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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2000
( ) 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 (I.R.S. Employer
incorporation or organization) Identification Number)
12615 CHENAL PARKWAY, P. O. BOX 8811, LITTLE ROCK, ARKANSAS 72231-8811
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (501) 978-2265
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
None N/A
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share
(Title of Class)
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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ( )
State the aggregate market value of the Registrant's common stock held
by non-affiliates: $28,672,909 (based upon the average bid and asked prices
quoted on the Nasdaq National Market on March 1, 2001).
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practical date.
Class Outstanding at March 1, 2001
- --------------------------------------- --------------------------------
Common Stock, par value $0.01 per share 3,779,555
Documents incorporated by reference: Parts I, II and III of this Form
10-K incorporate certain information by reference from the Registrant's Annual
Report to Stockholders for the year ended December 31, 2000 and the Proxy
Statement for its 2001 annual meeting.
BANK OF THE OZARKS, INC.
FORM 10-K
December 31, 2000
INDEX
PART I. Financial Information Page
----
Item 1. Business 1
Item 2. Properties 12
Item 3. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of Security Holders 13
PART II.
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters 13
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 14
Item 8. Financial Statements and Supplementary Data 14
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 14
PART III.
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial Owners and
Management 14
Item 13. Certain Relationships and Related Transactions 15
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 15
Signatures 18
Part I
Item 1. BUSINESS
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General
Bank of the Ozarks, Inc. (the "Company") is an Arkansas business
corporation registered under the Bank Holding Company Act of 1956. The Company
owns a state chartered subsidiary bank, Bank of the Ozarks, which conducts
banking operations through 24 offices in 17 communities throughout northern,
western and central Arkansas. The Company also owns Ozark Capital Trust, a
Delaware business trust. At December 31, 2000 the Company had total assets of
$827 million, total loans of $511 million and total deposits of $678 million.
The Company provides a wide range of retail and commercial banking
services. Deposit services include checking, savings, money market, time
deposit and individual retirement accounts. Loan services include various types
of real estate, consumer, commercial, industrial and agricultural loans. The
Company also provides mortgage lending, cash management, trust services, safety
deposit boxes, real estate appraisals, credit related life and disability
insurance, ATMs, telephone banking, internet banking and debit cards.
In 1994 the Company initiated an expansion strategy, via de novo
branching, into target Arkansas markets. Since embarking on this strategy, the
Company has opened nineteen new offices in northern, western and central
Arkansas. In 2000 the Company slowed its expansion opening only one office in
Yellville, Arkansas.
The Company's de novo branching strategy initially focused on opening
branches in smaller communities throughout its market area. During the period
from 1994 through 1997 the Company opened a total of nine additional full
service offices including new offices in Marshall, Van Buren, Mulberry, Alma,
Paris, Bellefonte, Harrison and two offices in Clarksville, Arkansas.
In 1998 the Company added a new element to its growth strategy by
significantly expanding into two of Arkansas' largest metropolitan markets -
Little Rock/North Little Rock and Fort Smith. The Company originally entered
the Little Rock market in 1995, when it opened its corporate headquarters and a
small commercial lending office. In 1996 the Company opened a residential
mortgage lending office. In February 1998 the Company began full service
banking operations in Little Rock with the acquisition of a small savings and
loan with $9.4 million in deposits. In 1998 the Company also opened three more
Little Rock offices, including its new corporate headquarters which houses a
full-service banking center, corporate offices, mortgage lending center and full
service trust operations. In 1999 the Company opened two offices in North
Little Rock, Arkansas. The Company began a major expansion in a second
metropolitan market in September 1998 with the opening of a banking center in
Fort Smith.
The Company plans to continue its expansion in and around these
metropolitan markets. During the first half of 2001, the Company expects to
open two previously announced branches in the Otter Creek area of Little Rock
(its fifth Little Rock office) and on Zero Street in Fort Smith (its second Fort
Smith office). During the first quarter of 2001, the Company was given the
opportunity to open a branch in the new Wal-Mart Supercenter being constructed
in Bryant, Arkansas near Little Rock. The Company promptly received regulatory
approval for this branch which is expected to open around the end of the first
quarter of 2001. The Company expects to construct or acquire additional
branches in 2001 and future years as desirable opportunities become available.
Lending Activities
The Company's primary source of income is interest earned from its
loan portfolio and, to a lesser extent, earnings on its investment portfolio.
In underwriting loans, primary emphasis is placed on the borrower's financial
condition, including its ability to generate cash flow to support its debt
obligations and other cash expenses. Additionally, substantial consideration is
given to collateral value and marketability as well as the borrower's character,
reputation and other relevant factors. The Company's portfolio includes most
types of real estate loans, consumer loans, commercial and industrial loans,
agricultural loans and other types of loans. The vast majority of the
properties collateralizing the Company's mortgage loans are located within the
trade areas of the Company's offices.
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Real Estate Loans. The Company's portfolio of real estate loans
includes loans secured by residential 1-4 family, non-farm non-residential,
agricultural, construction and land development, and multifamily residential
(five or more) properties. Residential 1-4 family loans comprise the largest
portion of the Company's real estate loans. Non-farm non-residential loans
include those secured by real estate mortgages on owner occupied commercial
buildings of various types, leased commercial buildings, medical and nursing
facilities, underdeveloped raw land for commercial purposes, and other business
and industrial properties. Agricultural real estate loans include loans secured
by farmland and related improvements including loans guaranteed by the Farm
Service Agency. Agricultural real estate loans also include loans to
individuals which would normally be characterized as residential 1-4 family
loans but for the fact that the individual borrowers are primarily engaged in
the production of timber, poultry, livestock or crops. Real estate construction
and land development loans include loans with original maturities of sixty
months or less to finance land development or construction of industrial,
commercial, residential or farm buildings or additions or alterations to
existing structures.
The Company offers a variety of real estate loan products that are
generally amortized over five to thirty years, payable in monthly or other
periodic installments of principal and interest, and due and payable in full
(unless renewed) at a balloon maturity generally within one to five years.
Certain loans not subject to Arkansas' usury law, typically first mortgage
residential loans, may be structured as term loans with adjustable interest
rates (adjustable daily, every six months, annually, or at other regular
adjustment intervals usually not to exceed every five years) and without balloon
maturities.
Residential 1-4 family loans are underwritten primarily based on the
borrower's ability to repay, including prior credit history, and the value of
the collateral. Other real estate loans are underwritten based on the ability
of the property, in the case of income producing property, or the borrower's
business to generate sufficient cash flow to amortize the debt. Secondary
emphasis is placed upon collateral value and other factors. Loans
collateralized by real estate have generally been originated with loan to
appraised value ratios of not more than 89% for residential 1-4 family, 85% for
other single family residential and other improved property, 80% for
construction loans secured by commercial, multifamily and other non-residential
properties, 75% for land development loans and 65% for raw land loans.
The Company typically requires mortgage title insurance in the amount
of the loan and hazard insurance on improvements. Documentation requirements
vary depending on loan size, type, complexity and other factors.
