What changed in this filing

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Item 1. Financial Statements

2026-05-05 compared with 2025-11-17 · 224 added, 465 removed, 912 unchanged (43% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

As of September 30, 2025 (unaudited) and December 31, 2024

As of March 31, 2026 (unaudited) and December 31, 2025

(Dollars in thousands)

September 30,

2026 December 31,

21 unchanged sentences

Shareholders’ equity

Series A Preferred stock, no par value, 1,000,000 shares authorized, 100,000 shares and 0 shares, issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Class A common stock, no par value, 100,000,000 shares authorized, 45,855,739 and 45,359,425 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Series A Preferred stock, no par value, 1,000,000 shares authorized, 100,000 shares, issued and outstanding at March 31, 2026 and December 31, 2025

96,266 96,266

Class A common stock, no par value, 100,000,000 shares authorized, 46,240,691 and 46,032,402 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

392,258 388,389

Retained earnings 836,444 809,885

8 unchanged sentences

Condensed Consolidated Statements of Income

For the three and nine months ended September 30, 2025 and 2024 (unaudited)

For the three months ended March 31, 2026 and 2025 (unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Interest income

14 unchanged sentences

Net gains on sales of loans 15,425 15,438

Net (loss) gain on loans accounted for under the fair value option ( 350 ) 2,255 ( 302 ) 2,208

Net loss on loans accounted for under the fair value option ( 1,165 ) ( 1,034 )

Equity method investments (loss) income ( 817 ) ( 2,239 )

1 unchanged sentence

Lease income 2,135 2,573

Management fee income — 1,116 — 7,658

Other noninterest income 4,889 4,043

9 unchanged sentences

Other loan origination and maintenance expense 5,919 4,585

Renewable energy tax credit investment impairment (recovery) 336 115 606 ( 642 )

FDIC insurance 4,401 3,551

6 unchanged sentences

Net income attributable to Live Oak Bancshares, Inc.

26,516 13,025 59,661 67,574

Preferred stock dividends 2,094 —

5 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

For the three and nine months ended September 30, 2025 and 2024 (unaudited)

For the three months ended March 31, 2026 and 2025 (unaudited)

(Dollars in thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net income $ 29,947 $ 9,668

Other comprehensive income before tax:

Net unrealized gain on investment securities available-for-sale during the period 12,319 38,565 39,727 30,953

Reclassification adjustment for gain on sale of securities available-for-sale included in net income — — — —

Other comprehensive income before tax 12,319 38,565 39,727 30,953

Income tax expense ( 2,956 ) ( 9,256 ) ( 9,534 ) ( 7,429 )

Other comprehensive income, net of tax 9,363 29,309 30,193 23,524

Other comprehensive (loss) income before tax:

Net unrealized (loss) gain on investment securities available-for-sale during the period ( 3,526 ) 19,271

Other comprehensive (loss) income before tax ( 3,526 ) 19,271

Income tax benefit (expense) 846 ( 4,625 )

Other comprehensive (loss) income, net of tax ( 2,680 ) 14,646

Total comprehensive income 27,267 24,314

5 unchanged sentences

Condensed Consolidated Statements of Changes in Shareholders’ Equity

For the three and nine months ended September 30, 2025 and 2024 (unaudited)

For the three months ended March 31, 2026 and 2025 (unaudited)

(Dollars in thousands)

6 unchanged sentences

Series A Class A Class B

Balance at June 30, 2025

Balance at December 31, 2025

100,000 $ 96,266 46,032,402 — $ 388,389 $ 809,885 $ ( 44,672 ) $ 4,238 $ 1,254,106

Net income — — — — — 26,516 — ( 50 ) 26,466

Other comprehensive income — — — — — — 9,363 — 9,363

Net income (loss) — — — — — 30,040 — ( 93 ) 29,947

Other comprehensive loss — — — — — — ( 2,680 ) — ( 2,680 )

Issuance of restricted stock — — 154,541 — — — — — —

Issuance of Series A preferred stock, net of issuance costs 100,000 96,266 — — — — — — 96,266

Tax withholding related to vesting of restricted stock and other

3 unchanged sentences

Restricted stock compensation expense — — — — 6,880 — — — 6,880

Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense — — — — — 183 — — 183

Cash dividends - preferred — — — — — ( 2,094 ) — — ( 2,094 )

1 unchanged sentence

— — — — — ( 1,387 ) — — ( 1,387 )

Balance at September 30, 2025

100,000 $ 96,266 45,855,739 — $ 383,288 $ 770,820 $ ( 52,151 ) $ 4,326 $ 1,202,549

Balance at June 30, 2024

— $ — 45,003,856 — $ 356,381 $ 695,172 $ ( 90,504 ) $ — $ 961,049

Net income — — — — — 13,025 — — 13,025

Other comprehensive income — — — — — — 29,309 — 29,309

Issuance of restricted stock — — 78,402 — — — — — —

Tax withholding related to vesting of restricted stock and other

— — — — ( 2,356 ) — — — ( 2,356 )

Employee stock purchase program — — 16,445 — 747 — — — 747

Stock option exercises — — 52,988 — 539 — — — 539

Restricted stock compensation expense — — — — 6,614 — — — 6,614

Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense

— — — — — 183 — — 183

Cash dividends ($ 0.03 per share) - common

— — — — — ( 1,354 ) — — ( 1,354 )

