LOS ANGELES, Nov. 19, 2025 (GLOBE NEWSWIRE) -- The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of Live Oak Bancshares, Inc. (“Live Oak” or “the Company”) (NYSE: LOB) for violations of the securities laws. The investigation focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors. Live Oak disclosed in a SEC filing on November 12, 2025, that “"the C ...

Core Viewpoint - The Schall Law Firm is investigating Live Oak Bancshares, Inc. for potential violations of securities laws, focusing on misleading statements and undisclosed information that may have affected investors [1][2]. Summary by Sections Investigation Details - The investigation centers on whether Live Oak issued false or misleading statements and failed to disclose critical information to investors [2]. - On November 12, 2025, Live Oak announced it would amend its 2024 Annual Report and Quarterly Reports for the periods ending March 31, 2025, and June 30, 2025, to restate its Consolidated Financial Statements due to errors in cash flow classifications [2]. - The company identified a misclassification of cash flows between operating and investing activities related to loan participations, concluding that the misclassifications were material [2]. Market Reaction - Following the announcement of the investigation and the need for restatements, shares of Live Oak Bancshares experienced a decline [2].

Financial Performance - For the three months ended September 30, 2025, the Company reported net income attributable to common shareholders of $25.6 million, or $0.55 per diluted share, compared to $13.0 million, or $0.28 per diluted share for the same period in 2024[146]. - For the nine months ended September 30, 2025, net income attributable to common shareholders was $58.7 million, or $1.28 per diluted share, down from $67.6 million, or $1.48 per diluted share for the same period in 2024[148]. - The Company’s net income tax expense increased by $13.0 million, from $8.4 million in the first nine months of 2024 to $21.4 million for the same period in 2025[151]. Interest Income and Assets - Net interest income for the three months ended September 30, 2025, increased by $18.5 million, or 19.1%, to $115.5 million compared to $97.0 million for the same period in 2024[153]. - Average interest-earning assets increased by $2.19 billion, or 19.0%, to $13.77 billion for the third quarter of 2025, compared to $11.57 billion for the third quarter of 2024[153]. - For the nine months ended September 30, 2025, net interest income increased by $46.8 million, or 16.8%, to $325.2 million compared to $278.4 million for the same period in 2024[155]. - Total interest-earning assets for the three months ended September 30, 2025, were $13.77 billion, generating interest income of $231.43 million[159]. - The yield on average interest-earning assets decreased by 51 basis points to 6.67% for the third quarter of 2025[153]. - The yield on average interest-earning assets decreased by 42 basis points to 6.72% for the nine months ended September 30, 2025[155]. Credit Losses and Provisions - The provision for credit losses decreased by $12.3 million, or 35.5%, to $22.2 million for the third quarter of 2025, compared to $34.5 million for the same period in 2024[149]. - For the nine months ended September 30, 2025, the provision for credit losses increased to $74.5 million, up $11.8 million from $62.6 million in the same period of 2024, driven by loan growth and charge-off impacts[167]. - The allowance for credit losses on loans and leases increased by $18.2 million, or 10.9%, to $185.7 million at September 30, 2025[213]. Noninterest Income and Expenses - Noninterest expense increased by $27.6 million, or 11.9%, primarily due to increased salaries and employee benefits of $11.9 million and technology expenses of $4.8 million[150]. - Total noninterest income for Q3 2025 decreased by $2.3 million, or 7.0%, to $30.6 million compared to $32.9 million in Q3 2024[173]. - For the nine months ended September 30, 2025, total noninterest income decreased by $2.5 million, or 2.6%, to $90.7 million compared to $93.2 million in the same period in 2024[175]. Loans and Leases - Loans and leases held for investment at historical cost reached $11.27 billion as of September 30, 2025, an increase of $1.79 billion, or 18.8%, compared to September 30, 2024[168]. - Net charge-offs for Q3 2025 were $16.8 million, or 0.61% of average quarterly loans, compared to $1.7 million, or 0.08%, in Q3 2024, marking an increase of 883.4%[169]. - Total loans and leases 90 or more days past due increased by $46.0 million, or 18.0%, compared to December 31, 2024[215]. Assets and Equity - Total assets at September 30, 2025, were $14.67 billion, an increase of $1.72 billion, or 13.3%, compared to $12.94 billion at December 31, 2024[192]. - Total deposits at September 30, 2025, were $13.29 billion, an increase of $1.53 billion, or 13.0%, from $11.76 billion at December 31, 2024[192]. - Total shareholders' equity at September 30, 2025, was $1.20 billion, an increase of $199.1 million, or 19.8%, from $1.00 billion at December 31, 2024[193]. Regulatory Capital Ratios - The Company's Common Equity Tier 1 Capital ratio as of September 30, 2025, was 10.51%, significantly above the minimum requirement of 4.50%[227]. - Total Capital to Risk-Weighted Assets ratio was 12.67% as of September 30, 2025, exceeding the minimum requirement of 8.00%[227]. Accounting Policies and Estimates - The Company’s critical accounting policy involves the allowance for credit losses, which requires subjective judgments about uncertain matters[229]. - Changes in the allowance for credit losses could materially impact the Company's financial position and results of operations[229]. - Understanding the accounting policies is essential for reviewing the Company's financial statements[229].

