• Live Oak Bancshares, Inc. Reports First Quarter 2024 Results

    Source: Nasdaq GlobeNewswire / 24 Apr 2024 16:30:01   America/New_York

    WILMINGTON, N.C., April 24, 2024 (GLOBE NEWSWIRE) -- Live Oak Bancshares, Inc. (NYSE: LOB) (“Live Oak” or “the Company”) today reported first quarter of 2024 net income of $16.5 million, or $0.36 per diluted share.

    “The Live Oak model continued to prove its fortitude in the first quarter as our teams marched ahead to steadily grow both sides of the balance sheet and delivered exceptional service to our customers,” said Live Oak Chairman and CEO James S. (Chip) Mahan III. “In a challenging environment for our industry, I remain bullish on our dedication to America’s small business owners and believe that our passion around innovation, efficiency and expertise will continue to shine a light on how Live Oak differs from the crowd.”

    First Quarter 2024 Key Measures

    (Dollars in thousands, except per share data)   Increase (Decrease)  
     1Q 2024 4Q 2023 Dollars Percent 1Q 2023
    Total revenue(1)$116,208  $119,683  $(3,475) (2.9)% $101,596 
    Total noninterest expense 78,679   93,204   (14,525) (15.6)  78,962 
    Income before taxes 21,165   17,484   3,681  21.1   3,613 
    Effective tax rate 21.8%  7.6% n/a n/a  89.0%
    Net income$16,548  $16,163  $385  2.4% $398 
    Diluted earnings per share 0.36   0.36        0.01 
    Loan and lease production:         
    Loans and leases originated$805,129  $981,703  $(176,574) (18.0)% $1,030,882 
    % Fully funded 43.8%  49.0% n/a n/a  54.5%
    Total loans and leases:$9,223,310  $9,020,884  $202,426  2.2% $8,220,279 
    Total assets: 11,503,300   11,271,423   231,877  2.1   10,364,297 
    Total deposits: 10,383,361   10,275,019   108,342  1.1   9,421,994 
                       

    (1) Total revenue consists of net interest income and total noninterest income.

    Loans and Leases

    As of March 31, 2024, the total loan and lease portfolio was $9.22 billion, 2.2% above its level at December 31, 2023, and 12.2% above its level a year ago. This growth was the product of strong origination volumes. Compared to the fourth quarter of 2023, loans and leases held for investment increased $278.7 million, or 3.2%, to $8.91 billion while loans held for sale decreased $76.3 million, or 19.7%, to $310.7 million. Average loans and leases were $9.11 billion during the first quarter of 2024 compared to $8.84 billion during the fourth quarter of 2023. 

    The total loan and lease portfolio at March 31, 2024, and December 31, 2023, was comprised of 37.4% and 37.8% of guaranteed loans and leases, respectively.

    Loan and lease originations totaled $805.1 million during the first quarter of 2024, a decrease of $176.6 million, or 18.0%, from the fourth quarter of 2023. Loan and lease originations decreased $225.8 million, or 21.9%, from the first quarter of 2023.

    Deposits

    Total deposits increased to $10.38 billion at March 31, 2024, an increase of $108.3 million compared to December 31, 2023, and an increase of $961.4 million compared to March 31, 2023. The increase in total deposits from prior periods was to support growth in the loan and lease portfolio as well as the Company’s targeted liquidity levels.

    Average total interest-bearing deposits for the first quarter of 2024 increased $234.7 million, or 2.4%, to $10.07 billion, compared to $9.84 billion for the fourth quarter of 2023. The ratio of average total loans and leases to average interest-bearing deposits was 90.4% for the first quarter of 2024, compared to 89.9% for the fourth quarter of 2023.

    Borrowings

    Borrowings totaled $120.2 million at March 31, 2024 compared to $23.4 million and $30.8 million at December 31, 2023, and March 31, 2023, respectively. During the first quarter of 2024, the Company increased long-term borrowings by $100.0 million through an unsecured 5.95% fixed rate 60-month term loan with a third party correspondent bank. This increase in borrowings was to strategically enhance Bank capital levels in order to accommodate future growth expectations.

