Bank OZK (OZK) has had a rough 12-24 months relative to the “average” bank stock, as investors have grown increasingly worried about OZK’s heavy exposure to riskier construction lending, and particularly in markets like New York City and Miami, as well as its high beta funding structure. While the shares have continued to underperform over the last three months, operating performance has at least settled down.
If a significant recession is right around the corner (or just a rough period in commercial real estate), Bank OZK will have problems – the bank’s underwriting