Financial Data and Key Metrics Changes - Q3 earnings per share increased by 8% quarter-over-quarter to $0.55, nearly doubling compared to Q3 2024 [10] - Core operating leverage improved by 24% year-over-year, with a 7% quarter-over-quarter increase [10][11] - Net interest income rose by $6 million, or 6% quarter-over-quarter, and $23 million, or 19% year-over-year [17] Business Line Data and Key Metrics Changes - Loan production increased by 22% year-over-year, with total loan origination in Q3 2025 reaching approximately $1.65 billion, an 8% increase from the previous quarter [5][13] - Customer deposit growth was 20% year-over-year, with checking balances increasing by 26% quarter-over-quarter to $363 million [15][16] - The small dollar SBA loan product, Live Oak Express, is ramping up significantly, contributing to a $12 million year-to-date gain on sale [22] Market Data and Key Metrics Changes - Market share in the SBA 7(a) lending program increased from 6.4% to 7.7%, with over $2.8 billion in loans provided to small businesses [5] - The total loan portfolio grew approximately 5% quarter-over-quarter and 17% year-over-year [14] Company Strategy and Development Direction - The company is focused on extending customer product offerings, including checking and small dollar SBA loan capabilities, to enhance customer relationships and reduce deposit costs [6][8] - Emphasis on AI-enabled solutions for loan origination to improve efficiency and speed in servicing customers [9][43] - The company aims for sustainable profitability with a target of 15% returns on equity and 15% EPS growth annually [88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties, emphasizing sound underwriting practices and proactive credit management [35][36] - The potential impact of government shutdowns on loan growth was discussed, with a strategy in place to manage SBA loan pipelines effectively [37][70] - The company is optimistic about leveraging AI to enhance productivity and customer experience, viewing it as a significant competitive advantage [40][42] Other Important Information - The company raised $100 million through a preferred offering, enhancing its capital position [11][25] - Non-interest expense decreased by approximately 2% quarter-over-quarter, reflecting a focus on efficiency [22] Q&A Session Summary Question: Can you provide more color around the increase in NPAs this quarter and talk about new default trends? - Management noted that the increase in non-accrual balances is manageable and related to the SBA portfolio, with a focus on sound underwriting and servicing [33][35] Question: How are you thinking about the potential for an extended government shutdown? - The company has a playbook for government shutdowns and has prepared by pooling PLPs to maintain loan growth [37][38] Question: Can you quantify the benefits of AI enhancements? - AI is expected to significantly improve productivity and customer experience, with ongoing efforts to automate processes [40][42] Question: What is the trajectory for the margin with the reentering of the rate cut cycle? - Management indicated that margin recovery is typically quick following Fed rate cuts, with a focus on net interest income growth [48][50] Question: Have you seen easing competition in the SBA space? - The company believes it has a strong position in the SBA market and continues to grow despite competition [52][54] Question: Have you adjusted underwriting standards in light of broader economic pressures? - Management stated that while underwriting standards are generally consistent, they may tighten criteria in specific verticals as needed [64][66] Question: What is the update on the embedded finance build-out? - The company is actively working on embedded finance and studying opportunities in stablecoins, viewing it as a potential growth area [78][79]

Financial Data and Key Metrics Changes - Q3 earnings per share increased by 8% quarter over quarter to $0.55, nearly doubling compared to Q3 2024 [10] - Core operating leverage improved by 24% year over year, with a 7% increase quarter over quarter [10] - Net interest income rose by $6 million, or 6% quarter over quarter, and $23 million, or 19% year over year [17] - Total loan portfolio grew approximately 5% in the quarter, with year-over-year loan balances increasing approximately 17% [14] - Customer deposit growth was outstanding at 20% year over year, with a 3% increase quarter over quarter [15] Business Line Data and Key Metrics Changes - Loan production increased by 22%, with loan outstandings growth up 17% [5] - The company originated approximately $1.65 billion in loans in Q3, an 8% increase quarter over quarter [13] - Checking balances increased by 26% quarter over quarter to $363 million, representing 4% of the total deposit base [16] - Small dollar SBA loan production, termed Live Oak Express, is ramping up significantly, contributing to gains on sale [8][22] Market Data and Key Metrics Changes - The company maintained its position as the number one SBA 7(a) lender for 2025, increasing market share from 6.4% to 7.7% [5] - The competitive landscape remains challenging, but the company continues to grow its verticals and customer base [53] Company Strategy and Development Direction - The company is focused on extending customer product offerings, including checking and small dollar SBA loan capabilities [6] - Emphasis on AI-enabled loan origination solutions to improve efficiency and speed in servicing customers [9] - The strategy includes enhancing non-interest-bearing deposits to improve margin efficiency and funding resilience [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of small business owners despite economic uncertainties [36] - The company is prepared for potential government shutdowns, having a playbook in place to manage SBA loan pipelines [37] - Future net interest income and margin trajectories are expected to be positively impacted by the Fed's rate cuts [18] Other Important Information - The company successfully raised $100 million through a preferred offering, enhancing tier one capital [11] - Non-interest expense decreased by approximately 2% quarter over quarter, reflecting a focus on efficiency [22] Q&A Session Summary Question: Can you provide more color around the increase in NPAs this quarter? - Management noted that the increase in non-accrual balances is manageable and related to the SBA portfolio, with strong servicing efforts in place [33][35] Question: How do you view the potential impact of an extended government shutdown? - The company has a plan to manage SBA loans during shutdowns and does not anticipate significant impacts on growth if the shutdown is resolved quickly [37][38] Question: Can you quantify the benefits of AI enhancements? - Management believes AI could significantly improve productivity and reduce the need for a larger employee base to achieve revenue growth [40][42] Question: What is the outlook for net interest margin in the context of rate cuts? - The company expects a quick recovery in net interest margin following Fed rate cuts, supported by its asset-sensitive balance sheet [48][50] Question: Have you seen easing competition in the SBA space? - Management indicated that they continue to grow their market share and do not see significant changes in competition, focusing on their strengths in the SBA market [52][54] Question: Have underwriting standards been adjusted in light of current economic pressures? - The company maintains consistent underwriting standards but may tighten criteria in specific verticals as needed [64][66]

Financial Data and Key Metrics Changes - Q3 earnings per share reached $0.55, an 8% increase linked quarter and nearly doubled compared to 2024, driven by a 7% linked quarter increase in core operating leverage and lower provision expense [10][11][12] - Total loan portfolio grew approximately 5% linked quarter and 17% year over year, indicating strong growth in a competitive industry [14][15] - Customer deposits increased by 3% linked quarter and 20% year over year, showcasing robust deposit growth [15] Business Line Data and Key Metrics Changes - Loan production increased by 22%, with loan outstandings growing by 17% and customer deposit growth at 20% [6][10] - Q3 loan originations totaled approximately $1,650,000,000, an 8% increase linked quarter, primarily driven by the Commercial Banking segment [13] - Checking balances reached $363,000,000, up from 2% to 4% of total deposits year over year, reflecting a significant increase in customer relationships [7][15] Market Data and Key Metrics Changes - Market share in SBA lending increased from 6.4% to 7.7%, with over $2,800,000,000 in loans provided to small businesses, a 44% increase over last year [5][6] - The company remains focused on growing non-interest bearing business checking balances and originating small dollar SBA loans, which are expected to enhance profitability [11][15] Company Strategy and Development Direction - The company is extending customer product offerings by adding checking and small dollar SBA loan