Bank of the Ozarks Move Slices Reporting Obligations to Fed

Bank of the Ozarks Move Slices Reporting Obligations to Fed
Bank of the Ozarks Chairman and CEO George Gleason during a July 2017 visit to the Nasdaq MarketSite in New York City's Times Square in honor of the bank's 20th anniversary as a public company. (Nasdaq)

When Bank of the Ozarks absorbed its parent company in June, the $20 billion-asset lender shed itself of two regulators.

The decision to merge Bank of the Ozarks Inc. into the bank meant no more reports for and examinations by the Federal Reserve, tasked with regulating bank holding companies.

Eliminating the bank holding company also eliminated reporting requirements to the Securities & Exchange Commission.

The change eliminated “redundant corporate infrastructure and the associated duplicative federal regulatory oversight,” Greg McKinney, the bank’s chief financial officer, said in April, two months ahead of the move.

The largest banking concern based in Arkansas had joined a tiny group of lenders that operate as public companies but don’t report to the SEC.

A check of regulatory filings indicates that Bank of the Ozarks is among fewer than two dozen lenders with publicly traded shares that instead report to the Federal Deposit Insurance Corp. (See list.)

This handful of companies files the same 10-Qs (quarterly reports), 10-Ks (annual reports) and more with the FDIC that other public companies are required to file with the SEC.

“All of the filing requirements are exactly the same,” said George Gleason, chairman and CEO of Bank of the Ozarks. “The form and content is exactly the same.”

The publicly traded banks without a holding company range in size from the $80 billion-asset First Republic Bank of San Francisco to the $54 million-asset Quarry City Savings & Loan Association in Warrensburg, Missouri.

“The other publicly traded banks that I’m aware of were banks when they went public,” Gleason said.

Bank of the Ozarks, however, went public under its holding company, and the move to merge Bank of the Ozarks Inc. into the bank served up a rarity in the securities world.

“It’s not a voluntary election to file with the SEC,” Gleason said. “We can no longer file with the SEC.”

On July 6, Bank of the Ozarks Inc. made its final SEC filing: A form 15D, which served as official notice of its suspension of duty to file reports with the commission.

“Effective June 26, 2017, Bank of the Ozarks Inc. merged with and into Bank of the Ozarks, with Bank of the Ozarks surviving the merger as the surviving corporation.”

New Bank of the Ozarks filings that in the past would be available through the SEC’s website are accessible through the FDIC’s website. Those same reports remain available through the company’s website as well.

The FDIC is a common regulator shared by public or privately held banks and thrifts whose deposits are protected by FDIC insurance. As such, Bank of the Ozarks was already under FDIC purview and subject to filings with the agency.

As a state-chartered bank, Bank of the Ozarks remains under the regulatory jurisdiction of the Arkansas State Bank Department.

The unusual move to do away with its holding company and the ensuing changes caused minor ripples in some corners of the investment community.

“I believe Shakespeare wrote a play about this: ‘Much Ado About Nothing,’” Gleason said.

(Related: George Gleason Reallocates Time to Oversee Loan Growth)

Simmons Considers Action
George Makris, chairman and CEO of Pine Bluff’s Simmons First National Corp., said the possibility of merging its holding company into Simmons Bank is under consideration.

“We’re just beginning to look at it,” Makris said. “We have a corporate board retreat coming up at the end of the month in Little Rock (at Simmons’ new River Market building, the former Acxiom headquarters). Our first item on the agenda is doing that exact thing. We believe it’s something worth looking at.”

At one time, Simmons had eight banks operating under its holding company. All of those charters were merged into Simmons Bank of Pine Bluff by 2015.

Multibank ownership is one of the functions of a bank holding company.

“When you only have one bank, that purpose goes away,” Makris said. “We have pending acquisitions with Bank SNB of Stillwater, Oklahoma, and Southwest Bank of Fort Worth. When those are completed, we will become a three-bank holding company.”

That temporary arrangement will end with the merger of the two banks into Simmons Bank in the following weeks.

The leadership at Conway’s Home BancShares Inc. analyzed the pros and cons of merging the holding company into Centennial Bank this summer.

“We looked at it but decided not to,” said Johnny Allison, chairman of Home BancShares. “We’re going to keep doing what we’re doing.”

Allison noted the move has some advantages, such as getting rid of regulatory exams by the Federal Reserve along with eliminating reporting requirements.

In September, Home BancShares removed from the market one of the largest publicly traded banks that didn’t report to the SEC.

The company closed on its $820 million acquisition of the $3.1 billion-asset Stonegate Bank of Pompano Beach, Florida.

Allison expects Stonegate to be fully consolidated into Centennial Bank during the first quarter.

“It appears to be the smoothest transition we’ve ever done even though it’s the biggest transaction we’ve ever done,” Allison said.

Publicly Traded Banks Without Holding Companies

  Total Assets Initial Public Offering
First Republic Bank, San Francisco $80 billion Dec. 9, 2010
Signature Bank, New York $30.7 billion March 23, 2004
Bank of the Ozarks, Little Rock $20 billion July 17, 1997*
Towne Bank, Portsmouth, Virginia $8.4 billion May 5, 1999
Opus Bank, Irvine, California $7.7 billion April 16, 2014
Carter Bank & Trust, Martinsville, Virginia $4.3 billion March 15, 2007
Preferred Bank, Los Angeles $3.6 billion Aug. 19, 1999
Hingham Institution for Savings, Hingham, Massachusetts $2.1 billion Dec. 14, 1988
First Bank, Hamilton, New Jersey $1.2 billion Oct. 15, 2010
Bank of Princeton, New Jersey $1 billion May 31, 2017
Idaho Independent Bank, Coeur D'Alene $662 million March 15, 1999
1st Capital Bank, Monterey, California $557 million July 13, 2007
Summit State Bank, Santa Rosa, California $537 million July 14, 2006
Harford Bank, Aberdeen, Maryland $342 million Oct. 28, 1999
Pacific Valley Bank, Salinas, California $261 million Feb. 17, 2005
BlueHarbor Bank, Mooresville, North Carolina $192 million Jan. 4, 2010
Quarry City Savings & Loan Association, Warrensburg, Missouri $54 million July 30, 2013

*Merged its bank holding company into the bank on June 26.