    Net Interest Income

    Net interest income for the first quarter of 2024 was $90.1 million compared to $89.6 million for the fourth quarter of 2023 and $82.0 million for the first quarter of 2023. The net interest margin for the first quarter of 2024 and fourth quarter of 2023 was 3.33% and 3.32%, respectively, an increase of one basis point quarter over quarter. During the first quarter of 2024, the average cost of interest-bearing liabilities increased by 17 basis points while the average yield on interest-earning assets increased by 19 basis points.

    The increase in net interest income for the first quarter of 2024 compared to the first quarter of 2023 was driven by growth in average loans and leases held for investment. Partially mitigating this increase was a decrease in the net interest margin by 13 basis points arising from an increase in deposits combined with the increase in average cost of funds outpacing the increase in average yield on interest-earning assets.

    Noninterest Income

    Noninterest income for the first quarter of 2024 was $26.1 million, a decrease of $4.0 million compared to the fourth quarter of 2023, and an increase of $6.5 million compared to the first quarter of 2023. The primary drivers in noninterest income changes are outlined below.

    The loan servicing asset revaluation resulted in a loss of $2.7 million for the first quarter of 2024 compared to a $356 thousand gain for the first quarter of 2023. The net loss in the loan servicing asset revaluation for the first quarter of 2024 was principally related to increasing market prepayment speeds while the net gain in the first quarter of 2023 was the result of positive movements in market premiums. In the third quarter of 2023, the Company changed its valuation techniques in the estimation of fair value for servicing assets and loans accounted for under the fair value option.

    Loans accounted for under the fair value option had a net loss of $219 thousand for the first quarter of 2024, compared to a $4.5 million net loss for the first quarter of 2023. The net loss in the valuation of loans accounted for under the fair value option in the first quarter of 2024 was largely the result of the above discussed increased levels of market prepayment speeds, while the net loss in the first quarter of 2023 was driven by negative market impacts related to rising interest rates.

    Equity method investment losses totaled $5.0 million for the first quarter of 2024, a $5.1 million increase in losses from net income of $47 thousand in the fourth quarter of 2023 and a $2.1 million increase from the net loss of $3.0 million in the first quarter of 2023. The increase in losses for both comparative periods was principally related to heightened levels of underlying losses in several of the Company’s equity method investees.

    Other noninterest income for the first quarter of 2024 totaled $9.8 million compared to $4.1 million for the first quarter of 2023. This $5.7 million increase in noninterest income was largely related to a gain arising from increased fair value of equity warrant assets associated with the Company’s wine & craft beverage vertical.

    Noninterest Expense

    Noninterest expense for the first quarter of 2024 totaled $78.7 million compared to $93.2 million for the fourth quarter of 2023 and $79.0 million for the first quarter of 2023. The driver for the quarter over quarter decrease was $14.6 million of impairment charges in the fourth quarter of 2023 related to a new renewable energy tax credit investment. Partially offsetting the decrease in noninterest expense for both comparative periods was increased salaries and employee benefits of $3.0 million compared to fourth quarter of 2023 and $2.5 million compared to the first quarter of 2023.

    Asset Quality

    During the first quarter of 2024, the Company recognized net charge-offs for loans carried at historical cost of $3.2 million, compared to $4.4 million in the fourth quarter of 2023 and $6.7 million in the first quarter of 2023. Net charge-offs as a percentage of average held for investment loans and leases carried at historical cost, annualized, for the quarters ended March 31, 2024, December 31, 2023, and March 31, 2023, was 0.15%, 0.22% and 0.38%, respectively.

    Unguaranteed nonperforming (nonaccrual) loans and leases, excluding $7.9 million and $7.2 million accounted for under the fair value option at March 31, 2024, and December 31, 2023, respectively, increased to $43.1 million, or 0.51% of loans and leases held for investment which are carried at historical cost, at March 31, 2024, compared to $39.3 million, or 0.48%, at December 31, 2023.

