Live Oak Bancshares, Inc. Reports First Quarter 2022 Results
Live Oak Bancshares reported a first quarter 2022 net income of $34.5 million or $0.76 per diluted share, marking a 14% increase from the previous year. Total revenue stood at $110.4 million, a 1% decrease from Q4 2021. Loan and lease production decreased by 20% to $865 million, but showed a 28.6% increase year-over-year. Total assets grew to $8.62 billion, up 5% from Q1 2021. Notably, deposits rose to $7.64 billion, a 7% increase. Live Oak's focus remains on serving small business owners with a robust financial foundation.
- Net income increased by $4.4 million or 14% year-over-year.
- Total assets grew by $406.6 million, or 5%, from Q1 2021.
- Total deposits rose to $7.64 billion, up $1.32 billion or 7% year-over-year.
- Net interest income increased to $77.8 million, reflecting growth in the loan portfolio.
- Total revenue decreased by $947,000, or 1%, compared to Q4 2021.
- Loan originations decreased by $218.6 million, or 20% from Q4 2021.
- Noninterest expense increased by $6 million, or 10% year-over-year.
WILMINGTON, N.C., April 27, 2022 (GLOBE NEWSWIRE) -- Live Oak Bancshares, Inc. (Nasdaq: LOB) (“Live Oak” or “the Company”) today reported first quarter of 2022 net income of
“Live Oak Bank continues to focus on soundness, profitability and growth – in that order – and this quarter sustains the momentum of our franchise with strong balance sheet growth, credit quality and a differentiated model dedicated to America’s small business owners,” said Live Oak Chairman and CEO James S. (Chip) Mahan, III. “The beginning of 2022 provided continued indications that the small business market is robust and there remain many exciting opportunities for Live Oak to serve American entrepreneurs on a next-generation platform.”
First Quarter 2022 Key Measures
| (Dollars in thousands, except per share data) | Increase (Decrease) | |||||||||||||||||||
| 1Q 2022 | 4Q 2021 | Dollars | Percent | 1Q 2021 | ||||||||||||||||
| Total revenue (1) | $ | 110,447 | $ | 111,394 | $ | (947 | ) | (1 | )% | $ | 101,007 | |||||||||
| Total noninterest expense | 65,714 | 59,698 | 6,016 | 10 | 58,272 | |||||||||||||||
| Income before taxes | 42,897 | 47,778 | (4,881 | ) | (10 | ) | 43,608 | |||||||||||||
| Effective tax rate | 19.6 | % | 36.9 | % | n/a | n/a | 9.6 | % | ||||||||||||
| Net income | $ | 34,509 | $ | 30,147 | $ | 4,362 | 14 | % | $ | 39,427 | ||||||||||
| Diluted earnings per share | 0.76 | 0.66 | 0.10 | 15 | 0.88 | |||||||||||||||
| Loan and lease production: | ||||||||||||||||||||
| Loans and leases originated | $ | 865,063 | $ | 1,083,623 | $ | (218,560 | ) | (20 | )% | $ | 1,180,219 | |||||||||
| % Fully funded | 55.9 | % | 54.1 | % | n/a | n/a | 77.7 | % | ||||||||||||
| Total loans and leases: | $ | 6,766,876 | $ | 6,637,781 | $ | 129,095 | 2 | % | $ | 6,533,495 | ||||||||||
| Total loans and leases, excluding PPP loans: | 6,636,056 | 6,375,903 | 260,153 | 4 | 5,088,437 | |||||||||||||||
| Total assets: | 8,619,966 | 8,213,393 | 406,573 | 5 | 8,417,875 | |||||||||||||||
| Total deposits: | 7,637,163 | 7,112,044 | 525,119 | 7 | 6,316,004 | |||||||||||||||
(1) Total revenue consists of net interest income and total noninterest income.
