It's no secret that Bank of the Ozarks (NASDAQ:OZK) is charting a risky course by financing speculative commercial real estate projects in most major metropolitan areas across the country. Yet analysts give the bank a pass -- a get-out-of-jail free card.

They cite its net charge-off ratio, which has come in below the industry average every year since the bank went public in 1997. They also cite its performance through the financial crisis, which was similarly stellar.

But while both points are true, they shouldn't be given much evidentiary value by analysts and investors today. That's because they refer to what Bank of the Ozarks used to be, not what it is right now.

Bright yellow vintage city streetcars in downtown Little Rock Arkansas

Bright yellow vintage city streetcars in downtown Little Rock, Arkansas -- the home of Bank of the Ozarks. Image source: Getty Images.

1. Dramatic growth

The most obvious way Bank of the Ozarks has changed is that it has grown rapidly, quintupling in size since 2012. Five years ago, it had $4 billion in assets on its balance sheet, with an additional $800 million in off-balance sheet exposure. Today, it has $20 billion in assets, with $11.9 billion in off-balance sheet commitments.

Bar chart comparing Bank of the Ozarks assets in 2012 to 2017.

Data source: Bank of the Ozarks. Chart by author.

2. Source of growth

While Bank of the Ozarks is widely known as an acquisitive bank, completing 16 acquisitions since 2010, two-thirds of its combined on- and off-balance-sheet loans nevertheless come from a single, internal unit of the bank, its real estate specialties group, or RESG.

RESG is based in Dallas, Texas, and makes large and complex commercial real estate loans. The unit was established in 2003, but it wasn't until after 2012 that its origination volumes surged. That was the year RESG's longtime president, Dan Thomas, became chief lending officer of the bank, as well as the vice chairman of its board of directors. (Thomas has since left the bank, resigning abruptly on July 27, three weeks after the bank suspended its duty to report to the Securities & Exchange Commission.)

Today, RESG is responsible for half of Bank of the Ozarks' $15.2 billion loan portfolio, and 93% of its $11.9 billion worth of off-balance sheet exposure.

Donut charts showing the allocation of Bank of the Ozarks' on and off-balance sheet loans.

Data source: Bank of the Ozarks. Chart by author.

3. Out-of-market lending

A bank doesn't quintuple the size of its balance sheet in five years without changing its growth strategy. Bank of the Ozarks is no exception.

Eighty percent of Bank of the Ozarks' real estate loans in 2012 were made in Arkansas and Texas, its traditional footprint, with only 20% coming from elsewhere. Today, these numbers are reversed. Now, only 20% are in Arkansas and Texas, while 80% are elsewhere.

A pie chart showing that 80% of Bank of the Ozarks' loans are out-of-market.

Data source: Bank of the Ozarks. Chart by author.

The takeaway from these charts is that Bank of the Ozarks is a very different bank today than it was even five years ago. It was a community bank before. Now, it's a nationwide financier of commercial real estate. It's a mistake to conflate the two.