Bank of OZK updated input and opportunity
Curious to know the most recent thoughts on Bank of OZK. Was reading some content from previous years and haven't seen an update. It seems they were diving into more riskier loans. Is this a solid shop and what are potential exit ops for below CRE role?
Position Description
Job Purpose and Scope: Performs analysis of the underwriting and servicing documents for commercial real estate loans on behalf of Bank.
Essential Job Functions Analyzes Loan Request Memorandums, financial statements and performs projections. Analyzes Construction Loan Draws. Pre-screens potential lending opportunities for further analysis. Populates and analyzes proprietary Bank financial Excel models. Reviews and comprehends market data and real estate trends. Drafts credit memorandums for committee approval. Conducts other general financial analysis as required. Assists senior staff members with their responsibilities. Regularly exercises discretion and judgment in the performance of the other essential job functions.
I understand the role described, but what's the job title and who do you report to? Also, is this in their CRE group? (They have a specialized CRE group, but also Bankers in each market that do CRE and C&I lending).
I’ve read on here a couple times how “aggressive” they are. But they recently quoted barely over 50% LTC on a deal I’m doing in an opportunity zone. On the other hand they seem to be providing pre-Covid level interest rates, just at reduced leverage ratios.
Meanwhile other lenders quoted 60-78% LTC, albeit at higher rates.
That is their business model. They typically do deals that other banks wouldn't touch for a myriad of reasons with rates that are in line with typical bank lenders and leverage which is lower than typical (45%-55% LTC). One key differentiation is that they allow for mezz and preferred equity to be structured behind their position which hopefully nets out to similar levels of leverage and pricing to debt funds which play in the space.
Oh gotcha, good to know.
I wouldn’t necessarily call that aggressive, they compensate by lowering leverage so it’s probably a wash.
Thanks for the response. Job Title is “Commercial Real Estate Analyst, MMCRE”. Industry it says is in Lending
I will add it did not say who it reports. Just said the division/group.
So it's in their CRE group, which is good. You'll learn a lot in this role. Whether you take it or not depends upon your other offers. They are known as agressive lenders, for example sometimes higher leverage than other banks. I saw a comment above saying the opposite. I can't tell you what they are quoting now, but can tell you that their CRE group is typically more agressive than their market based Commercial Bankers (who also can do CRE).
As far as "exit ops", you could transition to anything in CRE or banking. The easiest would be either to a Producer/Lender role or Credit role within the bank. For other options, it's up to your imagination and networking. What are you interested in?
Nice, I appreciate it. I'd be interested longer term potentially working at a debt fund or potentially capital markets at a bank in RE division.
Wouldn't take producer/lender off the table though. Really would have to feel it out longer term.
MMCRE is not their non-recourse Real Estate Specialities (RESG) that everyone is referring to here.
MMCRE is $20mm, and typical 60-75% recourse debt.
Thanks for the input. Could you provide any color on the reputation of this specific team and potential exit ops? Assuming it is a different group everyone has referenced.
I would consider the MMCRE no differently than any other commerical real estate lending platform at a regional bank. Think CRE lending at regions, synovus, etc., where you are capped at $20MM loans. OZK acquires your local bank for the deposits, brands it OZK Bank, and maintains the exisiting lending relationships. You will be providing recourse debt to local sponsors. Exit ops include taking relationships to other banks as a producer, but extremely location specific.
Everything you hear about OZK is about the RESG group, which is their main business line.
A ton of mis-information out there. RESG does not do hairy, broken, or 'pioneering' deals. They will lend $500MM on a $1B ground-up office deal with the best developers in the country, but that's a lot of equity in the deal before they draw $1.
They deal with the most sophisticated and complex projects in the country. Many banks don't know how to handle (and do not have the legal-limit required), which makes it seem like they do hairy deals. And yes, they will lend on condos, at a 45% LTC and require 65% non-refundable 10% deposit pre-sales prior to funding, with a completion guarnatee = 100% of project cost. They are usually out of the deal before final C/O. RESG exit ops include debt funds, equity funds, construction groups, GC's. If it was this group, I'd say go for it. But also expect to get burned out underwriting billions construction debt requests.
honest/curious question, do people actually call it/say "Bank OZK" (like saying O Z K as three letters) or just refer to it as "Bank of the Ozarks" like it always was? I saw that name recently on deal I was looking at, and was like "huh" is that Bank of the Ozarks? Then I read about the re-brand from a few years ago. Just wondering to those who may be talking to them.
Bank of the OZARKZ,
Bank OZK
Although i am unsure where they are lending currently (post-COVID), bank of ozarks was known to do hairier deals when compared to others. Construction deals w/o recourse, typically they were an outlier when compared to the competition (both lower octane banks and higher octane debt funds). Depending on sponsorship, the non-recourse carve outs will start to look a lot like recourse.
One of Bank of Ozarks deals we should all be on the look out for is their financing of Marty Byrde's Missouri Belle casino. Seems like it COVID hit this deal really hard and word on the street is that it was financed at 70% LTC without recourse. Not the best time to be playing in this space.
I heard there was some cartel money tied up in that deal. Hard to know for sure though on whether it is just rumor or not. If it is true they'll probably make a TV show out of it someday.
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