AdjustedEarnings Posted January 18, 2019 Share Posted January 18, 2019 Results for the quarter are out. To the extent these short term results matter, it didn't seem like there's a continuation of construction loan losses. Core spread was up. Overall, it was an okay quarter it'd seem, though you never know much about a bank's performance from just a quarter.... but taken together with all their previous history everything seems as expected and in line with what these folks do. But not stellar. Obviously it was much more than what the market expected, given the stock price movement. What does everyone here think (would like to hear from short and long side both)? Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted January 18, 2019 Share Posted January 18, 2019 No major losses is certainly better than sentiment right now. And it's hard to complain about 1.2x TBV given ROE. My concerns are the same. They can't grow their CRE book like they used to, which is their specialty. Instead of C&I, they funded a lot of multifamily recently. There's some articles about recent loans in Brooklyn that seem like aggressive valuations. Supply is starting to tick up in the major cities. I guess we'll see how this all plays out. Edit: bad math on RV loans. I think if you like the OZK business model, HIFS is a much, much better bank. HIFS is at 2x TBV so it's more of an idea for folks in the future than right now. Link to comment Share on other sites More sharing options...
AdjustedEarnings Posted January 18, 2019 Share Posted January 18, 2019 Recent loans in Brooklyn specific to OZK being at aggressive valuations? Or in general? Link to comment Share on other sites More sharing options...
rawraw Posted January 18, 2019 Share Posted January 18, 2019 The visibility into RESG loans let's us know we are at risk to have another charge off coming. But we also know that absent some new problems, that is probably it. Buying a bank that grows tangible book at 10% a year plus a 4% dividend yield is a winner in my book. The quarter shows how one sided and irrational people got. The uncertainty of OZK is relatively unchanged IMO. I think last quarter was an over reaction and I think this quarter is a over reaction. But at the end of the day, it is still trading below its value. But I added a ton during the past month and I am at my size limit for the portfolio. So we will see in future quarters if oddball is right or not. It's unrealistic to expect we would know this quarter Link to comment Share on other sites More sharing options...
Guest Schwab711 Posted January 18, 2019 Share Posted January 18, 2019 Recent loans in Brooklyn specific to OZK being at aggressive valuations? Or in general? OZK was the senior lender on deals that folks who follow that market thought were unlikely to be successful. As senior lender it's unlikely to lead to OZK blowing up. Nothing stood out to me in Brooklyn (as compared to some Miami projects I've posted) but you might be interested. I think ROE has to come down at some point but that's yet to be realized. So far they are fighting gravity with consumer loans. I'll find and forward you the threads this weekend. I think OZK could be a decent way to play continued economic expansion in the US at near-TBV. It's hard to change my mind after being negative for so long but at <= 1x TBV, I probably should have realized there was more upside than downside. Congrats to anyone that bought in December. I don't have interest in the $30's but I probably missed a chance on a company I knew well. Link to comment Share on other sites More sharing options...
rawraw Posted January 31, 2019 Share Posted January 31, 2019 The shorts seem concerned with a specific Miami loan currently. However, based on the information I have heard from management and the publicly available data on presales and such, it would be quite hard for OZK to ever lose money on that loan. I'm hoping that loan pays off soon. May provide another boost Link to comment Share on other sites More sharing options...
Guest notorious546 Posted August 23, 2019 Share Posted August 23, 2019 https://therealdeal.com/issues_articles/why-nycs-most-important-construction-lender-may-be-on-shaky-ground/ Link to comment Share on other sites More sharing options...
oddballstocks Posted August 23, 2019 Share Posted August 23, 2019 https://therealdeal.com/issues_articles/why-nycs-most-important-construction-lender-may-be-on-shaky-ground/ Thanks, just reinforced what we've all known for a while. Egos and non-recourse construction lending with a Podunk state bank regulator don't equal safe... I still firmly believe this is a donut, although not short at the time. Link to comment Share on other sites More sharing options...
Guest notorious546 Posted August 23, 2019 Share Posted August 23, 2019 https://therealdeal.com/issues_articles/why-nycs-most-important-construction-lender-may-be-on-shaky-ground/ Thanks, just reinforced what we've all known for a while. Egos and non-recourse construction lending with a Podunk state bank regulator don't equal safe... I still firmly believe this is a donut, although not short at the time. Thanks for your comments on this in the past. Do you have any insight into the quality of the regulator in AR vs other states? Not too familiar with the specifics of the different states if there are any Link to comment Share on other sites More sharing options...
aglittell Posted April 6, 2020 Share Posted April 6, 2020 Any thoughts here? This was a divisive stock before COVID. Bulls said underwriting was conservative, average LTV and LTC in their Real Estate Lending Group (RESG) of 41.8% and 50.1%, respectively, which comprises 71% of their funded and unfunded commitments in their loan book. The other portion is largely comprised of RV & Marine lending, where the consumer credit metrics also seem conservative. The bears said growth in lending w/n cyclical verticals would surely lead to their demise. Chunky loans in a few MSAs, namely NYC and Miami (33% and 10% of the RESG exposure) could wipe equity out in a downturn. The stock is priced at .6x of TBV today. These are senior secured loans in prime locations with good sponsors (generally speaking). Not entirely sure how to think about the RV & Marine exposure; the consumers had good credit metrics, but this virus is disrupting most aspects of the economy at this point. Charge offs and NPLs have remained under FDIC insured averages for the entirety of the company's life. The stock did not trade near this valuation during GFC. However, it is a different company today with more chunky exposures. Appreciate any thoughts. Link to comment Share on other sites More sharing options...
bci23 Posted May 13, 2020 Share Posted May 13, 2020 The current economic environment is the perfect storm for the OZK bears. If OZK can survive these next 2-3 years, Gleason can be crowned the king Outsider/Compounder the bulls have argued. Link to comment Share on other sites More sharing options...
alwaysdrawing Posted May 13, 2020 Share Posted May 13, 2020 The current economic environment is the perfect storm for the OZK bears. If OZK can survive these next 2-3 years, Gleason can be crowned the king Outsider/Compounder the bulls have argued. Biggest lender in Miami and Vegas and risky commercial projects during a pandemic depression? Good luck surviving the next 12 months. Link to comment Share on other sites More sharing options...
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