    Provision for Loan and Lease Credit Losses

    The provision for loan and lease credit losses for the first quarter of 2024 totaled $16.4 million compared to $9.0 million for the fourth quarter of 2023 and $19.0 million for the first quarter of 2023. The provision expense in the first quarter of 2024 was primarily the result of specific reserve changes on individually evaluated loans and to a lesser extent continued growth of the loan and lease portfolio combined with charge-off related impacts.

    The allowance for credit losses on loans and leases totaled $139.0 million at March 31, 2024, compared to $125.8 million at December 31, 2023. The allowance for credit losses on loans and leases as a percentage of total loans and leases held for investment carried at historical cost was 1.63% and 1.53% at March 31, 2024, and December 31, 2023, respectively.

    Income Tax

    Income tax expense and related effective tax rate was $4.6 million and 21.8% for the first quarter of 2024, $1.3 million and 7.6% for the fourth quarter of 2023 and $3.2 million and 89.0% for the first quarter of 2023, respectively. The higher level of income tax expense for the first quarter of 2024 compared to the fourth quarter of 2023 was primarily the result of lower investment tax credits in 2024 as compared to the prior year. The higher level of income tax expense for the first quarter of 2024 as compared to the first quarter of 2023 was primarily the result of increased pretax income during the current period while the lower effective tax rate was principally the product of discrete items in the first quarter of 2023 related to stock compensation.

    Conference Call

    Live Oak will host a conference call to discuss the Company's financial results and business outlook tomorrow, April 25, 2024, at 9:00 a.m. ET. The call will be accessible by telephone and webcast using Conference ID: 50185213. A supplementary slide presentation will be posted to the website prior to the event, and a replay will be available for 12 months following the event. The conference call details are as follows:

    Live Telephone Dial-In

    U.S.: 888.259.6580
    International: +1 416.764.8624
    Pass Code: None Required

    Live Webcast Log-In

    Webcast Link: investor.liveoakbank.com
    Registration: Name and Email Required
    Multi-Factor Code: Provided After Registration

    Important Note Regarding Forward-Looking Statements

    Statements in this press release that are based on other than historical data or that express the Company’s plans or expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include changes in Small Business Administration (“SBA”) rules, regulations or loan products, including the Section 7(a) program, changes in SBA standard operating procedures or changes in Live Oak Banking Company's status as an SBA Preferred Lender; changes in rules, regulations or procedures for other government loan programs, including those of the United States Department of Agriculture; the impacts of global health crises and pandemics, such as the Coronavirus Disease 2019 (COVID-19) pandemic, on trade (including supply chains and export levels), travel, employee productivity and other economic activities that may have a destabilizing and negative effect on financial markets, economic activity and customer behavior; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; a reduction in or the termination of the Company's ability to use the technology-based platform that is critical to the success of its business model, including a failure in or a breach of operational or security systems or those of its third-party service providers; technological risks and developments, including cyber threats, attacks, or events; competition from other lenders; the Company's ability to attract and retain key personnel; market and economic conditions and the associated impact on the Company; operational, liquidity and credit risks associated with the Company's business; changes in political and economic conditions, including any prolonged U.S. government shutdown; the impact of heightened regulatory scrutiny of financial products and services and the Company's ability to comply with regulatory requirements and expectations; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget; adverse results, including related fees and expenses, from pending or future lawsuits, government investigations or private actions; and the other factors discussed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (http://www.sec.gov). Except as required by law, the Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

    About Live Oak Bancshares, Inc.

    Live Oak Bancshares, Inc. (NYSE: LOB) is a financial holding company and the parent company of Live Oak Bank. Live Oak Bancshares and its subsidiaries partner with businesses that share a groundbreaking focus on service and technology to redefine banking. To learn more, visit www.liveoakbank.com.

