Bank OZK reports net profit decline in Q1
Little Rock-based bank OZK on Thursday (April 21) reported net income of $128 million for the first quarter, down 13.7% from a year earlier. Diluted earnings per common share for the first quarter of 2022 were $1.02, down 10.5% from $1.14 in the first quarter of 2021.
“We are pleased to announce our excellent results for the first quarter of 2022. Our results were highlighted by our second consecutive quarter of record RESG [real estate services group] Lending, reflecting the importance of organic growth in our long-term strategy. With our strong capital and liquidity, disciplined credit culture and outstanding team, we are well positioned for the future,” said George Gleason, Chairman and CEO of Bank OZK.
Key metrics for the quarter include:
- Noninterest income for the first quarter of 2022 included gains on the sale of other assets of $7.0 million, of which $1.8 million was a gain on the sale of the bank’s Magnolia, Arkansas branch .
- Interest income topped $262,371, down 0.6% from $264,064 a year ago.
- Total loans were $18.93 billion as of March 31, 2022, up 1.2% from $18.72 billion on March 31, 2021.
- Deposits were $20.33 billion as of March 31, 2022, down 4.5% from $21.30 billion on March 31, 2021.
- Total assets were $26.56 billion as of March 31, 2022, down 2.6% from $27.28 billion year-on-year.
The Bank’s provision for credit losses was $4.2 million in the first quarter of 2022 compared to a negative provision for credit losses of $31.6 million in the first quarter of 2021. Total allowance for credit losses was at March 31, 2022 to $293.5 million.
“The prospect of further increases in the Fed fund’s target rate, coupled with our significant volume of adjustable rate loans, should be positive for our unpurchased loan yields. However, for several quarters, we have found that most of our recently originated loans had initial contractual interest rates that were lower than our current yield on unpurchased loans. This will tend to offset, to some extent, our benefit from the impact of increases in the fed funds target rate. The actual impact of these opposing forces on our future unpurchased loan yields will depend on a variety of factors, including the speed and magnitude of any increases in the Fed Funds Target Rate and the competitive environment,” the bank said in a statement.