Bank of the Ozarks (OZRK) in Little Rock said its first-quarter earnings increased 23% from the same period in 2011, to $18 million, on the strength of improved efficiency, solid growth in fee income and a continued decline in problem assets.

On a per-share basis, earnings climbed 21%, to 52 cents, beating the estimates of Sandler O'Neill & Partners analysts by four cents.

The $3.8 billion-asset company achieved the results without the benefit of an acquisition, a development Sandler O'Neill said in a research note "has to be considered a positive." Bank of the Ozarks' assets have increased by more than 35% over the last two years and that growth has been fueled largely by acquisitions of seven failed banks in the Southeast.

In a news release late Thursday, Chairman and Chief Executive George Gleason said that improved asset quality was the primary driver of earnings growth. Excluding loans covered by the Federal Deposit Insurance Corp., the bank's ratio of nonperforming assets to total assets fell 40 basis points year over year, to 0.77%, while loans more than 30 days past due fell from 2.19% in the first quarter of 2011 to 0.86% at March 31.

Though expenses rose slightly due to staff and branches inherited in acquisitions, the company's overall efficiency ratio fell from 51% to 47.7% year. Earnings growth was also aided by a 6.3% increase in noninterest income, much of which was generated through increased fees from mortgage lending and service charges on deposit accounts.

Loan growth, though, fell short of expectations, according to Sandler O'Neill, which could explain why the stock was down 2.9% early Friday, to $30.05. Excluding covered loans, total loan balances rose by only $8 million, or 4.4%, from the prior year.

But Gleason said that despite the modest growth in total balances, origination volume was strong and noted that a $78 million increase in the unfunded balance of closed loans reflects "excellent prospects for growth in future quarters."

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