Live Oak Bancshares Reports Q2 2025 Financial Results with Decreased Net Income

Live Oak Bancshares, Inc. reported its financial results for the second quarter of 2025, revealing a net income of $23.4 million, or $0.51 per diluted share, a decrease from $27.0 million, or $0.59 per diluted share, in the same period last year. The decline in profitability was attributed to a significant increase in the provision for credit losses, which rose by 97.6% to $23.3 million, compared to $11.8 million in the prior year. Additionally, management fee income dropped to zero due to the restructuring of the Canapi Funds, and other noninterest income decreased by $6.1 million, largely due to a prior year gain from the sale of an aircraft.

For the first half of 2025, the company reported a net income of $33.1 million, or $0.72 per diluted share, down from $54.5 million, or $1.20 per diluted share, in the same period of 2024. The increase in the provision for credit losses was again a significant factor, rising by 85.6% to $52.2 million. Noninterest expenses also increased, driven by higher salaries and employee benefits, technology expenses, and a notable loss from the early buyout of a bioenergy lease.

Live Oak Bancshares experienced growth in its asset base, with total assets reaching $13.83 billion as of June 30, 2025, an increase of 6.9% from $12.94 billion at the end of 2024. This growth was primarily driven by an increase in loans and leases held for investment, which rose by 7.4% to $11.36 billion. Total deposits also increased by 7.1% to $12.59 billion, reflecting the company's strategy to support loan growth and maintain liquidity.

Operationally, the company reported a total of 1,056 full-time equivalent employees as of June 30, 2025, up from 987 a year earlier. The increase in headcount aligns with the company's strategic initiatives to enhance its service offerings and operational capabilities. Live Oak Bancshares continues to focus on small business lending, with a significant portion of its loans guaranteed by the Small Business Administration and the U.S. Department of Agriculture.

Looking ahead, the company remains cautious about the macroeconomic environment, particularly regarding interest rates and inflation, which could impact borrower performance. Management emphasized the importance of maintaining a strong allowance for credit losses and monitoring asset quality as part of its ongoing risk management strategy. The company is committed to enhancing its operational controls and addressing previously identified weaknesses in its internal control over financial reporting.