Bank of the Ozarks’ 4Q profits nearly double

by Talk Business & Politics staff ([email protected]) 105 views 

Fast-growing Bank of the Ozarks Inc. ended fiscal 2015 on a strong note after the Little Rock regional banking group reported record fourth quarter profits underlined by the largest acquisition in the bank’s history.

For the period ended Dec. 31, the Little Rock bank reported fourth quarter net income of $52.5 million, or 57 cents per share, up 48% from $34.8 million, or 43 cents a year ago. Robust fourth quarter sales came in at $137.1 million, up 28.7% from $106.5 in the same period of 2014.

The fourth quarter results were one penny better than Wall Street views. Analysts surveyed by Thomson Reuters had expected the Little Rock banking holding company to report fourth quarters earnings of 56 cents per share on revenue of $128.7 million.

“We are very pleased with our outstanding fourth quarter results, highlighted by our record quarterly growth of $1.08 billion in non-purchased loans and leases and our record quarterly growth of $939 million in the unfunded balance of our closed loans,” said George Gleason, chairman and CEO of the Little Rock banking group. “This exceptional growth was achieved while adhering to our very conservative credit principles, as evidenced by some of our best asset quality ratios as a public company.”

For the full year, Bank of the Ozarks earnings was equally impressive. The Arkansas banking concern reported record net income of $182.3 million, a 53.7% increase from $118.6 million in 2014. Diluted earnings per common share rose 37.5% to $2.09, compared to $1.52 in the same period a year ago.

The Little Rock bank’s financial results were highlighted by two major acquisitions in the fourth quarter that will grow the company’s asset base well beyond the $10 billion mark, the FDIC’s line of demarcation between community banks and larger regional banking groups.

On Oct. 19, Bank of the Ozarks announced an all-stock pact and plan of merger to acquire Community & Southern Holdings Inc., and its wholly-owned bank subsidiary, Community & Southern Bank, in a deal valued at nearly $800 million, or approximately $20.50 per fully diluted CSB share. At Sept. 30, 2015, CSB had approximately $4.4 billion of total assets, $3 billion of loans and $3.7 billion of deposits.

Following the CSB deal, Bank of the Ozarks announced on Nov. 16 that it would expand its southern reach and acquire St. Petersburg, Fla.-based C1 Financial, Inc. in an all-stock transaction valued at $402.5 million.

C1 operates 32 Florida banking offices on the west coast of Florida and in Miami-Dade and Orange counties. The majority of the offices are located in Florida’s top six metropolitan markets. At September 30, 2015, C1 had approximately $1.7 billion of total assets, $1.4 billion of loans and $1.3 billion of deposits.

Both those deals are expected to close in the first half of 2016, pending normal regulatory and shareholder approvals, bank officials have said.

Other highlights from the earnings report issued Thursday (Jan. 14) after the markets closed include:

  • Non-purchased loans and leases were $6.53 billion in the fourth quarter, a 64% increase from $3.98 billion a year ago. Total loans and leases, including purchased loans, were $8.33 billion at the end of fiscal 2015, a 62.5% increase from $5.13 billion in the same period of 2014.
  • Non-interest income for the fourth quarter of 2015 increased 9.5% to $30.5 million compared to $27.9 million for the fourth quarter of 2014.
  • Deposits were $7.97 billion at Dec. 31, 2015, a 45.0% increase from $5.50 billion at December 31, 2014.
  • Common stockholders’ equity was $1.46 billion on Dec. 31, 2015, a 61.2% increase from $908 million at the close of 2014. Tangible common stockholders’ equity was $1.31 billion in the fourth quarter of 2015, up 63.5% from $803 million on Dec. 31, 2014.
  • Total assets were $9.88 billion at December 31, 2015, a 46.0% increase from $6.77 billion at December 31, 2014.

The bank’s shares closed Thursday at $46.06, up 75 cents or 1.66%. During the past 52 weeks the share price has ranged from a low of $32.42 to a high of $54.96 touched on Nov. 11.

Earlier this week, Bank of the Ozarks announced it would build a new corporate headquarters in west Little Rock to keep pace with its rapid growth.