Wednesday, April 16, 2014

Seeking Alpha: Frustrating To Value, Bank Of The Ozarks Keeps Growing

Valuing normal banks on the basis of their returns on tangible equity, tangible book value, and long-term returns on equity usually works pretty well. For better and for worse, Bank of the Ozarks (OZRK) is not at all a "normal bank" and investors have to make their peace with a demanding valuation to take part in a very strong, very well-run bank growth story.

The growth side of Bank of the Ozarks looks fine. While the company is seeing more competition for lending, the bank's capabilities in specialty and complex real estate lending sets it apart. Bank of the Ozarks also has the option to expand its leasing operations and use its equity to expand its asset base. It's tough to put together a valuation model that goes much past the low $60s for these shares, but I don't have any particular expectation of getting them cheap while the growth story remains intact.

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Frustrating To Value, Bank Of The Ozarks Keeps Growing

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