Live Oak Bancshares, Inc. (Nasdaq: LOB) (“Live Oak” or “the
Company”) today reported third quarter net earnings available to
common shareholders of $3.9 million, or $0.09 per diluted share,
compared to $14.3 million, or $0.34 per diluted share, for the
third quarter of 2018.
“We continued to build franchise value through
our portfolio of earning assets and exited the third quarter of
2019 with recurring revenue growth of 26% compared to the prior
year. Supporting this recurring revenue trend, our loan and
lease originations totaled $562 million for the third quarter, a
49% increase from a year ago. In addition to our core banking
activities, we maintained our focus on changing the infrastructure
of the financial industry to deliver more compelling products and
services through technological innovation,” said James S. Mahan,
III, Chief Executive Officer of Live Oak.
Third Quarter 2019 Key
Measures
(Dollars in thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
Increase (Decrease) |
|
|
|
|
|
|
|
Q3 2019 |
|
|
Q3 2018 |
|
|
Dollars |
|
|
Percent |
|
|
Q2 2019 |
|
Net interest income and servicing revenues |
|
$ |
44,362 |
|
|
$ |
35,230 |
|
|
$ |
9,132 |
|
|
|
26 |
% |
|
$ |
40,998 |
|
Net income |
|
|
3,895 |
|
|
|
14,252 |
|
|
|
(10,357 |
) |
|
|
(73 |
) |
|
|
4,935 |
|
Diluted earnings per
share |
|
|
0.09 |
|
|
|
0.34 |
|
|
|
(0.25 |
) |
|
|
(74 |
) |
|
|
0.12 |
|
Non-GAAP net income
(1) |
|
|
4,169 |
|
|
|
16,562 |
|
|
|
(12,393 |
) |
|
|
(75 |
) |
|
|
5,664 |
|
Non-GAAP diluted earnings
per share (1) |
|
|
0.10 |
|
|
|
0.40 |
|
|
|
(0.30 |
) |
|
|
(75 |
) |
|
|
0.14 |
|
Loan and lease
production: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases originated |
|
$ |
562,259 |
|
|
$ |
377,337 |
|
|
$ |
184,922 |
|
|
|
49 |
% |
|
$ |
525,088 |
|
% Fully funded |
|
|
51.3 |
% |
|
|
48.2 |
% |
|
n/a |
|
|
n/a |
|
|
|
42.9 |
% |
Total loans and
leases |
|
$ |
3,345,048 |
|
|
$ |
2,277,812 |
|
|
$ |
1,067,236 |
|
|
|
47 |
% |
|
$ |
3,083,310 |
|
Total
assets |
|
|
4,603,697 |
|
|
|
3,444,757 |
|
|
|
1,158,940 |
|
|
|
34 |
|
|
|
4,274,301 |
|
Total
deposits |
|
|
4,019,267 |
|
|
|
2,924,288 |
|
|
|
1,094,979 |
|
|
|
37 |
|
|
|
3,721,597 |
|
(1) See accompanying GAAP to Non-GAAP
Reconciliation.
Loans and Leases
At September 30, 2019, the total loan and lease
portfolio of $3.35 billion increased 46.9% from its level at the
end of the third quarter of 2018 and 8.5% from its level at June
30, 2019. Compared to the second quarter of 2019, loans and
leases held for investment increased $216.5 million, or 9.7%, to
$2.44 billion while loans held for sale increased $45.3 million, or
5.3%, to $903.1 million. Loan and lease originations rose to $562.3
million during the third quarter of 2019, an increase of $37.2
million, or 7.1%, from the second quarter of 2019, due to increased
production across multiple industry verticals. Origination
volumes also benefited from the ongoing selective hiring of
experienced SBA lending generalists along with the ongoing
diversification of lending activities. For the first nine
months of 2019, total loan and lease originations reached $1.48
billion. The total loan and lease portfolio at September 30,
2019, and June 30, 2019, of $3.35 billion and $3.08 billion,
respectively, was comprised of approximately 54.7% and 57.0% of
unguaranteed loans and leases, respectively.
Average loans and leases were $3.22 billion
during the third quarter of 2019 compared to $2.93 billion during
the second quarter of 2019.
Deposits
Total deposits increased by $297.7 million, or
8.0%, to $4.02 billion at September 30, 2019, from $3.72 billion at
June 30, 2019, supporting the growing loan and lease portfolio.
Average total interest-bearing deposits for the third quarter of
2019 increased $302.4 million, or 8.6%, to $3.83 billion, compared
to $3.53 billion for the second quarter of 2019. The ratio of
average total loans and leases to average deposits was 83.1% for
the third quarter of 2019, compared to 81.8% for the second quarter
of 2019.
Net Interest Income
Net interest income for the third quarter of
2019 rose to $37.5 million compared to $27.7 million for the third
quarter of 2018 and $33.9 million for the second quarter of 2019.
The increase from the prior year was driven by the significant
growth in the combined held for sale and held for investment loan
and lease portfolios reflecting the Company's ongoing initiative to
grow recurring revenue sources. Another contributing factor
was higher investment security holdings as the Company strives to
strengthen its liquidity profile while improving the
asset-liability repricing mix. The increase from the second
quarter of 2019 arose from higher average balances in the loans and
lease portfolio. The net interest margin for the third
quarter of 2019 increased four basis points to 3.74% versus 3.70%
in the second quarter of 2019 as the increasing yields on interest
earning assets outpaced the increase in the average cost of
interest bearing liabilities.
Noninterest Income
Noninterest income for the third quarter of 2019
decreased by $5.7 million, or 23.4%, compared to the third quarter
of 2018, and increased by $3.9 million, or 26.7%, compared to the
second quarter of 2019. The Company’s strategic decision to
retain a greater portion of its loans to improve interest income
with the consequent reduction in the level of loan sales and
related gains was a major factor in the decline from the third
quarter of 2018.