    Contacts:

    Walter J. Phifer | CFO | Investor Relations | 910.202.6926
    Claire Parker | Corporate Communications | Media Relations | 910.597.1592

    Live Oak Bancshares, Inc.
    Quarterly Statements of Income (unaudited)
    (Dollars in thousands, except per share data)

     Three Months Ended 1Q 2024 Change vs.
     1Q 2024 4Q 2023 3Q 2023 2Q 2023 1Q 2023 4Q 2023 1Q 2023
    Interest income          % %
    Loans and fees on loans$176,010  $169,531  $162,722  $152,362  $139,052  3.8  26.6 
    Investment securities, taxable 8,954   8,746   8,701   8,503   7,547  2.4  18.6 
    Other interest earning assets 7,456   8,259   9,188   8,847   4,817  (9.7) 54.8 
    Total interest income 192,420   186,536   180,611   169,712   151,416  3.2  27.1 
    Interest expense             
    Deposits 101,998   96,695   90,914   85,003   67,595  5.5  50.9 
    Borrowings 311   265   287   407   1,804  17.4  (82.8)
    Total interest expense 102,309   96,960   91,201   85,410   69,399  5.5  47.4 
    Net interest income 90,111   89,576   89,410   84,302   82,017  0.6  9.9 
    Provision for loan and lease credit losses 16,364   8,995   10,279   13,028   19,021  81.9  (14.0)
    Net interest income after provision for loan and lease credit losses 73,747   80,581   79,131   71,274   62,996  (8.5) 17.1 
    Noninterest income             
    Loan servicing revenue 7,624   7,342   6,990   6,687   6,380  3.8  19.5 
    Loan servicing asset revaluation (2,744)  (3,974)  11,335   (2,831)  356  31.0  (870.8)
    Net gains on sales of loans 11,502   12,891   12,675   10,804   10,175  (10.8) 13.0 
    Net (loss) gain on loans accounted for under the fair value option (219)  (170)  (568)  1,728   (4,529) (28.8) 95.2 
    Equity method investments (loss) income (5,022)  47   (1,034)  (2,055)  (2,952) (10,785.1) (70.1)
    Equity security investments (losses) gains, net (529)  (384)  (783)  121   77  (37.8) (787.0)
    Lease income 2,453   2,439   2,498   2,535   2,535  0.6  (3.2)
    Management fee income 3,271   3,309   3,277   3,266   3,472  (1.1) (5.8)
    Other noninterest income 9,761   8,607   3,501   3,901   4,065  13.4  140.1 
    Total noninterest income 26,097   30,107   37,891   24,156   19,579  (13.3) 33.3 
    Noninterest expense             
    Salaries and employee benefits 47,275   44,274   42,947   43,066   44,765  6.8  5.6 
    Travel expense 2,438   1,544   2,197   2,770   2,411  57.9  1.1 
    Professional services expense 1,878   3,052   1,762   1,996   927  (38.5) 102.6 
    Advertising and marketing expense 3,692   2,501   3,446   3,009   3,603  47.6  2.5 
    Occupancy expense 2,247   2,231   2,129   2,205   1,925  0.7  16.7 
    Technology expense 7,723   8,402   7,722   8,005   7,729  (8.1) (0.1)
    Equipment expense 3,074   3,480   3,676   4,023   3,818  (11.7) (19.5)
    Other loan origination and maintenance expense 3,911   3,937   3,498   3,442   3,927  (0.7) (0.4)
    Renewable energy tax credit investment impairment 15   14,575         69  (99.9) (78.3)
    FDIC insurance 3,200   4,091   4,115   5,061   3,403  (21.8) (6.0)
    Other expense 3,226   5,117   2,770   2,880   6,385  (37.0) (49.5)
    Total noninterest expense 78,679   93,204   74,262   76,457   78,962  (15.6) (0.4)
    Income before taxes 21,165   17,484   42,760   18,973   3,613  21.1  485.8 
    Income tax expense 4,617   1,321   2,967   1,429   3,215  249.5  43.6 
    Net income$16,548  $16,163  $39,793  $17,544  $398  2.4  4,057.8 
    Earnings per share             
    Basic$0.37  $0.36  $0.89  $0.40  $0.01  2.8  3,600.0 
    Diluted$0.36  $0.36  $0.88  $0.39  $0.01    3,500.0 
    Weighted average shares outstanding             
    Basic 44,762,308   44,516,646   44,408,997   44,327,474   44,157,156     
    Diluted 45,641,210   45,306,506   45,268,745   44,835,089   44,964,616     
                            


