July 2018 Issue
by Dwain Hebda
George Gleason is a numbers guy of the highest order. Every day the CEO and chairman of Bank of the Ozarks – now Bank OZK – surfs a tsunami of data, tracking every conceivable element of bank operations impacting the bottom line in ways great and small. Nearly 40 years into the banking business, it’s second nature, as essential as breathing. Numbers, he’ll tell you, are everything.
So, it’s somewhat curious that Gleason shows such an indifference to a number that’s usually the first and often the most widely regarded on the national scorecard of his industry – national rank by size. Gleason barely gets the ranking out of his mouth – 58th largest of the roughly 5,000 FDIC-insured commercial banks in the United States – before all but dismissing it.
“Size has never mattered to us,” he says. “When I meet with investors, often they ask the question, ‘Is your goal to be the 20th biggest bank in the country or the 10th biggest bank in the country?’ That’s not our goal.”
It’s not that Gleason doesn’t regard the ranking as a point of pride, particularly for how it reflects the work of Bank of the Ozarks’ nearly 2,500 employees. It’s a nice dose of perspective too, considering the day he took over then-Bank of Ozark – March 6, 1979 – the business ranked somewhere around 11,000th in the country.
But, Gleason says, as a qualitative measurement, it misses entirely the vision he set out on Day One.
“The strategy that I articulated to staff, which is now just about 39 years and three months ago, was our goal isn’t to be the biggest. Our goal is to be the best,” he says. “That morning, without really realizing the full consequence and full import of that statement, we set a standard to try to be excellent in everything we do and to try to strive for perfection. We know we’ll never hit perfection, none of us ever do. But you can strive for perfection.
“I don’t ever meet with the board and say, ‘We’re the 58th largest bank in the country and our goal is to become the 50th or the 40th.’ All of our plans and goals and objectives are centered around getting better, getting better, getting better,” he adds.
George Gleason’s education in daily self- and organizational improvement came almost from the beginning. His parents were entrepreneurs of a multimodal variety, operating a collection of stores, businesses and agricultural ventures in and around Dardanelle.
“As a kid, I worked in all of those businesses and when I say as a kid, I’m talking about I worked in them from the time I was 10 on every Saturday, every Sunday and so forth,” he says. “Did all sorts of very nasty, very hot, very dangerous jobs in every one of their businesses.”
Gleason’s father began teaching him the financial elements of the family’s interests in his early teens; by 14, he was preparing the tax returns and keeping the books. He showed uncommon appetite and aptitude for the hands-on business experience, later refined by Hendrix College, law school and a stint at Rose Law Firm for what would be his life’s work.
“The interesting thing was, in those first days, when I probably had no qualifications to be the CEO of a bank, my experiences as a child across every line of business provided me perspective and understanding of pretty much every customer we dealt with,” he says. “If somebody came in, and it was a small business owner and he had a loan request, I understood the issues. If someone came in, and they had an operation that cleaned chicken litter out of poultry houses, I had done that.
“I was amazed at how applicable all that childhood knowledge was when I got into the business.”
Throughout his career shepherding Bank of the Ozarks, Gleason kept these fundamentals intact, even as the markets in which the bank operates became larger and the deals considerably more complicated. Cost control, risk management and the ability to outwork the other guy are all key elements of Bank of the Ozarks that ripen day after day, quarter after quarter.
“Excellence and discipline go hand-in-hand,” he says. “The most recent economic downturn, the Great Recession, we were making record earnings in the years leading up to the Great Recession and we made record earnings through the Great Recession. We did that in part because of the commitment to excellence and the focus on discipline.
“In 2005, 2006, 2007, we saw many competitors getting very aggressive on credit terms and very aggressive on pricing and our philosophy has always been that credit is primary to success,” he adds. “You should never, as a banker, be willing to take credit risk that you’re not fully comfortable with, that don’t meet your standards.”
He continues, “Secondarily, you need to get paid for the services you provide and you need to get a reasonable return on equity. And while you’re willing to negotiate somewhat on that, there’s a standard on return on equity beyond which you won’t go. Growth is truly a tertiary consideration.”
By not following the herd in the run-up, Bank of the Ozarks not only maintained its profitability throughout the recession but was primed to seize opportunities its battered competition couldn’t entertain.
“There was not one day in the downturn that we weren’t making every type of loan and truly doing business as usual,” Gleason said. “Many, many competitors were totally out of the game of making new loans because they had so many problems.”
This scenario, combined with Gleason’s prove-it-every-day mantra made Bank of the Ozarks not merely the best option left standing but, as new clients were finding out coast-to-coast, the best option, period.
“There was initially a natural skepticism regarding a bank from Little Rock, Arkansas, being able to execute at the highest level at the top of the industry on the most complex commercial real estate transactions,” he says. “But we’ve been fortunate to get the opportunity to prove that time and time again and earn a reputation for being the guys that can do the most complex, sophisticated transactions with a level of excellence that’s at the top of the industry.
“Expertise, excellence and execution sell well everywhere,” Gleason adds. “We do business with most of the top 100 developers in the United States. We are a go-to bank for them. We do business literally in every major market and a lot of secondary and some tertiary markets throughout the country.”
Bank of the Ozarks’ reach became so pronounced it greatly complicated plans for a new corporate headquarters. Gleason admits having had “significant other opportunities” to locate elsewhere prior to last fall’s decision to stay and build the 247,000-square-foot campus, built by CDI Contractors, at The Ranch along Highway 10 in Little Rock.
“We have a tremendous nucleus of highly qualified people here on our team in Arkansas. It is the core of our corporate infrastructure,” Gleason says. “But we have incredibly valuable teams elsewhere, such as our real estate specialties group that’s headquartered in Dallas and our OZK Labs group that’s headquartered in St. Petersburg, Florida.
“The Arkansas Economic Development Commission, the governor’s office and other folks worked with us to help us overcome and match some of the incentive opportunities we probably could have gotten elsewhere,” Gleason adds. “When you factor in the state’s effort to keep us here and the substantial infrastructure that we already have here it became the right business decision to stay here.”
Four decades into his leadership tenure, Gleason has yet to find a lower cruising speed for the organization. In addition to the new headquarters, the company is adding 36,761 square feet to its operations in Ozark, Arkansas, creating more than 130 jobs over the next five years. And, in July 2018, the bank’s name will change to Bank OZK, another symbol of the organization’s forward-looking mentality.
“A large part of the new name is to reflect our commitment to technology and our commitment to serve a new, coming generation of bank customers,” Gleason said. “Bank OZK, we think, is a very modern name. We think it evokes a technological feel. We think it evokes an international feel (and) we think it really speaks to what our company will be in five, ten, 20 years from now.”
Whatever that company ultimately looks like, there’s no doubt Gleason will be shouting his well-worn gospel from the parapets.
“You’ve got to constantly strive to improve; I think that has been the key to my longevity as the CEO here,” he says. “I have never been satisfied with what we’ve accomplished. Even with the best results, I’ve always believed we could do better.
“I tell the people who work closely with me every day, if you want to work for Bank of the Ozarks, you need to be willing to come to the office and run up Mount Everest every day,” Gleason adds. “However well we did something yesterday, we want to try to do it better today and even better tomorrow. It is a constant quest for improvement.”
CORRECTION: The print version of this article incorrectly counted the number of employees at Bank of the Ozarks. The company has nearly 2,500 employees.