Live Oak Bancshares (LOB) just wrapped up FY 2025 with fourth quarter total revenue of US$139.9 million and basic EPS of US$0.96, while trailing twelve month revenue came in at US$480.8 million with EPS of US$2.25. Over recent periods, the company has seen quarterly revenue move from US$93.3 million in Q4 2024 to US$139.9 million in Q4 2025, with quarterly EPS shifting from US$0.22 to US$0.96 over the same span. This sets up a results season where investors are focused on how sustainably the bank is converting that top line into earnings. Margins sit at the center of the story, with the latest print giving the market a clearer read on how efficiently the franchise is running its loan book.

See our full analysis for Live Oak Bancshares.

With the headline numbers on the table, the next step is to see how this earnings run lines up, or clashes, with the key bullish and bearish narratives that have built around Live Oak over the past year.

TTM net margin settles at 21.4%

• On a trailing basis, Live Oak generated US$102.8 million of net income on US$480.8 million of revenue, which works out to a 21.4% net margin compared with 19.2% a year earlier.
• What stands out for the bullish side is that this higher 21.4% margin sits alongside trailing EPS of US$2.25 and 32.7% earnings growth over the past year. This supports the idea of a more profitable bank but also invites a check on longer term trends such as the 15.5% annual earnings decline over five years.
• Supporters can point to FY 2025 quarterly net income rising from US$9.7 million in Q1 to US$44.1 million in Q4 as evidence that recent profitability is lining up with that stronger trailing margin.
• At the same time, the longer term earnings decline in the data is a reminder to weigh whether this margin level looks durable or if it simply reflects a stronger recent period.

To see how this balance between a 21.4% margin and a mixed earnings track record feeds into the full story, have a look at the broader narrative for the stock. 📊 Read the full Live Oak Bancshares Consensus Narrative.

P/E of 18.2x versus peers and DCF

• The shares trade on a trailing P/E of 18.2x versus 12.1x for the US Banks industry and 16.2x for peers, and the current price of US$40.76 sits above the DCF fair value of about US$30.02.
• Critics highlight that this richer P/E and the premium to the DCF fair value look hard to square with a bank that, over five years, shows a 15.5% annual earnings decline, even though trailing 12 month earnings grew 32.7% and net margin is now 21.4%.
• The gap between the current price of US$40.76 and the US$30.02 DCF fair value in the data is one concrete example skeptics may use when they argue the stock has run ahead of fundamentals.
• On the other hand, the one year rebound in earnings and the forecast revenue and earnings growth rates provided are the kind of factors that might help explain why the market is currently comfortable with an 18.2x multiple.

Non performing loans at 4.5% with 36% coverage

• Non performing loans stand at US$562.8 million, which is 4.5% of the book and described in the data as high, while the allowance for bad loans is 36%, described as low.
• Bears argue that this mix of a relatively high 4.5% non performing loan ratio and 36% coverage deserves close attention, because it sits alongside rapid quarterly EPS moves from US$0.21 in Q1 2025 to US$0.96 in Q4 2025 and could affect how secure that earnings run rate is if credit costs step up.
• Across FY 2025, non performing loans in the quarterly data climbed from US$492.6 million in Q1 to US$562.8 million in Q4, which is consistent with the elevated 4.5% level cited in the risk summary.
• When you set that against trailing net income of US$102.8 million, it is clear that any meaningful change in how those problem loans are resolved or reserved for could matter a lot to future profit figures.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Live Oak Bancshares's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

For all the stronger recent earnings, Live Oak still carries a 4.5% non performing loan ratio with 36% coverage and a five year annual earnings decline of 15.5%.

If that mix of weak credit quality and patchy earnings makes you uneasy, use our solid balance sheet and fundamentals stocks screener (389 results) today to focus on companies built on sturdier financial foundations.

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.