Loans and Leases
As of March 31, 2022, the total loan and lease portfolio was
The total loan and lease portfolio of
Loan and lease originations totaled
Deposits
Total deposits increased to
Average total interest-bearing deposits for the first quarter of 2022 increased
Borrowings
Borrowings totaled
Net Interest Income
Net interest income for the first quarter of 2022 increased to
The increase for the first quarter of 2022 compared to the first quarter of 2021 was driven by the significant growth in the total loan and lease portfolio combined with the reduction in the average rate on interest bearing liabilities from
The net interest margin remained level compared to the fourth quarter of 2021 at
Noninterest Income
Noninterest income for the first quarter of 2022 increased to
The loan servicing asset revaluation resulted in a loss of
Net gains on sales of loans increased
The net gain on loans accounted for under the fair value option totaled
Equity method investments had a net loss totaling
Noninterest Expense
Noninterest expense for the first quarter of 2022 totaled
Salaries and employee benefits for the first quarter of 2022 increased to
Travel expense for the first quarter of 2022 increased to
Advertising and marketing expense increased to
Technology expense is a new line item which replaces data processing expense in previous income statements. This new line item includes data processing expense and other non-compensation related costs reclassified from equipment expense and other expense line items for software, computer and telecommunications. This reclassification was made primarily to improve the clarity of expenses related to the Company’s ongoing technology initiatives and is reflected in all comparative periods of this release. Technology expense for the first quarter of 2022 was
Partially offsetting the increase in noninterest expense for the first quarter of 2022 compared to the first quarter of 2021 was decreased impairment charges of
Asset Quality
During the first quarter of 2022, the Company recognized net charge-offs for loans carried at historical cost of
Unguaranteed nonperforming (nonaccrual) loans and leases, excluding
Provision for (Recovery of) Loan and Lease Credit Losses
The provision for loan and lease credit losses for the first quarter of 2022 totaled
The allowance for credit losses on loans and leases totaled
Income Tax
Income tax expense and related effective tax rate was
The higher level of income tax expense for the first quarter of 2022 compared to the first quarter of 2021 was primarily driven by vesting of restricted stock unit awards with market price conditions during the first three months of 2021.
The lower level of income tax expense for the first quarter of 2022 compared to the fourth quarter of 2021 was primarily the product of the above mentioned recognition of fewer investment tax credits in the last quarter of 2021 than the Company had anticipated in its annual effective tax rate for that year.
Shareholders’ Equity
Total shareholders’ equity decreased by
During the first quarter of 2022, all of the remaining shares of Class B common stock (non-voting) amounting to 125,024 shares were converted to Class A common stock (voting) in connection with private sales.
Conference Call
Live Oak will host a conference call to discuss quarterly results at 9:00 a.m. ET tomorrow morning (April 28, 2022). 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 8584099. 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 conference call will also be available until May 5, 2022 and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) with conference ID 8584099.