    Live Oak Bancshares, Inc.

    Quarterly Balance Sheets (unaudited)
    (Dollars in thousands)

     As of the quarter ended 1Q 2024 Change vs.
     1Q 2024 4Q 2023 3Q 2023 2Q 2023 1Q 2023 4Q 2023 1Q 2023
    Assets          % %
    Cash and due from banks$597,394  $582,540  $534,774  $808,131  $463,186  2.5  29.0 
    Certificates of deposit with other banks 250   250   3,750   4,000   4,000    (93.8)
    Investment securities available-for-sale 1,120,622   1,126,160   1,099,878   1,133,146   1,149,691  (0.5) (2.5)
    Loans held for sale 310,749   387,037   572,604   523,776   533,292  (19.7) (41.7)
    Loans and leases held for investment(1) 8,912,561   8,633,847   8,202,631   7,836,398   7,686,987  3.2  15.9 
    Allowance for credit losses on loans and leases (139,041)  (125,840)  (121,273)  (120,116)  (108,242) (10.5) (28.5)
    Net loans and leases 8,773,520   8,508,007   8,081,358   7,716,282   7,578,745  3.1  15.8 
    Premises and equipment, net 258,071   257,881   258,041   269,485   268,138  0.1  (3.8)
    Foreclosed assets 8,561   6,481   6,701        32.1  100.0 
    Servicing assets 49,343   48,591   47,127   31,042   29,357  1.5  68.1 
    Other assets 384,790   354,476   346,227   333,334   337,888  8.6  13.9 
    Total assets$11,503,300  $11,271,423  $10,950,460  $10,819,196  $10,364,297  2.1  11.0 
    Liabilities and shareholders’ equity             
    Liabilities             
    Deposits:             
    Noninterest-bearing$226,668  $259,270  $239,536  $229,833  $176,439  (12.6) 28.5 
    Interest-bearing 10,156,693   10,015,749   9,764,106   9,649,278   9,245,555  1.4  9.9 
    Total deposits 10,383,361   10,275,019   10,003,642   9,879,111   9,421,994  1.1  10.2 
    Borrowings 120,242   23,354   25,847   28,317   30,767  414.9  290.8 
    Other liabilities 83,017   70,384   70,603   79,280   88,729  17.9  (6.4)
    Total liabilities 10,586,620   10,368,757   10,100,092   9,986,708   9,541,490  2.1  11.0 
    Shareholders’ equity             
    Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding                  
    Class A common stock (voting) 349,648   344,568   340,929   341,032   334,672  1.5  4.5 
    Class B common stock (non-voting)                  
    Retained earnings 658,269   642,817   627,759   589,036   572,530  2.4  15.0 
    Accumulated other comprehensive loss (91,237)  (84,719)  (118,320)  (97,580)  (84,395) 7.7  8.1 
    Total shareholders' equity 916,680   902,666   850,368   832,488   822,807  1.6  11.4 
    Total liabilities and shareholders’ equity$11,503,300  $11,271,423  $10,950,460  $10,819,196  $10,364,297  2.1  11.0 
                              

    (1) Includes $379.2 million, $388.0 million, $410.1 million, $441.8 million and $467.0 million measured at fair value for the quarters ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023 respectively.


    Live Oak Bancshares, Inc.

