Why Is Bank OZK (OZK) Down 2.9% Since Last Earnings Report?

It has been about a month since the last earnings report for Bank OZK (OZK). Shares have lost about 2.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Bank OZK due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Bank OZK before we dive into how investors and analysts have reacted as of late.

Bank OZK Q2 Earnings Beat Estimates on Higher Fee Income

Bank OZK reported second-quarter 2026 earnings per share of $1.49, which surpassed the Zacks Consensus Estimate of $1.46. However, the bottom line declined 5.7% year over year from $1.58.

Results benefited from higher non-interest income and deposit balances. Progress in the strategic diversification of the loan portfolio also provided support. However, a higher provision for credit losses, rising expenses, lower net interest income (NII) and weakening credit quality were headwinds. 

Net income available to common shareholders was $163.3 million, down 8.7% from the year-ago quarter’s $178.9 million. Our estimate for the metric was $158.3 million.

Revenues & Expenses Rise

Net revenues were $430.02 million, up 0.5% year over year. The top line missed the Zacks Consensus Estimate of $432.02 million.

NII was $392.1 million, down 1.2% year over year. Our estimate for the metric was $397.3 million.

The net interest margin (NIM), on a fully-taxable-equivalent basis, contracted 12 basis points year over year to 4.24%. Our estimate for NIM was 4.13%.

Non-interest income was $37.9 million, up 21% from the year-ago quarter. The increase reflected growth in deposit-related fees, loan-related fees and other income. Our estimate for the metric was $32.7 million.

Non-interest expenses were $170.6 million, up 11.4% from the prior-year quarter. The increase was due to higher salaries and employee benefits, net occupancy and equipment costs and other operating expenses. We expected this metric to be $166.4 million.

Bank OZK’s efficiency ratio was 39.16%, up from 35.46% in the year-ago quarter, indicating reduced profitability.

Loan Balances Decline & Deposits Rise

As of June 30, 2026, total loans were $32.6 billion, down 1.3% from the prior quarter. Total deposits were $34 billion, reflecting increases of 0.7% sequentially. Our estimates for total loans and deposits were $33.7 billion and $34.7 billion, respectively.

Credit Quality Weakens

Net charge-offs to average total loans grew to 0.69% from 0.10% in the year-ago quarter. Provision for credit losses was $45.6 million, rising 29.5% year over year. We projected provisions of $52.3 million.

The ratio of non-performing loans to total loans was 0.92% as of June 30, 2026, up from 0.18% a year ago. The non-performing assets-to-total assets ratio increased to 1.42% from 0.53%.

Profitability Ratios Decline

At the end of the second quarter, return on average assets was 1.60%, down from 1.81% in the year-earlier quarter. Return on average common equity also declined to 11.14% from 12.98%.

Share Repurchase Update

During the second quarter, Bank OZK repurchased 0.33 million shares for $15.5 million. This was part of the company’s June 2025 share buyback program.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -5.74% due to these changes.

VGM Scores

Currently, Bank OZK has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Bank OZK has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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

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