GENERAL

Net income available to common stockholders for Bank of the Ozarks, Inc. (the "Company") was $18.0 million for the first quarter of 2012, a 23.1% increase from $14.6 million for the first quarter of 2011. Diluted earnings per common share were $0.52 for the first quarter of 2012, a 20.9% increase from $0.43 for the first quarter of 2011.

On August 16, 2011 the Company completed a 2-for-1 stock split, in the form of a stock dividend, effected by issuing one share of common stock for each share of such stock outstanding on August 5, 2011. All share and per share information in this Management's Discussion and Analysis has been adjusted to give effect to this stock split.

The Company's annualized return on average assets was 1.91% for the first quarter of 2012 compared to 1.77% for the first quarter of 2011. Its annualized return on average common stockholders' equity was 16.75% for the first quarter of 2012 compared to 18.16% for the first quarter of 2011.

Total assets were $3.84 billion at both March 31, 2012 and December 31, 2011. Loans and leases, excluding those covered by Federal Deposit Insurance Corporation ("FDIC") loss share agreements, were $1.89 billion at both March 31, 2012 and December 31, 2011. Total loans and leases, including loans covered by FDIC loss share agreements ("covered loans"), were $2.65 billion at March 31, 2012 compared to $2.69 billion at December 31, 2011. Deposits were $2.93 billion at March 31, 2012 compared to $2.94 billion at December 31, 2011.

Common stockholders' equity was $442.6 million at March 31, 2012 compared to $424.5 million at December 31, 2011. Book value per common share was $12.81 at March 31, 2012 compared to $12.32 at December 31, 2011. Tangible book value per common share, which is calculated by dividing total common stockholders' equity less intangible assets, by total common shares outstanding, was $12.47 at March 31, 2012 compared to $12.06 at December 31, 2011. Changes in common stockholders' equity, book value per common share and tangible book value per common share reflect earnings, dividends paid, stock option and stock grant transactions, changes in unrealized gains and losses on investment securities available for sale ("AFS"), and, for tangible book value per common share, changes in intangible assets.

Annualized results for these interim periods may not be indicative of results for the full year or future periods.

ANALYSIS OF RESULTS OF OPERATIONS

The Company is a bank holding company whose primary business is commercial banking conducted through its wholly-owned state chartered bank subsidiary - Bank of the Ozarks (the "Bank"). The Company's results of operations depend primarily on net interest income, which is the difference between the interest income from earning assets, such as loans, leases, covered loans and investments, and the interest expense incurred on interest bearing liabilities, such as deposits, borrowings and subordinated debentures. The Company also generates non-interest income, including service charges on deposit accounts, mortgage lending income, trust income, bank owned life insurance ("BOLI") income, accretion of FDIC loss share receivable, net of amortization of FDIC clawback payable, other loss share income, gains on investment securities and from sales of other assets, and gains on FDIC-assisted acquisitions.

The Company's non-interest expense consists of salaries and employee benefits, net occupancy and equipment and other operating expenses. The Company's results of operations are significantly impacted by its provision for loan and lease losses and its provision for income taxes. The following discussion provides a comparative summary of the Company's operations for the three months ended March 31, 2012 and 2011 and should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report.

Net Interest Income

Net interest income is analyzed in this discussion and the following tables on a fully taxable equivalent ("FTE") basis. The adjustment to convert certain income to a FTE basis consists of dividing federal tax-exempt income by one minus the Company's statutory federal income tax rate of 35%. The FTE adjustments to net interest income were $2.3 million for both quarters ended March 31, 2012 and 2011. No adjustments have been made in this analysis for income exempt from state income taxes or for interest expense deductions disallowed under the provisions of the Internal Revenue Code as a result of investment in certain tax-exempt securities.

Net interest income for the first quarter of 2012 increased 20.1% to $46.1 million compared to $38.4 million for the first quarter of 2011. Net interest margin was 5.98% for the first quarter of 2012 compared to 5.61% for the first quarter of 2011. The growth in net interest income was a result of the improvement in net interest margin, which increased 37 basis points ("bps") for the first quarter of 2012 compared to the first quarter of 2011, and growth in average earning assets which increased 11.9% for the first quarter of 2012 compared to the first quarter of 2011.

