Live Oak Bancshares, Inc. Reports First Quarter 2025 Results
23-Apr-2025 16:30:07 EDT
Live Oak Bancshares, Inc. Reports First Quarter 2025 Results
GlobeNewswire April 23, 2025
WILMINGTON, N.C., April 23, 2025 (GLOBE NEWSWIRE) — Live Oak Bancshares, Inc. (NYSE: LOB) (“Live Oak” or “the Company”) today reported first quarter of 2025 net income attributable to the Company of $9.7 million, or $0.21 per diluted share.
Live Oak's performance in the quarter compared to the fourth quarter of 2024, includes these notable items:
Record first quarter production of $1.40 billion accompanied by strong deposit growth of $635.5 million, with total assets growing by 5.0% to $13.60 billion
Net interest income increased 3.1% and net interest margin increased 5 basis points from 3.15% to 3.20%
1.5% decline in revenue and 3.4% increase in noninterest expenses generated 10% decline in pre-provision net revenue1
Provision expense for credit losses of $29.0 million, principally driven by loan growth amid a challenging macroeconomic environment, where elevated interest rates and inflationary pressures placed financial strain on some small business borrowers
Two key initiatives saw positive momentum — non-interest bearing deposit growth and small dollar loan production
“Live Oak Bank demonstrated strong growth across our lending and deposit franchises in the first quarter, all while navigating the current small business credit cycle and a backdrop of economic uncertainty,” said Live Oak Chairman and CEO James S. (Chip) Mahan III. “We have an unwavering dedication to small business and staying close to our customers in these turbulent times remains paramount. Small business is the backbone of America, and we continue to support our nation's entrepreneurs with the capital they need to create jobs, drive innovation, and serve their communities well.”
Conference Call
Live Oak will host a conference call to discuss the Company's financial results and business outlook tomorrow, April 24, 2025, at 9:00 a.m. ET. The call will be accessible by telephone and webcast using Conference ID: 75855. A supplementary slide presentation will be posted to the website prior to the event, and a replay will be available for 12 months following the event. The conference call details are as follows:
Webcast Link: investor.liveoakbank.com Registration: Name and Email Required Multi-Factor Code: Provided After Registration
(1) See accompanying GAAP to Non-GAAP Reconciliation.
First Quarter 2025 Key Measures
(Dollars in thousands, except per share data)
Increase (Decrease)
1Q 2025
4Q 2024
Dollars
Percent
1Q 2024
Total revenue (1)
$
126,113
$
128,067
$
(1,954
)
(1.5
)%
$
116,208
Total noninterest expense
84,017
81,257
2,760
3.4
77,737
Income before taxes
13,132
13,229
(97
)
(0.7
)
22,107
Effective tax rate
26.4
%
25.6
%
n/a
n/a
(24.8
)%
Net income attributable to Live Oak Bancshares, Inc.
$
9,717
$
9,900
$
(183
)
(1.8
)%
$
27,586
Diluted earnings per share
0.21
0.22
(0.01
)
(5
)
0.60
Loan and lease production:
Loans and leases originated
$
1,396,223
$
1,421,118
$
(24,895
)
(1.8
)%
$
805,129
% Fully funded
46.0
%
42.4
%
n/a
n/a
43.8
%
Total loans and leases:
$
11,061,866
$
10,579,376
$
482,490
4.6
%
$
9,223,310
Total assets:
13,595,704
12,943,380
652,324
5.0
11,505,569
Total deposits:
12,395,945
11,760,494
635,451
5.4
10,383,361
(1) Total revenue consists of net interest income and total noninterest income.
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; the impacts of any pandemic or public health situation on trade (including supply chains and export levels), travel, employee productivity and other economic activities that may have a destabilizing and negative effect on financial markets, economic activity and customer behavior; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; 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 or those of its third-party service providers; risks relating to the material weakness we identified in our internal control over financial reporting; technological risks and developments, including cyber threats, attacks, or events; 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; changes in political and economic conditions, including any prolonged U.S. government shutdown; the impact of heightened regulatory scrutiny of financial products and services and the Company's ability to comply with regulatory requirements and expectations; changes in tariffs and trade barriers, including potential changes in U.S. and international trade policies and the resulting impact on the Company and its customers; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget; adverse results, including related fees and expenses, from pending or future lawsuits, government investigations or private actions; 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. (NYSE: LOB) is a financial holding company and the parent company of Live Oak Bank. Live Oak Bancshares and its subsidiaries partner with businesses that share a groundbreaking focus on service and technology to redefine banking. To learn more, visit www.liveoak.bank.
