EX-99.1 2 lob-ex991_8.htm EX-99.1 lob-ex991_8.htm

Exhibit 99.1

LIVE OAK BANCSHARES, INC. REPORTS FOURTH QUARTER 2019 RESULTS

Wilmington, NC, January 22, 2020 - Live Oak Bancshares, Inc. (Nasdaq: LOB) (“Live Oak” or “the Company”) today reported fourth quarter 2019 net earnings available to common shareholders of $6.8 million, or $0.17 per diluted share as the Company continues to execute on our strategic priorities that we believe will deliver long-term earnings for our shareholders.  Net earnings for the year ended totaled $18.0 million, or $0.44 per diluted share.

 

“Live Oak’s performance in 2019 was highlighted by strong growth, recurring revenues and profitability since making a strategic pivot a year ago to hold more loans on our balance sheet. The fourth quarter showed strength across all key metrics, and we aim to continue that momentum in the quarters to come,” said James S. Mahan, III, Chief Executive Officer of Live Oak. “In 2019 total assets grew by more than $1 billion and our deposit model successfully fired on all cylinders. We believe in our model and will continue to embrace innovation in financial technology while demonstrating a relentless dedication to American entrepreneurs who support our economy.”

Year over Year Highlights

 

(Dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

 

2019

 

 

2018

 

 

Dollars

 

 

Percent

 

Net interest income and servicing revenues

 

$

168,116

 

 

$

137,164

 

 

$

30,952

 

 

 

23

%

Net income

 

 

18,034

 

 

 

51,448

 

 

 

(33,414

)

 

 

(65

)

Diluted earnings per share

 

 

0.44

 

 

 

1.24

 

 

 

(0.80

)

 

 

(65

)

Non-GAAP net income (1)

 

 

19,306

 

 

 

54,571

 

 

 

(35,265

)

 

 

(65

)

Non-GAAP diluted earnings per share (1)

 

 

0.47

 

 

 

1.32

 

 

 

(0.85

)

 

 

(64

)

Loan and lease production:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases originated

 

$

2,001,886

 

 

$

1,765,680

 

 

$

236,206

 

 

 

13

%

% Fully funded

 

 

51.4

%

 

 

56.5

%

 

n/a

 

 

n/a

 

Total loans and leases:

 

$

3,613,746

 

 

$

2,530,812

 

 

 

1,082,934

 

 

 

43

%

Total assets:

 

 

4,814,970

 

 

 

3,670,449

 

 

 

1,144,521

 

 

 

31

 

Total deposits:

 

 

4,229,122

 

 

 

3,149,583

 

 

 

1,079,539

 

 

 

34

 

Fourth Quarter 2019 Key Measures

 

(Dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

 

 

 

 

 

Q4 2019

 

 

Q4 2018

 

 

Dollars

 

 

Percent

 

 

Q3 2019

 

Net interest income and servicing revenues

 

$

44,741

 

 

$

36,547

 

 

$

8,194

 

 

 

22

%

 

$

44,362

 

Net income

 

 

6,832

 

 

 

10,490

 

 

 

(3,658

)

 

 

(35

)

 

 

3,895

 

Diluted earnings per share

 

 

0.17

 

 

 

0.26

 

 

 

(0.09

)

 

 

(35

)

 

 

0.09

 

Non-GAAP net income (1)

 

 

7,106

 

 

 

10,764

 

 

 

(3,658

)

 

 

(34

)

 

 

4,169

 

Non-GAAP diluted earnings per share (1)

 

 

0.17

 

 

 

0.26

 

 

 

(0.09

)

 

 

(35

)

 

 

0.10

 

Loan and lease production:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases originated

 

$

523,688

 

 

$

498,987

 

 

$

24,701

 

 

 

5

%

 

$

562,259

 

% Fully funded

 

 

49.0

%

 

 

49.8

%

 

n/a

 

 

n/a

 

 

 

51.3

%

 

(1) See accompanying GAAP to Non-GAAP Reconciliation.

