Bank OZK - any good

saw this earlier today

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Bank OZK OZK has announced yet another quarterly dividend hike. The company declared a cash dividend of 34 cents per share, marking a 3.03% increase from the prior payout. The dividend will be paid out on Jan 24 to shareholders of record on Jan 17.

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I use to work for their CRO. Their big CRE deals are somewhat mitigated by their high hard equity requirements. They incur a lot of project finance risk. They’ve pulled it back in recent quarters.

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Soooo many people / banks don’t get risk at all.

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Nope. Been at it for 25 years (banking) and some will never learn. I totally get more leverage increases an investors IRR but damn you need to understand the sun doesn’t always shine and the more leverage you have on a deal, the less wiggle room you have when the clouds role in.

You’re really starting to see it now on multifamily. These guys bought at a 4.5 cap, leverage up to 80% and stacked another 10% of mezz debt on it and now are screwed. The institutional investors can typically handle the shifting winds, but others not so much.

I also see so may real estate guys that have only played when the tide is rolling in. They were in high school and college in 2008 when the shite hit the fan and have no clue how bad it could get (although it won’t this cycle). They are used to low rates, easy money and all the other positives. When the tide rolls out you always find out who’s playing with their pants down.

To the poster above about the hard equity requirement, I get that completely and it’s a good practice, but ask the office project folks how quickly that equity evaporates in the current environment. I suspect OZk is probably sitting on a few assets that they anticipated being at 65% LTV but are now 80% plus LTV’s and then having some tough conversations.

Damn I sound like an F-ing credit guy, but I’m not I swear!