The most interesting thing about Bank of the Ozarks' (NASDAQ: OZRK) second-quarter conference call was what wasn't discussed: Only five days earlier, Bank of the Ozarks permanently stopped submitting regulatory filings to the Securities & Exchange Commission (SEC).
I had never heard of a bank doing this. Two analysts I spoke to, each with decades of experience, had never heard of it either. Even an analyst who follows Bank of the Ozarks was caught off guard and didn't seem to understand the bank's move when we discussed it two months later.
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Yet, when I asked Bank of the Ozarks' chairman and CEO, George Gleason, about the decision to suspend SEC filings, here was his response (emphasis added):
To Gleason's point, it's true that other banks are exempt from SEC filings. But there aren't many of them. Gleason cites three, while a spokesperson for the bank said there "over a dozen banks in total." Either way, it's a minuscule fraction of the hundreds of banks that trade publicly.
This is why you would have been excused for thinking that Bank of the Ozarks would have gone out of its way on its latest earnings call to let analysts and investors understand the rationale behind the move and quell any concern about it. But it didn't.
When I asked a bank spokesperson about this, she responded by pointing to two places where the bank touched tangentially on the topic:
Here's the section she referenced from the bank's second-quarter earnings release:
And here's the relevant portion from Executive Vice President Tim Hicks' prepared remarks on the bank's second-quarter earnings call:
These explain where the bank's filings can be found, but it doesn't say the bank will no longer submit regulatory filings to the SEC. That's an independently significant fact, which, given how unusual it is, seems like it would warrant a more patent disclosure.
This may seem trivial, but it isn't. It's an affront to transparency, closing off one of the principle places where analysts and investors get information about publicly traded companies. Even more importantly, it leaves an objective observer to ask why the top performing bank stock in the country over the past two decades would even consider doing something with such bad optics.
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