Bank OZK (OZK) to Exit South Carolina by Selling 2 Branches
Bank OZK OZK recently announced that it would be moving out of South Carolina, with the sale of its two branches in the state. As the company wasn’t able to work efficiently with just a couple of branches in the state, it announced the sale of the same.
The company has entered into a Purchase and Assumption Agreement with Indian Land, SC-based Sharonview Federal Credit Union to sell its two branches in the state. These branches are located in Hilton Head Island and Bluffton.
Per the terms of the deal, certain deposit liabilities and loans, as well as cash, real property, personal property and other fixed assets related to these branches will be acquired by Sharonview. As of Mar 31, 2020, the branches had a combined deposit and loan balances of about $107 million and $3 million, respectively.
Financial terms of the deal, expected to close in fourth-quarter 2020, remain undisclosed. The transaction, subject to regulatory approvals, is projected to result in marginal gains on sale.
Bank OZK has been taking initiatives to streamline its operations, of late. Earlier this month, it announced plans to exit the Alabama market with the sale of its two branches in the state.
While the bank’s business-restructuring efforts will likely keep supporting profitability, margin pressure might prevail in the near term, mainly due to the near-zero interest rates. Further, the coronavirus-induced economic slowdown is expected to hurt the company.
Shares of this Zacks Rank #3 (Hold) company have lost 21.1%, so far this year, compared with the 36.2% decline recorded by the industry.
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