Live Oak Bancshares: Too Much Of A Mixed Bag To Turn Optimistic

2026-03-10 13:19:00 ET

Around the middle of December of last year, I made the difficult decision to downgrade Live Oak Bancshares ( LOB ) from a "Buy" to a "Hold." Before that point, I had been bullish about the company. But at the end of the day, even though the business had exhibited attractive deposit and loan growth, it was being pressured by declining net interest margins and rising credit loss provisions. Mediocre asset quality and a valuation that was expensive compared to other similar firms justified a more neutral stance than a bullish tone. So, out of an abundance of caution, I downgraded the company....

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