Bank of the Ozarks CEO: Media hype hurt mortgage lending revenue
Bank of the Ozarks, Inc. (Nasdaq: OZRK) CEO George Gleason said “tremendous media hype” helped cause the company’s decline in mortgage lending revenue. During a midday conference call, he told investors that the company is still able to provide mortgage lending services to a variety of customers.
“I would love to give you good guidance on where our mortgage lending income is going, but in our markets it seems that the conditions are being driven more by market psychology than economic fundamentals; it is especially difficult to predict when we will return to a more normal environment,” Gleason said.
The company’s third-quarter mortgage lending income declined to $0.59 million during 2007, from $0.79 million a year earlier. Higher energy prices and slower economic conditions are affecting some borrowers, he said.
Bank of the Ozarks has total assets of $2.6 billion as of June 30. The bank’s holding company owns banks in Arkansas, Texas and North Carolina.
After Thursday’s closing, Bank of the Ozarks reported record third-quarter profit of $8.4 million, or $0.50 per share, above views of $0.49 per share and from $8 million, or $0.48 per share, a year earlier. For the three months ended Sept. 30, the firm’s net interest income was $19.7 million, from $17.8 million during the same period of 2006.
The firm’s non-interest expense for the third quarter was $11.7 million, flat with $11.7 million in the year-ago period. Non-interest expense for the first nine months of 2007 is up slightly at $35.7 million, from $33.9 million in 2006.
“Decelerating our rate of increase in non-interest expense is another key goal for 2007,” the chief executive said.
Gleason said the company is pleased with its third-quarter earnings, but said it will be difficult to improve upon each quarter’s results due to difficult market conditions. The company only sees room for modest earnings growth during the fourth quarter, he said.
In midday trading, OZRK shares are up 1.44%, or $0.46, at $32.48. Over the last 52 weeks, shares have ranged from $26.61 to $34.16.
