Live Oak Bancshares, Inc. · NYSE:LOB

Live Oak Bancshares — Q2 2025 Earnings Presentation

28 slides from Live Oak Bancshares's earnings presentation, Jul 24, 2025

Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 Information in this presentation may contain “forward-looking statements” within the Private Securities Litigation Reform Act of 1995. These statements generally relate to our financial condition, results of operations, plans, objectives, future performance or business a
Slide 3: Live Oak Bancshares Q2 GAAP Results
LIVE OAK BANCSHARES Q2 GAAP RESULTS 3 LIVE OAK BANCSHARES, INC. ($ IN MILLIONS, EXCEPT PER SHARE DATA) Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 a Net Interest Income $ 91.3 $ 97.0 $ 97.5 $ 100.5 $ 109.2 Provision for Credit Losses 11.8 34.5 33.6 29.0 23.3 b Total Noninterest Income 34.2 32.9 30.6 25.
Slide 4: Live Oak Q2 2025 Highlights
LIVE OAK | Q2 2025 HIGHLIGHTS 4 Business momentum continues Strong growth in core PPNR Checking relationships building Credit moderating ©2025 Live Oak Bancshares. All rights reserved. | View all disclosures at end of presentation
Slide 5: Live Oak's Core Business Generating Improved Leverage
LIVE OAK'S CORE BUSINESS GENERATING IMPROVED LEVERAGE 5 Live Oak Core Operating Leverage 1 Adjusted PPNR $ in millions +22% LQ $62 $53 $53 $50 $ in millions $45 +36% PYQ % CHANGE Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 QoQ Adjusted Total Revenue 1 $123 $131 $133 $134 $148 10% Adjusted Noninterest $7
Slide 6: Business Checking Continues to Grow
BUSINESS CHECKING CONTINUES TO GROW 6 CHECKING ACCOUNTS BUILDING DEEPER, MORE PROFITABLE RELATIONSHIPS Business Checking Customers $ in millions $511 4.03% $419 4.13% 4.15% 3.88% 3.75% $334 2.63% 2.45% 2.25% 2.19% $232 2.47% $179 $279 $288 $212 $125 $145 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Total
Slide 7: Credit Moderated as Expected, Key Metrics Improved
CREDIT MODERATED AS EXPECTED, KEY METRICS IMPROVED 7 Quarterly Provision and Unguaranteed Reserve $ in millions 2 Provision Unguaranteed ACL / Unguaranteed Loans and Leases 2.53% 2.53% 2.37% 2.34% 2.28% $35 $34 $29 $23 $12 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Allowance for Credit $138 $169 $168 $
Slide 9: Q2 2025 Earnings Results
Q2 2025 EARNINGS RESULTS 9 Q2 2025 CHANGE VS. $ in millions Q2 2025 Q1 2025 Q2 2024 Key Highlights Net interest income $ 109 $9 $18 • 2.34% unguaranteed ACL to unguaranteed loans and leases2 Noninterest income $ 35 $9 $— Soundness • 2:1 liquidity capacity to uninsured deposits, a Total revenue $ 144
Slide 10: Q2 Earnings Summary
Q2 EARNINGS SUMMARY 10 • Diluted EPS of $0.51, +$0.30 (+143%) LQ EPS • Substantial LQ improvement in ROE and ROA • Net Interest Income of $109 million, +9% LQ and +20% PYQ PPNR • Net Interest Margin +8bps LQ, ~flat to PYQ • Adjusted PPNR1 of $62 million, +22% LQ and +36% PYQ • +$303 million, +3% LQ
Slide 11: Diversified Loan Originations Driving Growth
DIVERSIFIED LOAN ORIGINATIONS DRIVING GROWTH 11 YOY Origination Growth by Vertical Quarterly Production Trend Size represents each vertical's outstanding balance $ in millions as a proportion of the bank's total outstanding balance Small Business Banking Commercial Total Solar $1,758 $1,527 $1,421 $
Slide 12: Strong Balance Sheet Growth Trends Continue
STRONG BALANCE SHEET GROWTH TRENDS CONTINUE 12 Period-End Loan and Deposit Balance Trends Key Highlights Total HFS and HFI Loans and Leases Total Deposits QoQ % Loan Growth $ in billions $12.4 $12.6 • Strong QoQ loan and $11.8 $11.4 $11.4 deposit growth driving net $11.1 $10.7 $10.6 interest income
Slide 13: Net Interest Margin and Net Interest Income Trends
NET INTEREST MARGIN AND NET INTEREST INCOME TRENDS 13 Key Highlights $109 • Net Interest Income +9% LQ, +20% PYQ $101 • Net Interest Margin +8bps LQ $97 $97 • Growth and pricing discipline driving 9bps Net Interest Income $91 improvement to net spread LQ Net Interest Margin ◦ Q2 loan production aver
Slide 14: Loan Sales Continue to Provide Revenue, Liquidity, and Optionality
LOAN SALES CONTINUE TO PROVIDE REVENUE, LIQUIDITY, AND OPTIONALITY 14 Secondary Market Performance Key Highlights Net Gains on Sales of Loans Total Average Gain on Sale Premium $ in millions Net gains on Q2 loan sales • SBA premiums relatively steady since Q2 2024 107% 107% 107% 107% • Small loan SB