The Company's improvement in net interest margin for the first quarter of 2012 compared to the first quarter of 2011 resulted from a combination of factors including, among others, an increase in the volume of the Company's covered loan portfolio, which is higher yielding than the Company's non-covered loan and lease portfolio, and reductions in rates paid on most categories of interest bearing liabilities, partially offset by decreases in yield on the Company's non-covered loan and lease portfolio and its aggregate investment securities portfolio.

Yields on earning assets were unchanged at 6.77% for both the first quarter of 2012 and the first quarter of 2011. The yield on the Company's portfolio of covered loans increased 20 bps for the first quarter of 2012 compared to the first quarter of 2011, and was offset by decreases in yields on non-covered loans and leases of 16 bps and decreases in the aggregate yield on the Company's investment securities portfolio of 57 bps for the first quarter of 2012 compared to the first quarter of 2011.

The decline in rates on average interest bearing liabilities was primarily due to the declines in rates on interest bearing deposits, the largest component of the Company's interest bearing liabilities. Rates on interest bearing deposits decreased 37 bps for the first quarter of 2012 compared to the first quarter of 2011. This decrease in the rate on interest bearing deposits was principally due to (i) a change in mix of the Company's interest bearing deposits due to growth in the volume of savings and interest bearing transaction accounts resulting in an increase in the average balance of these deposits to 63.5% of total average interest bearing deposits for the first quarter of 2012 compared to 58.6% for the first quarter of 2011 and (ii) effectively managing the repricing of both time deposits and savings and interest bearing transaction deposits which resulted in lower rates paid on deposits as they were renewed or otherwise repriced.

The Company's other borrowing sources include (i) repurchase agreements with customers ("repos"), (ii) other borrowings comprised primarily of Federal Home Loan Bank of Dallas ("FHLB - Dallas") advances, and, to a lesser extent, Federal Reserve Bank ("FRB") borrowings and federal funds purchased, and
(iii) subordinated debentures. The rates on repos decreased 37 bps for the first quarter of 2012 compared to the first quarter of 2011 primarily as a result of the Company's efforts to effectively manage the rates on its interest bearing liabilities, including repos. The rates on the Company's other borrowings, which consist primarily of fixed rate callable FHLB - Dallas advances, decreased one bps in the first quarter of 2012 compared to the first quarter of 2011. The rates paid on the Company's subordinated debentures, which are tied to a spread over the 90-day London Interbank Offered Rate ("LIBOR") and reset periodically, increased 28 bps for the first quarter of 2012 compared to the first quarter of 2011 primarily as a result of the increase in the 90-day LIBOR on the applicable reset dates.

The increase in average earning assets was due primarily to increases in the Company's average balance of covered loans of $229 million for the first quarter of 2012 compared to the first quarter of 2011. The Company made seven FDIC-assisted acquisitions during 2010 and 2011, resulting in significant increases in its covered loan portfolio. The Company also had increases in its average non-covered loans and leases of $59 million for the first quarter of 2012 compared to the first quarter of 2011 and increases in its average investment securities portfolio of $42 million for the first quarter of 2012 compared to the first quarter of 2011.

      Average Consolidated Balance Sheets and Net Interest Analysis - FTE



                                                                Three Months Ended March 31,
                                                       2012                                      2011
                                         Average       Income/      Yield/         Average       Income/      Yield/
                                         Balance       Expense       Rate          Balance       Expense       Rate
                                                                   (Dollars in thousands)
               ASSETS
Interest earning assets:
Interest earning deposits and
federal funds sold                     $       827     $      2        0.81 %    $     1,884     $      3        0.54 %
Investment securities:
Taxable                                     85,906          715        3.35           42,263          427        4.09
Tax-exempt - FTE                           349,939        6,516        7.49          351,570        6,604        7.62
Loans and leases - FTE                   1,886,441       28,303        6.03        1,827,543       27,882        6.19
Covered loans                              780,969       16,695        8.60          551,629       11,424        8.40

