UNITED STATES

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 June 30, 2015

¨ 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)

17901 CHENAL PARKWAY, LITTLE ROCK, ARKANSAS	72223
(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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

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 July 31, 2015
Common Stock, $0.01 par value per share	86,813,057

BANK OF THE OZARKS, INC.

FORM 10-Q

June 30, 2015

INDEX

PART I.	Financial Information
Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2015 and 2014 and December 31, 2014	1
	Consolidated Statements of Income for the Three Months Ended June 30, 2015 and 2014 and for the Six Months Ended June 30, 2015 and 2014	2
	Consolidated Statements of Comprehensive Income for the Three Months Ended June 30, 2015 and 2014 and for the Six Months Ended June 30, 2015 and 2014	3
	Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2015 and 2014	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	66
PART II.	Other Information
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	68
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3.	Defaults Upon Senior Securities	68
Item 4.	Mine Safety Disclosures	68
Item 5.	Other Information	68
Item 6.	Exhibits	68
Signature		69
Exhibit Index		70

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BANK OF THE OZARKS, INC.

CONSOLIDATED BALANCE SHEETS

	Unaudited
	June 30,						December 31, 2014
	2015			2014
	(Dollars in thousands, except per share amounts)
ASSETS
Cash and due from banks	$	512,908		$	107,240		$	147,751
Interest earning deposits		1,982			3,448			2,452
Cash and cash equivalents		514,890			110,688			150,203
Investment securities - available for sale (“AFS”)		782,277			892,129			839,321
Non-purchased loans and leases		4,767,123			3,171,585			3,979,870
Purchased loans		1,826,848			1,404,069			1,147,947
Total loans and leases		6,593,971			4,575,654			5,127,817
Allowance for loan and lease losses		(56,749	)		(46,958	)		(52,918	)
Net loans and leases		6,537,222			4,528,696			5,074,899
Federal Deposit Insurance Corporation (“FDIC”) loss share receivable		0			50,679			0
Premises and equipment, net		285,087			265,061			273,591
Foreclosed assets		25,973			56,356			37,775
Accrued interest receivable		26,345			21,143			20,192
Bank owned life insurance (“BOLI”)		269,311			179,277			182,052
Intangible assets, net		151,150			108,640			105,576
Other, net		118,180			85,306			82,890
Total assets	$	8,710,435		$	6,297,975		$	6,766,499
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand non-interest bearing	$	1,320,779		$	1,058,210		$	1,145,454
Savings and interest bearing transaction		3,645,551			2,748,929			2,892,989
Time		2,120,969			1,176,758			1,457,939
Total deposits		7,087,299			4,983,897			5,496,382
Repurchase agreements with customers		70,011			55,999			65,578
Other borrowings		161,931			280,875			190,855
Subordinated debentures		117,403			64,950			64,950
FDIC clawback payable		0			26,533			0
Accrued interest payable and other liabilities		61,033			32,063			36,892
Total liabilities		7,497,677			5,444,317			5,854,657
Commitments and contingencies
Stockholders’ equity:
Preferred stock; $0.01 par value; 1,000,000 shares authorized; no shares outstanding at June 30, 2015 and 2014 or at December 31, 2014		0			0			0
Common stock; $0.01 par value; 125,000,000 shares authorized; 86,811,457, 79,662,150 and 79,924,350 shares issued at June 30, 2015, June 30, 2014 and December 31, 2014, respectively		868			797			799
Additional paid-in capital		566,320			315,267			324,354
Retained earnings		633,998			524,134			571,454
Accumulated other comprehensive income		8,068			10,006			14,132
Treasury stock, at cost, none at June 30, 2015 or June 30, 2014, 72,268 shares at December 31, 2014		0			0			(2,349	)
Total stockholders’ equity before noncontrolling interest		1,209,254			850,204			908,390
Noncontrolling interest		3,504			3,454			3,452
Total stockholders’ equity		1,212,758			853,658			911,842
Total liabilities and stockholders’ equity	$	8,710,435		$	6,297,975		$	6,766,499

See accompanying notes to consolidated financial statements.

1

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(Dollars in thousands, except per share amounts)
Interest income:
Non-purchased loans and leases	$	56,637		$	36,833		$	107,069		$	70,247
Purchased loans		35,762			25,128			68,622			42,013
Investment securities:
Taxable		3,230			2,790			6,715			5,149
Tax-exempt		4,456			4,974			9,125			9,371
Deposits with banks and federal funds sold		18			35			27			38
Total interest income		100,103			69,760			191,558			126,818
Interest expense:
Deposits		3,917			1,827			7,454			3,408
Repurchase agreements with customers		19			13			36			25
Other borrowings		1,443			2,692			3,146			5,347
Subordinated debentures		968			427			1,676			840
Total interest expense		6,347			4,959			12,312			9,620
Net interest income		93,756			64,801			179,246			117,198
Provision for loan and lease losses		(4,308	)		(5,582	)		(10,623	)		(6,887	)
Net interest income after provision for loan and lease losses		89,448			59,219			168,623			110,311
Non-interest income:
Service charges on deposit accounts		7,088			6,605			13,715			12,244
Mortgage lending income		1,772			1,126			3,279			2,080
Trust income		1,463			1,364			2,895			2,681
BOLI income		1,785			1,278			5,407			2,408
Net amortization of FDIC loss share receivable and FDIC clawback payable		0			(741	)		0			(49	)
Other income from purchased loans, net		6,971			3,629			15,879			6,940
Net gains on investment securities		85			18			2,618			23
Gains on sales of other assets		2,557			1,448			5,385			2,422
Gain on merger and acquisition transaction		0			0			0			4,667
Other		1,549			2,661			3,159			4,333
Total non-interest income		23,270			17,388			52,337			37,749
Non-interest expense:
Salaries and employee benefits		22,646			18,831			45,243			36,520
Net occupancy and equipment		7,344			5,707			14,635			10,751
Other operating expenses		13,734			13,340			34,030			28,062
Total non-interest expense		43,724			37,878			93,908			75,333
Income before taxes		68,994			38,729			127,052			72,727
Provision for income taxes		24,190			12,251			42,330			20,981
Net income		44,804			26,478			84,722			51,746
Earnings attributable to noncontrolling interest		(28	)		8			(52	)		16
Net income available to common stockholders	$	44,776		$	26,486		$	84,670		$	51,762
Basic earnings per common share	$	0.52		$	0.35		$	0.99		$	0.69
Diluted earnings per common share	$	0.51		$	0.34		$	0.98		$	0.68
Dividends declared per common share	$	0.135		$	0.115		$	0.265		$	0.225

See accompanying notes to consolidated financial statements.

2

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(Dollars in thousands)
Net income	$	44,804		$	26,478		$	84,722		$	51,746
Other comprehensive income (loss):
Unrealized gains and losses on investment securities AFS		(10,091	)		11,199			(7,600	)		22,529
Tax effect of unrealized gains and losses on investment securities AFS		3,844			(4,393	)		3,157			(8,837	)
Reclassification of gains and losses on investment securities AFS included in net income		(85	)		(18	)		(2,618	)		(23	)
Tax effect of reclassification of gains and losses on investment securities AFS included in net income		33			7			997			9
Total other comprehensive income (loss)		(6,299	)		6,795			(6,064	)		13,678
Total comprehensive income	$	38,505		$	33,273		$	78,658		$	65,424

See accompanying notes to consolidated financial statements.

3

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Unaudited

	Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non- Controlling Interest			Total
	(Dollars in thousands)
Balances – January 1, 2014	$	737	$	143,017		$	488,978		$	(3,672	)	$	0		$	3,470		$	632,530
Net income		0		0			51,746			0			0			0			51,746
Earnings attributable to noncontrolling interest		0		0			16			0			0			(16	)		0
Total other comprehensive income		0		0			0			13,678			0			0			13,678
Common stock dividends paid		0		0			(16,606	)		0			0			0			(16,606	)
Issuance of 185,000 shares of common stock for exercise of stock options		2		1,570			0			0			0			0			1,572
Forfeiture of 400 shares of unvested restricted common stock		0		0			0			0			0			0			0
Excess tax benefit on stock-based compensation		0		1,373			0			0			0			0			1,373
Stock-based compensation expense		0		3,050			0			0			0			0			3,050
Issuance of 5,765,846 shares of common stock for acquisition of Summit Bancorp, Inc., net of issuance costs of $88,000		58		166,257			0			0			0			0			166,315
Balances – June 30, 2014	$	797	$	315,267		$	524,134		$	10,006		$	0		$	3,454		$	853,658
Balances – January 1, 2015	$	799	$	324,354		$	571,454		$	14,132		$	(2,349	)	$	3,452		$	911,842
Net income		0		0			84,722			0			0			0			84,722
Earnings attributable to noncontrolling interest		0		0			(52	)		0			0			52			0
Total other comprehensive income (loss)		0		0			0			(6,064	)		0			0			(6,064	)
Common stock dividends paid		0		0			(22,126	)		0			0			0			(22,126	)
Issuance of 99,050 shares of common stock for exercise of stock options		1		996			0			0			0			0			997
Issuance of 245,300 shares of unvested restricted common stock		2		(2,351	)		0			0			2,349			0			0
Excess tax benefit on stock-based compensation		0		791			0			0			0			0			791
Stock-based compensation expense		0		4,220			0			0			0			0			4,220
Forfeiture of 29,875 shares of unvested restricted common stock		0		0			0			0			0			0			0
Issuance of 7,657 shares of common stock to non-employee directors		0		0			0			0			0			0			0
Issuance of 6,637,243 shares of common stock for acquisition of Intervest Bancshares Corporation, net of issuance costs of $100,000		66		238,310			0			0			0			0			238,376
Balances – June 30, 2015	$	868	$	566,320		$	633,998		$	8,068		$	0		$	3,504		$	1,212,758

See accompanying notes to consolidated financial statements

4

BANK OF THE OZARKS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

	Six Months Ended
	June 30,
	2015			2014
	(Dollars in thousands)
Cash flows from operating activities:
Net income	$	84,722		$	51,746
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		4,575			3,816
Amortization		3,236			1,932
Earnings attributable to noncontrolling interest		(52	)		16
Provision for loan and lease losses		10,623			6,887
Provision for losses on foreclosed assets		2,427			863
Net (accretion) amortization of investment securities AFS		(51	)		301
Net gains on investment securities AFS		(2,618	)		(23	)
Originations of mortgage loans held for sale		(136,267	)		(90,110	)
Proceeds from sales of mortgage loans held for sale		127,302			83,337
Accretion of purchased loans		(68,622	)		(42,013	)
Net amortization of FDIC loss share receivable and FDIC clawback payable		0			49
Gains on sales of other assets		(5,385	)		(2,422	)
Gain on merger and acquisition transaction		0			(4,667	)
Prepayment penalty on Federal Home Loan Bank of Dallas advances		2,480			0
Deferred income tax expense (benefit)		2,252			(3,407	)
Increase in cash surrender value of BOLI		(3,119	)		(2,408	)
BOLI death benefits in excess of cash surrender value		(2,289	)		0
Stock-based compensation expense		4,220			3,050
Excess tax benefit on stock-based compensation		(791	)		(1,373	)
Changes in assets and liabilities:
Accrued interest receivable		(4,420	)		(2,049	)
Other assets, net		28,658			3,449
Accrued interest payable and other liabilities		(1,951	)		13,094
Net cash provided by operating activities		44,930			20,068
Cash flows from investing activities:
Proceeds from sales of investment securities AFS		32,777			48,394
Proceeds from maturities/calls/paydowns of investment securities AFS		81,532			29,706
Purchases of investment securities AFS		(37,522	)		(35,109	)
Net increase of non-purchased loans and leases		(800,061	)		(539,695	)
Payments received on purchased loans		462,027			207,403
Payments received from FDIC under loss share agreements		0			16,076
Other net decreases in assets covered by FDIC loss share agreements and FDIC loss share receivable		0			9,246
Purchases of premises and equipment		(9,720	)		(4,586	)
Purchase of BOLI		(85,000	)		0
Proceeds from BOLI death benefits		3,149			0
Proceeds from sales of other assets		40,018			30,166
Cash invested in unconsolidated investments		(639	)		(2,320	)
Net cash received in merger and acquisition transactions		274,235			121,918
Net cash used by investing activities		(39,204	)		(118,801	)
Cash flows from financing activities:
Net increase in deposits		406,269			41,190
Net repayments of other borrowings		(31,404	)		(464	)
Net increase (decrease) in repurchase agreements with customers		4,434			(13,619	)
Proceeds from exercise of stock options		997			1,572
Excess tax benefit on stock-based compensation		791			1,373
Cash dividends paid on common stock		(22,126	)		(16,606	)
Net cash provided by financing activities		358,961			13,446
Net increase (decrease) in cash and cash equivalents		364,687			(85,287	)
Cash and cash equivalents – beginning of period		150,203			195,975
Cash and cash equivalents – end of period	$	514,890		$	110,688

See accompanying notes to consolidated financial statements.