 

 

 

1


Loans and Leases

At December 31, 2019, the total loan and lease portfolio increased to $3.61 billion, 42.8% above its level a year ago and 8.0% above its level at September 30, 2019.  Compared to the third quarter of 2019, loans and leases held for investment increased $205.3 million, or 8.4%, to $2.65 billion while loans held for sale increased $63.4 million, or 7.0%, to $966.4 million. Loan and lease originations totaled $523.7 million during the fourth quarter of 2019, a decrease of $38.6 million, or 6.9%, from the third quarter of 2019.  Originations for year ended December 31, 2019, increased by 13.4% to $2.00 billion compared to $1.77 billion for the year ended December 31, 2018.  This continued growth in loan originations was across multiple legacy and new industry verticals as well as in our SBA generalist category.  The total loan and lease portfolio at December 31, 2019, and September 30, 2019, of $3.61 billion and $3.35 billion, respectively, was comprised of approximately 54.4% and 54.7% of unguaranteed loans and leases, respectively.

Average loans and leases were $3.50 billion during the fourth quarter of 2019 compared to $3.22 billion during the third quarter of 2019.

Deposits

Total deposits increased by $209.9 million to $4.23 billion at December 31, 2019 from $4.02 billion at September 30, 2019, in support of the growing loan and lease portfolio. Average total interest-bearing deposits for the fourth quarter of 2019 increased $247.4 million, or 6.5%, to $4.08 billion, compared to $3.83 billion for the third quarter of 2019. The ratio of average total loans and leases to average interest-bearing deposits was 85.8% for the fourth quarter of 2019, compared to 83.1% for the third quarter of 2019.

Net Interest Income

Net interest income for the fourth quarter of 2019 rose to $38.0 million compared to $28.8 million for the fourth quarter of 2018 and $37.5 million for the third quarter of 2019. The increase from the prior year was driven by the significant growth in the total loan and lease portfolios along with higher investment security holdings reflecting the Company's ongoing initiative to grow recurring revenue sources and strengthen its liquidity profile.  The slight increase from the third quarter of 2019 arose from a higher average loan and lease portfolio balance that was mitigated by a nineteen basis point decline in the net interest margin to 3.55%. The margin decline reflected the cumulative impact of recent Fed rate cuts that put pressure on earning asset yields coupled with the timing of repricing the Company’s variable rate loans. The decrease in earning asset yields outpaced the reduction in the average cost of interest-bearing liabilities.

Net interest income for the year ending December 31, 2019 totaled $140.1 million, a $32.0 million increase from the prior year due to the increases in the volume of interest earning assets.

Noninterest Income

Noninterest income for the fourth quarter of 2019 increased to $21.5 million compared to $18.1 million for the fourth quarter of 2018 and $18.6 million for the third quarter of 2019.  The primary driver of the increase compared to the fourth quarter of 2018 was higher revenue from the net gains on sales of loans. The Company’s net gains on sales of loans increased $5.7 million to $11.4 million in the fourth quarter of 2019 compared to $5.7 million in the fourth quarter of 2018 and increased $3.9 million compared to $7.4 million in the third quarter of 2019.  The volume of guaranteed loan sales in the fourth quarter of 2019 remained relatively flat at $105.0 million compared to $104.6 million in the fourth quarter of 2018 and $100.5 million in the third quarter of 2019.

The average net gain on guaranteed loan sales increased to $106.2 thousand per million sold in the fourth quarter of 2019 versus $59.8 thousand in the fourth quarter of 2018 and $80.5 thousand in the third quarter of 2019.  The increase in average loan sale pricing from the fourth quarter of 2018 was driven by the mix of loans sold by the Company, continued strength of market conditions for the purchase of guaranteed loans, and favorable fair value adjustments for exchange-traded interest rate lock commitments. The Company recorded $1.2 million in fair value net gains in exchange-traded interest rate lock commitments during the fourth quarter of 2019 compared to $1.5 million in fair value net losses during the third quarter of 2019.  Excluding fair value fluctuations in exchange-traded interest rate lock commitments, the average net gain on guaranteed loan sales was

2


$94.9 thousand and $77.4 thousand per million sold in the fourth quarters of 2019 and 2018, respectively, and $95.0 thousand per million sold in the third quarter of 2019.  

