FALSE000146212000014621202024-01-242024-01-24

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 24, 2024
LiveOakBancsharesLogo.jpg
LIVE OAK BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
North Carolina001-3749726-4596286
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
1741 Tiburon Drive,Wilmington,NC28403
(Address of principal executive offices)(Zip Code)
Registrant’s Telephone Number, Including Area Code: (910) 790-5867
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Voting Common Stock, no par value per shareLOBNew York Stock Exchange LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02.    Results of Operations and Financial Condition.
On January 24, 2024, Live Oak Bancshares, Inc. (the “Company”) announced financial results for the fourth quarter ended December 31, 2023. A copy of the press release announcing the Company’s results for the fourth quarter is attached as Exhibit 99.1 hereto and incorporated by reference herein.
The information contained in this report (including Exhibit 99.1) shall not be deemed “filed” for purposes of section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01.    Financial Statements and Exhibits.
(d)    Exhibits
Exhibit
Number
Description
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
1

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
LIVE OAK BANCSHARES, INC.
Date: January 24, 2024
By:/s/ J. Wesley Sutherland
J. Wesley Sutherland
Chief Accounting Officer
2

Exhibit 99.1
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LIVE OAK BANCSHARES, INC. REPORTS FOURTH QUARTER 2023 RESULTS
Wilmington, NC, January 24, 2024 - Live Oak Bancshares, Inc. (NYSE: LOB) (“Live Oak” or “the Company”) today reported fourth quarter of 2023 net income of $16.2 million, or $0.36 per diluted share. Net income for the year ended December 31, 2023, totaled $73.9 million, or $1.64 per diluted share.
“Live Oak Bank spent 2023 doing what we do best -- growing loans, deposits, and revenue in our mission to support small business owners, our employees and our shareholders,” said Live Oak Chairman and CEO James S. (Chip) Mahan III. “When looking back at 2023, it is clear that our customers and our model were extraordinarily resilient. We are proud to serve America’s small business owners through all cycles and believe our fourth quarter results, and the historical performance of our bank, continue to demonstrate our strength in the market.”
Year Over Year Highlights
(Dollars in thousands, except per share data)Increase (Decrease)
20232022DollarsPercent
Total revenue (1)
$457,038 $565,493 $(108,455)(19)%
Total noninterest expense322,885 314,226 8,6593 
Income before taxes82,830 210,324 (127,494)(61)
Effective tax rate10.8 %16.2 %n/an/a
Net income$73,898 $176,208 $(102,310)(58)%
Diluted earnings per share1.64 3.92 (2.28)(58)
Loan and lease production:
Loans and leases originated$3,946,873 $4,007,621 $(60,748)(2)%
% Fully funded55.1 %58.8 %n/an/a
Total loans and leases:$9,020,884 $7,898,788 $1,122,09614 %
Total assets:11,271,423 9,855,498 1,415,92514 
Total deposits:10,275,019 8,884,928 1,390,09116 
(1)Total revenue consists of net interest income and total noninterest income.

Fourth Quarter 2023 Key Measures
(Dollars in thousands, except per share data)Increase (Decrease)
4Q 20233Q 2023DollarsPercent4Q 2022
Total revenue (1)
$119,683 $127,301 $(7,618)(6)%$104,973 
Total noninterest expense93,204 74,262 18,94226 84,585 
Income before taxes17,484 42,760 (25,276)(59)717 
Effective tax rate7.6 %6.9 %n/an/a(149.9)%
Net income$16,163 $39,793 $(23,630)(59)%$1,792 
Diluted earnings per share0.36 0.88 (0.52)(59)0.04 
Loan and lease production:
Loans and leases originated$981,703 $1,073,255 $(91,552)(9)%$1,177,688 
% Fully funded49.0 %52.2 %n/an/a58.1 %
(1)Total revenue consists of net interest income and total noninterest income.
1

