How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to address problematic loans, likely making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
Live Oak Banking Company beat the national average on Bankrate's earnings test, achieving a score of 30 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. Live Oak Banking Company's most recent annualized quarterly return on equity was 21.39 percent, above the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $18.3 million on total equity of $182.5 million. The bank reported an annualized return on average assets, or ROA, of 1.93 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.