Critical Analysis: First US Bancshares (NASDAQ:FUSB) & Live Oak Bancshares (NASDAQ:LOB)

Live Oak Bancshares (NASDAQ:LOB) and First US Bancshares (NASDAQ:FUSB) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Risk and Volatility

Live Oak Bancshares has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500. Comparatively, First US Bancshares has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Earnings & Valuation

This table compares Live Oak Bancshares and First US Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Live Oak Bancshares	$800.01 million	2.24	$73.90 million	$1.59	24.91
First US Bancshares	$40.03 million	1.89	$8.48 million	$1.40	9.44

Live Oak Bancshares has higher revenue and earnings than First US Bancshares. First US Bancshares is trading at a lower price-to-earnings ratio than Live Oak Bancshares, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

64.0% of Live Oak Bancshares shares are held by institutional investors. Comparatively, 18.7% of First US Bancshares shares are held by institutional investors. 23.9% of Live Oak Bancshares shares are held by insiders. Comparatively, 13.3% of First US Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Live Oak Bancshares and First US Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Live Oak Bancshares	7.99%	7.65%	0.62%
First US Bancshares	14.25%	9.31%	0.81%

Analyst Ratings

This is a summary of current recommendations and price targets for Live Oak Bancshares and First US Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Live Oak Bancshares	0	2	2	0	2.50
First US Bancshares	0	0	0	0	0.00

Live Oak Bancshares currently has a consensus target price of $45.50, suggesting a potential upside of 14.90%. Given Live Oak Bancshares’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Live Oak Bancshares is more favorable than First US Bancshares.

Dividends

Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. First US Bancshares pays an annual dividend of $0.28 per share and has a dividend yield of 2.1%. Live Oak Bancshares pays out 7.5% of its earnings in the form of a dividend. First US Bancshares pays out 20.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Live Oak Bancshares beats First US Bancshares on 12 of the 16 factors compared between the two stocks.

About Live Oak Bancshares

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various banking products and services in the United States. It operates through two segments, Banking and Fintech. The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; financing for renewable energy application industry; wealth and investment management services to high-net-worth individuals and families; and investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.

About First US Bancshares

First US Bancshares, Inc. operates as the bank holding company for First US Bank that provides commercial banking products and services. The company offers non-interest-bearing demand deposits, savings accounts, NOW accounts, money market demand accounts, individual retirement accounts, and time deposits. Its loan products include commercial construction, land, and land development loans, including residential housing projects, commercial and industrial development, and for purchase and improvement of raw land for agricultural production; mortgage loans on one-to-four family and multi-family residential properties; real estate loans secured by commercial and industrial properties, office or mixed-use facilities, strip shopping centers, and other commercial properties; commercial and industrial loans and leases; and secured and unsecured personal loans, including automobile loans, loans for household and personal purposes, and other direct consumer installment loans. The company also provides loans secured by collateral in form of personal property items. In addition, it provides letters of credit; and safe deposit box and remote deposit capture services. The company serves small-and medium-sized businesses, property managers, business executives, professionals, and other individuals. The company was formerly known as United Security Bancshares, Inc. and changed its name to First US Bancshares, Inc. in October 2016. First US Bancshares, Inc. was founded in 1952 and is headquartered in Birmingham, Alabama.