Loans and Leases
At December 31, 2023, the total loan and lease portfolio was $9.02 billion, 2.8% above its level at September 30, 2023 and 14.2% above its level at December 31, 2022. This growth was driven by strong origination volumes. Compared to the third quarter of 2023, loans and leases held for investment increased $431.2 million, or 5.3%, to $8.63 billion while loans held for sale decreased $185.6 million, or 32.4%, to $387.0 million. Average loans and leases were $8.84 billion during the fourth quarter of 2023 compared to $8.58 billion during the third quarter of 2023.
The total loan and lease portfolio at December 31, 2023, and September 30, 2023 was comprised of 37.8% and 39.0% of guaranteed loans and leases, respectively.
Loan and lease originations totaled $981.7 million during the fourth quarter of 2023, a decrease of $91.6 million, or 8.5%, from the third quarter of 2023.
Deposits
Total deposits increased to $10.28 billion at December 31, 2023, an increase of $271.4 million compared to September 30, 2023, and an increase of $1.39 billion compared to December 31, 2022. The increase in total deposits from the prior periods provides support for the growth in the loan and lease portfolio.
Average total interest-bearing deposits for the fourth quarter of 2023 increased $137.5 million, or 1.4%, to $9.84 billion, compared to $9.70 billion for the third quarter of 2023. The ratio of average total loans and leases to average interest-bearing deposits was 89.9% for the fourth quarter of 2023 compared to 88.5% for the third quarter of 2023.
Borrowings
Borrowings totaled $23.4 million at December 31, 2023, compared to $25.8 million and $83.2 million at September 30, 2023 and December 31, 2022, respectively. The decrease from the fourth quarter of 2022 was principally due to paying off the Company’s Fed Funds line of credit.
Net Interest Income
Net interest income for the fourth quarter of 2023 increased to $89.6 million compared to $89.4 million for the third quarter of 2023 and $85.9 million for the fourth quarter of 2022.
The net interest margin for the fourth and third quarters of 2023 was 3.32% and 3.37%, respectively, a decrease of 5 basis points quarter over quarter. This decrease was principally the result of growth in loan yields being outpaced by the cost of deposits. The primary mitigant to loan yields in the fourth quarter of 2023 arose from the accelerated recognition of a large deferred expense, as a result of early payoffs on two loans, which was recognized as a reduction to interest income. The increase in cost of deposits was primarily driven by a large certificate of deposit maturity event in the fourth quarter renewing at higher current market rates. During the fourth quarter of 2023, the average cost of interest-bearing liabilities increased by 18 basis points while the average yield on interest-earning assets increased by 11 basis points.
The increase in net interest income for the fourth quarter of 2023 compared to the fourth quarter of 2022 was driven by growth in the total loan and lease portfolio. Partially mitigating this increase was a decrease in the net interest margin arising from an increase in interest-bearing liabilities combined with average cost of funds outpacing the average yield on interest-earning assets.
Noninterest Income
Noninterest income for the fourth quarter of 2023 decreased to $30.1 million compared to $37.9 million for the third quarter of 2023 and increased from $19.1 million for the fourth quarter of 2022. The primary drivers behind changes in noninterest income are outlined below.
The loan servicing asset revaluation resulted in a loss of $4.0 million for the fourth quarter of 2023 compared to a gain of $11.3 million for the third quarter of 2023 and loss of $5.0 million for the fourth quarter of 2022. The $15.3 million quarter over quarter negative change in servicing asset revaluation was principally due to the third quarter of 2023 one-time positive adjustment of $13.7 million, arising from the Company’s change in valuation techniques used to estimate the fair value of servicing rights.
2