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 potential impacts of the Coronavirus Disease 2019 (COVID-19) pandemic 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; 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 scrutiny of financial products and services and the Company's ability to comply with regulatory requirements and expectations; 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. (Nasdaq: 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.liveoakbank.com.
Contacts:
William C. (BJ) Losch, III | CFO | Investor Relations | 910.765.9966
Claire Parker | SVP 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 2022 Change vs. | |||||||||||||||||||||||||||
| 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | 4Q 2021 | 1Q 2021 | ||||||||||||||||||||||
| Interest income | % | % | ||||||||||||||||||||||||||
| Loans and fees on loans | $ | 89,198 | $ | 88,577 | $ | 89,388 | $ | 84,780 | $ | 84,993 | 0.7 | 4.9 | ||||||||||||||||
| Investment securities, taxable | 3,399 | 3,455 | 3,147 | 2,975 | 2,929 | (1.6 | ) | 16.0 | ||||||||||||||||||||
| Other interest earning assets | 185 | 171 | 224 | 244 | 303 | 8.2 | (38.9 | ) | ||||||||||||||||||||
| Total interest income | 92,782 | 92,203 | 92,786 | 87,999 | 88,225 | 0.6 | 5.2 | |||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||
| Deposits | 14,348 | 13,817 | 14,159 | 14,820 | 16,944 | 3.8 | (15.3 | ) | ||||||||||||||||||||
| Borrowings | 655 | 748 | 892 | 1,717 | 1,331 | (12.4 | ) | (50.8 | ) | |||||||||||||||||||
| Total interest expense | 15,003 | 14,565 | 15,051 | 16,537 | 18,275 | 3.0 | (17.9 | ) | ||||||||||||||||||||
| Net interest income | 77,779 | 77,638 | 77,735 | 71,462 | 69,950 | 0.2 | 11.2 | |||||||||||||||||||||
| Provision for (recovery of) loan and lease credit losses | 1,836 | 3,918 | 4,319 | 7,846 | (873 | ) | (53.1 | ) | (310.3 | ) | ||||||||||||||||||
| Net interest income after provision for (recovery of) loan and lease credit losses | 75,943 | 73,720 | 73,416 | 63,616 | 70,823 | 3.0 | 7.2 | |||||||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||||
| Loan servicing revenue | 6,356 | 6,289 | 6,278 | 6,218 | 6,434 | 1.1 | (1.2 | ) | ||||||||||||||||||||
| Loan servicing asset revaluation | (1,569 | ) | (4,160 | ) | (5,878 | ) | (3,181 | ) | 1,493 | 62.3 | (205.1 | ) | ||||||||||||||||
| Net gains on sales of loans | 20,977 | 20,257 | 18,860 | 16,234 | 11,929 | 3.6 | 75.8 | |||||||||||||||||||||
| Net gain (loss) on loans accounted for under the fair value option | 516 | (66 | ) | (1,030 | ) | 1,135 | 4,218 | 881.8 | (87.8 | ) | ||||||||||||||||||
| Equity method investments income (loss) | (2,124 | ) | 2,969 | (1,250 | ) | (2,278 | ) | (1,157 | ) | (171.5 | ) | (83.6 | ) | |||||||||||||||
| Equity security investments gains (losses), net | (44 | ) | 218 | 176 | 44,253 | 105 | (120.2 | ) | (141.9 | ) | ||||||||||||||||||
| Lease income | 2,503 | 2,521 | 2,527 | 2,616 | 2,599 | (0.7 | ) | (3.7 | ) | |||||||||||||||||||
| Management fee income | 1,488 | 1,482 | 1,489 | 1,473 | 1,934 | 0.4 | (23.1 | ) | ||||||||||||||||||||
| Other noninterest income | 4,565 | 4,246 | 4,104 | 3,641 | 3,502 | 7.5 | 30.4 | |||||||||||||||||||||
| Total noninterest income | 32,668 | 33,756 | 25,276 | 70,111 | 31,057 | (3.2 | ) | 5.2 | ||||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||||
| Salaries and employee benefits | 38,507 | 32,464 | 28,202 | 32,900 | 31,366 | 18.6 | 22.8 | |||||||||||||||||||||
| Travel expense | 1,897 | 1,782 | 1,819 | 1,549 | 659 | 6.5 | 187.9 | |||||||||||||||||||||
| Professional services expense | 2,791 | 3,724 | 4,251 | 3,329 | 3,831 | (25.1 | ) | (27.1 | ) | |||||||||||||||||||
