Although I thought Bank OZK (OZK) looked undervalued a quarter ago, I also thought that the weak short-term outlook, driven by spread compression risk, was likely to weigh on the shares. And so it has been, with the shares down another 7% and underperforming the broader regional bank group over the last three months.
Credit quality remains very good, but spread compression was worse than the Street (and I) expected, and although I think Bank OZK has some underappreciated opportunities to offset spread compression, I do worry that just as deposit betas didn't