Live Oak Bancshares, Inc. · NYSE:LOB
Live Oak Bancshares — Q2 2018 Earnings Presentation
16 slides from Live Oak Bancshares's earnings presentation, Jul 26, 2018
Slide 1: Live Oak Bancshares Second Quarter 2018
Live Oak Bancshares Second Quarter 2018
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: Second Quarter 2018 Highlights
Second Quarter 2018 | Highlights 45% increase versus Q2 2017 38% increase versus Q2 2017 35% increase versus Q2 2017 Income before Taxes Net Interest Income & Total Loans & Leases Loan Servicing Revenue $14.7 million $34 million $2.3 billion 45% increase versus Q2 2017 7% increase versus Q2 2017 244
Slide 4: Retention & Performance Stock Awards
Retention & Performance Stock Awards Potential Impact of Vesting $32.95 2.10 2x IPO Shares vest when LOB’s share per share million LOB reached a record Number of shares to vest at price reaches $34 for 20 trading price in Q3 target stock price of $34 not consecutive trading days reflected in diluted
Slide 5: The Theory of Verticality
The Theory of Verticality (Originations, $ in millions) YTD 17 YTD 18 Veterinary Live Oak 1.0 Healthcare Pharmacies (2008-2014) Death Care Investment Advisory Family Entertainment $530 $392 Chickens Live Oak 2.0 Wine & Craft Beverages Independent Insurance Renewable Energy (2015-2016) Self-Storage H
Slide 6: Live Oak Bank General SBA Loan Solutions
Live Oak Bank General SBA Loan Solutions Home Office Locations • SBA General Lenders: 8 • Average Production in 2017 at Former Employer: $22,000,000 • Average Years Working in SBA Lending: 17 6
Slide 7: Credit Stats: Justify a Pre-Provision Look
Credit Stats: Justify a Pre-Provision Look • Loans from inception: $8.2 billion originated (Unguaranteed: $2 billion) • Net Charge offs since inception: $15.2 million (75 bps cumulative) • Average DSCR: 1.97 • Average FICO: 754 • TTM Charge Offs: 25 bps (as a percent of unguaranteed) • Classified As
Slide 8: Adjusted Non-GAAP Income
Adjusted Non-GAAP Income 1. Adjusted Non-GAAP Income before taxes excludes expenses arising from the provision for loan and lease losses, stock-based compensation expenses, depreciation expenses, and the operating performance of Reltco, Inc. Reference calculation at the end of this presentation in t
Slide 9: Stock Awards
Stock Awards 4.6% 3.3% 0.3% Live Oak SaaS Companies1 Bank Group2 Annual stock awarded as a Stock awarded as a % of Stock awarded as a % of % of common stock common stock common stock (5-year Average) (most recent fiscal year) (2017) 9.8% 9.9% 1.3% Live Oak SaaS Companies1 Bank Group2 Average stock a
Slide 10: Operating Leverage
Operating Leverage SBA General Lending Verticals 3.0 Verticals 1.0 Verticals 2.0 10
Slide 11: Growing Recurring Revenue Quarterly
Growing Recurring Revenue Quarterly Year-Over-Year Year-Over-Year 38% Recurring Revenue1 Growth 35% Portfolio Growth 55% 60% 58% 57% 59% 38% 39% 39% 39% 38% 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 12: The Power of the Deposit Platform
The Power of the Deposit Platform YTD 2018 New Online Savings/CD YTD 2018 Maturing YTD 2018 Consumer Savings Originations CD Retention Retention $796 million $344 million 94.5% 14,524 new accounts 77% Renewal Rate Compared to active accounts at December 31, 2017 Balance retention over the same time
Slide 13: The Digital Bank
The Digital Bank • nCino – Loans & Workflow • Platform: Force.com • Status: Installed • Apiture – Online Banking • Platform: AWS • Status: Installed • Payrailz – Payments Platform • Platform: AWS Workflow • Status: Q4 Go-Live • Finxact – Core Banking • Platform: AWS API Layer • Status: Q4 Go-Live Co
Slide 14: All Rights Reserved
©2018 Live Oak Bancshares Inc. All Rights Reserved
Slide 15: Appendix
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Slide 16: Adjusted Non-GAAP Income
Adjusted Non-GAAP Income FY 2015 FY 2016 FY 2017 1H 2017 1H 2018 Net income attributable to Live Oak Bancshares, Inc. $ 20,625 $ 13,773 $ 100,499 $ 15,907 $ 26,706 Income tax expense (benefit) 13,795 3,443 (2,245) 1,206 806 Net income attributable to Live Oak Bancshares, Inc., before tax 34,420 17,2