5

BANK OF THE OZARKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

1. Organization and Principles of Consolidation

Bank of the Ozarks, Inc. (the “Company”) is a bank holding company headquartered in Little Rock, Arkansas, which operates under the rules and regulations of the Board of Governors of the Federal Reserve System. The Company owns a wholly-owned state chartered bank subsidiary – Bank of the Ozarks (the “Bank”), eight 100%-owned finance subsidiary business trusts – Ozark Capital Statutory Trust II (“Ozark II”), Ozark Capital Statutory Trust III (“Ozark III”), Ozark Capital Statutory Trust IV (“Ozark IV”), Ozark Capital Statutory Trust V (“Ozark V”) (collectively, the “Ozark Trusts”), Intervest Statutory Trust II (“Intervest II”), Intervest Statutory Trust III (“Intervest III”), Intervest Statutory Trust IV (“Intervest IV”) and Intervest Statutory Trust V (“Intervest V”), (collectively, the “Intervest Trusts”; and together with Ozark Trusts, the “Trusts”) and, indirectly through the Bank, a subsidiary engaged in the development of real estate, a subsidiary that owns private aircraft and various other entities that hold foreclosed assets or tax credits or engage in other activities. The Company and Bank are subject to the regulation of certain federal and state agencies and undergo periodic examinations by those regulatory authorities. The consolidated financial statements include the accounts of the Company, the Bank, the real estate subsidiary, the aircraft subsidiary and certain of those various other entities in accordance with accounting principles generally accepted in the United States (“GAAP”). Significant intercompany transactions and amounts have been eliminated in consolidation.

At June 30, 2015, the Company had 164 offices, including 80 in Arkansas, 28 in Georgia, 21 in Texas, 16 in North Carolina, 11 in Florida, three in Alabama, two offices each in South Carolina and New York and one office in California.

2. Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) in Article 10 of Regulation S-X and in accordance with the instructions to Form 10-Q and GAAP for interim financial information. Certain information, accounting policies and footnote disclosures normally included in complete financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In the opinion of management, all adjustments considered necessary, consisting of normal recurring items, have been included for a fair presentation of the accompanying consolidated financial statements. Operating results for the three months or six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full year or future periods.

Certain reclassifications of prior period amounts have been made to conform with the current period presentation. These reclassifications had no impact on previously reported net income.

During the fourth quarter of 2014, the Bank and the Federal Deposit Insurance Corporation (“FDIC”) entered into agreements terminating the loss share agreements for all seven of its FDIC-assisted acquisitions. As a result of entering these termination agreements, the Company reclassified its loans previously reported as covered by FDIC loss share to purchased loans for all periods presented, and it has reclassified all interest income on loans previously reported as covered by FDIC loss share to interest income on purchased loans for all periods presented.

During the second quarter of 2015, the Company revised its initial estimates and assumptions regarding the recovery of certain acquired loans and acquired deferred tax assets from its acquisition of Intervest Bancshares Corporation (“Intervest”). As a result, certain amounts previously reported in the Company’s consolidated financial statements have been recast.

3. Acquisitions

Intervest

On February 10, 2015, the Company completed its previously announced acquisition of Intervest and its wholly-owned bank subsidiary Intervest National Bank, for an aggregate of 6,637,243 shares of its common stock (plus cash in lieu of fractional shares) in a transaction valued at approximately $238.5 million. The acquisition of Intervest provided the Company with a banking office in New York City and expanded its service area in Florida by adding five banking offices in Clearwater, Florida and one office in South Pasadena, Florida.

6

During the second quarter of 2015, management revised its initial estimates and assumptions regarding the recovery of certain acquired loans and acquired deferred tax assets. Because such revision occurred during the first 12 months following the date of acquisition and was not the result of a change in circumstances, management has recast the first quarter 2015 consolidated financial statements to decrease the goodwill recorded in the Intervest acquisition by $2.7 million to reflect this change in estimate.

The following table provides a summary of the assets acquired and liabilities assumed as recorded by Intervest, the estimates of the fair value adjustments necessary to adjust those acquired assets and assumed liabilities to estimated fair value, the recast adjustment described above and the estimates of the resultant fair values of those assets and liabilities as recorded by the Company. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. Once management has finalized the fair values of acquired assets and assumed liabilities within this 12-month period, management considers such values to be the day 1 fair values (“Day 1 Fair Values”). The fair value adjustments and the resultant fair values shown in the following table continue to be evaluated by management and may be subject to further adjustment.

	February 10, 2015
	As Recorded by Intervest			Fair Value Adjustments(1)			Recast Adjustment			As Recorded by the Company(1)
	(Dollars in thousands)
Assets acquired:
Cash, due from banks and interest earning deposits	$	274,343		$	0		$	0		$	274,343
Investment securities		21,495			321	a		0			21,816
Loans		1,108,439			(33,868	) b		4,393			1,078,964
Allowance for loan losses		(25,208	)		25,208	b		0			0
Premises and equipment		4,357			2,256	c		0			6,613
Foreclosed assets		2,350			(1,710	) d		0			640
Accrued interest receivable and other assets		34,076			(4,091	) e		(689	)		29,296
Core deposit intangible asset		0			4,595	f		0			4,595
Deferred income taxes		11,758			8,082	g		(985	)		18,855
Total assets acquired		1,431,610			793			2,719			1,435,122
Liabilities assumed:
Deposits		1,162,437			22,211	h		0			1,184,648
Subordinated debentures		56,702			(4,463	) i		0			52,239
Accrued interest payable and other liabilities		3,608			358	j		0			3,966
Total liabilities assumed		1,222,747			18,106			0			1,240,853
Net assets acquired	$	208,863		$	(17,313	)	$	2,719			194,269
Consideration paid:
Cash in lieu of fractional shares											(7	)
Stock											(238,476	)
Total consideration paid											(238,483	)
Goodwill										$	44,214

⁽¹⁾  Management is continuing to evaluate each of these fair value adjustments and may revise one or more of such fair value adjustments in future periods. To the extent that any of these fair value adjustments are revised in future periods, the resultant fair values and the amount of goodwill may be subject to further adjustment.

Explanation of preliminary fair value adjustments

a- Adjustment reflects the fair value adjustment based on the pricing of the acquired investment securities portfolio.

b- Adjustment reflects the fair value adjustment based on the evaluation of the acquired loan portfolio and to eliminate the recorded allowance for loan losses.

c- Adjustment reflects the fair value adjustment based on the evaluation of the premises and equipment acquired.

d- Adjustment reflects the fair value adjustment based on the evaluation of the acquired foreclosed assets.

e- Adjustment reflects the fair value adjustment based on the evaluation of accrued interest receivable and other assets.

f- Adjustment reflects the fair value adjustment for the core deposit intangible asset recorded as a result of the acquisition.

g- This adjustment reflects the differences in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal income tax purposes.

h- Adjustment reflects the fair value adjustment based on the evaluation of the acquired deposits.

i- Adjustment reflects the fair value adjustment of these assumed liabilities based on a valuation of such instruments by an independent, third party valuation firm.

j- Adjustment reflects the amount needed to adjust other liabilities to estimated fair value and to record certain liabilities directly attributable to the Intervest acquisition.

7

As a result of the recast adjustment described above, certain amounts previously reported in the Company’s consolidated financial statements as of March 31, 2015 have been recast. The following is a summary of those financial statement captions that have been impacted by the recast adjustment.

	As Previously Reported		Recast Adjustment			As Recast
	(Dollars in thousands)
Purchased loans	$	2,042,164	$	4,393		$	2,046,557
Net deferred tax asset		63,483		(985	)		62,498
Goodwill		125,603		(2,719	)		122,884
Income taxes receivable		689		(689	)		0

Goodwill of $44.2 million, which is the excess of the merger consideration over the fair value of net assets acquired, was recorded in the Intervest acquisition and is the result of expected operational synergies, expansion of full service banking in New York City and other factors. This goodwill is not expected to be deductible for tax purposes. To the extent that management further revises any of the above fair value adjustments as a result of its continuing evaluation, the amount of goodwill recorded in the Intervest acquisition may be subject to further adjustment.

The Company’s consolidated results of operations include the operating results of Intervest beginning February 11, 2015 through the end of the reporting period. For the three months ended June 30, 2015, Intervest contributed $14.9 million of net interest income and $8.6 million of net income to the Company’s operating results. For the six months ended June 30, 2015, Intervest contributed $23.8 million of net interest income and $13.5 million of net income to the Company’s operating results.

The following unaudited supplemental pro forma information is presented to show the estimated results assuming Intervest was acquired as of the beginning of the earliest period presented, adjusted for estimated potential costs savings. These unaudited pro forma results are not necessarily indicative of the operating results that the Company would have achieved had it completed the acquisition as of January 1, 2014 or 2015 and should not be considered as representative of future operating results.

	Six Months Ended
	June 30,
	2015		2014
	(Dollars in thousands, except per share amounts)
Net interest income – pro forma (unaudited)	$	186,428	$	143,484
Net income – pro forma (unaudited)	$	88,745	$	62,949
Diluted earnings per common share – pro forma (unaudited)	$	1.01	$	0.76

Summit Bancorp, Inc.

On May 16, 2014, the Company completed the acquisition of Summit Bancorp, Inc. (“Summit”) and Summit Bank, its wholly-owned bank subsidiary, for an aggregate of $42.5 million in cash and 5,765,846 shares of its common stock. The acquisition of Summit expanded its service area in Central, South and Western Arkansas by adding 23 banking locations and one loan production office in nine Arkansas counties. During the second quarter of 2014, the Company closed one of the banking offices and the one loan production office acquired in the Summit acquisition. During the fourth quarter of 2014 and the second quarter of 2015, the Company closed eight additional banking offices, including six that were acquired from Summit, in markets where the Company had excess branches as a result of the Summit acquisition. Goodwill of $73.4 million, which is the excess of the merger consideration over the fair value of net assets acquired, was recorded in the Summit acquisition and is the result of expected operational synergies and other factors. This goodwill is not expected to be deductible for tax purposes.

Bancshares, Inc.

On March 5, 2014, the Company completed its acquisition of Bancshares, Inc. (“Bancshares”) and OMNIBANK, N.A., its wholly-owned bank subsidiary, for an aggregate of $21.5 million in cash. The Company recognized a bargain purchase gain of $4.7 million during the first quarter of 2014 as a result of the Bancshares acquisition. The acquisition of Bancshares expanded the Company’s service area in South Texas by adding three offices in Houston and one office each in Austin, Cedar Park, Lockhart, and San Antonio.

