Bank of Ozarks sheds a layer of regulation

Arkansas-based lender removes holding-company status, Fed oversight

New York /
Nov.November 09, 2017 10:05 AM
George Gleason

George Gleason

Bank of the Ozarks in June did away with its holding-company structure as a way to save costs by removing oversight by the Federal Reserve.

And while other banks have the same structure, some say the institutions could be going back to the days of “regulatory arbitrage” seen before the financial crisis when banks sought more lenient regulators, the Wall Street Journal reported.

“It might be arbitrage,” said Karen Shaw Petrou, managing partner of the policy-analysis firm Federal Financial Analytics Inc. “But it’s also a huge boost to their challenged earnings.”

Bank of the Ozarks and other lenders are still regulated by the FDIC, which they said is not a lenient regulator.

“We didn’t really need to be regulated by both,” Bank of the Ozarks CEO George Gleason said.

The Arkansas-based bank, with about $21 billion in assets, is the largest company in recent years to shed its holding-company structure, which is used by about 80 percent of banks and thrifts. Signature Bank is another that doesn’t have a holding company.

Bank of the Ozarks is one of the most active lenders in New York City, especially in the risky construction-financing space so many competitors have pulled back from. In July, company executive Dan Thomas, who headed the real estate lending group, abruptly resigned. But that hasn’t stopped the firm from providing significant loans to New York developers. Earlier this month, it issued a $215 million loan to the developers of 537 Greenwich Street and in September provided the senior portion on a $170 million construction loan to the Chetrit Group for a retail-hotel Tower On West 34th Street.  [WSJ] Rich Bockmann


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
The Torkian Group's Hersel Torkian and 250 East 83rd Street (Getty, Google Maps, The Torkian Group)
Torkian nabs $145M loan for Upper East Side development
Torkian nabs $145M loan for Upper East Side development
(Getty Images)
Housing affordability is worst on record, data shows
Housing affordability is worst on record, data shows
Rotem Rosen with rendering of 126 E 57th Street (Getty, ODA Architecture)
Rotem Rosen lands $170M construction loan for Billionaires’ Row condo
Rotem Rosen lands $170M construction loan for Billionaires’ Row condo
Triangle Equities' Lester Petracca with 533 Main Street (Triangle Equities, Getty)
Record East Orange project lands $317M financing
Record East Orange project lands $317M financing
From left: Trinity Place Holdings’ Matthew Messinger and Macquarie Group’s Shemara Wikramanayake along with 77 Greenwich Street (Getty, Trinity Place Holdings, Macquarie Group, Google Maps)
Trinity Place gets extension to finish pandemic-slowed 77 Greenwich
Trinity Place gets extension to finish pandemic-slowed 77 Greenwich
Estate Partners' David Aviram, FIA Capital Partners' David Goldwasser and Steve Croman (LinkedIn, Google Maps, Getty)
Steve Croman: I was duped by predatory lender
Steve Croman: I was duped by predatory lender
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...