Bank OZK Shares Fall as Q4 Earnings Miss Estimates, Provisions Rise

Shares of Bank OZK OZK fell 1.4% in yesterday’s trading session as it reported fourth-quarter 2025 earnings per share of $1.53, down 1.9% year over year. The bottom line also missed the Zacks Consensus Estimate of $1.56.

Results were primarily hurt by higher provisions for credit losses and a rise in operating expenses. Nevertheless, solid net interest income (NII) and non-interest income growth acted as tailwinds. Healthy year-over-year growth in loans and deposits was another positive.

Net income available to common shareholders was $171.9 million, down 3.5% from the year-ago quarter’s $178.1 million.

For 2025, earnings per share were $6.18, up from $6.14 in the year-ago period. However, the metric missed the Zacks Consensus Estimate of $6.20. Net income available to common shareholders was $699.3 million, down marginally from the year-ago quarter.

OZK’s Revenues & Expenses Rise

Net revenues were $440.6 million, up 6.9% year over year. The top line beat the Zacks Consensus Estimate of $432.6 million.

For 2025, net revenues were $1.72 billion, up from $1.66 billion reported in 2024. The top line met the Zacks Consensus Estimate.

Fourth quarter net interest income was $407 million, up 7.3% year over year. Our estimate for the metric was $402 million.

The net interest margin (NIM), on a fully-taxable-equivalent basis, contracted 3 basis points year over year to 4.30%. Our estimate for NIM was 4.31%.

Non-interest income totaled $33.6 million, up 2% from the year-ago quarter. Our estimate for the metric was $34.5 million.

Non-interest expenses were $161.6 million, up 15.4% from the prior-year quarter. The increase was driven by higher salaries and employee benefits, net occupancy and equipment costs, and other operating expenses. We expected this metric to be $159 million.

Bank OZK’s efficiency ratio was 36.36%, up from 33.71% in the year-ago quarter, indicating reduced profitability.

As of Dec. 31, 2025, net loans were $31.8 billion, up from $29.5 billion as of Dec. 31, 2024. Total deposits were $33.4 billion, reflecting a 7.5% increase from the prior-year level.

OZK’s Credit Quality Weakens

Net charge-offs to average total loans jumped to 1.18% from 0.16% in the year-ago quarter. Provision for credit losses was $50.6 million, rising 36% year over year. We projected provisions of $40.1 million.

The ratio of non-performing loans to total loans increased to 1.06% as of Dec. 31, 2025, from 0.44% a year ago, indicating pressure on asset quality.

Profitability Ratios Decline for Bank OZK

At the end of the fourth quarter, return on average assets was 1.67%, down from 1.87% in the year-earlier quarter. Return on average common equity also declined to 11.80% from 13.33%.

Our Take on Bank OZK

Bank OZK continues to benefit from steady loan growth and solid net interest income generation. However, elevated operating expenses, higher credit costs, and worsening asset quality metrics remain key 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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performances of Other Banks

WaFd, Inc.’s WAFD first-quarter fiscal 2026 (ended Dec. 31) earnings of 79 cents per share beat the Zacks Consensus Estimate of 76 cents. The bottom line also jumped 46% year over year. 

WAFD's results reflected higher NII, a surge in non-interest income, and lower expenses. However, credit costs remained elevated, with provisions for credit losses recorded in the quarter.

First Horizon Corporation’s FHN fourth-quarter 2025 adjusted earnings per share of 52 cents surpassed the Zacks Consensus Estimate of 47 cents. This compares favorably with 43 cents in the year-ago quarter.

FHN’s results benefited from higher NII and a significant rise in non-interest income, along with the absence of provision for credit losses. However, the rise in expenses remains a headwind.

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

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