Bank of the Ozarks takes hit on loan loss provision
by January 15, 2009 5:38 pm 88 views
Little Rock-based Bank of the Ozarks announced today (Jan. 15) 2008 fiscal year net income of $34.47 million, up 8.6% over 2007 net income of $31.74 million.
Also, the company closed out the year with fourth-quarter net income of $9.09 million, up 17.5% over the same quarter of 2007.
However, the bank took a big hit on bad loans and leases for the year. The company reported a loan loss provision of $19.02 million in 2008, up more than 209% over the provision of $6.15 million in 2007. The significant 2008 loan loss provision took the shine off the 27.2% gain in net interest income ($98.7 million) in 2008.
“During the quarter just ended, we made our largest ever quarterly provision to the allowance for loan and lease losses resulting in our largest ever quarterly increase in our allowance for loan and lease losses. This is consistent with our cautious outlook for economic and credit conditions in 2009,” said bank Chairman and CEO George Gleason in the earnings release.
The downturn in the housing market also is seen in the company’s income from mortgage activity. Mortgage lending income was $2.21 million in 2008, down 17% from $22007. Mortgage lending income was $434,000 in the fourth quarter of 2008, down 17.5% from $526,000 in the fourth quarter of 2007.
The bank also reiterated its participation in the federal Emergency Economic Stabilization Act of 2008. Under the Act, the bank acquired $75 million from the U.S. Treasury in exchange for future rights to a portion of the bank’s preferred stock and to its common stock.
Shares of the bank (Nasdaq: OZRK) closed Thursday at $22,90, down 40 cents. During the past 52 weeks, the share price has ranged from a $36.80 high to a $13.81 low.
The bank operates in 34 cities in Arkansas, has six bank offices in Texas and a loan office in Charlotte, N.C.