Net gains on sales of loans was $12.9 million, a $216 thousand increase compared to the third quarter of 2023 and a $5.5 million increase compared to the fourth quarter of 2022. The increase in net gains on sales of loans compared to the fourth quarter of 2022 was largely the result of a higher volume of loan sales. The average guaranteed loan sale premium was stable for all compared periods at 105% for the fourth quarter of 2023, third quarter of 2023 and fourth quarter of 2022. The volume of guaranteed loans sold was $239.1 million for the fourth quarter of 2023 compared to $225.6 million sold in the third quarter of 2023 and $144.3 million sold in the fourth quarter of 2022.
Other noninterest income for the fourth quarter of 2023 totaled $8.6 million compared to $3.5 million for the third quarter of 2023 and $5.1 million for the fourth quarter of 2022. The increase in noninterest income for both comparative periods was principally driven by a $4.4 million gain arising from the sale of one of the Company’s aircraft in the fourth quarter of 2023.
Noninterest Expense
Noninterest expense for the fourth quarter of 2023 totaled $93.2 million compared to $74.3 million for the third quarter of 2023 and $84.6 million for the fourth quarter of 2022. The primary drivers in the noninterest expense changes are outlined below.
Salaries and employee benefits for the fourth quarter of 2023 increased $1.3 million compared to the third quarter of 2023 and increased $1.7 million compared to the fourth quarter of 2022. Included in the fourth quarter of 2023 was a special employee bonus of $4.5 million. Excluding this special bonus, total salaries and employee benefits for the fourth quarter of 2023 decreased $3.2 million compared to the third quarter of 2023 and decreased $2.8 million compared to the fourth quarter of 2022.
The Company incurred impairment charges related to a new renewable energy tax credit investment transaction of $14.6 million in the fourth quarter of 2023 compared to none in the third quarter of 2023 and $8.4 million in the fourth quarter of 2022. Investments of this type generate a return primarily through the realization of income tax credits and other benefits; accordingly, impairment of the investment amount is recognized in conjunction with the realization of related tax benefits. These investments generated federal investment tax credits in the fourth quarters of 2023 and 2022 of $16.4 million and $10.3 million, respectively, which are reflected in the Company’s effective tax rate for each respective year. Investments of this nature are part of the Company’s ongoing initiative to promote renewable energy sources.
Asset Quality
During the fourth quarter of 2023, the Company recognized net charge-offs for loans carried at historical cost of $4.4 million compared to $9.1 million in the third quarter of 2023 and $1.4 million in the fourth quarter of 2022. Net charge-off activity in the fourth quarter of 2023 was largely related to four loans spread across three verticals. Net charge-offs as a percentage of average held for investment loans and leases carried at historical cost, annualized, for the quarters ended December 31, 2023, September 30, 2023 and December 31, 2022, was 0.22%, 0.48% and 0.09%, respectively. Net charge-offs as a percentage of total average held for investment loans and leases carried at historical cost for the years ended December 31, 2023 and 2022, were 0.29% and 0.14%, respectively.
Unguaranteed nonperforming (nonaccrual) loans and leases, excluding $7.2 million and $6.5 million accounted for under the fair value option at December 31, 2023, and September 30, 2023, respectively, increased to $39.3 million, or 0.48% of loans and leases held for investment which are carried at historical cost, at December 31, 2023, compared to $33.3 million, or 0.43%, at September 30, 2023.
Provision for Loan and Lease Credit Losses
The provision for loan and lease credit losses for the fourth quarter of 2023 totaled $9.0 million compared to $10.3 million for the third quarter of 2023 and $19.7 million for the fourth quarter of 2022. The lower provision expense in the fourth quarter of 2023 compared to the fourth quarter of 2022 was primarily the result of a decline in reserves related to loans individually evaluated for impairment.
The allowance for credit losses on loans and leases totaled $125.8 million at December 31, 2023, compared to $121.3 million at September 30, 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 1.53% and 1.56% at December 31, 2023, and September 30, 2023, respectively.
3

Income Tax
Income tax expense (benefit) and related effective tax rate was $1.3 million and 7.6% for the fourth quarter of 2023, $3.0 million and 6.9% for the third quarter of 2023, and $(1.1) million and (149.9)% for the fourth quarter of 2022, respectively. The higher level of income tax expense for the fourth quarter of 2023 compared to the fourth quarter of 2022 was primarily the result of a higher level of pretax income combined with higher levels of investment tax credits related to renewable energy investment transactions in the fourth quarter of 2023 in conjunction with recognition of a research credit recognized during the fourth quarter of 2022.
Conference Call
Live Oak will host a conference call to discuss the company's financial results and business outlook tomorrow, January 25, 2024, at 9:00 a.m. ET. The call will be accessible by telephone and webcast using Conference ID: 19103652. 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
4