Partially offsetting the increase in noninterest income compared to the fourth quarter of 2018 were decreased levels of loan servicing revenue and increased flow-through losses from investments accounted for under the equity method.   Loan servicing revenues of $6.7 million in the fourth quarter of 2019 decreased $1.0 million from the fourth quarter of 2018 as the outstanding balance of sold loans serviced has declined with the Company’s strategic shift to hold more guaranteed loans on balance sheet. Flow-through losses from investments accounted for under the equity method of $1.8 million in the fourth quarter of 2019 increased $2.8 million from income of $1.0 million in the fourth quarter of 2018.  

Partially offsetting the increase in noninterest income compared to the third quarter of 2019 was a decline in revenue from equity security investments following a $3.3 million gain in the prior quarter.  This gain was driven by observable fair market value changes in orderly transactions of underlying equity security investments.

The Company’s equity method and equity security portfolio is largely comprised of investments in strategic financial technology start-ups.

Noninterest Expense

Noninterest expense for the fourth quarter of 2019 increased to $44.4 million compared to $32.6 million for the fourth quarter of 2018 and $42.7 million for the third quarter of 2019.

Salaries and employee benefits for the fourth quarter of 2019 increased to $24.1 million compared to $14.5 million for the fourth quarter of 2018 and $22.7 million for the third quarter of 2019 as the Company invested in its workforce to support growth and a variety of initiatives.  The increase in salaries and benefits of $9.6 million compared to the fourth quarter of 2018 was largely influenced by the Company’s reversal of accrued incentive compensation in the fourth quarter of 2018 due to not meeting internal performance metrics for that year.

Also largely contributing to the increase in noninterest expense was FDIC insurance expense of $2.0 million for the fourth quarter of 2019, an increase of $1.5 million compared to the fourth quarter of 2018 and $1.9 million from the third quarter of 2019.  The year over year increase in FDIC insurance was related to increased premiums while the increase over the third quarter of 2019 was related to a large credit received in that quarter.   

The increase in noninterest expense for the fourth quarter of 2019 compared to the fourth quarter of 2018 was mitigated in part by a decrease in travel expense of $1.0 million.  

Partially offsetting the increase in noninterest expense for the fourth quarter of 2019 compared to the third quarter of 2019 were decreases in professional services, data processing, and loan related expenses of $1.1 million, $1.2 million, and $1.1 million, respectively.

Asset Quality

Net charge-offs decreased to $905 thousand in the fourth quarter of 2019 compared to $2.3 million in the third quarter of 2019 and $1.2 million in the fourth quarter of 2018.  Net charge-offs as a percentage of average held for investment loans and leases, annualized, for the quarters ended December 31, 2019 and 2018, was 0.14% and 0.28%, respectively.  Net charge-offs for the year ended December 31, 2019 totaled $3.8 million compared to $4.8 million for the year ended December 31, 2018.  Net charge-offs as a percentage of total average held for investment loans and leases for the years ended December 31, 2019 and 2018 were 0.17% and 0.31%, respectively.

The unguaranteed exposure of nonperforming (nonaccrual) loans decreased to $17.9 million, or 0.68% of loans and leases held for investment, at December 31, 2019, compared to $19.8 million, or 0.81%, at September 30, 2019.  Total nonperforming loans decreased to $76.3 million in the fourth quarter of 2019 from $80.8 million at the end of the prior quarter.

The unguaranteed exposure of foreclosed assets decreased $22 thousand to $1.1 million at December 31, 2019 compared to September 31, 2019.  Foreclosed assets decreased $90 thousand to $5.6 million at December 31, 2019, from $5.7 million at September 30, 2019.

3


Provision for Loan and Lease Losses

The provision for loan and lease losses for the fourth quarter of 2019 totaled $6.2 million compared to $7.2 million for the third quarter of 2019 and $6.8 million for the fourth quarter of 2018.  The provision expense is driven by growth in the loan and lease portfolio combined with ongoing changes in net charge-offs and criticized and classified loans and leases.

The allowance for loan and lease losses totaled $48.2 million at December 31, 2019, compared to $42.9 million at September 30, 2019. The allowance for loan and lease losses as a percentage of total loans and leases held for investment was 1.82% and 1.76% at December 31, 2019, and September 30, 2019, respectively.

