Bank of the Ozarks' Risky Off-Balance Sheet Exposure
One of the things that makes Bank of the Ozarks (NASDAQ: OZRK) so different from most other banks you're likely to come across is that it has an enormous amount of off-balance sheet exposure to the commercial real estate market, which comes in the form of unfunded lending commitments.
Bank of the Ozarks has emerged as one of the biggest banks in the country from its perch in Little Rock, Arkansas. Image source: Getty Images.
When a commercial real estate developer applies for financing with Bank of the Ozarks, the two often come to an agreement long before loan proceeds change hands. A lag like this is in fact common in commercial real estate projects, where financing must generally be lined up long before construction commences.
Source: Fool.com