The Company’s net gains on sales of loans
decreased to $7.4 million in the third quarter of 2019 compared to
$22.0 million in the third quarter of 2018 and increased from $6.0
million in the second quarter of 2019. The volume of
guaranteed loan sales in the third quarter of 2019 declined to
$100.5 million compared to $298.1 million in the third quarter of
2018 and increased from $71.9 million in the second quarter of
2019. As mentioned above, the decline in loan sale volumes from the
prior year is consistent with the Company’s strategic decision to
build its recurring revenue streams by holding substantially more
of its production on balance sheet. The average net gain on
guaranteed loan sales was $80.5 thousand per million sold in the
third quarter of 2019, an increase from $71.8 thousand in the third
quarter of 2018 and from $80.1 thousand in the second quarter of
2019. The average net gain on guaranteed loan sales for the third
quarter of 2019 was influenced by $1.5 million in fair value net
losses in exchange-traded interest rate lock commitments compared
to $770 thousand in fair value net gains during the third quarter
of 2018. Excluding fair value fluctuations in exchange-traded
interest rate lock commitments, the average net gain on guaranteed
loan sales was $95.0 thousand and $69.2 thousand per million sold
in the third quarters of 2019 and 2018, respectively, and $93.7
thousand per million sold in the second quarter of 2019.
The net loss resulting from the revaluation of
the servicing asset declined to $859 thousand for the third quarter
of 2019, an improvement of $8.5 million compared to the third
quarter of 2018 which was driven by improving market conditions,
such as increased premiums, and increased by $456 thousand compared
to the second quarter of 2019.
The flow-through loss from investments accounted
for under the equity method totaled $2.4 million, $360 thousand,
and $1.7 million for the quarters ended September 30, 2019,
September 30, 2018, and June 30, 2019, respectively. These
changes reflect the Company’s pro-rata portion of operating results
for certain strategic start-up investments.
Equity security investment net gains totaled
$3.3 million for the third quarter of 2019 compared to $39 thousand
in the third quarter of 2018 and $32 thousand in the second quarter
of 2019. The increase in the third quarter of 2019 was driven by
observable fair market value changes in orderly transactions of
underlying equity security instruments. The Company’s equity
security portfolio is largely comprised of investments in strategic
start-ups.
Noninterest Expense
Noninterest expense for the third quarter of
2019 was $42.7 million, an increase from $41.2 million for the
third quarter of 2018 and from $39.6 million for the second quarter
of 2019.
The $1.5 million, or 3.6% increase in
noninterest expense from the third quarter of 2018 was primarily
driven by increases in salaries and employee benefits, professional
services expense, and loan related expenses. Salaries and
employee benefits expenses increased by $2.2 million to $22.7
million for the third quarter of 2019 from $20.6 million for the
third quarter of 2018 due to the expansion of the workforce to
support a variety of initiatives by the Company. Professional
services expenses increased by $845 thousand from the third quarter
of 2018 to $2.1 million for the third quarter of 2019 principally
due to expenses incurred in relation to the Company’s investment in
Apiture and Canapi Advisors, LLC. Other loan origination and
maintenance expenses increased by $1.8 million to $3.5 million for
the third quarter of 2019 compared to $1.7 million for the third
quarter of 2018 due principally to expenses associated with the
repurchase of certain guaranteed loans in the portfolio during the
third quarter of 2019 along with increases in the ongoing guarantee
fees arising from holding a higher volume of loans on balance
sheet. The increase in noninterest expense from the third
quarter of 2018 was mitigated by decreases in FDIC insurance of
$1.0 million due to lower required premiums combined with a
one-time impairment expense in the third quarter of 2018 of $2.7
million on goodwill and other intangibles associated with the sale
of Reltco, Inc.
Compared to the second quarter of 2019, the $3.2
million or 8.0% increase in noninterest expense was principally
comprised of data processing expense which increased $1.1 million
related largely to system development and other loan origination
and maintenance expense which increased by $1.8 million as
described above.
Asset Quality
Net charge-offs of $2.3 million in the third
quarter of 2019 increased from $526 thousand in the second quarter
of 2019 and decreased $46 thousand compared to the third quarter of
2018. Net charge-offs as a percentage of average held for
investment loans and leases, annualized, for the quarter ended
September 30, 2019, was 0.39% compared to 0.10% for the second
quarter of 2019 and 0.57% for the third quarter of 2018.
Total nonperforming loans and leases increased
to $80.8 million in the third quarter of 2019 from $65.5 million at
the end of the second quarter of 2019. The unguaranteed
exposure of nonperforming loans and leases increased slightly to
$19.8 million, or 0.81% of total loans and leases held for
investment, at September 30, 2019, compared to $18.4 million, or
0.82%, at June 30, 2019. For the quarters ended September 30,
2019 and June 30, 2019, the percentage of unguaranteed criticized
and classified loans and leases, comprised of risk grades 5 through
8, to unguaranteed held for investment loans and leases was 6.62%
and 5.27%, respectively.
Foreclosed assets decreased $342 thousand to
$5.7 million at September 30, 2019, from $6.0 million at June 30,
2019. The unguaranteed exposure of foreclosed assets
decreased to $1.1 million at September 30, 2019, from $1.2 million
at June 30, 2019.
Provision for Loan and Lease
Losses
The provision for loan and lease losses for the
third quarter of 2019 totaled $7.2 million compared to a negative
provision of $243 thousand for the third quarter of 2018 and
provision expense of $3.5 million for the second quarter of
2019. The increase in provision expense was largely the
result of continued significant portfolio growth combined with
increases in net charge-offs and criticized and classified loans
and leases for the third quarter of 2019.
The allowance for loan and lease losses totaled
$42.9 million at September 30, 2019, compared to $38.0 million at
June 30, 2019. The allowance for loan and lease losses as a
percentage of total loans and leases held for investment was 1.76%
and 1.71% at September 30, 2019, and June 30, 2019,
respectively.
Income Tax
Income tax expense was $2.4 million in the third
quarter of 2019 compared to an income tax benefit of $3.2 million
in the third quarter of 2018 and income tax expense of $662
thousand in the second quarter of 2019. The Company’s
effective tax rate is influenced by the leasing of renewable energy
assets which generate investment tax credits. The significant
increase in the effective tax rate for the third quarter of 2019
compared to the preceding quarter is the result of forecasted
changes, largely comprised of a reduction in the targeted solar
panel leasing activity for the remainder of the year.