Income Tax

Income tax expense was $2.1 million in the fourth quarter of 2019 compared to a net income tax benefit in the fourth quarter of 2018 of $3.0 million and an income tax expense of $2.4 million in the third quarter of 2019.  During the year ended December 31, 2018, the Company’s effective tax rate was predominantly driven by the leasing of renewable energy assets which generated investment tax credits.  For the year ended December 31, 2019, investment tax credits were less of a driver of the Company’s effective tax rate.

Shareholders’ Equity

During the fourth quarter of 2019, 900,000 shares of Class B common stock (non-voting) were converted to Class A common stock (voting) in connection with private sales. The conversion decreased the value of Class B common stock (non-voting) and increased the value of Class A common stock (voting) by $9.5 million.

Conference Call

Live Oak will host a conference call to discuss quarterly results at 9:00 a.m. ET tomorrow morning (January 23, 2020). Media representatives, analysts and the public are invited to listen to this discussion by calling (844) 743-2494 (domestic) or (661) 378-9528 (international) with conference ID 9470049. A live webcast of the conference call along with presentation materials referenced during the conference call will be available on the Investor Relations page of the Company’s website at http://investor.liveoakbank.com. A replay of the webcast will be archived on the Company's website for one year.  A replay of the conference call will also be available until 5:00 p.m. ET January 30, 2020 and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international).

CFO Commentary

Additional commentary on the quarter by Brett Caines, Chief Financial Officer of the Company, is available at http://investor.liveoakbank.com in the supporting materials for the conference call.

Important Note Regarding Forward-Looking Statements

Statements in this press release that are based on other than historical data or that express the Company’s plans or expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include changes in Small Business Administration (“SBA”) rules, regulations or loan products, including the Section 7(a) program, changes in SBA standard operating procedures or changes in Live Oak Banking Company's status as an SBA Preferred Lender; changes in rules, regulations or procedures for other government loan programs, including those of the United States Department of Agriculture; a reduction in or the termination of the Company's ability to use the technology-based platform that is critical to the success of its business model, including a failure in or a breach of operational or security systems; competition from other lenders; the Company's ability to attract and retain key personnel; market and economic conditions and the associated impact on the Company; operational, liquidity and credit risks associated with the Company's business; the impact of heightened regulatory

4


scrutiny of financial products and services and the Company's ability to comply with regulatory requirements and expectations; and the other factors discussed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (http://www.sec.gov). Except as required by law, the Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

About Live Oak Bancshares, Inc.

Live Oak Bancshares, Inc. (Nasdaq: LOB) is a financial holding company and the parent company of Live Oak Banking Company.  Live Oak Bancshares and its subsidiaries partner with businesses that have a common focus of changing the banking industry by bringing efficiency and excellence to customers using technology and innovation.

Contacts:

Brett Caines | CFO | Investor Relations | 910.796.1645 & Micah Davis | CMO | Media Relations | 910.550.2255

 

 

 

 

5


Live Oak Bancshares, Inc.

Quarterly Statements of Income (unaudited)

(Dollars in thousands, except per share data)

 

 

 

Three months ended

 

 

 

4Q 2019

 

 

3Q 2019

 

 

2Q 2019

 

 

1Q 2019

 

 

4Q 2018

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and fees on loans

 

$

57,017

 

 

$

55,939

 

 

$

49,914

 

 

$

44,966

 

 

$

40,628

 

Investment securities, taxable

 

 

3,911

 

 

 

4,001

 

 

 

4,116

 

 

 

3,317

 

 

 

2,558

 

Other interest earning assets

 

 

885

 

 

 

1,167

 

 

 

1,108

 

 

 

1,639

 

 

 

1,568

 

Total interest income

 

 

61,813

 

 

 

61,107

 

 

 

55,138

 

 

 

49,922

 

 

 

44,754

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

23,801

 

 

 

23,576

 

 

 

21,203

 

 

 

19,317

 

 

 

15,959

 

Borrowings

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest expense

 

 

23,802

 

 

 

23,576

 

 

 

21,203

 

 

 

19,317

 

 

 

15,959

 

Net interest income

 

 

38,011

 

 

 

37,531

 

 

 

33,935

 

 

 

30,605

 

 

 

28,795

 

Provision for loan and leases losses

 

