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.

Story Continues

Our Take on Bank OZK

Bank OZK’s decent loan demand, loan diversification efforts, fee income growth and initiatives to grow secondary mortgage banking business alongside relatively lower interest rates are expected to aid revenues. However, elevated operating expenses and deteriorating asset quality are major near-term concerns.

Bank OZK Price, Consensus and EPS SurpriseBank OZK Price, Consensus and EPS Surprise

Bank OZK price-consensus-eps-surprise-chart | Bank OZK Quote

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Hancock Whitney Corp.’s HWC first-quarter 2025 earnings per share of $1.38 exceeded the Zacks Consensus Estimate and the year-ago figure of $1.28. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Results benefited from an increase in non-interest income and NII. Lower provisions were another positive. However, higher adjusted expenses alongside lower loans and deposits balances were headwinds for HWC.

WaFd, Inc.’s WAFD second-quarter fiscal 2025 (ended March 31) adjusted earnings of 65 cents per share outpaced the Zacks Consensus Estimate of 60 cents. Also, the bottom line increased significantly year over year.

WAFD’s results were primarily aided by a rise in NII and non-interest income. Lower non-interest expenses and provision for credit losses also supported WAFD’s performance. However, the decline in loan balance acted as a spoilsport.

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