Live Oak Bancshares, Inc. · NYSE:LOB
Live Oak Bancshares — Q4 2024 Earnings Presentation
31 slides from Live Oak Bancshares's earnings presentation, Jan 23, 2025
Slide 1: Fourth Quarter 2024
FOURTH QUARTER 2024 January 23, 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 Q4 GAAP Results
LIVE OAK BANCSHARES Q4 GAAP RESULTS 3 LIVE OAK BANCSHARES, INC. ($ IN MILLIONS, EXCEPT PER SHARE DATA) Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2022 FY 2023 FY 2024 a Net Interest Income $ 89.6 $ 90.1 $ 91.3 $ 97.0 $ 97.5 $ 327.5 $ 345.3 $ 375.9 Provision for Credit Losses 9.0 16.4 11.8 34.5 33.6
Slide 4: Live Oak 2024 Highlights
LIVE OAK | 2024 HIGHLIGHTS 4 Business momentum continues to build Milestone year of record loan production Positive operating leverage driven by revenue growth Elevated provision from strong growth and macroeconomic factors Investing in "good costs" ©2025 Live Oak Bancshares. All rights reserved. |
Slide 5: 2024 Earnings Summary
2024 EARNINGS SUMMARY 5 • Diluted EPS of $1.69, up 3% vs. PY EPS • Strong PPNR growth offset by elevated provision • Adjusted PPNR1 of $191 million, up 24% vs. PY PPNR • Adjusted total revenue1 up 11% vs. PY • Adjusted expenses1 up 4% vs. PY • $5.2 billion record annual loan production, up 31% vs. P
Slide 6: Record Year of Loan Originations in 2024
RECORD YEAR OF LOAN ORIGINATIONS IN 2024 6 AND YET PIPELINE REMAINS NEAR ALL-TIME HIGHS AT $3.6 BILLION YoY Loan Production & Loan Pipeline $ in billions Production Pipeline +30% $5.2 $4.0 $3.9 $3.6 $2.9 $2.4 2022 2023 2024 ©2025 Live Oak Bancshares. All rights reserved. | View all disclosures at en
Slide 7: Live Oak's Core Business Generating Improved Leverage
LIVE OAK'S CORE BUSINESS GENERATING IMPROVED LEVERAGE 7 Live Oak Core Operating Leverage 1 $ in millions Adjusted PPNR +31% since FY 2022 $ in millions $191 $154 $146 +24% YoY 2022 2023 2024 % CHANGE % CHANGE 2022-2024 2023-2024 Adjusted Total Revenue 1 $428 $455 $505 +18% +11% Adjusted Noninterest
Slide 8: Key Credit Trends on Unguaranteed Loan Portfolio
KEY CREDIT TRENDS ON UNGUARANTEED LOAN PORTFOLIO 8 34% OF TOTAL PORTFOLIO IS GOVERNMENT GUARANTEED LATER STAGE CREDIT MIGRATION IN SECOND HALF OF 2024, PAST DUES DOWN MEANINGFULLY IN Q4 Credit Trends 2, 3 2, 4 2, 5 Classified, nonaccruals Classified, but still accruing Over 30 days past due 1.27% 1.
Slide 9: Live Oak SBA Credit Trends Remain Better Than Other Lenders
LIVE OAK SBA CREDIT TRENDS REMAIN BETTER THAN OTHER LENDERS 9 6 Source: Lumos Technologies, Inc., SBA 7a Program Data. ©2025 Live Oak Bancshares. All rights reserved. | View all disclosures at end of presentation
Slide 10: Live Oak | Growth Opportunities Building
LIVE OAK | GROWTH OPPORTUNITIES BUILDING 10 Lending pipelines at all-time highs Live Oak Express (small dollar SBA) ramping up Checking relationships building Commercial Banking efforts scaling Infrastructure investments enabling growth ©2025 Live Oak Bancshares. All rights reserved. | View all disc
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS ©2025 Live Oak Bancshares. All rights reserved.
