BANK OF THE OZARKS INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 0-22759

BANK OF THE OZARKS, INC.

(Exact name of registrant as specified in its charter)


ARKANSAS		71-0556208
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

12615 CHENAL PARKWAY, LITTLE ROCK, ARKANSAS		72211
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (501) 978-2265

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 x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Act). Yes x No ¨

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practical date.


Class		Outstanding at March 31, 2004
Common Stock, $0.01 par value per share		16,356,490

BANK OF THE OZARKS, INC.

FORM 10-Q

March 31, 2004

INDEX


PART I. Financial Information

Item 1.	Consolidated Balance Sheets as of March 31, 2004 and 2003 and December 31, 2003	1

	Consolidated Statements of Income for the Three Months Ended March 31, 2004 and 2003	2

	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2004 and 2003	3

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003	4

	Notes to Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

	Selected and Supplemental Financial Data	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4.	Controls and Procedures	23

PART II. Other Information

Item 1.	Legal Proceedings	24

Item 2	Changes in Securities, Use of Proceeds and Issuer Purchase of Equity Securities	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Submission of Matters to a Vote of Security Holders	24

Item 5.	Other Information	24

Item 6.	Exhibits and Reports on Form 8-K	25

	(a). Exhibits	25

	Reference is made to the Exhibit Index contained at the end of this report.

	(b). Reports on Form 8-K	25

	Signature	26

	Exhibit Index	27

BANK OF THE OZARKS, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

Unaudited


	March 31,						December 31, 2003
	2004			2003			December 31, 2003
ASSETS
Cash and due from banks	$	27,938		$	30,154		$	28,405
Interest-earning deposits		423			424			428
Investment securities - available for sale (“AFS”)		362,050			237,379			364,320
Investment securities - held to maturity (“HTM”)		—			10,260			—
Federal funds sold		—			15,000			—
Loans and leases		951,037			731,586			909,147
Allowance for loan and lease losses		(14,460	)		(11,124	)		(13,820	)

Net loans and leases		936,577			720,462			895,327
Premises and equipment, net		53,956			41,688			50,251
Foreclosed assets held for sale, net		629			373			780
Accrued interest receivable		7,382			6,035			7,029
Intangible assets, net		6,313			2,633			6,375
Other		31,368			25,328			33,614

Total assets	$	1,426,636		$	1,089,736		$	1,386,529

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand noninterest-bearing	$	120,547		$	90,691		$	106,586
Savings and interest-bearing transaction		409,747			327,968			396,443
Time		616,707			446,211			559,035

Total deposits		1,147,001			864,870			1,062,064
Repurchase agreements with customers		31,967			35,892			29,898
Other borrowings		90,023			88,611			145,541
Subordinated debentures		46,651			17,783			46,651
Accrued interest and other liabilities		4,728			5,899			3,889

Total liabilities		1,320,370			1,013,055			1,288,043

Commitments and contingencies

Stockholders’ equity:
Preferred stock; $0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding		—			—			—
Common stock; $0.01 par value, 50,000,000 shares authorized at March 31, 2004 and December 31, 2003 and 10,000,000 shares authorized at March 31, 2003; 16,356,490, 15,668,520 (split adjusted) and 16,232,540 shares issued and outstanding at March 31, 2004, March 31, 2003 and December 31, 2003, respectively		164			79			162
Additional paid-in capital		28,590			18,402			27,131
Retained earnings		76,118			58,450			71,293
Accumulated other comprehensive income (loss)		1,394			(250	)		(100	)

Total stockholders’ equity		106,266			76,681			98,486

Total liabilities and stockholders’ equity	$	1,426,636		$	1,089,736		$	1,386,529

See accompanying notes to consolidated financial statements.

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)

Unaudited


	Three Months Ended March 31,
	2004			2003
Interest income:
Loans and leases	$	14,934		$	12,692
Investment securities - taxable		3,232			2,902
- nontaxable		1,062			281
Deposits with banks and federal funds sold		4			8

Total interest income		19,232			15,883

Interest expense:
Deposits		3,405			3,311
Repurchase agreements with customers		66			65
Other borrowings		1,137			1,233
Subordinated debentures		705			408

Total interest expense		5,313			5,017

Net interest income		13,919			10,866
Provision for loan and lease losses		(745	)		(750	)

Net interest income after provision for loan and lease losses		13,174			10,116

Other income:
Service charges on deposit accounts		2,107			1,674
Mortgage lending income		815			1,042
Trust income		301			237
Bank owned life insurance		253			284
Other		517			297

Total other income		3,993			3,534

Other expense:
Salaries and employee benefits		4,851			4,068
Net occupancy and equipment		1,213			994
Other operating expenses		2,320			1,692

Total other expense		8,384			6,754

Income before income taxes		8,783			6,896
Provision for income taxes		2,818			2,421

Net income	$	5,965		$	4,475

Basic earnings per share	$	0.37		$	0.29

Diluted earnings per share	$	0.36		$	0.28

Dividends declared per share	$	0.07		$	0.05

See accompanying notes to consolidated financial statements.

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Dollars in thousands)

Unaudited


	Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance – January 1, 2003	$	78	$	17,010	$	54,755		$	1,075		$	72,918
Comprehensive income:
Net income		—		—		4,475			—			4,475
Other comprehensive income:
Unrealized losses on AFS securities net of $840 tax effect		—		—		—			(1,302	)		(1,302	)
Reclassification adjustment for gains previously included in comprehensive income net of $15 tax effect		—		—		—			(23	)		(23	)

Comprehensive income												3,150

Cash dividends paid		—		—		(780	)		—			(780	)
Issuance of 162,700 split adjusted shares of common stock for exercise of stock options		1		810		—			—			811
Tax benefits on exercise of stock options		—		582		—			—			582

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