Consumer Loans. The Company's portfolio of consumer loans generally
includes loans to individuals for household, family and other personal
expenditures. Proceeds from such loans are used to, among other things, fund
the purchase of automobiles, household appliances, furniture, trailers, boats,
mobile homes and for other similar purposes. Consumer loans made by the Company
are generally collateralized with terms typically ranging up to 72 months,
depending upon the nature of the collateral and size of the loan.
Consumer loans are attractive to the Company because they generally
have a short term with higher yielding interest rates. Such loans, however,
pose additional risks of collectibility and loss when compared to certain other
types of loans. The borrower's ability to repay is of primary importance in the
underwriting of consumer loans.
Commercial and Industrial Loans. The Company's commercial and
industrial loan portfolio consists of loans for commercial, industrial and
professional purposes including loans to fund working capital requirements (such
as inventory, floor plan and receivables financing), purchases of machinery and
equipment and other purposes. The Company offers a variety of commercial and
industrial loan arrangements, including term loans, balloon loans and lines of
credit with the purpose and collateral supporting a particular loan determining
its structure. These loans are offered to businesses and professionals for
short and medium terms on both a collateralized and uncollateralized basis. As
a general practice, the Company obtains as collateral a lien on furniture,
fixtures, equipment, inventory, receivables or other assets.
Commercial and industrial loans typically are underwritten on the
basis of the borrower's ability to make repayment from the cash flow of its
business and generally are collateralized by business assets. As a result, such
loans involve additional complexities, variables and risks and require more
thorough underwriting and servicing than other types of loans.
2
Agricultural (Non-Real Estate) Loans. The Company's portfolio of
agricultural (non-real estate) loans includes loans for financing agricultural
production, including loans to businesses or individuals engaged in the
production of timber, poultry, livestock or crops. The Company's agricultural
(non-real estate) loans are generally secured by farm machinery, livestock,
crops, vehicles or other agri-related collateral. A portion of the Company's
portfolio of agricultural (non-real estate) loans are loans to individuals which
would normally be characterized as consumer loans but for the fact that the
individual borrowers are primarily engaged in the production of timber, poultry,
livestock or crops.
Deposits
The Company offers an array of deposit products consisting of non-
interest bearing checking accounts, low cost deposit products, including
interest bearing transaction (such as checking) and savings accounts, and higher
cost deposit products, including money market accounts and time deposits.
The Company acts as depository for a number of state and local
governments and government agencies or instrumentalities. Such public fund
deposits are often subject to competitive bid and in many cases must be secured
by the Company's pledge of government agency or other securities. The Company's
deposits come primarily from within the Company's trade area. As of December 31,
2000 the Company had $1.6 million "brokered deposits," defined as deposits
which, to the knowledge of management of the Company, have been placed with the
bank subsidiary by a person who acts as a broker in placing such deposits on
behalf of others.
Other Banking Services
Trust Services. Prior to 1999 the Company provided trust services
from its Ozark, Arkansas office. As the Company expanded into larger markets, it
identified a need to expand the capabilities and services of this department. In
1998 the Company assembled a team of experienced trust officers at its main
office in Little Rock to handle personal trusts, corporate trusts, employee
benefit accounts and trust operations. In late 1998 this team commenced
operations in Little Rock and the Ozark trust operations were consolidated into
that office. In 1999 and 2000 revenue from trust services continued to grow as
this team began to develop increased business from the expanded trust
operations. As of December 31, 2000 total trust assets under management were
$114.5 million compared to $99.4 million as of December 31, 1999.
Cash Management Services. In 1998 the Company introduced cash
management products which are designed to provide a high level of specialized
support to the treasury operations of business customers. In 2000 the Company
continued to build its cash management products and added new commercial account
customers. Cash management has four basic functions: deposit handling, funds
concentration, funds disbursement and information reporting. The Company's cash
management services include automated clearing house services (e.g., direct
deposit, direct debit and electronic cash concentration and disbursement), zero
balance accounts, current and prior day transaction reporting, wholesale lockbox
services, automated credit line transfer and account analysis. The Company
expects to continue to increase the number of customers to which it provides
such services.
Mortgage Lending. In 1996 the Company expanded its residential
mortgage product line by offering long-term fixed and variable rate loans to be
sold on a servicing released basis in the secondary market. The Company
originates such loans through its Little Rock, Fort Smith and Harrison offices.
In 2000 rising rates impacted the volume of mortgage loans being refinanced and
the volume of loans on home purchases resulting in a substantial decline in the
Company's mortgage loan originations and mortgage lending income. Loan
originations dropped from $83.0 million in 1999 to $51.1 million in 2000.
Although this business is cyclical, it will continue to be an important
component of non-interest income.
Internet Banking. In 2000 the Company launched an On-Line Banking
service providing complete banking service over the Internet for both business
customers and consumers. Through this service individuals can access their
account information, pay bills, transfer funds, reorder checks, change addresses
and issue stop payment requests electronically. Businesses are offered more
advanced features that allow them to take care of most cash management functions
electronically and gives them better access to their account information on a
more timely basis. One thousand individuals signed up for the service in the
first 82 days and by year-end over 8% of the Company's personal checking
households were enrolled to do business on-line. The introduction of On-Line
Banking has also increased activity on the Company's website www.bankozarks.com,
------------------
which has seen a nine-fold increase in visitors to the site since the
introduction of the new service in May.
3
Competition
The banking industry in the Company's market area is highly
competitive. In addition to competing with other commercial and savings banks
and savings and loan associations, the Company competes with credit unions,
finance companies, mortgage companies, brokerage and investment banking firms,
asset-based non-bank lenders and many other financial service firms. Competition
is based upon interest rates offered on deposit accounts, interest rates charged
on loans, fees and service charges, the quality and scope of the services
rendered, the convenience of banking facilities and, in the case of loans to
commercial borrowers, relative lending limits.
A substantial number of the commercial banks operating in the
Company's market area are branches or subsidiaries of much larger organizations
affiliated with statewide, regional or national banking companies, and as a
result may have greater resources and lower costs of funds than the Company.
Additionally, the Company faces increased competition from de novo community
banks, including those with senior management who were previously with other
local banks or those controlled by investor groups with strong local business
and community ties. Management believes the Company will continue to be
competitive because of its strong commitment to quality customer service,
convenient local branches, active community involvement and competitive products
and pricing.
Employees
At December 31, 2000 the Company employed 292 full-time equivalent
employees. None of the employees were represented by any union or similar
group. The Company has not experienced any labor disputes or strikes arising
from any organized labor groups. The Company believes its employee relations
are good.
Executive Officers of Registrant
The following is a list of the executive officers of the Company:
George Gleason, age 47, Chairman and Chief Executive Officer. Mr.
Gleason has served the Company or its bank subsidiary as Chairman, Chief
Executive Officer and/or President since 1979. He holds a B.A. in Business and
Economics from Hendrix College and a J.D. from the University of Arkansas.
