Bank of the Ozarks Wednesday (July 11) posted another strong quarterly earnings report as the dynamic Arkansas-based banking group prepares for the next phase of growth and competition with larger regional and national financial institutions with a new name and new look.
For the period ended June 30, the Little Rock-based regional bank reported net income of $114.8 million, or 89 cents per share, up 26.8% from $90.5 million, or 73 cents per share, in the same period a year ago. That met Wall Street expectations of 89 cents per share on second quarter revenue of $255.5 million, according to a survey of financial analysts by Thomson Reuters.
“We are very pleased to report another excellent quarter, continuing our long tradition of achieving industry-leading results quarter after quarter,” said longtime Bank of the Ozarks Chairman and CEO George Gleason. “Our outstanding team continues to work hard delivering great results for both our shareholders and customers.”
Overall, Bank of the Ozarks saw near-across the board improvements among its key financial metrics. Deposits grew to $17.9 billion at the close of the second quarter, a 10.2% increase from $15.2 billion a year ago. Total assets jumped 10.1% to $22.2 billion compared to $20.1 billion in the same period of 2017.
Net interest income for the second quarter of 2018 was a record $224.7 million, an 11.2% increase from $202.1 million for the second quarter of 2017. Non-interest income for the second quarter, however, decreased 14.0% to $27.4 million compared to $31.8 million a year ago.
Total loans, including purchased loans, were $16.8 billion at June 30, 2018, a 10.4% increase from $15.2 billion in the same period of 2017. Non-purchased loans, which exclude loans acquired in previous acquisitions, were $14.2 billion for the quarter, a 28.6% increase from $11 billion a year ago.
Common stockholders’ equity was $3.61 billion at June 30, 2018, a 10.9% increase from $3.26 billion in the second quarter of 2017. Tangible common stockholders’ equity was $2.91 billion for the quarter, a 14.4% increase from $2.54 billion a year ago.
REBRANDING ON THE HORIZON
Bank of the Ozarks’ robust second quarter report comes as the fast-growing Little Rock banking group prepares for the next step in its maturation following a long period of key acquisitions across the Southeast U.S. that has given the Arkansas bank a presence in 10 states, including commercial loan offices in New York and California.
To coordinate that growth, the Little Rock bank began construction in late 2017 on the new 247,000-square foot headquarters at a 44-acre site on State Highway 10 in west Little Rock. According to company officials, some 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.
Next week, Bank of the Ozarks is expected to officially change its name to Bank OZK as part of a strategic rebranding effort. When the new name was announced in March, company officials said the new name will be beneficial in achieving its long-term objectives, including continued growth and expansion in new markets.
“Bank OZK is a new name reflecting both our rich heritage and history and our commitment to be a leader in technology and innovation as we expand across the United States,” said Gleason of the name change, which was approved by Arkansas regulators on June 16. “Bank OZK retains the brand equity we have developed over our 115-year history and our 21 years of outstanding performance as a public company. At the same time, it frees us from the limitations of a name tied to a specific geographic region.”
Once rebranding efforts get underway, company officials said the bank intends to adopt a new logo and signage in connection with the name change but does not expect any interruption of service to customers. The local bank expects to incur one-time, pre-tax expenses of between $15 million and $25 million in the third quarter.
Bank of the Ozarks’ common stock currently trades on the NASDAQ Global Select Market under the ticker symbol “OZRK.” The Little Rock publicly-traded concern anticipates that its common stock will continue to be listed on the NASDAQ Global Select Market under a new ticker symbol, “OZK,” which bank officials have already reserved.
During the past 52 weeks, Bank of the Ozarks share price has ranged from a low of $40.15 to a high of $53.70. The Arkansas regional bank’s shares closed flat at $26.22 per share at the end of Wednesday’s market session, but was down $1.27 in after hours trading.