What’s Missing? (Gwen Moritz Editor's Note)

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On police procedural shows, victims are sometimes asked to list things that have been stolen in a burglary, and I ask myself if I would be able to do that. I would probably notice the absence of something I use daily, like a TV or favorite kitchen knife, but how long would it take to notice that a particular necklace or keepsake was missing?

About two weeks after I dismantled my Christmas decorations, including several precious wall hangings my mother made, I realized I had forgotten to rehang the framed artwork that normally occupied those totally blank spaces.

Recognizing what’s missing from a news story is infinitely harder than assessing the clarity and relevance of what’s there and presents a constant editorial challenge. One thing years of experience taught me is this: If net income is missing from the headline on a publicly traded company’s earnings report, it means profit wasn’t anything to brag about.

With this in mind, let us compare the headlines on the fourth-quarter/year-end earnings reports as issued by Arkansas’ three big publicly traded banks in the order they were released:

► “Results of West Texas Headwinds and FDIC Surprise 4th Quarter Assessment Only Things Standing Between [Home BancShares Inc.] and Expected 2023 Goal of $400 Million Plus”

► “Bank OZK Announces Record Fourth Quarter and Full Year 2023 Earnings”

► “Simmons First National Corporation Reports Fourth Quarter 2023 Results”

I think you see what I mean.

While Bank OZK bragged about its record earnings right there in the headline, something else was missing from its release — and I confess I didn’t notice it until a sharp-eyed banker called it to my attention. Unlike the others, Bank OZK felt no need to blame its results on a $9.9 million special assessment by the Federal Deposit Insurance Corp.

Meanwhile, Home BancShares blamed litigation following a Texas acquisition and a $12.9 million special assessment by the FDIC for its failure to meet its earnings goal. Simmons mentioned the assessment ($10.5 million) as well as the necessity of selling some bonds at a loss as factors in fourth-quarter earnings that were more than 70% below the same period in 2022.

Calling the assessment a “surprise,” as Home BancShares did, might be a bit of an overstatement. The final assessment announced in November was only a bit higher than the original proposal in May, but the necessity of a special assessment was recognized as soon as Silicon Valley Bank collapsed in March. Only banks with at least $5 billion in deposits — in Arkansas, that means the three above, plus Arvest Bank and First Security Bank — were subject to the assessment.

To quote my banker source:

“The whole premise of the big banks absorbing that cost was that core business was so strong it would be a fairly minimal hit.” Clearly not true in every case.