Shareholders’ Equity
During the third quarter of 2019, 624,716 shares
of Class B common stock (non-voting) were converted to Class A
common stock (voting) under a private sale. The conversion
decreased the value of Class B common stock (non-voting) and
increased the value of Class A common stock (voting) by $6.6
million.
Conference Call
Live Oak will host a conference call to discuss
quarterly results at 9:00 a.m. ET tomorrow morning (October 24,
2019). 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 5573497. 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
October 31, 2019 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
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
Live Oak Bancshares,
Inc.Quarterly Statements of Income
(unaudited)(Dollars in thousands, except per share
data)
|
|
Three months ended |
|
|
|
3Q 2019 |
|
|
2Q 2019 |
|
|
1Q 2019 |
|
|
4Q 2018 |
|
|
3Q 2018 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and fees on loans |
|
$ |
55,939 |
|
|
$ |
49,914 |
|
|
$ |
44,966 |
|
|
$ |
40,628 |
|
|
$ |
37,724 |
|
Investment securities,
taxable |
|
|
4,001 |
|
|
|
4,116 |
|
|
|
3,317 |
|
|
|
2,558 |
|
|
|
2,528 |
|
Other interest earning
assets |
|
|
1,167 |
|
|
|
1,108 |
|
|
|
1,639 |
|
|
|
1,568 |
|
|
|
1,638 |
|
Total interest income |
|
|
61,107 |
|
|
|
55,138 |
|
|
|
49,922 |
|
|
|
44,754 |
|
|
|
41,890 |
|
Interest
expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
23,576 |
|
|
|
21,203 |
|
|
|
19,317 |
|
|
|
15,959 |
|
|
|
14,165 |
|
Borrowings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Total interest expense |
|
|
23,576 |
|
|
|
21,203 |
|
|
|
19,317 |
|
|
|
15,959 |
|
|
|
14,166 |
|
Net interest income |
|
|
37,531 |
|
|
|
33,935 |
|
|
|
30,605 |
|
|
|
28,795 |
|
|
|
27,724 |
|
Provision for (recovery
of) loan and leases losses |
|
|
7,160 |
|
|
|
3,463 |
|
|
|
2,742 |
|
|
|
6,822 |
|
|
|
(243 |
) |
Net interest income after
provision for loan and lease losses |
|
|
30,371 |
|
|
|
30,472 |
|
|
|
27,863 |
|
|
|
21,973 |
|
|
|
27,967 |
|
Noninterest
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan servicing revenue |
|
|
6,831 |
|
|
|
7,063 |
|
|
|
7,410 |
|
|
|
7,752 |
|
|
|
7,506 |
|
Loan servicing asset
revaluation |
|
|
(859 |
) |
|
|
(403 |
) |
|
|
(2,246 |
) |
|
|
(627 |
) |
|
|
(9,380 |
) |
Net gains on sales of loans |
|
|
7,425 |
|
|
|
6,015 |
|
|
|
4,198 |
|
|
|
5,687 |
|
|
|
22,004 |
|
Equity method investments income
(loss) |
|
|
(2,370 |
) |
|
|
(1,736 |
) |
|
|
(2,014 |
) |
|
|
1,011 |
|
|
|
(360 |
) |
Equity security investments gains
(losses), net |
|
|
3,346 |
|
|
|
32 |
|
|
|
103 |
|
|
|
79 |
|
|
|
39 |
|
Gain on sale of investment
securities available-for-sale |
|
|
87 |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
— |
|
Lease income |
|
|
2,361 |
|
|
|
2,369 |
|
|
|
2,325 |
|
|
|
2,244 |
|
|
|
2,194 |
|
Construction supervision fee
income |
|
|
360 |
|
|
|
386 |
|
|
|
779 |
|
|
|
323 |
|
|
|
578 |
|
Title insurance income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
479 |
|
Other noninterest income |
|
|
1,447 |
|
|
|
975 |
|
|
|
2,467 |
|
|
|
1,596 |
|
|
|
1,271 |
|
Total noninterest income |
|
|
18,628 |
|
|
|
14,701 |
|
|
|
13,027 |
|
|
|
18,065 |
|
|
|
24,331 |
|
Noninterest
expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
22,717 |
|
|
|
21,990 |
|
|
|
21,855 |
|
|
|
14,503 |
|
|
|
20,553 |
|
Travel expense |
|
|
1,934 |
|
|
|
1,541 |
|
|
|
1,200 |
|
|
|
3,269 |
|
|
|
2,003 |
|
Professional services
expense |
|
|
2,073 |
|
|
|
1,621 |
|
|
|
2,182 |
|
|
|
1,233 |
|
|
|
1,228 |
|
Advertising and marketing
expense |
|
|
1,277 |
|
|
|
1,665 |
|
|
|
1,364 |
|
|
|
1,023 |
|
|
|
1,462 |
|
Occupancy expense |
|
|
2,131 |
|
|
|
1,848 |
|
|
|
1,609 |
|
|
|
1,738 |
|
|
|
1,588 |
|
Data processing expense |
|
|
3,072 |
|
|
|
1,947 |
|
|
|
2,399 |
|
|
|
2,606 |
|
|
|
3,661 |
|
Equipment expense |
|
|
4,361 |
|
|
|
4,239 |
|
|
|
3,325 |
|
|
|
3,630 |
|
|
|
3,649 |
|
Other loan origination and
maintenance expense |
|
|
3,535 |
|
|
|
1,708 |
|
|
|
1,639 |
|
|
|
1,482 |
|
|
|
1,742 |
|