4. Earnings Per Common Share (“EPS”)

Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding after consideration of the dilutive effect, if any, of outstanding common stock options using the treasury stock method. No options to purchase shares of common stock for the three months ended June 30, 2015 and 2014 or the six

8

months ended June 30, 2014 were excluded from the diluted EPS calculations as all options were dilutive. Options to purchase 531,500 shares of the Company’s common stock at a weighted-average exercise price of $40.34 were outstanding but not included in the computation of diluted EPS for the six months ended June 30, 2015 because the options exercise price was greater than the average market price of the common shares and inclusion would have been antidilutive.

The following table presents the computation of basic and diluted EPS for the periods indicated.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
	(In thousands, except per share amounts)
Numerator:
Distributed earnings allocated to common stockholders	$	11,713	$	8,497	$	22,126	$	16,606
Undistributed earnings allocated to common stockholders		33,063		17,989		62,544		35,156
Net income available to common stockholders	$	44,776	$	26,486	$	84,670	$	51,762
Denominator:
Denominator for basic EPS – weighted-average common shares		86,786		76,743		85,251		75,281
Effect of dilutive securities – stock options		729		723		750		700
Denominator for diluted EPS – weighted-average common shares and assumed conversions		87,515		77,466		86,001		75,981
Basic EPS	$	0.52	$	0.35	$	0.99	$	0.69
Diluted EPS	$	0.51	$	0.34	$	0.98	$	0.68

5. Investment Securities

At June 30, 2015 and 2014 and at December 31, 2014, the Company classified all of its investment securities portfolio as AFS. Accordingly, investment securities are stated at estimated fair value in the consolidated financial statements with unrealized gains and losses, net of related income tax, reported as a separate component of stockholders’ equity and included in accumulated other comprehensive income (loss).

The following table presents the amortized cost and estimated fair value of investment securities AFS as of the dates indicated. The Company’s investment in the “CRA qualified investment fund” includes shares held in a mutual fund that qualifies under the Community Reinvestment Act of 1977 for community reinvestment purposes. The Company’s holdings of equity securities in Federal Home Loan Bank of Dallas (“FHLB”) and First National Banker’s Bankshares, Inc. (“FNBB”) do not have readily determinable fair values and are carried at cost.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(Dollars in thousands)
June 30, 2015:
Obligations of state and political subdivisions	$	496,777	$	11,768	$	(1,630	)	$	506,915
U.S. Government agency securities		257,849		4,627		(1,723	)		260,753
Corporate obligations		3,574		0		0			3,574
CRA qualified investment fund		1,028		0		(8	)		1,020
FHLB and FNBB equity securities		10,015		0		0			10,015
Total	$	769,243	$	16,395	$	(3,361	)	$	782,277
December 31, 2014:
Obligations of state and political subdivisions	$	555,335	$	18,267	$	(393	)	$	573,209
U.S. Government agency securities		245,854		6,144		(765	)		251,233
Corporate obligations		654		0		0			654
FHLB and FNBB equity securities		14,225		0		0			14,225
Total	$	816,068	$	24,411	$	(1,158	)	$	839,321
June 30, 2014:
Obligations of state and political subdivisions	$	603,533	$	15,536	$	(2,504	)	$	616,565
U.S. Government agency securities		254,878		5,613		(2,180	)		258,311
Corporate obligations		685		0		0			685
FHLB and FNBB equity securities		16,568		0		0			16,568
Total	$	875,664	$	21,149	$	(4,684	)	$	892,129

9

The following table shows estimated fair value of investment securities AFS having gross unrealized losses and the amount of such unrealized losses, aggregated by investment category and length of time that individual investment securities have been in a continuous unrealized loss position, as of the dates indicated.

	Less than 12 Months				12 Months or More				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(Dollars in thousands)
June 30, 2015:
Obligations of state and political subdivisions	$	104,621	$	1,532	$	7,515	$	98	$	112,136	$	1,630
U.S. Government agency securities		76,252		1,534		7,181		189		83,433		1,723
CRA qualified investment fund		1,020		8		0		0		1,020		8
Total temporarily impaired securities	$	181,893	$	3,074	$	14,696	$	287	$	196,589	$	3,361
December 31, 2014:
Obligations of state and political subdivisions	$	29,174	$	75	$	34,414	$	318	$	63,588	$	393
U.S. Government agency securities		9,630		25		47,626		740		57,256		765
Total temporarily impaired securities	$	38,804	$	100	$	82,040	$	1,058	$	120,844	$	1,158
June 30, 2014:
Obligations of state and political subdivisions	$	60,769	$	386	$	79,000	$	2,118	$	139,769	$	2,504
U.S. Government agency securities		15,227		67		58,608		2,113		73,835		2,180
Total temporarily impaired securities	$	75,996	$	453	$	137,608	$	4,231	$	213,604	$	4,684

In evaluating the Company’s unrealized loss positions for other-than-temporary impairment of its investment securities portfolio, management considers the credit quality of the issuer, the nature and cause of the unrealized loss, the severity and duration of the impairments and other factors. At June 30, 2015 management determined the unrealized losses were the result of fluctuations in interest rates and did not reflect deteriorations of the credit quality of the investments. Accordingly, management considers these unrealized losses to be temporary in nature. The Company does not have the intent to sell these investment securities with unrealized losses and, more likely than not, will not be required to sell these investment securities before fair value recovers to amortized cost.

The following table shows the amortized cost and estimated fair value of investment securities AFS by maturity or estimated date of repayment as of the date indicated.

	June 30, 2015
Maturity or Estimated Repayment	Amortized Cost		Estimated Fair Value
	(Dollars in thousands)
One year or less	$	36,133	$	36,619
After one year to five years		139,079		140,690
After five years to ten years		189,702		192,251
After ten years		404,329		412,717
Total	$	769,243	$	782,277

For purposes of this maturity distribution, all investment securities AFS are shown based on their contractual maturity date or estimated date of repayment, except (i) FHLB and FNBB equity securities and the CRA qualified investment fund with no contractual maturity date are shown in the longest maturity category and (ii) U.S. Government agency securities and municipal housing authority securities backed by residential mortgages are allocated among various maturities based on an estimated repayment schedule utilizing Bloomberg median prepayment speeds or other estimates of prepayment speeds and interest rate levels at the measurement date. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

10

The following table is a summary of sales activities in the Company’s investment securities AFS for the periods indicated.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015			2014
	(Dollars in thousands)
Sales proceeds	$	2,660	$	47,170	$	32,777		$	48,394
Gross realized gains	$	85	$	18	$	2,619		$	23
Gross realized losses		0		0		(1	)		0
Net gains on investment securities	$	85	$	18	$	2,618		$	23

6. Allowance for Loan and Lease Losses (“ALLL”) and Credit Quality Indicators

Allowance for Loan and Lease Losses

The following table is a summary of activity within the ALLL for the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(Dollars in thousands)
Beginning balance	$	54,147		$	43,861		$	52,918		$	42,945
Non-purchased loans and leases charged off		(1,496	)		(1,650	)		(5,575	)		(2,569	)
Recoveries of non-purchased loans and leases previously charged off		198			247			506			982
Net non-purchased loans and leases charged off		(1,298	)		(1,403	)		(5,069	)		(1,587	)
Purchased loans charged off, net		(408	)		(1,082	)		(1,723	)		(1,287	)
Net charge-offs – total loans and leases		(1,706	)		(2,485	)		(6,792	)		(2,874	)
Provision for loan and lease losses:
Non-purchased loans and leases		3,900			4,500			8,900			5,600
Purchased loans		408			1,082			1,723			1,287
Total provision		4,308			5,582			10,623			6,887
Ending balance	$	56,749		$	46,958		$	56,749		$	46,958

As of June 30, 2015, the Company had identified purchased loans where it had determined it was probable that the Company would be unable to collect all amounts according to the contractual terms thereof (for purchased loans without evidence of credit deterioration at date of acquisition) or the expected performance of such loans had deteriorated from its performance expectations established in conjunction with the determination of the Day 1 Fair Values or since our most recent review of such portfolio’s performance (for purchased loans with evidence of credit deterioration at date of acquisition). As a result, the Company recorded partial charge-offs totaling $0.4 million and $1.1 million during the second quarter of 2015 and 2014, respectively, and $1.7 million and $1.3 million during the first six months of 2015 and 2014, respectively. The Company also recorded provision for loan and lease losses of $0.4 million and $1.1 million during the second quarter of 2015 and 2014, respectively, and $1.7 million and $1.3 million during the first six months of 2015 and 2014, respectively. At June 30, 2015, the Company had $12.3 million of impaired purchased loans compared to $21.2 million at June 30, 2014 and $14.0 million at December 31, 2014.

11

The following tables are a summary of the Company’s ALLL for the periods indicated.

	Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance
	(Dollars in thousands)
Three months ended June 30, 2015:
Real estate:
Residential 1-4 family	$	5,657	$	(92	)	$	10	$	26		$	5,601
Non-farm/non-residential		17,766		(119	)		5		580			18,232
Construction/land development		17,580		(469	)		0		2,037			19,148
Agricultural		2,526		0			0		(66	)		2,460
Multifamily residential		2,423		(208	)		0		671			2,886
Commercial and industrial		3,301		(93	)		23		18			3,249
Consumer		824		(24	)		21		4			825
Direct financing leases		3,258		(155	)		7		444			3,554
Other		812		(336	)		132		186			794
Purchased loans		0		(408	)		0		408			0
Total	$	54,147	$	(1,904	)	$	198	$	4,308		$	56,749
Six months ended June 30, 2015:
Real estate:
Residential 1-4 family	$	5,482	$	(621	)	$	21	$	719		$	5,601
Non-farm/non-residential		17,190		(324	)		17		1,349			18,232
Construction/land development		15,960		(771	)		37		3,922			19,148
Agricultural		2,558		(13	)		0		(85	)		2,460
Multifamily residential		2,147		(208	)		0		947			2,886
Commercial and industrial		4,873		(2,540	)		39		877			3,249
Consumer		818		(69	)		42		34			825
Direct financing leases		2,989		(341	)		13		893			3,554
Other		901		(688	)		337		244			794
Purchased loans		0		(1,723	)		0		1,723			0
Total	$	52,918	$	(7,298	)	$	506	$	10,623		$	56,749
Year ended December 31, 2014:
Real estate:
Residential 1-4 family	$	4,701	$	(577	)	$	135	$	1,223		$	5,482
Non-farm/non-residential		13,633		(1,357	)		33		4,881			17,190
Construction/land development		12,306		(638	)		11		4,281			15,960
Agricultural		3,000		(214	)		14		(242	)		2,558
Multifamily residential		2,504		0			0		(357	)		2,147
Commercial and industrial		2,855		(720	)		808		1,930			4,873
Consumer		917		(222	)		80		43			818
Direct financing leases		2,266		(602	)		49		1,276			2,989
Other		763		(793	)		266		665			901
Purchased loans		0		(3,215	)		0		3,215			0
Total	$	42,945	$	(8,338	)	$	1,396	$	16,915		$	52,918

12

	Beginning Balance		Charge-offs			Recoveries		Provision			Ending Balance
	(Dollars in thousands)
Three months ended June 30, 2014:
Real estate:
Residential 1-4 family	$	4,622	$	(142	)	$	49	$	231		$	4,760
Non-farm/non-residential		14,013		(1,181	)		1		2,003			14,836
Construction/land development		12,828		(14	)		0		2,650			15,464
Agricultural		3,018		0			6		(116	)		2,908
Multifamily residential		2,429		0			0		(657	)		1,772
Commercial and industrial		2,738		(48	)		135		23			2,848
Consumer		831		(56	)		18		133			926
Direct financing leases		2,438		(121	)		8		247			2,572
Other		944		(88	)		30		(14	)		872
Purchased loans		0		(1,082	)		0		1,082			0
Total	$	43,861	$	(2,732	)	$	247	$	5,582		$	46,958
Six months ended June 30, 2014:
Real estate:
Residential 1-4 family	$	4,701	$	(341	)	$	71	$	329		$	4,760
Non-farm/non-residential		13,633		(1,254	)		4		2,453			14,836
Construction/land development		12,306		(14	)		8		3,164			15,464
Agricultural		3,000		(15	)		11		(88	)		2,908
Multifamily residential		2,504		0			0		(732	)		1,772
Commercial and industrial		2,855		(422	)		763		(348	)		2,848
Consumer		917		(97	)		36		70			926
Direct financing leases		2,266		(267	)		14		559			2,572
Other		763		(159	)		75		193			872
Purchased loans		0		(1,287	)		0		1,287			0
Total	$	42,945	$	(3,856	)	$	982	$	6,887		$	46,958

13

The following table is a summary of the Company’s ALLL and recorded investment in non-purchased loans and leases as of the dates indicated.

