15to pick up activity from qualified borrowers looking for a bank that will work with them.“They’re really big, chunky loans.They’re construction developmentloans, which are much, much largerthan any bank with a [similarly] sizedbalance sheet would take.”2024 may be one such environment. While thereare still banks competing against Bank OZK, others have pulled back due to earnings weakness, interest rate risk, credit issues or low capital levels.The NaysayersGleason knows regulators, short sellers and theindustry are watching Bank OZK to see if it cancontinue dodging the shortfalls that have befallenhundreds of banks before it. Scouten, for his part,Benjamin Gerlinger / Citigroupunderstands why people are negative on the bankafter all this time, even if they’ve been repeatedlyproven wrong. He just thinks they should considerupdating their thesis.“It’s been the same thesis for seven years now,”manager and that his thought process is “worthyhe says. “At some point, you just have to give cred-of respect” from both admirers and critics.it to the management team that they’ll continue to“That sort of approach in banking draws a lotdo the things that drive profitability.”on cognitive ability and a willingness and ability toBank OZK sets itself apart in the industry asunderstand complex situations,” he says. “I thinkone of the most active managers of the risks ita bunch of people would agree with me here, youtakes — and makes money for doing it. It doeswant Gleason doing that. You don’t necessarilythis in the face of skepticism that these risks canwant guys who come up the ranks from businessbe managed or that the bank is managing them asschool.”well as it says it is.Piper Sandler’s Scouten saw Gleason’s portfo-“We try to let extraneous things be extraneouslio management approach when Gleason person-things,” Gleason says. “We focus on our businessally managed the book of assets that Bank OZKand our customers. … If you take care of youracquired in FDIC-assisted deals. He recalls thatcustomers, you’re going to put up good results. IfGleason knew the details of hundreds of theseyou put up good results, you’re going to take carecredits. “The guy’s mind is insane,” he says.of your shareholders. So, if people are crazy onGleason doesn’t have a target asset size in mindthe short side for a little while and have a negativefor Bank OZK, which falls squarely within the re-thesis, that’s on them. Just keep producing, keepgional bank space and misses the heightened scru-delivering the results, and you win in the long run.”tiny that regulators apply to bigger banks. Therehave been years when the bank hasn’t grown be-Kiah Lau Haslett is the banking & fintech editor atcause competition pulled pricing to levels belowBank Director.the bank’s standards. And there are times whenthe rest of industry has pulled back, nursingwounds inflicted during more exuberant times orrebuilding capital — that’s when Bank OZK likes
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