Renewable energy tax credit
investment impairment |
|
|
— |
|
|
|
602 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
FDIC insurance |
|
|
101 |
|
|
|
699 |
|
|
|
635 |
|
|
|
547 |
|
|
|
1,105 |
|
Title insurance closing services
expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
114 |
|
Impairment expense on goodwill
and other intangibles, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,680 |
|
Other expense |
|
|
1,536 |
|
|
|
1,716 |
|
|
|
1,993 |
|
|
|
2,527 |
|
|
|
1,459 |
|
Total noninterest expense |
|
|
42,737 |
|
|
|
39,576 |
|
|
|
38,201 |
|
|
|
32,558 |
|
|
|
41,244 |
|
Income before
taxes |
|
|
6,262 |
|
|
|
5,597 |
|
|
|
2,689 |
|
|
|
7,480 |
|
|
|
11,054 |
|
Income tax expense (benefit) |
|
|
2,367 |
|
|
|
662 |
|
|
|
317 |
|
|
|
(3,010 |
) |
|
|
(3,198 |
) |
Net income |
|
$ |
3,895 |
|
|
$ |
4,935 |
|
|
$ |
2,372 |
|
|
$ |
10,490 |
|
|
$ |
14,252 |
|
Earnings per
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.10 |
|
|
$ |
0.12 |
|
|
$ |
0.06 |
|
|
$ |
0.26 |
|
|
$ |
0.36 |
|
Diluted |
|
$ |
0.09 |
|
|
$ |
0.12 |
|
|
$ |
0.06 |
|
|
$ |
0.26 |
|
|
$ |
0.34 |
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
40,240,740 |
|
|
|
40,196,662 |
|
|
|
40,160,118 |
|
|
|
40,148,115 |
|
|
|
40,119,561 |
|
Diluted |
|
|
41,113,575 |
|
|
|
40,998,541 |
|
|
|
40,921,823 |
|
|
|
41,075,864 |
|
|
|
41,688,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Live Oak Bancshares,
Inc.Quarterly Balance Sheets
(unaudited)(Dollars in thousands)
|
|
As of the quarter ended |
|
|
|
3Q 2019 |
|
|
2Q 2019 |
|
|
1Q 2019 |
|
|
4Q 2018 |
|
|
3Q 2018 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
159,527 |
|
|
$ |
115,292 |
|
|
$ |
221,159 |
|
|
$ |
316,823 |
|
|
$ |
368,565 |
|
Federal funds sold |
|
|
88,919 |
|
|
|
68,153 |
|
|
|
64,708 |
|
|
|
— |
|
|
|
— |
|
Certificates of deposit with
other banks |
|
|
7,250 |
|
|
|
7,250 |
|
|
|
7,250 |
|
|
|
7,250 |
|
|
|
750 |
|
Investment securities
available-for-sale |
|
|
570,795 |
|
|
|
576,275 |
|
|
|
569,739 |
|
|
|
380,490 |
|
|
|
374,284 |
|
Loans held for sale |
|
|
903,095 |
|
|
|
857,837 |
|
|
|
772,481 |
|
|
|
687,393 |
|
|
|
646,475 |
|
Loans and leases held for
investment |
|
|
2,441,953 |
|
|
|
2,225,473 |
|
|
|
2,002,124 |
|
|
|
1,843,419 |
|
|
|
1,631,337 |
|
Allowance for loan and lease
losses |
|
|
(42,944 |
) |
|
|
(38,048 |
) |
|
|
(35,111 |
) |
|
|
(32,434 |
) |
|
|
(26,797 |
) |
Net loans and leases |
|
|
2,399,009 |
|
|
|
2,187,425 |
|
|
|
1,967,013 |
|
|
|
1,810,985 |
|
|
|
1,604,540 |
|
Premises and equipment, net |
|
|
280,942 |
|
|
|
281,126 |
|
|
|
271,810 |
|
|
|
262,524 |
|
|
|
263,861 |
|
Foreclosed assets |
|
|
5,702 |
|
|
|
6,044 |
|
|
|
1,374 |
|
|
|
1,094 |
|
|
|
1,429 |
|
Servicing assets |
|
|
37,583 |
|
|
|
41,687 |
|
|
|
44,324 |
|
|
|
47,641 |
|
|
|
49,261 |
|
Operating lease right-of-use
assets |
|
|
1,890 |
|
|
|
1,996 |
|
|
|
2,136 |
|
|
|
— |
|
|
|
— |
|
Other assets |
|
|
148,985 |
|
|
|
131,216 |
|
|
|
136,053 |
|
|
|
156,249 |
|
|
|
135,592 |
|
Total assets |
|
$ |
4,603,697 |
|
|
$ |
4,274,301 |
|
|
$ |
4,058,047 |
|
|
$ |
3,670,449 |
|
|
$ |
3,444,757 |
|
Liabilities and
Shareholders’
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
56,373 |
|
|
$ |
55,416 |
|
|
$ |
53,843 |
|
|
$ |
53,993 |
|
|
$ |
48,622 |
|
Interest-bearing |
|
|
3,962,894 |
|
|
|
3,666,181 |
|
|
|
3,474,562 |
|
|
|
3,095,590 |
|
|
|
2,875,666 |
|
Total deposits |
|
|
4,019,267 |
|
|
|
3,721,597 |
|
|
|
3,528,405 |
|
|
|
3,149,583 |
|
|
|
2,924,288 |
|
Short term borrowings |
|
|
1,295 |
|
|
|
1,345 |
|
|
|
1,393 |
|
|
|
1,441 |
|
|
|
— |
|
Long term borrowings |
|
|
15 |
|
|
|
16 |
|
|
|
17 |
|
|
|
16 |
|
|
|
1,506 |
|
Operating lease liabilities |
|
|
2,041 |
|
|
|
2,162 |
|
|
|
2,314 |
|
|
|
— |
|
|
|
— |
|
Other liabilities |
|
|
52,860 |
|
|
|
30,195 |
|
|
|
25,538 |
|
|
|
25,849 |
|
|
|
41,733 |
|
Total liabilities |
|
|
4,075,478 |
|
|
|
3,755,315 |
|
|
|
3,557,667 |
|
|
|
3,176,889 |
|
|
|
2,967,527 |
|
Shareholders’
equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, no par value,
