Bank OZK Sets Aside More Money for Credit Losses; Q4 Profit Rises 6%

Bank OZK Sets Aside More Money for Credit Losses; Q4 Profit Rises 6%
George Gleason, chairman and CEO of Bank OZK (Karen E. Segrave)

Bank OZK of Little Rock (Nasdaq: OZK) in the fourth quarter continued to exercise caution in consumer lending, adding $32.5 million to its credit loss provisions amid weakening economic conditions. 

For the full year, the bank's credit loss provisions totaled $83.5 million, compared to a negative provision of $77.9 million in 2021. 

Bank OZK said the provisions, which are treated as an expense, cut into profits for the quarter and the full year.

Fourth-quarter net income was $158.8 million, a 6.1% increase from $149.8 million a year ago. On a per-share basis, earnings came to $1.34, beating Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of $1.33 per share.

The bank posted revenue of $426.5 million in the period. Revenue net of interest expense was $360 million, surpassing analysts' average projection of $338.3 million.

Net income for the full year was $547.5 million, a 5.4% decrease from a record $579 million in 2021. On a per-share basis, the bank posted record earnings of $4.54, up from $4.47 for the full year of 2021.

Bank OZK also raised its allowance for credit losses, an estimate of the money it may lose due to bad debts, to $365.3 million at the end of 2022, compared to $289 million at the end of the previous year.

The bank finished 2022 with $20.78 billion in total loans, up 6.5% from the third quarter and 13.5% higher than a year ago.

Deposits totaled $21.5 billion, up 5.3% from the third quarter and 6.4% higher than a year ago. 

The bank reported assets of $27.66 billion, a quarterly increase of 5.5% and annual gain of 4.2%.

Bank OZK has more than 240 offices in eight states including Arkansas, Georgia, Florida, North Carolina, Texas, New York, California and Mississippi.

Shares of the company were up less than 1% in after-hours trading Thursday. 

The Associated Press contributed information to this report.

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