Bank OZK's Q4 Earnings Beat on Higher NII & Lower Expenses Y/Y

Bank OZK’s OZK fourth-quarter 2024 earnings per share of $1.56 handily surpassed the Zacks Consensus Estimate of $1.45. The bottom line reflects a rise of 4% from the prior-year quarter’s actual.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Results benefited from a rise in net interest income (NII), driven by improvement in loans and deposit balances. Lower non-interest expenses and provisions were also positives. However, lower non-interest income and rising funding costs were the undermining factors.The net income available to common shareholders was $178.1 million, up 4.1% from the year-ago quarter. Our estimate for the metric was $160.9 million.In 2024, earnings of $6.14 per share beat the consensus estimate of $6.03 and rose 4.6% year over year. Net income available to common shareholders was $700.3 million, up 3.8%.OZK’s Revenues Improve, Expenses DeclineNet revenues were $412.3 million, up 1.2% year over year. The top line beat the Zacks Consensus Estimate of $408 million.For 2024, net revenues increased 6.2% to $1.66 billion. The top line also outpaced the consensus estimate of $1.65 billion.NII was $379.3 million, up 2.4% year over year. Our estimate for the metric was $387.3 million.Net interest margin (NIM), on a fully-taxable-equivalent basis, contracted 49 basis points (bps) year over year to 4.33%. Our estimate for NIM was 4.40%.Non-interest income was $32.9 million, down 11% on a year-over-year basis. This decline was mainly due to lower gains on sales of other assets, a fall in death benefits income, lower net gains on investment securities and the absence of NSF fees. Our estimate for non-interest income was $30.8 million.Non-interest expenses were $140.1 million, down 3.4% from the prior-year quarter’s level. This decline was driven by lower other operating expenses. We expected this metric to be $144.3 million.Bank OZK’s efficiency ratio was 33.71%, down from 35.33% in the prior-year quarter. A fall in the efficiency ratio indicates an improvement in profitability.As of Dec. 31, 2024, total loans were $30 billion, up 2.6% sequentially. As of the same date, total deposits amounted to $31 billion, up 1.5%.OZK’s Credit Quality DeterioratesNet charge-offs to average total loans were 0.16%, up 10 bps year over year. On the other hand, provision for credit losses was $37.2 million, down 15.2%. We projected a provision of $47.8 million.The ratio of non-performing loans, as a percentage of total loans, increased 19 bps to 0.44% as of Dec. 31, 2024.Profitability Ratios Worsen for Bank OZKAt the end of the fourth quarter, the return on average assets was 1.87%, down from 2.04% in the year-earlier quarter. Return on average common equity was 13.33%, down from 14.58%.OZK’s Share Repurchase UpdateBank OZK did not repurchase any shares during the quarter.Our Take on Bank OZKBank OZK’s solid loan balance, branch consolidation efforts, fee income growth, and lower deposit costs on interest rate cuts are expected to aid revenues. However, elevated operating expenses and deteriorating asset quality are major near-term concerns.Bank OZK Price, Consensus and EPS Surprise Bank OZK price-consensus-eps-surprise-chart | Bank OZK QuoteThe company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings Dates of Other BanksHancock Whitney Corp HWC is scheduled to report fourth-quarter and full-year 2024 results on Jan. 21.Over the past seven days, the Zacks Consensus Estimate for HWC’s quarterly earnings has remained unchanged at $1.28. This indicates a 1.6% rise from the prior-year quarter.Zions Bancorporation ZION is slated to announce fourth-quarter and full-year 2024 results on Jan. 21.Over the past seven days, the Zacks Consensus Estimate for ZION’s quarterly earnings has remained unchanged at $1.26, implying a fall of 2.3% from the prior-year quarter.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zions Bancorporation, N.A. (ZION): Free Stock Analysis Report Hancock Whitney Corporation (HWC): Free Stock Analysis Report Bank OZK (OZK): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks