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Bank OZK’s OZK first-quarter 2025 earnings per share of $1.47 surpassed the Zacks Consensus Estimate of $1.42. The bottom line, however, reflected a decline of 2.6% from the prior-year quarter’s actual.
Overall, results benefited from a rise in non-interest income and lower provisions. Also, higher loans and deposit balances were other positives. However, lower net interest income (NII) and higher non-interest expenses were the undermining factors.
Net income available to common shareholders was $167.9 million, down 2.1% from the year-ago quarter. Our estimate for the metric was $155.6 million.
OZK’s Revenues and Expenses Rise
Net revenues were $409.2 million, up marginally year over year. The top line beat the Zacks Consensus Estimate of $398.8 million.
NII was $374.5 million, down marginally year over year. Our estimate for the metric was $368.8 million.
Net interest margin (NIM), on a fully-taxable-equivalent basis, contracted 40 basis points (bps) year over year to 4.31%. Our estimate for NIM was 4.32%.
Non-interest income was $34.7 million, up 19.4% on a year-over-year basis. This rise was driven by an increase in almost all components except overdraft fees and net gains on investment securities. Our estimate for non-interest income was $28.2 million.
Non-interest expenses were $147 million, up 10.2% from the prior-year quarter’s level. This increase was due to a rise in all the components. We expected this metric to be $142.7 million.
Bank OZK’s efficiency ratio was 35.60%, up from 32.59% in the prior-year quarter. A rise in the efficiency ratio indicates a decline in profitability.
As of March 31, 2025, total loans were $31.1 billion, up 3.8% sequentially. As of the same date, total deposits amounted to $31.9 billion, up 2.8%.
OZK’s Credit Quality Improves
Net charge-offs to average total loans were 0.25%, up 14 bps year over year. On the other hand, provision for credit losses was $38.4 million, down 10.5%. We projected a provision of $45.7 million.
The ratio of non-performing loans, as a percentage of total loans, decreased 2 bps to 0.20% as of March 31, 2025.
Profitability Ratios Worsen for Bank OZK
At the end of the first quarter, the return on average assets was 1.77%, down from 1.96% in the year-earlier quarter. Return on average common equity was 12.52%, down from 14.16%.
OZK’s Share Repurchase Update
Bank OZK did not repurchase any shares during the quarter.
Due to recent market volatility, the bank repurchased 0.9 million shares between April 3 and April 15 for $34.5 million at roughly $38.34 per share.