Contacts:
Walter J. Phifer | CFO | Investor Relations | 910.202.6926 Claire Parker | Corporate Communications | Media Relations | 910.597.1592
Live Oak Bancshares, Inc. Quarterly Statements of Income (unaudited) (Dollars in thousands, except per share data)
Three Months Ended
1Q 2025 Change vs.
1Q 2025
4Q 2024
3Q 2024
2Q 2024
1Q 2024
4Q 2024
1Q 2024
Interest income
%
%
Loans and fees on loans
$
195,616
$
194,821
$
192,170
$
181,840
$
176,010
0.4
11.1
Investment securities, taxable
11,089
10,490
9,750
9,219
8,954
5.7
23.8
Other interest earning assets
6,400
7,257
7,016
7,389
7,456
(11.8
)
(14.2
)
Total interest income
213,105
212,568
208,936
198,448
192,420
0.3
10.7
Interest expense
Deposits
110,888
113,357
110,174
105,358
101,998
(2.2
)
8.7
Borrowings
1,685
1,737
1,762
1,770
311
(3.0
)
441.8
Total interest expense
112,573
115,094
111,936
107,128
102,309
(2.2
)
10.0
Net interest income
100,532
97,474
97,000
91,320
90,111
3.1
11.6
Provision for loan and lease credit losses
28,964
33,581
34,502
11,765
16,364
(13.7
)
77.0
Net interest income after provision for loan and lease credit losses
71,568
63,893
62,498
79,555
73,747
12.0
(3.0
)
Noninterest income
Loan servicing revenue
8,298
8,524
8,040
7,347
7,624
(2.7
)
8.8
Loan servicing asset revaluation
(4,728
)
(2,326
)
(4,207
)
(2,878
)
(2,744
)
(103.3
)
(72.3
)
Net gains on sales of loans
18,648
18,356
16,646
14,395
11,502
1.6
62.1
Net (loss) gain on loans accounted for under the fair value option
(1,034
)
195
2,255
172
(219
)
(630.3
)
(372.1
)
Equity method investments (loss) income
(2,239
)
(2,739
)
(1,393
)
(1,767
)
(5,022
)
18.3
55.4
Equity security investments (losses) gains, net
20
12
909
161
(529
)
66.7
(103.8
)
Lease income
2,573
2,456
2,424
2,423
2,453
4.8
4.9
Management fee income
—
—
1,116
3,271
3,271
—
(100.0
)
Other noninterest income
4,043
6,115
7,142
11,035
9,761
(33.9
)
(58.6
)
Total noninterest income
25,581
30,593
32,932
34,159
26,097
(16.4
)
(2.0
)
Noninterest expense
Salaries and employee benefits
48,008
45,214
44,524
46,255
47,275
6.2
1.6
Travel expense
2,795
2,628
2,344
2,328
2,438
6.4
14.6
Professional services expense
3,024
2,797
3,287
3,061
1,878
8.1
61.0
Advertising and marketing expense
3,665
1,979
2,473
3,004
3,692
85.2
(0.7
)
Occupancy expense
2,737
2,558
2,807
2,388
2,247
7.0
21.8
Technology expense
9,251
9,406
9,081
7,996
7,723
(1.6
)
19.8
Equipment expense
3,745
3,769
3,472
3,511
3,074
(0.6
)
21.8
Other loan origination and maintenance expense
4,585
4,812
4,872
3,659
3,911
(4.7
)
17.2
Renewable energy tax credit investment (recovery) impairment
—
1,172
115
170
(927
)
(100.0
)
(100.0
)
FDIC insurance
3,551
3,053
1,933
2,649
3,200
16.3
11.0
Other expense
2,656
3,869
2,681
2,635
3,226
(31.4
)
(17.7
)
Total noninterest expense
84,017
81,257
77,589
77,656
77,737
3.4
8.1
Income before taxes
13,132
13,229
17,841
36,058
22,107
(0.7
)
(40.6
)
Income tax expense
3,464
3,386
4,816
9,095
(5,479
)
2.3
(163.2
)
Net income
9,668
9,843
13,025
26,963
27,586
(1.8
)
(65.0
)
Net loss attributable to non-controlling interest
49
57
—
—
—
(14.0
)
100.0
Net income attributable to Live Oak Bancshares, Inc.