	ALLL						Non-Purchased Loans and Leases
	ALLL for Individually Evaluated Impaired Loans and Leases		ALLL for All Other Loans and Leases		Total ALLL		Individually Evaluated Impaired Loans and Leases		All Other Loans and Leases		Total Loans and Leases
	(Dollars in thousands)
June 30, 2015:
Real estate:
Residential 1-4 family	$	345	$	5,256	$	5,601	$	1,908	$	316,328	$	318,236
Non-farm/non-residential		3		18,229		18,232		809		1,687,994		1,688,803
Construction/land development		49		19,099		19,148		9,065		1,890,960		1,900,025
Agricultural		470		1,990		2,460		1,450		49,333		50,783
Multifamily residential		0		2,886		2,886		345		296,529		296,874
Commercial and industrial		487		2,762		3,249		547		259,073		259,620
Consumer		3		822		825		33		25,499		25,532
Direct financing leases		0		3,554		3,554		0		137,146		137,146
Other		0		794		794		7		90,097		90,104
Total	$	1,357	$	55,392	$	56,749	$	14,164	$	4,752,959	$	4,767,123
December 31, 2014:
Real estate:
Residential 1-4 family	$	356	$	5,126	$	5,482	$	2,734	$	280,519	$	283,253
Non-farm/non-residential		18		17,172		17,190		2,507		1,501,034		1,503,541
Construction/land development		68		15,892		15,960		14,304		1,397,534		1,411,838
Agricultural		6		2,552		2,558		365		46,870		47,235
Multifamily residential		0		2,147		2,147		0		211,156		211,156
Commercial and industrial		644		4,229		4,873		623		287,084		287,707
Consumer		3		815		818		34		25,635		25,669
Direct financing leases		0		2,989		2,989		0		115,475		115,475
Other		0		901		901		8		93,988		93,996
Total	$	1,095	$	51,823	$	52,918	$	20,575	$	3,959,295	$	3,979,870
June 30, 2014:
Real estate:
Residential 1-4 family	$	411	$	4,349	$	4,760	$	3,245	$	263,252	$	266,497
Non-farm/non-residential		13		14,823		14,836		2,363		1,287,811		1,290,174
Construction/land development		2		15,462		15,464		9,738		1,039,420		1,049,158
Agricultural		200		2,708		2,908		845		44,696		45,541
Multifamily residential		0		1,772		1,772		491		136,462		136,953
Commercial and industrial		553		2,295		2,848		689		166,195		166,884
Consumer		3		923		926		42		28,632		28,674
Direct financing leases		0		2,572		2,572		0		98,768		98,768
Other		0		872		872		9		88,927		88,936
Total	$	1,182	$	45,776	$	46,958	$	17,422	$	3,154,163	$	3,171,585

14

The following table is a summary of impaired non-purchased loans and leases as of and for the three months and six months ended June 30, 2015.

	Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Three Months Ended June 30, 2015		Weighted Average Carrying Value – Six Months Ended June 30, 2015
	(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	3,147	$	(1,859	)	$	1,288	$	345	$	1,299	$	1,362
Non-farm/non-residential		145		(142	)		3		3		22		196
Construction/land development		115		0			115		49		66		1,414
Agricultural		1,148		0			1,148		470		574		413
Commercial and industrial		672		(185	)		487		487		244		343
Consumer		40		(23	)		17		3		18		18
Total impaired loans and leases with a related ALLL		5,267		(2,209	)		3,058		1,357		2,223		3,746
Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		731		(111	)		620		0		910		1,022
Non-farm/non-residential		999		(193	)		806		0		651		1,089
Construction/land development		9,440		(490	)		8,950		0		9,174		9,514
Agricultural		518		(215	)		303		0		304		293
Multifamily residential		686		(341	)		345		0		173		115
Commercial and industrial		158		(98	)		60		0		95		90
Consumer		19		(5	)		14		0		15		15
Other		8		0			8		0		8		8
Total impaired loans and leases without a related ALLL		12,559		(1,453	)		11,106		0		11,330		12,146
Total impaired loans and leases	$	17,826	$	(3,662	)	$	14,164	$	1,357	$	13,553	$	15,892

15

The following table is a summary of impaired non-purchased loans and leases as of and for the year ended December 31, 2014.

	Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Year Ended December 31, 2014
	(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	3,163	$	(1,674	)	$	1,489	$	356	$	1,457
Non-farm/non-residential		762		(220	)		542		18		211
Construction/land development		4,656		(545	)		4,111		68		1,040
Agricultural		105		(12	)		93		6		217
Commercial and industrial		1,233		(691	)		542		644		554
Consumer		41		(23	)		18		3		20
Total impaired loans and leases with a related ALLL		9,960		(3,165	)		6,795		1,095		3,499
Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		1,373		(128	)		1,245		0		1,581
Non-farm/non-residential		2,676		(711	)		1,965		0		1,988
Construction/land development		10,378		(185	)		10,193		0		7,600
Agricultural		474		(202	)		272		0		383
Multifamily residential		133		(133	)		0		0		123
Commercial and industrial		264		(183	)		81		0		75
Consumer		81		(65	)		16		0		18
Other		8		0			8		0		8
Total impaired loans and leases without a related ALLL		15,387		(1,607	)		13,780		0		11,776
Total impaired loans and leases	$	25,347	$	(4,772	)	$	20,575	$	1,095	$	15,275

16

The following table is a summary of impaired non-purchased loans and leases as of and for the three months and six months ended June 30, 2014.

	Principal Balance		Net Charge-offs to Date			Principal Balance, Net of Charge-offs		Specific ALLL		Weighted Average Carrying Value – Three Months Ended June 30, 2014		Weighted Average Carrying Value – Six Months Ended June 30, 2014
	(Dollars in thousands)
Impaired loans and leases for which there is a related ALLL:
Real estate:
Residential 1-4 family	$	3,294	$	(1,721	)	$	1,573	$	411	$	1,505	$	1,642
Non-farm/non-residential		186		(142	)		44		13		52		50
Construction/land development		38		(22	)		16		2		16		16
Agricultural		336		(12	)		324		200		336		380
Commercial and industrial		838		(278	)		560		553		562		579
Consumer		102		(79	)		23		3		23		23
Other		0		0			0		0		0		5
Total impaired loans and leases with a related ALLL		4,794		(2,254	)		2,540		1,182		2,494		2,695
Impaired loans and leases for which there is not a related ALLL:
Real estate:
Residential 1-4 family		2,094		(421	)		1,673		0		2,023		2,059
Non-farm/non-residential		3,444		(1,125	)		2,319		0		1,942		1,999
Construction/land development		9,803		(81	)		9,722		0		5,015		3,417
Agricultural		554		(33	)		521		0		494		468
Multifamily residential		624		(133	)		491		0		246		164
Commercial and industrial		288		(159	)		129		0		95		88
Consumer		33		(14	)		19		0		22		24
Other		8		0			8		0		9		9
Total impaired loans and leases without a related ALLL		16,848		(1,966	)		14,882		0		9,846		8,228
Total impaired loans and leases	$	21,642	$	(4,220	)	$	17,422	$	1,182	$	12,340	$	10,923

Management has determined that certain of the Company’s impaired non-purchased loans and leases do not require any specific allowance at June 30, 2015 and 2014 or at December 31, 2014 because (i) management’s analysis of such individual loans and leases resulted in no impairment or (ii) all identified impairment on such loans and leases has previously been charged off.

Interest income on impaired non-purchased loans and leases is recognized on a cash basis when and if actually collected. Total interest income recognized on impaired non-purchased loans and leases for the three months and six months ended June 30, 2015 and 2014 and for the year ended December 31, 2014 was not material.

17

Credit Quality Indicators

Non-Purchased Loans and Leases

The following table is a summary of credit quality indicators for the Company’s non-purchased loans and leases as of the dates indicated.

	Satisfactory		Moderate		Watch		Substandard		Total
	(Dollars in thousands)
June 30, 2015:
Real estate:
Residential 1-4 family (1)	$	308,914	$	0	$	3,830	$	5,492	$	318,236
Non-farm/non-residential		1,442,958		169,776		67,722		8,347		1,688,803
Construction/land development		1,653,991		223,812		10,207		12,015		1,900,025
Agricultural		24,997		14,457		9,088		2,241		50,783
Multifamily residential		252,433		40,802		1,646		1,993		296,874
Commercial and industrial		185,737		70,305		2,092		1,486		259,620
Consumer (1)		25,022		0		214		296		25,532
Direct financing leases		136,605		297		100		144		137,146
Other (1)		84,271		5,648		93		92		90,104
Total	$	4,114,928	$	525,097	$	94,992	$	32,106	$	4,767,123
December 31, 2014:
Real estate:
Residential 1-4 family (1)	$	271,576	$	0	$	4,082	$	7,595	$	283,253
Non-farm/non-residential		1,300,582		142,688		53,863		6,408		1,503,541
Construction/land development		1,190,005		192,046		11,135		18,652		1,411,838
Agricultural		22,446		12,375		10,226		2,188		47,235
Multifamily residential		171,806		37,886		713		751		211,156
Commercial and industrial		208,054		59,967		18,310		1,376		287,707
Consumer (1)		25,267		0		141		261		25,669
Direct financing leases		114,586		715		117		57		115,475
Other (1)		89,364		4,312		286		34		93,996
Total	$	3,393,686	$	449,989	$	98,873	$	37,322	$	3,979,870
June 30, 2014:
Real estate:
Residential 1-4 family(1)	$	258,098	$	0	$	2,620	$	5,779	$	266,497
Non-farm/non-residential		1,090,525		139,080		53,478		7,091		1,290,174
Construction/land development		846,365		176,977		12,078		13,738		1,049,158
Agricultural		22,766		9,785		10,388		2,602		45,541
Multifamily residential		105,366		29,954		385		1,248		136,953
Commercial and industrial		127,935		35,769		1,768		1,412		166,884
Consumer(1)		28,244		0		132		298		28,674
Direct financing leases		97,967		727		34		40		98,768
Other(1)		85,684		3,036		189		27		88,936
Total	$	2,662,950	$	395,328	$	81,072	$	32,235	$	3,171,585

(1) The Company does not risk rate its residential 1-4 family loans, its consumer loans, and certain “other” loans. However, for purposes of the above table, the Company considers such loans to be (i) satisfactory – if they are performing and less than 30 days past due, (ii) watch – if they are performing and 30 to 89 days past due or (iii) substandard – if they are nonperforming or 90 days or more past due.

The following categories of credit quality indicators are used by the Company.

Satisfactory – Loans and leases in this category are considered to be a satisfactory credit risk and are generally considered to be collectible in full.

Moderate – Loans and leases in this category are considered to be a marginally satisfactory credit risk and are generally considered to be collectible in full.

Watch – Loans and leases in this category are presently protected from apparent loss; however, weaknesses exist which could cause future impairment of repayment of principal or interest.