Total interest earning assets - FTE      3,104,082       52,231        6.77        2,774,889       46,340        6.77
Non interest earning assets                697,528                                   578,644

Total assets                           $ 3,801,610                               $ 3,353,533

LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Deposits:
Savings and interest bearing
transaction                            $ 1,550,154     $  1,376        0.36 %    $ 1,338,957     $  2,266        0.69 %
Time deposits of $100,000 or more          396,762          669        0.68          481,032        1,235        1.04
Other time deposits                        494,457          870        0.71          464,046        1,279        1.12

Total interest bearing deposits          2,441,373        2,915        0.48        2,284,035        4,780        0.85
Repurchase agreements with customers        38,675           21        0.21           42,595           61        0.58
Other borrowings                           299,073        2,700        3.63          297,351        2,672        3.64
Subordinated debentures                     64,950          474        2.94           64,950          426        2.66

Total interest bearing liabilities       2,844,071        6,110        0.86        2,688,931        7,939        1.20
Non-interest bearing liabilities:
Non-interest bearing deposits              452,292                                   314,173
Other non-interest bearing
liabilities                                 69,285                                    20,207

Total liabilities                        3,365,648                                 3,023,311
Common stockholders' equity                432,536                                   326,787
Noncontrolling interest                      3,426                                     3,435

Total liabilities and stockholders'
equity                                 $ 3,801,610                               $ 3,353,533

Net interest income - FTE                              $ 46,121                                  $ 38,401

Net interest margin - FTE                                              5.98 %                                    5.61 %

The following table reflects how changes in the volume of interest earning assets and interest bearing liabilities and changes in interest rates have affected the Company's interest income, interest expense and net interest income for the periods indicated. Information is provided in each category with respect to changes attributable to (1) changes in volume (changes in volume multiplied by prior yield/rate); (2) changes in yield/rate (changes in yield/rate multiplied by prior volume); and (3) changes in both yield/rate and volume (changes in yield/rate multiplied by changes in volume). The changes attributable to the combined impact of volume and yield/rate have all been allocated to the changes due to volume.

                Analysis of Changes in Net Interest Income - FTE



                                                            Three Months Ended
                                                              March 31, 2012
                                                                   Over
                                                            Three Months Ended
                                                              March 31, 2011
                                                                  Yield/         Net
                                                    Volume         Rate         Change
                                                          (Dollars in thousands)
 Increase (decrease) in:
 Interest income - FTE:
 Interest earning deposits and federal funds sold   $    (2 )    $      1      $     (1 )
 Investment securities:
 Taxable                                                363           (75 )         288
 Tax-exempt - FTE                                       (31 )         (57 )         (88 )
 Loans and leases - FTE                                 884          (463 )         421
 Covered loans                                        4,903           368         5,271

 Total interest income - FTE                          6,117          (226 )       5,891

 Interest expense:
 Savings and interest bearing transaction               188        (1,078 )        (890 )
 Time deposits of $100,000 or more                     (142 )        (424 )        (566 )
 Other time deposits                                     53          (462 )        (409 )
 Repurchase agreements with customers                    (2 )         (38 )         (40 )
 Other borrowings                                        15            13            28
 Subordinated debentures                                 -             48            48

 Total interest expense                                 112        (1,941 )      (1,829 )

 Increase in net interest income - FTE              $ 6,005      $  1,715      $  7,720

Non-Interest Income

The Company's non-interest income consists primarily of service charges on deposit accounts, mortgage lending income, trust income, BOLI income, accretion of FDIC loss share receivable, net of amortization of FDIC clawback payable, other loss share income, gains on investment securities and on sales of other assets, and gains on FDIC-assisted acquisitions.

Non-interest income for the first quarter of 2012 increased 6.3% to $13.8 million compared to $13.0 million for the first quarter of 2011. These results include no pre-tax bargain purchase gains on FDIC-assisted acquisitions for the first quarter of 2012 compared to $3.0 million of such gains for the first quarter of 2011.