1,000,000 shares authorized, none issued or outstanding |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Class A common stock
(voting) |
|
|
294,773 |
|
|
|
284,987 |
|
|
|
281,994 |
|
|
|
278,945 |
|
|
|
276,831 |
|
Class B common stock
(non-voting) |
|
|
42,553 |
|
|
|
49,168 |
|
|
|
49,168 |
|
|
|
49,168 |
|
|
|
49,168 |
|
Retained earnings |
|
|
174,641 |
|
|
|
171,954 |
|
|
|
168,225 |
|
|
|
167,124 |
|
|
|
157,839 |
|
Accumulated other comprehensive
income (loss) |
|
|
16,252 |
|
|
|
12,877 |
|
|
|
993 |
|
|
|
(1,677 |
) |
|
|
(6,608 |
) |
Total equity |
|
|
528,219 |
|
|
|
518,986 |
|
|
|
500,380 |
|
|
|
493,560 |
|
|
|
477,230 |
|
Total liabilities and
shareholders’
equity |
|
$ |
4,603,697 |
|
|
$ |
4,274,301 |
|
|
$ |
4,058,047 |
|
|
$ |
3,670,449 |
|
|
$ |
3,444,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Live Oak Bancshares,
Inc.Statements of Income
(unaudited)(Dollars in thousands, except per share
data)
|
|
Nine Months Ended |
|
|
|
September 30, 2019 |
|
|
September 30, 2018 |
|
Interest income |
|
|
|
|
|
|
|
|
Loans and fees on loans |
|
$ |
150,819 |
|
|
$ |
106,682 |
|
Investment securities,
taxable |
|
|
11,434 |
|
|
|
6,175 |
|
Other interest earning
assets |
|
|
3,914 |
|
|
|
5,032 |
|
Total interest income |
|
|
166,167 |
|
|
|
117,889 |
|
Interest
expense |
|
|
|
|
|
|
|
|
Deposits |
|
|
64,096 |
|
|
|
38,510 |
|
Borrowings |
|
|
— |
|
|
|
131 |
|
Total interest expense |
|
|
64,096 |
|
|
|
38,641 |
|
Net interest income |
|
|
102,071 |
|
|
|
79,248 |
|
Provision for loan and
lease losses |
|
|
13,365 |
|
|
|
6,236 |
|
Net interest income after
provision for loan and lease losses |
|
|
88,706 |
|
|
|
73,012 |
|
Noninterest
income |
|
|
|
|
|
|
|
|
Loan servicing revenue |
|
|
21,304 |
|
|
|
21,369 |
|
Loan servicing asset
revaluation |
|
|
(3,508 |
) |
|
|
(18,138 |
) |
Net gains on sales of loans |
|
|
17,638 |
|
|
|
69,483 |
|
Equity method investments income
(loss) |
|
|
(6,120 |
) |
|
|
(1,397 |
) |
Equity security investments gains
(losses), net |
|
|
3,481 |
|
|
|
134 |
|
Gain on sale of investment
securities available-for-sale |
|
|
92 |
|
|
|
— |
|
Lease income |
|
|
7,055 |
|
|
|
5,722 |
|
Construction supervision fee
income |
|
|
1,525 |
|
|
|
1,954 |
|
Title insurance income |
|
|
— |
|
|
|
2,775 |
|
Other noninterest income |
|
|
4,889 |
|
|
|
3,798 |
|
Total noninterest income |
|
|
46,356 |
|
|
|
85,700 |
|
Noninterest
expense |
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
66,562 |
|
|
|
62,908 |
|
Travel expense |
|
|
4,675 |
|
|
|
5,887 |
|
Professional services
expense |
|
|
5,876 |
|
|
|
3,645 |
|
Advertising and marketing
expense |
|
|
4,306 |
|
|
|
4,992 |
|
Occupancy expense |
|
|
5,588 |
|
|
|
5,327 |
|
Data processing expense |
|
|
7,418 |
|
|
|
9,404 |
|
Equipment expense |
|
|
11,925 |
|
|
|
10,094 |
|
Other loan origination and
maintenance expense |
|
|
6,882 |
|
|
|
4,485 |
|
Renewable energy tax credit
investment impairment |
|
|
602 |
|
|
|
— |
|
FDIC insurance |
|
|
1,435 |
|
|
|
2,687 |
|
Title insurance closing services
expense |
|
|
— |
|
|
|
912 |
|
Impairment expense on goodwill
and other intangibles, net |
|
|
— |
|
|
|
2,680 |
|
Other expense |
|
|
5,245 |
|
|
|
7,125 |
|
Total noninterest expense |
|
|
120,514 |
|
|
|
120,146 |
|
Income before
taxes |
|
|
14,548 |
|
|
|
38,566 |
|
Income tax expense (benefit) |
|
|
3,346 |
|
|
|
(2,392 |
) |
Net income |
|
$ |
11,202 |
|
|
$ |
40,958 |
|
Earnings per
share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.28 |
|
|
$ |
1.02 |
|
Diluted |
|
$ |
0.27 |
|
|
$ |
0.98 |
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
40,199,468 |
|
|
|
40,025,265 |
|
Diluted |
|
|
41,011,608 |
|
|
|
41,586,987 |
|
|
|
|
|
|
|
|
|
|
Live Oak Bancshares,
Inc.Quarterly Selected Financial
Data(Dollars in thousands, except per share data)
|
|
As of and for the three months ended |
|
|
|
3Q 2019 |
|
|
2Q 2019 |
|
|
1Q 2019 |
|
|
4Q 2018 |
|
|
3Q 2018 |
|
Income Statement Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
3,895 |
|
|
$ |
4,935 |
|
|
$ |
2,372 |
|
