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Live Oak Bancshares (LOB)
NYSE:LOB
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Live Oak Bancshares
(NYSE:LOB)
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Rating:72Outperform
Price Target:
$43.00
▲(7.61% Upside)
The score is driven primarily by solid fundamentals with a strong balance sheet but weaker cash flow and profitability trends. Technicals add support with a clear uptrend and positive momentum, while valuation is only average due to a higher P/E and low yield. The latest earnings call was constructive on growth and longer-term margin trajectory, tempered by near-term NIM compression and elevated nonaccruals.
Positive Factors
Strong SBA Lending Growth
The company's leadership in SBA lending demonstrates its strong market position and ability to capture significant market share, enhancing long-term revenue potential.
Advancements in AI and Technology
Investing in AI and technology enhances operational efficiency and customer experience, providing a competitive edge and supporting sustainable growth.
Strong Loan and Deposit Growth
Robust growth in loans and deposits indicates strong demand for the company's services, supporting future revenue and profitability.
Negative Factors
Increase in Nonaccrual Loans
Rising nonaccrual loans can lead to higher credit risk and potential losses, impacting financial stability and profitability.
Declining Profitability Margins
Decreasing profitability margins may indicate cost pressures or pricing challenges, affecting long-term earnings potential.
Weak Cash Flow Generation
Weak cash flow generation can limit the company's ability to invest in growth opportunities and meet financial obligations, impacting long-term viability.
Live Oak Bancshares (LOB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.83B
Dividend Yield0.33%
Average Volume (3M)309.55K
Price to Earnings (P/E)17.9
Beta (1Y)0.96
Revenue Growth10.41%
EPS Growth-19.43%
CountryUS
Employees1,008
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.95
Shares Outstanding45,731,300
10 Day Avg. Volume399,602
30 Day Avg. Volume309,546
Financial Highlights & Ratios
PEG Ratio7.67
Price to Book (P/B)1.78
Price to Sales (P/S)1.92
P/FCF Ratio3.65
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue1.95
Enterprise Value/Gross Profit4.54
Enterprise Value/Ebitda15.92
Forecast
1Y Price Target
$45.33Price Target Upside13.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 loans issued to small businesses, which includes commercial loans, SBA loans, and other specialized lending products. Additionally, the company earns non-interest income through fees associated with its banking services, such as account maintenance fees, transaction fees, and loan origination fees. The bank's focus on technology and online banking allows it to operate with lower overhead costs, which can enhance profit margins. Strategic partnerships with various industry players, including technology platforms and lending networks, further contribute to its revenue streams by expanding its reach and customer base.
Live Oak Bancshares Key Performance Indicators (KPIs)
Live Oak Bancshares Earnings Call Summary
Earnings Call Date:Jan 21, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call emphasized multiple strong operating and financial achievements: record loan production, double-digit revenue and NII growth, improving core profitability (PPNR), substantial checking and cross-sell momentum, and a meaningful contribution from Live Oak Express. Venture gains and steady deposit growth further bolstered results. Offsetting these positives were manageable but notable headwinds: an increase in nonaccruals driven by SBA exposure, near-term NIM compression risk from rapid deposit repricing after Fed cuts, intentionally lower gain-on-sale recognition in Q4 (timing), and several one-time expense offsets. Management framed credit as stabilizing and expects expense growth to moderate while continuing strategic investments (checking, Live Oak Express, AI/technology). Overall, the positives significantly outweighed the negatives, though near-term margin and timing variability remain watch items.Q4-2025 Updates
Positive Updates
Record Loan Production and Strong Balance Growth
Company delivered record loan production of $6.2B for 2025, including $1.6B in Q4, driving 17% year-over-year loan balance growth and 4% linked-quarter growth.
Revenue and Core Profitability Expansion
Reported 17% revenue growth year-over-year; management highlighted 27% core PPNR growth (and Q4 adjusted PPNR of $64M, ~21% higher than 2024).
Material EPS and Net Income Improvement
Q4 net income was $44M and diluted EPS $0.95 (approximately 3x Q4 2024); management reported adjusted EPS materially higher (management cited +49% and also referenced adjusted EPS roughly doubling vs prior period).
Net Interest Income and Margin Momentum
Net interest income rose $8M (7%) linked-quarter and $26M (26%) versus 2024; net interest margin expanded ~5 basis points quarter-over-quarter despite late-year Fed cuts.
Business Checking and Cross-Sell Traction
Business checking balances reached $377M (doubled year-over-year, +4% q/q); customers with both loan and deposit relationships rose from ~6% at end-2024 to 22% today; ~37% of new loan customers opened checking in Q4.