Mark Ross, age 45, President. Mr. Ross has served as President since
1986 and in various capacities for the bank subsidiary since 1980. He was
elected as a director of the Company in 1992. Mr. Ross holds a B.A. in Business
Administration from Hendrix College.
Paul Moore, age 54, Chief Financial Officer since 1995. From December
1989 to 1995 Mr. Moore served as secretary, secretary/treasurer or director of
eight privately held companies under common ownership of Frank Lyon Jr. and
family. Such companies engaged in diverse activities ranging from real estate to
agricultural to banking. He is a C.P.A. and received a B.S.B.A. in Banking,
Finance and Accounting from the University of Arkansas.
Danny Criner, age 46, President of the bank subsidiary's northern
division since 1990. Mr. Criner received a B.S.B.A. in Banking and Finance from
the University of Arkansas.
C. E. Dougan, age 54, President of the bank subsidiary's western
division since November 2000. Prior to that time Mr. Dougan served as a director
of the Company since February 1997. Mr. Dougan is co-owner of Mooney-Dougan,
Inc., specializing in residential real estate development, construction and
investments. Prior to 1997 Mr. Dougan, who has 28 years of banking experience,
served 12 years as president and chief executive officer of Mercantile Bank of
Crawford County, (formerly Peoples Bank & Trust Company of Van Buren and First
National Bank of Crawford County).
Jean Arehart, age 60, President of the bank subsidiary's mortgage
division since November 2000. She joined Bank of the Ozarks as Senior Vice
President in 1996 and was named an Executive Vice President in May 1997. In May
1999 Ms. Arehart resigned employment with the Company but returned to employment
in January 2000. Prior to 1996 Ms. Arehart served as Senior Vice President and a
member of the Executive Committee of Twin City Bank (formerly Mercantile Bank of
Arkansas, now Firstar Bank of Arkansas), where she worked from 1979 to February
1996.
4
Darrel Russell, age 47, Executive Vice President of the bank
subsidiary since May 1997. From 1992 to 1997 Mr. Russell served as Senior Vice
President of the bank subsidiary. He received a B.S.B.A. in Banking and Finance
from the University of Arkansas.
Susan Sisk Grobmyer, age 52, Executive Vice President of the bank
subsidiary since May 1997. Ms. Grobmyer joined the bank subsidiary in March 1997
as Senior Vice President. She previously served as a Senior Vice President of
Commercial Loans for Pulaski Bank from 1995 to 1997 and Twin City Bank (formerly
Mercantile Bank of Arkansas, now Firstar Bank of Arkansas) from 1978 to 1995.
Ms. Grobmyer attended the University of Arkansas at Monticello.
Randy Oates, age 57, Senior Vice President, Marketing since 1996. From
1992 to 1996 he served as Marketing Director for Commercial National Bank,
Shreveport, Louisiana. He received a B.S.B.A. in Marketing from the University
of Arkansas.
Aubrey Avants*, age 57, Executive Vice President, Trust of the bank
subsidiary since June 1998. From 1993 to June 1997 Mr. Avants served as Senior
Vice President, Trust Manager for First Bank of Arkansas, Jonesboro, Arkansas,
and from June 1997 to June 1998 he served as Senior Vice President, Trust for
First Commercial Bank, Memphis, Tennessee. Mr. Avants received an MBA from the
University of Tennessee and his undergraduate degree in Finance from the
University of Arkansas.
Unless otherwise noted, each of the foregoing persons serves in the
same position with both the Company and its bank subsidiary.
___________________________
* As of the date of this filing Mr. Avants is an executive officer however
effective March 23, 2001 Mr. Avants has resigned his position with the Company.
(The remainder of this page intentionally left blank)
5
SUPERVISION AND REGULATION
In addition to the generally applicable state and federal laws
governing businesses and employers, bank holding companies and banks are
extensively regulated under both federal and state law. With few exceptions,
state and federal banking laws have as their principal objective either the
maintenance of the safety and soundness of the Bank Insurance Fund ("BIF") and
Savings Association Insurance Fund ("SAIF") of the FDIC or the protection of
consumers or classes of consumers, rather than the specific protection of the
stockholders of the Company. To the extent that the following information
describes statutory and regulatory provisions, it is qualified in its entirety
by reference to those particular statutory and regulatory provisions. Any change
in applicable law or regulation may have an adverse effect on the results of
operation and financial condition of the Company and its bank subsidiary.
Federal Regulations
The primary federal banking regulatory authority for the Company is
the Board of Governors of the Federal Reserve System (the "FRB"), acting
pursuant to its authority to regulate bank holding companies. Because the
Company's bank subsidiary is an insured depository institution which is not a
member bank of the Federal Reserve System, it is subject to regulation and
supervision by the FDIC and is not subject to direct supervision by the FRB.
Bank Holding Company Act. The Company is subject to supervision by
the FRB under the provisions of the Bank Holding Company Act of 1956, as amended
(the "BHCA"). The BHCA restricts the types of activities in which bank holding
companies may engage and imposes a range of supervisory requirements on their
activities, including regulatory enforcement actions for violations of laws and
policies. The BHCA limits the activities of the Company and any companies
controlled by it to the activities of banking, managing and controlling banks,
furnishing or performing services for its subsidiaries, and any other activity
that the FRB determines to be incidental to or closely related to banking. These
restrictions also apply to any company in which the Company owns 5% or more of
the voting securities.
Before a bank holding company engages in any bank-related activities,
either by acquisition or commencement of de novo operations, it must comply with
the FRB's notification and approval procedures. In reviewing these
notifications, the FRB considers a number of factors, including the expected
benefits to the public versus the risks of possible adverse effects. In
general, the potential benefits include greater convenience to the public,
increased competition and gains in efficiency, while the potential risks include
undue concentration of resources, decreased or unfair competition, conflicts of
interest and unsound banking practices.
Under the BHCA, a bank holding company must obtain FRB approval before
engaging in acquisitions of banks or bank holding companies. In particular, the
FRB must generally approve the following actions by a bank holding company:
. the acquisition of ownership or control of more than 5% of the
voting securities of any bank or bank holding company;
. the acquisition of all or substantially all of the assets of a
bank; and
. the merger or consolidation with another bank holding company.
In considering any application for approval of an acquisition or merger, the FRB
is required to consider various competitive factors, the financial and
managerial resources of the companies and banks concerned, the convenience and
needs of the communities to be served and the applicant's record of compliance
with the Community Reinvestment Act (the "CRA"). The CRA generally requires
financial institutions to take affirmative action to ascertain and meet the
credit needs of its entire community, including low and moderate income
neighborhoods. The Attorney General of the United States may, within 30 days
after approval of an acquisition by the FRB, bring an action challenging such
acquisition under the federal antitrust laws, in which case the effectiveness of
such approval is stayed pending a final ruling by the courts.
