Wednesday, July 17, 2013

Bank of the Ozarks Q2 Earnings

Bank of the Ozarks (OZRK) reported 2nd quarter earnings on Thursday July 11th, 2013. Revenue and operating income came in slightly below the street’s expectations, however diluted earnings per share was in line with consensus. Net income for the quarter rose to $20.4 million, a 6.8% increase from $19.1 million during same period last year. Diluted earnings per share rose 3.6% to $0.57 a share from $0.55 the previous year. Deposits and total assets both increased from the prior year. Deposits are up 6.3% to $2.98 billion from $2.69 billion and total assets are up 7.4% to $4.04 billion from $3.76 billion.

Net interest income, the banks largest revenue source was up 2.8% to $43.5 million and noninterest revenue rose 20% to $19 million. This was Bank of the Ozarks best quarter ever for organic loan and lease growth. Total Loans and leases increased to $2.96 billion from $2.69 billion, representing a 9.7% increase. Guidance predicts solid loan and lease growth for the rest of the year, however not as high as growth during the 2nd quarter. Net interest margin decreased to 5.56% from 5.83% in the first quarter. This is partly due to the increase in volume of loans.  During the quarter systems conversions were completed from the Genala Banc acquisition and noninterest expenses are expected to modestly decline the rest of the year. With the sizable amount of capital acquired through retained earnings Bank of the Ozarks is looking to increase their loan and lease portfolio and look to continue to grow through mergers and acquisitions if the right opportunity comes.  Going forward many analysts rate Bank of the Ozarks as a hold. OZRK is currently priced at $45.66 a share, which is about 7.74% below its price target of $49.49.

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