Wunderlich Securities Reiterates Bank of the Ozarks (OZRK) Buy Rating

Wunderlich Securities analyst Kevin Reynolds reiterated his Buy rating for shares of Bank of the Ozarks (Nasdaq: OZRK), with a price target of $40.

Bank of the Ozarks announced last Friday that it was going to do an FDIC-assisted acquisition of Unity National Bank, a failed Cartersville, Georgia bank.

The analyst noted that only a bank with a strong management team, significant capital and a low risk credit profile would be capable of the planned acquisition and that the FDIC's choice of Bank of the Ozarks to acquire the failed bank was evidence that Bank of the Ozarks was a solid organization.

The Wunderlich Securities analyst wrote, "loss sharing agreement offers significant protection. The $206 million in acquired loans are covered by a loss sharing agreement with the FDIC. Specifically, the FDIC will cover 80% of losses on the first $65 million, or $52 million, and 95% of losses thereafter. Assuming total losses on all loans, Bank of the Ozarks would face a maximum loss exposure of $20 million, for which we expect the company to be compensated by the FDIC. OZRK purchased the loans at a discount bid of $29.9 million."