Recent Banking Legislation. On November 12, 1999, the Gramm-Leach-
Bliley Act (the "GLBA") was signed into law and it became effective March 11,
2000. Under the GLBA, a bank holding company that elects to become a "financial
holding company" will be permitted to engage in any activity that the FRB, in
consultation with the Secretary of the Treasury, determines by regulation or
order is (i) financial in nature or incidental to such financial activity or
(ii) complementary to a
6
financial activity and does not pose a substantial risk to the safety and
soundness of depository institutions or the financial system generally. In
addition to traditional lending activities, the GLBA specifies the following
activities as financial in nature:
. acting as principal, underwriter, agent or broker for
insurance;
. underwriting, dealing in or making a market in securities;
. merchant banking activities; and
. providing financial and investment advice.
A bank holding company may become a financial holding company only if
all depository institution subsidiaries of the holding company are well-
capitalized, well-managed and have at least a satisfactory rating under the
Community Reinvestment Act. A financial holding company that falls out of
compliance with such requirement may be required to cease engaging in certain
activities.
National banks are also authorized by the GLBA to engage, through
"financial subsidiaries," in any activity that is permissible for a financial
holding company, except (i) insurance underwriting, (ii) real estate development
or real estate investment activities (unless otherwise permitted by law), (iii)
insurance company portfolio investments and (iv) merchant banking. The
authority of a national bank to invest in a financial subsidiary is subject to a
number of conditions, including, among other things, requirements that the bank
must be well-managed and well-capitalized (after deducting from capital the
bank's outstanding investments in financial subsidiaries). The GLBA provides
that state banks, such as the Company's bank subsidiary, may invest in financial
subsidiaries that engage as principal in activities that would only be
permissible for a national bank to conduct in a financial subsidiary. This
authority is generally subject to the same conditions that apply to national
bank investments in financial subsidiaries.
The GLBA also adopts a number of consumer protections, including
provisions intended to protect privacy of bank customers' financial information
and provisions requiring disclosure of ATM fees imposed by banks on customers of
other banks. The consumer privacy regulation mandated by the GLBA was approved
on May 10, 2000. The rule became effective on November 13, 2000, but compliance
is optional until July 1, 2001. Under the rule, when establishing a customer
relationship, a financial institution must give the consumer information such as
when it will disclose nonpublic, personal information to unaffiliated third
parties, what type of information it may share and what types of affiliates may
receive the information. The institution must also provide customers with
annual privacy notices, a reasonable means for preventing the disclosure of
information to third parties, and the opportunity to opt out of the disclosure
at any time.
All of the implementing regulations under the GLBA have not yet been
promulgated and the Company cannot predict the full impact of the new
legislation and has not yet determined if it will elect to become a financial
holding company. As long as the Company has not elected to become a financial
holding company, it will remain subject to the current restrictions of the BHCA.
Interstate Banking. On September 29, 1994, President Clinton signed
into law the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "Interstate Act") which amended the BHCA to permit bank holding companies
to acquire existing banks in any state effective September 29, 1995. The
Interstate Act preempted barriers that restricted entry into states and created
opportunities for expansion into markets that were previously closed. Interstate
banking and branching authority (discussed below) is subject to certain
conditions and restrictions, such as capital adequacy, management and CRA
compliance.
The Interstate Act also contained interstate branching provisions that
allow multistate banking operations to merge into a single bank with interstate
branches. The interstate branching provisions became effective on June 1, 1997,
although states were allowed to pass laws to opt in early or to opt out
completely as long as they acted prior to that date. Effective May 31, 1997, the
Arkansas Interstate Banking and Branching Act of 1997 (the "Arkansas Interstate
Act") authorized banks to engage in interstate branching activities within the
borders of the state of Arkansas.
Banks acquired pursuant to this new branching authority may be
converted to branches. Interstate branching allows banks to merge across state
lines to form a single institution. Interstate merger transactions can be used
to consolidate existing
7
multistate operations or to acquire new branches. A bank can also establish a
new branch as its initial entry into a state if the state has authorized de novo
branching. The Arkansas Interstate Act prohibits entry into the state through de
novo branching.
Deposit Insurance. The FDIC insures the deposits of the Company's
bank subsidiary to the extent provided by law. BIF is the primary insurance fund
for the bank's deposits, but SAIF insures a portion due to certain acquisitions
by the Company of deposits from SAIF-insured institutions. Under the FDIC's
risk-based insurance system, depository institutions are currently assessed
premiums based upon the institution's capital position and other supervisory
factors. BIF and SAIF members currently have the same risk-based assessment
schedule, which is 0 to 27 cents per $100 of eligible deposits.
Insured depository institutions are further assessed premiums for
Financing Corporation Bond debt service ("FICO"). Beginning January 1, 1997,
FICO premiums for BIF and SAIF became 1.22 and 6.1 basis points, respectively,
per $100 of eligible deposits. For the period July 1, 2000 through December 31,
2000, the Company's bank subsidiary was assessed an average annualized premium
of $0.0204 per $100 of BIF-eligible deposits and $0.0204 per $100 of SAIF-
eligible deposits.
Capital Adequacy Requirements. The FRB monitors the capital adequacy
of bank holding companies such as the Company, and the FDIC monitors the capital
adequacy of its bank subsidiary. The federal bank regulators use a combination
of risk-based guidelines and leverage ratios to evaluate capital adequacy.
Under the risk-based capital guidelines, bank regulators assign a risk
weight to each category of assets based generally on the perceived credit risk
of the asset class. The risk weights are then multiplied by the corresponding
asset balances to determine a "risk-weighted" asset base. The minimum ratio of
total risk-based capital to risk-weighted assets is 8.0%. At least half of the
risk-based capital must consist of Tier 1 capital, which is comprised of common
equity, retained earnings and certain types of preferred stock and excludes
goodwill and various intangible assets. The remainder, or Tier 2 capital, may
consist of a limited amount of subordinated debt, certain hybrid capital
instruments and other debt securities, preferred stock, and an allowance for
loan losses not to exceed 1.25% of risk-weighted assets. The sum of Tier 1
capital and Tier 2 capital is "total risk-based capital."
The leverage ratio is a company's Tier 1 capital divided by its
adjusted total assets. The leverage ratio requires a 3.0% Tier 1 capital to
adjusted average asset ratio for institutions with the highest regulatory rating
of 1. All other institutions must maintain a leverage ratio of 4.0% to 5.0%. For
a tabular summary of the Company's and the bank subsidiary's risk-weighted
capital and leverage ratios, see "Management's Discussion and Analysis of
Financial Condition and Results of Operation--Liquidity and Capital Resources."
Bank regulators from time to time consider raising the capital
requirements of banking organizations beyond current levels. However, the
Company is unable to predict whether higher capital requirements will be imposed
and, if so, the amount or timing of such increases. Therefore, the Company
cannot predict what effect such higher requirements may have on it or its bank
subsidiary.