$
9,717
$
9,900
$
13,025
$
26,963
$
27,586
(1.8
)
(64.8
)
Earnings per share
Basic
$
0.21
$
0.22
$
0.28
$
0.60
$
0.62
(4.5
)
(66.1
)
Diluted
$
0.21
$
0.22
$
0.28
$
0.59
$
0.60
(4.5
)
(65.0
)
Weighted average shares outstanding
Basic
45,377,965
45,224,470
45,073,482
44,974,942
44,762,308
Diluted
45,754,499
46,157,979
45,953,947
45,525,082
45,641,210
Live Oak Bancshares, Inc. Quarterly Balance Sheets (unaudited) (Dollars in thousands)
As of the quarter ended
1Q 2025 Change vs.
1Q 2025
4Q 2024
3Q 2024
2Q 2024
1Q 2024
4Q 2024
1Q 2024
Assets
%
%
Cash and due from banks
$
744,263
$
608,800
$
666,585
$
615,449
$
597,394
22.3
24.6
Certificates of deposit with other banks
250
250
250
250
250
—
—
Investment securities available-for-sale
1,312,680
1,248,203
1,233,466
1,151,195
1,120,622
5.2
17.1
Loans held for sale
367,955
346,002
359,977
363,632
310,749
6.3
18.4
Loans and leases held for investment (1)
10,693,911
10,233,374
9,831,891
9,172,134
8,912,561
4.5
20.0
Allowance for credit losses on loans and leases
(190,184
)
(167,516
)
(168,737
)
(137,867
)
(139,041
)
(13.5
)
(36.8
)
Net loans and leases
10,503,727
10,065,858
9,663,154
9,034,267
8,773,520
4.4
19.7
Premises and equipment, net
259,113
264,059
267,032
267,864
258,071
(1.9
)
0.4
Foreclosed assets
2,108
1,944
8,015
8,015
8,561
8.4
(75.4
)
Servicing assets
56,911
56,144
52,553
51,528
49,343
1.4
15.3
Other assets
348,697
352,120
356,314
376,370
387,059
(1.0
)
(9.9
)
Total assets
$
13,595,704
$
12,943,380
$
12,607,346
$
11,868,570
$
11,505,569
5.0
18.2
Liabilities and shareholders' equity
Liabilities
Deposits:
Noninterest-bearing
$
386,108
$
318,890
$
258,844
$
264,013
$
226,668
21.1
70.3
Interest-bearing
12,009,837
11,441,604
11,141,703
10,443,018
10,156,693
5.0
18.2
Total deposits
12,395,945
11,760,494
11,400,547
10,707,031
10,383,361
5.4
19.4
Borrowings
110,247
112,820
115,371
117,745
120,242
(2.3
)
(8.3
)
Other liabilities
58,065
66,570
83,672
82,745
74,248
(12.8
)
(21.8
)
Total liabilities
12,564,257
11,939,884
11,599,590
10,907,521
10,577,851
5.2
18.8
Shareholders' equity
Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding
—
—
—
—
—
—
—
Class A common stock (voting)
370,513
365,607
361,925
356,381
349,648
1.3
6.0
Class B common stock (non-voting)
—
—
—
—
—
—
—
Retained earnings
724,215
715,767
707,026
695,172
669,307
1.2
8.2
Accumulated other comprehensive loss
(67,698
)
(82,344
)
(61,195
)
(90,504
)
(91,237
)
17.8
25.8
Total shareholders' equity attributed to Live Oak Bancshares, Inc.
1,027,030
999,030
1,007,756
961,049
927,718
2.8
10.7
Non-controlling interest
4,417
4,466
—
—
—
(1.1
)
100.0
Total shareholders' equity
1,031,447
1,003,496
1,007,756
961,049
927,718
2.8
11.2
Total liabilities and shareholders' equity
$
13,595,704
$
12,943,380
$
12,607,346
$
11,868,570
$
11,505,569
5.0
18.2
(1) Includes $316.8 million, $328.7 million, $343.4 million, $363.0 million and $379.2 million measured at fair value for the quarters ended March 31, 2025, December 31, 2024, September 30, 2024, June 30, 2024, and March 31, 2024 respectively.
