- Live Oak Bancshares (LOB, Financial) reports a 65% decline in net income to $9.7 million for Q1 2025.
- Record loan production of $1.40 billion and deposit growth of $635.5 million were achieved in the quarter.
- Challenges include a $29.0 million provision for credit losses amid economic headwinds affecting small businesses.
Live Oak Bancshares, Inc. (LOB) has announced its first-quarter financial results for 2025, showing a net income of $9.7 million or $0.21 per diluted share. This marks a substantial 65% decrease from the previous year’s $27.6 million. The downturn is largely attributed to a hefty $29.0 million provision for credit losses, which the company cites as necessary due to loan growth in a challenging macroeconomic environment.
Despite the decline in profits, Live Oak Bancshares reported strong operational growth measures. The bank achieved record loan production of $1.40 billion in Q1 2025 and noted a significant deposit growth of $635.5 million. This contributed to a 5% increase in total assets, which now stand at $13.60 billion.
Net interest income also rose by 3.1%, and the bank's net interest margin improved by 5 basis points, moving from 3.15% to 3.20%. However, these gains were overshadowed by a 1.5% decline in revenue and a 3.4% hike in noninterest expenses, leading to a 10% drop in pre-provision net revenue.
Amidst these dynamics, CEO James S. (Chip) Mahan III emphasized the bank's commitment to supporting small businesses, which face pressures from high interest rates and inflation. The company remains focused on its growth initiatives, including non-interest bearing deposit growth and small dollar loan production.