 

6,208

 

 

 

7,160

 

 

 

3,463

 

 

 

2,742

 

 

 

6,822

 

Net interest income after provision for loan and

   lease losses

 

 

31,803

 

 

 

30,371

 

 

 

30,472

 

 

 

27,863

 

 

 

21,973

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan servicing revenue

 

 

6,730

 

 

 

6,831

 

 

 

7,063

 

 

 

7,410

 

 

 

7,752

 

Loan servicing asset revaluation

 

 

(1,304

)

 

 

(859

)

 

 

(403

)

 

 

(2,246

)

 

 

(627

)

Net gains on sales of loans

 

 

11,364

 

 

 

7,425

 

 

 

6,015

 

 

 

4,198

 

 

 

5,687

 

Equity method investments income (loss)

 

 

(1,769

)

 

 

(2,370

)

 

 

(1,736

)

 

 

(2,014

)

 

 

1,011

 

Equity security investments gains (losses), net

 

 

54

 

 

 

3,343

 

 

 

32

 

 

 

103

 

 

 

79

 

Gain on sale of investment securities available-for-sale

 

 

528

 

 

 

87

 

 

 

 

 

 

5

 

 

 

 

Lease income

 

 

2,600

 

 

 

2,361

 

 

 

2,369

 

 

 

2,325

 

 

 

2,244

 

Construction supervision fee income

 

 

240

 

 

 

360

 

 

 

386

 

 

 

779

 

 

 

323

 

Other noninterest income

 

 

3,081

 

 

 

1,450

 

 

 

975

 

 

 

2,467

 

 

 

1,596

 

Total noninterest income

 

 

21,524

 

 

 

18,628

 

 

 

14,701

 

 

 

13,027

 

 

 

18,065

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

24,072

 

 

 

22,717

 

 

 

21,990

 

 

 

21,855

 

 

 

14,503

 

Travel expense

 

 

2,246

 

 

 

1,934

 

 

 

1,541

 

 

 

1,200

 

 

 

3,269

 

Professional services expense

 

 

983

 

 

 

2,073

 

 

 

1,621

 

 

 

2,182

 

 

 

1,233

 

Advertising and marketing expense

 

 

1,630

 

 

 

1,277

 

 

 

1,665

 

 

 

1,364

 

 

 

1,023

 

Occupancy expense

 

 

2,528

 

 

 

2,131

 

 

 

1,848

 

 

 

1,609

 

 

 

1,738

 

Data processing expense

 

 

1,847

 

 

 

3,072

 

 

 

1,947

 

 

 

2,399

 

 

 

2,606

 

Equipment expense

 

 

4,402

 

 

 

4,361

 

 

 

4,239

 

 

 

3,325

 

 

 

3,630

 

Other loan origination and maintenance expense

 

 

2,390

 

 

 

3,535

 

 

 

1,708

 

 

 

1,639

 

 

 

1,482

 

Renewable energy tax credit investment impairment

 

 

 

 

 

 

 

 

602

 

 

 

 

 

 

 

FDIC insurance

 

 

2,012

 

 

 

101

 

 

 

699

 

 

 

635

 

 

 

547

 

Other expense

 

 

2,300

 

 

 

1,536

 

 

 

1,716

 

 

 

1,993

 

 

 

2,527

 

Total noninterest expense

 

 

44,410

 

 

 

42,737

 

 

 

39,576

 

 

 

38,201

 

 

 

32,558

 

Income before taxes

 

 

8,917

 

 

 

6,262

 

 

 

5,597

 

 

 

2,689

 

 

 

7,480

 

Income tax expense (benefit)

 

 

2,085

 

 

 

2,367

 

 

 

662

 

 

 

317

 

 

 

(3,010

)

Net income

 

$

6,832

 

 

$

3,895

 

 

$

4,935

 

 

$

2,372

 

 

$

10,490

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.17

 

 

$

0.10

 

 

$

0.12

 

 

$

0.06

 

 

$

0.26

 

Diluted

 

$

0.17

 

 

$

0.09

 

 

$

0.12

 

 

$

0.06

 

 

$

0.26

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

40,291,867

 

 

 

40,240,740

 

 

 

40,196,662

 

 

 

40,160,118

 

 

 

40,148,115

 

Diluted

 

 

41,178,472

 

 

 

41,113,575

 

 

 

40,998,541

 

 

 

40,921,823

 

 

 

41,075,864

 

 

6


Live Oak Bancshares, Inc.

