The United States is not particularly suffering because of the closure of a few regional banks. After all, it has nearly 4,100 financial institutions.
But for the little banks that failed — and their lenders — the impact is dramatic.
So there is a lesson to be learned from $1 billion Live Oak Bancshares (LOB.N), which is still thriving despite being a tiny bank.
Founded in 2008 by former Wachovia banker Chip Mahan, Live Oak seems to have the secret to staying afloat, even in the face of rapid growth.
The secret? At Live Oak, just 15% of deposits are above the government guarantee limit, so potentially flighty funds are more than three times covered by cash and rapidly available credit lines.
Which makes the North Carolina-based firm about as run-proof as any small bank can be.
By John Foley/Bloomberg
