George Gleason Casts An Eye Back to Record Profits

by George Waldon  on Tuesday, May. 20, 2014 9:18 am  

George Gleason (Photo by Jason Burt)

George Gleason likes where Bank of the Ozarks Inc. is heading and believes the $6.8 billion-plus asset concern is tracking back toward its record-setting path.

"We've got a great business model" with "a great team," said Gleason, chairman, chief executive officer and largest shareholder at Bank of the Ozarks. "It's a great honor to lead these guys."

The Little Rock company set its high-water mark for earnings in 2011 at $101.3 million after more than a decade-long string of record profits. That peak was reached thanks to after-tax gains on three FDIC-assisted acquisitions totaling $36.1 million.

Absent that unusual source, net income fell to $77 million in 2012 before rising to $87.1 million last year. First quarter profits tallied $25.3 million this year, up 26.4 percent from $20 million a year ago.

"We've not gotten back to record earnings, but we certainly like the trend," Gleason said.

He spoke about the company's performance and achievements at Monday's annual shareholders meeting.

Gleason noted that Bank of the Ozarks has a long history of outperforming industry metrics and that 2013 was no exception. He walked through a list of measurements that included:

  • Return on average assets: the company reached 2.12 percent versus the industry average of 1.07 percent.
  • Return on average equity: the company achieved 16.6 percent versus the industry average of 9.56 percent.
  • Efficiency ratio: the company spends 46 cents to produce each dollar of revenue, compared to the industry average of 60.5 cents.

Gleason said the company is shooting to push that number below 40, with an eye toward the extreme target of getting the efficiency ratio close to 30

"It's sort of an outlandish goal, and I don't know if we can get there," he said. "But we're going to try any way."

Net charge-off rate: Loan losses at the company amounted to 0.13 percent versus the industry average of 0.69 percent.

"We have a long history of losing less money than the industry," Gleason said.

He pointed out continued strong contributions of the company's operations in the Lone Star State, which accounted for 47.5 percent of loans in 2013.

 

 

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