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Bank OZK (OZK)
NASDAQ:OZK
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Bank OZK
(NASDAQ:OZK)
Rating:81Outperform
Price Target:
$52.00
▲(16.38%Upside)
Positive Factors
Credit Performance
Better credit performance led to a significant positive stock reaction.
Earnings Performance
Operating earnings per share surpassed expectations with beats across net interest income, expenses, provision, and fees.
Loan Diversification
Loan diversification and sustained credit trend improvement are expected to drive the valuation multiple higher.
Negative Factors
Credit Risk
Negative migration of some larger credits opens the door to additional charge-off/provisioning down the line, especially if rates stay higher for longer while the economy slows.
Credit Trends
OZK did see some idiosyncratic negative credit trends, including foreclosed loans and moved loans to substandard categories.
Bank OZK (OZK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.19B
Dividend Yield3.76%
Average Volume (3M)721.16K
Price to Earnings (P/E)7.5
Beta (1Y)1.21
Revenue Growth13.85%
EPS Growth2.43%
CountryUS
Employees3,096
SectorFinancial
Sector Strength78
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.47
Shares Outstanding113,431,900
10 Day Avg. Volume627,718
30 Day Avg. Volume721,159
Financial Highlights & Ratios
PEG Ratio6.39
Price to Book (P/B)1.03
Price to Sales (P/S)0.00
P/FCF Ratio6.55
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit3.28
Enterprise Value/Ebitda1.52
Forecast
1Y Price Target
$47.80Price Target Upside6.98% Upside
Rating ConsensusHold
Number of Analyst Covering5
Bank OZK Business Overview & Revenue Model
Company DescriptionBank OZK is a regional bank headquartered in Little Rock, Arkansas, serving customers since 1903. The bank operates across various sectors, primarily focusing on commercial banking, real estate lending, and offering personal and business banking services. Bank OZK is known for its strong presence in the real estate sector, providing a range of financial services including commercial real estate loans, construction lending, and retail banking products such as savings and checking accounts, personal loans, and credit cards.
How the Company Makes MoneyBank OZK generates revenue primarily through interest income derived from its substantial portfolio of loans, including commercial real estate loans, construction financing, and residential mortgages. The bank also earns money through fees and service charges associated with its retail banking products such as checking and savings accounts, as well as transaction fees from debit and credit card usage. Additionally, Bank OZK invests in securities, generating income from interest and dividends. A key factor contributing to its earnings is its strategic focus on real estate lending, which allows the bank to leverage its expertise and relationships in the sector to maintain a robust loan portfolio. The bank's prudent risk management and cost-efficient operations further enhance its profitability.
Bank OZK Earnings Call Summary
Earnings Call Date:Apr 16, 2025
(Q1-2025)
| % Change Since: 13.57%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of strong operational performance, particularly in loan growth and strategic deposit cost management, alongside challenges posed by macroeconomic uncertainties and specific loan portfolio issues. The bank is capitalizing on growth and diversification opportunities, but market volatility has led to cautious guidance and increased provisions.Q1-2025 Updates
Positive Updates
Strong Loan Growth
Bank OZK achieved a 3.8% loan growth in Q1, not annualized, with a continued expectation of mid to high single-digit total loan growth for 2025.
Deposit Cost Reduction
The bank decreased its cost of interest-bearing deposits by 29 basis points during the quarter, with March alone seeing a reduction of 90 basis points in savings.
Diversification Strategy Success
The Corporate and Institutional Banking Group has been a significant contributor to non-RESG loan growth, with new business lines being launched and expanded, such as the natural resources group.
Investment Opportunities
Bank OZK capitalized on market conditions by purchasing $320 million in bonds at favorable yields, reflecting strategic opportunistic investments.
Negative Updates
Paused Guidance on RESG
Due to market uncertainty, Bank OZK paused its guidance on RESG origination volume, despite having a decent closing pipeline for the quarter.
Uncertain Macro Environment
The ongoing macroeconomic uncertainties, including tariff impacts and a potential recession, have led to a cautious outlook and further downside scenario weightings in credit loss provisions.
Substandard Loan Ratings
A Maryland land loan was moved to substandard accrual status due to its complex nature and approaching maturity, requiring close monitoring.
