This Regional Bank Witnesses Two Board Members Buy Shares
Bank Of The Ozarks Inc. (NASDAQ:OZRK) also had corporate insiders buy shares last week. Director John B. Reynolds bought 750 shares on Thursday at $43.64 apiece, lifting his ownership to 18,649 shares. Mr. Reynolds also holds an indirect ownership stake of 526 shares, which are held in a trust fund for his child. Moreover, Board member Richard L. Cisne acquired 3,700 shares on the same day at a weighted average price of $44.29, which increased his holding to 77,950 shares. The recent insider buying activity comes after the company released its first quarter earnings report on April 11.
Bank of the Ozarks is a bank holding company that owns an Arkansas state chartered subsidiary bank, called Bank of the Ozarks. The bank conducts operations through 174 offices, which include 81 offices in Arkansas, 28 in Georgia, 25 in North Carolina, 22 in Texas, ten in Florida, three in Alabama, two offices each in South Carolina and New York, and one office in California. While most dividend-paying companies tend to raise dividend payments on an annual basis, Bank of the Ozarks keeps raising dividends each quarter. Earlier this month, the bank’s Board approved a quarterly cash dividend of $0.155 per share, which was increased by $0.005 per share. More importantly, this dividend increase marked the 23rd consecutive quarterly cash dividend increase. Even so, the freshly-increased dividend payment equates to a dividend yield of only 1.42%, which is below the yield of 3.17% offered by regional banking company BB&T Corporation (NYSE:BBT), as well as the 2.44% yield offered by M&T Bank Corporation (NYSE:MTB) and the 2.42% yield provided by PNC Financial Services Group Inc. (NYSE:PNC).
Let’s take a brief look at the company’s first quarter earnings report, which revealed that the bank’s net income for the quarter increased by 29.6% year-over-year to a record $51.7 million. Diluted earnings per share reached $0.57, increasing by 21.3% year-over-year. Furthermore, net interest income generated by Bank of the Ozarks reached a record $112.5 million, up from $85.5 million in the first quarter of 2015. The increase was mainly driven by higher average earnings assets, which increased by a whopping 42% year-over-year to $9.36 billion.
Shares of Bank of the Ozarks are down by 11% year-t0-date and trade at a forward P/E multiple of 13.9, which is above the ratio of 11.0 for the regional banks industry. The Arkansas-based bank’s forward P/E ratio is also higher than the ratio of 10.5 for BB&T Corporation, 12.5 for M&T Bank Corporation, and 10.9 for PNC Financial Services Group. There were 15 hedge funds in our database with stakes in Bank of the Ozarks at the end of December, which held nearly 5% of the bank’s outstanding common stock. Charles Paquelet’s Skylands Capital trimmed its stake in Bank Of The Ozarks Inc. (NASDAQ:OZRK) by 15% during the first quarter of 2016, ending the three-month period with 22,600 shares.
