What changed in this filing

/stocks — the workspaceLOADING

Item 5. Other Information

2024-08-06 compared with 2024-05-10 · 7 added, 100 removed, 23 unchanged (82% of the section changed)

Other Information

Subsequent to the Company's earnings release on April 24, 2024, the Company identified that a renewable energy tax credit investment made in the fourth quarter of 2023 became eligible for increased levels of tax credits in the first quarter of 2024.

Under the Inflation Reduction Act of 2022, certain circumstances allow for enhanced investment tax credits, if requirements, including locations within an energy community, are satisfied.

At the time of the investment in 2023, the location of the investee was not within a previously declared energy community.

On March 22, 2024, the Internal Revenue Service released Notice 2024-30 which expanded the qualifying list of energy communities.

This expanded list included the Company's 2023 investment.

The Company became eligible for incremental federal investment tax credits of $10.6 million and, combined with other related impacts, resulted in increased net income of $11.0 million, or $0.24 per diluted share, in the first quarter of 2024.

As a result of the items described above, certain of the GAAP financial results for the three months ended March 31, 2024 furnished in Exhibit 99.1 to the Current Report on Form 8-K filed on April 24, 2024 (the “Form 8-K”), differ from the financial results disclosed in this Quarterly Report on Form 10-Q.

The Company's Unaudited Condensed Consolidated Statement of Income for the three months ended March 31, 2024 and the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2024 furnished in Exhibit 99.1 to the Form 8-K did not reflect the additional investment tax credit and related impacts due to the timing of this new information.

The Unaudited Condensed Consolidated Financial Statements and the accompanying disclosures presented in this Quarterly Report on Form 10-Q reflect these adjustments.

The following tables present the Company’s Unaudited Condensed Consolidated Statement of Income for the three months ended March 31, 2024 and the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2024 as adjusted for the additional tax credits and related impacts discussed above.

Live Oak Bancshares, Inc.

Quarterly Statements of Income (unaudited)

(Dollars in thousands, except per share data)

Three Months Ended March 31, 2024

Interest income

Loans and fees on loans $ 176,010 $ — $ 176,010

Investment securities, taxable 8,954 — 8,954

Other interest earning assets 7,456 — 7,456

Total interest income 192,420 — 192,420

Interest expense

Deposits 101,998 — 101,998

Borrowings 311 — 311

Total interest expense 102,309 — 102,309

Net interest income 90,111 — 90,111

Provision for loan and lease credit losses 16,364 — 16,364

Net interest income after provision for loan and lease credit losses 73,747 — 73,747

Noninterest income

Loan servicing revenue 7,624 — 7,624

Loan servicing asset revaluation (2,744) — (2,744)

Net gains on sales of loans 11,502 — 11,502

Net loss on loans accounted for under the fair value option

(219) — (219)

Equity method investments (loss) income (5,022) — (5,022)

Equity security investments (losses) gains, net (529) — (529)

Lease income 2,453 — 2,453

Management fee income 3,271 — 3,271

Other noninterest income 9,761 — 9,761

Total noninterest income 26,097 — 26,097

Noninterest expense

Salaries and employee benefits 47,275 — 47,275

Travel expense 2,438 — 2,438

Professional services expense 1,878 — 1,878

Advertising and marketing expense 3,692 — 3,692

Occupancy expense 2,247 — 2,247

Technology expense 7,723 — 7,723

Equipment expense 3,074 — 3,074

Other loan origination and maintenance expense 3,911 — 3,911

Renewable energy tax credit investment impairment (recovery)

15 (942) (927)

FDIC insurance 3,200 — 3,200

Other expense 3,226 — 3,226

Total noninterest expense 78,679 (942) 77,737

Income before taxes 21,165 942 22,107

Income tax (benefit) expense

4,617 (10,096) (5,479)

Net income $ 16,548 $ 11,038 $ 27,586

Earnings per share

Basic $ 0.37 $ 0.25 $ 0.62

Diluted $ 0.36 $ 0.24 $ 0.60

Weighted average shares outstanding

Basic 44,762,308 — 44,762,308

Diluted 45,641,210 — 45,641,210

Live Oak Bancshares, Inc.

Quarterly Balance Sheets (unaudited)

(Dollars in thousands)

As of the quarter ended March 31, 2024

Cash and due from banks $ 597,394 $ — $ 597,394

Certificates of deposit with other banks 250 — 250

Investment securities available-for-sale 1,120,622 — 1,120,622

Loans held for sale 310,749 — 310,749

Loans and leases held for investment (1)

8,912,561 — 8,912,561

Allowance for credit losses on loans and leases (139,041) — (139,041)

Net loans and leases 8,773,520 — 8,773,520

Premises and equipment, net 258,071 — 258,071

Foreclosed assets 8,561 — 8,561

Servicing assets 49,343 — 49,343

Other assets 384,790 2,269 387,059

Total assets $ 11,503,300 $ 2,269 $ 11,505,569

Liabilities and shareholders’ equity

Noninterest-bearing $ 226,668 $ — $ 226,668

Interest-bearing 10,156,693 — 10,156,693

Total deposits 10,383,361 — 10,383,361

Borrowings 120,242 — 120,242

Other liabilities 83,017 (8,769) 74,248

Total liabilities 10,586,620 (8,769) 10,577,851

Shareholders’ equity

Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding — — —

Class A common stock (voting) 349,648 — 349,648

Class B common stock (non-voting) — — —

Retained earnings 658,269 11,038 669,307

Accumulated other comprehensive loss (91,237) — (91,237)

Total shareholders' equity 916,680 11,038 927,718

Total liabilities and shareholders’ equity $ 11,503,300 $ 2,269 $ 11,505,569

(1) Includes $379.2 million, $388.0 million, $410.1 million, $441.8 million and $467.0 million measured at fair value for the quarters ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.

Exhibits to this report are listed in the Index to Exhibits section of this report.

6 unchanged sentences

4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 of the registration statement on Form S-1, filed on June 19, 2015)

10.1 Form of 2024 RSU Award Agreement for non-employee directors* #

31.1 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

2 unchanged sentences

101 Interactive data files pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL:

(i) Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023;

(ii) Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2024 and 2023;

(iii) Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and 2023;

(iv) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2024 and 2023;

(v) Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023;

(i) Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023;

(ii) Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2024 and 2023;

(iii) Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023;

(iv) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023;

(v) Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023;

and (vi) Notes to Unaudited Condensed Consolidated Financial Statements*

6 unchanged sentences

Live Oak Bancshares, Inc.

August 6, 2024

/ s / Walter J.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information