Live Oak Bancshares Inc
NYSE:LOB
Live Oak Bancshares Inc
Live Oak Bancshares Inc., founded in 2008 and headquartered in Wilmington, North Carolina, has carved a distinctive niche in the banking sector with its innovative approach to small business financing. At its core, Live Oak focuses on providing specialized lending services to small and medium-sized enterprises (SMEs) across a wide array of industries, including veterinary, dental, and healthcare practices, as well as independent pharmacies, and even wine and craft breweries. The bank has efficiently leveraged technology to streamline the lending process, employing a tech-savvy and customer-centric approach to address the specific needs of niche markets that are often underserved by traditional banks. This strategy has allowed Live Oak to expand its reach and build professional relationships with business owners across all 50 states, facilitating growth and sustainability for local ventures.
Revenue generation for Live Oak primarily comes from interest earned on loans and a suite of financial services tailored to small business clients. The bank positions itself not just as a lender, but as a partner, offering extensive support services, including business advisory and management tools. Additionally, by participating actively in the Small Business Administration (SBA) loan programs, Live Oak Bancshares benefits from reduced risk and favorable funding conditions, ensuring steady revenue streams while supporting small business initiatives. Its technology-driven infrastructure minimizes operational costs and enhances efficiency, providing a competitive edge that allows higher return on investments and solidifies its reputation as a forward-thinking institution in the banking ecosystem. With a focus on adaptability and growth, Live Oak continues to thrive by aligning its financial products and services with the evolving demands of its client base.
Live Oak Bancshares Inc., founded in 2008 and headquartered in Wilmington, North Carolina, has carved a distinctive niche in the banking sector with its innovative approach to small business financing. At its core, Live Oak focuses on providing specialized lending services to small and medium-sized enterprises (SMEs) across a wide array of industries, including veterinary, dental, and healthcare practices, as well as independent pharmacies, and even wine and craft breweries. The bank has efficiently leveraged technology to streamline the lending process, employing a tech-savvy and customer-centric approach to address the specific needs of niche markets that are often underserved by traditional banks. This strategy has allowed Live Oak to expand its reach and build professional relationships with business owners across all 50 states, facilitating growth and sustainability for local ventures.
Revenue generation for Live Oak primarily comes from interest earned on loans and a suite of financial services tailored to small business clients. The bank positions itself not just as a lender, but as a partner, offering extensive support services, including business advisory and management tools. Additionally, by participating actively in the Small Business Administration (SBA) loan programs, Live Oak Bancshares benefits from reduced risk and favorable funding conditions, ensuring steady revenue streams while supporting small business initiatives. Its technology-driven infrastructure minimizes operational costs and enhances efficiency, providing a competitive edge that allows higher return on investments and solidifies its reputation as a forward-thinking institution in the banking ecosystem. With a focus on adaptability and growth, Live Oak continues to thrive by aligning its financial products and services with the evolving demands of its client base.
Record Loan Growth: Live Oak delivered record loan production in 2025, with 17% annual loan growth and a total of $6.2 billion in new loans.
Profitability Surge: Q4 net income was $44 million and EPS was $0.95, both about three times higher than the prior year’s Q4.
Strong Revenue and PPNR: Core PPNR grew 27% and revenue rose 17% for the year, while adjusted EPS increased 49%.
Deposit Growth: Customer deposits increased 18% year-over-year, and business checking balances doubled to $377 million.
Expense Growth to Slow: Management guided for expense growth to moderate to the mid-single digits in 2026.
Solid Credit Trends: Credit quality remained stable with low past dues, and although nonaccruals ticked up, reserves and provision stayed stable.
Outlook: Management is optimistic for 2026, expecting continued loan growth and stable to modestly lower rates, with opportunities from business checking and Live Oak Express initiatives.
Net Interest Margin: Q4 NIM expanded by 5 bps QoQ, but management expects some near-term compression from Fed rate cuts before resuming upward momentum later in the year.
