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Live Oak Bancshares, Inc. Reports Second Quarter 2025 Results

1. Live Oak's Q2 2025 net income rose to $23.4 million, $0.51 per share. 2. Record loan production of $1.53 billion and strong deposits increased by $198.8 million. 3. Net interest income grew 8.6%; net interest margin improved to 3.28%. 4. Provision for credit losses decreased by $5.7 million due to improving credit trends. 5. Management remains focused on supporting entrepreneurs amidst economic uncertainty.

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Why Bullish?

Live Oak’s strong quarterly performance and growth metrics suggest potential upside, similar to past quarters where robust earnings resulted in share price increases.

How important is it?

Strong quarterly results and positive credit trends directly influence investor sentiment and future profitability projections.

Why Short Term?

Immediate market reactions likely; investors may respond quickly to strong earnings and cash flow.

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WILMINGTON, N.C., July 23, 2025 (GLOBE NEWSWIRE) -- Live Oak Bancshares, Inc. (NYSE: LOB) (“Live Oak” or “the Company”) today reported second quarter of 2025 net income attributable to the Company of $23.4 million, or $0.51 per diluted share. Live Oak’s performance in the quarter, compared to the first quarter of 2025, includes these notable items: Record second quarter production of $1.53 billion accompanied by strong deposit growth of $198.8 million, with total assets growing by 1.7% to $13.83 billionNet interest income increased 8.6% and net interest margin increased eight basis points from 3.20% to 3.28%14.0% increase in revenue and 6.3% increase in noninterest expenses generated 29.4% increase in pre-provision net revenue1Provision expense for credit losses of $23.3 million, a decrease of $5.7 million, driven by moderating credit trends, loan growth, and the current macroeconomic environment “Live Oak Bank delivered an outstanding quarter in Q2, driven by excellent growth, healthy revenue, and lower provision expense,” said Live Oak Chairman and CEO James S. (Chip) Mahan III. “We remain focused on supporting our nation’s entrepreneurs as they continue to navigate a backdrop of uncertainty while also providing the service, technology and financial guidance they need to succeed.” Conference Call Live Oak will host a conference call to discuss the Company's financial results and business outlook tomorrow, July 24, 2025, at 9:00 a.m. ET. The call will be accessible by telephone and webcast using Conference ID: 25229. 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: Live Telephone Dial-In U.S.: 800.549.8228International: +1 646.564.2877 Pass Code: None Required Live Webcast Log-In Webcast Link: investor.liveoakbank.com Registration: Name and Email Required Multi-Factor Code: Provided After Registration (1)See accompanying GAAP to Non-GAAP Reconciliation.   Second Quarter 2025 Key Measures (Dollars in thousands, except per share data)   Increase (Decrease)   2Q 2025 1Q 2025 Dollars Percent 2Q 2024Total revenue(1)$143,747  $126,113  $17,634 14.0% $125,479 Total noninterest expense 89,293   84,017   5,276 6.3   77,656 Income before taxes 31,202   13,132   18,070 137.6   36,058 Effective tax rate 25.0%  26.4% n/a n/a  25.2%Net income attributable to Live Oak Bancshares, Inc.