Live Oak Bancshares, Inc. · NYSE:LOB
Live Oak Bancshares — Q4 2017 Earnings Presentation
18 slides from Live Oak Bancshares's earnings presentation, Jan 25, 2018
Slide 1: Live Oak Bancshares Fourth Quarter 2017
Live Oak Bancshares Fourth Quarter 2017
Slide 2: Forward Looking Statements
LIVE OAK BANCSHARES | FORWARD LOOKING STATEMENTS 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 perfo
Slide 3: 2017 Highlights & Beyond
2017 Highlights & Beyond • First – The “Noise” • FDC/LOB joint venture – Apiture: One-time gain of $68 million • Reltco and M&A expenses of approximately $8 million • DTL revaluation of approximately $19 million (income tax credit) • Strong Core Operating Business • YoY loan originations – up 26% fr
Slide 4: Growing Recurring Revenue Annually
Growing Recurring Revenue Annually CAGR CAGR 55% Recurring Revenue1 Growth 59% Portfolio Growth 37% 38% 47% 56% 32% 34% 33% 39% Recurring Revenue as a percent of Total Revenue2 Guaranteed Loans as a percent of Total Loans & Leases 1. Net Interest Income plus Loan Servicing Revenue 2. Q4 2017 exclude
Slide 5: Growing Recurring Revenue Quarterly
Growing Recurring Revenue Quarterly Year-Over-Year Year-Over-Year 60% Recurring Revenue1 Growth 56% Portfolio Growth 47% 52% 55% 60% 58% 33% 37% 38% 39% 39% Recurring Revenue as a percent of Total Revenue2 Guaranteed Loans as a percent of Total Loans & Leases 1. Net Interest Income plus Loan Servici
Slide 6: Q4 2017 – Strong Credit Quality
Q4 2017 – Strong Credit Quality 28 bps Versus Q3 2017 of 34 bps 1.80% Versus Q3 2017 of 1.80% Annualized Net CO to ALLL to Loans & Leases HFI Average Loans & Leases HFI $3.7 million Versus Q3 2017 of $3.7 million 13 bps Versus Q3 2017 of 15 bps Unguaranteed Nonperforming Loans & Unguaranteed Nonperf
Slide 7: A Strong Balance Sheet
A Strong Balance Sheet $437 million $24 million Total Equity + Reserve Unguaranteed Exposure Total Equity Loan Loss Reserve $1.25 billion 37% Coverage Unguaranteed Loan Exposure $2.76billion $304million $3.6 million Total Assets Treasure Chest Nonperforming Loans, unguaranteed 7
Slide 8: Proven Scalable Business Model
Proven Scalable Business Model Live Oak 1.0 (2008-2014) Live Oak 2.0 (2015-2016) Live Oak 3.0 (2017+) Veterinary Wine and Craft Beverages Solar Panel Leasing Healthcare Self-Storage Equipment Leasing Pharmacies Independent Insurance Early Education Services Death Care Hotels Senior Care Investment A
Slide 9: Scalability
Scalability 1.0 2.0 3.0 FY 2017 $973 $805 $156 Originations million million million Direct Operating Cost1 $22.4 $16.2 $31.6 per $1 million Originations thousand thousand thousand Direct Operating1 Cost 25% 217% to Revenue2 16% Fully Funding 40% 54% 69% % of Originations Verticals 1.0 Verticals 1.0
Slide 10: Robust Loan & Lease Origination
Robust Loan & Lease Origination 40% CAGR 2013-2017 10
Slide 11: Online Savings Portfolio Increases 52%
Online Savings Portfolio Increases 52% FY Savings Origination Deposits Portfolio as of 12/31/17: $577 million $2.3 billion 7,516 new accounts 11% Q4 Growth / 52% YoY Growth Savings Stats (launched June 21, 2017): Portfolio Stats: 39 $3.0 million $77k 17,344 73% / 27% 1.43% Avg Daily New Avg Daily Ne
Slide 12: New Customer Acquisition via Digital Partners
New Customer Acquisition via Digital Partners Enabling: Practice Mgmt • Low Cost of Funds • Low Deposit Beta • Core Deposits • Scale Online Lenders SMEs Direct DIGITAL Partners BANK 4.0 Robo Advisors API LAYER Consumers e-Comm 12
Slide 13: Setup Vet Practice
Setup Vet Practice • Setup Vet practice and open LOB account during initial setup Open Acct 13
Slide 14: Setup Practice + LOB Account
Setup Practice + LOB Account • Open Savings, CD accounts now, checking later 14
Slide 15: Partner Banking Opportunity
Partner Banking Opportunity • Practice Management Systems • Robo Advisors • Tax Prep Companies • eCommerce Store fronts • Online Lenders • FinTech Checking Accounts 15
Slide 16: FY 2017 | Financial Highlights
FY 2017 | Financial Highlights 26% increase versus FY 2016 60% increase versus FY 2016 186% increase versus FY 2016 Loan & Lease Originations Net Interest Income & Other Revenue* $15 million Loan Servicing Revenue $1.93 billion $103 million 4% increase versus FY 2016 3% increase versus FY 2016 1278
Slide 17: Fourth Quarter 2017 | Financial Highlights
Fourth Quarter 2017 | Financial Highlights 6% decrease versus Q4 2016 60% increase versus Q4 2016 56% increase versus Q4 2016 Loan & Lease Originations Net Interest Income & Total Loans & Leases Loan Servicing Revenue $483 million $2.0 billion $29 million 19% decrease versus Q4 2016 44% increase ver
Slide 18: ©2018 Live Oak Bancshares Inc. All Rights Reserved
©2018 Live Oak Bancshares Inc. All Rights Reserved