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Live Oak Bancshares (LOB)
NYSE:LOB
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Live Oak Bancshares
(NYSE:LOB)
Rating:77Outperform
Price Target:
$32.00
▲(9.18%Upside)
Live Oak Bancshares (LOB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.34B
Dividend Yield0.41%
Average Volume (3M)210.60K
Price to Earnings (P/E)22.6
Beta (1Y)1.24
Revenue Growth12.30%
EPS Growth-41.81%
CountryUS
Employees1,008
SectorFinancial
Sector Strength80
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.21
Shares Outstanding45,607,983
10 Day Avg. Volume232,748
30 Day Avg. Volume210,598
Financial Highlights & Ratios
PEG Ratio0.60
Price to Book (P/B)1.56
Price to Sales (P/S)0.00
P/FCF Ratio15.63
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue0.66
Enterprise Value/Gross Profit2.66
Enterprise Value/Ebitda5.76
Forecast
1Y Price Target
$32.00Price Target Upside9.18% Upside
Rating ConsensusHold
Number of Analyst Covering2
Live Oak Bancshares Business Overview & Revenue Model
Company DescriptionLive 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.
How the Company Makes MoneyLive Oak Bancshares generates revenue primarily through interest income from its loan portfolio. The company specializes in originating small business loans, often guaranteed by the Small Business Administration (SBA), which provides a stable income stream through interest payments. Additionally, Live Oak earns non-interest income from the sale of loans in the secondary market, as well as from fees related to loan servicing. The company's earnings are also supported by its strategic partnerships and technological advancements, which enhance operational efficiency and customer reach.
Live Oak Bancshares Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 18.42%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook, with significant achievements in loan and deposit growth, net interest income milestones, and improved credit quality trends. However, these positives are tempered by challenges related to elevated provision expenses, economic uncertainty, increased non-accruing loans, and the impact of SBA rule changes. The bank remains cautiously optimistic, emphasizing proactive credit management and strategic initiatives.Q1-2025 Updates
Positive Updates
Record Loan Originations
Q1 2025 loan originations totaled approximately $1.4 billion, marking the largest Q1 loan production in bank history, with a 73% increase year over year.
Strong Deposit Growth
Customer deposits grew by 8% quarter-over-quarter, nearly double the Q1 growth experienced in 2024.
Net Interest Income Milestone
Quarterly net interest income surpassed $100 million for the first time in bank history, with a 3% linked quarter growth and 12% compared to Q1 2024.
Growth in Business Checking Products
Noninterest-bearing balances in business checking increased by 31% quarter-over-quarter.
Improved Credit Quality Trends
Consecutive quarters of low past dues at $10 million or approximately nine basis points of the total held for investment loan portfolio.
Negative Updates
Elevated Provision Expense
Continued high provision expenses due to ongoing work through the small business credit cycle, with an increase in allowance for credit losses of $51 million over the last five quarters.
Economic Uncertainty Impact
Uncertainty in the economic environment, including inflation, tariffs, and interest rates, affecting the small business credit cycle and overall cautious outlook.
Non-Accruing Loans Increase
An increase in non-accruing classified loans quarter-over-quarter, though the rate of increase has slowed compared to the previous year.
Impact of SBA Rule Changes
Reinstatement of small dollar borrower fees and other rule changes, potentially affecting the profitability and time to close for small dollar loans.
Company Guidance
During the Q1 2025 earnings call for Live Oak Bancshares, multiple metrics and guidance were provided, demonstrating strong momentum across several areas. The company reported a significant increase in checking balances, which stood at $279 million by the quarter's end, a fourfold increase from the previous year. Loan originations reached a record $1.4 billion, marking a 73% year-over-year increase, with a notable 55% rise in SBA 7(a) loans. Deposits also grew by 8% quarter-over-quarter. Despite an uncertain economic environment and ongoing small business credit cycle challenges, the bank maintained elevated provision levels, resulting in a $51 million increase in the allowance for credit losses over the past five quarters. Net interest income hit a record high of approximately $101 million, while the net interest margin expanded by five basis points to 3.2%. The bank also achieved a 27% year-over-year increase in core pre-provision net revenue (PPNR), totaling $50 million. Overall, the bank emphasized its strong credit quality, with 33% of loans government-guaranteed and a well-diversified portfolio, while maintaining a healthy capital position with a Mahan ratio of nearly 17%.Live Oak Bancshares Financial Statement Overview
Summary
Live Oak Bancshares shows strong revenue growth and a robust balance sheet with no debt, but faces challenges in cash flow generation due to negative operating and free cash flows. The company is financially stable but needs to address cash flow issues for long-term growth.Income Statement