$23,428  $9,717  $13,711 141.1% $26,963 Diluted earnings per share 0.51   0.21   0.30 142.9   0.59 Loan and lease production:         Loans and leases originated$1,526,592  $1,396,223  $130,369 9.3% $1,171,141 % Fully funded 39.7%  46.0% n/a n/a  38.2%Total loans and leases:$11,364,846  $11,061,866  $302,980 2.7% $9,535,766 Total assets: 13,831,208   13,595,704   235,504 1.7   11,868,570 Total deposits: 12,594,790   12,395,945   198,845 1.6   10,707,031  (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 | 910.202.6926Claire 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 2Q 2025 Change vs. 2Q 2025 1Q 2025 4Q 2024 3Q 2024 2Q 2024 1Q 2025 2Q 2024Interest income          % %Loans and fees on loans$204,513  $195,616  $194,821  $192,170  $181,840  4.5  12.5 Investment securities, taxable 11,648   11,089   10,490   9,750   9,219  5.0  26.3 Other interest earning assets 8,123   6,400   7,257   7,016   7,389  26.9  9.9 Total interest income 224,284   213,105   212,568   208,936   198,448  5.2  13.0 Interest expense             Deposits 113,380   110,888   113,357   110,174   105,358  2.2  7.6 Borrowings 1,683   1,685   1,737   1,762   1,770  (0.1) (4.9)Total interest expense 115,063   112,573   115,094   111,936   107,128  2.2  7.4 Net interest income 109,221   100,532   97,474   97,000   91,320  8.6  19.6 Provision for credit losses 23,252   28,964   33,581   34,502   11,765  (19.7) 97.6 Net interest income after provision for credit losses 85,969   71,568   63,893   62,498   79,555  20.1  8.1 Noninterest income             Loan servicing revenue 8,565   8,298   8,524   8,040   7,347  3.2  16.6 Loan servicing asset revaluation (3,057)  (4,728)  (2,326)  (4,207)  (2,878) 35.3  (6.2)Net gains on sales of loans 21,641   18,648   18,356   16,646   14,395  16.0  50.3 Net gain (loss) on loans accounted for under the fair value option 1,082   (1,034)  195   2,255   172  204.6  529.1 Equity method investments (loss) income (2,716)  (2,239)  (2,739)  (1,393)  (1,767) (21.3) (53.7)Equity security investments gains, net 1,004   20   12   909   161  4,920.0  523.6 Lease income 3,103   2,573   2,456   2,424   2,423  20.6  28.1 Management fee income —   —   —   1,116   3,271  —  (100.0)Other noninterest income 4,904   4,043   6,115   7,142   11,035  21.3  (55.6)Total noninterest income 34,526   25,581   30,593   32,932   34,159  35.0  1.1 Noninterest expense             Salaries and employee benefits 49,137   48,008   45,214   44,524   46,255  2.4  6.2 Travel expense 2,576   2,795   2,628   2,344   2,328  (7.8) 10.7 Professional services expense 2,874   3,024   2,797   3,287   3,061  (5.0) (6.1)Advertising and marketing expense 4,420   3,665   1,979   2,473   3,004  20.6  47.1 Occupancy expense 2,369   2,737   2,558   2,807   2,388  (13.4) (0.8)Technology expense 10,066   9,251   9,406   9,081   7,996  8.8  25.9 Equipment expense 3,685   3,745   3,769   3,472   3,511  (1.6) 5.0 Other loan origination and maintenance expense 4,190   4,585   4,812   4,872   3,659  (8.6) 14.5 Renewable energy tax credit investment impairment 270   —   1,172   115   170  100.0  58.8 FDIC insurance 3,545   3,551   3,053   1,933   2,649  (0.2) 33.8 Other expense 6,161   2,656   3,869   2,681   2,635  132.0  133.8 Total noninterest expense 89,293   84,017   81,257   77,589   77,656  6.3  15.0 Income before taxes 31,202   13,132   13,229   17,841   36,058  137.6  (13.5)Income tax expense 7,815   3,464   3,386   4,816   9,095  125.6  (14.1)Net income 23,387   9,668   9,843   13,025   26,963  141.9  (13.3)Net loss attributable to non-controlling interest 41   49   57   —   —  (16.3) 100.0 Net income attributable to Live Oak Bancshares, Inc.