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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 robust fundamentals, including a diversified and collateralized loan book, strong net interest income, and high capital adequacy. The company's Q3 2025 earnings report revealed net income attributable to common shareholders of $25.6 million, or $0.55 per diluted common share. Despite missing earnings and revenue estimates, the company's attractive valuations, with P/B and P/S ratios below historical averages, support a positive outlook. Additionally, Live Oak Bank's ranking as the most active SBA 7(a) lender by dollar amount and its investment in Cascading AI, Inc. through Live Oak Ventures, demonstrate its growth potential.

1.c. Company Highlights

2. Live Oak Banking Company Shines with Strong Q3 Earnings

Live Oak Banking Company's Q3 earnings per share (EPS) came in at $0.55, slightly below estimates of $0.58. Despite this, the company's financial performance was robust, with net interest income increasing by 6% linked quarter and 19% compared to Q3 2024, driven by a 5% linked quarter growth in loan balances and 5 basis points of margin expansion to 3.33%. Revenue growth was also impressive, with the company's net interest margin expanding for the third consecutive quarter. Analysts estimate next year's revenue growth at 15.1%, indicating a strong outlook for the company.

Publication Date: Oct -28

📋 Highlights
  • Top SBA Lender Growth: Named #1 SBA 7(a) lender in 2025 with $2.8B in loans and 44% YoY production growth, market share rising to 7.7%.
  • EPS and Operating Leverage Surge: Q3 EPS of $0.55 doubled YoY, driven by 24% core operating leverage growth and 19% net interest income increase vs. 2024.
  • Checking Account Expansion: Checking balances reached $363M (4% of deposits) with 17% YoY deposit growth; 1/3 of new loan customers open checking accounts.
  • Margin Expansion: Net interest margin rose to 3.33% (3Q25), up 5 bps QoQ, with $551M loan growth and 5 bps margin expansion aiding net interest income.
  • Live Oak Express Gains: Small-dollar SBA sales generated $12M in YTD gain on sale, 4x higher than 2024, with 106–107 premium range for larger loans.

Loan Production and Deposit Growth

The company's loan production was up 22% year-over-year, with loan outstandings growth at 17%. Customer deposit growth was also significant, increasing by 20% year-over-year. The company's checking balances grew to $363 million, or 4% of its total deposit base, up from 2% in the same period last year. This growth in deposits and loans is a testament to the company's strong banking franchise.

Asset Quality and Credit Risk Management

The company's asset quality remains strong, with over 30-day past dues remaining low at 14 basis points. Nonaccrual loans increased to $85 million, or 73 basis points of the unguaranteed held-for-investment loan portfolio. However, the company's servicing team continues to support SBA customers impacted by the small business credit cycle, and the bank is intensifying its servicing efforts, including annual risk rate assessments and site visits. As Michael Cairns, the company's CFO, stated, "We have changed our philosophy on charging off loans, being more proactive and charging them off when we feel like it's past the point of getting back to repayment quickly."

Valuation and Outlook

Live Oak Banking Company's valuation metrics are reasonable, with a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.26, and a Dividend Yield of 0.36%. The company's Net Interest Margin (NIM) is also respectable at 3.33%. Given the company's strong financial performance and growth prospects, its valuation appears to be justified. With analysts estimating 15.1% revenue growth next year, the company's outlook is positive. As the company continues to execute on its growth strategy, investors may want to keep a close eye on its progress.

3. NewsRoom

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LOB Investors Have Opportunity to Join Live Oak Bancshares, Inc. Fraud Investigation with the Schall Law Firm

Dec -03

Source: globenewswire.com

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Ewa M. Stasiowska Joins Live Oak Bank as Chief Risk Officer

Dec -01

Source: globenewswire.com

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Financial Contrast: Live Oak Bancshares (NYSE:LOB) vs. Commercial Bancgroup (NASDAQ:CBK)

Nov -29

Source: defenseworld.net

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LOB Investors Have Opportunity to Join Live Oak Bancshares, Inc. Fraud Investigation with the Schall Law Firm

Nov -26

Source: globenewswire.com

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LOB Investors Have Opportunity to Join Live Oak Bancshares, Inc. Fraud Investigation with the Schall Law Firm

Nov -24

Source: prnewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Live Oak Bancshares, Inc. - LOB

Nov -20

Source: prnewswire.com

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LOB Investors Have Opportunity to Join Live Oak Bancshares, Inc. Fraud Investigation with the Schall Law Firm

Nov -19

Source: globenewswire.com

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LOB Investors Have Opportunity to Join Live Oak Bancshares, Inc. Fraud Investigation With the Schall Law Firm

Nov -19

Source: businesswire.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: 4.9

Quality: 6.8

Yield: 4.0

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
NSTS Bancorp

A-Score: 5.8/10

Value: 7.7

Growth: 5.7

Quality: 4.1

Yield: 0.0

Momentum: 7.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
TC Bancshares

A-Score: 5.7/10

Value: 5.5

Growth: 6.3

Quality: 5.6

Yield: 0.0

Momentum: 9.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Equity Bancshares

A-Score: 5.5/10

Value: 6.1

Growth: 6.6

Quality: 5.8

Yield: 3.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
MidWestOne Financial Group

A-Score: 5.1/10

Value: 6.0

Growth: 2.1

Quality: 7.0

Yield: 7.0

Momentum: 5.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Live Oak Bancshares

A-Score: 4.6/10

Value: 6.0

Growth: 8.3

Quality: 6.2

Yield: 0.0

Momentum: 2.0

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

32.91$

Current Price

32.91$

Potential

-0.00%

Expected Cash-Flows