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$45.5M charge-off drags Bank OZK's Q3 earnings

A $45.5 million charge-off dragged down Bank OZK's third-quarter net income applicable to common shares to $74.2 million, or 58 cents per share.

The compares to net income of $96 million, or 75 cents per share, in the third quarter of the prior year, according to the Oct. 18 release. The S&P Global Market Intelligence consensus GAAP EPS estimate for the third quarter was 86 cents.

Shares were down almost 17% to $28.94 in after-market trading.

The charge-offs were due to two unrelated projects in South Carolina and North Carolina. The bank said these credits had been in the real estate specialties group portfolio since 2007 and 2008, and were previously classified as substandard. After the charge-offs, the combined balance of these credits was $20.6 million.

Total loans increased 6% year over year to $16.73 billion. Total deposits grew 6% from the previous year to $17.82 billion.

The provision for loan losses totaled $41.9 million for the third quarter and $57.1 million for the first nine months of 2018, compared to $7.8 million a year ago and $18.8 million for the first nine months of 2017. The bank said the two real estate specialties group credit charge-offs and the associated recalibration of the allowance for loan losses were behind the increase in the reserve throughout 2018.

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