Bank OZK Posts 9% Profit Decline, Flags CRE Recovery for 2028

Bank OZK reported third-quarter net income of $164.3 million, down 9% from a year earlier, as the Arkansas lender continued to manage credit issues in its commercial-real-estate portfolio. Shares closed up more than 4% Wednesday at $48.09 after CEO George Gleason projected double-digit loan growth in 2027. The $43.2 billion-asset bank cut nonperforming and criticized loans sharply, largely by returning its $915 million San Diego construction loan to "pass" status after a $100 million equity injection from the project's sponsor. CRE repayments of $1.65 billion outpaced $1.55 billion in originations for the quarter ended Sept. 30, and reached $690 million in the first 19 days of the fourth quarter. Gleason said elevated paydowns should persist through 2027 before balances inflect in 2028. Diversification efforts gained traction: the Corporate and Institutional Banking unit ended the quarter with $8.63 billion in loans, up nearly $1.4 billion from June 30, after adding 65 client relationships. Earnings per share of $1.50 beat the $1.44 consensus. Citi analyst Ben Gerlinger warned CRE credit issues will likely match or exceed 2026 levels.