Live Oak Express Growth and Gain-on-Sale Contribution
Live Oak Express (small-dollar 7(a)) production ramped meaningfully and contributed $12M to 2025 gain-on-sale totals (roughly 20% of gain-on-sale), a 2x contribution versus 2024.
Venture Investment Gains
Net gains from ventures totaled $28M in Q4, primarily driven by a $24M gain from the Aperture sale, providing one-time income tailwinds that improved overall results.
Credit Stabilization and Relative Outperformance
Management highlighted improving credit trends: >30 days past due remained low at $10M (9 bps of held-for-investment portfolio); reserves declined modestly and Live Oak's credit performance continued to compare favorably to broader SBA lender peers.
Deposit Growth and Funding Profile
Customer deposits rose 18% year-over-year; low-cost deposit initiatives showed progress (noninterest-bearing and low-cost balances and related accounts now ~4% of total deposit base, a 2x increase y/y).
Negative Updates
Increase in Nonaccrual Loans (SBA-Driven)
Nonaccrual loans increased to $110M, representing ~91 basis points of the unguaranteed held-for-investment loan portfolio; management attributed the linked-quarter rise primarily to SBA credit and broader SBA industry trends.
Near-Term NIM Compression Risk from Fed Cuts and Repricing Timing
Management noted near-term margin compression due to 50 bps of Fed cuts in Q4 as deposit pricing repriced faster than the bank's large variable quarterly-adjusting loan portfolio (loan repricing effective Jan 1), creating short-term pressure on NIM.
Temporarily Lower Gain-on-Sale in Q4 and Seasonal Q1 Risk
Gain-on-sale was intentionally down in Q4 (management delayed some loan sales and increased loans held-for-sale by ~$60M q/q to capture NII), and Q1 historically is the lowest quarter for gain-on-sale income, creating timing variability.
One-Time Charges and Other Offsets to Reported Results
Reported results included roughly $11M of offsets (warrant losses, accelerated capitalized software depreciation, severance, donor-advised fund allocation) and reported noninterest expense of ~$89M that included approximately $6.6M of one-time items.
Macro and Operational Headwinds (Timing and Uncertainty)
Management cited macro uncertainty (rate moves, policy noise) and a government shutdown that caused some timing delays in origination/processing; these factors introduce short-term operational timing risk for sales and closings.
Company Guidance
Management's forward guidance assumes three Fed cuts (March, June, September 2026) and a generally stable/low rate environment that they view as favorable for growth, margins and credit; they expect near‑term NIM compression in Q1 as deposit pricing re‑prices after the recent 50 bp move but anticipate NIM and NII to resume an "up and to the right" trajectory through 2026 driven by strong loan growth (2025 loan balances +17% YoY, $6.2B production in 2025, Q4 originations $1.6B), continued deposit momentum (customer deposits +18% YoY, business checking $377M doubled YoY, 22% of customers now have both a loan and deposit vs ~6% at end‑2024, low‑cost deposits ~4% of total, 2x YoY), and product ramps (Live Oak Express contributed $12M of gain‑on‑sale in 2025, ~20% of total gains and is being built toward an aspirational $1B/year at cruise altitude). They expect Q1 gain‑on‑sale to be closer to Q1 2025 (~$15M) after intentionally increasing loans held‑for‑sale by about $60M, plan to moderate expense growth into the single digits YoY while investing in checking, Live Oak Express and AI/tech, and see credit and reserves remaining manageable (30+ days past due $10M/9 bps, nonaccruals $110M/91 bps unguaranteed HFI); management noted any fewer or later Fed cuts would provide upside to earnings.Live Oak Bancshares Financial Statement Overview
Summary
Financials are mixed: a strong balance sheet (low debt-to-equity of 0.09) supports stability, but profitability has weakened (gross margin down to 31.59%) and cash generation is soft (operating cash flow down materially and negative free cash flow growth).Income Statement
Live Oak Bancshares shows moderate revenue growth with a TTM increase of 2.07%. However, the gross profit margin has decreased to 31.59% from a high of 100% in previous years, indicating a decline in profitability. The net profit margin is stable at 7.21%, but lower than past performance. Overall, the income statement reflects a company with steady revenue growth but declining profitability.65