capabilities, aiming for sustainable growth [6][7] - AI-enabled loan origination solutions are being piloted to improve efficiency and speed in processing loans, indicating a strong focus on technology integration [9][45] - The company is committed to maintaining strong underwriting standards while adapting to market conditions, ensuring resilience in credit performance [68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic uncertainties, emphasizing sound underwriting practices and proactive credit management [32][34] - The company anticipates that the Federal Reserve will implement further rate cuts, which could impact net interest income and margin, but expects a quick recovery due to its asset-sensitive balance sheet [17][51] - Management remains optimistic about maintaining a sustainable growth trajectory and achieving consistent returns on equity [90][91] Other Important Information - The company successfully raised $100,000,000 through a preferred offering, enhancing its capital position [11][23] - Non-accrual loans increased to $85,000,000, but management remains confident in the overall credit quality and reserve levels [22][32] Q&A Session Summary Question: Can you provide more color around the increase in NPAs this quarter? - Management noted that the increase in non-accrual balances was manageable and related to loans tracked over time, with a focus on sound underwriting and servicing [30][32] Question: How do you think about the potential for an extended government shutdown? - Management has a playbook for government shutdowns and has already pooled significant SBA loans to mitigate impacts on loan growth [36][38] Question: Can you quantify the benefits of AI enhancements? - Management believes AI could significantly improve productivity and reduce the need for a larger employee base, enhancing customer experience and operational efficiency [42][45] Question: What is the trajectory for the margin with upcoming rate cuts? - Management expects margin variation but believes that net interest income will continue to grow despite fluctuations in margin [51][52] Question: Have you seen easing competition in the SBA space? - Management indicated that they have a strong understanding of the SBA market and continue to grow despite competition, focusing on improving their offerings [56][57] Question: Are there any industries struggling more than others? - Management noted that stress is observed in industries with less pricing power, but overall performance remains in line with expectations [60][61] Question: What is the sustainable path for returns on equity? - Management aims for a consistent 15% return on equity with a focus on growth initiatives and expense discipline [90][91]

Financial Data and Key Metrics Changes - Q3 2025 earnings per share increased by 8% quarter-over-quarter to $0.55, nearly doubling compared to Q3 2024 [10] - Core operating leverage improved by 24% year-over-year, with a 7% quarter-over-quarter increase [10] - Net interest income rose by $6 million, or 6% quarter-over-quarter, and $23 million, or 19% year-over-year [17] Business Line Data and Key Metrics Changes - Loan production increased by 22%, with loan outstandings growing by 17% [5] - Small dollar SBA loan production, termed Live Oak Express, is ramping up significantly [6] - Checking balances increased to $363 million, representing 4% of total deposits, up from 2% a year ago [6] Market Data and Key Metrics Changes - The company maintained its position as the number one SBA 7(a) lender for 2025, providing over $2.8 billion in loans, a 44% increase from the previous year [5] - Customer deposit growth was 20% year-over-year, with a 3% increase quarter-over-quarter [14] Company Strategy and Development Direction - The company is focused on extending customer product offerings, including checking and small dollar SBA loan capabilities [6] - Emphasis on AI-enabled loan origination solutions to improve efficiency and speed [8] - The strategy includes enhancing non-interest-bearing deposits to improve margin efficiency and funding resilience [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of small business owners despite economic uncertainties [32] - The company is prepared for potential government shutdowns, having pooled $900 million in PLPs to maintain operations [33] - Future net interest income and margin trajectories are expected to be positively impacted by the Fed's rate cuts [18] Other Important Information - The company raised $100 million through a preferred offering, enhancing tier