We’ve been doing this 20 years now. We’ve averaged an 8 basis point annualized loss ratio over 20 years. We’ve had tens and tens and tens of billions of dollars of projects that have paid off. People in the industry know that we’ve probably got the best risk adjusted real estate credit model in the whole industry. We are always a senior secured lender.We’re always low loan-to-value, low loan-to-cost on these things. And the track record through all sorts of economic environments just prove that we’re only going to have occasional incidental challenges in that portfolio and the life of the portfolio losses are just undisputably favorable at 8 basis points over 20 years. So people who want to be negative and want to be argumentative and want to be hardheaded and continue to argue that something that has demonstrated good quality is not a good quality and is some sort of systemic risk to our balance sheet.I don’t know that you can prove to them that it’s not.
But we’ve got a great business model. It drives great quality assets. It drives great yields, which give us an industry-leading net interest margin and an industry-leading ROA. And if people want to argue about it, they can argue about it. We’re just going to execute our business plan well and consistently, time and time again. And I think however long it takes, the naysayers will get over it.Brody Preston Great. Thank you.George Gleason Thank you.Operator Thank you. One moment for our next question. Our next question comes from the line of Matt Olney with Stephens. Your line is now open.Matt Olney Hi. Thanks for taking my question. I want to follow up on the OREO property. Just curious, if you hold that property into 2024 and wait till conditions stabilize and improve, I would assume you need to take or get another appraisal by December of ’23, if not earlier.
Is that fair?George Gleason Yes. As I said earlier, we will appraise — reappraise it at least annually since it’s an OREO.Matt Olney Okay. And I guess on that note, I guess, what we typically see from other banks is once a property is taken into OREO, I think that action typically requires an updated appraisal at that time, but that wasn’t the case here. Any more clarity for us as far as why there wasn’t a new appraisal when it did come into the foreclosed assets for the bank?George Gleason It was essentially within 90 days. So a new appraisal by regulatory standards is anything that’s a year or less old. So it was a new appraisal at that time.Matt Olney Okay. That’s helpful. And then I guess, thinking more about capital ratios, the unfunded balance at RESG was relatively flat, I think, in the first quarter.
Do you think we’ve seen a peak in that unfunded balance, at least for the near term? Just looking for any kind of commentary on kind of where you think that could go over the next few quarters.George Gleason Tim, do you want to take?Tim Hicks Sure. Yes. Hey, Matt. I would agree with you that it is certainly at its peak or near its peak and is likely to trend down as we go throughout the year. Obviously, we had $14 billion of originations last year. It’s — we’re not going to have that much this year.George Gleason $13.2 billion.Tim Hicks Not expecting to have that much this year at this point. So yes, to your point, I do think that will trend down as we go throughout the year.Matt Olney And then, Tim, just to follow up on that as far as capital ratios.
Any commentary on kind of where you expect capital ratios to go? I mean, the bank has done a good job of deploying some of the excess capital, but now you’re sitting on a pretty sizable slug of the unfunded balance. Just curious kind of where you expect to see this go.Tim Hicks Yes. It’s probably a good opportunity to talk about capital ratios, and they obviously came into light pretty considerably over the last quarter. And certainly, our tangible common equity ratio is among the top of our top 100 banks in the US, and if you adjust that for a fair value of HTM or other things are — remains in the top. We, of course, don’t have any HTM securities. So looking at tangible common equity, we have maintained a very high level of that over the years.I would expect to continue to do that.
Obviously, our risk-weighted asset grew considerably. Last year, we don’t expect risk-weighted assets to grow certainly at that level this year and possibly are relatively flat. So with our earnings in a somewhat flat risk-weighted asset our capital ratios as we go throughout the year could be flat to up on a risk-weighted basis and certainly maintaining really strong tangible common and Tier 1 leverage ratio throughout the year.Matt Olney Okay. Thanks everybody.Tim Hicks Thanks.George Gleason Thank you.Operator Thank you. [Operator Instructions] One moment for our next question. Our next question comes from the line of Brian Martin with Janney Montgomery Scott. Your line is now open.Brian Martin Hey. Good morning, guys.George Gleason Good morning, Brian.Brian Martin Maybe just — a lot of it has been answered on the real estate stuff, but just a couple of things.
Just on the payoffs this quarter for RESG, are you beginning to see those — it sounds like you had a couple, George, this quarter already, but are you starting to see that pick up, I mean, given how low it’s been here? Is that — I know the kind of commentary, is that still where you’re trending, but are you beginning to see some acceleration there in the payoffs or still a lot of caution from the sponsors as they kind of gauge the market?George Gleason Brian, I don’t know that I would say it’s accelerating, but we are seeing a continued level of payoffs. It’s not slowing or stopping. So we’ll see where that goes. I think we reiterated our guidance for payoffs this year to be back in that same range as we had in ’21 and ’22, which was kind of $5.6 million to $6.2 million, plus or minus $1 billion.So I think we’re going to see somewhat of a repeat of the last couple of years payoffs that has some nice implications given the substantial origination volume last year for us to continue to have good growth in our funded balance of loans over the course of this year and next year, and that plays back into Tim’s response to the capital question.
We expect to continue to have industry leading total tangible common equity and CET 1, sort of capital ratios, but those ratios are going to support the expected growth that we expect this year and next year.Brian Martin Got you. Okay. And then just last two, could you just touch a little bit, George, there’s a lot of good momentum on the lending groups outside of RESG. But just kind of where you think the momentum and given kind of the recessionary outlook here, just how much momentum do you think can continue there on some of those areas, just kind of from a high level, just give a little perspective, it would be helpful.George Gleason Well, I would say we’re cautiously optimistic about those guys in the other business units and their ability to maintain momentum.
And part of that is a result of the fact, Brian, that we’re — we think we’re going to see some other banks that are pulling back. There are banks that don’t have the robust capital level that we do in banks that don’t have the more diverse, stable organically originated deposit base that we do. And you’ve already read some banks commenting that they’ve shut down loan growth and expect to shrink their balance sheet and so forth or curtail new originations or limit and restrict new originations going forward.It’s business as usual at Bank OZK, and we’re looking for good customers, good relationships, good business. So I think even though there may be some macroeconomic headwinds will be that will tend to constrain volume in some respects, I think we may get some opportunities and bigger pieces of the pie that we wouldn’t have gotten before that will tend to offset that.