Substandard – Loans and leases in this category are characterized by deterioration in quality exhibited by a number of weaknesses requiring corrective action and posing risk of some loss.

18

The following table is an aging analysis of past due non-purchased loans and leases as of the dates indicated.

	30-89 Days Past Due (1)		90 Days or More (2)		Total Past Due		Current (3)		Total
	(Dollars in thousands)
June 30, 2015:
Real estate:
Residential 1-4 family	$	4,642	$	1,031	$	5,673	$	312,563	$	318,236
Non-farm/non-residential		2,672		1,180		3,852		1,684,951		1,688,803
Construction/land development		906		9,119		10,025		1,890,000		1,900,025
Agricultural		516		1,426		1,942		48,841		50,783
Multifamily residential		1,042		0		1,042		295,832		296,874
Commercial and industrial		737		115		852		258,768		259,620
Consumer		225		35		260		25,272		25,532
Direct financing leases		140		106		246		136,900		137,146
Other		98		85		183		89,921		90,104
Total	$	10,978	$	13,097	$	24,075	$	4,743,048	$	4,767,123
December 31, 2014:
Real estate:
Residential 1-4 family	$	6,352	$	1,536	$	7,888	$	275,365	$	283,253
Non-farm/non-residential		2,708		1,445		4,153		1,499,388		1,503,541
Construction/land development		3,520		12,881		16,401		1,395,437		1,411,838
Agricultural		1,680		304		1,984		45,251		47,235
Multifamily residential		0		0		0		211,156		211,156
Commercial and industrial		586		94		680		287,027		287,707
Consumer		161		55		216		25,453		25,669
Direct financing leases		39		54		93		115,382		115,475
Other		58		12		70		93,926		93,996
Total	$	15,104	$	16,381	$	31,485	$	3,948,385	$	3,979,870
June 30, 2014:
Real estate:
Residential 1-4 family	$	2,890	$	1,521	$	4,411	$	262,086	$	266,497
Non-farm/non-residential		1,714		1,693		3,407		1,286,767		1,290,174
Construction/land development		49		10,060		10,109		1,039,049		1,049,158
Agricultural		269		436		705		44,836		45,541
Multifamily residential		491		0		491		136,462		136,953
Commercial and industrial		674		0		674		166,210		166,884
Consumer		139		54		193		28,481		28,674
Direct financing leases		10		30		40		98,728		98,768
Other		0		0		0		88,936		88,936
Total	$	6,236	$	13,794	$	20,030	$	3,151,555	$	3,171,585

(1) Includes $0.7 million, $0.9 million and $1.8 million at June 30, 2015, December 31, 2014 and June 30, 2014, respectively, of loans and leases on nonaccrual status.

(2) All loans and leases greater than 90 days past due were on nonaccrual status at June 30, 2015 and 2014 and December 31, 2014.

(3) Includes $2.5 million, $0.4 million and $2.8 million of loans and leases on nonaccrual status at June 30, 2015, December 31, 2014 and June 30, 2014, respectively.

19

Purchased Loans

The following table is a summary of credit quality indicators for the Company’s purchased loans as of the dates indicated.

	Purchased Loans Without Evidence of Credit Deterioration at Acquisition										Purchased Loans With Evidence of Credit Deterioration at Acquisition				Total Purchased Loans
	FV 33		FV 44		FV 55		FV 36		FV 77		FV 66		FV 88
	(Dollars in thousands)
June 30, 2015:
Real estate:
Residential 1-4 family	$	61,886	$	88,824	$	30,228	$	58,905	$	83	$	85,917	$	1,888	$	327,731
Non-farm/non-residential		209,433		702,962		119,491		3,780		255		119,406		6,778		1,162,105
Construction/land development		18,084		9,638		3,397		8,724		0		19,420		2,695		61,958
Agricultural		6,903		13,465		1,901		865		108		6,377		0		29,619
Multifamily residential		23,260		117,586		25,968		706		65		12,555		0		180,140
Total real estate		319,566		932,475		180,985		72,980		511		243,675		11,361		1,761,553
Commercial and industrial		10,126		17,812		4,316		5,722		20		8,179		449		46,624
Consumer		793		261		213		7,775		2		310		4		9,358
Other		4,247		3,558		288		462		0		758		0		9,313
Total	$	334,732	$	954,106	$	185,802	$	86,939	$	533	$	252,922	$	11,814	$	1,826,848
December 31, 2014:
Real estate:
Residential 1-4 family	$	73,196	$	81,840	$	30,180	$	71,687	$	151	$	96,752	$	1,899	$	355,705
Non-farm/non-residential		166,754		180,522		32,157		4,906		505		114,217		5,828		504,889
Construction/land development		21,803		26,858		4,312		13,708		0		28,497		4,598		99,776
Agricultural		10,444		25,187		2,409		1,525		0		8,331		92		47,988
Multifamily residential		22,731		11,646		1,971		884		67		4,823		312		42,434
Total real estate		294,928		326,053		71,029		92,710		723		252,620		12,729		1,050,792
Commercial and industrial		20,340		23,048		4,900		10,659		22		9,297		559		68,825
Consumer		1,605		272		420		12,538		3		426		4		15,268
Other		4,845		5,830		597		945		0		845		0		13,062
Total	$	321,718	$	355,203	$	76,946	$	116,852	$	748	$	263,188	$	13,292	$	1,147,947
June 30, 2014:
Real estate:
Residential 1-4 family	$	81,102	$	84,839	$	32,286	$	79,449	$	10	$	111,106	$	2,306	$	391,098
Non-farm/non-residential		211,896		198,937		40,193		3,704		0		148,491		10,249		613,470
Construction/land development		32,850		37,840		12,447		10,878		9		36,031		6,032		136,087
Agricultural		15,058		29,337		3,185		1,744		0		10,984		323		60,631
Multifamily residential		10,505		13,418		7,453		1,030		67		8,754		1,090		42,317
Total real estate		351,411		364,371		95,564		96,805		86		315,366		20,000		1,243,603
Commercial and industrial		27,269		49,175		9,702		14,637		0		11,371		1,119		113,273
Consumer		3,215		1,165		670		20,204		0		615		0		25,869
Other		5,762		9,292		935		4,391		0		944		0		21,324
Total	$	387,657	$	424,003	$	106,871	$	136,037	$	86	$	328,296	$	21,119	$	1,404,069

The following grades are used for purchased loans without evidence of credit deterioration at the date of acquisition.

FV 33 – Loans in this category are considered to be satisfactory with minimal credit risk and are generally considered collectible.

FV 44 – Loans in this category are considered to be marginally satisfactory with minimal to moderate credit risk and are generally considered collectible.

FV 55 – Loans in this category exhibit weakness and are considered to have elevated credit risk and elevated risk of repayment.

FV 36 – Loans in this category were not individually reviewed at the date of purchase and are assumed to have characteristics similar to the characteristics of the aggregate acquired portfolio.

FV 77 – Loans in this category have deteriorated since the date of purchase and are considered impaired.

The following grades are used for purchased loans with evidence of credit deterioration at the date of acquisition.

20

FV 66 – Loans in this category are performing in accordance with or exceeding management’s performance expectations established in conjunction with the determination of Day 1 Fair Values.

FV 88 – Loans in this category have deteriorated from management’s performance expectations established in conjunction with the determination of Day 1 Fair Values.

The Company had no allowance at June 30, 2015 and 2014 or December 31, 2014 for its (i) purchased loans without evidence of credit deterioration at the date of acquisition as management’s analysis of such individual loans resulted in no impairment or all identified impairment on such loans had been charged off, or (ii) purchased loans with evidence of credit deterioration at the date of acquisition as all such loans were performing in accordance with management’s expectations established in conjunction with the determination of the Day 1 Fair Values or all losses had been charged off on such loans whose performance had deteriorated from management’s expectations established in conjunction with the determination of the Day 1 Fair Values.

The following table is an aging analysis of past due purchased loans as of the dates indicated.

	30-89 Days Past Due		90 Days or More		Total Past Due		Current		Total Purchased Loans
	(Dollars in thousands)
June 30, 2015:
Real estate:
Residential 1-4 family	$	6,476	$	5,975	$	12,451	$	315,280	$	327,731
Non-farm/non-residential		16,737		9,191		25,928		1,136,177		1,162,105
Construction/land development		1,045		2,715		3,760		58,198		61,958
Agriculture		291		166		457		29,162		29,619
Multifamily residential		408		709		1,117		179,023		180,140
Commercial and industrial		936		611		1,547		45,077		46,624
Consumer		111		68		179		9,179		9,358
Other		40		11		51		9,262		9,313
Total	$	26,044	$	19,446	$	45,490	$	1,781,358	$	1,826,848
December 31, 2014:
Real estate:
Residential 1-4 family	$	8,088	$	9,043	$	17,131	$	338,574	$	355,705
Non-farm/non-residential		8,907		12,439		21,346		483,543		504,889
Construction/land development		1,197		5,464		6,661		93,115		99,776
Agriculture		237		875		1,112		46,876		47,988
Multifamily residential		515		67		582		41,852		42,434
Commercial and industrial		863		751		1,614		67,211		68,825
Consumer		199		103		302		14,966		15,268
Other		0		31		31		13,031		13,062
Total	$	20,006	$	28,773	$	48,779	$	1,099,168	$	1,147,947
June 30, 2014:
Real estate:
Residential 1-4 family	$	10,866	$	14,074	$	24,940	$	366,158	$	391,098
Non-farm/non-residential		4,929		25,570		30,499		582,971		613,470
Construction/land development		1,146		9,766		10,912		125,175		136,087
Agriculture		165		2,260		2,425		58,206		60,631
Multifamily residential		0		2,594		2,594		39,723		42,317
Commercial and industrial		392		1,733		2,125		111,148		113,273
Consumer		170		183		353		25,516		25,869
Other		16		19		35		21,289		21,324
Total	$	17,684	$	56,199	$	73,883	$	1,330,186	$	1,404,069

21

At June 30, 2015 and 2014 and December 31, 2014, a portion of the Company’s purchased loans with evidence of credit deterioration at the date of acquisition were past due, including many that were 90 days or more past due. Such delinquencies were included in the Company’s performance expectations in determining the Day 1 Fair Values. Additionally, in accordance with GAAP, the Company continues to accrete into earnings income on such loans.

7. Income Taxes

The following table is a summary of the types of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities and their approximate tax effects as of the dates indicated.

	June 30,						December 31,
	2015			2014			2014
	(Dollars in thousands)
Deferred tax assets:
Allowance for loan and lease losses	$	21,617		$	18,116		$	20,324
Differences in amounts reflected in the financial statements and income tax basis of purchased loans not previously covered by FDIC loss share agreements		28,605			26,024			20,444
Differences in amounts reflected in the financial statements and income tax basis for deposits assumed in acquisitions		7,703			2,405			1,337
Stock-based compensation		4,477			3,364			3,268
Deferred compensation		2,092			1,890			1,991
Foreclosed assets		3,111			5,624			3,503
Deferred fees and costs on loans and leases		6,405			2,059			4,785
Differences in amounts reflected in the financial statements and income tax basis of assets acquired and liabilities assumed in FDIC-assisted acquisitions		8,032			7,397			8,098
Acquired net operating losses		13,456			13,662			13,332
Other, net		1,949			1,486			2,568
Total gross deferred tax assets		97,447			82,027			79,650
Less valuation allowance		(474	)		(474	)		(474	)
Net deferred tax asset		96,973			81,553			79,176
Deferred tax liabilities:
Accelerated depreciation on premises and equipment		18,921			18,028			18,653
Investment securities AFS		3,798			5,022			7,692
Acquired intangible assets		10,407			10,847			9,743
Total gross deferred tax liabilities		33,126			33,897			36,088
Net deferred tax assets	$	63,847		$	47,656		$	43,088

Net operating losses were acquired in the Bancshares, Summit and Intervest acquisitions and the Company’s 2013 acquisition of The First National Bank of Shelby (“FNB Shelby”). The net operating losses from the Bancshares transaction total $15.7 million at June 30, 2015 and will expire at various dates from 2030 through 2034. The net operating losses acquired from the Summit transaction were utilized during 2014. The net operating losses acquired in the Intervest transaction totaled $6.3 million at June 30, 2015 and will expire at various dates from 2030 through 2035. The net operating losses from the FNB Shelby transaction totaled $20.0 million at June 30, 2015, of which $12.5 million will expire in 2032 and $7.5 million will expire in 2033.