Live Oak Bancshares has demonstrated a strong improvement in revenue with a significant increase from 2022 to 2023. The gross profit margin remains robust at 100%, indicating that the company efficiently controls its cost of goods sold. However, the net profit margin is lower, which suggests higher operating or other expenses affecting profitability. The EBIT margin is strong, highlighting effective management of operating expenses.75
Positive
Balance Sheet
The balance sheet is solid with a high equity ratio, indicating financial stability and lower reliance on debt. The company has no total debt as of the latest report, which is a positive indicator of financial health. Return on equity is healthy, reflecting effective use of shareholder funds to generate income. The company's substantial cash reserves add to its financial stability.80
Positive
Cash Flow
The cash flow statement shows some areas of concern, mainly the negative operating and free cash flows in the latest period. However, the company has shown an ability to generate significant cash from financing activities, which may provide some buffer. The negative free cash flow growth rate suggests potential challenges in cash generation from core operations.60
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 812.37M | 119.49M | 391.86M | 441.99M | 284.62M |
| Gross Profit | 812.37M | 119.49M | 391.86M | 441.99M | 284.62M |
| EBITDA | 0.00 | 104.10M | 231.11M | 232.15M | 69.08M |
| Net Income | 77.47M | 73.90M | 176.21M | 167.00M | 59.54M |
Balance Sheet | |||||
| Total Assets | 12.94B | 11.27B | 9.86B | 8.21B | 7.87B |
| Cash, Cash Equivalents and Short-Term Investments | 1.86B | 89.52M | 1.30B | 1.10B | 1.05B |
| Total Debt | 112.82M | 23.35M | 133.20M | 318.29M | 1.54B |
| Total Liabilities | 11.94B | 10.37B | 9.04B | 7.50B | 7.30B |
| Stockholders Equity | 999.03M | 902.67M | 811.03M | 715.13M | 567.85M |
Cash Flow | |||||
| Free Cash Flow | 487.16M | 573.23M | 80.73M | -122.80M | -293.98M |
| Operating Cash Flow | 536.47M | 620.07M | 124.48M | -119.72M | -272.99M |
| Investing Cash Flow | -2.08B | -1.77B | -1.44B | -149.80M | -2.61B |
| Financing Cash Flow | 1.57B | 1.32B | 1.53B | 154.95M | 2.98B |
Live Oak Bancshares Technical Analysis
Positive
29.31
Price Trends
27.18
Positive
28.50
Positive
36.12
Negative
Market Momentum
0.42
Negative
60.03
Neutral
79.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOB, the sentiment is Positive. The current price of 29.31 is above the 20-day moving average (MA) of 28.19, above the 50-day MA of 27.18, and below the 200-day MA of 36.12, indicating a neutral trend. The MACD of 0.42 indicates Negative momentum. The RSI at 60.03 is Neutral, neither overbought nor oversold. The STOCH value of 79.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LOB.
Live Oak Bancshares Risk Analysis
Live Oak Bancshares disclosed 48 risk factors in its most recent earnings report. Live Oak Bancshares reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Live Oak Bancshares Peers Comparison
Overall Rating
UnderperformOutperform
Sector (69)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.34B | 22.59 | 6.10% | 0.41% | 12.30% | -41.81% | |
77 Outperform | $1.42B | 10.72 | 9.84% | 3.64% | 1.26% | -1.92% | |
77 Outperform | $1.08B | 9.56 | 11.08% | 1.55% | 7.63% | -1.13% | |
71 Outperform | $1.13B | 42.74 | 2.45% | 3.68% | -2.81% | -64.24% | |
70 Outperform | $1.33B | 11.81 | 9.38% | 3.27% | 3.01% | 4.55% | |
69 Neutral | €15.95B | 12.26 | 14.11% | 5.34% | 7.09% | 0.17% | |
56 Neutral | $1.26B | 63.52 | 1.27% | 4.87% | 6.67% | -83.79% |
* Financial Sector Average
Performance Comparison
LOB
Live Oak Bancshares
29.31
-4.20
-12.53%
DCOM
Dime Community Bancshares
25.81
7.28
39.29%
STBA
S&T Bancorp
37.30
6.14
19.70%
SASR
Sandy Spring Bancorp
27.95
5.23
23.02%
TCBK
Trico Bancshares
40.58
4.40
12.16%
BY
Byline Bancorp
25.74
3.09
13.64%
Live Oak Bancshares Corporate Events
Executive/Board ChangesShareholder Meetings
Live Oak Bancshares Holds Annual Shareholder Meeting
Neutral
May 22, 2025
On May 20, 2025, Live Oak Bancshares, Inc. held its Annual Meeting of Shareholders where several key decisions were made. Shareholders elected members to the Board of Directors, approved executive compensation, and ratified KPMG LLP as the company’s independent auditors for 2025. Additionally, it was decided that advisory votes on executive compensation will be held annually, aligning with the Board’s recommendation.
The most recent analyst rating on (LOB) stock is a Hold with a $36.00 price target. To see the full list of analyst forecasts on Live Oak Bancshares stock, see the LOB Stock Forecast page.
Dividends
Live Oak Bancshares Declares Cash Dividend Announcement
Positive
May 20, 2025
On May 20, 2025, Live Oak Bancshares, Inc. announced that its Board of Directors declared a cash dividend of $0.03 per share. This dividend is payable on June 17, 2025, to shareholders of record as of June 3, 2025, reflecting the company’s ongoing commitment to providing value to its investors.
The most recent analyst rating on (LOB) stock is a Hold with a $36.00 price target. To see the full list of analyst forecasts on Live Oak Bancshares stock, see the LOB Stock Forecast page.
Executive/Board Changes
Live Oak Bancshares Appoints Patrick McHenry to Board
Positive
May 8, 2025
On May 6, 2025, Live Oak Bancshares appointed Patrick T. McHenry to its board of directors, effective May 21, 2025. McHenry, a former U.S. Representative and Chairman of the House Financial Services Committee, brings extensive experience in financial services, fintech, and public policy, which is expected to enhance Live Oak’s mission to support small businesses across the U.S.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.