Bank OZK Q3 Earnings Miss Estimates Despite Y/Y Revenue Growth

Bank OZK’s OZK third-quarter 2025 earnings per share were a record $1.59, which increased 2.6% year over year. However, the bottom line missed the Zacks Consensus Estimate of $1.67.

Results were primarily hurt because of an increase in expenses and provisions. Nevertheless, higher net interest income (NII) and non-interest income were the tailwinds. Increases in loans and deposit balances were other positives.

Net income available to common shareholders was $180.5 million, up 1.9% from the year-ago quarter. Our estimate for the metric was $184 million.

OZK’s Revenues & Expenses Rise

Net revenues were $449.9 million, up 6.4% year over year. The top line beat the Zacks Consensus Estimate of $444.1 million.

NII was $413.9 million, up 6.3% year over year. Our estimate for the metric was $410 million.

The net interest margin (NIM), on a fully-taxable-equivalent basis, contracted 20 basis points (bps) year over year to 4.35%. Our estimate for NIM was 4.37%.

Non-interest income was $36.1 million, up 7.4% on a year-over-year basis. This rise was driven by an increase in almost all components except for BOLI income, net gains on investment securities and other income. Our estimate for non-interest income was $33.1 million.

Non-interest expenses were $159.3 million, up 13.5% from the prior-year quarter’s level. This increase was due to a rise in all components. We expected this metric to be $156.1 million.

Bank OZK’s efficiency ratio was 35.11%, up from 32.95% in the prior-year quarter. A rise in the efficiency ratio indicates a deterioration in profitability.

As of Sept. 30, 2025, net loans were $32.3 billion, up from $29.5 billion as of Dec. 31, 2024. As of the same date, total deposits amounted to $34 billion, up 9.5% from the December 2024 level.

OZK’s Credit Quality: A Mixed Bag

Net charge-offs to average total loans were 0.41%, up 5 bps year over year. Provision for credit losses was $48.3 million, up 4% year over year. We projected provisions of $40.7 million.

The ratio of non-performing loans, as a percentage of total loans, decreased 14 bps to 0.41% as of Sept. 30, 2025.

Profitability Ratios Worsen for Bank OZK

At the end of the third quarter, the return on average assets was 1.74%, down from 1.90% in the year-earlier quarter. Return on average common equity was 12.66%, down from 13.65%.

Our Take on Bank OZK

Bank 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 Quote

The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Banks

Hancock Whitney Corp.’s HWC third-quarter 2025 earnings per share of $1.49 exceeded the Zacks Consensus Estimate of $1.41. Further, the bottom line rose 12% from the prior-year quarter.

HWC’s results benefited from an increase in non-interest income and NII alongside lower provisions. Also, higher loans were another positive. However, higher adjusted expenses alongside lower deposit balances were headwinds.

The Bank of New York Mellon Corporation’s BK third-quarter 2025 adjusted earnings of $1.91 per share surpassed the Zacks Consensus Estimate of $1.76. Also, the bottom line reflected a jump of 25.7% from the prior-year quarter.

Results were primarily aided by a rise in fee revenues and NII. BNY Mellon recorded a provision benefit in the quarter, which was a tailwind. Growth in assets under custody and/or administration further supported results. However, higher expenses and a lower assets under management balance were the undermining factors for BK.

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This article originally published on Zacks Investment Research (zacks.com).

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