Service charges on deposit accounts, traditionally the Company's largest source of non-interest income, increased 22.3% to $4.69 million for the first quarter of 2012 compared to $3.84 million for the first quarter of 2011. The increase in service charges on deposit accounts is primarily due to growth in the number of transaction accounts and the addition of deposit customers from the Company's seven FDIC-assisted acquisitions.

Mortgage lending income increased 61.7% to $1.10 million for the first quarter of 2012 compared to $0.68 million for the first quarter of 2011. The volume of originations of mortgage loans available for sale increased 78.0% for the first quarter of 2012 compared to the first quarter of 2011. During the first quarter of 2012, approximately 68% of the Company's originations of mortgage loans available for sale were related to mortgage refinancings and 32% were related to new home purchases, compared to approximately 48% for refinancings and approximately 52% for new home purchases in the first quarter of 2011.

Trust income was $0.77 million for the first quarter of 2012, a decrease of 1.0% from $0.78 million for the first quarter of 2011. The decrease in trust income was primarily due to a decline in corporate trust income earned for services provided in connection with new municipal bond issues, partially offset by growth in personal trust and employee benefit trust income.

The Company recognized $2.31 million of income from the accretion of the FDIC loss share receivable, net of amortization of the FDIC clawback payable, during the first quarter of 2012 compared to $2.00 million during the first quarter of 2011. The FDIC loss share receivable reflects the indemnification provided by the FDIC in FDIC-assisted acquisitions, and the FDIC clawback payable represents the obligation of the Company to reimburse the FDIC should actual losses be less than certain thresholds established in each loss share agreement. The FDIC loss share receivable and the FDIC clawback payable are both carried at net present value.

The accretion of the FDIC loss share receivable, net of amortization of the FDIC clawback payable, increased in the first quarter of 2012 compared to the first quarter of 2011 primarily due to the Company having entered into seven FDIC-assisted acquisitions at March 31, 2012 compared to five FDIC-assisted acquisitions at March 31, 2011, resulting in the increase in the balance of the FDIC loss share receivable.

As the Company collects payments in future periods from the FDIC under the loss share agreements, the balance of the FDIC loss share receivable, absent any significant revisions of the amounts expected to be collected under the loss share agreements, will decline, resulting in a corresponding decrease in the accretion of the FDIC loss share receivable. Because any amounts due under the FDIC clawback payable are due at the conclusion of the loss share agreements, absent any significant revision of the amounts expected to be paid to the FDIC under the clawback provisions of the loss share agreements, the amortization of this liability is not expected to change significantly over the next several quarters.

Other loss share income consisting primarily of income recognized on covered loan prepayments and payoffs that are not considered yield adjustments, was $1.98 million in the first quarter of 2012 compared to $0.97 million in the first quarter of 2011.

Net gains on sales of other assets were $1.56 million in the first quarter of 2012 compared to $0.41 million in the first quarter of 2011. These net gains on sales of other assets were primarily due to net gains on sales of foreclosed assets covered by FDIC loss share agreements, or covered foreclosed assets. Because the estimated fair value of acquired covered foreclosed assets includes a net present value component, which is not accreted into income over the expected holding period of the covered foreclosed assets, the sale of a majority of the Company's covered foreclosed assets has resulted in gains.

During the first quarter of 2011, the Company made one FDIC-assisted acquisition. Specifically, on January 14, 2011 the Company, through the Bank, entered into a purchase and assumption agreement with loss share agreements with the FDIC pursuant to which it acquired substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of the former Oglethorpe Bank. This FDIC-assisted acquisition resulted in the Company recognizing a pre-tax bargain purchase gain of $2.95 million in the first quarter of 2011.

An analysis of the assets acquired and liabilities assumed and a detailed discussion of the day 1 fair values adjustments, as well as the key factors and methodologies utilized to determine the estimated day 1 fair values of assets acquired and liabilities assumed and the resulting bargain purchase gain for each of the Company's FDIC-assisted acquisitions is included in footnote 3 to the Notes to the Consolidated Financial Statements.

