We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Bank of the Ozarks (OZRK) Beats on Q1 Earnings, Revenues Up
Read MoreHide Full Article
Bank of the Ozarks, Inc.’s first-quarter 2017 earnings of 73 cents per share surpassed the Zacks Consensus Estimate of 71 cents. The figure improved 28.1% on a year-over-year basis.
An increase in both net interest income and non-interest income drove the better-than-expected results. Moreover, growth in total loans and deposits acted as tailwinds. However, the company witnessed an increase in expenses during the quarter, along with a significant rise in provision for loan and lease losses.
Net income available to common shareholders came in at $89.2 million, up 72.6% year over year.
Revenue Growth Offsets Increase in Expenses
Net revenue for the quarter rose 66.1% year over year to $219.8 million. However, the figure lagged the Zacks Consensus Estimate of $225.5 million.
Net interest income grew 69.5% year over year to $190.8 million. However, net interest margin, on a fully taxable equivalent basis, decreased 4 basis points (bps) to 4.88%.
Non-interest income totaled $29.1 million, up 46.3% year over year. The rise was driven by an increase in all the components of income.
Non-interest expense was $78.3 million, reflecting a rise of 64.1% year over year. The increase was triggered by a rise in all the expense components.
Bank of the Ozarks’ efficiency ratio was 35.03%, compared with 35.51% in the prior-year quarter. A fall in efficiency ratio indicates higher profitability.
Strong Balance Sheet
As of Mar 31, 2017, total loans and leases (including purchased loans) were $14.8 billion, up 59.6% year over year, while total deposits surged 63.2% year over year to $15.7 billion.
Further, as of the same date, the company had total assets of $19.2 billion, while shareholders equity summed up to $2.9 billion.
Credit Quality: A Mixed Bag
Annualized net charge-off ratio for all loans and leases increased 4 bps year over year to 0.09%. Also, provision for loan and lease losses increased significantly year over year to $4.9 million.
However, the ratio of non-performing loans and leases, as a percentage of total loans and leases, fell 4 bps to 0.11% as of Mar 31, 2017.
Profitability Ratios Deteriorate
At the end of the reported quarter, return on average assets was 1.93%, down 5 bps year over year. Additionally, return on average common equity decreased from 14.00% to 12.80%.
Our Viewpoint
Bank of the Ozarks remains well positioned for merger & acquisitions based on its balance sheet strength. Moreover, consistent revenue growth and improvement in loan and deposit balances assure a steady earnings growth in the future. Further, the company is expected to continue enhancing shareholder value through efficient capital deployment activities.
However, the company’s increasing expense levels remains a matter of concern. Also, its exposure to real estate loans might hurt its financials in the near term.
Bank of the Ozarks Price, Consensus and EPS Surprise
Among other Southeast banking stocks, First Horizon National Corporation (FHN - Free Report) is slated to report results on Apr 13, Regions Financial Corporation (RF - Free Report) is slated to report results on Apr 18 and BancorpSouth, Inc. is scheduled to report earnings on Apr 19.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public. Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Bank of the Ozarks (OZRK) Beats on Q1 Earnings, Revenues Up
Bank of the Ozarks, Inc.’s first-quarter 2017 earnings of 73 cents per share surpassed the Zacks Consensus Estimate of 71 cents. The figure improved 28.1% on a year-over-year basis.
An increase in both net interest income and non-interest income drove the better-than-expected results. Moreover, growth in total loans and deposits acted as tailwinds. However, the company witnessed an increase in expenses during the quarter, along with a significant rise in provision for loan and lease losses.
Net income available to common shareholders came in at $89.2 million, up 72.6% year over year.
Revenue Growth Offsets Increase in Expenses
Net revenue for the quarter rose 66.1% year over year to $219.8 million. However, the figure lagged the Zacks Consensus Estimate of $225.5 million.
Net interest income grew 69.5% year over year to $190.8 million. However, net interest margin, on a fully taxable equivalent basis, decreased 4 basis points (bps) to 4.88%.
Non-interest income totaled $29.1 million, up 46.3% year over year. The rise was driven by an increase in all the components of income.
Non-interest expense was $78.3 million, reflecting a rise of 64.1% year over year. The increase was triggered by a rise in all the expense components.
Bank of the Ozarks’ efficiency ratio was 35.03%, compared with 35.51% in the prior-year quarter. A fall in efficiency ratio indicates higher profitability.
Strong Balance Sheet
As of Mar 31, 2017, total loans and leases (including purchased loans) were $14.8 billion, up 59.6% year over year, while total deposits surged 63.2% year over year to $15.7 billion.
Further, as of the same date, the company had total assets of $19.2 billion, while shareholders equity summed up to $2.9 billion.
Credit Quality: A Mixed Bag
Annualized net charge-off ratio for all loans and leases increased 4 bps year over year to 0.09%. Also, provision for loan and lease losses increased significantly year over year to $4.9 million.
However, the ratio of non-performing loans and leases, as a percentage of total loans and leases, fell 4 bps to 0.11% as of Mar 31, 2017.
Profitability Ratios Deteriorate
At the end of the reported quarter, return on average assets was 1.93%, down 5 bps year over year. Additionally, return on average common equity decreased from 14.00% to 12.80%.
Our Viewpoint
Bank of the Ozarks remains well positioned for merger & acquisitions based on its balance sheet strength. Moreover, consistent revenue growth and improvement in loan and deposit balances assure a steady earnings growth in the future. Further, the company is expected to continue enhancing shareholder value through efficient capital deployment activities.
However, the company’s increasing expense levels remains a matter of concern. Also, its exposure to real estate loans might hurt its financials in the near term.
Bank of the Ozarks Price, Consensus and EPS Surprise
Bank of the Ozarks Price, Consensus and EPS Surprise | Bank of the Ozarks Quote
Bank of the Ozarks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Among other Southeast banking stocks, First Horizon National Corporation (FHN - Free Report) is slated to report results on Apr 13, Regions Financial Corporation (RF - Free Report) is slated to report results on Apr 18 and BancorpSouth, Inc. is scheduled to report earnings on Apr 19.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public. Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>