$23,428  $9,717  $9,900  $13,025  $26,963  141.1  (13.1)Earnings per share             Basic$0.51  $0.21  $0.22  $0.28  $0.60  142.9  (15.0)Diluted$0.51  $0.21  $0.22  $0.28  $0.59  142.9  (13.6)Weighted average shares outstanding             Basic 45,634,741   45,377,965   45,224,470   45,073,482   44,974,942     Diluted 45,795,608   45,754,499   46,157,979   45,953,947   45,525,082                              Live Oak Bancshares, Inc.Quarterly Balance Sheets (unaudited)(Dollars in thousands)  As of the quarter ended 2Q 2025 Change vs. 2Q 2025 1Q 2025 4Q 2024 3Q 2024 2Q 2024 1Q 2025 2Q 2024Assets          % %Cash and due from banks$662,755  $744,263  $608,800  $666,585  $615,449  (11.0) 7.7 Certificates of deposit with other banks 250   250   250   250   250  —  — Investment securities available-for-sale 1,325,206   1,312,680   1,248,203   1,233,466   1,151,195  1.0  15.1 Loans held for sale 350,791   367,955   346,002   359,977   363,632  (4.7) (3.5)Loans and leases held for investment(1) 11,014,055   10,693,911   10,233,374   9,831,891   9,172,134  3.0  20.1 Allowance for credit losses on loans and leases (182,231)  (190,184)  (167,516)  (168,737)  (137,867) 4.2  (32.2)Net loans and leases 10,831,824   10,503,727   10,065,858   9,663,154   9,034,267  3.1  19.9 Premises and equipment, net 246,493   259,113   264,059   267,032   267,864  (4.9) (8.0)Foreclosed assets 6,318   2,108   1,944   8,015   8,015  199.7  (21.2)Servicing assets 60,359   56,911   56,144   52,553   51,528  6.1  17.1 Other assets 347,212   348,697   352,120   356,314   376,370  (0.4) (7.7)Total assets$13,831,208  $13,595,704  $12,943,380  $12,607,346  $11,868,570  1.7  16.5 Liabilities and shareholders’ equity             Liabilities             Deposits:             Noninterest-bearing$393,393  $386,108  $318,890  $258,844  $264,013  1.9  49.0 Interest-bearing 12,201,397   12,009,837   11,441,604   11,141,703   10,443,018  1.6  16.8 Total deposits 12,594,790   12,395,945   11,760,494   11,400,547   10,707,031  1.6  17.6 Borrowings 107,659   110,247   112,820   115,371   117,745  (2.3) (8.6)Other liabilities 61,494   58,065   66,570   83,672   82,745  5.9  (25.7)Total liabilities 12,763,943   12,564,257   11,939,884   11,599,590   10,907,521  1.6  17.0 Shareholders’ equity             Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding —   —   —   —   —  —  — Class A common stock (voting) 377,953   370,513   365,607   361,925   356,381  2.0  6.1 Class B common stock (non-voting) —   —   —   —   —  —  — Retained earnings 746,450   724,215   715,767   707,026   695,172  3.1  7.4 Accumulated other comprehensive loss (61,514)  (67,698)  (82,344)  (61,195)  (90,504) 9.1  32.0 Total shareholders' equity attributed to Live Oak Bancshares, Inc. 1,062,889   1,027,030   999,030   1,007,756   961,049  3.5  10.6 Non-controlling interest 4,376   4,417   4,466   —   —  (0.9) 100.0 Total shareholders' equity 1,067,265   1,031,447   1,003,496   1,007,756   961,049  3.5  11.1 Total liabilities and shareholders’ equity$13,831,208  $13,595,704  $12,943,380  $12,607,346  $11,868,570  1.7  16.5  (1)Includes $303.8 million, $316.8 million, $328.7 million, $343.4 million and $363.0 million loans measured at fair value for the quarters ended June 30, 2025, March 31, 2025, December 31, 2024, September 30, 2024, and June 30, 2024, respectively.   