Bank of the Ozarks executives formally announced Tuesday (Sept. 19) that the fast-growing publicly-traded financial concern will begin construction on a new 247,000-square-foot headquarters by the end of 2017.
Bank of the Ozarks Chairman and CEO George Gleason, joined by Gov. Asa Hutchinson, Little Rock Mayor Mark Stodola and a host of state, city and business officials, made the announcement nearly 20 months after the Little Rock-based financial institution revealed plans for a new corporate headquarters in an exclusive western part of the city on the Little Maumelle River.
At a press event at the Governor’s Conference room at the State Capitol, Gleason revealed that the bank had acquired a 44-acre site in west Little Rock to support initial development and future expansion for its new corporate headquarters. That campus, located at The Ranch development on Arkansas Highway 10, will replace three local offices that the company has outgrown over the past 21 years.
“Our home state has provided a talented and dedicated workforce, enabling our company to thrive and grow,” Gleason said in statement. “Little Rock’s southern charm, abundant arts and entertainment venues, beautiful and natural setting and rich heritage also contribute to our ability to recruit exceptional talent at a national level. Our new campus in Little Rock will provide capacity for our company’s long-term growth over many years.”
Gov. Hutchinson credited Gleason for the Arkansas bank’s explosive growth, citing the fact that Bank of the Ozarks is the largest bank headquartered in Arkansas and among the top 60 banks in the U.S. based on asset size.
“George Gleason is a great example of the entrepreneurial spirit in Arkansas,” Hutchinson said. “Through hard work and an innovative plan for growth, he and his team have built a bank that has been ranked as the number one performing bank in the nation by several respected organizations each of the past seven years. The State of Arkansas is grateful to Bank of the Ozarks for this significant investment that will mean great job growth for Arkansas.”
In January 2016, Bank of the Ozarks officials first announced that the company had paid nearly $13 million for the land to expand from its current headquarters at 17901 Chenal Parkway. At the time, bank officials said the Arkansas regional bank would maintain the Chenal Parkway building to house its existing retail branch banking office, leasing operations, corporate loan and mortgage lending divisions and other personnel.
Bank of the Ozarks officials said the existing and future headquarters will require employees with skills in accounting, finance, information systems, marketing, human resources, internal audit, risk management, facilities, legal, trust and tax areas. Approximately 500 employees are expected to move into the building when construction is completed in late 2019 or early 2020, with capacity to accommodate 800 to 900 employees.
Bank of the Ozarks and Arkansas rivals Arvest Bank of Bentonville, Conway-based Home Bancshares, Simmons First National of Pine Bluff have all seen tremendous growth following the Great Recession banking crisis, snapping up smaller distressed community banks across the Southeast and Southwest U.S. mainly through the FDIC’s “failed bank” auction process.
During the height of the nation’s post-recession banking crisis between 2009-2012, Arkansas’ largest banks participated in more than 110 FDIC auctions seeking to purchase distressed banks with assets exceeding $52 billion in more than a dozen states, according to an analysis of the Federal Deposit Insurance Corp.’s (FDIC) “Failed Bank” bid summaries by Talk Business & Politics and the Northwest Arkansas Business Journal.
In July, Bank of the Ozarks reported record second quarter earnings of $90.5 million, easily besting year ago results by 66%. For that same period, the growth-oriented Arkansas financial concern said the bank’s deposits grew 59.3% to $16.2 billion in the second quarter and total assets jumped to $20.1 billion, a 63.4% spike from $12.3 billion a year ago.
Last summer, Bank of the Ozarks completed two of the largest largest acquisitions in the bank’s history. On July 20, the Arkansas regional bank closed on its $800 million acquisition of Atlanta-based Community & Southern Holdings Inc. (C&S), the 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.
As part of bank’s commitment to remain in Little Rock, Arkansas Economic Development Commission spokesman Jeff More said the publicly-traded regional bank will receive “performance-based” incentives from the state of Arkansas through the Create Rebate and ArkPlus programs.
According to the state Department of Finance & Administration (DFA), the Create Rebate program provides qualified businesses a financial incentive equal to 3.9 to 5% of the annual payroll of new full-time permanent employees. The program requires a minimum payroll of $2,000,000 within 24 months for the new full-time permanent employees hired after the date of the financial incentive agreement. Little Rock Chamber of Commerce officials said Bank of the Ozarks will not receive any local financial incentives to remain in the city.
ArkPlus provides a 10% income tax credit to eligible businesses based on the total investment in a new location or expansion project. That program requires a minimum investment and payroll based on the number of new full-time permanent employees hired after the date of a financial incentive agreement signed by AEDC.
The ArkPlus incentive may also be awarded by AEDC as an optional income tax credit or sales tax credit to technology-based businesses that create a new payroll of at least $250,000 and pay wages at least 175% of the state or county average hourly wage, whichever is less.
“These are both performance based incentives, so it would be impossible to say how much the company will receive in credits,” Moore said.
Bank of the Ozarks spokeswoman Susan Blair would not comment on whether or not the bank looked at other locations out-of-state for the company’s new headquarters. However, company officials did mention that there were other cities vying for this project, but would not divulge those suitors.
“No specific states were mentioned by the company specifically, but this type of project certainly will draw a number of suitors,” Moore said, referring additional questions to Bank of the Ozarks.
In January 2017, the Arkansas bank consolidated its real estate specialties loan group and retail banking office in New York City, and opened another loan production office in Atlanta for the company’s mortgage operations a month later. According to the bank’s latest quarterly financial report, Bank of the Ozarks expects to open a retail banking office in McKinney, Texas in 2017, and replace leased facilities with bank-owned facilities in Miami Beach, Fla. and Harrisburg, N.C.
Concerning its future growth strategy, Bank of the Ozarks plans to focus on growing in states with current banking offices and in larger markets and metropolitan areas across the U.S. “where we currently do not have retail banking offices and believe we can generate significant growth from one or two strategically located offices in each such market,” the company said in a recent 10Q filing.
Securities filings also show that future real estate loan production offices may be opened in strategically important markets such as Seattle, Washington, D.C., Boston and Chicago.
“With respect to acquisitions, we are seeking acquisitions that are either immediately accretive to book value, tangible book value, and diluted earnings per share, or strategic to our business, or both,” the company said.