Quarterly Balance Sheets (unaudited)

(Dollars in thousands)

 

 

 

As of the quarter ended

 

 

 

4Q 2019

 

 

3Q 2019

 

 

2Q 2019

 

 

1Q 2019

 

 

4Q 2018

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

126,752

 

 

$

159,527

 

 

$

115,292

 

 

$

221,159

 

 

$

316,823

 

Federal funds sold

 

 

96,787

 

 

 

88,919

 

 

 

68,153

 

 

 

64,708

 

 

 

 

Certificates of deposit with other banks

 

 

7,250

 

 

 

7,250

 

 

 

7,250

 

 

 

7,250

 

 

 

7,250

 

Investment securities available-for-sale

 

 

540,045

 

 

 

570,795

 

 

 

576,275

 

 

 

569,739

 

 

 

380,490

 

Loans held for sale

 

 

966,447

 

 

 

903,095

 

 

 

857,837

 

 

 

772,481

 

 

 

687,393

 

Loans and leases held for investment

 

 

2,647,299

 

 

 

2,441,953

 

 

 

2,225,473

 

 

 

2,002,124

 

 

 

1,843,419

 

Allowance for loan and lease losses

 

 

(48,247

)

 

 

(42,944

)

 

 

(38,048

)

 

 

(35,111

)

 

 

(32,434

)

Net loans and leases

 

 

2,599,052

 

 

 

2,399,009

 

 

 

2,187,425

 

 

 

1,967,013

 

 

 

1,810,985

 

Premises and equipment, net

 

 

279,099

 

 

 

280,942

 

 

 

281,126

 

 

 

271,810

 

 

 

262,524

 

Foreclosed assets

 

 

5,612

 

 

 

5,702

 

 

 

6,044

 

 

 

1,374

 

 

 

1,094

 

Servicing assets

 

 

35,365

 

 

 

37,583

 

 

 

41,687

 

 

 

44,324

 

 

 

47,641

 

Operating lease right-of-use assets

 

 

2,427

 

 

 

1,890

 

 

 

1,996

 

 

 

2,136

 

 

 

 

Other assets

 

 

156,134

 

 

 

148,985

 

 

 

131,216

 

 

 

136,053

 

 

 

156,249

 

Total assets

 

$

4,814,970

 

 

$

4,603,697

 

 

$

4,274,301

 

 

$

4,058,047

 

 

$

3,670,449

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

54,107

 

 

$

56,373

 

 

$

55,416

 

 

$

53,843

 

 

$

53,993

 

Interest-bearing

 

 

4,175,015

 

 

 

3,962,894

 

 

 

3,666,181

 

 

 

3,474,562

 

 

 

3,095,590

 

Total deposits

 

 

4,229,122

 

 

 

4,019,267

 

 

 

3,721,597

 

 

 

3,528,405

 

 

 

3,149,583

 

Borrowings

 

 

14

 

 

 

1,310

 

 

 

1,361

 

 

 

1,410

 

 

 

1,457

 

Operating lease liabilities

 

 

2,619

 

 

 

2,041

 

 

 

2,162

 

 

 

2,314

 

 

 

 

Other liabilities

 

 

50,829

 

 

 

52,860

 

 

 

30,195

 

 

 

25,538

 

 

 

25,849

 

Total liabilities

 

 

4,282,584

 

 

 

4,075,478

 

 

 

3,755,315

 

 

 

3,557,667

 

 

 

3,176,889

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, no par value, 1,000,000 shares

   authorized, none issued or outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A common stock (voting)

 

 

309,526

 

 

 

296,925

 

 

 

284,987

 

 

 

281,994

 

 

 

278,945

 

Class B common stock (non-voting)

 

 

30,871

 

 

 

40,401

 

 

 

49,168

 

 

 

49,168

 

 

 

49,168

 

Retained earnings

 

 

180,265

 

 

 

174,641

 

 

 

171,954

 

 

 

168,225

 

 

 

167,124

 

Accumulated other comprehensive income (loss)

 

 

11,724

 

 

 

16,252

 

 

 

12,877

 

 

 

993

 

 

 

(1,677

)

Total equity

 

 

532,386

 

 

 

528,219

 

 

 

518,986

 

 

 

500,380

 

 

 

493,560

 

Total liabilities and shareholders’ equity

 

$

4,814,970

 

 

$

4,603,697

 

 

$

4,274,301

 

 

$

4,058,047

 

 

$

3,670,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7


Live Oak Bancshares, Inc.