At June 30, 2015 and 2014 and December 31, 2014, the Company had a deferred tax valuation allowance of approximately $0.5 million to reflect its assessment that the realization of the benefits from the recovery of certain acquired net operating losses are expected to be subject to limitations under section 382 of the Internal Revenue Code.

To the extent that additional information becomes available regarding the settlement or recovery of acquired net operating loss carryforwards or assets with built-in losses acquired in any of the Company’s previous acquisitions, management may be required to make adjustments to its deferred tax asset valuation allowance, which adjustments could affect goodwill or deferred income tax expense (benefit).

22

8. Supplemental Data for Cash Flows

The following table provides supplemental cash flow information for the periods indicated.

	Six Months Ended
	June 30,
	2015			2014
	(Dollars in thousands)
Cash paid during the period for:
Interest	$	13,031		$	9,808
Taxes		34,024			17,690
Supplemental schedule of non-cash investing and financing activities:
Net change in unrealized gains/losses on investment securities AFS		(10,218	)		22,506
Loans and premises and equipment transferred to foreclosed assets		9,797			31,013
Loans advanced for sales of foreclosed assets		0			258
Unsettled AFS investment security purchases		4,453			1,465
Unsettled AFS investment security sales		0			1,815
Unsettled loan sales		14,361			0
Unsettled loan purchases		18,269			0
Common stock issued in merger and acquisition transactions		238,476			166,315

9. Guarantees and Commitments

Outstanding standby letters of credit are contingent commitments issued by the Company generally to guarantee the performance of a customer in third party arrangements. The maximum amount of future payments the Company could be required to make under these guarantees at June 30, 2015 was $13.3 million. The Company holds collateral to support guarantees when deemed necessary. Collateralized commitments at June 30, 2015 totaled $13.2 million.

At June 30, 2015, the Company had outstanding commitments to extend credit, excluding mortgage interest rate lock commitments, totaling $4.0 billion. The following table shows the contractual maturities of outstanding commitments to extend credit as of the date indicated.

Contractual Maturities at June 30, 2015
Maturity	Amount
(Dollars in thousands)
2015	$	91,624
2016		358,317
2017		1,715,962
2018		1,356,777
2019		170,419
Thereafter		312,844
Total	$	4,005,943

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10. Subordinated Debentures

At June 30, 2015, the Company had the following issues of trust preferred securities and subordinated debentures owed to the Trusts.

	Subordinated Debentures Owed to Trust		Unamortized Discount at June 30, 2015			Carrying Value of Subordinated Debentures at June 30, 2015		Trust Preferred Securities of the Trusts		Contractual Interest Rate at June 30, 2015
	(Dollars in thousands)
Ozark II	$	14,433	$	0		$	14,433	$	14,000		3.18	%
Ozark III		14,434		0			14,434		14,000		3.24
Ozark IV		15,464		0			15,464		15,000		2.50
Ozark V		20,619		0			20,619		20,000		1.89
Intervest II		15,464		(678	)		14,786		15,000		3.23
Intervest III		15,464		(785	)		14,679		15,000		3.07
Intervest IV		15,464		(1,428	)		14,036		15,000		2.68
Intervest V		10,310		(1,358	)		8,952		10,000		1.94
	$	121,652	$	(4,249	)	$	117,403	$	118,000

On February 10, 2015, in conjunction with the Intervest acquisition, the Company acquired the Intervest Trusts with outstanding subordinated debentures totaling $56.7 million and related trust preferred securities totaling $55.0 million. On the date of such acquisition, the Company recorded the assumed subordinated debentures owed to the Intervest Trusts at estimated fair value of $52.2 million, based on an independent third party valuation, to reflect a current market interest rate for comparable obligations. The fair value adjustment of $4.5 million is being amortized, using a level-yield methodology over the estimated holding period of approximately eight years, as an increase in interest expense of the subordinated debentures owed to the Intervest Trusts. In addition to the subordinated debentures of the Intervest Trusts, the Company also acquired $1.7 million of trust common equity issued by the Intervest Trusts.

The trust preferred securities issued by Intervest Trust II and the related subordinated debentures bear interest, adjustable quarterly, at 90-day London Interbank Offered Rates (“LIBOR”) plus 2.95% and contain a final maturity of September 17, 2033. The trust preferred securities issued by Intervest Trust III and the related subordinated debentures bear interest, adjustable quarterly, at 90-day LIBOR plus 2.79% and contain a final maturity of March 17, 2034. The trust preferred securities issued by Intervest Trust IV and the related subordinated debentures bear interest, adjustable quarterly, at 90-day LIBOR plus 2.40% and contain a final maturity of September 20, 2034. The trust preferred securities issued by Intervest Trust V and the related subordinated debentures bear interest, adjustable quarterly, at 90-day LIBOR plus 1.65% and contain a final maturity of December 15, 2036.

At June 30, 2015, the Company had an aggregate of $121.7 million of subordinated debentures outstanding (with an aggregate carrying value of $117.4 million) and had an asset of $3.7 million representing its investment in the common equity issued by the Trusts. The sole assets of the Trusts are the adjustable rate debentures and the liabilities of the Trusts are the trust preferred securities. At June 30, 2015 and 2014, the Trusts had aggregate common equity of $3.7 million and $1.9 million, respectively, and did not have any restricted net assets. The Company has, through various contractual arrangements or by operation of law, fully and unconditionally guaranteed all obligations of the Trusts with respect to the trust preferred securities. Additionally, there are no restrictions on the ability of the Trusts to transfer funds to the Company in the form of cash dividends, loans or advances. The Company has the option to defer interest payments on the subordinated debentures from time to time for a period not to exceed five consecutive years. These trust preferred securities generally mature at or near the 30th anniversary date of each issuance. However, the trust preferred securities and related subordinated debentures may be prepaid at par, subject to regulatory approval.

11. Stock-Based Compensation

The Company has a nonqualified stock option plan for certain employees of the Company. This plan provides for the granting of nonqualified options to purchase shares of common stock in the Company. No option may be granted under this plan for less than the fair market value of the common stock, defined by the plan as the average of the highest reported asked price and the lowest reported bid price, on the date of the grant. The benefits or amounts that may be received by or allocated to any particular officer or employee of the Company under this plan will be determined in the sole discretion of the personnel and compensation committee of the Company’s board of directors. While the vesting period and the termination date for the employee plan options are determined when options are granted, all such employee options outstanding at June 30, 2015 were issued with a vesting date three years after issuance and an expiration date seven years after issuance.

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During the second quarter of 2015, the Company adopted the Bank of the Ozarks, Inc. Non-Employee Director Stock Plan (the “Director Plan”) that provides for awards of common stock to eligible non-employee directors. The Director Plan grants to each director who is not otherwise an employee of the Company, or any subsidiary, shares of common stock on the day of his or her election as director of the Company at each annual shareholders meeting, or any special meeting called for the purpose of electing a director or directors of the Company, and upon appointment for the first time as director of the Company. The number of shares of common stock to be awarded will be the equivalent of $25,000 worth of shares of common stock based on the average of the highest reported asked price and lowest reported bid price on the grant date. The common stock awarded under this plan is fully vested on the grant date. The aggregate number of shares of common stock which may be issued as awards under this plan will not exceed 50,000 shares, subject to certain adjustments. For the three months ended June 30, 2015, the Company issued 7,657 shares of common stock and incurred $0.3 million in stock-based compensation expense related to common-stock awards issued under the Director Plan.

Prior to the adoption of the Director Plan, the Company had a nonqualified stock option plan for non-employee directors. No options were granted under this plan during the six months ended June 30, 2015. All options previously granted under this plan were exercisable immediately and expire ten years after issuance.

All shares issued in connection with options exercised under both the employee and non-employee director stock option plans were in the form of newly issued shares.

The following table summarizes stock option activity for both the employee and non-employee director stock option plans for the period indicated.

	Options			Weighted- Average Exercise Price/Share		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Six Months Ended June 30, 2015:
Outstanding – January 1, 2015		1,859,350		$	23.49
Granted		2,000			40.82
Exercised		(99,050	)		10.06
Forfeited		(74,350	)		26.13
Outstanding – June 30, 2015		1,687,950			24.18		5.3	$	36,400	(1)
Fully vested and exercisable – June 30, 2015		315,550		$	14.17		4.6	$	9,966	(1)
Expected to vest in future periods		1,248,680
Fully vested and expected to vest – June 30, 2015(2)		1,564,230		$	23.58		5.2	$	34,676	(1)

(1) Based on closing price of $45.75 per share on June 30, 2015.

(2) At June 30, 2015, the Company estimated that outstanding options to purchase 123,720 shares of its common stock would not vest and would be forfeited prior to their vesting date.

Intrinsic value for stock options is defined as the amount by which the current market price of the underlying stock exceeds the exercise price. For those stock options where the exercise price exceeds the current market price of the underlying stock, the intrinsic value is zero. The total intrinsic value of options exercised during the three months ended June 30, 2015 and 2014 was $1.4 million and $0.2 million, respectively. The total intrinsic value of options exercised during the six months ended June 30, 2015 and 2014 was $2.8 million and $4.1 million, respectively.

Options to purchase 2,000 shares and 52,000 split-adjusted shares of the Company’s stock were issued during the six months ended June 30, 2015 and 2014, respectively. Stock-based compensation expense for stock options included in non-interest expense was $0.6 million and $0.8 million for the three months ended June 30, 2015 and 2014, respectively, and $1.2 million for both six month periods ended June 30, 2015 and 2014. Total unrecognized compensation cost related to non-vested stock option grants was $3.7 million at June 30, 2015 and is expected to be recognized over a weighted-average period of 2.0 years.

The Company has a restricted stock and incentive plan whereby all officers and employees of the Company are eligible to receive awards of restricted stock, restricted stock units or performance awards. The benefits or amounts that may be received by or allocated to any particular officer or employee of the Company under this plan will be determined in the sole discretion of the Company’s board of directors or its personnel and compensation committee. Shares of common stock issued under the plan may be shares of original issuance or shares held in treasury that have been reacquired by the Company. While the vesting period for awards under the plan is determined by the personnel and compensation committee at the time of grant, all restricted stock awards granted under the plan have a vesting date of three years after issuance.

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The following table summarizes non-vested restricted stock activity for the period indicated.

	Six Months Ended June 30, 2015
Outstanding – January 1, 2015		444,700
Granted		245,300
Forfeited		(29,875	)
Vested		0
Outstanding – June 30, 2015		660,125
Weighted-average grant date fair value	$	25.27

The fair value of the restricted stock awards is amortized to compensation expense over the vesting period and is based on the market price of the Company’s common stock at the date of grant multiplied by the number of shares granted that are expected to vest. Stock-based compensation expense for restricted stock included in non-interest expense was $1.4 million and $0.9 million for the quarters ended June 30, 2015 and 2014, respectively, and $2.7 million and $1.8 million for the six months ended June 30, 2015 and 2014, respectively. Unrecognized compensation expense for non-vested restricted stock awards was $9.5 million at June 30, 2015 and is expected to be recognized over a weighted-average period of 2.2 years.

