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1. Company Snapshot

1.a. Company Description

Live Oak Bancshares, Inc.operates as the bank holding company for Live Oak Banking Company that provides various commercial banking products and services to individuals, small businesses, and professionals in North Carolina, the United States.The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits.


It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans.In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; wealth and investment management services to high-net-worth individuals and families; investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies; and an on-site restaurant location to company employees and business visitors.Live Oak Bancshares, Inc.


was incorporated in 2008 and is headquartered in Wilmington, North Carolina.

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1.b. Last Insights on LOB

Live Oak Bancshares' recent performance was driven by strong Q4 2025 earnings, with net income attributable to common shareholders reaching $44.1 million, or $0.95 per diluted share, surpassing the Zacks Consensus Estimate of $0.56 per share. The company's revenue also exceeded expectations, with a solid beat in its quarterly earnings. Additionally, Live Oak's CEO James S. Mahan III's indirect sale of 20,000 shares in February 2026, valued at approximately $810,000, may indicate a positive sentiment towards the company's future prospects.

1.c. Company Highlights

2. Live Oak Bancshares' Q4 2025 Earnings: A Strong Performance

Live Oak Bancshares reported a robust financial performance in Q4 2025, with net income reaching $44 million and earnings per share (EPS) of $0.95, significantly exceeding the estimated EPS of $0.56. The company's revenue grew 17% year-over-year, driven by a record loan production of $6.2 billion, representing a 17% annual loan balance growth. The adjusted pre-provision net revenue (PPNR) increased 27% in 2025, with a 21% rise in the fourth quarter. The tangible book value grew 13% in 2025, and the company's adjusted EPS surged 49%.

Publication Date: Jan -23

📋 Highlights
  • Record Loan Production: $6.2 billion in loan originations achieved, representing 17% annual loan balance growth.
  • Earnings Growth: Net income of $44 million with earnings per share (EPS) of $0.95, tripling from 2024 levels.
  • Adjusted PPNR Surge: Adjusted pre-provision net revenue (PPNR) grew 27% in 2025 and 21% in Q4 2025.
  • Revenue and EPS Expansion: Revenue increased 17%, and adjusted EPS rose 49% year-over-year.
  • Stable Credit Trends: Delinquency rate held at nine basis points, with nonaccrual loans at $110 million, primarily driven by SBA credit.

Loan Growth and Credit Trends

The company's loan growth was a key driver of its performance, with a significant increase in loan originations. The credit trends remain stable, with a low delinquency rate of nine basis points. Nonaccrual loans increased to $110 million, primarily driven by SBA credit. According to Michael Cairns, the quarter was "fairly uneventful and stable" compared to the previous quarter, with classified loans flat to slightly improving.

Outlook and Guidance

Live Oak Bancshares is optimistic about its growth prospects in 2026, expecting continued strong loan growth and a stable or low-rate environment to drive growth, margin, and credit outlook. The company expects some compression in net interest income (NII) and net interest margin (NIM) in the first quarter due to the lag in loan yields and deposit costs. However, it believes its growth engine and deposit pricing will help it migrate back to a positive trajectory.

Valuation and Metrics

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.56, the company's valuation appears reasonable. The Net Interest Margin (NIM) is expected to decline in Q1, similar to the 18 basis-point decline in 4Q24, but then expand throughout the year. Analysts estimate revenue growth at 15.0% for next year, and the current valuation multiples, such as a P/E Ratio of 26.83, suggest that the market has high expectations for the company's future performance.

Strategic Initiatives

The company is making progress in its strategic initiatives, including business checking and Live Oak Express. Noninterest-bearing deposits have reached 4% of the deposit base, with a goal to increase to 15% over time. The Live Oak Express product is expected to see growth over the next several years, with a focus on building top-of-funnel capabilities and improving efficiency.