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; recent 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; 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
5

Live Oak Bancshares, Inc.
Quarterly Statements of Income (unaudited)
(Dollars in thousands, except per share data)
Three Months Ended4Q 2023 Change vs.
4Q 20233Q 20232Q 20231Q 20234Q 20223Q 20234Q 2022
Interest income%%
Loans and fees on loans$169,531 $162,722 $152,362 $139,052 $127,310 4.2 33.2 
Investment securities, taxable8,746 8,701 8,503 7,547 6,716 0.5 30.2 
Other interest earning assets8,259 9,188 8,847 4,817 2,584 (10.1)219.6 
Total interest income186,536 180,611 169,712 151,416 136,610 3.3 36.5 
Interest expense
Deposits96,695 90,914 85,003 67,595 50,357 6.4 92.0 
Borrowings265 287 407 1,804 351 (7.7)(24.5)
Total interest expense96,960 91,201 85,410 69,399 50,708 6.3 91.2 
Net interest income89,576 89,410 84,302 82,017 85,902 0.2 4.3 
Provision for loan and lease credit losses8,995 10,279 13,028 19,021 19,671 (12.5)(54.3)
Net interest income after provision for loan and lease credit losses80,581 79,131 71,274 62,996 66,231 1.8 21.7 
Noninterest income
Loan servicing revenue7,342 6,990 6,687 6,380 6,296 5.0 16.6 
Loan servicing asset revaluation(3,974)11,335 (2,831)356 (5,016)(135.1)20.8 
Net gains on sales of loans12,891 12,675 10,804 10,175 7,362 1.7 75.1 
Net (loss) gain on loans accounted for under the fair value option(170)(568)1,728 (4,529)571 70.1 (129.8)
Equity method investments income (loss)47 (1,034)(2,055)(2,952)(1,818)104.5 102.6 
Equity security investments (losses) gains, net(384)(783)121 77 868 51.0 (144.2)
Lease income2,439 2,498 2,535 2,535 2,555 (2.4)(4.5)
Management fee income3,309 3,277 3,266 3,472 3,200 1.0 3.4 
Other noninterest income8,607 3,501 3,901 4,065 5,053 145.8 70.3 
Total noninterest income30,107 37,891 24,156 19,579 19,071 (20.5)57.9 
Noninterest expense
Salaries and employee benefits44,274 42,947 43,066 44,765 42,560 3.1 4.0 
Travel expense1,544 2,197 2,770 2,411 1,872 (29.7)(17.5)
Professional services expense3,052 1,762 1,996 927 2,453 73.2 24.4 
Advertising and marketing expense2,501 3,446 3,009 3,603 3,892 (27.4)(35.7)
Occupancy expense2,231 2,129 2,205 1,925 3,469 4.8 (35.7)
Technology expense8,402 7,722 8,005 7,729 8,849 8.8 (5.1)
Equipment expense3,480 3,676 4,023 3,818 3,759 (5.3)(7.4)
Other loan origination and maintenance expense3,937 3,498 3,442 3,927 3,657 12.6 7.7 
Renewable energy tax credit investment impairment14,575 — — 69 8,446 100.0 72.6 
FDIC insurance4,091 4,115 5,061 3,403 2,923 (0.6)40.0 
Contributions and donations— — — — 33 — (100.0)
Other expense5,117 2,770 2,880 6,385 2,672 84.7 91.5 
Total noninterest expense93,204 74,262 76,457 78,962 84,585 25.5 10.2 
Income before taxes17,484 42,760 18,973 3,613 717 (59.1)2,338.5 
Income tax expense (benefit)1,321 2,967 1,429 3,215 (1,075)(55.5)222.9 
Net income$16,163 $39,793 $17,544 $398 $1,792 (59.4)802.0 
Earnings per share
Basic$0.36 $0.89 $0.40 $0.01 $0.04 (59.6)800.0 
Diluted$0.36 $0.88 $0.39 $0.01 $0.04 (59.1)800.0 
Weighted average shares outstanding
Basic44,516,646 44,408,997 44,327,474 44,157,156 44,005,220 
Diluted45,306,506 45,268,745 44,835,089 44,964,616 44,794,941 
6

