Bank of the Ozarks exec Thomas quits; shares tum­ble 12.3%

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - MARTIN CRUTSINGER

Dan Thomas, 54, the vice chair­man of Bank of the Ozarks and pres­i­dent of the bank’s real es­tate spe­cial­ties group which has closed more than $25 bil­lion in loans, an­nounced his res­ig­na­tion on Thurs­day.

Af­ter the an­nounce­ment Bank of the Ozarks shares fell $5.83, or 12.3 per­cent, to close at $41.74 in trad­ing on the Nas­daq ex­change. More than 9.1 mil­lion shares were traded, about six times its av­er­age vol­ume of 1.5 mil­lion shares. The bank lost more than $700 mil­lion of its value Fri­day.

“Based on the trad­ing ac­tiv­ity above the nor­mal trad­ing vol­ume and the drop in mar­ket value of shares of Bank of the Ozarks, in­vestors have re­acted neg­a­tively to the res­ig­na­tion of Dan Thomas,” said Gar­land Binns, a Lit­tle Rock bank­ing at­tor­ney.

Thomas joined the bank in 2003, be­came pres­i­dent of the real es­tate spe­cial­ties group in 2005 and vice chair­man in 2013.

He gave no in­di­ca­tion why he re­signed or what his plans are.

“I have en­joyed be­ing a part of a com­mer­cial lend­ing team that has closed over $25 bil­lion in fi­nanc­ings since its in­cep­tion,” Thomas said in his let­ter. “While the vol­ume is nice, I am more proud of the fact that the port­fo­lio has been built uti­liz­ing in­cred­i­ble dis­ci­pline — in­clud­ing

● the uti­liza­tion of very low lever­age with best in class sponsorship. In ad­di­tion, the team is very tal­ented and ex­pe­ri­enced.”

Bank of the Ozarks cur­rently has more than $12 bil­lion in out­stand­ing real es­tate loans in about 30 states.

At­tempts to con­tact Thomas were un­suc­cess­ful.

With the news, Matt Ol­ney, a bank­ing an­a­lyst in Lit­tle Rock with Stephens Inc., low­ered his rat­ing of the bank from buy to hold.

“Mr. Thomas has been a key ar­chi­tect be­hind [Bank of the Ozarks’ real es­tate spe­cial­ties group] strat­egy that now rep­re­sents 70 per­cent of orig­i­nated loans,” Ol­ney said Fri­day in a re­search brief. “We ex­pect this news to cre­ate an over­hang for the stock’s val­u­a­tion un­til the bank’s growth out­look is as­sured.”

As part of a fil­ing with the fed­eral Se­cu­ri­ties and Ex­change Com­mis­sion, Bank of the Ozarks said it re­as­signed Thomas’ du­ties “in ac­cor­dance with the man­age­ment suc­ces­sion plan pre­vi­ously ap­proved by the board.”

The bank said that with the depth of the com­pany’s man­age­ment team at the real es­tate spe­cial­ties group, it doesn’t ex­pect Thomas’ res­ig­na­tion to have a ma­te­rial im­pact on the long-term prospects of the group.

Bank of the Ozarks has had suc­cess ex­e­cut­ing suc­ces­sion plans in the past and con­tin­ued to do well, said Randy Den­nis, pres­i­dent of DD&F Con­sult­ing Group, a Lit­tle Rock bank con­sult­ing firm.

“You hate to lose good peo­ple,” Den­nis said. “But I would be very sur­prised if they miss many heart­beats.”

Brian Martin, a bank­ing an­a­lyst with At­lanta-based FIG Part­ners, does not ex­pect Thomas’ res­ig­na­tion to have much im­pact.

“While Mr. Thomas had sig­nif­i­cant over­sight at [real es­tate spe­cial­ties group], we would not be sur­prised to see a more de­cen­tral­ized man­age­ment struc­ture im­ple­mented given the breadth and depth of tal­ent at the op­er­a­tion,” Martin said in a re­search re­port.

The bank paid Thomas $ 4.7 mil­lion last year, sec­ond only to the $6.2 mil­lion Chair­man Ge­orge Glea­son was paid.

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