Enforcement Authority. The FRB has enforcement authority over bank
holding companies and non-banking subsidiaries to forestall activities that
represent unsafe or unsound practices or constitute violations of law. It may
exercise these powers by issuing cease-and-desist orders or through other
actions. The FRB may also assess civil penalties against companies or
individuals who violate the BHCA or related regulations in amounts up to $1
million for each day's violation. The FRB can also require a bank holding
company to divest ownership or control of a non-banking subsidiary or require
such subsidiary to terminate its non-banking activities. Certain violations may
also result in criminal penalties.
The FDIC possesses comparable authority under the Federal Deposit
Insurance Act (the "FDI Act"), the Federal Deposit Insurance Corporation
Improvement Act ("FDICIA") and other statutes with respect to the bank
subsidiary. In addition, the FDIC can terminate insurance of accounts, after
notice and hearing, upon a finding that the insured institution is or has
engaged in any unsafe or unsound practice that has not been corrected, is in an
unsafe and unsound condition to continue operations, or has violated any
applicable law, regulation, rule, or order of, or condition imposed by the
appropriate supervisors.
8
The FDICIA required federal banking agencies to broaden the scope of
regulatory corrective action taken with respect to depository institutions that
do not meet minimum capital and related requirements and to take such actions
promptly in order to minimize losses to the FDIC. In connection with FDICIA,
federal banking agencies established capital measures (including both a leverage
measure and a risk-based capital measure) and specified for each capital measure
the levels at which depository institutions will be considered well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized or
critically undercapitalized. If an institution becomes classified as
undercapitalized, the appropriate federal banking agency will require the
institution to submit an acceptable capital restoration plan and can suspend or
greatly limit the institution's ability to effect numerous actions including
capital distributions, acquisitions of assets, the establishment of new branches
and the entry into new lines of business. On December 15, 2000 the FDIC advised
the Company that the bank subsidiary had been classified as "well-capitalized"
under these guidelines.
Examination. The FRB may examine the Company and any or all of its
subsidiaries. The FDIC examines and evaluates insured banks every 12 months, and
it may assess the institution for its costs of conducting the examinations. The
FDIC has a reciprocal agreement with the Arkansas State Bank Department whereby
each will accept the other's examination reports in certain cases. As a result,
the bank subsidiary generally undergoes FDIC and state examinations either on a
joint basis or in alternating years.
Reporting Obligations. As a bank holding company, the Company must
file with the FRB an annual report and such additional information as the FRB
may require pursuant to the BHCA. The bank subsidiary must submit to federal and
state regulators annual audit reports prepared by independent auditors, and the
Company's audit report can be used to satisfy this requirement.
Other Regulation. The Company's status as a registered bank holding
company under the BHCA does not exempt it from certain federal and state laws
and regulations applicable to corporations generally, including, without
limitation, certain provisions of the federal securities laws. The Company is
under the jurisdiction of the Securities and Exchange Commission and of state
securities commissions for matters relating to the offer and sale of its
securities.
The bank subsidiary's loan operations are subject to certain federal
laws applicable to credit transactions, such as the federal Truth-In-Lending Act
governing disclosures of credit terms to consumer borrowers, the Home Mortgage
Disclosure Act of 1975 requiring financial institutions to provide information
to enable the public and public officials to determine whether a financial
institution is fulfilling its obligation to help meet the housing needs of the
community it serves, the Equal Credit Opportunity Act prohibiting discrimination
on the basis of race, creed or other prohibited factors in extending credit, the
Fair Credit Reporting Act of 1978 governing the use and provision of information
to credit reporting agencies, the Fair Debt Collection Act governing the manner
in which consumer debts may be collected by collection agencies, the Fair
Housing Act prohibiting discriminatory practices relative to real estate-related
transactions, including the financing of housing and the rules and regulations
of the various federal agencies charged with the responsibility of implementing
such federal laws. The deposit operations of the bank subsidiary also are
subject to the Right to Financial Privacy Act, which imposes a duty to maintain
confidentiality of consumer financial records and prescribes procedures for
complying with administrative subpoenas of financial records, the Electronic
Funds Transfer Act, which governs automatic deposits to and withdrawals from
deposit accounts and customers' rights and liabilities arising from the use of
automated teller machines and other electronic banking services, the Truth in
Savings Act requiring depository institutions to disclose the terms of deposit
accounts to consumers and the Expedited Funds Availability Act requiring
financial institutions to make deposited funds available according to specified
time schedules and to disclose funds availability policies to consumers.
State Regulations
The Company and its bank subsidiary are subject to examination and
regulation by the Arkansas State Bank Department. Examinations of the bank
subsidiary are conducted annually but may be extended to 24 months if an interim
examination is performed by the FDIC. The Arkansas State Bank Department may
also make at any time an examination of the Company as may be necessary to
disclose fully the relations between the holding company and its bank subsidiary
and the effect of those relations.
The Arkansas Constitution provides, in summary, that "consumer loans
and credit sales" have a maximum percentage limitation of 17% per annum and that
all "general loans" have a maximum limitation of 5% over the Federal Reserve
Discount
9
Rate in effect at the time the loan was made. The Arkansas Supreme Court has
determined that "consumer loans and credit sales" are also "general loans" and
are thus subject to an interest rate limitation equal to the lesser of 5% over
the Federal Reserve Discount Rate or 17% per annum. The Arkansas Constitution
also provides penalties for usurious "general loans" and "consumer loans and
credit sales," including forfeiture of all principal and interest on consumer
loans and credit sales made at a greater rate of interest than 17% per annum.
Additionally, "general loans" made at a usurious rate may result in forfeiture
of uncollected interest and a refund to the borrower of twice the interest
collected.
Arkansas usury laws have historically been preempted by federal law
with respect to first residential real estate loans and certain loans guaranteed
by the Small Business Administration. Furthermore, the GLBA preempted the
application of the Arkansas Constitution's usury limits to the Company's bank
subsidiary effective November 12, 1999. Because of the recent enactment of this
usury preemption under the GLBA, the lack of clear judicial guidance, and the
current competitive marketplace for loans, the Company is unable to predict the
impact of this provision on its operations or whether its bank subsidiary will
seek to make loans with interest rates in excess of the Arkansas usury limits.
The Company is also subject to the Arkansas Bank Holding Company Act of
1983 ("ABHCA") which places certain restrictions on the acquisition of banks by
bank holding companies. Any acquisition by the Company of more than 10% of any
class of the outstanding capital stock of any bank located in Arkansas, would
require the Arkansas Bank Commissioner's approval. Further, no bank holding
company may acquire any bank if after such acquisition the holding company would
control, directly or indirectly, banks having 25% of the total bank deposits
(excluding deposits from other banks and public funds) in the State of Arkansas.
Under the ABHCA a bank holding company cannot own more than one bank subsidiary
if any of its bank subsidiaries has been chartered for less than 5 years.
Effective January 1, 1999 Arkansas law allows the Company to engage in
branching activities for its bank subsidiaries on a statewide basis.