Live Oak Bancshares, Inc.
Quarterly Balance Sheets (unaudited)
(Dollars in thousands)
As of the quarter ended4Q 2023 Change vs.
4Q 20233Q 20232Q 20231Q 20234Q 20223Q 20234Q 2022
Assets%%
Cash and due from banks$582,540 $534,774 $808,131 $463,186 $280,239 8.9 107.9 
Federal funds sold— — — — 136,397 — (100.0)
Certificates of deposit with other banks250 3,750 4,000 4,000 4,000 (93.3)(93.8)
Investment securities available-for-sale1,126,160 1,099,878 1,133,146 1,149,691 1,014,719 2.4 11.0 
Loans held for sale387,037 572,604 523,776 533,292 554,610 (32.4)(30.2)
Loans and leases held for investment (1)
8,633,847 8,202,631 7,836,398 7,686,987 7,344,178 5.3 17.6 
Allowance for credit losses on loans and leases(125,840)(121,273)(120,116)(108,242)(96,566)3.8 30.3 
Net loans and leases8,508,007 8,081,358 7,716,282 7,578,745 7,247,612 5.3 17.4 
Premises and equipment, net257,881 258,041 269,485 268,138 263,290 (0.1)(2.1)
Foreclosed assets6,481 6,701 — — — (3.3)100.0 
Servicing assets48,591 47,127 31,042 29,357 26,323 3.1 84.6 
Other assets354,476 346,227 333,334 337,888 328,308 2.4 8.0 
Total assets$11,271,423 $10,950,460 $10,819,196 $10,364,297 $9,855,498 2.9 14.4 
Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest-bearing$259,270 $239,536 $229,833 $176,439 $194,100 8.2 33.6 
Interest-bearing10,015,749 9,764,106 9,649,278 9,245,555 8,690,828 2.6 15.2 
Total deposits10,275,019 10,003,642 9,879,111 9,421,994 8,884,928 2.7 15.6 
Borrowings23,354 25,847 28,317 30,767 83,203 (9.6)(71.9)
Other liabilities70,384 70,603 79,280 88,729 76,334 (0.3)(7.8)
Total liabilities10,368,757 10,100,092 9,986,708 9,541,490 9,044,465 2.7 14.6 
Shareholders’ equity
Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding— — — — — — — 
Class A common stock (voting)344,568 340,929 341,032 334,672 330,854 1.1 4.1 
Class B common stock (non-voting)— — — — — — — 
Retained earnings642,817 627,759 589,036 572,530 572,497 2.4 12.3 
Accumulated other comprehensive (loss) income(84,719)(118,320)(97,580)(84,395)(92,318)(28.4)(8.2)
Total shareholders’ equity902,666 850,368 832,488 822,807 811,033 6.2 11.3 
Total liabilities and shareholders’ equity$11,271,423 $10,950,460 $10,819,196 $10,364,297 $9,855,498 2.9 14.4 
(1)Includes $388.0 million, $410.1 million, $441.8 million, $467.0 million and $494.5 million measured at fair value for the quarters ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.
7

