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Bank OZK of Little Rock on Thursday reported second-quarter net income of $50.3 million, down 54.5% from $110.5 million it reported in the same quarter of last year.
The bank blamed the poorer performance on the sudden and severe economic downturn caused by the pandemic, implementation of the new “current expected credit losses” accounting standard and uncertain future economic projection. CECL, an order from the Financial Accounting Standards Board, changed the way large and publicly traded banks reserve for possible loan losses, and it took effect this year.
Earnings per share was 39 cents, a 54.7% decrease from 86 cents. But those earnings beat Wall Street expectations. The average estimate of 10 analysts surveyed was for earnings of 58 cents per share, according to CNN.
For the six months ended June 30, net income was $62.1 million, a 71.9% decrease from $221.2 million for the first six months of 2019. Earnings per share was 48 cents, a 71.9% decrease from $1.71.
“We have continued our long-standing focus on our team members, our customers, serving the communities in which we operate and delivering favorable returns for shareholders,” Chairman and CEO George Gleason said in a news release. “Our strong credit culture and consistent discipline have been important ingredients in our success, and we believe they have positioned us well for the current economic environment.”
As of June 30, total loans were $19.31 billion, up 10.4% increase from the same point last year. Non-purchased loans, which exclude loans acquired in acquisitions, were $18.25 billion, up 15.6% from last year. Purchased loans were $1.06 billion, down 37.4% from last year.
Deposits were $20.72 billion at June 30, a 14% increase from last year. Total assets were $26.38billion, up 14.9% from last year.
Arkansas Business will update this story.