Immediately prior to that date, the state's branching laws prevented state and
national banks from opening branches in any county of the state other than their
home county and the counties contiguous to their home county. Because the state
branching laws did not limit the branching activities of federal savings banks,
the Company was able to branch outside of the traditional areas of its state
bank subsidiaries through the federal thrift that it acquired in February 1998.
In response to the change in state branching laws, the Company merged its thrift
charter into its lead state bank subsidiaries in early 1999.
Bank Subsidiary
The lending and investment authority of the state bank subsidiary is
derived from Arkansas law. The lending power is generally subject to certain
restrictions, including the amount which may be lent to a single borrower.
Regulations of the FDIC and the Arkansas State Bank Department limit
the ability of the bank subsidiary to pay dividends to the Company without the
prior approval of such agencies. FDIC regulations prevent insured state banks
from paying any dividends from capital and allows the payment of dividends only
from net profits then on hand after deduction for losses and bad debts. The
Arkansas State Bank Department currently limits the amount of dividends that the
bank subsidiary can pay the Company to 75% of the bank's net profits after taxes
for the current year plus 75% of its retained net profits after taxes for the
immediately preceding year.
Federal law substantially restricts transactions between financial
institutions and their affiliates, particularly their non-financial institution
affiliates. As a result, the bank subsidiary is sharply limited in making
extensions of credit to the Company or any non-bank subsidiary, in investing in
the stock or other securities of the Company or any non-bank subsidiary, in
buying the assets of, or selling assets to, the Company, and/or in taking such
stock or securities as collateral for loans to any borrower. Moreover,
transactions between the bank subsidiary and the Company (or any nonbank
subsidiary) must generally be on terms and under circumstances at least as
favorable to the bank subsidiary as those prevailing in comparable transactions
with independent third parties or, in the absence of comparable transactions, on
terms and under circumstances that in good faith would be available to
nonaffiliated companies.
The federal banking laws require all insured banks, including the bank
subsidiary, to maintain reserves against their checking and transaction accounts
(primarily checking accounts, NOW and Super NOW checking accounts). Because
reserves must generally be maintained in cash or in non-interest bearing
accounts, the effect of the reserve requirements is to increase
10
the bank subsidiary's cost of funds. Arkansas law requires state chartered banks
to maintain such reserves as are required by the applicable federal regulatory
agency.
The bank subsidiary is subject to Section 23A of the Federal Reserve
Act, which places limits on the amount of loans or extensions of credit to, or
investments in, or certain other transactions with, affiliates, including the
Company. In addition, limits are placed on the amount of advances to third
parties collateralized by the securities or obligations of affiliates. Most of
these loans and certain other transactions must be secured in prescribed
amounts. The bank subsidiary is also subject to Section 23B of the Federal
Reserve Act, which prohibits an institution from engaging in transactions with
certain affiliates unless the transactions are on terms substantially the same,
or at least as favorable to such institution or its subsidiaries, as those
prevailing at the time for comparable transactions with non-affiliated
companies. The bank subsidiary is subject to restrictions on extensions of
credit to executive officers, directors, certain principal stockholders, and
their related interests. These extensions of credit (1) must be made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with third parties and (2)
must not involve more than the normal risk of repayment or present other
unfavorable features.
Proposed Legislation For Bank Holding Companies And Banks
Certain proposals affecting the banking industry have been discussed
from time to time. Such proposals include: regulation of all insured depository
institutions by a single regulator; limitations on the number of accounts
protected by the federal deposit insurance funds; and modification of the
$100,000 coverage limit on deposits. It is uncertain which, if any, of the above
proposals may become law and what effect they would have on the Company and its
bank subsidiary.
(The remainder of this page intentionally left blank)
11
Item 2. PROPERTIES
The Company serves its customers by offering a broad range of banking
services throughout northern, western and central Arkansas from the following
locations:
Banking Location /(1)/ Year Opened Square Footage
- --------------------------------------------------------- ---------------------------- -------------------
Bryant Wal-Mart Supercenter/(2)/..................... Under Construction 675
Little Rock (Otter Creek) ........................... Under Construction 2,400
Fort Smith (Zero).................................... Under Construction 2,784
Yellville ........................................... 2000 2,716
Clinton ............................................. 1999 2,784
North Little Rock (North Hills) /(3)/................ 1999 4,350
Harrison (Downtown).................................. 1999 14,000
North Little Rock (Indian Hills)/(4)/................ 1999 1,500
Fort Smith (Rogers).................................. 1998 22,500
Little Rock (Cantrell)............................... 1998 2,700
Little Rock (Chenal)................................. 1998 40,000
Little Rock (Rodney Parham).......................... 1998 2,500
Little Rock (Chester) /(5)/.......................... 1998 1,716
Bellefonte........................................... 1997 1,444
Alma................................................. 1997 4,200
Paris................................................ 1997 3,100
Mulberry............................................. 1997 1,875
Harrison (North) /(6)/............................... 1996 3,300
Clarksville (Rogers)/(6)/............................ 1995 3,300
Van Buren............................................ 1995 2,520
Marshall /(6)/....................................... 1995 2,520
Clarksville (Main)................................... 1994 2,520
Ozark (Westside)..................................... 1993 2,520
Western Grove........................................ 1976 (expanded 1991) 2,610
Altus /(7)/.......................................... 1972 (rebuilt 1998) 1,500
Ozark (Main)......................................... 1971 (expanded 1985) 30,877
Jasper............................................... 1967 (expanded 1984) 4,408
________________________
(1) Unless otherwise indicated, the Company owns, or will own upon the
completion of construction, its banking locations.
(2) The Company leases this facility with an initial term expiring May 9,
2006 subject to options to renew for two additional terms of five
years each.
(3) The Company owns the building and leases the land at this location.
The initial lease term expires twenty years from November 1999 with
the right to extend for four additional five-year periods.
(4) The Company leases the building and land at this location with an
initial term expiring in December 2002, subject to options to renew
for four additional terms of two years each.
(5) This location was acquired by the Company in February 1998. The
facility was constructed in 1994.
(6) The Company owns the buildings and leases the land at these locations.
The initial lease terms expire in 2001 (Harrison), 2007 (Clarksville)
and 2024 (Marshall). The Company has renewal options on the Harrison
and Marshall facilities and purchase options on the Harrison and
Clarksville facilities.
(7) Original facility was destroyed by storm in 1997. This facility was
rebuilt and placed in service in 1998.
While management believes its existing banking locations are adequate
for its present operations, the Company intends to establish additional branch
offices in the future in accordance with its growth strategy.
12
Item 3. LEGAL PROCEEDINGS
-----------------
On July 26, 2000, the case of David Dodds, et. al. vs. Bank of the
------------------------------------
Ozarks and Jean Arehart was filed in the Circuit Court of Pulaski County,
- -----------------------
Arkansas, Fifth Division, which contains allegations that the Company's bank
subsidiary (the "Bank") committed breach of contract, certain common law torts,
fraud, and a violation of the Racketeer Influenced and Corrupt Organizations
Act, 18 U.S.C. (S) 1961, et. seq. ("RICO"). The Bank removed the case to the
United States District Court for the Eastern District of Arkansas, Western
Division. The complaint seeks alternative remedies of either (a) compensatory
damages of $5 million and punitive damages of $10 million based on the common
law tort claims, or (b) compensatory damages of $5 million trebled to $15
million based on RICO. Previously the Bank made several residential construction
loans related to houses built by the plaintiffs, and in 1998, the Bank commenced
foreclosure of a house that was being constructed by one of the plaintiffs. The
complaint relates to such transactions.