12. Fair Value Measurements

The Company measures certain of its assets and liabilities on a fair value basis using various valuation techniques and assumptions, depending on the nature of the asset or liability. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, fair value is used either annually or on a non-recurring basis to evaluate certain assets and liabilities for impairment or for disclosure purposes. The Company had no liabilities that were accounted for at fair value at June 30, 2015 or 2014 or at December 31, 2014.

The Company applies the following fair value hierarchy.

Level 1 –	Quoted prices for identical instruments in active markets.
Level 2 –	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable.
Level 3 –	Instruments whose inputs are unobservable.

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The following table sets forth the Company’s assets, as of the dates indicated, that are accounted for at fair value.

	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
June 30, 2015:
Investment securities AFS(1):
Obligations of state and political subdivisions	$	0	$	488,158	$	18,757	$	506,915
U.S. Government agency securities		0		260,753		0		260,753
Corporate obligations		0		3,574		0		3,574
CRA qualified investment fund		1,020		0		0		1,020
Total investment securities AFS		1,020		752,485		18,757		772,262
Impaired non-purchased loans and leases		0		0		12,807		12,807
Impaired purchased loans		0		0		12,347		12,347
Foreclosed assets		0		0		25,973		25,973
Total assets at fair value	$	1,020	$	752,485	$	69,884	$	823,389
December 31, 2014:
Investment securities AFS(1):
Obligations of state and political subdivisions	$	0	$	553,808	$	19,401	$	573,209
U.S. Government agency securities		0		251,233		0		251,233
Corporate obligations		0		654		0		654
Total investment securities AFS		0		805,695		19,401		825,096
Impaired non-purchased loans and leases		0		0		19,480		19,480
Impaired purchased loans		0		0		14,040		14,040
Foreclosed assets		0		0		37,775		37,775
Total assets at fair value	$	0	$	805,695	$	90,696	$	896,391
June 30, 2014:
Investment securities AFS(1):
Obligations of state and political subdivisions	$	0	$	595,965	$	20,600	$	616,565
U.S. Government agency securities		0		258,311		0		258,311
Corporate obligations		0		685		0		685
Total investment securities AFS		0		854,961		20,600		875,561
Impaired non-purchased loans and leases		0		0		16,240		16,240
Impaired purchased loans		0		0		21,205		21,205
Foreclosed assets		0		0		56,356		56,356
Total assets at fair value	$	0	$	854,961	$	114,401	$	969,362

(1) Does not include $10.0 million at June 30, 2015; $14.2 million at December 31, 2014 and $16.6 million at June 30, 2014 of FHLB and FNBB equity securities that do not have readily determinable fair values and are carried at cost.

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The following table presents information related to Level 3 non-recurring fair value measurements as of the date indicated.

Description	Fair Value at June 30, 2015		Technique	Unobservable Inputs
(Dollars in thousands)
Impaired non-purchased loans and leases	$	12,807	Third party appraisal(1) or discounted cash flows	1.	Management discount based on underlying collateral characteristics and market conditions
				2.	Life of loan
Impaired purchased loans	$	12,347	Third party appraisal(1) and/or discounted cash flows	1.	Management discount based on underlying collateral characteristics and market conditions
				2.	Life of loan
Foreclosed assets	$	25,973	Third party appraisal,(1) broker price opinions and/or discounted cash flows	1.	Management discount based on asset characteristics and market conditions
				2.	Discount rate
				3.	Holding period

(1) The Company utilizes valuation techniques consistent with the market, cost, and income approaches, or a combination thereof in determining fair value.

The following methods and assumptions are used to estimate the fair value of the Company’s assets and liabilities that are accounted for at fair value.

Investment securities – The Company utilizes independent third parties as its principal pricing sources for determining fair value of investment securities which are measured on a recurring basis. As a result, the Company receives estimates of fair values from at least two independent pricing sources for the majority of its individual securities within its investment portfolio. For investment securities traded in an active market, fair values are based on quoted market prices if available. If quoted market prices are not available, fair values are based on quoted market prices of comparable securities, broker quotes, comprehensive interest rate tables and pricing matrices or a combination thereof. For investment securities traded in a market that is not active, fair value is determined using unobservable inputs. All fair value estimates of the Company’s investment securities are reviewed and approved on a quarterly basis by its Investment Portfolio Manager and its Chief Financial Officer.

The Company has determined that certain of its investment securities had a limited to non-existent trading market at June 30, 2015. As a result, the Company considers these investments as Level 3 in the fair value hierarchy. Specifically, the fair values of certain obligations of state and political subdivisions consisting primarily of certain unrated private placement bonds (the “private placement bonds”) in the amount of $18.8 million at June 30, 2015 were calculated using Level 3 hierarchy inputs and assumptions as the trading market for such securities was determined to be “not active.” This determination was based on the limited number of trades or, in certain cases, the existence of no reported trades for the private placement bonds. The private placement bonds are generally prepayable at par value at the option of the issuer. As a result, management believes the private placement bonds should be individually valued at the lower of (i) the matrix pricing provided by the Company’s third party pricing services for comparable unrated municipal securities or (ii) par value. At June 30, 2015, the third parties’ pricing matrices valued the Company’s portfolio of private placement bonds at $18.8 million which was equal to the aggregate par value of the private placement bonds. Accordingly, at June 30, 2015, the Company reported the private placement bonds at $18.8 million.

Impaired non-purchased loans and leases – Fair values are measured on a nonrecurring basis and are based on the underlying collateral value of the impaired loan or lease, net of holding and selling costs, or the estimated discounted cash flows for such loan or lease. At June 30, 2015 the Company had reduced the carrying value of its impaired loans and leases (all of which are included in nonaccrual loans and leases) by $5.0 million to the estimated fair value of $12.8 million. The $5.0 million adjustment to reduce the carrying value of impaired loans and leases to estimated fair value consisted of $3.6 million of partial charge-offs and $1.4 million of specific loan and lease loss allocations.

Impaired purchased loans – Impaired purchased loans are measured at fair value on a non-recurring basis. As of June 30, 2015, the Company had identified purchased loans where the expected performance had deteriorated from management’s performance expectations established in conjunction with the determination of the Day 1 Fair Values or where current information indicates it is probable that the Company will not be able to collect all amounts according to the contractual terms thereof (for purchased loans without evidence of credit deterioration at date of acquisition) or the expected performance of such loans had deteriorated from management’s performance expectations established in conjunction with the determination of the Day 1 Fair Values or since management’s most recent review of such portfolio’s performance (for purchased loans with

28

evidence of credit deterioration at date of acquisition). As a result, the Company recorded partial charge-offs totaling $0.4 million and $1.1 million during the second quarter of 2015 and 2014, respectively, and $1.7 million and $1.3 million during the first six months of 2015 and 2014, respectively. The Company also recorded provision for loan and lease losses of $0.4 million and $1.1 million during the second quarter of 2015 and 2014, respectively, and $1.7 million and $1.3 million during the first six months of 2015 and 2014, respectively, to cover such charge-offs. In addition to these charge-offs, the Company transferred certain of these purchased loans to foreclosed assets. As a result of these actions, at June 30, 2015, the Company had $12.3 million of impaired purchased loans.

Foreclosed assets – Repossessed personal properties and real estate acquired through or in lieu of foreclosure are measured on a non-recurring basis and are initially recorded at the lesser of current principal investment or fair value less estimated cost to sell (generally 8% to 10%) at the date of repossession or foreclosure. Purchased foreclosed assets are initially recorded at Day 1 Fair Values. In estimating such Day 1 Fair Values, management considered a number of factors including, among others, appraised value, estimated selling price, estimated holding periods and net present value (calculated using discount rates ranging from 8.0% to 9.5% per annum) of cash flows expected to be received. Valuations of these assets are periodically reviewed by management with the carrying value of such assets adjusted to the then estimated fair value net of estimated selling costs, if lower, until disposition. Fair values of foreclosed and repossessed assets are generally based on third party appraisals, broker price opinions or other valuations of the property.

The following table presents additional information for the periods indicated about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value.

	Investment Securities AFS
	(Dollars in thousands)
Balance – January 1, 2015	$	19,401
Total realized gains (losses) included in earnings		0
Total unrealized gains (losses) included in comprehensive income		(271	)
Paydowns and maturities		(373	)
Sales		0
Transfers in and/or out of Level 3		0
Balance – June 30, 2015	$	18,757
Balance – January 1, 2014	$	18,682
Total realized gains (losses) included in earnings		0
Total unrealized gains (losses) included in comprehensive income		403
Acquired		1,907
Paydowns and maturities		(392	)
Sales		0
Transfers in and/or out of Level 3		0
Balance – June 30, 2014	$	20,600

13. Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of financial instruments.

Cash and due from banks – For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Investment securities – The Company utilizes independent third parties as its principal pricing sources for determining fair value of investment securities which are measured on a recurring basis. As a result, the Company receives estimates of fair values from at least two independent pricing sources for the majority of its individual securities within its investment portfolio. For investment securities traded in an active market, fair values are based on quoted market prices if available. If quoted market prices are not available, fair values are based on quoted market prices of comparable securities, broker quotes, comprehensive interest rate tables, pricing matrices or a combination thereof. For investment securities traded in a market that is not active, fair value is determined using unobservable inputs. All fair value estimates of the Company’s investment securities are reviewed and approved on a quarterly basis by its Investment Portfolio Manager and its Chief Financial Officer. The Company’s investments in FHLB and FNBB equity securities totaling $10.0 million at June 30, 2015, $14.2 million at December 31, 2014 and $16.6 million at June 30, 2014, do not have readily determinable fair values and are carried at cost.

Loans and leases – The fair value of loans and leases, including purchased loans, is estimated by discounting the contractual cash flows to be received in future periods using the current rate at which similar loans or leases would be made to borrowers or lessees with similar credit ratings and for the same remaining maturities.

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Deposit liabilities – The fair value of demand deposits, savings accounts, money market deposits and other transaction accounts is the amount payable on demand at the reporting date. The fair value of fixed maturity time deposits is estimated using the rate currently available for deposits of similar remaining maturities.

Repurchase agreements – For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Other borrowed funds – For these short-term instruments, the carrying amount is a reasonable estimate of fair value. The fair value of long-term instruments is estimated based on the current rates available to the Company for borrowings with similar terms and remaining maturities.

Subordinated debentures – The fair values of these instruments are based primarily upon discounted cash flows using rates for securities with similar terms and remaining maturities.

Off-balance sheet instruments – The fair values of commercial loan commitments and letters of credit are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, and were not material at June 30, 2015 and 2014 or at December 31, 2014.

The fair values of certain of these instruments were calculated by discounting expected cash flows, which contain numerous uncertainties and involve significant judgments by management. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company did not know whether the fair values represent values at which the respective financial instruments could be sold individually or in the aggregate.

The following table presents the carrying amounts and estimated fair values for the dates indicated and the fair value hierarchy of the Company’s financial instruments.

		June 30,
		2015				2014				December 31, 2014
	Fair Value Hierarchy	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
						(Dollars in thousands)
Financial assets:
Cash and cash equivalents	Level 1	$	514,890	$	514,890	$	110,688	$	110,688	$	150,203	$	150,203
Investment securities AFS	Levels 1, 2 and 3		782,277		782,277		892,129		892,129		839,321		839,321
Loans and leases, net of ALLL	Level 3		6,537,222		6,469,690		4,528,696		4,480,221		5,074,899		5,042,831
FDIC loss share receivable	Level 3		0		0		50,679		50,600		0		0
Financial liabilities:
Demand, savings and interest bearing transaction deposits	Level 1	$	4,966,330	$	4,966,330	$	3,807,139	$	3,807,139	$	4,038,443	$	4,038,443
Time deposits	Level 2		2,120,969		2,142,807		1,176,758		1,177,108		1,457,939		1,463,590
Repurchase agreements with customers	Level 1		70,011		70,011		55,999		55,999		65,578		65,578
Other borrowings	Level 2		161,931		171,614		280,875		304,381		190,855		203,493
FDIC clawback payable	Level 3		0		0		26,533		26,533		0		0
Subordinated debentures	Level 2		117,403		66,679		64,950		32,554		64,950		39,103

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14. Repurchase Agreements With Customers

At June 30, 2015 and 2014 and December 31, 2014, securities sold under agreements to repurchase (“repurchase agreements”) totaled $70.0 million, $56.0 million and $65.6 million, respectively. Securities utilized as collateral for repurchase agreements are primarily U.S. Government agency mortgage-backed securities and are maintained by the Company’s safekeeping agents. These securities are reviewed by the Company on a daily basis, and the Company may be required to provide additional collateral due to changes in the fair market value of these securities. The terms of the Company’s repurchase agreements are continuous but may be cancelled at any time by the Company or the customer.

