2023-04-20 16:24:45 ET
Bank OZK ( NASDAQ: OZK ) stock climbed 2.1% in Thursday after-hours trading after Q1 earnings exceeded Wall Street expectations, with rising net interest income pushing up pretax preprovision net revenue to a record level.
Q1 EPS of $1.41, topping the $1.39 consensus, rose from $1.34 in the prior quarter and $1.02 in the year-ago quarter.
Q1 provision for credit losses was $35.8M, an increase from $32.5M in Q4 2022 and $4.2M in Q1 2022.
Net interest income rose to $344.9M from $332.5M in Q4 and from $249.3M in Q1 2022.
Pretax preprovision net revenue of $246.4M vs. $241.0M in the prior quarter and $173.1M in the year-ago period.
Total noninterest expense of $126.2M increased from $119.0M in Q4 and from $107.7M in Q1 2022. Salaries and employee benefits expense of $63.2M climbed from $59.9M in the prior quarter and $54.6M in the year-ago quarter.
Total loans were $22.06B at March 31, 2023 vs. $20.78B at Dec. 31, 2022.
Bank OZK's Real Estate Specialties Group (RESG) originated $1.81B of loans during the quarter, and $12.49B for the last four quarters. "Given the typical lag between RESG originations and the funding of such loans, the recent origination volumes should continue to contribute meaningfully to funded loan growth in the remainder of 2023 and 2024," the company said.
Due to the current uncertain macro environoment, including the impact of recent increases in interest rates, RESG origination volume for full-year 2023 is expects to "be back in or around the range achieved during 2020 and 2021." RESG loan repayments for full-year 2023 are also expected to remain in approximately the range achieved in 2021 and 2022.
Deposits of $22.8B vs. $21.50B at Dec. 31, 2022.
In light of recent turmoil in the banking sector, Bank OZK ( OZK ) said it has no investment securities categorized as held-to-maturity. "We have long believed that holding our securities as available-for sale or trading provides us maximum liquidity and flexibility to manage our balance sheet, while most accurately reflecting our financial position," the company said. "Thus, we have no unrecognized mark-to-market adjustments on securities."
In addition, the company pointed out that, even though not required under the Dodd-Frank Act, it conducts capital stress tests annually, liquidity stress tests quarterly, and commercial real estate stress tests quarterly.
Conference call on April 21 at 11:00 AM ET.
Earlier, Bank OZK ( OZK ) GAAP EPS of $1.41 beats by $0.02, revenue of $336.83M misses by $24.73M
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Bank OZK stock gains after Q1 earnings deliver beat amid banking turmoil