This Bank Stock Is Just Too Cheap
The failures of SVB Financial's Silicon Valley Bank and First Republic Bank sent shockwaves through the financial sector. Investors feared contagion could spread across regional banks, leading to a sell-first, ask-questions-later mentality.
Amid this, one notable stock that has fallen about 25% since the beginning of March is Live Oak Bancshares (NYSE: LOB). Despite the setback, Live Oak Bank has established itself as a trusted partner for small businesses. Although the stock may have outpaced its true value amid its success with the Paycheck Protection Program (PPP) lending program, the current sell-off might offer an attractive buying opportunity.
The U.S. Small Business Administration (SBA) sponsors lending programs to help small businesses refinance debt, purchase machinery, and build working capital. The 7(a) program is its most popular loan program, and Live Oak Bank is the top lender through the program. Live Oak Bank has made nearly $1.2 billion in 7 (a) loans this year, outpacing Huntington Bank ($891 million) and Newtek Small Business Finance ($814 million).
Source Fool.com