15. Changes In and Reclassifications From Accumulated Other Comprehensive Income (“AOCI”)

The following table presents changes in AOCI for the periods indicated.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(Dollars in thousands)
Beginning balance of AOCI – unrealized gains and losses on investment securities AFS	$	14,367		$	3,211		$	14,132		$	(3,672	)
Other comprehensive income (loss):
Unrealized gains and losses on investment securities AFS		(10,091	)		11,199			(7,600	)		22,529
Tax effect of unrealized gains and losses on investment securities AFS		3,844			(4,393	)		3,157			(8,837	)
Amounts reclassified from AOCI		(84	)		(18	)		(2,618	)		(23	)
Tax effect of amounts reclassified from AOCI		32			7			997			9
Total other comprehensive income (loss)		(6,299	)		6,795			(6,064	)		13,678
Ending balance of AOCI – unrealized gains and losses on investment securities AFS	$	8,068		$	10,006		$	8,068		$	10,006

Amounts reclassified from AOCI are included in net gains on investment securities and the tax effect of amounts reclassified from AOCI are included in provision for income tax in the consolidated statements of income. The amounts reclassified from AOCI relate entirely to unrealized gains/losses on investment securities AFS.

16. Other Operating Expenses

The following table is a summary of other operating expenses for the periods indicated.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
	(Dollars in thousands)
Salaries and employee benefits	$	22,646	$	18,831	$	45,243	$	36,520
Net occupancy and equipment		7,344		5,707		14,635		10,751
Other operating expenses:
Postage and supplies		1,014		852		1,929		1,623
Advertising and public relations		586		636		1,169		1,036
Telecommunication services		1,616		1,191		2,964		2,207
Professional and outside services		2,526		2,353		6,912		4,526
Software and data processing		766		1,662		1,515		2,799
Travel and meals		821		629		1,617		1,169
FDIC insurance		900		555		1,650		1,105
FDIC and state assessments		331		218		641		431
ATM expense		543		307		1,251		516
Loan collection and repossession expense		1,020		1,528		2,753		1,987
Writedowns of foreclosed and other assets		235		798		2,427		877
Amortization of intangibles		1,640		1,119		3,236		1,932
FHLB prepayment penalty		0		0		2,480		0
Other		1,736		1,492		3,486		7,854
Total non-interest expense	$	43,724	$	37,878	$	93,908	$	75,333

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17. Subsequent Event

On August 5, 2015, the Company completed the acquisition of Bank of the Carolinas Corporation (“BCAR”) and its wholly-owned subsidiary Bank of the Carolinas for an aggregate of approximately 1.4 million shares of common stock (plus cash in lieu of fractional shares) in a transaction valued at approximately $65.4 million. The acquisition of BCAR expands the Company’s operations in North Carolina by adding eight full service branch locations in Advance, Asheboro, Concord, Harrisburg, Landis, Lexington, Mocksville and Winston-Salem. At June 30, 2015, BCAR had approximately $345 million of total assets, $277 million of loans, $296 million of deposits and $48 million of total common stockholders’ equity.

18. Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers.”ASU 2014-09 provides guidance that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating the impact, if any, ASU 2014-09 will have on its financial position, results of operations, and its financial statement disclosures.

In June 2014, the FASB issued ASU 2014-11 “Transfers and Servicing (Topic 860).”ASU 2014-11 amends the accounting guidance for repo-to-maturity transactions and requires such transactions to be accounted for as secured borrowings. In addition, ASU 2014-11 requires enhanced disclosures related to the collateral pledged, maturity and risk associated with repurchase agreements. The Company adopted the provision of ASU 2014-11 beginning April 1, 2015. The adoption of ASU 2014-11 had no significant impact on the Company’s financial position or results of operations; however, the additional disclosures required by ASU 2014-11 are included in Note 14-Repurchase Agreement with Customers.

In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20) – Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” ASU 2015-01 eliminates from GAAP the concept of extraordinary items, which, among other things, required an entity to segregate extraordinary items considered to be unusual and infrequent from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. ASU 2015-01 is effective for interim and annual periods beginning after December 15, 2015. ASU 2015-01 is not expected to have a significant impact on the Company’s financial position, results of operations and its financial statement disclosures.

In February 2015, FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” which amends the consolidation requirements of ASU 810 by changing the consolidation analysis required under GAAP. The revised guidance amends the consolidation analysis based on certain fee arrangements or relationships to the reporting entity and, for limited partnerships, requires entities to consider the limited partner’s rights relative to the general partner. ASU 2015-02 is effective for annual and interim periods beginning after December 15, 2015. The Company is currently evaluating the impact, if any, ASU 2015-02 will have on its financial position, results of operations, and its financial statement disclosures.

In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. ASU 2015-03 is effective for interim and annual periods beginning after December 15, 2015. ASU 2015-03 is not expected to have a significant impact on the Company’s financial position, results of operations and its financial statement disclosures.

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

Unless this quarterly report on Form 10-Q indicates otherwise, or the context otherwise requires, the terms “we,” “our,” “us,” and “the Company,” as used herein refer to Bank of the Ozarks, Inc. and its subsidiaries, including Bank of the Ozarks, which we sometimes refer to as “Bank of the Ozarks,” “our bank subsidiary,” or “the Bank.”

FORWARD-LOOKING INFORMATION

This quarterly report on Form 10-Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), other filings made by us with the Securities and Exchange Commission (“SEC”) and other oral and written statements or reports by us and our management include certain forward-looking statements 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, management at the time. Forward-looking statements include, without limitation, statements about economic, real estate market, competitive, employment, credit market and interest rate conditions and our plans, goals, beliefs, expectations, thoughts, estimates and outlook for the future with respect to our revenue growth; net income and earnings per common share; net interest margin; net interest income; non-interest income, including service charges on deposit accounts, mortgage lending and trust income, gains (losses) on investment securities and sales of other assets; gains on merger and acquisition transactions; other income from purchased loans; non-interest expense; efficiency ratio; anticipated future operating results and financial performance; asset quality and asset quality ratios, including the effects of current economic and real estate market conditions; nonperforming loans and leases; nonperforming assets; the impact from termination of the loss share agreement; net charge-offs and net charge-off ratios; provision and allowance for loan and lease losses; past due loans and leases; current or future litigation; interest rate sensitivity, including the effects of possible interest rate changes; future growth and expansion opportunities including plans for making additional acquisitions; problems with integrating or managing acquisitions; the effect of the announcements or completion of any pending or future mergers or acquisitions on customer relationships and operating results; plans for opening new offices or relocating or closing existing offices; opportunities and goals for future market share growth; expected capital expenditures; loan, lease and deposit growth, including growth from unfunded closed loans; changes in the volume, yield and value of our investment securities portfolio; availability of unused borrowings and other similar forecasts and statements of expectation. Words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “hope,” “intend,” “look,” “may,” “plan,” “project,” “seek,” “target,” “trend,” “will,” “would,” and similar expressions, as they relate to us or our management, identify forward-looking statements.

Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by us and our management due to certain risks, uncertainties and assumptions. Certain factors that may affect our future results include, but are not limited to, potential delays or other problems in implementing our growth and expansion strategy including delays in identifying satisfactory sites, hiring or retaining qualified personnel, obtaining regulatory or other approvals, obtaining permits and designing, constructing and opening new offices; the ability to enter into and/or close additional acquisitions; problems with, or additional expenses relating to, integrating or managing acquisitions; the availability of capital; the ability to attract new or retain existing or acquired deposits; the ability to achieve growth in loans and leases, including growth from unfunded closed loans; the ability to generate future revenue growth or to control future growth in non-interest expense; interest rate fluctuations, including changes in the yield curve between short-term and long-term interest rates; competitive factors and pricing pressures, including their effect on our net interest margin; general economic, unemployment, credit market and real estate market conditions, and the effect of such conditions on the creditworthiness of borrowers and lessees, collateral values, the value of investment securities and asset recovery values; changes in legal and regulatory requirements; recently enacted and potential legislation and regulatory actions, and the costs and expenses to comply with new legislation and regulatory actions, including legislation and regulatory actions intended to stabilize economic conditions and credit markets, strengthen the capital of financial institutions, increase regulation of the financial services industry and protect homeowners or consumers; changes in U.S. government monetary and fiscal policy; possible further downgrade of U.S. Treasury securities; the ability to keep pace with technological changes, including changes regarding cyber security; an increase in the incidence or severity of fraud, illegal payments, security breaches and other illegal acts impacting our bank subsidiary or our customers; adoption of new accounting standards or changes in existing standards; and adverse results in current or future litigation or regulatory examinations as well as other factors described in this quarterly report on Form 10-Q or as detailed from time to time in the other reports we file with the SEC, including those factors included in the disclosures under the heading “Forward-Looking Information” and “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K for the year ended December 31, 2014. Should one or more of the foregoing risks materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described in the forward-looking statements. We disclaim any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information or otherwise.

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SELECTED AND SUPPLEMENTAL FINANCIAL DATA

The following tables set forth selected unaudited consolidated financial data as of and for the three months and six months ended June 30, 2015 and 2014 and supplemental unaudited quarterly financial data for each of the most recent eight quarters beginning with the third quarter of 2013 through the second quarter of 2015. These tables are qualified in their entirety by our consolidated financial statements and related notes presented elsewhere in this quarterly report on Form 10-Q. The calculations of our tangible book value per common share and our annualized returns on average tangible common stockholders’ equity and the reconciliations to generally accepted accounting principles (“GAAP”) are included in this MD&A under “Capital Resources and Liquidity” in this quarterly report on Form 10-Q.

Selected Consolidated Financial Data - Unaudited

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
	(Dollars in thousands, except per share amounts)
Income statement data:
Interest income	$	100,103	$	69,760	$	191,558	$	126,818
Interest expense		6,347		4,959		12,312		9,620
Net interest income		93,756		64,801		179,246		117,198
Provision for loan and lease losses		4,308		5,582		10,623		6,887
Non-interest income		23,270		17,388		52,337		37,749
Non-interest expense		43,724		37,878		93,908		75,333
Net income available to common stockholders		44,776		26,486		84,670		51,762
Common share and per common share data:
Earnings – diluted	$	0.51	$	0.34	$	0.98	$	0.68
Book value		13.93		10.67		13.93		10.67
Tangible book value		12.19		9.31		12.19		9.31
Dividends		0.135		0.115		0.265		0.225
Weighted-average diluted shares outstanding (thousands)		87,515		77,466		86,001		75,981
End of period shares outstanding (thousands)		86,811		79,662		86,811		79,662
Balance sheet data at period end:
Total assets	$	8,710,435	$	6,297,975	$	8,710,435	$	6,297,975
Non-purchased loans and leases		4,767,123		3,171,585		4,767,123		3,171,585
Purchased loans(1)		1,826,848		1,404,069		1,826,848		1,404,069
Allowance for loan and lease losses		56,749		46,958		56,749		46,958
Foreclosed assets(1)		25,973