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Live Oak Bancshares, Inc. Reports First Quarter 2024 Results

WILMINGTON, N.C., April 24, 2024 (GLOBE NEWSWIRE) — Live Oak Bancshares, Inc. (NYSE: LOB) (â€œLive Oakâ€ or â€œthe Companyâ€) today reported first quarter of 2024 net income of $16.5 million, or $0.36 per diluted share.

â€œThe 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,â€ said Live Oak Chairman and CEO James S. (Chip) Mahan III. â€œIn a challenging environment for our industry, I remain bullish on our dedication to Americaâ€™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.â€

First QuarterÂ 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

89.0

Net income

16,548

16,163

385

2.4

398

Diluted earnings per share

0.36

â€”

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

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 MarchÂ 31, 2024, the total loan and lease portfolio was $9.22 billion, 2.2% above its level at DecemberÂ 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.Â

The total loan and lease portfolio at MarchÂ 31, 2024, and DecemberÂ 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 MarchÂ 31, 2024, an increase of $108.3 million compared to DecemberÂ 31, 2023, and an increase of $961.4 million compared to MarchÂ 31, 2023. The increase in total deposits from prior periods was to support growth in the loan and lease portfolio as well as the Companyâ€™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 marginÂ 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 thousandÂ for theÂ firstÂ quarter of 2024, compared to a $4.5 million net loss for theÂ firstÂ quarter of 2023. TheÂ net loss in theÂ valuation of loans accounted for under theÂ fair valueÂ optionÂ in the first quarter of 2024Â 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 firstÂ 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 Companyâ€™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 Companyâ€™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 MarchÂ 31, 2024, DecemberÂ 31, 2023, and MarchÂ 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 MarchÂ 31, 2024, and DecemberÂ 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 MarchÂ 31, 2024, compared to $39.3 million, or 0.48%, at DecemberÂ 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 MarchÂ 31, 2024, compared to $125.8 million at DecemberÂ 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 MarchÂ 31, 2024, and DecemberÂ 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, AprilÂ 25, 2024, atÂ 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 Companyâ€™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 Companyâ€™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 managementâ€™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 (â€œSBAâ€) rules, regulations or loan products, including the SectionÂ 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 Companyâ€™s Annual Report on Form 10-K filed with the Securities and Exchange Commission (â€œSECâ€) and available at the SECâ€™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:

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

)

(1,034

)

(2,055

)

(2,952

)

(10,785.1

)

(70.1

)

Equity security investments (losses) gains, net

(529

)

(384

)

(783

)

121

(37.8

)

(787.0

)

Lease income

2,453

2,439

2,498

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

14,575

â€”

(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

0.88

0.39

0.01

â€”

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

3,750

4,000

â€”

(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

â€”

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 shareholdersâ€™ 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

Shareholdersâ€™ equity

Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding

â€”

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)

â€”

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 shareholdersâ€™ 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 MarchÂ 31, 2024, DecemberÂ 31, 2023, SeptemberÂ 30, 2023, JuneÂ 30, 2023, and MarchÂ 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

0.88

0.39

0.01

Dividends declared

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

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 loansÂ 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
DecemberÂ 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 shareholdersâ€™ equity

916,680

902,666

850,368

832,488

822,807

Less:

Goodwill

1,797

Other intangible assets

1,682

1,721

1,759

1,797

1,835

Tangible shareholdersâ€™ 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

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 shareholdersâ€™ 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 Companyâ€™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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