Bank OZK's Q2 Earnings Beat on Higher Fee Income & NII, Stock Up 1.5%

Shares of Bank OZK OZK rose 1.5% in after-market hours on better-than-expected quarterly results. Its second-quarter 2025 earnings per share of $1.58 surpassed the Zacks Consensus Estimate of $1.51. Moreover, the bottom line reflected a rise of 3.9% from the prior-year quarter’s actual.Overall, results benefited from a rise in net interest income (NII) and non-interest income, and lower provisions. Also, higher loans and deposit balances were other positives. However, higher non-interest expenses acted as spoilsports.Net income available to common shareholders was $178.9 million, up 3.1% from the year-ago quarter. Our estimate for the metric was $162.9 million.OZK’s Revenues and Expenses RiseNet revenues were $428 million, up 2.7% year over year. The top line beat the Zacks Consensus Estimate of $417.7 million.NII was $396.7 million, up 2.3% year over year. Our estimate for the metric was $379.1 million.Net interest margin (NIM), on a fully-taxable-equivalent basis, contracted 32 basis points (bps) year over year to 4.36%. Our estimate for NIM was 4.27%.Non-interest income was $31.3 million, up 8.7% on a year-over-year basis. This rise was driven by an increase in almost all components except overdraft fees and, gains on sales of other assets and net gains on investment securities. Our estimate for non-interest income was $32.2 million.Non-interest expenses were $153.2 million, up 11.4% from the prior-year quarter’s level. This increase was due to a rise in all components. We expected this metric to be $150.2 million.Bank OZK’s efficiency ratio was 35.53%, up from 32.67% in the prior-year quarter. A rise in the efficiency ratio indicates a decline in profitability.As of June 30, 2025, total loans were $33 billion, up 6.1% sequentially. As of the same date, total deposits amounted to $33.5 billion, up 5%.OZK’s Credit Quality ImprovesNet charge-offs to average total loans were 0.10%, down 7 bps year over year. Further, provision for credit losses was $35.2 million, down 28.2%. We projected a provision of $41.6 million.The ratio of non-performing loans, as a percentage of total loans, decreased 12 bps to 0.18% as of June 30, 2025.Profitability Ratios Worsen for Bank OZKAt the end of the second quarter, the return on average assets was 1.81%, down from 1.92% in the year-earlier quarter. Return on average common equity was 12.98%, down from 13.98%.OZK’s Share Repurchase UpdateBank OZK repurchased 1.12 million shares during the quarter for $43.2 million.Additionally, the bank announced a new repurchase program worth $200 million effective July 1, 2025.Our Take on Bank OZKBank OZK’s decent loan demand, loan diversification efforts, fee income growth and initiatives to grow secondary mortgage banking business alongside relatively higher interest rates are expected to aid revenues. However, elevated operating expenses and a significant exposure to real estate loans 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.Performance of Other BanksCommerce Bancshares Inc.’s CBSH second-quarter 2025 earnings of $1.14 per share surpassed the Zacks Consensus Estimate of $1.02. The bottom line also jumped 10.7% from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)CBSH’s results benefited from a rise in NII and non-interest income. An increase in loan balances was also a tailwind. However, increased provisions and higher expenses were headwinds.Hancock Whitney Corp.’s HWC second-quarter 2025 adjusted earnings per share of $1.37 exceeded the Zacks Consensus Estimate of $1.34. Further, the bottom line rose 4.6% from the prior year quarter.Results benefited from an increase in non-interest income and NII. Also, higher loans were another positive. However, higher adjusted expenses and provisions alongside lower deposit balances were headwinds for HWC.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.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 Commerce Bancshares, Inc. (CBSH): Free Stock Analysis Report Hancock Whitney Corporation (HWC): Free Stock Analysis Report Bank OZK (OZK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks