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5 Bank Stocks That Can't Stop Posting Profits

3. Bank of the Ozarks

Shares of Bank of the Ozarks (OZRK) of Little Rock, Ark., closed at $33.47 Monday, returning 15% during 2012, with a three-year total return of 143% and a five-year return of 180%.

The shares traded for 2.5 times tangible book value, and for 14.6 times the consensus 2013 EPS estimate of $2.29. The consensus 2014 EPS estimate is $2.42.

Based on Monday's close and a quarterly payout of 14 cents, the shares had a dividend yield of 1.67%.

For the first quarter of 2010 through the third quarter of 2012, the bank's return on average tangible common equity was 22.05%.

Bank of the Ozarks had $3.8 billion in total assets as of Sept. 30. The bank has been expanding through acquisitions, including the purchase of seven failed institutions from the Federal Deposit Insurance Corp. in 2010 and 2011. The bank's most recent acquisition was Genala Banc., Inc., which held The Citizens Bank of Geneva Ala., which had $166.8 million in total assets as of Sept. 30. Bank of the Ozarks paid roughly $27.5 million in cash and stock to complete the deal.

The bank reported third-quarter earnings of $19.3 million, or 55 cents a share, increasing from $19.1 million, or 55 cents a share, the previous quarter, and $18.9 million, or 55 cents a share, a year earlier. Bank of the Ozarks bucked the industry trend, with its net interest margin expanding to 5.97% in the third quarter from 5.84% in the second quarter and 5.90% in the third quarter of 2011.

The third-quarter return on average tangible common equity was 16.84%.

FIG Partners analyst Brian Martin rates Bank of the Ozarks "Market Perform," with a $35 price target, saying on Oct. 15 that "an increased focus on organic loan growth sets the stage for positive earnings momentum in the coming quarters even without the benefit of M&A," although he also said that "M&A is a key priority for OZRK as they continue to build capital at a faster rate than they can deploy it with any deal announced expected to be additive to EPS and [tangible book value] given pricing disciplines."

Martin said that his neutral rating for the shares was "value driven," although "on a fundamental basis, OZRK remains one of the best performing banks in our coverage universe and industry."

The analyst estimates that Bank of the Ozarks will earn $2.34 a share in 2013.

OZRK Chart OZRK data by YCharts

Interested in more on Bank of the Ozarks? See TheStreet Ratings' report card for this stock.
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