3. NewsRoom

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Unexpected Stock Picks and Looking to the Future

Mar -02

Source: fool.com

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Live Oak Bancshares CEO Sells Another 20,000 Shares

Mar -01

Source: fool.com

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Live Oak Bancshares CEO Sells 20,000 Shares As Stock Starts 2026 Strong

Feb -22

Source: fool.com

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Live Oak Bancshares, Inc. (LOB) Q4 2025 Earnings Call Transcript

Jan -22

Source: seekingalpha.com

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Live Oak Bancshares (LOB) Reports Q4 Earnings: What Key Metrics Have to Say

Jan -22

Source: zacks.com

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Live Oak Bancshares (LOB) Beats Q4 Earnings and Revenue Estimates

Jan -21

Source: zacks.com

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Live Oak Bancshares, Inc. Reports Fourth Quarter 2025 Results

Jan -21

Source: globenewswire.com

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Countdown to Live Oak Bancshares (LOB) Q4 Earnings: A Look at Estimates Beyond Revenue and EPS

Jan -15

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.49%)

6. Segments

Banking

Expected Growth: 7.43%

Live Oak Bancshares' 7.43% growth is driven by its niche focus on small business lending, particularly in the healthcare and technology industries. Strong loan growth, fueled by its digital lending platform, has increased revenue. Additionally, the company's cost-cutting initiatives and efficient operations have improved profitability, contributing to its robust growth.

Fintech

Expected Growth: 10.98%

Fintech growth driven by increasing adoption of digital banking, strategic partnerships, and expansion into new markets. Live Oak Bancshares' focus on technology-enabled lending, digital payment solutions, and data analytics has enabled it to capitalize on the shift towards online banking, resulting in 10.98% growth.

Other

Expected Growth: 7.43%

Live Oak Bancshares' 7.43% growth is driven by its strategic expansion into new markets, increased lending activities, and a growing deposit base. The company's focus on technology-enabled banking and digital transformation has also contributed to its growth. Additionally, its diversified loan portfolio and strong risk management practices have enabled it to maintain a stable net interest margin.

7. Detailed Products

Commercial Banking

Provides a range of commercial banking services, including cash management, treasury management, and commercial lending to businesses and organizations.

Mortgage Banking

Offers mortgage loan origination and servicing to individuals and families, as well as correspondent lending services to other financial institutions.

SBA Lending

Provides Small Business Administration (SBA) loans to small businesses and entrepreneurs, offering flexible financing options and expert guidance.

Treasury Services

Offers a range of treasury services, including cash management, wire transfer, and account services to businesses and organizations.

Digital Banking

Provides online and mobile banking services, allowing customers to manage their accounts, transfer funds, and pay bills remotely.

8. Live Oak Bancshares, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Live Oak Bancshares, Inc. is medium due to the presence of alternative financial institutions and digital banking platforms.

Bargaining Power Of Customers

The bargaining power of customers for Live Oak Bancshares, Inc. is low due to the lack of concentration of buyers and the presence of multiple banking options.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Live Oak Bancshares, Inc. is medium due to the presence of multiple suppliers of financial services and technology.

Threat Of New Entrants

The threat of new entrants for Live Oak Bancshares, Inc. is high due to the low barriers to entry in the banking industry and the presence of fintech companies.

Intensity Of Rivalry

The intensity of rivalry for Live Oak Bancshares, Inc. is high due to the presence of multiple competitors in the banking industry and the need to differentiate itself through innovative products and services.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.52%
Debt Cost 12.12%
Equity Weight 97.48%
Equity Cost 12.12%
WACC 12.12%
Leverage 2.59%

11. Quality Control: Live Oak Bancshares, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
First Bank

A-Score: 5.9/10

Value: 4.8

Growth: 4.8

Quality: 7.8

Yield: 4.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
MidWestOne Financial Group

A-Score: 5.5/10

Value: 5.4

Growth: 2.1

Quality: 7.1

Yield: 7.0

Momentum: 8.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
NSTS Bancorp

A-Score: 5.4/10

Value: 7.9

Growth: 5.7

Quality: 3.9

Yield: 0.0

Momentum: 5.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
TC Bancshares

A-Score: 5.3/10

Value: 4.0

Growth: 6.1

Quality: 5.6

Yield: 0.0

Momentum: 9.0

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
Equity Bancshares

A-Score: 5.1/10

Value: 5.1

Growth: 6.6

Quality: 5.5

Yield: 2.0

Momentum: 4.0

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
Live Oak Bancshares

A-Score: 4.7/10

Value: 6.0

Growth: 8.3

Quality: 6.4

Yield: 0.0

Momentum: 2.5

Volatility: 5.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

36.6$

Current Price

36.6$

Potential

-0.00%

Expected Cash-Flows