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Bank OZK (OZK)
NASDAQ:OZK
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Bank OZK
(NASDAQ:OZK)
Rating:80Outperform
Price Target:
$60.00
▲(13.96% Upside)
Positive Factors
Earnings Performance
2Q25 Operating EPS of $1.58 beat MS/Consensus of $1.44/$1.53 driven by higher NII and lower provision.
Loan Strategy
The ongoing loan remix strategy is accelerating and should support a higher trading multiple.
Valuation
Valuation shows OZK trades at a substantial discount to its 10-year average and peer median, suggesting potential for price appreciation.
Negative Factors
CRE/C&D Concentration
Investors have remained cautious on OZK due to its CRE/C&D concentration and the impact of a significant Fed Funds rate increase.
Credit Quality
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
$5.95B
Dividend Yield3.23%
Average Volume (3M)937.97K
Price to Earnings (P/E)8.5
Beta (1Y)1.20
Revenue Growth7.12%
EPS Growth2.47%
CountryUS
Employees3,096
SectorFinancial
Sector Strength76
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.58
Shares Outstanding113,431,900
10 Day Avg. Volume808,032
30 Day Avg. Volume937,972
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.74
Enterprise Value/Revenue1.58
Enterprise Value/Gross Profit2.90
Enterprise Value/Ebitda4.20
Forecast
1Y Price Target
$57.29Price Target Upside8.81% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Bank OZK Business Overview & Revenue Model
Company DescriptionBank OZK (OZK) is a regional bank headquartered in Little Rock, Arkansas, offering a wide range of financial services primarily in the southeastern United States. The bank operates through various sectors, including commercial banking, retail banking, and mortgage lending, providing products such as personal and business loans, deposit accounts, and wealth management services. With a focus on serving both individual and corporate clients, Bank OZK emphasizes customer service and community involvement.
How the Company Makes MoneyBank OZK generates revenue primarily through interest income from loans, which constitutes a significant portion of its earnings. The bank offers various types of loans, including commercial real estate loans, consumer loans, and agricultural loans, charging interest on these products. Additionally, Bank OZK earns non-interest income through fees associated with deposit accounts, transaction services, and investment management. The bank's mortgage lending division also contributes to revenue through origination fees and interest on mortgage loans. Strategic partnerships with local businesses and real estate developers further enhance its lending opportunities and customer base, thereby contributing to its overall profitability.
Bank OZK Earnings Call Summary
Earnings Call Date:Jul 17, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 16, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong loan and deposit growth, driven by the CIB group's expansion and branch openings. However, challenges remain, particularly in the RESG portfolio with expected high repayments and increased special mention loans. The bank's cautious economic outlook further tempers the positive developments.Q2-2025 Updates
Positive Updates
Strong Loan Growth
Loan growth for the first half of the year was 10.1% nonannualized, exceeding the initial guidance of high single-digit growth. The bank has updated its guidance to 11% to 13% growth for the full year.
CIB Group Expansion
The Corporate and Institutional Banking (CIB) group has been a major contributor to growth, with strong pipelines and plans for geographic expansion. The group looked at over $7 billion in opportunities with a pull-through rate of 12%.
Branch Network Expansion
Bank OZK has opened 11 branches so far this year and plans to open 14 more by the end of the year, with additional hires to support this expansion.
Deposit Growth Strategy
Deposits grew significantly, with interest-bearing deposit costs slightly declining. The bank plans to continue growing deposits in line with its balance sheet expansion needs.
Positive Sponsor Engagement
Sponsors have remained engaged with troubled projects, often providing additional equity and support to ensure successful project outcomes.
Negative Updates
Higher Loan Repayments Expected
Significantly higher loan repayments are expected in the RESG portfolio, which may act as a headwind to future loan growth.
Increased Special Mention Loans
Special mention loans increased by $176 million, largely due to ongoing negotiations with sponsors.
Challenges in Life Sciences Sector
The life sciences sector has experienced muted activity, with leasing slower than desired, although there is some positive momentum.
Economic Uncertainty
The bank maintains a cautious outlook due to ongoing uncertainty in the economy, reflected in a conservative approach to loan loss reserves.
