Bank of the Ozarks reports record 1Q profits, beats Wall Street view by one penny

Bank of the Ozarks, now Arkansas’ largest regional bank by assets, reported record first quarter profits of more than $89 million on Tuesday (April 11) as U.S. financial institutions kicked off Wall Street’s quarterly earnings period ahead of Easter weekend.

For the period ended March 31, the Little Rock-based regional banking group reported first quarter earnings of $89.2 million, or 73 cents per share, a 72.6% increase from $51.7 million for the first quarter of 2016, or 57 cents per share, in the same period a year ago.

A survey of eleven banking analysts had forecasted the Arkansas bank to report first quarter earnings of 72 cents per share on revenue of $226.6 million, according to Thomson Reuters.

“We are very pleased to report our excellent results for the first quarter of 2017, including quarterly records in net income, diluted earnings per common share and trust income, $612 million growth in the funded balance of non-purchased loans and leases, $1.19 billion growth in the unfunded balance of non-purchased loans and leases, a 4.88% net interest margin, a 35.0% efficiency ratio and excellent asset quality,” said George Gleason, the bank’s chairman and CEO.

Bank of the Ozarks’ record start in fiscal 2017 follows a notable year in which the bank completed two of the largest acquisitions in the company’s history. The state’s largest bank, which is building a new campus in west Little Rock, completed last year with record deposits and assets at $15.6 billion and nearly $19 billion, respectively.

On July 20, Bank of the Ozarks completed its $800 million acquisition of Atlanta-based Community & Southern Holdings Inc. (C&S), the Little Rock bank’s largest takeover to date and its 14th acquisition since March 2010. A day later, the Arkansas banking group again expanded its southern U.S. reach with the completion of its acquisition of St. Petersburg, Fla.-based C1 Financial in an all-stock transaction valued at $402.5 million.

Highlights from the 1Q earnings report include:

• Total loans and leases, including purchased loans, were $14.8 billion at the end of fiscal 2016, a 59.6% increase from $9.27 billion in the same period of 2015. Non-purchased loans and leases were $10.22 billion in the fourth quarter, a 34.6% increase from $7.59 billion a year ago.
• Net interest income for the first quarter of 2017 rose to $190.8 million, a 69.5% increase from $112.5 million for the first quarter of 2016. Net interest margin, on a fully taxable equivalent basis, was 4.88% for the first quarter of 2017, a decrease of four basis points from 4.92% for the first quarter of 2016.
• Deposits grew 63.2% to $15.71 billion for the three-month period, compared to $9.63 billion in the first quarter of 2016. Total assets moved closer to the $20 billion mark, jumping 67.7% to nearly $19.2 billion, compared to $11.43 billion a year ago.
• Common stockholders’ equity was $2.87 billion on March 31, 2017, a 90.5% increase from $1.51 million in the first quarter of 2016. Tangible common stockholders’ equity was $2.15 billion at the end of the quarter, up 58.6% from $1.36 billion in the same period a year ago.

During the past 52 weeks, Bank of the Ozarks’ share price has ranged from a low of $33.51 to a high of $56.86. In early trading today on the Nasdaq stock exchange, the bank’s shares were up three cents at $49.82.