Bank OZK Spends Less to Make a Dollar

A Bank OZK branch in Houston, Texas

Little Rock’s Bank OZK set the bar in Arkansas for the best efficiency ratio, which measures how much money a bank has to spend to make a buck. For every dollar of revenue generated during 2022, Bank OZK spent 35.5 cents.

“Most banks with a good efficiency ratio focus relentlessly on controlling costs,” said George Gleason, chairman and CEO of the $27.6 billion-asset lender. “We take a different approach. 

“We achieve our industry-leading efficiency ratio by executing a great business model, which generates strong revenue year after year. Our strong revenue allows us to constantly improve our products and technology for our customers and provide competitive pay and benefits for our teammates.”

Among the 20 largest banks headquartered in Arkansas, only one other lender operated at a sub-40% efficiency ratio: Searcy’s First Security Bank at 39.43%.

Top 20 ROE

Within that group of 20, two banks registered a return on equity north of 20%.

Evolve Bank & Trust of West Memphis, supported by a staff of 518, ginned out a 28.51% ROE during 2022. That performance was backed by a $25.5 million profit that almost doubled 2021’s net income of $12.9 million.

The loan portfolio of the $1.7 billion-asset bank grew from $574.7 million in 2021 to more than $843 million last year.

About 245 miles to the northwest, Green Forest’s Anstaff Bank tallied a 20.61% ROE for 2022. Backed by a staff of 164, the bank recorded a profit of nearly $15.5 million last year compared with $13 million in 2021. That positioned Anstaff for a $6.6 million dividend payout last year.

The bank’s total interest income grew from nearly $33 million in 2021 to $37.5 million last year. Anstaff’s 2021 loan portfolio of $621.7 million grew to more than $694.7 million last year.

Billion Dollar Prospects

With total assets of $967 million, Anstaff is among three Arkansas banks on the brink of joining the Billion Dollar Club.

Jacksonville’s First Arkansas Bank & Trust ended the year with total assets of more than $985 million, followed closely by Fayetteville’s Signature Bank of Arkansas at more than $982 million.

First Arkansas reported net income of $14.3 million last year compared with about $20.8 million in 2021. Costs for replacing Fiserv as its credit card processor slashed into profits.

“We have chosen to work with Primax to get some better pricing and better service,” said Larry Wilson, chairman and CEO of First Arkansas.