Slide 12: Q4 2024 Earnings Results
Q4 2024 EARNINGS RESULTS 12 Q4 2024 CHANGE VS. $ in millions Q4 2024 Q3 2024 Q4 2023 Key Highlights Net interest income $ 97 $— $8 • 2.37% unguaranteed ACL to Noninterest income $ 31 $(2) $— unguaranteed loans and leases7 Soundness a Total revenue $ 128 $(2) $8 • 2:1 liquidity capacity to uninsured
Slide 13: Q4 Earnings Summary
Q4 EARNINGS SUMMARY 13 • Diluted EPS of $0.22 EPS • Healthy PPNR offset by elevated provision • Adjusted PPNR1 of $53 million, flat compared to LQ and up 15% PYQ PPNR • Adjusted total revenue1 up 2% LQ and 11% PYQ • Adjusted expenses1 up 3% LQ, up 9% PYQ • 8% LQ before loan sales Loan growth • $1.4B
Slide 14: Strong Loan Origination Platform Driving Growth
STRONG LOAN ORIGINATION PLATFORM DRIVING GROWTH 14 YTD 2024 vs. YTD 2023 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 8 Small Business Banking Commercial Total Senio
Slide 15: Strong Balance Sheet Growth Trends Continue
STRONG BALANCE SHEET GROWTH TRENDS CONTINUE 15 Loan and Deposit Balance Trends Key Highlights $ in billions Total HFS and HFI Loans and Leases Total Deposits QoQ % Loan Growth $11.8 • Strong, consistent QoQ loan $11.4 $10.7 and deposit growth $10.3 $10.4 $10.6 $10.2 $9.5 • $1.4 billion in Q4 and $5.
Slide 16: Business Checking Spotlight
BUSINESS CHECKING SPOTLIGHT 16 CHECKING ACCOUNTS BUILDING DEEPER, MORE PROFITABLE RELATIONSHIPS Key Highlights Business Checking Customers $ in millions Checking Balances Savings & CD Balances Avg COF LOB Average COF • Business checking full launch 4.15% in Q1 2024 4.07% 4.13% 4.03% 3.90% • Business
Slide 17: Net Interest Margin and Net Interest Income Trends
NET INTEREST MARGIN AND NET INTEREST INCOME TRENDS 17 $97 $97 Key Highlights $ in millions $91 • Net interest income flat LQ, $90 $90 +9% PYQ, despite NIM compression Net Interest Income • Q4 loan production average yield @ 8.48%, +101bps to average portfolio Net Interest Margin loan yield 3.32% 3.3
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 Q4 loan sales • SBA premiums steady • Small loan SBA 7(a) 107% 107% 107% providing additional ga
Slide 19: Expenses Stable While Investments in Growth Engine Continue
EXPENSES STABLE WHILE INVESTMENTS IN GROWTH ENGINE CONTINUE 19 GROWTH-FOCUSED HIRING DRIVEN BY REVENUE-GENERATING, DEPOSIT GATHERING, RISK, AND TECHNOLOGY-BASED ROLES Quarterly Expenses $ in millions 1 Personnel expense Non-personnel expense Non-GAAP adjustments $93 $19 $78 $78 $78 $81 $1 $31 $32 $3
Slide 20: Reserve Levels Relatively Steady, Elevated Provision and NCOs in H2 2024
RESERVE LEVELS RELATIVELY STEADY, ELEVATED PROVISION AND NCOs IN H2 2024 20 Quarterly Provision and Net Charge-Offs $ in millions Provision Net Charge-Offs 7, 13 7 Unguaranteed ACL / Unguaranteed Loans and Leases Net Charge-Offs / Average HFI Unguaranteed Loans & Leases 2.53% 2.44% 2.37% 2.28% 2.28%
Slide 21: Strong Capital Positioning - The Mahan Ratio
STRONG CAPITAL POSITIONING - THE MAHAN RATIO 21 Total Assets $ in millions CAPITAL RATIOS Q4 2024 Common Equity Tier 1 Capital 11.0% $468 $12,000 $1,857 Total Capital 12.3% $10,000 Tier 1 Capital 11.0% $3,582 Tier 1 Leverage 8.2% $8,000 $6,000 As of December 31, 2024 $4,000 Tier 1 Capital (a) $1,049
Slide 22: ©2025 Live Oak Bancshares. All rights reserved.