|
$ |
10,490 |
|
|
$ |
14,252 |
|
Per Common
Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, basic |
|
$ |
0.10 |
|
|
$ |
0.12 |
|
|
$ |
0.06 |
|
|
$ |
0.26 |
|
|
$ |
0.36 |
|
Net income, diluted |
|
|
0.09 |
|
|
|
0.12 |
|
|
|
0.06 |
|
|
|
0.26 |
|
|
|
0.34 |
|
Dividends declared |
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.03 |
|
Book value |
|
|
13.12 |
|
|
|
12.90 |
|
|
|
12.45 |
|
|
|
12.29 |
|
|
|
11.89 |
|
Tangible book value (1) |
|
|
13.12 |
|
|
|
12.90 |
|
|
|
12.45 |
|
|
|
12.29 |
|
|
|
11.89 |
|
Performance
Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
(annualized) |
|
|
0.35 |
% |
|
|
0.48 |
% |
|
|
0.25 |
% |
|
|
1.20 |
% |
|
|
1.65 |
% |
Return on average equity
(annualized) |
|
|
2.94 |
|
|
|
3.85 |
|
|
|
1.88 |
|
|
|
8.64 |
|
|
|
12.08 |
|
Net interest margin |
|
|
3.74 |
|
|
|
3.70 |
|
|
|
3.63 |
|
|
|
3.72 |
|
|
|
3.61 |
|
Efficiency ratio (1) |
|
|
76.22 |
|
|
|
81.37 |
|
|
|
87.56 |
|
|
|
69.48 |
|
|
|
79.23 |
|
Noninterest income to total
revenue |
|
|
33.07 |
|
|
|
30.23 |
|
|
|
29.85 |
|
|
|
38.55 |
|
|
|
46.74 |
|
Selected Loan
Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases originated |
|
$ |
562,259 |
|
|
$ |
525,088 |
|
|
$ |
390,851 |
|
|
$ |
498,987 |
|
|
$ |
377,337 |
|
Guaranteed loans sold |
|
|
100,498 |
|
|
|
71,934 |
|
|
|
62,940 |
|
|
|
104,646 |
|
|
|
298,073 |
|
Average net gain on sale of
guaranteed loans |
|
|
80.51 |
|
|
|
80.12 |
|
|
|
61.30 |
|
|
|
59.83 |
|
|
|
71.81 |
|
Adjusted average net gain on
sale of guaranteed loans (2) |
|
|
94.98 |
|
|
|
93.74 |
|
|
|
89.04 |
|
|
|
77.42 |
|
|
|
69.23 |
|
Outstanding balance of sold loans
serviced: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranteed |
|
|
2,802,073 |
|
|
|
2,870,108 |
|
|
|
2,952,774 |
|
|
|
3,045,460 |
|
|
|
3,102,820 |
|
Unguaranteed |
|
|
211,095 |
|
|
|
183,991 |
|
|
|
179,307 |
|
|
|
174,066 |
|
|
|
170,784 |
|
Total |
|
|
3,013,168 |
|
|
|
3,054,099 |
|
|
|
3,132,081 |
|
|
|
3,219,526 |
|
|
|
3,273,604 |
|
Asset Quality
Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to
loans and leases held for investment |
|
|
1.76 |
% |
|
|
1.71 |
% |
|
|
1.75 |
% |
|
|
1.76 |
% |
|
|
1.64 |
% |
Net charge-offs |
|
$ |
2,264 |
|
|
$ |
526 |
|
|
$ |
65 |
|
|
$ |
1,185 |
|
|
$ |
2,310 |
|
Net charge-offs to average loans
and leases held for investment (3) |
|
|
0.39 |
% |
|
|
0.10 |
% |
|
|
0.01 |
% |
|
|
0.28 |
% |
|
|
0.57 |
% |
Nonperforming loans and
leases |
|
$ |
80,757 |
|
|
$ |
65,473 |
|
|
$ |
70,692 |
|
|
$ |
57,690 |
|
|
$ |
52,709 |
|
Foreclosed assets |
|
|
5,702 |
|
|
|
6,044 |
|
|
|
1,374 |
|
|
|
1,094 |
|
|
|
1,429 |
|
Nonperforming loans and leases
(unguaranteed exposure) |
|
|
19,817 |
|
|
|
18,352 |
|
|
|
20,186 |
|
|
|
14,488 |
|
|
|
12,897 |
|
Foreclosed assets (unguaranteed
exposure) |
|
|
1,142 |
|
|
|
1,228 |
|
|
|
170 |
|
|
|
148 |
|
|
|
158 |
|
Nonperforming loans and leases
not guaranteed by the SBA and foreclosures |
|
$ |
20,959 |
|
|
$ |
19,580 |
|
|
$ |
20,356 |
|
|
$ |
14,636 |
|
|
$ |
13,055 |
|
Nonperforming loans and leases
and foreclosures, not guaranteed by the SBA, to total
assets |
|
|
0.46 |
% |
|
|
0.46 |
% |
|
|
0.50 |
% |
|
|
0.40 |
% |
|
|
0.38 |
% |
Capital
Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital (to
risk-weighted assets) |
|
|
15.22 |
% |
|
|
15.94 |
% |
|
|
16.68 |
% |
|
|
17.10 |
% |
|
|
17.88 |
% |
Total capital (to risk-weighted
assets) |
|
|
16.47 |
|
|
|
17.19 |
|
|
|
17.92 |
|
|
|
18.28 |
|
|
|
18.93 |
|
Tier 1 risk based capital (to
risk-weighted assets) |
|
|
15.22 |
|
|
|
15.94 |
|
|
|
16.68 |
|
|
|
17.10 |
|
|
|
17.88 |
|
Tier 1 leverage capital (to
average assets) |
|
|
11.12 |
|
|
|
11.77 |
|
|
|
12.34 |
|
|
|
13.40 |
|
|
|
13.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Quarterly Selected Financial
Data
(1) See accompanying GAAP to Non-GAAP
Reconciliation.
(2) Excludes fair value gain/loss on
exchange-traded interest rate lock commitments.
(3) Quarterly net charge-offs as a percentage of
quarterly average loans and leases held for investment,
annualized.