| Advertising and marketing expense | 1,729 | 1,844 | 1,631 | 875 | 652 | (6.2 | ) | 165.2 | ||||||||||||||||||||
| Occupancy expense | 2,327 | 2,045 | 2,042 | 2,224 | 2,112 | 13.8 | 10.2 | |||||||||||||||||||||
| Technology expense | 6,053 | 6,489 | 6,150 | 5,131 | 4,878 | (6.7 | ) | 24.1 | ||||||||||||||||||||
| Equipment expense | 3,816 | 3,741 | 3,706 | 3,721 | 3,701 | 2.0 | 3.1 | |||||||||||||||||||||
| Other loan origination and maintenance expense | 3,113 | 3,406 | 3,489 | 3,307 | 3,327 | (8.6 | ) | (6.4 | ) | |||||||||||||||||||
| Renewable energy tax credit investment impairment | — | — | 60 | — | 3,127 | — | (100.0 | ) | ||||||||||||||||||||
| FDIC insurance | 1,972 | 1,931 | 1,670 | 1,704 | 1,765 | 2.1 | 11.7 | |||||||||||||||||||||
| Other expense | 3,509 | 2,272 | 2,439 | 2,818 | 2,854 | 54.4 | 23.0 | |||||||||||||||||||||
| Total noninterest expense | 65,714 | 59,698 | 55,459 | 57,558 | 58,272 | 10.1 | 12.8 | |||||||||||||||||||||
| Income before taxes | 42,897 | 47,778 | 43,233 | 76,169 | 43,608 | (10.2 | ) | (1.6 | ) | |||||||||||||||||||
| Income tax expense | 8,388 | 17,631 | 9,394 | 12,587 | 4,181 | (52.4 | ) | 100.6 | ||||||||||||||||||||
| Net income | $ | 34,509 | $ | 30,147 | $ | 33,839 | $ | 63,582 | $ | 39,427 | 14.5 | (12.5 | ) | |||||||||||||||
| Earnings per share | ||||||||||||||||||||||||||||
| Basic | $ | 0.79 | $ | 0.69 | $ | 0.78 | $ | 1.48 | $ | 0.92 | 14.5 | (14.1 | ) | |||||||||||||||
| Diluted | $ | 0.76 | $ | 0.66 | $ | 0.76 | $ | 1.41 | $ | 0.88 | 15.2 | (13.6 | ) | |||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||||||
| Basic | 43,701,943 | 43,492,172 | 43,329,889 | 43,173,312 | 42,673,615 | |||||||||||||||||||||||
| Diluted | 45,227,536 | 45,474,530 | 45,040,690 | 45,062,392 | 44,696,850 | |||||||||||||||||||||||
Live Oak Bancshares, Inc.
Quarterly Balance Sheets (unaudited)
(Dollars in thousands)
| As of the quarter ended | 1Q 2022 Change vs. | |||||||||||||||||||||||||||
| 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | 4Q 2021 | 1Q 2021 | ||||||||||||||||||||||
| Assets | % | % | ||||||||||||||||||||||||||
| Cash and due from banks | $ | 477,778 | $ | 187,203 | $ | 336,362 | $ | 428,907 | $ | 630,081 | 155.2 | (24.2 | ) | |||||||||||||||
| Federal funds sold | 29,993 | 16,547 | 10,672 | 9,917 | 5,461 | 81.3 | 449.2 | |||||||||||||||||||||
| Certificates of deposit with other banks | 4,250 | 4,750 | 6,000 | 6,000 | 6,500 | (10.5 | ) | (34.6 | ) | |||||||||||||||||||
| Investment securities available-for-sale | 844,577 | 906,052 | 861,377 | 817,896 | 775,177 | (6.8 | ) | 9.0 | ||||||||||||||||||||
| Loans held for sale (1) | 1,028,635 | 1,116,519 | 1,042,756 | 1,064,911 | 1,076,741 | (7.9 | ) | (4.5 | ) | |||||||||||||||||||
| Loans and leases held for investment (2) | 5,738,241 | 5,521,262 | 5,418,611 | 5,441,423 | 5,456,754 | 3.9 | 5.2 | |||||||||||||||||||||
| Allowance for credit losses on loans and leases | (63,058 | ) | (63,584 | ) | (59,681 | ) | (57,848 | ) | (52,417 | ) | 0.8 | (20.3 | ) | |||||||||||||||
| Net loans and leases | 5,675,183 | 5,457,678 | 5,358,930 | 5,383,575 | 5,404,337 | 4.0 | 5.0 | |||||||||||||||||||||
| Premises and equipment, net | 254,865 | 240,196 | 244,212 | 249,069 | 253,774 | 6.1 | 0.4 | |||||||||||||||||||||
| Foreclosed assets | 198 | 620 | 883 | 1,793 | 4,185 | (68.1 | ) | (95.3 | ) | |||||||||||||||||||
| Servicing assets | 36,286 | 33,574 | 33,968 | 36,966 | 37,744 | 8.1 | (3.9 | ) | ||||||||||||||||||||
| Other assets | 268,201 | 250,254 | 242,181 | 244,152 | 223,875 | 7.2 | 19.8 | |||||||||||||||||||||
