Write it down.(Whispers)

Think back a month, to the eye-popping $108 million civil lawsuit that northwest Arkansas developer (and former Tyson in-law) Gary Combs filed against Bank of the Ozarks.

Then fast-forward four weeks, to the 8-K disclosure that Bank of the Ozarks filed with the Securities & Exchange Commission on May 29.

Sometime in between, Combs defaulted on his $25.6 million in loans, and BOZ took action. Specifically, it liquidated deposit accounts and a letter of credit--total value of $2.3 million--and then wrote off $10.5 million of the loan because "recently completed appraisals of the underlying real estate collateral" found it to be worth only $12.8 million.

Combs, whose lawsuit accused BOZ, CEO George Gleason and northwest market president J. Shannon White of "bait and switch" tactics, first told your "Whispers" staff that "you knew that would happen." Then he changed tactics.

"We don't discuss it because we're in settlement mode," he said. "Make what you will about it."

What we make of it is this: BOZ doesn't seem to be in settlement mode. As of the date of the 8-K, it had not even responded to Combs' lawsuit but intends "to vigorously defend the action" and believes "that the allegations of the complaint are wholly without merit."

Combs' lawsuit had been disclosed in BOZ's first-quarter report to the SEC, which was filed May 7. But the write-off was not, according to the 8-K, because "payments on the subject loans had been made in a timely manner and the Company had expected the loans to continue to perform."

So before making some investor presentations last week, BOZ revealed its prediction that net charge-offs in 2009 would be higher than its earlier prediction.

After all, $10.5 million is more than the bank wrote off in all of 2008.

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