Moody's rates Bank OZK subordinated debt Baa3

Moody's Investors Service said it assigned a Baa3 rating to subordinated debt issued by Bank OZK.

“The assigned subordinated debt rating follows Moody's notching practices incorporating its loss-given-failure analysis. Moody's ratings on Bank OZK also reflect its consistent balance sheet strengths, even throughout the coronavirus pandemic-induced downturn, and its ability to generate sound profitability despite the higher credit provision expenses that were recognized in 2020. Bank OZK maintains above peer average capitalization and low problem loans and net charge-offs.

“The bank's profitability benefits from an above peer average net interest margin and excellent operating efficiency. These credit strengths are reduced by the risks stemming from its high commercial real estate (CRE) concentration, including a large national construction component, Moody’s said in a press release.

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