Live Oak Bancshares,
Inc.Quarterly Average Balances and Net Interest
Margin(Dollars in thousands)
|
|
Three Months Ended
September 30,
2019 |
|
|
Three months ended June 30, 2019 |
|
|
|
AverageBalance |
|
|
Interest |
|
|
AverageYield/Rate |
|
|
AverageBalance |
|
|
Interest |
|
|
AverageYield/Rate |
|
Interest earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds sold and interest earning balances in other
banks |
|
$ |
205,342 |
|
|
$ |
1,167 |
|
|
|
2.25 |
% |
|
$ |
184,986 |
|
|
$ |
1,108 |
|
|
|
2.40 |
% |
Investment securities |
|
|
554,871 |
|
|
|
4,001 |
|
|
|
2.86 |
|
|
|
566,159 |
|
|
|
4,116 |
|
|
|
2.92 |
|
Loans held for sale |
|
|
910,837 |
|
|
|
15,982 |
|
|
|
6.96 |
|
|
|
839,724 |
|
|
|
14,333 |
|
|
|
6.85 |
|
Loans and leases held for investment (1) |
|
|
2,313,615 |
|
|
|
39,957 |
|
|
|
6.85 |
|
|
|
2,089,225 |
|
|
|
35,581 |
|
|
|
6.83 |
|
Total interest earning
assets |
|
|
3,984,665 |
|
|
|
61,107 |
|
|
|
6.08 |
|
|
|
3,680,094 |
|
|
|
55,138 |
|
|
|
6.01 |
|
Less: allowance for loan and
lease losses |
|
|
(37,995 |
) |
|
|
|
|
|
|
|
|
|
|
(35,124 |
) |
|
|
|
|
|
|
|
|
Non-interest earning assets |
|
|
501,369 |
|
|
|
|
|
|
|
|
|
|
|
474,706 |
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
4,448,039 |
|
|
|
|
|
|
|
|
|
|
$ |
4,119,676 |
|
|
|
|
|
|
|
|
|
Interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing checking |
|
$ |
— |
|
|
$ |
— |
|
|
|
— |
% |
|
$ |
— |
|
|
$ |
— |
|
|
|
— |
% |
Savings |
|
|
1,036,858 |
|
|
|
5,501 |
|
|
|
2.10 |
|
|
|
989,512 |
|
|
|
5,235 |
|
|
|
2.12 |
|
Money market accounts |
|
|
91,813 |
|
|
|
179 |
|
|
|
0.77 |
|
|
|
85,982 |
|
|
|
161 |
|
|
|
0.75 |
|
Certificates of deposit |
|
|
2,701,350 |
|
|
|
17,896 |
|
|
|
2.63 |
|
|
|
2,452,159 |
|
|
|
15,807 |
|
|
|
2.59 |
|
Total interest bearing deposits |
|
|
3,830,021 |
|
|
|
23,576 |
|
|
|
2.44 |
|
|
|
3,527,653 |
|
|
|
21,203 |
|
|
|
2.41 |
|
Other borrowings |
|
|
1,359 |
|
|
|
— |
|
|
|
— |
|
|
|
1,409 |
|
|
|
— |
|
|
|
— |
|
Total interest bearing
liabilities |
|
|
3,831,380 |
|
|
|
23,576 |
|
|
|
2.44 |
|
|
|
3,529,062 |
|
|
|
21,203 |
|
|
|
2.41 |
|
Non-interest bearing
deposits |
|
|
51,781 |
|
|
|
|
|
|
|
|
|
|
|
51,643 |
|
|
|
|
|
|
|
|
|
Non-interest bearing
liabilities |
|
|
35,654 |
|
|
|
|
|
|
|
|
|
|
|
26,580 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
529,224 |
|
|
|
|
|
|
|
|
|
|
|
512,391 |
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
4,448,039 |
|
|
|
|
|
|
|
|
|
|
$ |
4,119,676 |
|
|
|
|
|
|
|
|
|
Net interest income and interest
rate spread |
|
|
|
|
|
$ |
37,531 |
|
|
|
3.64 |
% |
|
|
|
|
|
$ |
33,935 |
|
|
|
3.60 |
% |
Net interest margin |
|
|
|
|
|
|
|
|
|
|
3.74 |
|
|
|
|
|
|
|
|
|
|
|
3.70 |
|
Ratio of average interest-earning
assets to average interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
104.00 |
% |
|
|
|
|
|
|
|
|
|
|
104.28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
|
|
3Q 2019 |
|
|
2Q 2019 |
|
|
1Q 2019 |
|
|
4Q 2018 |
|
|
3Q 2018 |
|
Total shareholders’ equity |
|
$ |
528,219 |
|
|
$ |
518,986 |
|
|
$ |
500,380 |
|
|
$ |
493,560 |
|
|
$ |
477,230 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other intangible assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Tangible shareholders’ equity
(a) |
|
$ |
528,219 |
|
|
$ |
518,986 |
|
|
$ |
500,380 |
|
|
$ |
493,560 |
|
|
$ |
477,230 |
|
Shares outstanding (c) |
|
|
40,272,908 |
|
|
|
40,220,916 |
|
|
|
40,175,079 |
|
|
|
40,155,792 |
|
|
|
40,140,417 |
|
Total assets |
|
$ |
4,603,697 |
|
|
$ |
4,274,301 |
|
|
$ |
4,058,047 |
|
|
$ |
3,670,449 |
|
|
$ |
3,444,757 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other intangible assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Tangible assets (b) |
|
$ |
4,603,697 |
|
|
$ |
4,274,301 |
|
|
$ |
4,058,047 |
|
|
$ |
3,670,449 |
|
|
$ |
3,444,757 |
|
Tangible shareholders’ equity to
tangible assets (a/b) |
|
|
11.47 |
% |
|
|
12.14 |
% |
|
|
12.33 |
% |
|
|
13.45 |
% |
|
|
13.85 |
% |
Tangible book value per share
(a/c) |
|
$ |
13.12 |
|
|
$ |
12.90 |
|
|
$ |
12.45 |
|
|
$ |
12.29 |
|
|
$ |
11.89 |
|
Efficiency ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense (d) |
|
$ |
42,737 |
|
|
$ |
39,576 |
|
|
$ |
38,201 |
|
|
$ |
32,558 |
|
|
$ |
41,244 |
|
Net interest income |
|
|
37,531 |
|
|
|
33,935 |
|
|
|
30,605 |
|
|
|
28,795 |
|
|
|
27,724 |
|
Noninterest income |
|
|
18,628 |
|
|
|
14,701 |
|
|
|
13,027 |
|
|
|
18,065 |
|
|
|
24,331 |
|
Less: gain on sale of securities |
|
|
