OZK Bank stock falls, third-quarter earnings miss due to higher provision as loans rise (NASDAQ:OZK)

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OZK Bank

OZK Bank (NASDAQ: OZK) stock has fell 7.6% Thursday after-hours trading after third-quarter earnings missed Wall Street’s estimate as it increased its provision for credit losses on loan growth.

“Growth both funded and unfunded loan balances during the quarter contributed to the higher provision for credit losses, which impacted net earnings,” the company said.

Its $4.35 billion real estate group’s loan originations, marking its fourth straight quarter of record originations, rose $3.53 billion in the second quarter.

Q3 EPS of $1.08, missing the consensus of $1.17, slipped $1.10 in Q2 and rose $1.00 in the prior year quarter.

Provision for credit losses in the third quarter was $39.8 million, compared with $7.0 million in the prior quarter and profit of $7.5 million a year earlier.

As with most banks, the Fed’s rate hike cycle has led to growth in the NII. Net interest income increased to $294.6m from $265.8m in Q2 and $248.0m in Q3 2021; net interest margin (“ETP”) of 5.03% compared to 4.52% in the prior quarter and 4.16% in the prior year quarter.

OZK Bank (OZK) total non-interest expense of $115.7 million increased from $109.3 million in the third quarter and $110.4 million in the year. last year. Payroll and benefits expense of $57.4 million increased from $54.4 million in the prior quarter and $53.8 million a year ago.

Total loans were $19.51 billion compared to $18.74 billion as of June 30.

Deposits of $20.4 billion, an increase from $19.98 billion as of June 30.

Conference call on October 21 at 11:00 a.m.

Previously, OZK Bank (OZK) GAAP EPS $1.08 missed $0.09, revenue $323.78M beat $18.69M

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