Bank OZK on Thursday posted record fourth-quarter net income of $175.1 million, capping the most profitable year in the Little Rock lender’s history.
Income was up 7.5% from $162.8 million in the same period the previous year.
The bank said it had earnings of $1.50 per share, surpassing Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $1.46 per share.
Revenue was $642.5 million in the period. Its revenue net of interest expense was $407.6 million, also topping Street forecasts. Six analysts surveyed by Zacks expected $392.7 million.
For the full year, the company reported profit of $690.8 million, up 22.4% from $564.1 million in 2022. On a per-share basis, full-year earnings came to $5.87.
Full-year revenue was reported as $1.56 billion.
“Our goal for 2024 is to continue to improve our record annual net income and diluted earnings per common share achieved in 2023, and we believe that is a reasonable goal, notwithstanding what appears likely to remain a challenging macroeconomic environment,” CEO George Gleason said in a statement. “We feel that we are well positioned for the coming year, and we look forward to capitalizing on new opportunities.”
The bank’s record year comes as it faces growing concern over its high exposure to commercial real estate. Credit card rating company Moody’s in August shifted its outlook for the bank from stable to negative, pointing to risks from high interest rates, a slowing economy and reduced demand for office space.
Construction and land development deals accounted for 44% of Bank OZK’s loans at the end of 2023, up from 42% in the third quarter and 39.5% a year ago. Non-farm and non-residential projects accounted for about 20% of its loans, and multifamily residential projects accounted for 7.8%.
Bank OZK ended the year with total loans of $26.46 billion, up 27.3% from $20.78 billion at the end of 2022.
The bank’s ratio of nonperforming non-purchased loans to total loans was 0.23% in the fourth quarter, compared to 0.25% in the third quarter and up from 0.22 % a year ago. The bank’s ratio of nonperforming assets to total assets was 0.36%, compared to 0.19% a year ago.
Deposits totaled $27.41 billion, a 27.5% increase from $21.50 billion a year ago.
The bank reported total assets of $34.24 billion, an increase of 23.8% from $27.66 billion at the end 2022.
Bank OZK has about 240 offices in eight states, including Arkansas, Georgia, Florida, North Carolina, Texas, New York, California and Mississippi.
Shares of the company were up 2% Friday to $46.80. Year to date, shares were down nearly 6%.
The Associated Press contributed information to this report.
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