Diamond Hill Capital, an investment management company, released its “Small Cap Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fourth quarter posted another period of favorable gains for equity markets, with the Russell 2000 Index returning 2.19%, roughly in line with the Russell 1000 Index’s 2.41% gain. Health care (+18.6%) emerged as the best-performing sector in the Russell 2000 Index. Heightened uncertainty and geopolitical risks contributed to a mixed ma ...

Core Viewpoint - TD Cowen has lowered the price target for Bank OZK (OZK) to $54 from $56 while maintaining a Buy rating, indicating a cautious outlook following a disappointing Q4 earnings report [1] Summary by Category Earnings Performance - Bank OZK reported a Q4 earnings miss, which has led to a reassessment of expectations for the stock [1] Analyst Insights - TD Cowen believes that prior reserve builds will help the bank absorb future pressures, suggesting a potential for recovery in the future [1] - The firm views the stock as "resetting expectations" with the possibility of better performance ahead [1]

Core Viewpoint - Bank OZK is facing challenges but has a positive price target set by Piper Sandler, indicating potential growth despite recent earnings setbacks [1][5]. Financial Performance - For Q4 2025, Bank OZK reported earnings per share of $1.53, a 1.9% decrease from the previous year and below the Zacks Consensus Estimate of $1.56 [2]. - The full year 2025 earnings per share were $6.18, with net income available to common shareholders at $171.9 million, down from $178.1 million the previous year [4]. Revenue and Growth - The bank experienced a 6.9% increase in net revenues, primarily driven by growth in net interest income [3][5]. - There was healthy year-over-year growth in loans and deposits, despite challenges in asset quality [3]. Market Activity - The stock price fluctuated between $46 and $49.69, with a market capitalization of approximately $5.35 billion and a trading volume of 4,529,664 shares [4]. - Piper Sandler set a price target of $62 for Bank OZK, suggesting a potential price increase of about 29.63% from its current price of $47.83 [1][5].

Core Viewpoint - Bank OZK's Chairman and CEO George Gleason expresses optimism about a recovery in the commercial real estate (CRE) sector, predicting that the downturn is nearing its end and a rebound could begin as early as 2026 [2][9]. Company Performance - Bank OZK's net charge-off ratio increased to 1.18% for the quarter ending December 31, 2025, the highest level since the financial crisis, attributed to charge-offs on four previously criticized loans [7]. - Despite the rise in net charge-offs, the bank's profitability remained strong, with net income of $171.9 million for the quarter, down only 3.5% from the previous year, and full-year profits of $699.3 million, virtually unchanged from 2024 [10]. - The bank's allowance for credit losses rose significantly from $300 million in mid-2022 to $632 million by the end of 2025, which is expected to cover anticipated lower charge-off levels in 2026 [8][10]. Industry Trends - U.S. Bancorp reported its first linked-quarter increase in its CRE portfolio in nearly three years, with average balances rising by nearly $250 million to $48.5 billion as of December 31, 2025 [3]. - M&T Bancorp also noted a marked increase in CRE originations during the fourth quarter, expecting growth in its CRE book starting in the second quarter of 2026 [3]. - The Federal Reserve Bank of St. Louis indicated that unfunded CRE commitments increased for the second consecutive quarter, reversing a trend of nine quarterly declines [4]. Market Sentiment - Analysts view Bank OZK's fourth-quarter credit issues as a temporary setback rather than a systemic problem, with some noting the bank's ability to build its allowance for credit losses while maintaining profitability [11]. - Investors reacted positively to the news, with Bank OZK's shares rising less than 1% to $47.83 following the announcement [11].

Key Takeaways Bank OZK reported Q4 EPS of $1.53, down 1.9% y/y and lagging estimates amid higher provisions.OZK's net revenues rose 6.9% on growth in net interest income, though margins contracted slightly.Asset quality weakened as charge-offs, non-performing loans and credit-loss provisions all climbed.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 Es ...

Shares of Bank OZK ( OZK ) have been a weak performer over the past year, losing about 4% of their value. Despite solid credit outcomes, its outsized commercial real estate exposure (CRE) has been a source of ongoing concern, capping its valuation. Plus, compared to other regional banks, Fed rateOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specifi ...

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Gleason added that the bank believes it is in the “late stages” of the commercial real estate cycle and pointed to what he described as “green shoots” in leasing and property sales, an increase in refinancing activity amid improving sector liquidity, and relief from Federal Reserve rate cuts. He said the company sees 2026 as a year of continued work-through, while expressing optimism about 2027.Chairman and CEO George Gleason said management expects 2026 results to resemble 2024 and 2025 in several respects ...

Credit quality concerns continue to hobble Little Rock’s Bank OZK ( OZK ). While the bank delivered on management's promise to outperform the industry-wide loss rate in 2025, fourth quarter net charge-offs of just under $100 million ensured it closed the year onI like to take a long term, buy-and-hold approach to investing, with a bias toward stocks that can sustainably post high quality earnings. Mostly found in the dividend and income section. Blog about various US/Canadian stocks at 'The Compound Investo ...

Credit quality concerns continue to hobble Little Rock’s Bank OZK ( OZK ). While the bank delivered on management's promise to outperform the industry-wide loss rate in 2025, fourth quarter net charge-offs of just under $100 million ensured it closed the year onI like to take a long term, buy-and-hold approach to investing, with a bias toward stocks that can sustainably post high quality earnings. Mostly found in the dividend and income section. Blog about various US/Canadian stocks at 'The Compound Investo ...