Live Oak Bancshares, Inc. Quarterly Selected Financial Data (Dollars in thousands, except per share data)
As of and for the three months ended
1Q 2025
4Q 2024
3Q 2024
2Q 2024
1Q 2024
Income Statement Data
Net income attributable to Live Oak Bancshares, Inc.
$
9,717
$
9,900
$
13,025
$
26,963
$
27,586
Per Common Share
Net income, diluted
$
0.21
$
0.22
$
0.28
$
0.59
$
0.60
Dividends declared
0.03
0.03
0.03
0.03
0.03
Book value
22.62
22.12
22.32
21.35
20.64
Tangible book value (1)
22.55
22.05
22.24
21.28
20.57
Performance Ratios
Return on average assets (annualized)
0.30
%
0.31
%
0.43
%
0.93
%
0.98
%
Return on average equity (annualized)
3.78
3.85
5.21
11.39
11.93
Net interest margin
3.20
3.15
3.33
3.28
3.33
Efficiency ratio (1)
66.62
63.45
59.72
61.89
66.89
Noninterest income to total revenue
20.28
23.89
25.35
27.22
22.46
Selected Loan Metrics
Loans and leases originated
$
1,396,223
$
1,421,118
$
1,757,856
$
1,171,141
$
805,129
Outstanding balance of sold loans serviced
4,949,962
4,715,895
4,452,750
4,292,857
4,329,097
Asset Quality Ratios
Allowance for credit losses to loans and leases held for investment (3)
1.83
%
1.69
%
1.78
%
1.57
%
1.63
%
Net charge-offs (3)
$
6,774
$
33,566
$
1,710
$
8,253
$
3,163
Net charge-offs to average loans and leases held for investment (2) (3)
0.27
%
1.39
%
0.08
%
0.38
%
0.15
%
Nonperforming loans and leases at historical cost (3)
Unguaranteed
$
99,907
$
81,412
$
49,398
$
37,340
$
43,117
Guaranteed
322,993
222,885
166,177
122,752
105,351
Total
422,900
304,297
215,575
160,092
148,468
Unguaranteed nonperforming historical cost loans and leases, to loans and leases held for investment (3)
0.96
%
0.82
%
0.52
%
0.42
%
0.51
%
Nonperforming loans at fair value (4)
Unguaranteed
$
9,938
$
9,115
$
8,672
$
9,590
$
7,942
Guaranteed
58,100
54,873
49,822
51,570
47,620
Total
68,038
63,988
58,494
61,160
55,562
Unguaranteed nonperforming fair value loans to fair value loans held for investment (4)
3.14
%
2.77
%
2.53
%
2.64
%
2.09
%
Capital Ratios
Common equity tier 1 capital (to risk-weighted assets)
10.70
%
11.04
%
11.19
%
11.85
%
11.89
%
Tier 1 leverage capital (to average assets)
8.03
8.21
8.60
8.71
8.69
Notes to Quarterly Selected Financial Data (1) See accompanying GAAP to Non-GAAP Reconciliation. (2) Quarterly net charge-offs as a percentage of quarterly average loans and leases held for investment, annualized. (3) Loans and leases at historical cost only (excludes loans measured at fair value). (4) Loans accounted for under the fair value option only (excludes loans and leases carried at historical cost).
