Earnings Miss and Rising Charge-Offs Might Change The Case For Investing In Live Oak Bancshares (LOB)

• In October 2025, Live Oak Bancshares reported third-quarter results with net interest income rising to US$115.49 million and net income of US$26.52 million, but earnings per share missed analyst forecasts and the company disclosed much higher net charge-offs year-on-year.
• While core banking metrics such as loan and deposit growth remain strong, the sharp increase in net charge-offs raises new questions about credit quality and risk management trends.
• We'll explore how the earnings miss and elevated charge-offs could influence the company’s digital-first growth ambitions going forward.

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Live Oak Bancshares Investment Narrative Recap

To be a shareholder of Live Oak Bancshares, you have to believe in the company’s capacity to sustain rapid digital banking and small business lending growth, despite sector-specific risks. The most important short-term catalyst, ongoing expansion in loan and deposit volumes, is tested by this quarter’s sharp rise in net charge-offs, which materially increases credit quality concerns and could dampen confidence in near-term profitability and risk management.

Among recent developments, the Q3 2025 earnings announcement stands out. Despite showing robust loan and deposit growth, the simultaneous surge in net charge-offs and a miss on earnings per share has cast a spotlight on the delicate balance between aggressive lending expansion and rising credit risk, both of which are key to the company’s digital-first ambitions.

By contrast, investors should be aware of the sudden spike in bad loans and what this could mean for...

Read the full narrative on Live Oak Bancshares (it's free!)

Live Oak Bancshares is projected to reach $1.1 billion in revenue and $328.0 million in earnings by 2028. This outlook assumes annual revenue growth of 37.6% and an earnings increase of $271.9 million from the current $56.1 million.

Uncover how Live Oak Bancshares' forecasts yield a $42.00 fair value, a 33% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community users provide three fair value estimates for Live Oak Bancshares, ranging from US$42 to US$69.40. While you consider these broad valuations, keep in mind that rising net charge-offs could influence future earnings quality and risk perception, offering several perspectives worth weighing before making your own assessment.

Explore 3 other fair value estimates on Live Oak Bancshares - why the stock might be worth just $42.00!

Build Your Own Live Oak Bancshares Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Live Oak Bancshares research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Live Oak Bancshares research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Live Oak Bancshares' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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