Live Oak Bancshares, Inc. · NYSE:LOB
Live Oak Bancshares — Q1 2025 Earnings Presentation
30 slides from Live Oak Bancshares's earnings presentation, Apr 24, 2025
Slide 1: First Quarter 2025
FIRST QUARTER 2025 April 24, 2025 ©2025 Live Oak Bancshares. All rights reserved.
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 Q1 GAAP Results
LIVE OAK BANCSHARES Q1 GAAP RESULTS 3 LIVE OAK BANCSHARES, INC. ($ IN MILLIONS, EXCEPT PER SHARE DATA) Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 a Net Interest Income $ 89.6 $ 90.1 $ 91.3 $ 97.0 $ 97.5 $ 100.5 Provision for Credit Losses 9.0 16.4 11.8 34.5 33.6 29.0 b Total Noninterest Income
Slide 4: Live Oak | Q1 2025 Highlights
LIVE OAK | Q1 2025 HIGHLIGHTS 4 Business momentum continues Outstanding year-over-year improvement in core PPNR Checking relationships building Strong loan growth, diversified portfolio Provision remains elevated, driven by growth and macroeconomic factors ©2025 Live Oak Bancshares. All rights reser
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 $53 $53 $50 $ in millions $46 $45 $39 +27% PYQ Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 % CHANGE Q1 2024-Q1 2025 Adjusted Total Revenue 1 $120 $117 $123 $131 $133 $134 13% Ad
Slide 6: Business Checking Continues to Ramp
BUSINESS CHECKING CONTINUES TO RAMP 6 CHECKING ACCOUNTS BUILDING DEEPER, MORE PROFITABLE RELATIONSHIPS Business Checking Customers $ in millions $419 4.07% 4.13% 4.15% 4.03% 3.88% $334 2.69% 2.63% 2.45% 2.47% 2.25% $232 $179 $119 $279 $212 $125 $145 $63 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Total
Slide 7: Well-Diversified Loan Portfolio
WELL-DIVERSIFIED LOAN PORTFOLIO 7 NO INDIVIDUAL VERTICAL BALANCE IS GREATER THAN 10% OF THE TOTAL LOAN PORTFOLIO $11.1 billion Portfolio Balance Average loan size of $1.2 million ~40 Unique Verticals ~33% of portfolio is government guaranteed ©2025 Live Oak Bancshares. All rights reserved. | View al
Slide 8: Maintaining Strong Reserves to Support Growth and Economic Environment
MAINTAINING STRONG RESERVES TO SUPPORT GROWTH AND ECONOMIC ENVIRONMENT 8 Quarterly Provision and Net Charge-Offs $ in millions Provision Net Charge-Offs 2, 3 2 Unguaranteed ACL / Unguaranteed Loans and Leases Net Charge-Offs / Average HFI Loans & Leases 2.53% 2.53% 2.44% 2.37% 2.28% $35 $34 $34 $29
Slide 9: Taking the Long View
TAKING THE LONG VIEW 9 LIVE OAK CREDIT TRENDS REMAIN BETTER THAN OTHER SBA LENDERS 4, 5 Annualized Net Charge-Off Ratio (10-year average) 0.65% 0.27% 6 7 Live Oak SBA Industry ©2025 Live Oak Bancshares. All rights reserved. | View all disclosures at end of presentation
Slide 10: Unique Balance Sheet Composition and the Mahan Ratio
UNIQUE BALANCE SHEET COMPOSITION AND THE MAHAN RATIO 10 GOVERNMENT GUARANTEED LOAN MIX IS ~7X THE INDUSTRY8: 42% OF ASSETS ARE CASH OR GOVERNMENT GUARANTEED Total Assets $ in millions CAPITAL RATIOS Q1 2025 Common Equity Tier 1 Capital 10.7% $14,000 Tier 1 Capital 10.7% $12,000 Tier 1 Leverage 8.0%
Slide 11: SBA Update - Here Is What We Know
SBA UPDATE - HERE IS WHAT WE KNOW 11 SBA is a DOGE impacts Rollback of Standard Operating bi-partisan, on staffing and small dollar Procedure self-funding, technology borrower Changes agency with a fees Effective June 1 70+ year history ©2025 Live Oak Bancshares. All rights reserved. | View all disc
Slide 12: Financial Highlights
FINANCIAL HIGHLIGHTS ©2025 Live Oak Bancshares. All rights reserved.