Company Guidance
During the Bank OZK Second Quarter 2025 Earnings Conference Call, several key metrics and guidance for future periods were discussed. The bank reported the addition of 109 new full-time employees (FTEs) in the quarter, reflecting growth across various segments, including 11 new branch openings with plans for 14 more by year-end and approximately 25 in 2026. The bank's deposit costs were reported at 3.68% in June, slightly down from 3.7% for the quarter, with expectations that they will remain stable until further Federal Reserve movements. The company anticipates its loan growth for 2025 to be in the range of 11% to 13%, up from previous guidance of high single digits, with the Corporate and Institutional Banking (CIB) group contributing significantly to growth. The Real Estate Specialties Group (RESG) is expected to face some headwinds due to anticipated higher prepayments. The bank's strategic growth, growth, and diversification plan continues to focus on expanding its CIB and indirect lending activities while maintaining a strong presence in real estate lending.Bank OZK Financial Statement Overview
Summary
Bank OZK shows strong revenue growth and profitability with a stable balance sheet and low leverage. However, the significant decline in free cash flow growth poses a risk to future cash flow stability.Income Statement
Bank OZK has demonstrated strong revenue growth with a TTM revenue growth rate of 10.9%. The gross profit margin is healthy at 54.48%, and the net profit margin is stable at 25.83%. However, there is a slight decline in margins compared to previous years, indicating potential pressure on profitability.85
Very Positive
Balance Sheet
The bank maintains a solid balance sheet with a low debt-to-equity ratio of 0.21, indicating prudent financial leverage. Return on equity is strong at 12.46%, reflecting effective use of equity capital. The equity ratio is robust, supporting financial stability.78
Positive
Cash Flow
Operating cash flow remains positive, but free cash flow growth has significantly declined by 97.3% in the TTM period. The free cash flow to net income ratio is high at 88.53%, indicating efficient cash generation relative to net income.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.78B | 2.77B | 2.25B | 1.38B | 1.19B | 1.18B |
| Gross Profit | 1.52B | 1.48B | 1.40B | 1.17B | 1.18B | 781.27M |
| EBITDA | 1.05B | 1.02B | 930.80M | 777.05M | 796.05M | 419.97M |
| Net Income | 718.31M | 716.46M | 690.78M | 564.14M | 579.00M | 291.90M |
Balance Sheet | ||||||
| Total Assets | 41.45B | 38.26B | 34.24B | 27.66B | 26.53B | 27.16B |
| Cash, Cash Equivalents and Short-Term Investments | 3.14B | 3.35B | 5.39B | 4.53B | 5.97B | 5.80B |
| Total Debt | 1.26B | 883.04M | 1.27B | 1.08B | 1.23B | 1.10B |
| Total Liabilities | 35.53B | 32.55B | 29.10B | 22.97B | 21.69B | 22.89B |
| Stockholders Equity | 5.92B | 5.71B | 5.14B | 4.69B | 4.84B | 4.27B |
Cash Flow | ||||||
| Free Cash Flow | 749.38M | 738.85M | 852.41M | 735.09M | 494.28M | 502.34M |
| Operating Cash Flow | 846.50M | 834.47M | 881.55M | 764.95M | 528.20M | 551.95M |
| Investing Cash Flow | -4.43B | -3.25B | -5.53B | -2.43B | 140.21M | -2.97B |
| Financing Cash Flow | 3.72B | 3.05B | 5.77B | 644.92M | -1.01B | 3.32B |
Bank OZK Technical Analysis
Positive
52.65
Price Trends
50.22
Positive
46.89
Positive
46.26
Positive
Market Momentum
0.87
Negative
62.42
Neutral
71.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OZK, the sentiment is Positive. The current price of 52.65 is above the 20-day moving average (MA) of 50.47, above the 50-day MA of 50.22, and above the 200-day MA of 46.26, indicating a bullish trend. The MACD of 0.87 indicates Negative momentum. The RSI at 62.42 is Neutral, neither overbought nor oversold. The STOCH value of 71.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OZK.
Bank OZK Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $5.95B | 8.49 | 12.68% | 3.23% | 7.12% | 2.47% | |
79 Outperform | $5.63B | 10.73 | 10.24% | 5.41% | -1.39% | 11.31% | |
78 Outperform | $5.99B | 12.73 | 7.40% | 2.91% | 7.73% | 8.39% | |
74 Outperform | $5.83B | 25.31 | 6.60% | 2.70% | 8.37% | 17.00% | |
72 Outperform | $5.83B | 13.33 | 6.33% | 4.19% | 0.20% | 9.86% | |
68 Neutral | $17.88B | 11.66 | 10.46% | 3.76% | 9.66% | 1.70% | |
50 Neutral | $5.33B | ― | -7.62% | 0.31% | -13.26% | 86.72% |
* Financial Sector Average
Performance Comparison
OZK
Bank OZK
52.65
13.26
33.66%
COLB
Columbia Banking System
26.61
3.63
15.80%
FNB
F.N.B.
16.48
2.61
18.82%
GBCI
Glacier Bancorp
48.80
5.73
13.30%
FLG
Flagstar Financial
12.83
2.55
24.81%
VLY
Valley National Bancorp
10.51
2.67
34.06%
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.