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Results were primarily hurt by higher provisions for credit losses and a rise in operating expenses. A decline in non-interest income also acted as a headwind. Nevertheless, solid net interest income (NII) growth supported the top line. Healthy loans and deposits balance provided support.
Net income available to common shareholders was $159.3 million, down 5.1% from the year-ago quarter’s $167.9 million. Our estimate for the metric was $162.4 million.
OZK’s Revenues & Expenses Rise
Net revenues were $418.1 million, up 2.2% year over year. The top line missed the Zacks Consensus Estimate of $421.9 million.
NII was $385.6 million, up 3% year over year. Our estimate for the metric was $386.5 million.
The net interest margin (NIM), on a fully-taxable-equivalent basis, contracted 11 basis points year over year to 4.20%. Our estimate for NIM was 4.21%.
Non-interest income was $32.5 million, down 6.3% from the year-ago quarter. Our estimate for the metric was $35.4 million.
Non-interest expenses were $164.5 million, up 12% from the prior-year quarter. The increase was driven by higher salaries and employee benefits, net occupancy and equipment costs, and other operating expenses. We expected this metric to be $158.5 million.
Bank OZK’s efficiency ratio was 38.96%, up from 35.60% in the year-ago quarter, indicating reduced profitability.
OZK’s Loans & Deposits Balances Increase
As of March 31, 2026, total loans were $33 billion, up 2% from the prior quarter. Total deposits were $33.8 billion, reflecting a 1.1 % increase. Our estimates for total loans and deposits were $32.1 billion and $35.1 billion, respectively.
OZK’s Credit Quality Weakens
Net charge-offs to average total loans grew to 0.57% from 0.25% in the year-ago quarter. Provision for credit losses was $41.9 million, rising 9.2% year over year. We projected provisions of $47.4 million.
The ratio of non-performing loans to total loans was 0.90% as of March 31, 2026, up from 0.20% a year ago.
Profitability Ratios Decline for Bank OZK
At the end of the first quarter, return on average assets was 1.58%, down from 1.77% in the year-earlier quarter. Return on average common equity also declined to 11.06% from 12.52%.
Our Take on Bank OZK
Bank OZK continues to benefit from steady loan growth and solid net interest income generation. However, elevated operating expenses, and worsening asset quality remain key near-term concerns.
WaFd, Inc.’s (WAFD - Free Report) second-quarter fiscal 2026 (ended March 31) adjusted earnings of 83 cents per share beat the Zacks Consensus Estimate of 74 cents. The bottom line also jumped 27.7% year over year.
WAFD’s results reflected higher NII and non-interest income. However, elevated expenses and provisions were the undermining factors. A decline in loans and deposits was another headwind.
First Horizon Corporation (FHN - Free Report) posted first-quarter 2026 earnings per share of 53 cents, surpassing the Zacks Consensus Estimate of 49 cents. This compares favorably with 42 cents in the year-ago quarter.
FHN’s results benefited from higher NII and a rise in non-interest income, along with improved credit quality. However, the rise in expenses was a headwind.
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Bank OZK Q1 Earnings Miss Estimates, Expenses & Provision Rise Y/Y
Key Takeaways
Bank OZK (OZK - Free Report) reported first-quarter 2026 adjusted earnings per share of $1.44, which missed the Zacks Consensus Estimate of $1.46. Also, the bottom line declined 2% year over year.
Results were primarily hurt by higher provisions for credit losses and a rise in operating expenses. A decline in non-interest income also acted as a headwind. Nevertheless, solid net interest income (NII) growth supported the top line. Healthy loans and deposits balance provided support.
Net income available to common shareholders was $159.3 million, down 5.1% from the year-ago quarter’s $167.9 million. Our estimate for the metric was $162.4 million.
OZK’s Revenues & Expenses Rise
Net revenues were $418.1 million, up 2.2% year over year. The top line missed the Zacks Consensus Estimate of $421.9 million.
NII was $385.6 million, up 3% year over year. Our estimate for the metric was $386.5 million.
The net interest margin (NIM), on a fully-taxable-equivalent basis, contracted 11 basis points year over year to 4.20%. Our estimate for NIM was 4.21%.
Non-interest income was $32.5 million, down 6.3% from the year-ago quarter. Our estimate for the metric was $35.4 million.
Non-interest expenses were $164.5 million, up 12% from the prior-year quarter. The increase was driven by higher salaries and employee benefits, net occupancy and equipment costs, and other operating expenses. We expected this metric to be $158.5 million.
Bank OZK’s efficiency ratio was 38.96%, up from 35.60% in the year-ago quarter, indicating reduced profitability.
OZK’s Loans & Deposits Balances Increase
As of March 31, 2026, total loans were $33 billion, up 2% from the prior quarter. Total deposits were $33.8 billion, reflecting a 1.1 % increase. Our estimates for total loans and deposits were $32.1 billion and $35.1 billion, respectively.
OZK’s Credit Quality Weakens
Net charge-offs to average total loans grew to 0.57% from 0.25% in the year-ago quarter. Provision for credit losses was $41.9 million, rising 9.2% year over year. We projected provisions of $47.4 million.
The ratio of non-performing loans to total loans was 0.90% as of March 31, 2026, up from 0.20% a year ago.
Profitability Ratios Decline for Bank OZK
At the end of the first quarter, return on average assets was 1.58%, down from 1.77% in the year-earlier quarter. Return on average common equity also declined to 11.06% from 12.52%.
Our Take on Bank OZK
Bank OZK continues to benefit from steady loan growth and solid net interest income generation. However, elevated operating expenses, and worsening asset quality remain key near-term concerns.
Bank OZK Price, Consensus and EPS Surprise
Bank OZK price-consensus-eps-surprise-chart | Bank OZK Quote
The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Banks
WaFd, Inc.’s (WAFD - Free Report) second-quarter fiscal 2026 (ended March 31) adjusted earnings of 83 cents per share beat the Zacks Consensus Estimate of 74 cents. The bottom line also jumped 27.7% year over year.
WAFD’s results reflected higher NII and non-interest income. However, elevated expenses and provisions were the undermining factors. A decline in loans and deposits was another headwind.
First Horizon Corporation (FHN - Free Report) posted first-quarter 2026 earnings per share of 53 cents, surpassing the Zacks Consensus Estimate of 49 cents. This compares favorably with 42 cents in the year-ago quarter.
FHN’s results benefited from higher NII and a rise in non-interest income, along with improved credit quality. However, the rise in expenses was a headwind.