On February 3, 2000, the plaintiffs filed a Chapter 13 bankruptcy
petition which is currently pending. In this bankruptcy proceeding, the
individual plaintiffs submitted a plan of reorganization which, among other
matters, proposed litigation against the Bank and to pay certain creditors with
proceeds of litigation, if any. At a hearing on the plan of reorganization, the
bankruptcy judge refused to confirm the plaintiff's proposed plan of
reorganization but did authorize the plaintiffs to file the complaint against
the Bank to avoid the running of the statute of limitations. The ability of the
plaintiffs to pursue the complaint was contingent upon (a) the bankruptcy
court's confirmation of a plan of reorganization which provides for pursuit of
the complaint, (b) a determination by a trustee to pursue the complaint in the
event of conversion of the pending bankruptcy proceeding to a Chapter 7 or
appointment of a trustee, or (c) dismissal of the pending bankruptcy proceeding
so the plaintiffs are no longer subject to the authority of the bankruptcy
court. On February 23, 2001, the plaintiffs voluntarily dismissed their
bankruptcy case. They are, therefore, now free to pursue the case. The Company
believes it has substantial defenses to the claims made in the complaint and
intends to vigorously defend the case.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
No information is required in response to this Item as no matters were
submitted to a vote of Registrant's security holders during the fourth quarter
of the fiscal year covered by this report.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.
---------------------------------------------------------------------
The Company's Common Stock is listed on the Nasdaq National Market
under the symbol "OZRK" and as of March 1, 2001 the Company had 191 holders of
record. The other information required by Item 201 of Regulation S-K is
contained in the Management's Discussion and Analysis section of the Company's
2000 Annual Report under the heading "Summary of Quarterly Results of
Operations, Common Stock Market Prices and Dividends" on page 22, which
information is incorporated herein by reference.
Item 6 SELECTED FINANCIAL DATA
-----------------------
The information required by Item 301 of Regulation S-K is contained in
the Company's 2000 Annual Report under the heading "Selected Consolidated
Financial Data" on page 4, which information is incorporated herein by
reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The information required by Item 303 of Regulation S-K is contained in
the Company's 2000 Annual Report under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 5 through
22, which information is incorporated herein by reference.
13
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
The information required by Item 305 of Regulation S-K is contained in
the Management's Discussion and Analysis section of the Company's 2000 Annual
Report under the heading "Interest Rate Sensitivity" on pages 16 through 18,
which information is incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
The information required by this Item and by Item 302 of Regulation S-
K is contained in the Company's 2000 Annual Report on pages 23 through 39 and in
the Management's Discussion and Analysis section of the 2000 Annual Report under
the heading "Summary of Quarterly Results of Operations, Common Stock Market
Prices and Dividends" on page 22 which information is incorporated herein by
reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
None
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
The information required by Item 401 of Regulation S-K regarding
directors is contained in the Company's Proxy Statement for the 2001 annual
meeting under the heading "Nominees for Election as Directors" on pages 3
through 4, which information is incorporated herein by reference. In accordance
with Item 401(b) of Regulation S-K, Instruction 3, information concerning the
Company's executive officers is furnished in a separate item captioned
"Executive Officers of Registrant" in Part I above.
Item 405 of Regulation S-K requires the Company to disclose any
failure of its executive officers and directors to file on a timely basis
reports of ownership and subsequent changes of ownership with the Securities and
Exchange Commission. The Company disclosed in its Proxy Statement for the 2001
annual meeting under the heading "Section 16(a) Beneficial Ownership Reporting
Compliance" on page 20 its belief that during the preceding year all filing
requirements applicable to directors and executive officers had been complied
with. However, since the 2001 Proxy Statement was distributed, the Company has
become aware of certain failures of an executive officer to file required
reports. Accordingly, the information contained in the Company's Proxy Statement
for the 2001 annual meeting under the heading "Section 16(a) Beneficial
Ownership Reporting Compliance" on page 20 is incorporated herein by reference
as supplemented by the following information: Jean Arehart has failed to file
two Form 4's with respect to two purchases of Company common stock in October
2000 and a purchase of Company common stock in November 2000. The aggregate
number of shares purchased in these transactions was 950.
Item 11. EXECUTIVE COMPENSATION
----------------------
The information required by Item 402 of Regulation S-K is contained in
the Company's Proxy Statement for the 2000 annual meeting under the heading
"Executive Compensation and Other Information" on pages 12 through 14, which
information is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The information required by Item 403 of Regulation S-K is contained in
the Company's Proxy Statement for the 2001 annual meeting under the headings
"Principal Stockholders" and "Security Ownership of Management" on pages 10
through 11 which information is incorporated herein by reference.
14
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
The information required by Item 404 of Regulation S-K is contained in
the Company's Proxy Statement for the 2001 annual meeting under the heading
"Certain Transactions" on page 19, which information is incorporated herein by
reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
----------------------------------------------------------------
(a) The following documents are filed as part of this report:
(1) The following consolidated financial statements of the Registrant
included on pages 24 to 39 in the Company's Annual Report for the
fiscal year ended December 31, 2000, and the Report of Independent
Auditors on page 23 of such Annual Report are incorporated herein by
reference.
Consolidated Balance Sheets as of December 31, 2000 and 1999.
Consolidated Statements of Income for the Years Ended
December 31, 2000, 1999 and 1998.
Consolidated Statements of Stockholders' Equity for the Years Ended
December 31, 2000, 1999 and 1998.
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2000, 1999 and 1998.
Notes to Consolidated Financial Statements.
(2) Financial Statement Schedules:
All schedules are omitted for the reasons that they are not required
or are not applicable, or the required information is shown in the
consolidated financial statements or the notes thereto.
(b) Reports on Form 8-K:
Registrant did not file any reports on Form 8-K during the fourth
quarter of 2000.
(c) Exhibits:
The exhibits to this report are listed in the Exhibit Index at the end
of this Item 14.
(d) Financial Statement Schedules:
Not applicable.
15
EXHIBIT INDEX
The following exhibits are filed with this report or are incorporated
by reference to previously filed material.
Exhibit No.
- -----------
3.1 Amended and Restated Articles of Incorporation of the Registrant, dated
May 22, 1997 (previously filed as Exhibit No. 3.1 to the Company's
Registration Statement on Form S-1 filed with the Commission on May 22,
1997, as amended, Commission File No. 333-27641, and incorporated
herein by this reference).
