Bank OZK profit hits $115M

Despite 21% drop, 4Q earnings exceed analysts’ estimates

Bank OZK earned $115 million in the fourth quarter of last year, a 21 percent decline from net income of $146 million in the same period of 2017, the Little Rock bank, the largest in Arkansas, said Thursday.

Earnings per share were 89 cents, almost 22 percent less than $1.14 in the fourth quarter of 2017. But that comfortably beat the 83 cents a share anticipated by 13 analysts who were surveyed by Thomson Reuters.

The bank, formerly known as Bank of the Ozarks, had a one-time income-tax benefit of almost $50 million in the fourth quarter of 2017 related to the federal tax reduction from 35 percent to 21 percent.

Bank OZK shares closed at $27.60 Thursday, up 15 cents, or 0.6 percent, in trading on the Nasdaq exchange. Bank OZK released its earnings report after the market closed.

The fourth quarter was the most profitable of the year for Bank OZK, George Gleason, chairman and chief executive officer, said in a prepared statement.

“Our strong net income in 2018 allowed us to increase our cash dividend each quarter,” Gleason said.

Bank OZK is positioned favorably going into 2019, said Garland Binns, a Little Rock banking attorney. For 2018, it increased its assets by 5.2 percent to $22.4 billion, its deposits by 4.3 percent to $17.9 billion and its loans by 6.7 percent to $17 billion, Binns said.

“Bank OZK continues to control its overhead expenses having a good efficiency ratio 36.9 percent for the fourth

quarter of 2018,” Binns said.

That means Bank OZK spent $36.90 to earn every $100.

The banks spent about $11.7 million last year related to its name change and related rebranding.

Bank OZK’s real estate specialties group, which focuses on commercial real estate lending, had $1.1 billion in loans in

the quarter, the bank said in its management comments.

“Our deep industry and market knowledge and relationships with our sponsors gives us a unique ability to win business based on our service and expertise without sacrificing our standards,” management said of the real estate specialties group.

The division continues to be a strong leader in commercial lending nationally, according to management.

For the year, the real estate specialties group’s loans grew by $908 million, community banking loans grew by $345 million and the indirect recreational vehicle and marine lending grew by $1.03 billion.

“Our indirect recreational vehicle and marine lending business has given us another exceptional national lending platform, providing substantial growth, good asset quality and healthy portfolio diversification,” management said.