Bank OZK (NASDAQ:OZK) Q4 2022 Earnings Call Transcript

George Gleason: Matt, that’s going to depend purely on what we see as reinvestment opportunities with the inverted yield curve, and steeply inverted as it is, and assuming a likely Fed pivot seems to be priced into the yield curve faster than what we would think the Fed’s going to pivot there is not much attractive for us to buy out there. So we’re pretty much on the sidelines and letting that portfolio run off. If there is a reversal in that sentiment and we get some higher yields and a better entry point, we would buy bonds and might buy a lot of bonds if it were what we thought was a very attractive entry point. But the market seems €“ the bond market seems to be a little ahead of itself right now with that steep inversion in the yield curve. So, we are sidelined and we are not going to chase it. So, if we miss that in that portfolio just gets smaller and we are okay with that.

Matt Olney: Okay. Alright. That’s all for me. Thanks and congrats on the quarter.

George Gleason: Thank you so much.

Operator: One moment for our next question. Our next question will come from the line of Jennifer Demba from Truist. Your line is open.

Jennifer Demba: Thank you. Good morning. Just curious how the new mortgage lending operation is going? And if you have any interest in starting any other new business lines anytime in the next several quarters?

George Gleason: Yes. We are working on the technology. We have got our three senior members of the mortgage team onboard, and they are doing all their process build and governance and risk build-out around that. We are in testing on the technology product that’s going to drive that business when we get the technology product fully vetted and tested, we will start adding some origination teams and begin doing business. That probably, Jennifer, is third quarter before we actually start that business. So €“ and we will start it in a small scale way and ramp it up slowly. So, that really is probably a 2024 matter that you will begin to see a little bit of trickle of results in there, late €˜23, but nothing that’s going to move the needle until possibly sometime into 2024.

Jennifer Demba: Great. Thank you.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Michael Rose from Raymond James. Your line is open.

Michael Rose: Hey. Good morning guys. Thanks for taking my questions. I wanted to start on the expense side of the house. You guys have done a bunch of different initiatives and projects kind of over the years. Just wondered to see if you had anything on tap for 2023? And then how should we think about different components, whether it would be kind of wage inflation, annual merit increases healthcare costs, FDIC costs going up. If you can just kind of contextualize the expense outlook, I would appreciate it. Thanks.

George Gleason: Tim, go ahead.