    Quarterly Selected Financial Data
    (Dollars in thousands, except per share data)

     As of and for the three months ended
     1Q 2024 4Q 2023 3Q 2023 2Q 2023 1Q 2023
    Income Statement Data         
    Net income$16,548  $16,163  $39,793  $17,544  $398 
    Per Common Share         
    Net income, diluted$0.36  $0.36  $0.88  $0.39  $0.01 
    Dividends declared 0.03   0.03   0.03   0.03   0.03 
    Book value 20.40   20.23   19.12   18.77   18.58 
    Tangible book value(1) 20.32   20.15   19.04   18.69   18.50 
    Performance Ratios         
    Return on average assets (annualized) 0.58%  0.58%  1.46%  0.66%  0.02%
    Return on average equity (annualized) 7.16   7.36   18.68   8.26   0.19 
    Net interest margin 3.33   3.32   3.37   3.29   3.46 
    Efficiency ratio(1) 67.71   77.88   58.34   70.49   77.72 
    Noninterest income to total revenue 22.46   25.16   29.76   22.27   19.27 
    Selected Loan Metrics         
    Loans and leases originated$805,129  $981,703  $1,073,255  $861,033  $1,030,882 
    Outstanding balance of sold loans serviced 4,329,097   4,238,328   4,028,575   3,813,852   3,616,701 
    Asset Quality Ratios         
    Allowance for credit losses to loans and leases held for investment(3) 1.63%  1.53%  1.56%  1.62%  1.50%
    Net charge-offs(3)$3,163  $4,428  $9,122  $1,154  $6,669 
    Net charge-offs to average loans and leases held for investment(2) (3) 0.15%  0.22%  0.48%  0.06%  0.38%
              
    Nonperforming loans and leases at historical cost(3)         
    Unguaranteed$43,117  $39,285  $33,255  $44,899  $22,002 
    Guaranteed 105,351   95,678   65,837   66,322   63,696 
    Total 148,468   134,963   99,092   111,221   85,698 
    Unguaranteed nonperforming historical cost loans and leases, to loans and leases held for investment(3) 0.51%  0.48%  0.43%  0.61%  0.30%
              
    Nonperforming loans at fair value(4)         
    Unguaranteed$7,942  $7,230  $6,518  $8,602  $8,193 
    Guaranteed 47,620   41,244   39,378   45,114   43,968 
    Total 55,562   48,474   45,896   53,716   52,161 
    Unguaranteed nonperforming fair value loans to fair value loans held for investment(4) 2.09%  1.86%  1.59%  1.95%  1.75%
              
    Capital Ratios         
    Common equity tier 1 capital (to risk-weighted assets) 11.76%  11.73%  11.63%  11.55%  11.67%
    Tier 1 leverage capital (to average assets) 8.65   8.58   8.56   8.46   8.70 
                        

    Notes to Quarterly Selected Financial Data
    (1) See accompanying GAAP to Non-GAAP Reconciliation.
    (2) Quarterly net charge-offs as a percentage of quarterly average loans and leases held for investment, annualized.
    (3) Loans and leases at historical cost only (excludes loans measured at fair value).
    (4) Loans accounted for under the fair value option only (excludes loans and leases carried at historical cost).


    Live Oak Bancshares, Inc.

    Quarterly Average Balances and Net Interest Margin
    (Dollars in thousands)