Live Oak Bancshares, Inc.
Statements of Income (unaudited)
(Dollars in thousands, except per share data)
Twelve Months Ended
December 31, 2023December 31, 2022
Interest income
Loans and fees on loans$623,667 $418,545 
Investment securities, taxable33,497 19,667 
Other interest earning assets31,111 6,261 
Total interest income688,275 444,473 
Interest expense
Deposits340,207 115,035 
Borrowings2,763 1,937 
Total interest expense342,970 116,972 
Net interest income345,305 327,501 
Provision for loan and lease credit losses51,323 40,943 
Net interest income after provision for loan and lease credit losses293,982 286,558 
Noninterest income
Loan servicing revenue27,399 25,359 
Loan servicing asset revaluation4,886 (16,577)
Net gains on sales of loans46,545 43,244 
Net (loss) gain on loans accounted for under the fair value option(3,539)1,046 
Equity method investments (loss) income(5,994)144,250 
Equity security investments (losses) gains, net(969)3,355 
Lease income10,007 10,084 
Management fee income13,324 10,090 
Other noninterest income20,074 17,141 
Total noninterest income111,733 237,992 
Noninterest expense
Salaries and employee benefits175,052 170,822 
Travel expense8,922 8,499 
Professional services expense7,737 11,737 
Advertising and marketing expense12,559 10,543 
Occupancy expense8,490 11,088 
Technology expense31,858 28,434 
Equipment expense14,997 15,120 
Other loan origination and maintenance expense14,804 13,168 
Renewable energy tax credit investment impairment14,644 16,217 
FDIC insurance16,670 9,756 
Contributions and donations— 6,462 
Other expense17,152 12,380 
Total noninterest expense322,885 314,226 
Income before taxes82,830 210,324 
Income tax expense8,932 34,116 
Net income$73,898 $176,208 
Earnings per share
Basic$1.67 $4.02 
Diluted$1.64 $3.92 
Weighted average shares outstanding
Basic44,353,708 43,862,291 
Diluted45,094,879 44,906,310 
8

Live Oak Bancshares, Inc.
Quarterly Selected Financial Data
(Dollars in thousands, except per share data)
As of and for the three months ended
4Q 20233Q 20232Q 20231Q 20234Q 2022
Income Statement Data
Net income$16,163$39,793$17,544$398$1,792
Per Common Share
Net income, diluted$0.36$0.88$0.39$0.01$0.04
Dividends declared0.030.030.030.030.03
Book value20.2319.1218.7718.5818.41
Tangible book value (1)
20.1519.0418.6918.5018.32
Performance Ratios
Return on average assets (annualized)0.58%1.46%0.66%0.02%0.08%
Return on average equity (annualized)7.3618.688.260.190.88
Net interest margin3.323.373.293.463.76
Efficiency ratio (1)
77.8858.3470.4977.7280.58
Noninterest income to total revenue25.1629.7622.2719.2718.17
Selected Loan Metrics
Loans and leases originated$981,703$1,073,255$861,033$1,030,882$1,177,688
Outstanding balance of sold loans serviced4,238,3284,028,5753,813,8523,616,7013,481,885
Asset Quality Ratios
Allowance for credit losses to loans and leases held for investment (3)
1.53%1.56%1.62%1.50%1.41%
Net charge-offs (3)
$4,428$9,122$1,154$6,669$1,396
Net charge-offs to average loans and leases held for investment (2) (3)
0.22%0.48%0.06%0.38%0.09%
Nonperforming loans and leases at historical cost (3)
Unguaranteed$39,285$33,255$44,899$22,002$18,784
Guaranteed95,67865,83766,32263,69654,608
Total134,96399,092111,22185,69873,392
Unguaranteed nonperforming historical cost loans and leases, to loans and leases held for investment (3)
0.48%0.43%0.61%0.30%0.27%
Nonperforming loans at fair value (4)
Unguaranteed$7,230$6,518$8,602$8,193$6,678
Guaranteed41,24439,37845,11443,96838,212
Total48,47445,89653,71652,16144,890
Unguaranteed nonperforming fair value loans to loans held for investment (4)
1.86%1.59%1.95%1.75%1.35%
Capital Ratios
Common equity tier 1 capital (to risk-weighted assets)11.73%11.63%11.55%11.67%12.46%
Tier 1 leverage capital (to average assets)8.588.568.468.709.26
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).
9

