Live Oak Bancshares’ fourth quarter was marked by strong loan production and expansion in customer relationships, contributing to a positive market reaction. Management attributed these results to record loan growth, improved operating controls, and gains from the company’s venture investment portfolio. President Vijay Moesch emphasized the significance of a 17% increase in loan balances and the successful ramp of initiatives like Live Oak Express and business checking. Notably, the company’s credit performance remained ahead of peers despite industry-wide headwinds, with Moesch highlighting, “Our loan portfolio showed continued credit stabilization over the course of the year.”
Is now the time to buy LOB? Find out in our full research report (it’s free for active Edge members).
Live Oak Bancshares (LOB) Q4 CY2025 Highlights:
- Revenue: $151.9 million vs analyst estimates of $150.5 million (16.8% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.47 vs analyst expectations of $0.56 (16.3% miss)
- Adjusted Operating Income: $42.56 million vs analyst estimates of $63.83 million (28% margin, 33.3% miss)
- Market Capitalization: $1.78 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Live Oak Bancshares’s Q4 Earnings Call
- Crispin Love (Piper Sandler) asked CFO Walt Phifer about the impact of recent Fed cuts on net interest margin and income; Phifer explained that NIM would compress in the near term but recover as deposit pricing adjusts.
- David Feaster (Raymond James) questioned expense run-rate and investment priorities; Phifer responded that expense growth would moderate and be focused on strategic priorities, particularly technology and Live Oak Express.
- David (Cantor) sought details on other loan income and future gain on sale trends; Phifer clarified that recent loan income was driven by non-recurring prepayment penalties and that gain on sale should normalize in 2026.
- Tim (KBW) asked about market share in small-dollar SBA loans post-SOP changes; President Vijay Moesch said competitors were becoming more selective, while Live Oak is differentiating through ease of use and tech investment.
- Billy Young (TD Cowen) inquired about business checking growth’s impact on funding mix; Phifer shared the goal of increasing noninterest-bearing deposits to 15% over time, with steady progress year over year.
Catalysts in Upcoming Quarters
In the coming quarters, StockStory analysts are monitoring (1) the pace of loan and business checking account growth as indicators of Live Oak’s ability to deepen customer relationships, (2) the trajectory of net interest margin as deposit costs adjust to interest rate changes, and (3) the scaling of Live Oak Express and related fee income. Progress in AI-driven operational enhancements and credit quality trends will also be closely watched as measures of long-term sustainability.
Live Oak Bancshares currently trades at $38.76, in line with $39 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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