Third quarter profit down 1.5% for LR bank

OZK Bank’s third-quarter profits fell as Little Rock Bank reported net profit of $128.3 million on Thursday, down 1.5% from the same quarter’s $130.3 million. period last year.

Earnings per share for the period ended Sept. 30 were $1.08, an 8% increase from $1 in the third quarter of last year. Although up year-over-year, earnings per share were well below industry analysts’ forecasts.

Little Rock’s Stephens Inc. forecast $1.15 for the quarter while Zacks Investment Research’s Wall Street consensus was $1.18.

Lending activity was strong, with total loans increasing by 6.6%. Loan volume in the quarter was $19.5 billion, compared to $18.3 billion a year ago. The bank’s Real Estate Specialties Group (RESG) posted a fourth consecutive quarter of record production with $4.35 billion in loans.

“We are delighted to report our strong results for the third quarter of 2022,” said George Gleason, chairman and chief executive officer, in a press release announcing the results after the close of trading.

“Our results were highlighted by our fourth consecutive quarter of record RESG loan originations and solid growth in loans funded by RESG, as well as significant contributions to the growth of our community banks and other lending teams” , the statement said. “This reflects our dual focus of both organic loan growth and increased portfolio diversification.”

In management comments prepared and released with the results, the bank touted the growth of the Real Estate Specialties group. “Our RESG portfolio has performed very well and we expect it to continue to outperform the industry in this environment of heightened economic turbulence,” the statement said.

Net interest income, fueled by higher interest rates and loan growth, set a quarterly record of $294.6 million. This is an increase of 18.8% from nearly $248 million last year. Net interest margin increased to 5.03% from 4.16% in the third quarter of 2021.

Deposits increased 1.5% to $20.4 billion from $20.1 billion in the third quarter of 2021. term deposits,” the bank noted in management comments.

Total assets remained relatively stable at $26.2 billion, compared to $26.1 billion a year ago.

OZK has set aside $39.8 million to protect against potential loan losses, a provision that is eating into profits. The lender had a negative provision of $7.5 million in the third quarter of 2021.

During the quarter, OZK repurchased approximately 1.2 million shares for $47.7 million. Since the start of the buyback program in July 2021, OZK has repurchased 12.1 million shares – more than 9% of outstanding shares – for $520.2 million. Program authorization ends November 4.

Shares of the bank fell $2.02, or 4.7%, to close Thursday at $41.37.

OZK’s management team has scheduled a conference call with the investment community for 10 a.m. today. The call can be viewed through the investor relations section of the bank’s website, ir.ozk.com.

The bank operates 240 offices in Arkansas, California, Florida, Georgia, Mississippi, New York, North Carolina and Texas.

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