- Bank OZK had a strong fourth quarter on a core earnings basis, with pre-provision profits coming in 10% better than expected and driving the large majority of the beat.
- Credit quality has remained surprisingly resilient; a more benign downturn has undoubtedly helped, but it also supports the argument that Bank OZK is a superior evaluator of risk.
- Credit losses are still very likely to rise from here, but my bigger concern is what loan demand/growth looks like over the next two years.
- Bank OZK still offers a pretty solid return for a bank (around a 10% total annualized long-term return), but it's not the standout opportunity it was six months ago.
For further details see:
Bank OZK Proving Out Its Credit Quality, But Loan Growth Concerns Loom