How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial trouble. Conversely, losses take away from a bank's ability to do those things.
Live Oak Banking Company outperformed the average on Bankrate's test of earnings, achieving a score of 30 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important measure of a bank's earnings. The most recent annualized quarterly return on equity for Live Oak Banking Company was 54.68 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $114.0 million on total equity of $307.7 million. The bank experienced an annualized return on average assets, or ROA, of 5.33 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.