Bank OZK (OZK) investor relations material

Executive summary

• CIB (Corporate & Institutional Banking) continues to be the primary growth engine, expanding into over 42 industry niches and launching new business lines, while management remains confident in strategic initiatives despite macroeconomic and geopolitical challenges.

• Diversification within CIB allows pivoting between business lines to maintain yield and credit quality amid competitive pressures.

• RESG (Real Estate Specialties Group) faces headwinds from repayments, with growth expected to resume post-2027 as market conditions stabilize.

• Indirect lending and commercial/community banking are contributing to portfolio growth, with indirect lending now at 13% of the portfolio.

• Net income available to common stockholders for Q1 2026 was $159.3 million, down 5.1% year-over-year from $167.9 million in Q1 2025, and diluted EPS was $1.44, a 2.0% decrease.

Financial highlights

• Securities portfolio grew materially quarter-on-quarter, with 40% in muni housing bonds (tax equivalent yield ~6%) and 60% in agency mortgage-backed securities (yield ~4.6%).

• Net interest margin remains strong at 4.20%, outperforming peers despite competitive deposit and loan environments.

• Deposit rates were reduced by 18 basis points last quarter despite increased competition, with deposit growth synchronized with loan growth.

• Total assets as of March 31, 2026, were $41.7 billion.

• Average deposit balance: $52,000, with nearly $2 billion in deposit growth year-over-year.

Outlook and guidance

• CIB expected to match or surpass RESG in portfolio size by 2027, with continued expansion into new verticals and geographies.

• Efficiency ratio expected to remain in the high 30s% range during ongoing business build-out, with long-term improvement anticipated as operating leverage increases.

• Net charge-off guidance for the full year is around 50 basis points, reflecting expectations for some inflow and resolution of classified assets.

• Margin outlook is agnostic to rate changes, with balance sheet positioned to weather both rising and falling rates.

• Management expressed optimism about continued execution of strategic initiatives despite external challenges, but cautioned that actual results may differ due to risks and uncertainties.