What happened

Shares of Bank OZK (OZK -0.69%) closed nearly 12% higher on Friday, well outpacing both the broader stock market and many fellow banks. This followed the release of the bank's Q1 of fiscal 2020 results, which actually revealed a scary drop in net profit and sinking revenue.

So what

Bank OZK's net income for the quarter was $11.9 million, down almost 90% from Q1 2019. Revenue fell 6% to slightly under $300 million.

Bank OZK building.

Image source: Bank OZK.

However, that revenue figure was higher than analyst expectations, and while the bottom line was far below them, there was a valid reason for the sharp decline -- loan loss provisioning.

This earnings season for banks is marked by dramatic increases in that line item, as loan defaults are expected to shoot far higher due to the economic damage caused by the SARS-CoV-2 coronavirus. In Bank OZK's case, loan loss provisions increased by a multiple of nearly 20, to almost $118 million in Q1.

Now what

Bank OZK said its crucial real estate loan portfolio -- which is concentrated in big cities like New York and Miami -- has been holding up well so far. In fact, it sees that portfolio strengthening, as other lenders retrench in the wake of the coronavirus and provide opportunity to grab market share.

Investors on Friday seemed to appreciate that Bank OZK is still profitable despite that heavier provisioning, and appears better positioned than many of its peers to at least ride out the coronavirus pandemic.