Bank of the Ozarks Shareholders Like George Gleason Show

The two doors were shut to the conference room at Bank of the Ozarks headquarters in Little Rock, and the buzz of conversation went silent at 8:30 a.m.

George Gleason, chairman and chief executive officer of the $4 billion-asset lender, got the 2013 annual shareholders meeting off and running. A few minutes into the hour-long gathering on April 15, his multimedia support needed a nudge.

The video feed on his PowerPoint presentation went dark for a few seconds until Susan Blair leapt to Gleason’s aid. Blair, executive vice president in charge of investor relations, restored the image with some quick keystrokes, and the meeting was back on track.

“Fortunately, there are jobs here that don’t require great technical skills,” Gleason quipped, generating chuckles and smiles around the room.

Shareholders are willing to forgive whatever technical shortcomings their CEO might possess. Overseeing record earnings in 14 out of the past 16 years helps build a mountain of goodwill.

Extraordinary income from FDIC-assisted transactions in 2011 prevented a 15 out of 16 performance, but no one was complaining as core earnings continued trending along a record-setting trajectory.

“That tradition of high performance has continued in the year just ended,” Gleason said.

He underscored the rewards of discipline, especially as it relates to managing credit. The company’s net charge-off ratio for its non-covered loans and leases was 0.3 percent for 2012 compared with 1.1 percent for the industry.

“We’re in the business of loaning money, and it’s a dangerous business,” Gleason said. “Every year, we’ve outperformed the industry.”

He spoke glowingly of the profitability booked after taking on the problems of other banks via FDIC-assisted transactions.

Acquired portfolios have produced a 9 percent yield. Since Bank of the Ozarks entered the bidding wars in 2010, the company has received an additional earnings boost.

An equation of $17.8 million in other loss share income plus $11.3 million from gains on the sale of foreclosed assets offset by $6.5 million in expense provision added $22.6 million to the bottom line.

“That’s a nice contributor to our earnings over a 2½-year period,” he said.

Gleason pointed out that it was nice to look back on past achievements, but those numbers were in the history books and really didn’t matter anymore. The goal is to keep climbing to new heights.

“This is the standard we’ve set, and we hope to report similar results in 2013,” he said.

Gleason opened the floor to questions, and with none offered, concluded the meeting: “You all have been an extremely well-behaved group.”