10-Q · May 5, 2026
Live Oak Bancshares, Inc. reported Q1 2026 results with net income attributable to common shareholders of $27.9 million, or $0.60 EPS, surpassing expectations while revenue of $145.474 million fell short of estimates.…
Earnings analysis · 10-Q
LOB earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Live Oak delivered a strong 2Q26, with $156.145 million of revenue and diluted EPS of $0.74, up from $139.676 million and $0.51 in 2Q25, respectively. Growth in the loan portfolio and lower funding costs expanded net…
Read full summary
Live Oak delivered a strong 2Q26, with $156.145 million of revenue and diluted EPS of $0.74, up from $139.676 million and $0.51 in 2Q25, respectively. Growth in the loan portfolio and lower funding costs expanded net interest income 14.8% and net interest margin to 3.33%, while expense control supported earnings. The principal offsets are rising unguaranteed problem-loan exposure, a $25.8 million quarterly credit-loss provision, and an unresolved material weakness in internal controls.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.74
What stood out
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Revenue and EPS accelerated year over year
Second-quarter revenue, defined as net interest income plus noninterest income, was $156.145 million ($125.338 million plus $30.807 million), up $16.469 million, or 11.8%, from $139.676 million in 2Q25. Net income attributable to common shareholders increased 48.3% to $34.7 million and diluted EPS rose 45.1% to $0.74 from $0.51.
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Loan growth drove NII and margin expansion
Net interest income increased $16.1 million, or 14.8%, to $125.3 million as average interest-earning assets grew $1.72 billion, or 12.9%, to $15.08 billion. Net interest margin expanded 5 basis points year over year to 3.33%.
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Production and deposit funding remained strong
Loan and lease originations were $1.548 billion in 2Q26, while loans and leases held for investment at historical cost grew $1.69 billion, or 15.8%, year over year to $12.40 billion. Total deposits increased $858.9 million, or 6.3%, from year-end to $14.55 billion.
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Quarterly operating expense was controlled
Noninterest expense declined $0.7 million, or 0.8%, year over year to $84.5 million. Advertising and marketing expense fell $1.7 million, or 38.1%, and other expense declined $3.3 million, or 54.0%, partly offset by a $2.8 million, or 6.0%, increase in salaries and benefits.
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Problem assets and liquidity coverage improved
Reported nonperforming assets declined $29.7 million, or 5.2%, from year-end to $542.5 million, and total criticized/classified loans and leases decreased $159.1 million to $1.23 billion. Liquidity sources were $5.07 billion, or 31.6% of assets, with $4.08 billion of unused borrowing capacity.
What to watch
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Provision remains elevated despite lower quarterly charge-offs
Credit costs rose year over year: the 2Q26 provision for credit losses was $25.8 million, up $2.5 million from $23.3 million. Although quarterly net charge-offs declined to $24.2 million from $31.4 million, six-month net charge-offs increased $4.5 million, or 11.8%, to $42.7 million.
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Unguaranteed credit stress increased
Unguaranteed nonperforming exposure increased to $135.3 million at June 30, 2026, up $24.1 million, or 21.6%, from $111.2 million at December 31, 2025. Unguaranteed loans and leases past due rose $40.3 million to $117.4 million.
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Material weakness remains unresolved
Disclosure controls were ineffective at June 30, 2026 because of a previously disclosed material weakness involving loan-participation accounting and cash-flow classifications. Management expects remediation by the end of fiscal 2026, but the weakness remains until revised controls operate effectively for a sufficient period.
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Rate cuts could pressure net interest income
The balance sheet is moderately asset-sensitive: under the static-balance-sheet simulation, a 300-basis-point rate decline would reduce 12-month net interest income by 10.7%, while a 300-basis-point increase would reduce economic value of equity by 5.9%.
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No material risk-factor updates
The company states there were no material changes to risk factors disclosed in its 2025 Form 10-K. Accordingly, this filing does not identify a newly added or materially revised risk factor.
Management's outlook
The 10-Q provides no quantitative revenue or EPS outlook. Management states that it expects remediation of the internal-control material weakness to be completed by the end of fiscal 2026, subject to controls operating effectively for a sufficient period.
Earlier filings 4
10-K · February 27, 2026
Live Oak reported stronger 2025 operating performance with revenue of approximately $1.038 billion (quarterly revenues: $239M, $259M, $262M, $278M) and margin expansion culminating in a Q4 gross margin of 58.1% and…
10-Q · August 6, 2024
Live Oak Bancshares reported strong second-quarter results for 2024, with revenue increasing to $233 million, a significant 20% increase year-over-year. Diluted EPS rose to $0.59, up from $0.39 in the same quarter last…
10-Q · May 10, 2024
Live Oak reported materially stronger profitability in Q1 2024 with net income of $27,586,000 versus $398,000 in Q1 2023, driven by higher net interest income and noninterest income. Deposits and loans grew while the…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.