| Total assets | $ | 8,619,966 | $ | 8,213,393 | $ | 8,137,341 | $ | 8,243,186 | $ | 8,417,875 | 5.0 | 2.4 | ||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||
| Noninterest-bearing | $ | 86,342 | $ | 89,279 | $ | 77,026 | $ | 89,768 | $ | 75,794 | (3.3 | ) | 13.9 | |||||||||||||||
| Interest-bearing | 7,550,821 | 7,022,765 | 6,739,587 | 6,431,065 | 6,240,210 | 7.5 | 21.0 | |||||||||||||||||||||
| Total deposits | 7,637,163 | 7,112,044 | 6,816,613 | 6,520,833 | 6,316,004 | 7.4 | 20.9 | |||||||||||||||||||||
| Borrowings | 196,911 | 318,289 | 575,021 | 1,012,431 | 1,465,961 | (38.1 | ) | (86.6 | ) | |||||||||||||||||||
| Other liabilities | 72,565 | 67,927 | 56,284 | 52,575 | 45,550 | 6.8 | 59.3 | |||||||||||||||||||||
| Total liabilities | 7,906,639 | 7,498,260 | 7,447,918 | 7,585,839 | 7,827,515 | 5.4 | 1.0 | |||||||||||||||||||||
| Shareholders’ equity | ||||||||||||||||||||||||||||
| Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding | — | — | — | — | — | — | — | |||||||||||||||||||||
| Class A common stock (voting) | 315,607 | 310,970 | 304,085 | 299,809 | 298,525 | 1.5 | 5.7 | |||||||||||||||||||||
| Class B common stock (non-voting) | — | 1,324 | 5,404 | 5,404 | 7,330 | (100.0 | ) | (100.0 | ) | |||||||||||||||||||
| Retained earnings | 434,226 | 400,893 | 371,869 | 339,011 | 275,377 | 8.3 | 57.7 | |||||||||||||||||||||
| Accumulated other comprehensive (loss) income | (36,506 | ) | 1,946 | 8,065 | 13,123 | 9,128 | (1,976.0 | ) | (499.9 | ) | ||||||||||||||||||
| Total shareholders' equity | 713,327 | 715,133 | 689,423 | 657,347 | 590,360 | (0.3 | ) | 20.8 | ||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 8,619,966 | $ | 8,213,393 | $ | 8,137,341 | $ | 8,243,186 | $ | 8,417,875 | 5.0 | 2.4 | ||||||||||||||||
(1) Includes
(2) Includes
Live Oak Bancshares, Inc.
Quarterly Selected Financial Data
(Dollars in thousands, except per share data)
| As of and for the three months ended | ||||||||||||||||||||
| 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | ||||||||||||||||
| Income Statement Data | ||||||||||||||||||||
| Net income | $ | 34,509 | $ | 30,147 | $ | 33,839 | $ | 63,582 | $ | 39,427 | ||||||||||
| Per Common Share | ||||||||||||||||||||
| Net income, diluted | $ | 0.76 | $ | 0.66 | $ | 0.76 | $ | 1.41 | $ | 0.88 | ||||||||||
| Dividends declared | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | |||||||||||||||
| Book value | 16.29 | 16.39 | 15.89 | 15.19 | 13.74 | |||||||||||||||
| Tangible book value (1) | 16.20 | 16.31 | 15.80 | 15.10 | 13.65 | |||||||||||||||
| Performance Ratios | ||||||||||||||||||||
| Return on average assets (annualized) | 1.65 | % | 1.47 | % | 1.64 | % | 3.01 | % | 1.98 | % | ||||||||||
| Return on average equity (annualized) | 18.94 | 16.80 | 19.67 | 41.30 | 26.89 | |||||||||||||||
| Net interest margin | 4.02 | 4.02 | 3.99 | 3.63 | 3.81 | |||||||||||||||
| Efficiency ratio (1) | 59.50 | 53.59 | 53.84 | 40.66 | 57.69 | |||||||||||||||
| Noninterest income to total revenue | 29.58 | 30.30 | 24.54 | 49.52 | 30.75 | |||||||||||||||
| Selected Loan Metrics | ||||||||||||||||||||
| Loans and leases originated | $ | 865,063 | $ | 1,083,623 | $ | 1,063,190 | $ | 1,153,693 | $ | 1,180,219 | ||||||||||
| Outstanding balance of sold loans serviced | 3,381,883 | 3,298,828 | 3,212,271 | 3,134,068 | 3,216,727 | |||||||||||||||
| Asset Quality Ratios | ||||||||||||||||||||
| Allowance for credit losses to loans and leases held for investment (3) | 1.23 | % | 1.30 | % | 1.26 | % | 1.23 | % | 1.12 | % | ||||||||||
| Net charge-offs (recoveries) (3) | $ | 2,362 | $ | 15 | $ | 2,485 | $ | 2,417 | $ | (984 | ) | |||||||||
| Net charge-offs (recoveries) to average loans and leases held for investment (2) (3) | 0.19 | % | 0.00 | % | 0.21 | % | 0.21 | % | (0.09 | )% | ||||||||||
