2020 net income down more than 30% for Bank OZK

by Talk Business & Politics staff ([email protected]) 337 views 

Little Rock-based Bank OZK on Thursday (Jan. 21) reported that full-year net income was $291.9 million, below the $425.9 million in 2019, with “significant” allowances for credit losses a big part of the 31.4% decline. 2020 revenue was $1.185 billion, just below the $1.27 billion in 2019.

The regional bank operation reported fourth-quarter net income of $120.5 million, better than the $100.8 million in the 2019 quarter. The 93 cents per share in net income was well ahead of the 78 cents per share that was the consensus estimate among analysts who follow the company. Fourth-quarter revenue was $302.055 million, below the $311.269 million in the same quarter of 2019.

“We are pleased to report one of our best quarters ever, highlighted by record quarterly net interest income, our second highest quarterly net income in company history, excellent asset quality and an efficiency ratio among the best in the industry. It was a strong finish to a challenging year. Our strong capital and liquidity, our disciplined credit culture and our exceptional team have us well positioned for the future,” George Gleason, chairman and CEO, said in the earnings report posted after markets closed Thursday.

The earnings report also reported that the bank absorbed big hits in certain categories because of the global recession induced by the COVID-19 pandemic.

“The sudden and severe economic downturn, combined with the implementation of the current expected credit losses (“CECL”) method to calculate the Bank’s allowance for credit losses (“ACL”) and uncertain future economic projections, resulted in the Bank incurring significant provision for credit losses in the first and second quarters of 2020. The Bank’s provision for credit losses was $203.6 million for the full year of 2020, and the Bank’s ACL was $377.3 million at December 31, 2020,” noted the bank’s earnings report.

Following are key financial metrics noted in the earnings report.
• Total assets as of Dec. 31, 2020, were $27.162 billion, above the $23.555 billion at the end of 2019.
• Total deposits as of Dec. 31, 2020, were $21.45 billion, up from $18.474 billion at the end of 2019.
• Net loans as of Dec. 31, 2020, were $18.913 billion, up from $17.423 billion at the end of 2019. Of those loans, $14.282 billion were real estate loans, up from $12.77 billion in real estate loans at the end of 2019. Real estate loans were 74.1% of the loan portfolio at the end of 2019, up from 70.8% at the end of 2019.
• Return on assets, a key metric in the banking industry, as of Dec. 31, 2020, was 1.13%, down from 1.87% at the end of 2019.

Bank OZK has operations in more than 250 offices in Alabama, Arkansas, California, Florida, Georgia, Mississippi, New York, North Carolina, South Carolina and Texas.

Bank shares (NASDAQ: OZK) closed Thursday at $34.08, down 54 cents. During the past 52 weeks, the share price has ranged between $36.24 and $14.20.

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