Live Oak Bancshares, Inc. Quarterly Average Balances and Net Interest Margin (Dollars in thousands)
Three Months Ended March 31, 2025
Three Months Ended December 31, 2024
Average Balance
Interest
Average Yield/Rate
Average Balance
Interest
Average Yield/Rate
Interest-earning assets:
Interest-earning balances in other banks
$
581,267
$
6,400
4.47
%
$
603,758
$
7,257
4.78
%
Investment securities
1,379,797
11,089
3.26
1,340,027
10,490
3.11
Loans held for sale
407,953
8,612
8.56
339,394
7,361
8.63
Loans and leases held for investment (1)
10,388,872
187,004
7.30
10,030,353
187,460
7.44
Total interest-earning assets
12,757,889
213,105
6.77
12,313,532
212,568
6.87
Less: Allowance for credit losses on loans and leases
(165,320
)
(155,498
)
Noninterest-earning assets
534,133
551,265
Total assets
$
13,126,702
$
12,709,299
Interest-bearing liabilities:
Interest-bearing checking
$
350,491
$
3,929
4.55
%
$
350,304
$
4,350
4.94
%
Savings
5,540,147
51,604
3.78
5,333,338
52,308
3.90
Money market accounts
127,908
120
0.38
138,021
176
0.51
Certificates of deposit
5,563,004
55,235
4.03
5,376,290
56,523
4.18
Total deposits
11,581,550
110,888
3.88
11,197,953
113,357
4.03
Borrowings
111,919
1,685
6.11
114,561
1,737
6.03
Total interest-bearing liabilities
11,693,469
112,573
3.90
11,312,514
115,094
4.05
Noninterest-bearing deposits
342,482
281,874
Noninterest-bearing liabilities
58,739
83,373
Shareholders' equity
1,027,547
1,028,426
Non-controlling interest
4,465
3,112
Total liabilities and shareholders' equity
$
13,126,702
$
12,709,299
Net interest income and interest rate spread
$
100,532
2.87
%
$
97,474
2.82
%
Net interest margin
3.20
3.15
Ratio of average interest-earning assets to average interest-bearing liabilities
109.10
%
108.85
%
(1) Average loan and lease balances include non-accruing loans and leases.
Live Oak Bancshares, Inc. GAAP to Non-GAAP Reconciliation (Dollars in thousands)
As of and for the three months ended
1Q 2025
4Q 2024
3Q 2024
2Q 2024
1Q 2024
Total shareholders' equity
$
1,031,447
$
1,003,496
$
1,007,756
$
961,049
$
927,718
Less:
Goodwill
1,797
1,797
1,797
1,797
1,797
Other intangible assets
1,529
1,568
1,606
1,644
1,682
Tangible shareholders' equity (a)
$
1,028,121
$
1,000,131
$
1,004,353
$
957,608
$
924,239
Shares outstanding (c)
45,589,633
45,359,425
45,151,691
45,003,856
44,938,673
Total assets
$
13,595,704
$
12,943,380
$
12,607,346
$
11,868,570
$
11,505,569
Less:
Goodwill
1,797
1,797
1,797
1,797
1,797
Other intangible assets
1,529
1,568
1,606
1,644
1,682
Tangible assets (b)
$
13,592,378
$
12,940,015
$
12,603,943
$
11,865,129
$
11,502,090
Tangible shareholders' equity to tangible assets (a/b)
7.56
%
7.73
%
7.97
%
8.07
%
8.04
%
Tangible book value per share (a/c)
$
22.55
$
22.05
$
22.24
$
21.28
$
20.57
Efficiency ratio:
Noninterest expense (d)
$
84,017
$
81,257
$
77,589
$
77,656
$
77,737
Net interest income
100,532
97,474
97,000
91,320
90,111
Noninterest income
25,581
30,593
32,932
34,159
26,097
Total revenue (e)
$
126,113
$
128,067
$
129,932
$
125,479
$
116,208
Efficiency ratio (d/e)
66.62
%
63.45
%
59.72
%
61.89
%
66.89
%
Pre-provision net revenue (e-d)
$
42,096
$
46,810
$
52,343
$
47,823
$
38,471
This press release presents non-GAAP financial measures. The adjustments to reconcile from the non-GAAP financial measures to the applicable GAAP financial measure are included where applicable in financial results presented in accordance with GAAP. The Company considers these adjustments to be relevant to ongoing operating results. The Company believes that excluding the amounts associated with these adjustments to present the non-GAAP financial measures provides a meaningful base for period-to-period comparisons, which will assist regulators, investors, and analysts in analyzing the operating results or financial position of the Company. The non-GAAP financial measures are used by management to assess the performance of the Company's business for presentations of Company performance to investors, and for other reasons as may be requested by investors and analysts. The Company further believes that presenting the non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis as that applied by management. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although non-GAAP financial measures are frequently used by shareholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.
