Mr. Gleason: Bank of the Ozarks is a bank holding company with 33 offices located in northern, western and central Arkansas. We have 1 billion in total assets and have enjoyed excellent growth over the last eight years. We have been pursuing a growth and de novo branching strategy that has seen our growth come primarily from the opening of new offices. In fact, in the last eight and a half years we have grown from five offices to 33 offices.
TWST: Is there a reason for your strategy of de novo openings
rather than acquisitions?
Mr. Gleason: When we originally started our de novo branching
strategy in the fall of 1994, we were not a public company and as
a result could not really effectively make acquisitions for
stock. We didn't want to incur additional debt at that time, so
we worked hard to develop an effective strategy that we could
employ to grow and expand the company without incurring
additional debt or issuing stock. The de novo branching strategy
seemed to work very well for that purpose. We realized that if we
were going to significantly expand the company with de novo
branching we had to execute that strategy far better than most
banks typically execute a branching strategy. Specifically, we
had to develop a plan to get our offices to a profitable level of
operations fairly quickly, something around one year plus or
minus so that we could continue opening new offices. Obviously,
with five offices, if the first two new offices didn't become
profitable for two to three years, then we couldn't open the next
two. The strategy was developed and designed in a way to allow us
achieve a sufficient critical mass of business at those offices
quickly enough so we could achieve our breakeven level of
profitability somewhere around the one-year mark.
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