1 Reason Bank of the Ozarks Is Less Conservative Than It Claims

1 Reason Bank of the Ozarks Is Less Conservative Than It Claims

When most analysts and investors think about Bank of the Ozarks (NASDAQ: OZRK), they think about a bank that has grown rapidly since the financial crisis by acquiring more than a dozen of its peers. Over the past five years alone, the $21 billion bank based in Little Rock, Arkansas, has quintupled the size of its balance sheet.

But while it's true that Bank of the Ozarks has grown at a torrid pace, most of that growth hasn't come from acquisitions. It has come instead from a Dallas, Texas-based unit of the bank known as the real estate specialties group, or RESG, which was established in 2003 to make large and complex commercial real estate loans.

RESG is responsible for the majority of Bank of the Ozarks' growth since 2012. At the end of the second quarter, the unit was responsible for 68% of the organically originated loans on the bank's balance sheet, as well as 93% of the $11.9 billion worth of off-balance sheet liabilities that must be funded primarily over the next three years.

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Source: Fool.com