Statements of Income (unaudited)

(Dollars in thousands, except per share data)

 

 

 

Twelve months ended

 

 

 

December 31, 2019

 

 

December 31, 2018

 

Interest income

 

 

 

 

 

 

 

 

Loans and fees on loans

 

$

207,836

 

 

$

147,310

 

Investment securities, taxable

 

 

15,345

 

 

 

8,733

 

Other interest earning assets

 

 

4,799

 

 

 

6,600

 

Total interest income

 

 

227,980

 

 

 

162,643

 

Interest expense

 

 

 

 

 

 

 

 

Deposits

 

 

87,897

 

 

 

54,469

 

Borrowings

 

 

1

 

 

 

131

 

Total interest expense

 

 

87,898

 

 

 

54,600

 

Net interest income

 

 

140,082

 

 

 

108,043

 

Provision for loan and lease losses

 

 

19,573

 

 

 

13,058

 

Net interest income after provision for loan and lease losses

 

 

120,509

 

 

 

94,985

 

Noninterest income

 

 

 

 

 

 

 

 

Loan servicing revenue

 

 

28,034

 

 

 

29,121

 

Loan servicing asset revaluation

 

 

(4,812

)

 

 

(18,765

)

Net gains on sales of loans

 

 

29,002

 

 

 

75,170

 

Equity method investments income (loss)

 

 

(7,889

)

 

 

(386

)

Equity security investments gains (losses), net

 

 

3,532

 

 

 

213

 

Gain on sale of investment securities available-for-sale

 

 

620

 

 

 

 

Lease income

 

 

9,655

 

 

 

7,966

 

Construction supervision fee income

 

 

1,765

 

 

 

2,277

 

Title insurance income

 

 

 

 

 

2,775

 

Other noninterest income

 

 

7,973

 

 

 

5,394

 

Total noninterest income

 

 

67,880

 

 

 

103,765

 

Noninterest expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

90,634

 

 

 

77,411

 

Travel expense

 

 

6,921

 

 

 

9,156

 

Professional services expense

 

 

6,859

 

 

 

4,878

 

Advertising and marketing expense

 

 

5,936

 

 

 

6,015

 

Occupancy expense

 

 

8,116

 

 

 

7,065

 

Data processing expense

 

 

9,265

 

 

 

12,010

 

Equipment expense

 

 

16,327

 

 

 

13,724

 

Other loan origination and maintenance expense

 

 

9,272

 

 

 

5,967

 

Renewable energy tax credit investment impairment

 

 

602

 

 

 

 

FDIC insurance

 

 

3,447

 

 

 

3,234

 

Title insurance closing services expense

 

 

 

 

 

912

 

Impairment expense on goodwill and other intangibles, net

 

 

 

 

 

2,680

 

Other expense

 

 

7,545

 

 

 

9,652

 

Total noninterest expense

 

 

164,924

 

 

 

152,704

 

Income before taxes

 

 

23,465

 

 

 

46,046

 

Income tax expense (benefit)

 

 

5,431

 

 

 

(5,402

)

Net income

 

$

18,034

 

 

$

51,448

 

Earnings per share

 

 

 

 

 

 

 

 

Basic

 

$

0.45

 

 

$

1.28

 

Diluted

 

$

0.44

 

 

$

1.24

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

40,222,758

 

 

 

40,056,230

 

Diluted

 

 

41,053,514

 

 

 

41,446,750

 

8


Live Oak Bancshares, Inc.

Quarterly Selected Financial Data

(Dollars in thousands, except per share data)

 

 

 

As of and for the three months ended

 

 

 

4Q 2019

 

 

3Q 2019