Bank OZK's Q4 Earnings Beat on Higher NII & Lower Expenses Y/Y

Core Viewpoint - Bank OZK reported strong fourth-quarter 2024 earnings, with earnings per share of $1.56 exceeding estimates and reflecting a 4% increase year-over-year [1][2]. Financial Performance - The net income available to common shareholders for the fourth quarter was $178.1 million, a 4.1% increase from the previous year, surpassing the estimate of $160.9 million [2]. - For the full year 2024, earnings per share were $6.14, beating the consensus estimate of $6.03 and representing a 4.6% year-over-year increase [3]. - Net revenues for the fourth quarter were $412.3 million, up 1.2% year-over-year, exceeding the Zacks Consensus Estimate of $408 million [4]. - For 2024, net revenues increased by 6.2% to $1.66 billion, also surpassing the consensus estimate of $1.65 billion [4]. Income and Expenses - Net interest income (NII) for the fourth quarter was $379.3 million, a 2.4% increase year-over-year, although it fell short of the estimate of $387.3 million [4]. - Non-interest income decreased by 11% year-over-year to $32.9 million, primarily due to lower gains on asset sales and a decline in death benefits income [5]. - Non-interest expenses were $140.1 million, down 3.4% from the prior year, driven by lower operating expenses, and were better than the expected $144.3 million [6]. Credit Quality - The net charge-offs to average total loans ratio increased to 0.16%, up 10 basis points year-over-year, while the provision for credit losses decreased by 15.2% to $37.2 million [7]. - The ratio of non-performing loans rose by 19 basis points to 0.44% as of December 31, 2024 [7]. Profitability Ratios - The return on average assets decreased to 1.87% from 2.04% in the previous year, and the return on average common equity fell to 13.33% from 14.58% [8]. Share Repurchase - Bank OZK did not repurchase any shares during the quarter [10]. Outlook - The company expects solid loan balances, branch consolidation, fee income growth, and lower deposit costs to support revenue growth, but elevated operating expenses and deteriorating asset quality pose near-term challenges [11].