** Live Oak Bancshares' shares LOB.N fall as much as 6.3% to $26.50, hitting their lowest since October 2023

** Stock last down 3.4% at $27.34

** Regional lender late Tuesday filed its annual report and disclosed a material weakness in internal controls related to its loan review process

** Ineffective controls impacted bank's ability to timely identify risk rating downgrades and the impact to allowance for credit losses - LOB

** Piper Sandler says it views the material weakness as a negative especially as credit quality has worsened in the small business administration space

** Brokerage expects LOB to resolve the issue by enhancing its loan review process and internal controls rating

** LOB stock down 31% YTD

(Reporting by Arasu Kannagi Basil in Bengaluru)

((ArasuKannagi.Basil@thomsonreuters.com;))