Slide 15: Expense Trends: Supporting Growth, Targeting Efficiency Improvements
EXPENSE TRENDS: SUPPORTING GROWTH, TARGETING EFFICIENCY IMPROVEMENTS 15 Quarterly Expenses $ in millions 1 Personnel expense Non-personnel expense Non-GAAP adjustments $89 $84 $78 $78 $81 $1 $3 $1 $32 $36 $37 $33 $35 $46 $45 $45 $48 $49 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Efficiency ratio1 62% 6
Slide 16: Credit Quality Overview
CREDIT QUALITY OVERVIEW 16 Key Credit Metrics & Trends Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Over 30 days past due, accruing 6, 7 0.34% 0.74% 0.14% 0.09% 0.11% Non accrual ratio 6, 8 0.53% 0.60% 0.89% 1.03% 0.63% 2, 9 Net charge-off ratio 0.38% 0.08% 1.39% 0.27% 1.19% 2 ACL to loans & leases HFI 1
Slide 17: Unique Balance Sheet Composition and the Mahan Ratio
UNIQUE BALANCE SHEET COMPOSITION AND THE MAHAN RATIO 17 GOVERNMENT GUARANTEED LOAN MIX IS ~8X THE INDUSTRY11: 41% OF ASSETS ARE CASH OR GOVERNMENT GUARANTEED Total Assets $ in millions CAPITAL RATIOS Q2 2025 Common Equity Tier 1 Capital 10.7% $14,000 Tier 1 Capital 10.7% $12,000 Tier 1 Leverage 7.9%
Slide 18: Live Oak Focus
LIVE OAK | FOCUS 18 Building Seizing new Modernizing the momentum in growth opportunities engine with what we do best right in front of us new innovations ©2025 Live Oak Bancshares. All rights reserved. | View all disclosures at end of presentation
Slide 21: Appendix: Presentation Footnotes
APPENDIX: PRESENTATION FOOTNOTES 21 1. Non-GAAP financial measures. See Appendix for reconciliation of non-GAAP items to reported balances. 2. Loans and leases at historical cost only (excludes loans measured at fair value). 3. Represents total loans and leases at amortized cost, excluding PPP loans
Slide 22: Forward Looking Statements
FORWARD LOOKING STATEMENTS 22 Information in this presentation may contain “forward-looking statements” within the Private Securities Litigation Reform Act of 1995. These statements generally relate to our financial condition, results of operations, plans, objectives, future performance or business
Slide 23: Appendix: Reconciliation
APPENDIX: RECONCILIATION 23 Reconciliation of non-GAAP items to reported balances ($ in millions) Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 a Net interest income, as reported $ 91.3 $ 97.0 $ 97.5 $ 100.5 $ 109.2 b Total noninterest income, as reported 34.2 32.9 30.6 25.6 34.5 Fair value adjustments: A
Slide 24: Appendix: Reconciliation
APPENDIX: RECONCILIATION 24 ($ in millions) Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Total shareholders' equity $ 961.0 $ 1,007.8 $ 1,003.5 $ 1,031.4 $ 1,067.3 Less: Goodwill 1.8 1.8 1.8 1.8 1.8 Other intangible assets 1.6 1.6 1.6 1.5 1.5 a Tangible shareholders' equity 957.6 1,004.4 1,000.1 1,028.1
Slide 25: Well-Diversified Loan Portfolio
WELL-DIVERSIFIED LOAN PORTFOLIO 25 NO INDIVIDUAL VERTICAL BALANCE IS GREATER THAN 10% OF THE TOTAL LOAN PORTFOLIO $11.4 billion Portfolio Balance Average loan size of $1.2 million ~40 Unique Verticals ~32% of portfolio is government guaranteed ©2025 Live Oak Bancshares. All rights reserved. | View a
Slide 26: Appendix: Current and Past Production Driving Loan Growth
APPENDIX: CURRENT AND PAST PRODUCTION DRIVING LOAN GROWTH 26 3% PERIOD-END LOAN GROWTH LQ; 7% TOTAL NET GROWTH LQ BEFORE LOAN SALES Period End ($ in millions) $819 Increase Decrease Total $606 $(642) $11,365 $11,062 $(322) $(158) Q1 2025 Full Funded Other Loan Prepayment Guaranteed Unguaranteed Loan
Slide 27: Appendix: Taking the Long View
APPENDIX: TAKING THE LONG VIEW 27 LIVE OAK CREDIT TRENDS REMAIN BETTER THAN OTHER SBA LENDERS 1, 2 Annualized SBA Net Charge-Off Ratio (10-year average) 0.6% 0.3% 3 4 Live Oak SBA Industry 1. Source: Lumos Technologies, Inc., SBA 7(a) Program Data for fiscal years ending March 31. 2. Default is defi
Slide 28: Appendix: Live Oak Ventures
APPENDIX: LIVE OAK VENTURES 28 A B Book Value Cash Invested Implied Value Cash Proceeds $345 $349 $350 $333 $321 $300 $250 Cash ProceedsB to Date $198 $171 million $200 $154 $155 $150 $129 $131 $132 $131 $132 $132 Total Implied ValueA $117 Q2 2025 $100 $80 $82 $80 $82 $66 $70 $62 $70 $178 million $5