| Nonperforming loans and leases at historical cost (3) | ||||||||||||||||||||
| Unguaranteed | $ | 19,475 | $ | 15,987 | $ | 20,450 | $ | 22,458 | $ | 24,738 | ||||||||||
| Guaranteed | 32,828 | 26,546 | 28,888 | 25,551 | 32,633 | |||||||||||||||
| Total | 52,303 | 42,533 | 49,338 | 48,009 | 57,371 | |||||||||||||||
| Unguaranteed nonperforming historical cost loans and leases, to loans and leases held for investment (3) | 0.38 | % | 0.33 | % | 0.43 | % | 0.48 | % | 0.53 | % | ||||||||||
| Nonperforming loans at fair value (4) | ||||||||||||||||||||
| Unguaranteed | $ | 4,451 | $ | 4,791 | $ | 6,303 | $ | 5,503 | $ | 5,838 | ||||||||||
| Guaranteed | 30,850 | 33,471 | 36,708 | 34,323 | 34,396 | |||||||||||||||
| Total | 35,301 | 38,262 | 43,011 | 39,826 | 40,234 | |||||||||||||||
| Unguaranteed nonperforming fair value loans to loans held for investment (4) | 0.74 | % | 0.74 | % | 0.90 | % | 0.74 | % | 0.74 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Common equity tier 1 capital (to risk-weighted assets) | 12.10 | % | 12.38 | % | 12.56 | % | 12.45 | % | 12.16 | % | ||||||||||
| Tier 1 leverage capital (to average assets) | 8.87 | 8.87 | 8.82 | 8.70 | 8.50 | |||||||||||||||
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, 2022 | Three Months Ended December 31, 2021 | |||||||||||||||||||||||
| Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | |||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||||
| Interest earning balances in other banks | $ | 223,638 | $ | 179 | 0.32 | % | $ | 331,077 | $ | 168 | 0.20 | % | ||||||||||||
| Federal funds sold | 9,197 | 6 | 0.26 | 8,515 | 3 | 0.14 | ||||||||||||||||||
| Investment securities | 895,592 | 3,399 | 1.54 | 879,138 | 3,455 | 1.56 | ||||||||||||||||||
| Loans held for sale | 1,115,441 | 15,183 | 5.52 | 1,059,672 | 14,661 | 5.49 | ||||||||||||||||||
| Loans and leases held for investment (1) | 5,609,338 | 74,015 | 5.35 | 5,391,283 | 73,916 | 5.44 | ||||||||||||||||||
| Total interest earning assets | 7,853,206 | 92,782 | 4.79 | 7,669,685 | 92,203 | 4.77 | ||||||||||||||||||
| Less: allowance for credit losses on loans and leases | (62,732 | ) | (59,088 | ) | ||||||||||||||||||||
| Non-interest earning assets | 588,171 | 569,493 | ||||||||||||||||||||||
| Total assets | $ | 8,378,645 | $ | 8,180,090 | ||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||
| Savings | $ | 3,605,905 | $ | 4,840 | 0.54 | % | $ | 3,470,813 | $ | 4,487 | 0.51 | % | ||||||||||||
| Money market accounts | 91,463 | 54 | 0.24 | 97,230 | 61 | 0.25 | ||||||||||||||||||
| Certificates of deposit | 3,551,310 | 9,454 | 1.08 | 3,337,399 | 9,269 | 1.10 | ||||||||||||||||||
| Total interest bearing deposits | 7,248,678 | 14,348 | 0.80 | 6,905,442 | 13,817 | 0.79 | ||||||||||||||||||
| Borrowings | 262,485 | 655 | 1.01 | 427,044 | 748 | 0.69 | ||||||||||||||||||
| Total interest bearing liabilities | 7,511,163 | 15,003 | 0.81 | 7,332,486 | 14,565 | 0.79 | ||||||||||||||||||
| Non-interest bearing deposits | 86,570 | 79,479 | ||||||||||||||||||||||
| Non-interest bearing liabilities | 51,940 | 50,190 | ||||||||||||||||||||||
| Shareholders' equity | 728,972 | 717,935 | ||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 8,378,645 | $ | 8,180,090 | ||||||||||||||||||||
| Net interest income and interest rate spread | $ | 77,779 | 3.98 | % | $ | 77,638 | 3.98 | % | ||||||||||||||||
| Net interest margin | 4.02 | 4.02 | ||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 104.55 | % | 104.60 | % | ||||||||||||||||||||
(1) Average loan and lease balances include non-accruing loans.