Slide 13: Q1 2025 Earnings Results
Q1 2025 EARNINGS RESULTS 13 Q1 2025 CHANGE VS. $ in millions Q1 2025 Q4 2024 Q1 2024 Key Highlights Net interest income $ 101 $3 $10 • 2.53% unguaranteed ACL to Noninterest income $ 26 $(5) $(1) unguaranteed loans and leases2 Soundness a Total revenue $ 126 $(2) $10 • 2:1 liquidity capacity to unins
Slide 14: Q1 Earnings Summary
Q1 EARNINGS SUMMARY 14 • Diluted EPS of $0.21 EPS • Strong PPNR and growth mitigated by provision expense • Net Interest Income of $101 million, +3% LQ and +12% PYQ • Adjusted PPNR1 of $50 million, -5% LQ and +27% PYQ PPNR • Adjusted total revenue1 +1% LQ and +13% PYQ • Adjusted expenses1 +5% LQ and
Slide 15: Strong Loan Origination Platform Driving Growth
STRONG LOAN ORIGINATION PLATFORM DRIVING GROWTH 15 YOY Origination Growth by Vertical Quarterly Production Trend Size represents each vertical's outstanding balance as a proportion of the $ in millions bank's total outstanding balance Small Business Banking Commercial Total Seniors Housing $1,758 So
Slide 16: Strong Balance Sheet Growth Trends Continue
STRONG BALANCE SHEET GROWTH TRENDS CONTINUE 16 Loan and Deposit Balance Trends Key Highlights Total HFS and HFI Loans and Leases Total Deposits QoQ % Loan Growth $ in billions $12.4 • Strong, consistent QoQ $11.8 $11.4 loan and deposit growth $11.1 $10.7 $10.6 driving net interest $10.4 $10.2 $9.5 i
Slide 17: Net Interest Margin and Net Interest Income Trends
NET INTEREST MARGIN AND NET INTEREST INCOME TRENDS 17 $101 Key Highlights $97 $97 • Net interest income +3% LQ, Net Interest Margin +5bps LQ $91 $90 • Q1 loan production average yield Net Interest Income @ 8.14%, +79bps to average Net Interest Margin portfolio loan yield and driving 3bps 3.33% 3.28%
Slide 18: Loan Sales Continue to Provide Revenue, Liquidity, and Optionality
LOAN SALES CONTINUE TO PROVIDE REVENUE, LIQUIDITY, AND OPTIONALITY 18 Secondary Market Performance Key Highlights Net Gains on Sales of Loans Total Average Gain on Sale Premium $ in millions Net gains on Q1 loan sales • SBA premiums steady • Small loan SBA 7(a) 107% 107% 107% 107% providing addition
Slide 19: Investments in Growth Engine Continue
INVESTMENTS IN GROWTH ENGINE CONTINUE 19 LQ EXPENSE GROWTH ALIGNED WITH SEASONAL PERSONNEL EXPENSES Quarterly Expenses $ in millions 1 Personnel expense Non-personnel expense Non-GAAP adjustments $93 $19 $84 $78 $78 $78 $81 $1 $1 $31 $32 $33 $35 $36 $34 $40 $47 $46 $45 $45 $48 Q4 2023 Q1 2024 Q2 202
Slide 20: Credit Quality Overview
CREDIT QUALITY OVERVIEW 20 Key Credit Metrics & Trends Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Over 30 days past due, accruing 16, 17 0.10% 0.34% 0.74% 0.14% 0.09% Classified, accruing 16, 18 0.66% 0.51% 1.04% 0.87% 0.78% Classified, nonaccruing 16, 19 0.60% 0.53% 0.60% 0.89% 1.03% Net charge-off ra
Slide 21: Live Oak | Focus
LIVE OAK | FOCUS 21 Control what we can control Build on strong growth, positive operating leverage momentum Continue active credit portfolio management Support checking growth Invest in infrastructure to support growth ©2025 Live Oak Bancshares. All rights reserved. | View all disclosures at end of
Slide 22: ©2025 Live Oak Bancshares. All rights reserved.
22 ©2025 Live Oak Bancshares. All rights reserved.
Slide 23: Appendix
APPENDIX ©2025 Live Oak Bancshares. All rights reserved.
Slide 24: Appendix: Presentation Footnotes
APPENDIX: PRESENTATION FOOTNOTES 24 1. Non-GAAP financial measures. See Appendix for reconciliation of non-GAAP items to reported balances. 2. Loans and leases at historical cost only (excludes loans measured at fair value). 3. Quarterly net charge-offs as a percentage of quarterly average loans and
Slide 25: Forward Looking Statements
FORWARD LOOKING STATEMENTS 25 Information in this presentation may contain “forward-looking statements” within the Private Securities Litigation Reform Act of 1995. These statements generally relate to our financial condition, results of operations, plans, objectives, future performance or business
Slide 26: Appendix: Reconciliation
APPENDIX: RECONCILIATION 26 Fintech Activities Impact on Consolidated Financials ($ in millions) Banking Activities Apiture Live Oak Ventures Canapi Advisors Fintech Activities Other Consolidated, as reported Actuals for the quarter ended December 31, 2023 Net interest income $ 89.7 $ — $ — $ — $ —
Slide 27: Appendix: Reconciliation
APPENDIX: RECONCILIATION 27 Reconciliation of non-GAAP items to reported balances ($ in millions) Q4 2023 (3) Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 a Net interest income, as reported $ 89.6 $ 90.1 $ 91.3 $ 97.0 $ 97.5 $ 100.5 b Total noninterest income, as reported 30.1 26.1 34.2 32.9 30.6 25.6 Fa
Slide 28: Appendix: Reconciliation
APPENDIX: RECONCILIATION 28 ($ in millions) Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Total shareholders' equity $ 902.7 $ 927.7 $ 961.0 $ 1,007.8 $ 1,003.5 $ 1,031.4 Less: Goodwill 1.8 1.8 1.8 1.8 1.8 1.8 Other intangible assets 1.7 1.7 1.6 1.6 1.6 1.5 a Tangible shareholders' equity 899.1 92
Slide 29: Appendix: Current and Past Production Driving Loan Growth
APPENDIX: CURRENT AND PAST PRODUCTION DRIVING LOAN GROWTH 29 5% PERIOD-END LOAN GROWTH LQ; 8% TOTAL NET GROWTH LQ BEFORE LOAN SALES Period End ($ in millions) Increase Decrease $685 Total $642 $(441) $11,062 $10,579 $(266) $(137) Q4 2024 Full Funded Other Loan Prepayment Guaranteed Unguaranteed Loan
Slide 30: Appendix: Live Oak Ventures
APPENDIX: LIVE OAK VENTURES 30 A B Book Value Cash Invested Implied Value Cash Proceeds $345 $347 $350 $333 $321 $300 New Investment: $250 $198 $200 Cash ProceedsB to Date $154 $155 $131 $132 $131 $133 $133 $171 million $150 $129 $117 $100 $80 $82 $80 $82 $69 Total Implied ValueA $66 $62 $69 $52 $59