     Three Months Ended
    March 31, 2024
     Three Months Ended
    December 31, 2023
     Average
    Balance
     Interest Average
    Yield/Rate
     Average
    Balance
     Interest Average
    Yield/Rate
    Interest-earning assets:           
    Interest-earning balances in other banks$542,243  $7,456 5.53% $598,720  $8,259 5.47%
    Investment securities 1,240,861   8,954 2.90   1,251,467   8,746 2.77 
    Loans held for sale 353,476   8,354 9.51   477,155   10,825 9.00 
    Loans and leases held for investment(1) 8,753,232   167,656 7.70   8,363,881   158,706 7.53 
    Total interest-earning assets 10,889,812   192,420 7.11   10,691,223   186,536 6.92 
    Less: Allowance for credit losses on loans and leases (125,447)      (120,257)    
    Noninterest-earning assets 550,817       482,615     
    Total assets$11,315,182      $11,053,581     
    Interest-bearing liabilities:           
    Interest-bearing checking$300,067  $4,183 5.61% $300,064  $4,262 5.64%
    Savings 4,552,390   46,171 4.08   4,633,563   47,192 4.04 
    Money market accounts 125,317   187 0.60   128,486   198 0.61 
    Certificates of deposit 5,094,553   51,457 4.06   4,775,497   45,043 3.74 
    Total deposits 10,072,327   101,998 4.07   9,837,610   96,695 3.90 
    Borrowings 26,772   311 4.67   24,887   265 4.22 
    Total interest-bearing liabilities 10,099,099   102,309 4.07   9,862,497   96,960 3.90 
    Noninterest-bearing deposits 213,571       240,009     
    Noninterest-bearing liabilities 78,041       72,272     
    Shareholders' equity 924,471       878,803     
    Total liabilities and shareholders' equity$11,315,182      $11,053,581     
    Net interest income and interest rate spread  $90,111 3.04%   $89,576 3.02%
    Net interest margin    3.33      3.32 
    Ratio of average interest-earning assets to average interest-bearing liabilities    107.83%     108.40%
                  

    (1) Average loan and lease balances include non-accruing loans and leases.


    Live Oak Bancshares, Inc.

    GAAP to Non-GAAP Reconciliation
    (Dollars in thousands)

     As of and for the three months ended
     1Q 2024 4Q 2023 3Q 2023 2Q 2023 1Q 2023
    Total shareholders’ equity$916,680  $902,666  $850,368  $832,488  $822,807 
    Less:         
    Goodwill 1,797   1,797   1,797   1,797   1,797 
    Other intangible assets 1,682   1,721   1,759   1,797   1,835 
    Tangible shareholders’ equity (a)$913,201  $899,148  $846,812  $828,894  $819,175 
    Shares outstanding (c) 44,938,673   44,617,673   44,480,215   44,351,715   44,290,840 
    Total assets$11,503,300  $11,271,423  $10,950,460  $10,819,196  $10,364,297 
    Less:         
    Goodwill 1,797   1,797   1,797   1,797   1,797 
    Other intangible assets 1,682   1,721   1,759   1,797   1,835 
    Tangible assets (b)$11,499,821  $11,267,905  $10,946,904  $10,815,602  $10,360,665 
    Tangible shareholders’ equity to tangible assets (a/b) 7.94%  7.98%  7.74%  7.66%  7.91%
    Tangible book value per share (a/c)$20.32  $20.15  $19.04  $18.69  $18.50 
    Efficiency ratio:         
    Noninterest expense (d)$78,679  $93,204  $74,262  $76,457  $78,962 
    Net interest income 90,111   89,576   89,410   84,302   82,017 
    Noninterest income 26,097   30,107   37,891   24,156   19,579 
    Total revenue (e)$116,208  $119,683  $127,301  $108,458  $101,596 
    Efficiency ratio (d/e) 67.71%  77.88%  58.34%  70.49%  77.72%
                        

    This press release presents non-GAAP financial measures. The adjustments to reconcile from the non-GAAP financial measures to the applicable GAAP financial measure are included where applicable in financial results presented in accordance with GAAP. The Company considers these adjustments to be relevant to ongoing operating results. The Company believes that excluding the amounts associated with these adjustments to present the non-GAAP financial measures provides a meaningful base for period-to-period comparisons, which will assist regulators, investors, and analysts in analyzing the operating results or financial position of the Company. The non-GAAP financial measures are used by management to assess the performance of the Company’s business for presentations of Company performance to investors, and for other reasons as may be requested by investors and analysts. The Company further believes that presenting the non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis as that applied by management. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although non-GAAP financial measures are frequently used by shareholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.


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