First quarter net income for Little Rock-based Bank OZK fell 89.2% thanks to a significant credit loss allowance charge. First quarter revenue was $299.653 million, down 6.1% compared with the same quarter in 2019. However, the revenue beat the consensus estimate of $234.38 million.
Net income was $11.858 million in the quarter, down almost 90% from the $110.712 million in the same period of 2019. Per share earnings of 9 cents was well below the consensus estimate of 61 cents.
The bank said in the report that the “severe economic downturn” and a new method to calculate current expected credit losses (CECL) resulted in a first quarter loss provision of $117.7 million. The total allowance for credit losses held by the bank at the end of March was $316.4 million.
“During the first quarter of 2020, we continued our long-standing focus on our team members, meeting the needs of our customers, serving the communities in which we operate and delivering favorable returns for our shareholders,” George Gleason, board chairman and CEO, said in the earnings report. “As we navigate the various challenges created by the current economic environment, we will continue to seek to capitalize on investment and other opportunities which may arise from such turbulent conditions. We believe our team of industry and technology professionals is well-positioned to lead the Bank to continued success.”
Deposits were $18.81 billion at the end of the quarter, up1.8% from $18.48 billion at the end of the first quarter in 2019. Total assets were $24.57 billion at the end of the quarter, up 6.8% from $23.01 billion at the end of March 2019. Total loans were $18.23 billion, up 4.3% from $17.48 billion during the same quarter in 2019.
The first quarter results follow a 2019 that saw gains in income and revenue. Full-year net income for Bank OZK totaled $425.906 million, up 2.1% compared with the 2018 total. Earnings per share of $3.30 for the year beat the consensus estimate of $3.28. Full year revenue was $1.27 billion, just ahead of the $1.208 billion in 2018.
The share price of Bank OZK (NASDAQ: OZK) closed at $17.70 on Thursday, up 35 cents. In the past 52 weeks the share price has ranged between $14.20 to $34.34.