Bank $OZK is going to $0

*not investment advice do your own research

https://therealdeal.com/national/2024/06/05/bank-ozk-new-downgrade-brings-back-old-concerns/

$OZK has a history of misinforming investors (settled for $45MM in 2018)!

Anyone who believes they are the best in the business is wrong. They exploded their balance sheet in the massive bull run in CRE and low interest rates and have not been tested through a cycle.

They are misgrading their loans. All of their LTVs are based on “as-stabilized” values. Case in point San Diego project from Citi downgrade. They list that as ~50% LTV/LTC but it has minimal leasing and rents have softened! On top of that, interest rates (and therefore cap rates) are significantly higher than they were at origination. The equity they are so comforted by on these projects is wiped and sponsors won’t throw more good money at bad. That is a $900MMM loan and their market cap is $4.3BB lol!

NO other bank takes this concentration risk. Majority of banks this size have hold limits of $30-$40MM per project (not $900MM!)

Conclusion: If Bank OZK appropriately graded their loan book, their reserve requirements would skyrocket and their earning would be wiped. I believe that would lead to a bank run and bank failure.

We need to crowdsource more of their projects and people will realize this bank is about to go belly up. Please respond with other known projects in the format below:

1900 Lawrence - Denver https://www.1900lawrence.com $242MM senior loan by OZK Originated in December 2021 Delivering July 2024 ~5% Preleased Market Rents Down, No leasing Activity