015. Net interest margin, on a FTE basis, was 4.87% for the first six months of 2016, a 52 basis point decrease from 5.39% for the first six months of 2015. Average earning assets were $9.73 billion for the first six months of 2016, a 41.2% increase from $6.89 billion for the first six months of 2015.

NON-INTEREST INCOME

Non-interest income for the second quarter of 2016 decreased 2.3% to $22.7 million compared to $23.3 million for the second quarter of 2015, but increased 14.4% compared to

$19.9 million for the first quarter of 2016. Non-interest income for the first six months of 2016 decreased 18.6% to $42.6 million compared to $52.3 million for the first six months of 2015.

Service charges on deposit accounts increased 14.5% to a record $8.12 million in the second quarter of 2016 compared to $7.09 million in the second quarter of 2015. Service charges on deposit accounts increased 15.0% to $15.78 million in the first six months of 2016 compared to $13.72 million in the first six months of 2015.

Mortgage lending income increased 16.1% to a record $2.06 million in the second quarter of 2016 compared to $1.77 million in the second quarter of 2015. Mortgage lending income increased 1.9% to $3.34 million in the first six months of 2016 compared to $3.28 million in the first six months of 2015.

Trust income increased 7.6% to a record $1.57 million in the second quarter of 2016 compared to $1.46 million in the second quarter of 2015. Trust income increased 6.4% to $3.08 million in the first six months of 2016 compared to $2.90 million in the first six months of 2015.

Bank Owned Life Insurance ("BOLI") income increased 53.8% to $2.74 million in the second quarter of 2016 compared to $1.79 million in the second quarter of 2015. BOLI income increased 3.7% to $5.61 million in the first six months of 2016 compared to $5.41 million in the first six months of 2015. BOLI income increased in the quarter just ended and the first six months of 2016 due to additional BOLI purchases made in 2015 and early 2016. During the first six months (first quarter) of 2015 the Company received $2.3 million in BOLI death benefits, but received no such BOLI death benefits in the first six months of 2016.

Other income from purchased loans decreased 34.0% to $4.60 million in the second quarter of 2016 compared to $6.97 million in the second quarter of 2015, but increased 50.7% compared to $3.05 million in the first quarter of 2016. Other income from purchased loans decreased 51.8% to $7.65 million in the first six months of 2016 compared to $15.88 million in the first six months of 2015.

Net gains on sales of other assets decreased to $1.00 million in the second quarter of 2016 compared to $2.56 million in the second quarter of 2015. Net gains on sales of other assets decreased to $2.02 million for the first six months of 2016 compared to $5.39 million for the first six months of 2015.

The Company had no net gains on investment securities during the second quarter or first six months of 2016 compared to net gains on investment securities of $0.1 million during the second quarter of 2015 and $2.6 million during the first six months of 2015.

NON-INTEREST EXPENSE

Non-interest expense for the second quarter of 2016 increased 16.5% to $50.9 million compared to $43.7 million for the second quarter of 2015. During the second quarter of 2016, the Company incurred approximately $0.8 million of acquisition-related and systems conversion expenses. During the second quarter of 2015, the Company incurred approximately $1.6 million of acquisition-related and systems conversion expenses.

The Company's efficiency ratio (non-interest expense divided by the sum of net interest income FTE and non-interest income) for the second quarter of 2016 improved to 35.4% compared to 36.6% for the second quarter of 2015.

Non-interest expense for the first six months of 2016 increased 5.0% to $98.6 million compared to $93.9 million for the first six months of 2015. During the first six months of 2016, the Company incurred approximately $1.3 million of acquisition-related and systems conversion expenses and $0.1 million of software and contract termination charges. During the first six months of 2015, the Company incurred approximately $2.8 million of acquisition-related and systems conversion expenses, $0.7 million of software and contract termination charges and $2.5 million of penalties from the prepayment of Federal Home Loan Bank of Dallas advances.

The Company's efficiency ratio for the first six months of 2016 improved to 35.5% compared to 39.7% for the first six months of 2015.