Live Oak Bancshares, Inc.Statements of Income (unaudited)(Dollars in thousands, except per share data)  Six Months Ended June 30, 2025 June 30, 2024Interest income   Loans and fees on loans$400,129  $357,850 Investment securities, taxable 22,737   18,173 Other interest earning assets 14,523   14,845 Total interest income 437,389   390,868 Interest expense   Deposits 224,268   207,356 Borrowings 3,368   2,081 Total interest expense 227,636   209,437 Net interest income 209,753   181,431 Provision for credit losses 52,216   28,129 Net interest income after provision for credit losses 157,537   153,302 Noninterest income   Loan servicing revenue 16,863   14,971 Loan servicing asset revaluation (7,785)  (5,622)Net gains on sales of loans 40,289   25,897 Net gain (loss) on loans accounted for under the fair value option 48   (47)Equity method investments (loss) income (4,955)  (6,789)Equity security investments gain (losses), net 1,024   (368)Lease income 5,676   4,876 Management fee income —   6,542 Other noninterest income 8,947   20,796 Total noninterest income 60,107   60,256 Noninterest expense   Salaries and employee benefits 97,145   93,530 Travel expense 5,371   4,766 Professional services expense 5,898   4,939 Advertising and marketing expense 8,085   6,696 Occupancy expense 5,106   4,635 Technology expense 19,317   15,719 Equipment expense 7,430   6,585 Other loan origination and maintenance expense 8,775   7,570 Renewable energy tax credit investment impairment (recovery) 270   (757)FDIC insurance 7,096   5,849 Other expense 8,817   5,861 Total noninterest expense 173,310   155,393 Income before taxes 44,334   58,165 Income tax expense 11,279   3,616 Net income 33,055   54,549 Net loss attributable to non-controlling interest 90   — Net income attributable to Live Oak Bancshares, Inc.$33,145  $54,549 Earnings per share   Basic$0.72  $1.22 Diluted$0.72  $1.20 Weighted average shares outstanding   Basic 45,556,842   44,868,625 Diluted 45,825,543   45,583,146          Live Oak Bancshares, Inc.Quarterly Selected Financial Data(Dollars in thousands, except per share data)  As of and for the three months ended 2Q 2025 1Q 2025 4Q 2024 3Q 2024 2Q 2024Income Statement Data         Net income attributable to Live Oak Bancshares, Inc.$23,428  $9,717  $9,900  $13,025  $26,963 Per Common Share         Net income, diluted$0.51  $0.21  $0.22  $0.28  $0.59 Dividends declared 0.03   0.03   0.03   0.03   0.03 Book value 23.36   22.62   22.12   22.32   21.35 Tangible book value (1) 23.29   22.55   22.05   22.24   21.28 Performance Ratios         Return on average assets (annualized) 0.68%  0.30%  0.31%  0.43%  0.93%Return on average equity (annualized) 8.85   3.78   3.85   5.21   11.39 Net interest margin 3.28   3.20   3.15   3.33   3.28 Efficiency ratio (1) 62.12   66.62   63.45   59.72   61.89 Noninterest income to total revenue 24.02   20.28   23.89   25.35   27.22 Selected Loan Metrics         Loans and leases originated$1,526,592  $1,396,223  $1,421,118  $1,757,856  $1,171,141 Outstanding balance of sold loans serviced 5,321,284   4,949,962   4,715,895   4,452,750   4,292,857 Asset Quality Ratios         Allowance for credit losses to loans and leases held for investment (3) 1.70%  1.83%  1.69%  1.78%  1.57%Net charge-offs (3)$31,445  $6,774  $33,566  $1,710  $8,253 Net charge-offs to average loans and leases held for investment (2) (3) 1.19%  0.27%  1.39%  0.08%  0.38%          Nonperforming loans and leases at historical cost (3)         Unguaranteed$59,555  $99,907  $81,412  $49,398  $37,340 Guaranteed 336,777   322,993   222,885   166,177   122,752 Total 396,332   422,900   304,297   215,575   160,092 Unguaranteed nonperforming historical cost loans and leases, to loans and leases held for investment (3) 0.56%  0.96%  0.82%  0.52%  0.42%          Nonperforming loans at fair value (4)         Unguaranteed$8,873  $9,938  $9,115  $8,672  $9,590 Guaranteed 60,453   58,100   54,873   49,822   51,570 Total 69,326   68,038   63,988   58,494   61,160 