Live Oak Bancshares, Inc.
GAAP to Non-GAAP Reconciliation
(Dollars in thousands)
| As of and for the three months ended | ||||||||||||||||||||
| 1Q 2022 | 4Q 2021 | 3Q 2021 | 2Q 2021 | 1Q 2021 | ||||||||||||||||
| Total shareholders’ equity | $ | 713,327 | $ | 715,133 | $ | 689,423 | $ | 657,347 | $ | 590,360 | ||||||||||
| Less: | ||||||||||||||||||||
| Goodwill | 1,797 | 1,797 | 1,797 | 1,797 | 1,797 | |||||||||||||||
| Other intangible assets | 1,988 | 2,026 | 2,065 | 2,103 | 2,141 | |||||||||||||||
| Tangible shareholders’ equity (a) | $ | 709,542 | $ | 711,310 | $ | 685,561 | $ | 653,447 | $ | 586,422 | ||||||||||
| Shares outstanding (c) | 43,787,660 | 43,619,070 | 43,381,014 | 43,264,460 | 42,951,344 | |||||||||||||||
| Total assets | $ | 8,619,966 | $ | 8,213,393 | $ | 8,137,341 | $ | 8,243,186 | $ | 8,417,875 | ||||||||||
| Less: | ||||||||||||||||||||
| Goodwill | 1,797 | 1,797 | 1,797 | 1,797 | 1,797 | |||||||||||||||
| Other intangible assets | 1,988 | 2,026 | 2,065 | 2,103 | 2,141 | |||||||||||||||
| Tangible assets (b) | $ | 8,616,181 | $ | 8,209,570 | $ | 8,133,479 | $ | 8,239,286 | $ | 8,413,937 | ||||||||||
| Tangible shareholders’ equity to tangible assets (a/b) | 8.23 | % | 8.66 | % | 8.43 | % | 7.93 | % | 6.97 | % | ||||||||||
| Tangible book value per share (a/c) | $ | 16.20 | $ | 16.31 | $ | 15.80 | $ | 15.10 | $ | 13.65 | ||||||||||
| Efficiency ratio: | ||||||||||||||||||||
| Noninterest expense (d) | $ | 65,714 | $ | 59,698 | $ | 55,459 | $ | 57,558 | $ | 58,272 | ||||||||||
| Net interest income | 77,779 | 77,638 | 77,735 | 71,462 | 69,950 | |||||||||||||||
| Noninterest income | 32,668 | 33,756 | 25,276 | 70,111 | 31,057 | |||||||||||||||
| Less: gain on sale of securities | — | — | — | — | — | |||||||||||||||
| Adjusted operating revenue (e) | $ | 110,447 | $ | 111,394 | $ | 103,011 | $ | 141,573 | $ | 101,007 | ||||||||||
| Efficiency ratio (d/e) | 59.50 | % | 53.59 | % | 53.84 | % | 40.66 | % | 57.69 | % | ||||||||||
This press release presents the 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.
FAQ
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