Live Oak Bancshares — Q2 2025 Earnings Presentation on 6ix

Live Oak Bancshares — Q2 2025 Earnings Presentation

Slide 1: Second Quarter 2025

Slide 2: Forward Looking Statements

Slide 3: Live Oak Bancshares Q2 GAAP Results

Slide 4: Live Oak Q2 2025 Highlights

Slide 5: Live Oak's Core Business Generating Improved Leverage

Slide 6: Business Checking Continues to Grow

Slide 7: Credit Moderated as Expected, Key Metrics Improved

Slide 8: Financial Highlights

Slide 9: Q2 2025 Earnings Results

Slide 10: Q2 Earnings Summary

Slide 11: Diversified Loan Originations Driving Growth

Slide 12: Strong Balance Sheet Growth Trends Continue

Slide 13: Net Interest Margin and Net Interest Income Trends

Slide 14: Loan Sales Continue to Provide Revenue, Liquidity, and Optionality

Slide 15: Expense Trends: Supporting Growth, Targeting Efficiency Improvements

Slide 16: Credit Quality Overview

Slide 17: Unique Balance Sheet Composition and the Mahan Ratio

Slide 18: Live Oak Focus

Slide 19: ©2025 Live Oak Bancshares. All rights reserved.

Slide 20: Appendix

Slide 21: Appendix: Presentation Footnotes

Slide 22: Forward Looking Statements

Slide 23: Appendix: Reconciliation

Slide 24: Appendix: Reconciliation

Slide 25: Well-Diversified Loan Portfolio

Slide 26: Appendix: Current and Past Production Driving Loan Growth

Slide 27: Appendix: Taking the Long View

Slide 28: Appendix: Live Oak Ventures