Bank of the Ozarks in Little Rock, Ark., announced plans Tuesday to dissolve its holding company for cost-cutting purposes as first-quarter profits edged upward.
The $19 billion-asset bank's net income rose 2% from the fourth quarter to $89.2 million. Bank of the Ozarks acquired two companies in July, Community & Southern Holdings in Atlanta and C1 Financial in St. Petersburg, Fla. Those acquisitions affected year-over-year comparisons.
Net interest income fell 2% on a linked-quarter basis to $190.8 million, and noninterest income fell 5% to $29 million. But noninterest expense was little changed at $78.3 million, and the provision for loan losses fell 50% to $4.9 million.
In its planned reorganization, Bank of the Ozarks will merge its holding company into its bank, pending approval from regulators. The transaction is expected to close by the end of June.
The change is “purely an efficiency play,” Chairman and CEO George Gleason said during a conference call Tuesday. He declined to specify the estimated cost savings.
If the change is approved, Bank of the Ozarks would no longer be regulated by the Federal Reserve Board and would continue to be regulated by the Federal Deposit Insurance Corp. and Arkansas banking regulators.
Bank of the Ozarks delayed the closings of its two acquisitions last year by a couple of months because it had to wait on final approval from the Fed after the FDIC and state regulators had already approved the deals, Gleason said.
The move will also help Bank of the Ozarks avoid additional regulatory costs for bank holding companies with more than $50 billion in assets, since it will no longer have a holding company. However, Gleason said the bank is at least three years away from passing the $50 billion threshold.