Latest news with #LiveOakBancshares
Yahoo
06-05-2025
- Business
- Yahoo
Live Oak Bancshares (LOB) Fell Due To Credit Issues
Diamond Hill Capital, an investment management company, released its 'Small Cap Fund' first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q1, markets were uneven due to the new presidential administration's activity, leading to concern about the future. The Russell 3000 Index fell by 4.7% in Q1, the first quarterly loss since Q3 2023. Diamond Hill Small Cap Fund returned -11.56% in Q1, trailing the Russell 2000 Index's -9.48% return. For more information on the fund's top picks in 2025, please check its top five holdings. In its first-quarter 2025 investor letter, Diamond Hill Small Cap Fund highlighted stocks such as Live Oak Bancshares, Inc. (NYSE:LOB). Headquartered in Wilmington, North Carolina, Live Oak Bancshares, Inc. (NYSE:LOB) is a bank holding company for Live Oak Banking Company that offers commercial banking products and services. The one-month return of Live Oak Bancshares, Inc. (NYSE:LOB) was 12.99%, and its shares lost 25.73% of their value over the last 52 weeks. On May 5, 2025, Live Oak Bancshares, Inc. (NYSE:LOB) stock closed at $26.93 per share with a market capitalization of $1.189 billion. Diamond Hill Small Cap Fund stated the following regarding Live Oak Bancshares, Inc. (NYSE:LOB) in its Q1 2025 investor letter: "Among our bottom individual Q1 contributors were Triumph Financial and Live Oak Bancshares, Inc. (NYSE:LOB). Shares of regional bank Live Oak Bancshares were pressured as it faced credit issues during the quarter, as well as auditor questions regarding its review process. However, we believe the company has carved out an attractive lending niche to small businesses and could position itself well to become a go-to lender for small businesses in the US." An executive in a suit walking across the lobby of a modern commercial bank. Live Oak Bancshares, Inc. (NYSE:LOB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held Live Oak Bancshares, Inc. (NYSE:LOB) at the end of the fourth quarter, compared to 10 in the third quarter. While we acknowledge the potential of Live Oak Bancshares, Inc. (NYSE:LOB) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. In another article, we covered Live Oak Bancshares, Inc. (NYSE:LOB) and shared SouthernSun Small Cap Strategy's views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
Yahoo
28-04-2025
- Business
- Yahoo
Live Oak Bancshares (LOB) Fell on Increased Loan Loss Provisions Amid Recession Concerns and Low-Rate Loans
SouthernSun Asset Management, LLC, an investment management firm, released its 'SouthernSun Small Cap Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy returned -11.32% on a gross basis (-11.48% net) compared to a -9.48% return for the Russell 2000 Index and -7.74% for the Russell 2000 Value Index. The strategy returned -12.55% on a gross basis (-13.21% net) for the trailing twelve months compared to -4.01% and -3.12% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025. In its first-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks such as Live Oak Bancshares, Inc. (NYSE:LOB). Headquartered in Wilmington, North Carolina, Live Oak Bancshares, Inc. (NYSE:LOB) is a bank holding company for Live Oak Banking Company that offers commercial banking products and services. The one-month return of Live Oak Bancshares, Inc. (NYSE:LOB) was -0.26%, and its shares lost 20.58% of their value over the last 52 weeks. On April 25, 2025, Live Oak Bancshares, Inc. (NYSE:LOB) stock closed at $12.49 per share with a market capitalization of $1.212 billion. SouthernSun Small Cap Strategy stated the following regarding Live Oak Bancshares, Inc. (NYSE:LOB) in its Q1 2025 investor letter: "Live Oak Bancshares, Inc. (NYSE:LOB) was a top detractor in the first quarter in the Small Cap strategy. Live Oak continues to execute well on its unique approach of lending to small businesses as evidenced by the reported $1.4 billion of loan originations in the fourth quarter, which was the second highest quarter of originations in the company's history. Management also reported continued strength in the loan pipeline and positive small business sentiment based on both government surveys as well as Live Oak's own internal surveys. The stock has been under pressure primarily due to the elevated provision for loan losses that the company has recorded in recent quarters as well as the macro environment and increased probability for a recession in the US. Much of the provision expense relates to loans originated between 2020 and 2022 when interest rates were at historically low levels. The vast majority of Live Oak's loans are floating rate, and borrowers have had to absorb the rapid increase in interest rates that occurred primarily during 2023. Approximately 70% of defaults were loans that had interest rate increases of 4% or more since origination. While Live Oak may continue to record elevated provision for loan losses for a few more quarters, we believe that recent trends are part of a normal credit cycle and not indicative of lower credit standards. We believe Live Oak's differentiated model of leveraging leading edge technology to deliver superior service to small business borrowers will allow it to create significant value to shareholders over the long-term." A close-up of financial documents on a desk, indicating the banking products that the company provides. Live Oak Bancshares, Inc. (NYSE:LOB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held Live Oak Bancshares, Inc. (NYSE:LOB) at the end of the fourth quarter, compared to 10 in the third quarter. While we acknowledge the potential of Live Oak Bancshares, Inc. (NYSE:LOB) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. In another article, we covered Live Oak Bancshares, Inc. (NYSE:LOB) and shared the list of oversold bank stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