3.2 Amended and Restated By-Laws of the Registrant, dated March 13, 1997
(previously filed as Exhibit No. 3.2 to the Company's Registration
Statement on Form S-1 filed with the Commission on May 22, 1997, as
amended, Commission File No. 333-27641, and incorporated herein by this
reference).
4.1 Amended and Restated Trust Agreement, dated June 18, 1999, relating to
the issuance of Ozark Capital Trust's $17,250,000 of 9.0% Cumulative
Trust Preferred Securities (previously filed as exhibit 4.1 to the
Company's quarterly report on Form 10-Q filed with the Commission for
the period ended June 30, 1999, and incorporated herein by this
reference).
4.2 9.0% Cumulative Trust Preferred Securities Certificate (included as an
exhibit to Item 4.1 previously filed with the Company's quarterly
report on Form 10-Q filed with the Commission for the period ended June
30, 1999, and incorporated herein by this reference).
4.3 Agreement as to Expenses and Liabilities (included as an exhibit to
Item 4.1, previously filed as exhibit 4.1 to the Company's quarterly
report on Form 10-Q filed with the Commission for the period ended June
30, 1999, and incorporated herein by this reference).
4.4 Subordinated Indenture, dated June 18, 1999, relating to the issuance
of the Company's $17,783,510 of 9.0% Subordinated Debentures
(previously filed as exhibit 4.4 to the Company's quarterly report on
Form 10-Q filed with the Commission for the period ended June 30, 1999,
and incorporated herein by this reference).
4.5 Form of 9.0% Subordinated Debenture (included as an exhibit to Item 4.4
previously filed with the Company's quarterly report on Form 10-Q filed
with the Commission for the period ended June 30, 1999, and
incorporated herein by this reference).
4.6 Form of Preferred Securities Guarantee Agreement, dated June 18, 1999,
(previously filed as exhibit 4.6 to the Company's quarterly report on
Form 10-Q filed with the Commission for the period ended June 30, 1999,
and incorporated herein by this reference).
10.1 Bank of the Ozarks, Inc. Stock Option Plan, dated May 22, 1997
(previously filed as Exhibit No. 10.1 to the Company's Registration
Statement on Form S-1 filed with the Commission on May 22, 1997, as
amended, Commission File No. 333-27641, and incorporated herein by this
reference).
10.2 Bank of the Ozarks, Inc. Non-Employee Director Stock Option Plan, dated
May 22, 1997 (previously filed as Exhibit No. 10.2 to the Company's
Registration Statement on Form S-1 filed with the Commission on May 22,
1997, as amended, Commission File No. 333-27641, and incorporated
herein by this reference).
10.3 Ground Lease - Marshall (Searcy County), dated October 15, 1993
(previously filed as Exhibit No. 10.6 to the Company's Registration
Statement on Form S-1 filed with the Commission on May 22, 1997, as
amended, Commission File No. 333-27641, and incorporated herein by this
reference).
10.4 Ground Lease - Harrison (Boone County), dated December 22, 1994
(previously filed as Exhibit No. 10.7 to the Company's Registration
Statement on Form S-1 filed with the Commission on May 22, 1997, as
amended, Commission File No. 333-27641, and incorporated herein by this
reference).
16
10.5 Ground Lease - Clarksville (Johnson County), dated January 1, 1995
(previously filed as Exhibit No. 10.7 to the Company's Registration
Statement on Form S-1 filed with the Commission on May 22, 1997, as
amended, Commission File No. 333-27641, and incorporated herein by this
reference).
10.6 Form of Indemnification Agreement between the Registrant and its
directors and certain of its executive officers (previously filed as
Exhibit No. 10.10 to the Company's Registration Statement on Form S-1
filed with the Commission on May 22, 1997, as amended, Commission File
No. 333-27641, and incorporated herein by this reference).
10.7 Ground Lease - North Little Rock, Indian Hills Shopping Center (Pulaski
County), dated November 20, 1998, between Bank of the Ozarks, wca and
Indian Hills Shopping Center Partnership d/b/a Indian Hills Shopping
Center, as amended December 8, 1998 (previously filed as Exhibit No.
10.16 to the Company's annual report on 10-K for the year ended
December 31, 1998 and incorporated herein by this reference).
10.8 Construction Contract, dated June 16, 1999, between Bank of the Ozarks
and East-Harding, Inc. (Clinton, Arkansas) (previously filed as Exhibit
10.15 to the Company's annual report on 10-K for the year ended
December 31, 1999 and incorporated herein by this reference).
10.9 Construction Contract, dated June 16, 1999, between Bank of the Ozarks
and East-Harding, Inc. (North Little Rock) (previously filed as Exhibit
10.16 to the Company's annual report on 10-K for the year ended
December 31, 1999 and incorporated herein by this reference).
10.10 Construction Contract, dated November 23, 1999, between Bank of the
Ozarks and East-Harding, Inc. (Yellville, Arkansas) (previously filed
as Exhibit 10.17 to the Company's annual report on 10-K for the year
ended December 31, 1999 and incorporated herein by this reference).
10.11 Ground Lease - North Little Rock, Lakewood Shopping Center (Pulaski
County), dated May 18, 1999, between Bank of the Ozarks, wca and
Metropolitan Realty and Development, LLC (previously filed as Exhibit
10.18 to the Company's annual report on 10-K for the year ended
December 31, 1999 and incorporated herein by this reference).
10.12 Construction Contract, dated September 20, 2000, between Bank of the
Ozarks and East-Harding, Inc. (Little Rock, Otter Creek, Arkansas)
(attached).
10.13 Employment agreement, dated December 29, 2000, between the Registrant
and George Gleason (attached).
13 Portions of the Registrant's Annual Report to Stockholders for the year
ended December 31, 2000 which are incorporated herein by reference:
pages 4 to 39 of such Annual Report (attached).
21 List of Subsidiaries of the Registrant (attached).
23.1 Consent of Ernst & Young LLP (attached).
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BANK OF THE OZARKS, INC.
By: /s/ George Gleason
------------------------------------
Chairman and Chief Executive Officer
Date: March 20, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ George Gleason Chairman of the Board, Chief Executive Officer March 20, 2001
- ------------------------------ and Director
George Gleason
/s/ Mark Ross President and Director March 20, 2001
- ------------------------------
Mark Ross
/s/ Paul Moore Chief Financial Officer March 20, 2001
- ------------------------------ (Chief Accounting Officer)
Paul Moore
/s/ Jerry Davis Director March 20, 2001
- ------------------------------
Jerry Davis
/s/ Robert East Director March 20, 2001
- ------------------------------
Robert East
/s/ Linda Gleason Director March 20, 2001
- ------------------------------
Linda Gleason
/s/ Porter Hillard Director March 20, 2001
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Porter Hillard
18
/s/ Henry Mariani Director March 20, 2001
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Henry Mariani
/s/ Dr. R. L. Qualls Director March 20, 2001
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Dr. R. L. Qualls
/s/ Kennith Smith Director March 20, 2001
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Kennith Smith
19