Why Bank Ozk (NASDAQ: OZK) stock is skyrocketing

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Bank Ozk (NASDAQ: OZK) stock rose over 14.2% on 18th January, 2019 (as of 11:48 am GMT-5; Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 18.

Common stockholders’ equity was $3.77 billion at December 31, 2018, an 8.9% increase from $3.46 billion at December 31, 2017.  Tangible common stockholders’ equity was $3.07 billion at December 31, 2018, an 11.7% increase from $2.75 billion at December 31, 2017.  Book value per common share was $29.32 at December 31, 2018, an 8.7% increase from $26.98 at December 31, 2017.  Tangible book value per common share was $23.90 at December 31, 2018, an 11.4% increase from $21.45 at December 31, 2017.

The Bank’s ratio of total common stockholders’ equity to total assets was 16.84% at December 31, 2018 compared to 16.27% at December 31, 2017.  Its ratio of total tangible common stockholders’ equity to total tangible assets was 14.17% at December 31, 2018 compared to 13.38% at December 31, 2017.

Net interest income for the fourth quarter of 2018 was $228.4 million, a 6.3% increase from $214.8 million for the fourth quarter of 2017.  Net interest margin, on a fully taxable equivalent (“FTE”) basis, was 4.55% for the fourth quarter of 2018, a decrease of 17 basis points from 4.72% for the fourth quarter of 2017.  Average earning assets were $20.00 billion for the fourth quarter of 2018, a 9.4% increase from $18.28 billion for the fourth quarter of 2017.

The company posted the net income for the fourth quarter of 2018 of $115.0 million, a 21.3% decrease from net income of $146.2 million for the fourth quarter of 2017. During the fourth quarter of 2017, the Bank recognized a one-time income tax benefit of $49.8 million as a result of the revaluation, in the fourth quarter of 2017, of the Bank’s net deferred tax liability position to reflect the reduction in its federal corporate income tax rate from 35% to 21% due to the Tax Cuts and Jobs Act enacted on December 22, 2017.  Additionally, the Bank incurred pre-tax expenses of approximately $0.3 million for the fourth quarter and $11.7 million for the full year of 2018 (none in 2017) related to its name change and related strategic rebranding.

OZK in the fourth quarter of FY 18 has reported the adjusted earnings per share of 89 cents, beating the analysts’ estimates for the adjusted earnings per share of 83 cents, as per Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 35.9 percent to $255.94 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue by 4.01%.

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