Live Oak Bancshares Reports Q3 2025 Net Income of $25.6 Million, Driven by Increased Interest Income

Live Oak Bancshares, Inc. reported significant financial results for the third quarter of 2025, with net income attributable to common shareholders reaching $25.6 million, or $0.55 per diluted share, compared to $13.0 million, or $0.28 per diluted share, in the same period last year. This increase in net income was primarily driven by a 19.1% rise in net interest income, which totaled $115.5 million, and a decrease in the provision for credit losses by 35.5% to $22.2 million. The company also experienced a 25.4% increase in net gains on sales of loans, amounting to $20.9 million, reflecting higher loan sale volumes.

In contrast, for the nine months ended September 30, 2025, net income attributable to common shareholders decreased to $58.7 million, or $1.28 per diluted share, from $67.6 million, or $1.48 per diluted share, in the prior year. This decline was attributed to an 18.9% increase in the provision for credit losses, which rose to $74.5 million, and a significant drop in management fee income due to the restructuring of the Canapi Funds. Noninterest income also fell by 2.6% year-over-year, largely due to lower gains from asset sales compared to the previous year.

Operationally, Live Oak Bancshares saw total assets grow to $14.67 billion as of September 30, 2025, a 13.3% increase from $12.94 billion at the end of 2024. This growth was fueled by a $1.34 billion increase in loans and leases held for investment and held for sale, which reached $11.92 billion. Total deposits also rose by 13.0% to $13.29 billion, supporting the expansion of the loan portfolio. The company’s total shareholders' equity increased by 19.8% to $1.20 billion, bolstered by net proceeds from a preferred stock issuance and retained earnings.

The company reported a total of 1,029 full-time equivalent employees as of September 30, 2025, reflecting an increase in staffing to support its growth initiatives. However, the allowance for credit losses increased to $185.7 million, or 1.65% of loans and leases held for investment, as the company navigated a challenging macroeconomic environment characterized by elevated interest rates and inflationary pressures impacting borrowers.

Looking ahead, Live Oak Bancshares anticipates continued growth in its loan portfolio, although it remains cautious about potential credit risks stemming from economic conditions. The company is focused on maintaining its capital levels above regulatory requirements and managing its interest rate risk through strategic asset-liability management.