Although key indicators show continued growth, Wilmington-based Live Oak Bancshares reported earnings for the first quarter of its 2025 fiscal year that disappointed analysts.

For the quarter that ended March 31, Live Oak Bank reported total revenue of $126.1 million, a year-over-year increase of 8.5%, but short of the Zacks Consensus Estimate of $130.7 million. Earnings per share fell year over year, with a Q1 2025 EPS of $0.21, compared with an EPS of $0.36 in the first quarter of fiscal 2024. Analysts had expected an EPS of about $0.38 for the quarter just ended, according to Zacks.

“Live Oak Bank demonstrated strong growth across our lending and deposit franchises in the first quarter, all while navigating the current small business credit cycle and a backdrop of economic uncertainty,” Live Oak Chairman and CEO James “Chip” Mahan said in the company’s news release late Wednesday afternoon.

Net quarterly income was just over $9.7 million, less than for both Q1 of 2025 (nearly $26.7 million) and Q4 of 2024 ($9.9 million).

During the company’s Thursday morning earnings call, officials pointed to the quarter’s bright spots. Chief among them was record loan production ($1.4 billion) and strong deposit growth of $635.5 million, both of which helped boost Live Oak’s total assets 5% to $13.6 billion. Notable was the company’s growth in non-interest-bearing deposits.

“Key growth initiatives such as Live Oak Express, which is our small dollar SBA loan program, and acquiring checking relationships are continuing to ramp,” Live Oak President BJ Losch said during the call, noting the company's “focus on building full relationships with our customers through primary checking relationships.

“Our checking balances stood at $279 million at quarter end, more than four times the levels of just one year ago . . . we are adding incremental checking and savings accounts as we add loan customers with the percentage of customers with full relationships, both a loan and a deposit, doubling from last year.”

Live Oak Chief Financial Officer Walt Phifer added details on the bank's SBA lending in the first quarter of fiscal 2025.

“We sold $266 million of SBA loans in Q1 for a 7% average premium, generating approximately $19 million of gain on sale,” he said during the call. “We are also beginning to see the benefits of our focus on small loan SBA origination as small loan SBA sales provided for approximately 18% of the loans sold and 22% of our Q1 gain on sale.”

Pipelines for small business loans remain healthy, according to officials, including for small-dollar loans. Roughly one-third of the bank's loan portfolio is government-guaranteed.

“We have an unwavering dedication to small business and staying close to our customers in these turbulent times remains paramount,” Mahan said in the release. “Small business is the backbone of America, and we continue to support our nation’s entrepreneurs with the capital they need to create jobs, drive innovation, and serve their communities well.”

Expenses also increased in Q1. As it did the previous two quarters, Live Oak tucked away a generous amount as provision against credit losses. The quarter’s hedge amount of $29 million was “principally driven by loan growth amid a challenging macroeconomic environment, where elevated interest rates and inflationary pressures placed financial strain on some small business borrowers,” the company’s release stated.

Live Oak’s lower-than-anticipated net earnings also reflected increases in salaries and benefits, as well as basic operating expenses.

As of 3:15 p.m. Thursday, Live Oak Bancshares’ (LOB) stock was trading on the New York Stock Exchange at $26.35 per share, up from $25.25 at Thursday’s open.