24-04-2025
- Business
- Yahoo
Live Oak Bancshares (LOB) Q1 Earnings and Revenues Miss Estimates
Live Oak Bancshares (LOB) came out with quarterly earnings of $0.21 per share, missing the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.36 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -44.74%. A quarter ago, it was expected that this bank holding company would post earnings of $0.49 per share when it actually produced earnings of $0.22, delivering a surprise of -55.10%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Live Oak Bancshares , which belongs to the Zacks Banks - Southeast industry, posted revenues of $126.11 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 3.51%. This compares to year-ago revenues of $116.21 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Live Oak Bancshares shares have lost about 36.9% since the beginning of the year versus the S&P 500's decline of -10.1%. While Live Oak Bancshares has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Live Oak Bancshares: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.54 on $138.35 million in revenues for the coming quarter and $2.31 on $570.6 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Southeast is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Ameris Bancorp (ABCB), is yet to report results for the quarter ended March 2025. The results are expected to be released on April 28. This bank is expected to post quarterly earnings of $1.15 per share in its upcoming report, which represents a year-over-year change of +4.6%. The consensus EPS estimate for the quarter has been revised 0.8% higher over the last 30 days to the current level. Ameris Bancorp's revenues are expected to be $278.8 million, up 3.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Live Oak Bancshares, Inc. (LOB) : Free Stock Analysis Report Ameris Bancorp (ABCB) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Forbes
24-04-2025
- Business
- Forbes
Small Business Lending Stays Strong as Live Oak Reports Record Quarter
So far, at least, small business lending is powering through economic uncertainty. (Photo) Getty Images Getting a clear read on the health of small businesses is difficult. Hard data is limited. Most assessments rely on surveys or sentiment indexes. But insights can still be found, especially from publicly trading lenders with a front-row seat to borrowing behavior. Live Oak Bancshares offered one such window into the small business environment on Thursday. The Wilmington, North Carolina–based bank, which has a market capitalization of $1.2 billion, ranked second in the nation last year for originations of Small Business Administration 7(a) loans, a key federal program that supports small business financing through partial government guarantees. In fiscal 2024 (going by the Federal government calendar which begins in October), Live Oak originated $2 billion in 7(a) loans. So far in fiscal 2025, it has originated $1.5 billion—more than any other lender so far this year. In other words, they're clued into how small business is faring. Loan volume at that scale suggests demand remains strong. 'We have not yet seen a decline in potential borrowers' appetite,' said CFO Walt Phifer during the earnings call. At the same time, executives on the call said the economic outlook, clouded by President Trump's tariffs, remains uncertain. Inflation continues to weigh on operating costs, and many borrowers are still managing high interest expenses from loans originated in prior years. Delinquencies remain low, but credit standards have tightened. 'We still have some road to cover,' said Phifer, in regard to future loan charge-offs, which he said could rise in subsequent quarters. Recent reductions in headcount at the Small Business Administration have raised concerns about program stability, particularly following efforts by the Department of Government Efficiency (DOGE) to restructure operations. Live Oak executives indicated they have not seen a material impact. 'The SBA is alive and well,' said BJ Losch, the bank's president, noting early signs of progress on planned technology upgrades at the agency. Reinstated fees for smaller loans—rolled back during the pandemic—are not expected to affect the bank's operations and may offer a competitive edge as less established lenders, particularly 'fintech oriented lenders,' retreat, Losch said. Despite missing earnings expectations—reporting 21 cents per share against a 37-cent estimate from FactSet—Live Oak shares rose more than 7% following the report. Investors appeared to focus on record quarterly loan production of $1.4 billion and deposit growth of $635.5 million.