Company Guidance
During the Bank OZK First Quarter 2025 Earnings Conference Call, the management provided guidance on various operational and financial metrics. They highlighted the bank's expectation of mid-single-digit to high-single-digit total loan growth for the year, despite withdrawing specific guidance for their Real Estate Specialties Group (RESG) origination volume due to market uncertainties. In the first quarter, they achieved a non-annualized loan growth of 3.8%. The bank also focused on reducing the cost of interest-bearing deposits, achieving a 29 basis point decrease over the quarter, with a further reduction anticipated due to favorable time deposit repricing. The company reiterated its strategy of growth and diversification, particularly through its Corporate and Institutional Banking (CIB) division, which has contributed significantly to non-RESG loan growth, accounting for 65% of the loan growth over the last four quarters. They maintained a consistent approach to risk management, with an emphasis on credit quality across business lines. The bank also projected a 10% increase in non-interest expenses, aligned with their growth strategy, including opening new branches and expanding business lines. Despite economic uncertainties, the bank remains optimistic about its growth trajectory and the resilience of its asset quality.Bank OZK Financial Statement Overview
Summary
Bank OZK exhibits strong financial health with consistent revenue and profit growth, a stable capital structure, and effective cash management. The income statement shows robust profitability, the balance sheet reflects prudent leverage, and cash flow management is effective, although there is room to enhance equity relative to assets.Income Statement
Bank OZK has demonstrated a strong income statement performance with a gross profit margin of 100% for TTM, indicating efficient cost management. The net profit margin for TTM is approximately 28.8%, which is robust and suggests solid profitability despite a competitive banking environment. Revenue growth has been consistent, showing an upward trend from the prior years, and the EBIT and EBITDA margins are strong, reflecting good operational efficiency.85
Very Positive
Balance Sheet
The balance sheet of Bank OZK is solid, with a debt-to-equity ratio of approximately 0.15 for TTM, indicating prudent leverage management. Return on equity (ROE) is strong at around 12.6% for TTM, reflecting effective use of shareholder capital. The equity ratio stands at 14.9% for TTM, suggesting a stable capital structure, though there is room for improvement in increasing equity relative to total assets.78
Positive
Cash Flow
Bank OZK's cash flow performance is robust, with a positive free cash flow and a moderate free cash flow growth rate from the previous year. The operating cash flow to net income ratio is strong, indicating high-quality earnings. Furthermore, the free cash flow to net income ratio suggests effective cash management, although there has been a slight decrease compared to prior periods.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.77B | 1.37B | 1.25B | 1.10B | 984.91M | Gross Profit |
| 1.48B | 2.25B | 1.25B | 1.10B | 984.91M | EBIT |
| 931.29M | 1.02B | 845.41M | 752.89M | 376.21M | EBITDA |
| 1.02B | 904.40M | 765.52M | 796.05M | 419.97M | Net Income Common Stockholders |
| 716.46M | 690.78M | 564.14M | 579.00M | 291.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.35B | 2.15B | 4.53B | 5.97B | 5.80B | Total Assets |
| 38.26B | 34.24B | 27.66B | 26.53B | 27.16B | Total Debt |
| 883.04M | 1.27B | 1.08B | 1.22B | 1.10B | Net Debt |
| -1.90B | -874.80M | 41.75M | -836.46M | -1.30B | Total Liabilities |
| 32.55B | 29.10B | 22.97B | 21.69B | 22.89B | Stockholders Equity |
| 5.71B | 5.14B | 4.69B | 4.84B | 4.27B |
| Cash Flow | Free Cash Flow | |||
| 738.85M | 852.41M | 735.09M | 508.74M | 502.34M | Operating Cash Flow |
| 834.47M | 881.55M | 764.95M | 542.66M | 551.95M | Investing Cash Flow |
| -3.25B | -5.53B | -2.43B | 125.75M | -2.97B | Financing Cash Flow |
| 3.05B | 5.77B | 644.92M | -1.01B | 3.32B |
Bank OZK Technical Analysis
Neutral
44.68
Price Trends
43.23
Positive
45.22
Negative
44.43
Positive
Market Momentum
0.35
Positive
48.48
Neutral
56.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OZK, the sentiment is Neutral. The current price of 44.68 is below the 20-day moving average (MA) of 45.27, above the 50-day MA of 43.23, and above the 200-day MA of 44.43, indicating a neutral trend. The MACD of 0.35 indicates Positive momentum. The RSI at 48.48 is Neutral, neither overbought nor oversold. The STOCH value of 56.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for OZK.
Bank OZK Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $5.19B | 7.49 | 12.85% | 3.76% | 13.85% | 2.43% | |
76 Outperform | $5.03B | 10.74 | 7.40% | 3.44% | 10.34% | 2.54% | |
74 Outperform | $4.81B | 22.00 | 6.63% | 3.11% | 8.10% | 6.95% | |
70 Neutral | $5.02B | 13.04 | 5.48% | 4.93% | 1.48% | -18.84% | |
67 Neutral | $4.97B | 9.99 | 9.73% | 6.16% | -0.21% | 1.69% | |
64 Neutral | $12.93B | 9.70 | 7.85% | 78.03% | 12.07% | -7.83% | |
48 Neutral | $4.79B | ― | -10.40% | 0.35% | -8.17% | 73.59% |
* Financial Sector Average
Performance Comparison
OZK
Bank OZK
44.68
7.71
20.85%
COLB
Columbia Banking System
22.60
4.80
26.97%
FNB
F.N.B.
13.62
1.10
8.79%
GBCI
Glacier Bancorp
41.11
5.91
16.79%
FLG
Flagstar Financial
11.04
1.54
16.21%
VLY
Valley National Bancorp
8.53
2.12
33.07%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.