Bank OZK’s earnings dropped significantly for the second quarter of 2020, compared to its performance in 2019.
The Little Rock-headquartered bank released its second-quarter financial report today (July 23), showing that it earned $50.3 million in net income. This marks a 54.3 percent decreased from the same time period in 2019, when the bank netted $110.5 million.
In a management report, bank executives attributed this drop in net income largely to the Federal Reserve’s early actions at the onset of the COVID-19 pandemic. By cutting funds target rates to nearly zero, Bank OZK’s loan yields dropped faster than the bank could adjust. As a result, the bank’s net interest margin was negatively impacted.
In addition, the bank reported that its diluted earnings per common share for 2020’s second quarter were $0.39 per share. While this marked a decrease of 54.7 percent from 2019, it was a massive resurgence from the first quarter of 2020. During the first quarter, Bank OZK’s diluted earnings per common share plummeted to $0.09.
From the beginning of 2020 to June 30, Bank OZK pulled in $62.1 million in net income, a decrease from the first half of 2019. During that time period, Bank OZK earned $221.2 million, which marks a 71.9 percent decrease for the second quarter of 2020.
However, the bank increased its loans from 2019, with a total of $19.31 billion in loans made by June 30, 2020. By comparison, there were $17.49 million in loans made at June 30, 2019, a 10.4 percent increase.
Deposits also increased in 2020, growing to $20.72 billion from $18.19 billion at June 30, 2019. This is a 14 percent increase from year-to-year. Bank OZK’s overall assets similarly increased, growing by 14.9 percent from $22.96 billion at June 30, 2019 to $26.38 billion at June 30, 2020
Bank OZK is expecting “significant capacity for future deposit” in its network of bank branches, with a total of $1.9 billion in organic deposit growth for the second quarter of 2020. This growth was “partially” added by government stimulus checks and Paycheck Protection Program (PPP) loans.
For the full report, click here.