The following table presents non-interest income for the three months ended March 31, 2012 and 2011.

                              Non-Interest Income



                                                                  Three Months Ended
                                                                       March 31,
                                                                 2012               2011
                                                                (Dollars in thousands)
Service charges on deposit accounts                          $       4,693        $  3,838
Mortgage lending income                                              1,101             681
Trust income                                                           774             782
BOLI income                                                            576             568
Accretion of FDIC loss share receivable, net of
amortization of FDIC clawback payable                                2,305           1,998
Other loss share income, net                                         1,983             971
Gains on investment securities                                           1             152
Gains on sales of other assets                                       1,555             407
Gains on FDIC-assisted acquisitions                                     -            2,952
Other                                                                  822             641

Total non-interest income                                    $      13,810        $ 12,990

Non-Interest Expense

Non-interest expense increased 9.2% to $28.6 million for the first quarter of 2012 compared to $26.2 million for the first quarter of 2011. This increase in non-interest expense was primarily due to the fact that during 2010 and 2011 the Company made seven FDIC-assisted acquisitions. These acquisitions have resulted in an increase in the number of offices and personnel, as well as certain other categories of non-interest expenses. The Company had 113 offices and 1,103 full-time equivalent employees at March 31, 2012 compared to 94 offices and 911 full-time equivalent employees at March 31, 2011. The Company's first quarter 2012 results included no acquisition and conversion costs compared to $1.4 million of such costs in the first quarter of 2011.

The Company's efficiency ratio (non-interest expense divided by the sum of net interest income - FTE and non-interest income) was 47.7% for the first quarter of 2012 compared to 51.0% for the first quarter of 2011.

The following table presents non-interest expense for the three months ended March 31, 2012 and 2011.

                              Non-Interest Expense



                                                       Three Months Ended
                                                            March 31,
                                                       2012             2011
                                                     (Dollars in thousands)
        Salaries and employee benefits             $      14,052      $ 11,647
        Net occupancy and equipment                        3,878         3,106
        Other operating expenses:
        Postage and supplies                                 813           687
        Advertising and public relations                     882           609
        Telephone and data lines                             822           723
        Professional and outside services                    726         1,190
        Software expense                                     675           871
        Travel and meals                                     538           614
        FDIC insurance                                       375           630
        FDIC and state assessments                           178           118
        ATM expense                                          209           157
        Loan collection and repossession expense           2,071         1,453
        Write down of foreclosed assets                      994         2,622
        Amortization of intangibles                          509           228
        Other                                              1,885         1,537

        Total non-interest expense                 $      28,607      $ 26,192

Income Taxes

The provision for income taxes was $8.0 million for the first quarter of 2012 compared to $6.0 million for the first quarter of 2011. The effective income tax rate was 30.6% for the first quarter of 2012 compared to 29.1% for the first quarter of 2011. The effective tax rates for the periods were affected by various factors including non-taxable income and non-deductible expenses and FDIC-assisted acquisitions, which resulted in gains in certain periods affecting the Company's mix of taxable and tax-exempt income.

ANALYSIS OF FINANCIAL CONDITION

Loan and Lease Portfolio

At March 31, 2012 the Company's loan and lease portfolio, excluding loans covered by FDIC loss share agreements, was $1.89 billion, compared to $1.89 billion at December 31, 2011 and $1.81 billion at March 31, 2011. Real estate loans, the Company's largest category of loans, consist of all loans secured by real estate as evidenced by mortgages or other liens, including all loans made to finance the development of real property construction projects, provided such loans are secured by real estate. Total real estate loans were $1.68 billion at March 31, 2012, compared to $1.66 billion at December 31, 2011 and $1.59 billion at March 31, 2011. The amount and type of loans and leases outstanding, excluding loans covered by FDIC loss share agreements, at March 31, 2012 and 2011 and at December 31, 2011 and their respective percentage of the total loan and lease portfolio are reflected in the following table.

                            Loan and Lease Portfolio



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