Positive
Balance Sheet
The balance sheet is strong with a low debt-to-equity ratio of 0.09, indicating conservative leverage. Return on equity is at 6.49%, which is lower than previous years but still reasonable. The company has managed to maintain a healthy equity base, which supports its financial stability.75
Positive
Cash Flow
Operating cash flow has decreased significantly, with a TTM figure of $170.69 million compared to higher values in previous years. Free cash flow growth is negative, indicating challenges in generating cash. The free cash flow to net income ratio is close to 1, suggesting that net income is being effectively converted into cash flow, but overall cash flow performance is weak.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 991.72M | 929.29M | 776.55M | 508.83M | 506.41M | 378.31M |
| Gross Profit | 425.01M | 396.61M | 382.26M | 350.92M | 426.77M | 243.97M |
| EBITDA | 121.22M | 112.52M | 104.10M | 231.11M | 232.15M | 69.08M |
| Net Income | 69.56M | 77.47M | 73.90M | 176.21M | 167.00M | 59.54M |
Balance Sheet | ||||||
| Total Assets | 14.67B | 12.94B | 11.27B | 9.86B | 8.21B | 7.87B |
| Cash, Cash Equivalents and Short-Term Investments | 1.64B | 634.39M | 1.71B | 1.30B | 1.10B | 1.05B |
| Total Debt | 105.05M | 112.82M | 23.35M | 83.20M | 318.29M | 1.54B |
| Total Liabilities | 13.46B | 11.94B | 10.37B | 9.04B | 7.50B | 7.30B |
| Stockholders Equity | 1.20B | 999.03M | 902.67M | 811.03M | 715.13M | 567.85M |
Cash Flow | ||||||
| Free Cash Flow | 166.67M | 487.16M | 573.23M | 80.73M | -122.80M | -281.99M |
| Operating Cash Flow | 170.69M | 536.47M | 620.07M | 124.48M | -119.72M | -261.00M |
| Investing Cash Flow | -334.83M | -2.08B | -1.77B | -1.44B | -149.80M | -2.62B |
| Financing Cash Flow | 1.97B | 1.57B | 1.32B | 1.53B | 154.95M | 2.98B |
Live Oak Bancshares Technical Analysis
Positive
39.96
Price Trends
35.20
Positive
34.75
Positive
32.59
Positive
Market Momentum
1.22
Negative
63.34
Neutral
46.11
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 39.96 is above the 20-day moving average (MA) of 37.59, above the 50-day MA of 35.20, and above the 200-day MA of 32.59, indicating a bullish trend. The MACD of 1.22 indicates Negative momentum. The RSI at 63.34 is Neutral, neither overbought nor oversold. The STOCH value of 46.11 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $1.63B | 12.23 | 9.35% | 3.38% | -1.48% | -1.58% | |
77 Outperform | $1.52B | 14.10 | 9.06% | 3.07% | -2.46% | -1.98% | |
72 Outperform | $1.83B | 17.92 | 6.31% | 0.33% | 10.41% | -19.43% | |
68 Neutral | $1.54B | 24.66 | 2.65% | 4.97% | -7.96% | -52.79% | |
68 Neutral | $1.50B | 68.09 | 1.11% | ― | 2.04% | -64.17% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $1.45B | 31.47 | 11.82% | ― | -2.11% | 6.48% |
* Financial Sector Average
LOB
Live Oak Bancshares
39.96
5.73
16.74%
HOPE
Hope Bancorp
11.98
1.16
10.67%
STBA
S&T Bancorp
42.64
4.91
13.01%
TFIN
Triumph Financial
63.09
-12.87
-16.94%
NBHC
National Bank Holdings
40.18
-1.09
-2.63%
CCB
Coastal Financial
95.78
7.38
8.35%
Live Oak Bancshares Corporate Events
Executive/Board Changes
Live Oak Bancshares Appoints New Chief Risk Officer
Neutral
Dec 1, 2025
On December 1, 2025, Live Oak Bancshares appointed Ewa Stasiowska as Chief Risk Officer, succeeding Gregory W. Seward who will remain as General Counsel. Stasiowska, with over two decades of experience in risk management, is expected to enhance Live Oak’s risk management practices as the company continues to grow, having recently surpassed the $10 billion asset threshold.
The most recent analyst rating on (LOB) stock is a Hold with a $32.00 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 Announces Upcoming Cash Dividend
Positive
Nov 18, 2025
On November 18, 2025, Live Oak Bancshares, Inc. announced a cash dividend of $0.03 per share for its Voting Common Stock and $0.52344 per depositary share for its 8.375% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock. These dividends are scheduled to be paid on December 15, 2025, to shareholders recorded by December 2, 2025, reflecting the company’s commitment to returning value to its investors.
The most recent analyst rating on (LOB) stock is a Hold with a $32.00 price target. To see the full list of analyst forecasts on Live Oak Bancshares stock, see the LOB Stock Forecast page.
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.