87 |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
— |
|
Adjusted operating revenue (e) |
|
$ |
56,072 |
|
|
$ |
48,636 |
|
|
$ |
43,627 |
|
|
$ |
46,860 |
|
|
$ |
52,055 |
|
Efficiency ratio (d/e) |
|
|
76.22 |
% |
|
|
81.37 |
% |
|
|
87.56 |
% |
|
|
69.48 |
% |
|
|
79.23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Live Oak Bancshares, Inc.GAAP to
Non-GAAP Reconciliation (Continued)(Dollars in
thousands)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
3Q 2019 |
|
|
2Q 2019 |
|
|
3Q 2018 |
|
|
3Q 2019 |
|
|
3Q 2018 |
|
Reconciliation of net income to non-GAAP net income for
non-routine income and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
3,895 |
|
|
$ |
4,935 |
|
|
$ |
14,252 |
|
|
$ |
11,202 |
|
|
$ |
40,958 |
|
Gain on sale of aircraft |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(357 |
) |
|
|
— |
|
Stock based compensation expense for restricted stock awards
with an effective grant date of May 24, 2016, as discussed in
Note 10 of our March 31, 2016 Form 10-Q |
|
|
360 |
|
|
|
357 |
|
|
|
360 |
|
|
|
1,069 |
|
|
|
1,069 |
|
Impairment expense on goodwill and other intangibles, net |
|
|
— |
|
|
|
— |
|
|
|
2,680 |
|
|
|
— |
|
|
|
2,680 |
|
Renewable energy tax credit investment impairment |
|
|
— |
|
|
|
602 |
|
|
|
— |
|
|
|
602 |
|
|
|
— |
|
Income tax effects and adjustments for non-GAAP items* |
|
|
(86 |
) |
|
|
(230 |
) |
|
|
(730 |
) |
|
|
(315 |
) |
|
|
(900 |
) |
Non-GAAP net income |
|
$ |
4,169 |
|
|
$ |
5,664 |
|
|
$ |
16,562 |
|
|
$ |
12,201 |
|
|
$ |
43,807 |
|
* Estimated at 24.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.10 |
|
|
$ |
0.14 |
|
|
$ |
0.41 |
|
|
$ |
0.30 |
|
|
$ |
1.09 |
|
Diluted |
|
$ |
0.10 |
|
|
$ |
0.14 |
|
|
$ |
0.40 |
|
|
$ |
0.30 |
|
|
$ |
1.05 |
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
40,240,740 |
|
|
|
40,196,662 |
|
|
|
40,119,561 |
|
|
|
40,199,468 |
|
|
|
40,025,265 |
|
Diluted |
|
|
41,113,575 |
|
|
|
40,998,541 |
|
|
|
41,688,430 |
|
|
|
41,011,608 |
|
|
|
41,586,987 |
|
Reconciliation of financial
statement line items as reported to adjusted for non-routine
income and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income, as reported |
|
$ |
18,628 |
|
|
$ |
14,701 |
|
|
$ |
24,331 |
|
|
$ |
46,356 |
|
|
$ |
85,700 |
|
Gain on sale of aircraft |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(357 |
) |
|
|
— |
|
Noninterest income, as adjusted |
|
$ |
18,628 |
|
|
$ |
14,701 |
|
|
$ |
24,331 |
|
|
$ |
45,999 |
|
|
$ |
85,700 |
|
Noninterest expense, as reported |
|
$ |
42,737 |
|
|
$ |
39,576 |
|
|
$ |
41,244 |
|
|
$ |
120,514 |
|
|
$ |
120,146 |
|
Stock based compensation expense |
|
|
(360 |
) |
|
|
(357 |
) |
|
|
(360 |
) |
|
|
(1,069 |
) |
|
|
(1,069 |
) |
Impairment expense on goodwill and other intangibles, net |
|
|
— |
|
|
|
— |
|
|
|
(2,680 |
) |
|
|
— |
|
|
|
(2,680 |
) |
Renewable energy tax credit investment impairment |
|
|
— |
|
|
|
(602 |
) |
|
|
— |
|
|
|
(602 |
) |
|
|
— |
|
Noninterest expense, as adjusted |
|
$ |
42,377 |
|
|
$ |
38,617 |
|
|
$ |
38,204 |
|
|
$ |
118,843 |
|
|
$ |
116,397 |
|
Income before taxes, as reported |
|
$ |
6,262 |
|
|
$ |
5,597 |
|
|
$ |
11,054 |
|
|
$ |
14,548 |
|
|
$ |
38,566 |
|
Gain on sale of aircraft |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(357 |
) |
|
|
— |
|
Stock based compensation expense |
|
|
360 |
|
|
|
357 |
|
|
|
360 |
|
|
|
1,069 |
|
|
|
1,069 |
|
Impairment expense on goodwill and other intangibles, net |
|
|
— |
|
|
|
— |
|
|
|
2,680 |
|
|
|
— |
|
|
|
2,680 |
|
Renewable energy tax credit investment impairment |
|
|
— |
|
|
|
602 |
|
|
|
— |
|
|
|
602 |
|
|
|
— |
|
Income before taxes, as adjusted |
|
$ |
6,622 |
|
|
$ |
6,556 |
|
|
$ |
14,094 |
|
|
$ |
15,862 |
|
|
$ |
42,315 |
|
Income tax expense, as reported |
|
$ |
2,367 |
|
|
$ |
662 |
|
|
$ |
(3,198 |
) |
|
$ |
3,346 |
|
|
$ |
(2,392 |
) |
Income tax effects and adjustments for non-recurring income
and expenses |
|
|
86 |
|
|
|
230 |
|
|
|
730 |
|
|
|
315 |
|
|
|
900 |
|
Income tax expense, as adjusted |
|
$ |
2,453 |
|
|
$ |
892 |
|
|
$ |
(2,468 |
) |
|
$ |
3,661 |
|
|
$ |
(1,492 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This press release presents the non-GAAP
financial measures previously shown. The adjustments to reconcile
from the applicable GAAP financial measure to the non-GAAP
financial measures 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.
Live Oak Bancshares (NASDAQ:LOB)
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