Markets

Bank of the Ozarks in Expansion Mode: Hits New 52-Week High

An image of a stock chart with money, a calculator and a pen lying on it.
Credit: Shutterstock photo

Shares of Bank of the Ozarks, Inc.OZRK crafted a new 52-week high, touching $53.84 on Nov 9. The stock of this various retail and commercial banking services provider closed the session a notch lower at $52.77, reflecting a year-to-date return of 44.8%. The trading volume for the session was 656,478 shares.

Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock has plenty of upside left, given strong estimate revisions over the last 30 days and expected year-over-year earnings growth of 36.05%.

Growth Drivers

While strong organic growth aiding third-quarter 2015 results, steady capital deployment activities and Bank of the Ozarks' strategic acquisitions were the primary growth drivers.

Recently, Bank of the Ozarks announced a $402.5 million stock-deal to acquire C1 Financial Inc. BNK in an effort to further expand its operations in Florida. The bank believes that this acquisition deal will prove to be accretive to its earnings per common share for the first 12 months by 2-4 cents after the agreement closes and 7-10 cents thereafter. Moreover, after the completion of the merger, it is expected to be immediately accretive to the company's book value per common share and tangible book value per common share.

On Oct 19, 2015, Bank of the Ozarks also announced a merger agreement to acquire Community & Southern Holdings, Inc. of Atlanta, Georgia in an all-stock deal valued at about $799.6 million. The deal is expected to close late in the first quarter of 2016 or early in the second quarter of 2016.

Bank of the Ozarks came out with earnings of 52 cents per share on Oct 13, in line with the Zacks Consensus Estimate. Moreover, the reported figure outpaced the prior-year quarter earnings by 40%.

Results were aided by a 26.3% year-over-year rise in net revenues, partially offset by a 6.8% rise in non-interest expenses. Further, the quarter witnessed an increase in loans and leases (up 50.6%) along with higher deposits (up 48.0%).

In October 2015, Bank of the Ozarks' board of directors approved a 3.6% hike in regular quarterly cash dividend to 14.5 cents, which was paid on Oct 23, 2015 to shareholders of record as of Oct 16. Notably, the company has increased its quarterly dividend in the last twenty-one consecutive quarters.

Estimate Revisions Show Potency

Analysts' bullish stance was reflected in the earnings estimates movement over the last 30 days. The Zacks Consensus Estimate for 2015 has gone up by a penny to $2.07 per share, while for 2016, it spiked 1.7% to $2.42 per share.

Other Southeast banks worth considering include First NBC Bank Holding Company FNBC and Middleburg Financial Corporation MBRG , both with a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

BANK OZARKS (OZRK): Free Stock Analysis Report

MIDDLEBURG FINL (MBRG): Free Stock Analysis Report

C1 FINANCIAL (BNK): Free Stock Analysis Report

FIRST NBC BANK (FNBC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More