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Rates, Loans, Fee Income to Aid Bank OZK's (OZK) Q3 Earnings
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Bank OZK (OZK - Free Report) is scheduled to report third-quarter 2022 results on Oct 20, after market close. The overall lending scenario remained impressive in the to-be-reported quarter. Per the Federal Reserve’s latest data, real estate loans (constituting roughly 75% of the company’s total loan balances) witnessed decent improvement.
The Zacks Consensus Estimate for average earning assets is pegged at $23.4 billion, suggesting a 1.3% fall on a year-over-year basis.
With the Federal Reserve having increased the interest rates by 150 basis points (bps) during the quarter, OZK’s net interest margin and net interest income (NII) are expected to have been favorably impacted. Also, decent loan growth is liklely to have offered support.
The consensus estimate for NII is $276 million, reflecting a rise of 11.3% from the previous-year quarter’s reported number.
Other Factors & Estimates for Q3
Non-Interest Income: A steady increase in deposits during the third quarter is expected to have led to a rise in service charges on deposit accounts. The Zacks Consensus Estimate for the same of $11.77 million suggests a 5.3% rise from the prior-year quarter.
The consensus estimate for gains on sales of other assets of $1 million suggests a substantial rise from the prior-year quarter. The Zacks Consensus Estimate of $1.68 million for trust income implies a 25.3% plunge.
The consensus estimate for Bank OZK’s total non-interest income of $26.18 million indicates a rise of roughly 1%.
Expenses: OZK’s has been undertaking business restructuring and branch consolidation initiatives. Yet, as the company continues to invest in franchise, technological upgrades and inorganic growth strategy, expenses are expected to have witnessed an uptrend in the third quarter.
Management anticipates additional upward pressure on salaries and benefits costs as the company continues to respond to the ongoing competitive conditions in the labor market, fill currently unfilled positions and add team members to support growth.
Asset Quality: With the rise in loan balance and expectations of economic slowdown due to geopolitical and inflation concerns, Bank OZK is expected to have built reserves in the third quarter.
What the Zacks Model Predicts
Our proven model predicts an earnings beat for Bank OZK this time around. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Bank OZK is +0.21%.
Zacks Rank: Bank OZK currently carries a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at $1.18, which has remained unchanged over the past 30 days. The figure suggests an 18% growth from the prior-year quarter’s reported number.
The consensus estimate for sales of $303.08 million indicates a rise of 10.6%.
Other Bank Stocks Worth Considering
Here are a few other bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
The Earnings ESP for Comerica (CMA - Free Report) is +0.13% and it carries a Zacks Rank #2 (Buy) at present. The company is slated to report third-quarter 2022 results on Oct 19.
Over the past 30 days, the Zacks Consensus Estimate for CMA’s quarterly earnings has been revised 2% north.
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Rates, Loans, Fee Income to Aid Bank OZK's (OZK) Q3 Earnings
Bank OZK (OZK - Free Report) is scheduled to report third-quarter 2022 results on Oct 20, after market close. The overall lending scenario remained impressive in the to-be-reported quarter. Per the Federal Reserve’s latest data, real estate loans (constituting roughly 75% of the company’s total loan balances) witnessed decent improvement.
The Zacks Consensus Estimate for average earning assets is pegged at $23.4 billion, suggesting a 1.3% fall on a year-over-year basis.
With the Federal Reserve having increased the interest rates by 150 basis points (bps) during the quarter, OZK’s net interest margin and net interest income (NII) are expected to have been favorably impacted. Also, decent loan growth is liklely to have offered support.
The consensus estimate for NII is $276 million, reflecting a rise of 11.3% from the previous-year quarter’s reported number.
Other Factors & Estimates for Q3
Non-Interest Income: A steady increase in deposits during the third quarter is expected to have led to a rise in service charges on deposit accounts. The Zacks Consensus Estimate for the same of $11.77 million suggests a 5.3% rise from the prior-year quarter.
The consensus estimate for gains on sales of other assets of $1 million suggests a substantial rise from the prior-year quarter. The Zacks Consensus Estimate of $1.68 million for trust income implies a 25.3% plunge.
The consensus estimate for Bank OZK’s total non-interest income of $26.18 million indicates a rise of roughly 1%.
Expenses: OZK’s has been undertaking business restructuring and branch consolidation initiatives. Yet, as the company continues to invest in franchise, technological upgrades and inorganic growth strategy, expenses are expected to have witnessed an uptrend in the third quarter.
Management anticipates additional upward pressure on salaries and benefits costs as the company continues to respond to the ongoing competitive conditions in the labor market, fill currently unfilled positions and add team members to support growth.
Asset Quality: With the rise in loan balance and expectations of economic slowdown due to geopolitical and inflation concerns, Bank OZK is expected to have built reserves in the third quarter.
What the Zacks Model Predicts
Our proven model predicts an earnings beat for Bank OZK this time around. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Bank OZK is +0.21%.
Zacks Rank: Bank OZK currently carries a Zacks Rank #1 (Strong Buy).
Bank OZK Price and EPS Surprise
Bank OZK price-eps-surprise | Bank OZK Quote
The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at $1.18, which has remained unchanged over the past 30 days. The figure suggests an 18% growth from the prior-year quarter’s reported number.
The consensus estimate for sales of $303.08 million indicates a rise of 10.6%.
Other Bank Stocks Worth Considering
Here are a few other bank stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
The Earnings ESP for Comerica (CMA - Free Report) is +0.13% and it carries a Zacks Rank #2 (Buy) at present. The company is slated to report third-quarter 2022 results on Oct 19.
Over the past 30 days, the Zacks Consensus Estimate for CMA’s quarterly earnings has been revised 2% north.
BankUnited, Inc. (BKU - Free Report) is scheduled to release third-quarter 2022 earnings on Oct 20. BKU, which carries a Zacks Rank #3 at present, has an Earnings ESP of +1.32%. You can see the complete list of today’s Zacks #1 Rank stocks here.
BKU’s quarterly earnings estimates have remained unchanged over the past month.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.