Banking stock under pressure: Bank Ozk (NASDAQ: OZK)

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Bank Ozk (NASDAQ: OZK) stock lost over 3.3% on 17th January, 2020 (As of  11:00 am GMT-5; Source: Google finance). The company has reported 12.4% decline in the net income for the fourth quarter of 2019 to $100.8 million from $115.0 million for the fourth quarter of 2018, and posted a 3% decline from $103.9 million in the third quarter of 2019. The annualized return on average assets decreased to 1.74% for the fourth quarter of 2019 compared to 2.04% in the fourth quarter of 2018.  The annualized returns on average common stockholders’ equity and average tangible common stockholders’ equity for the fourth quarter of 2019 were 9.73% and 11.68%, respectively, compared to 12.36% and 15.24%, respectively, for the fourth quarter of 2018. Net interest income in the fourth quarter of 2019 fell 5.9% to $215.0 million from $228.4 million in the fourth quarter of 2018. The growth in net interest income has remained subdued in recent quarters due to, among other factors, the large volume of loan repayments of non-purchased loans, the pay-downs in our purchased loan portfolio, the impact on the net interest margin from the competitive environment for loans and deposits, and recent decreases in LIBOR and other interest rate indexes.

The average earning assets for the fourth quarter rose 3.2% to $20.6 billion from $20 billion for the fourth quarter of 2018. During the fourth quarter 2019, the outstanding balance of total loans declined $203 million from September 30, 2019, or 1.1% not annualized. The net interest margin was down 40 basis points (“bps”) to 4.15% for the fourth quarter from the fourth quarter of 2018 and down 11 bps from the third quarter of 2019. During the fourth quarter 2019, the book value per common share had increased to $32.19. During the fourth quarter, the company’s tangible book value per common share has increased to $26.88.

OZK in the fourth quarter of FY 19 has reported the adjusted earnings per share of 78 cents, beating the analysts’ estimates for the adjusted earnings per share of 76 cents, according to Zacks Consensus Estimate. The company had reported the adjusted revenue of $245.38 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue by 2.77%. OZK expects the effective tax rate for the full year of 2020 to be between 24.5% and 25.5%.

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