Unguaranteed nonperforming fair value loans to fair value loans held for investment (4) 2.92%  3.14%  2.77%  2.53%  2.64%          Capital Ratios         Common equity tier 1 capital (to risk-weighted assets) 10.67%  10.67%  11.04%  11.19%  11.85%Tier 1 leverage capital (to average assets) 7.90   8.03   8.21   8.60   8.71                      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 EndedJune 30, 2025 Three Months EndedMarch 31, 2025 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/RateInterest-earning assets:           Interest-earning balances in other banks$727,715  $8,123 4.48% $581,267  $6,400 4.47%Investment securities 1,408,942   11,648 3.32   1,379,797   11,089 3.26 Loans held for sale 381,531   8,008 8.42   407,953   8,612 8.56 Loans and leases held for investment(1) 10,843,303   196,505 7.27   10,388,872   187,004 7.30 Total interest-earning assets 13,361,491   224,284 6.73   12,757,889   213,105 6.77 Less: Allowance for credit losses on loans and leases (186,022)      (165,320)    Noninterest-earning assets 539,485       534,133     Total assets$13,714,954      $13,126,702     Interest-bearing liabilities:           Interest-bearing checking$350,978  $3,969 4.54% $350,491  $3,929 4.55%Savings 6,241,053   56,529 3.63   5,540,147   51,604 3.78 Money market accounts 128,757   93 0.29   127,908   120 0.38 Certificates of deposit 5,392,494   52,789 3.93   5,563,004   55,235 4.03 Total deposits 12,113,282   113,380 3.75   11,581,550   110,888 3.88 Borrowings 109,463   1,683 6.17   111,919   1,685 6.11 Total interest-bearing liabilities 12,222,745   115,063 3.78   11,693,469   112,573 3.90 Noninterest-bearing deposits 375,503       342,482     Noninterest-bearing liabilities 53,717       58,739     Shareholders' equity 1,058,572       1,027,547     Non-controlling interest 4,417       4,465     Total liabilities and shareholders' equity$13,714,954      $13,126,702     Net interest income and interest rate spread  $109,221 2.95%   $100,532 2.87%Net interest margin    3.28      3.20 Ratio of average interest-earning assets to average interest-bearing liabilities    109.32%     109.10% (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 2Q 2025 1Q 2025 4Q 2024 3Q 2024 2Q 2024Total shareholders’ equity$1,067,265  $1,031,447  $1,003,496  $1,007,756  $961,049 Less:         Goodwill 1,797   1,797   1,797   1,797   1,797 Other intangible assets 1,491   1,529   1,568   1,606   1,644 Tangible shareholders’ equity (a)$1,063,977  $1,028,121  $1,000,131  $1,004,353  $957,608 Shares outstanding (c) 45,686,081   45,589,633   45,359,425   45,151,691   45,003,856 Total assets$13,831,208  $13,595,704  $12,943,380  $12,607,346  $11,868,570 Less:         Goodwill 1,797   1,797   1,797   1,797   1,797 Other intangible assets 1,491   1,529   1,568   1,606   1,644 Tangible assets (b)$13,827,920  $13,592,378  $12,940,015  $12,603,943  $11,865,129 Tangible shareholders’ equity to tangible assets (a/b) 7.69%  7.56%  7.73%  7.97%  8.07%Tangible book value per share (a/c)$23.29  $22.55  $22.05  $22.24  $21.28 Efficiency ratio:         Noninterest expense (d)$89,293  $84,017  $81,257  $77,589  $77,656 Net interest income 109,221   100,532   97,474   97,000   91,320 Noninterest income 34,526   25,581   30,593   32,932   34,159 Total revenue (e)$143,747  $126,113  $128,067  $129,932  $125,479 Efficiency ratio (d/e) 62.12%  66.62%  63.45%  59.72%  61.89%Pre-provision net revenue (e-d)$54,454  $42,096  $46,810  $52,343  $47,823                      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.

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