one capital [11] - Non-interest expense decreased by approximately 2% quarter-over-quarter, reflecting a focus on efficiency [21] Q&A Session Summary Question: Can you provide more color around the increase in NPAs this quarter? - The increase in non-accrual balances was manageable and related to the SBA portfolio, with strong servicing efforts in place [30][32] Question: How are you thinking about the potential for an extended government shutdown? - The company has a playbook for government shutdowns and has prepared by pooling PLPs to ensure continued operations [33] Question: Can you quantify the benefits of AI enhancements? - AI is expected to significantly improve productivity and efficiency, allowing for better customer service and potentially reducing the need for a larger employee base [36][39] Question: What is the trajectory for the margin with the rate cut cycle? - The company anticipates a quick recovery in margin following Fed rate cuts, supported by its asset-sensitive balance sheet [44][46] Question: Have you seen easing competition in the SBA space? - The company believes it has a competitive edge in SBA lending and continues to grow its verticals despite market fluctuations [49][50] Question: Are there any industries struggling more than others? - Stress is observed in certain industries with less pricing power, but overall performance aligns with expectations [52] Question: Have you adjusted underwriting standards? - The company maintains consistent underwriting standards but may tighten criteria based on specific verticals [61][63] Question: How does the government shutdown impact organic growth? - The company expects to sustain its growth pace post-shutdown, leveraging its PLP reserves [66]

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Financial Performance - Net income available to common shareholders reached $26 million, a 96% increase year-over-year (YoY) and a 9% increase compared to the previous quarter[8],[23] - Diluted earnings per share (EPS) were $0.55, up 96% YoY and 8% quarter-over-quarter (QoQ)[8],[22],[23] - Adjusted Pre-Provision Net Revenue (PPNR) was $66 million, a 24% increase YoY and 7% QoQ[14],[16],[17],[18],[22] - Net interest income was $115 million, up 19% YoY and 6% QoQ[8],[22],[23] - Net interest margin was 333%, flat YoY and up 5 basis points QoQ[8],[22],[23] Loan and Deposit Growth - Total loans and leases reached $11916 million, a 17% increase YoY and 5% QoQ[8],[23] - Total deposits reached $13291 million, a 17% increase YoY and 6% QoQ[8],[23] - Business checking balances grew to $363 million, a 150% increase YoY and 26% QoQ[14],[22] Loan Origination and Sales - Loan and lease originations totaled $1649 million, a 6% decrease YoY and 8% increase QoQ[23],[26] - The company generated $12 million in year-to-date (YTD) gain on sales from Live Oak Express, a 4x increase compared to YTD 2024[14],[40] Credit Quality - Provision for credit losses was $22 million, a 36% decrease YoY and 4% decrease QoQ[8],[22],[23] - Unguaranteed Allowance for Credit Losses (ACL) to unguaranteed loans and leases was 222%[24],[44] Capital and Other Items - The company raised $963 million in net proceeds from a preferred stock offering[22],[24],[52] - The sale of Apiture settled in October, providing an estimated $24 million pre-tax gain in Q4[22],[52]

Core Insights - Live Oak Bancshares (LOB) reported revenue of $146.1 million for Q3 2025, a year-over-year increase of 12.4% [1] - The earnings per share (EPS) for the same period was $0.55, compared to $0.28 a year ago [1] - The reported revenue was a slight miss of -0.85% against the Zacks Consensus Estimate of $147.35 million [1] - The EPS fell short of the consensus estimate of $0.58, resulting in an EPS surprise of -5.17% [1] Performance Metrics - Net charge-offs to average loans and leases held for investment were 0.6%, higher than the estimated 0.4% [4] - Net Interest Margin stood at 3.3%, matching the average estimate [4] - Average balance of total interest-earning assets was $13.77 billion, exceeding the estimated $13.41 billion [4] - Efficiency Ratio was reported at 59.7%, significantly higher than the estimated 51.3% [4] - Total noninterest income was $30.61 million, below the average estimate of $33.71 million [4] - Net Interest Income reached $115.49 million, surpassing the estimated $112.25 million [4] Stock Performance - Shares of Live Oak Bancshares have returned -3.5% over the past month, while the Zacks S&P 500 composite increased by +1.1% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]