- The banking sector saw further loan growth in Q1'22, with a pick up in CRE lending, and Bank OZK entered the year with good momentum in its core RESG operations.
- I expect above-average loan growth from Bank OZK over the next two years, though paydowns could still weigh on 1H'22 growth.
- Management has improved its deposit base, but deposit beta is still likely to be high and OZK isn't particularly asset-sensitive as rate floors will mitigate leverage to initial rate hikes.
- Bank OZK should be able to grow core earnings at a high single-digit rate (normalized) and looks undervalued today.
For further details see:
Bank OZK Should Reverse Some Recent Underperformance As Loan Growth Accelerates