| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 18.58 | 11 |
| Intrinsic value (DCF) | 57.14 | 241 |
| Graham-Dodd Method | 50.10 | 199 |
| Graham Formula | 191.19 | 1041 |
Bank OZK (NASDAQ: OZKAP) is a leading regional bank headquartered in Little Rock, Arkansas, with a strong presence across the Southern and Eastern U.S. Founded in 1903, the bank offers a comprehensive suite of retail and commercial banking services, including deposit accounts, real estate loans, commercial lending, treasury management, and wealth services. Bank OZK is particularly known for its expertise in real estate lending, including construction and development loans, which has been a key driver of its growth. The bank operates approximately 240 branches in states such as Arkansas, Georgia, Florida, Texas, and North Carolina. With a market capitalization of over $1.8 billion, Bank OZK has demonstrated resilience and profitability, supported by a diversified loan portfolio and disciplined underwriting. The bank rebranded from Bank of the Ozarks in 2018 to reflect its expanding geographic footprint. Its strong capital position, conservative risk management, and focus on high-growth markets make it a notable player in the regional banking sector.
Bank OZK presents a compelling investment case due to its strong profitability metrics, disciplined lending practices, and exposure to high-growth real estate markets. The bank has consistently delivered solid earnings, with diluted EPS of $6.14 and net income of $716 million in recent filings. Its low beta (0.849) suggests relative stability compared to broader market volatility. However, investors should be mindful of risks tied to regional economic conditions, particularly in real estate, which constitutes a significant portion of its loan book. The bank’s dividend yield (~1.15 per share) adds income appeal, while its conservative balance sheet (strong cash reserves and manageable debt levels) provides a cushion against economic downturns. Long-term growth will depend on its ability to expand commercial lending while maintaining asset quality.
Bank OZK’s competitive advantage lies in its specialized real estate lending expertise, particularly in construction and development loans, where it has developed deep underwriting proficiency. This niche focus allows it to generate higher yields compared to traditional commercial banks. The bank’s conservative risk management and strong capital ratios (evidenced by its substantial cash reserves) position it well to navigate economic cycles. However, its regional concentration in the Southern U.S. exposes it to localized economic risks, and its reliance on real estate lending could be a vulnerability if property markets soften. Compared to larger national banks, Bank OZK lacks scale in digital banking and treasury services, but its personalized customer relationships and local market knowledge help it compete effectively in its core regions. Its ability to maintain low funding costs through a stable deposit base further enhances net interest margins.