Live Oak Bancshares, Inc.
Quarterly Average Balances and Net Interest Margin
(Dollars in thousands)
Three Months Ended
December 31, 2023		Three Months Ended
September 30, 2023
Average BalanceInterestAverage Yield/RateAverage BalanceInterestAverage Yield/Rate
Interest-earning assets:
Interest-earning balances in other banks$598,720 $8,259 5.47 %$677,857 $9,188 5.38 %
Investment securities1,251,467 8,746 2.77 1,257,740 8,701 2.74 
Loans held for sale477,155 10,825 9.00 602,109 13,271 8.74 
Loans and leases held for investment (1)
8,363,881 158,706 7.53 7,978,870 149,451 7.43 
Total interest-earning assets10,691,223 186,536 6.92 10,516,576 180,611 6.81 
Less: Allowance for credit losses on loans and leases(120,257)(119,941)
Noninterest-earning assets482,615 499,508 
Total assets$11,053,581 $10,896,143 
Interest-bearing liabilities:
Interest-bearing checking$300,064 $4,262 5.64 %$300,059 $4,217 5.58 %
Savings4,633,563 47,192 4.04 4,588,085 45,778 3.96 
Money market accounts128,486 198 0.61 136,879 202 0.59 
Certificates of deposit4,775,497 45,043 3.74 4,675,075 40,717 3.46 
Total deposits9,837,610 96,695 3.90 9,700,098 90,914 3.72 
Borrowings24,887 265 4.22 27,425 287 4.15 
Total interest-bearing liabilities9,862,497 96,960 3.90 9,727,523 91,201 3.72 
Noninterest-bearing deposits240,009 237,545 
Noninterest-bearing liabilities72,272 78,930 
Shareholders' equity878,803 852,145 
Total liabilities and shareholders' equity$11,053,581 $10,896,143 
Net interest income and interest rate spread$89,576 3.02 %$89,410 3.09 %
Net interest margin3.32 3.37 
Ratio of average interest-earning assets to average interest-bearing liabilities108.40 %108.11 %
(1)Average loan and lease balances include non-accruing loans and leases.
10

Live Oak Bancshares, Inc.
GAAP to Non-GAAP Reconciliation
(Dollars in thousands)
As of and for the three months ended
4Q 20233Q 20232Q 20231Q 20234Q 2022
Total shareholders’ equity$902,666 $850,368 $832,488 $822,807 $811,033 
Less:
Goodwill1,797 1,797 1,797 1,797 1,797 
Other intangible assets1,721 1,759 1,797 1,835 1,873 
Tangible shareholders’ equity (a)$899,148 $846,812 $828,894 $819,175 $807,363 
Shares outstanding (c)44,617,673 44,480,215 44,351,715 44,290,840 44,061,244 
Total assets$11,271,423 $10,950,460 $10,819,196 $10,364,297 $9,855,498 
Less:
Goodwill1,797 1,797 1,797 1,797 1,797 
Other intangible assets1,721 1,759 1,797 1,835 1,873 
Tangible assets (b)$11,267,905 $10,946,904 $10,815,602 $10,360,665 $9,851,828 
Tangible shareholders’ equity to tangible assets (a/b)7.98 %7.74 %7.66 %7.91 %8.20 %
Tangible book value per share (a/c)$20.15$19.04 $18.69 $18.50 $18.32 
Efficiency ratio:
Noninterest expense (d)$93,204$74,262 $76,457 $78,962 $84,585 
Net interest income89,57689,410 84,302 82,017 85,902 
Noninterest income30,10737,891 24,156 19,579 19,071 
Total revenue (e)$119,683$127,301 $108,458 $101,596 $104,973 
Efficiency ratio (d/e)77.88 %58.34 %70.49 %77.72 %80.58 %
This press release presents the 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.
11
v3.23.4
Cover
Jan. 24, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 24, 2024
Entity Registrant Name LIVE OAK BANCSHARES, INC.
Entity Incorporation, State or Country Code NC
Entity File Number 001-37497
Entity Tax Identification Number 26-4596286
Entity Address, Address Line One 1741 Tiburon Drive,
Entity Address, City or Town Wilmington,
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28403
City Area Code 910
Local Phone Number 790-5867
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Voting Common Stock, no par value per share
Trading Symbol LOB
Security Exchange Name NYSE
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001462120
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