22 ©2025 Live Oak Bancshares. All rights reserved.
Slide 23: Appendix
APPENDIX ©2025 Live Oak Bancshares. All rights reserved.
Slide 24: Appendix: Presentation Footnotes
APPENDIX: PRESENTATION FOOTNOTES 24 1. Non-GAAP financial measures. See Appendix for reconciliation of non-GAAP items to reported balances. 2. Ratio uses total HFI unguaranteed loans and leases at amortized cost (inclusive of loans and leases at fair value and historical cost) as denominator. 3. Cla
Slide 25: Forward Looking Statements
FORWARD LOOKING STATEMENTS 25 Information in this presentation may contain “forward-looking statements” within the Private Securities Litigation Reform Act of 1995. These statements generally relate to our financial condition, results of operations, plans, objectives, future performance or business
Slide 26: Appendix: Reconciliation
APPENDIX: RECONCILIATION 26 Fintech Activities Impact on Consolidated Financials ($ in millions) Banking Activities Apiture Live Oak Ventures Canapi Advisors Fintech Activities Other Consolidated, as reported Actuals for the year ended December 31, 2022 Net interest income $ 329.0 $ — $ 0.1 $ — $ 0.
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 a Net interest income, as reported $ 89.6 $ 90.1 $ 91.3 $ 97.0 $ 97.5 b Total noninterest income, as reported 30.1 26.1 34.2 32.9 30.6 Fair value adjustments:
Slide 28: Appendix: Reconciliation
APPENDIX: RECONCILIATION 28 Reconciliation of non-GAAP items to reported balances ($ in millions) FY 2022 (3) FY 2023 (3) FY 2024 a Net interest income, as reported $ 327.5 $ 345.3 $ 375.9 Less PPP loan interest income 0.7 — — Less PPP loan deferred fees & costs amortized into interest income, net 6
Slide 29: Appendix: Reconciliation
APPENDIX: RECONCILIATION 29 ($ in millions) Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Total shareholders' equity $ 902.7 $ 927.7 $ 961.0 $ 1,007.8 $ 1,003.5 Less: Goodwill 1.8 1.8 1.8 1.8 1.8 Other intangible assets 1.7 1.7 1.6 1.6 1.6 a Tangible shareholders' equity 899.1 924.2 957.6 1,004.4 1,000.1
Slide 30: Appendix: Current and Past Production Driving Loan Growth
APPENDIX: CURRENT AND PAST PRODUCTION DRIVING LOAN GROWTH 30 4% PERIOD-END LOAN GROWTH LQ; 8% TOTAL NET GROWTH LQ BEFORE LOAN SALES Period End ($ in millions) Increase $679 Decrease Total $603 $(485) $10,579 $10,192 $(278) $(132) Q3 2024 Full Funded Other Loan Prepayment Guaranteed Unguaranteed Loan
Slide 31: Appendix: Live Oak Ventures
APPENDIX: LIVE OAK VENTURES 31 A B Book Value Cash Invested Implied Value Cash Proceeds $345 $350 $333 $321 $300 New Investment: $250 $198 $200 $154 $155 $131 Cash ProceedsB to Date $150 $129 $131 $132 $131 $117 $171 million $100 $80 $82 $80 $82 $62 $52 $59 $66$66 Total Implied ValueA $50 $17 $19 $2