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Live Oak Bancshares (LOB)
NYSE:LOB
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Live Oak Bancshares
(NYSE:LOB)
Rating:66Neutral
Price Target:―
Live Oak Bancshares (LOB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.28B
Dividend Yield0.43%
Average Volume (3M)366.25K
Price to Earnings (P/E)21.6
Beta (1Y)1.26
Revenue Growth12.30%
EPS Growth-41.81%
CountryUS
Employees1,008
SectorFinancial
Sector Strength82
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.21
Shares Outstanding45,607,983
10 Day Avg. Volume251,091
30 Day Avg. Volume366,249
Financial Highlights & Ratios
PEG Ratio4.34
Price to Book (P/B)1.23
Price to Sales (P/S)0.00
P/FCF Ratio2.54
Enterprise Value/Market Cap0.58
Enterprise Value/Revenue0.44
Enterprise Value/Gross Profit1.78
Enterprise Value/Ebitda3.85
Forecast
1Y Price Target
$32.00Price Target Upside18.65% Upside
Rating ConsensusHold
Number of Analyst Covering2
Live Oak Bancshares Business Overview & Revenue Model
Company DescriptionLive Oak Bancshares, Inc. is a financial services company headquartered in Wilmington, North Carolina. It operates as the bank holding company for Live Oak Banking Company, which provides various commercial banking products and services. The bank specializes in offering lending solutions to small businesses across various industries, including veterinary, pharmacy, agriculture, and healthcare sectors. Live Oak Bank is known for its technology-driven approach to banking, which includes online banking services and a focus on customer-centric solutions.
How the Company Makes MoneyLive Oak Bancshares primarily generates revenue through interest income from its diverse loan portfolio. The company focuses on providing Small Business Administration (SBA) loans, which are partially guaranteed by the government, reducing the bank's risk exposure. Additionally, Live Oak earns money through interest and fees on its loan services, as well as from investment securities. The bank also benefits from partnerships with financial technology companies, which enhance its service offerings and expand its customer reach. Fee income from deposit-related services and other banking activities further contribute to the company's earnings.
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 | EBIT |
| 801.22M | 103.47M | 327.30M | 210.79M | 47.39M | EBITDA |
| 0.00 | 104.10M | 231.11M | 232.15M | 69.08M | Net Income Common Stockholders |
| 77.47M | 73.90M | 176.21M | 167.00M | 59.54M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.86B | 89.52M | 1.30B | 1.10B | 1.05B | Total Assets |
| 12.94B | 11.27B | 9.86B | 8.21B | 7.87B | Total Debt |
| 112.82M | 23.35M | 133.20M | 318.29M | 1.54B | Net Debt |
| -496.23M | -559.44M | -151.04M | 126.34M | 1.24B | 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
Negative
26.97
Price Trends
26.48
Positive
30.88
Negative
37.62
Negative
Market Momentum
0.46
Negative
48.37
Neutral
50.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOB, the sentiment is Negative. The current price of 26.97 is below the 20-day moving average (MA) of 27.24, above the 50-day MA of 26.48, and below the 200-day MA of 37.62, indicating a neutral trend. The MACD of 0.46 indicates Negative momentum. The RSI at 48.37 is Neutral, neither overbought nor oversold. The STOCH value of 50.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.25B | 10.10 | 11.08% | 1.36% | 7.68% | -1.13% | |
70 Outperform | $1.17B | 42.10 | 2.45% | 3.90% | -2.81% | -64.23% | |
70 Outperform | $1.46B | 11.01 | 9.84% | 3.51% | 1.26% | ― | |
68 Neutral | $1.35B | 11.99 | 9.38% | 3.22% | 3.01% | 4.55% | |
66 Neutral | $1.28B | 21.63 | 6.10% | 0.43% | 12.30% | -41.81% | |
64 Neutral | $12.78B | 9.87 | 7.67% | 17015.06% | 12.34% | -5.99% |
* Financial Sector Average
Performance Comparison
LOB
Live Oak Bancshares
26.97
-6.71
-19.92%
DCOM
Dime Community Bancshares
25.23
7.04
38.70%
STBA
S&T Bancorp
36.62
5.22
16.62%
TCBK
Trico Bancshares
39.99
3.96
10.99%
BY
Byline Bancorp
26.12
3.20
13.96%
Live Oak Bancshares Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 8.84%|
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 Corporate Events
Executive/Board ChangesShareholder Meetings
Diane B. Glossman to Leave Live Oak Bancshares Board
Neutral
Feb 14, 2025
On February 11, 2025, Diane B. Glossman announced she will not stand for re-election to the Live Oak Bancshares Board of Directors at the 2025 Annual Meeting, and she will also step down from the Live Oak Banking Company board. This decision was not due to any disagreements with the company. Additionally, on February 10, 2025, the Compensation Committee approved cash bonuses and restricted stock units (RSUs) for key executives under the 2015 Omnibus Stock Incentive Plan. These awards aim to align executive interests with shareholder interests, as seen in the substantial stock ownership of CEO James S. Mahan III.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.