Bank of the Ozarks, Inc. (OZRK) announced the timely completion of its acquisition of Intervest Bancshares Corp. (IBCA) on Feb 10. In Jul 2014, Bank of the Ozarks had signed a definitive agreement to acquire the latter in an all-stock deal.
Per the deal, the New York-based Intervest Bancshares has merged with and into Bank of the Ozarks, along with the wholly owned subsidiary banks of each party. Moreover, the company will be delivering nearly 6.6 million shares as part of the transaction.
Further, for each share of Intervest Bancshares, its shareholders have been granted the right to 0.3014 share of Bank of the Ozarks. Moreover, fractional shares, if any, will be entitled to a proportional cash payment of $33.88. The figure corresponds to the 10-day average closing price of the stock as on Feb 3.
With the acquisition, Bank of Ozarks deepened its footprints across New York and Florida regions, which going forward, should augur well for its growth. Besides, the deal is expected to be immediately accretive to the company’s book value per share as well as its tangible book value per share. Moreover, the company’s diluted earnings per share are projected to improve over the coming twelve months.
Bank of the Ozarks has shown strong inorganic growth over the years, with the latest acquisition being the twelfth one in recent years and probably the biggest one. Notably, in May 2014, the company had acquired Summit Bancorp, Inc., which strengthened its position in the Arkansas market. Further, in Mar 2014, it had completed the acquisition of Texas-based Bancshares Inc., which contributed 3 cents to first-quarter 2014 diluted earnings per share.
Thus, the acquisition of Intervest Bancshares is not only strategically significant, but also expected to materially benefit the company. Moreover, the company recently delivered strong fourth-quarter and full-year 2014 earnings on Jan 16. Fourth-quarter diluted earnings per share of 43 cents were up 30% year over year, while full-year earnings per share rose 20% from 2013 to $1.52. However, acquisition-related expenses have been a major concern for the company over the years.
Currently, Bank of the Ozarks carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the finance space are Pinnacle Financial Partners Inc. (PNFP), Customers Bancorp, Inc. (CUBI) and Southern First Bancshares, Inc. (SFST). All these stocks sport a Zacks Rank #1 (Strong Buy).
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