On the heels of a 20% jump in its first-quarter earnings from a year earlier, to $9.3 million, Bank of the Ozarks Inc. said it is considering returning the funds it received from the Treasury Department's Troubled Asset Relief Program.
"We don't need it. We could give it back, and we are seriously considering the possibility of doing so," George Gleason, the $3.2 billion-asset Little Rock's company chairman and chief executive officer, said in an earnings conference call Tuesday.
The board will discuss it at a meeting next week, he said.
Bank of the Ozarks took $75 million of government capital because it expected it would be able to use the money to buy a failed institution, Gleason said. However, the recession has diminished the potential for earnings growth from any acquisition, making such opportunities less attractive, he said.
After the market closed Monday, Bank of the Ozarks said its provision for loan losses more than tripled, to $10.6 million. The nonperforming asset rate increased 59 basis points, to 1.17% of its total.
Total loans were essentially flat from a year earlier but fell 1.5% from a quarter earlier, to $2 billion, as economic stress caused loan demand to shrink.
