Bank of the Ozarks had record net income of $96 million in the third quarter, a 26 percent increase over the same period last year, the Little Rock bank said Wednesday.
The bank earned 75 cents per share, up from 66 cents per share in the third quarter last year and beating the projection of 74 cents from 11 analysts surveyed by Thomson Reuters.
Shares of Bank of the Ozarks closed at $46.38 Wednesday, down $1.28 in trading on the Nasdaq exchange.
It was the eighth-straight quarter of record earnings for Bank of the Ozarks.
The improvement came in a quarter where the bank lost its vice chairman and leader of the successful real estate specialties group, Dan Thomas, who abruptly resigned in July. The bank also was affected by two of the most powerful hurricanes -- Harvey and Irma -- to hit the country in years.
George Gleason, Bank of the Ozarks' chairman and chief executive officer, said the bank has not seen any customer loss or slowdown in business because of Thomas' departure.
The real estate team, which has made loans in more than 40 states, has "tremendous capability," even with the loss of Thomas, Gleason said.
And the impact on employees at 122 offices in six states affected by the storms was in most cases minor.
"Bank of the Ozarks continues to outperform many publicly traded banks on a national level," said Garland Binns, a Little Rock banking attorney.
The bank had total assets of $20.8 billion on Sept. 30, up almost 13 percent from $18.4 billion a year earlier.
Deposits were $16.8 billion, an 11 percent increase over $15.1 billion in the third quarter last year.
Loans totaled $15.8 billion, up 11 percent from $14.2 billion on Sept. 30 last year.
Bank of the Ozarks' efficiency ratio in the third quarter was 34.38 percent, compared with 38.07 percent in the third quarter last year. That means the bank spends $34.38 to earn $100.
The bank expects that its operating expenses will increase by $3 million to $5 million in the fourth quarter with further expense increases in the first half of 2018, said Matt Olney, a banking analyst with Stephens Inc. in Little Rock.
The expected increase in expenses is because of the company developing its products and infrastructure to operate as a larger institution, Olney said in a research brief.
The bank's management cited expectations that the bank "could see the efficiency ratio increase modestly in the near term," Olney said.
Gleason mentioned a strategy the bank is considering -- putting an updated version of newly built branches in the Orlando, Fla., Nashville, Tenn., and Atlanta markets over the next six quarters.
These new branches will be very different from the bank's current offices, with an emphasis on technology and employees who are sales-oriented, Gleason said.
Bank of the Ozarks will expand that branching strategy into the country's 100 largest metropolitan areas that show strong growth, he said.
"We'll roll out these branches over time," Gleason said. "We anticipate ... going from our 252 offices to somewhere in the 290-office range."
That would include the updated branches as well as companion branches to reach different demographics.
Business on 10/12/2017
Print Headline: LR lender logs record quarter; Bank of Ozarks’ income hits $96M, up 26% from last year