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Should You Consider Holding Bank of the Ozarks Stock?
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On Jun 6, 2016, we issued an updated research report on Bank of the Ozarks, Inc. . Despite mounting expenses and margin compression, the company’s inorganic growth strategy and improvement in loan and deposits assure a steady growth in the future.
Bank of the Ozarks has grown substantially through de novo branching strategy as well as acquisitions, given its strong balance sheet position. The company also plans to focus on M&As across locations where it does not have offices at present.
Apart from this, we are encouraged by Bank of the Ozarks’ improving credit quality. The company’s asset quality metrics – nonperforming assets, provision for loan and lease losses and net charge-offs – have been witnessing a declining trend over the last several quarters. With the overall economic recovery, the asset quality improvement is expected to continue.
However, like most banks, Bank of the Ozarks faces margin compression given the low rate environment. Management expects net interest margin (excluding the effect of any future acquisitions) to remain under pressure in 2016.
Further, persistently rising operating expenses remains a matter of concern for Bank of the Ozarks. Going forward, expenses are expected to further rise as the company continues expansion.
As a result of these concerns, analysts have lowered their estimates for 2016 and 2017. Over the past 60 days, the Zacks Consensus Estimate for 2016 fell 1.6% to $2.46; while for 2017, the same declined 1.3% to $3.09.
Currently, Associated Banc-Corp carries a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Some better-ranked finance stocks include First Bancorp (FBP - Free Report) , Southern National Bancorp of Virginia Inc. and Monarch Financial Holdings, Inc. . All three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Should You Consider Holding Bank of the Ozarks Stock?
On Jun 6, 2016, we issued an updated research report on Bank of the Ozarks, Inc. . Despite mounting expenses and margin compression, the company’s inorganic growth strategy and improvement in loan and deposits assure a steady growth in the future.
Bank of the Ozarks has grown substantially through de novo branching strategy as well as acquisitions, given its strong balance sheet position. The company also plans to focus on M&As across locations where it does not have offices at present.
Apart from this, we are encouraged by Bank of the Ozarks’ improving credit quality. The company’s asset quality metrics – nonperforming assets, provision for loan and lease losses and net charge-offs – have been witnessing a declining trend over the last several quarters. With the overall economic recovery, the asset quality improvement is expected to continue.
However, like most banks, Bank of the Ozarks faces margin compression given the low rate environment. Management expects net interest margin (excluding the effect of any future acquisitions) to remain under pressure in 2016.
Further, persistently rising operating expenses remains a matter of concern for Bank of the Ozarks. Going forward, expenses are expected to further rise as the company continues expansion.
As a result of these concerns, analysts have lowered their estimates for 2016 and 2017. Over the past 60 days, the Zacks Consensus Estimate for 2016 fell 1.6% to $2.46; while for 2017, the same declined 1.3% to $3.09.
Currently, Associated Banc-Corp carries a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Some better-ranked finance stocks include First Bancorp (FBP - Free Report) , Southern National Bancorp of Virginia Inc. and Monarch Financial Holdings, Inc. . All three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>