Balance at September 30, 2024

Balance at March 31, 2026

100,000 $ 96,266 46,240,691 — $ 392,258 $ 836,444 $ ( 47,352 ) $ 4,145 $ 1,281,761

Live Oak Bancshares, Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Continued)

For the three and nine months ended September 30, 2025 and 2024 (unaudited)

(Dollars in thousands)

Nine Months Ended

Preferred Stock Common stock Retained

earnings Accumulated

comprehensive

income (loss)

Non-controlling interest Total

Shares Amount Shares Amount

Series A Class A Class B

Balance at December 31, 2024

— $ — 45,359,425 — $ 365,607 $ 715,767 $ ( 82,344 ) $ 4,466 $ 1,003,496

Net income — — — — — 59,661 — ( 140 ) 59,521

Net income (loss) — — — — — 9,717 — ( 49 ) 9,668

Other comprehensive income — — — — — — 14,646 — 14,646

Issuance of restricted stock — — 143,784 — — — — — —

Issuance of Series A preferred stock, net of issuance costs 100,000 96,266 — — — — — — 96,266

Tax withholding related to vesting of restricted stock and other

4 unchanged sentences

Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense

Cash dividends - preferred — — — — — ( 954 ) — — ( 954 )

Cash dividends ($ 0.09 per share) - common

— — — — — 98 — — 98

Balance at September 30, 2025

100,000 $ 96,266 45,855,739 — $ 383,288 $ 770,820 $ ( 52,151 ) $ 4,326 $ 1,202,549

Balance at December 31, 2023

$ — $ — 44,617,673 — $ 344,568 $ 642,817 $ ( 84,719 ) $ — $ 902,666

Net income — — — — — 67,574 — — 67,574

Other comprehensive loss — — — — — — 23,524 — 23,524

Issuance of restricted stock — — 247,685 — — — — — —

Tax withholding related to vesting of restricted stock and other

— — — — ( 5,750 ) — — — ( 5,750 )

Employee stock purchase program — — 34,930 — 1,449 — — — 1,449

Stock option exercises — — 251,403 — 1,945 — — — 1,945

Restricted stock compensation expense — — — — 19,713 — — — 19,713

Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense — — — — — 684 — — 684

Cash dividends ($ 0.03 per share) - common

— — — — — ( 1,367 ) — — ( 1,367 )

Balance at September 30, 2024

Balance at March 31, 2025

— $ — 45,589,633 — $ 370,513 $ 724,215 $ ( 67,698 ) $ 4,417 $ 1,031,447

See Notes to Unaudited Condensed Consolidated Financial Statements

Live Oak Bancshares, Inc.

Condensed Consolidated Statements of Cash Flows

For the nine months ended September 30, 2025 and 2024 (unaudited)

For the three months ended March 31, 2026 and 2025 (unaudited)

(Dollars in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

4 unchanged sentences

Accretion of discount on securities, net ( 155 ) ( 83 )

Deferred tax expense (benefit) 3,577 ( 8,989 )

Deferred tax benefit ( 598 ) ( 1,009 )

Originations of loans held for sale ( 325,627 ) ( 349,091 )

1 unchanged sentence

Net gains on sale of loans held for sale ( 15,425 ) ( 15,438 )

Net (gain) loss on impairment or sale of foreclosed assets ( 33 ) 9

Net loss (gain) on loans accounted for under fair value option 302 ( 2,208 )

Net loss on impairment or sale of foreclosed assets 140 34

Net loss on loans accounted for under fair value option 1,165 1,034

Net change in servicing assets ( 1,522 ) ( 767 )

Net gain on disposal of long-lived assets — ( 9,079 )

Net loss on disposal of property and equipment — 24

Proceeds received from government guaranteed receivables 73,948 5,169

Equity method investments loss (income) 817 2,239

Equity security investments (gains) losses, net — ( 20 )

Loss (gain) on equity warrant assets 819 ( 6,119 )

Renewable energy tax credit investment impairment (recovery) 606 ( 642 )

Net (gain) loss on equity warrant assets ( 26 ) 304

Restricted stock compensation expense 6,880 6,667

Stock based compensation excess tax (deficiency) benefit ( 669 ) 729

Stock based compensation excess tax deficiency ( 48 ) ( 156 )

Lease right-of-use assets and liabilities, net ( 26 ) ( 14 )

2 unchanged sentences

Other liabilities ( 6,685 ) ( 7,901 )

Net cash provided by operating activities 78,552 107,106

Net cash provided by (used in) operating activities 87,384 ( 29,767 )

Cash flows from investing activities

2 unchanged sentences

Proceeds from sale of foreclosed assets 227 —

Purchases of loans previously sold ( 85,379 ) ( 67,424 )

Loan and lease originations and principal collections, net ( 262,125 ) ( 413,757 )

Proceeds from sale of long-lived asset — 43,598

Purchases of equity security investments ( 66 ) ( 3,433 )

7 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Continued)

For the nine months ended September 30, 2025 and 2024 (unaudited)

For the three months ended March 31, 2026 and 2025 (unaudited)

(Dollars in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from financing activities

4 unchanged sentences

Employee stock purchase program 484 659

Proceeds from the issuance of preferred stock, net 96,266 —

Tax withholding related to vesting of restricted stock and other ( 3,994 ) ( 3,178 )

9 unchanged sentences

Supplemental disclosures of noncash investing and financing activities

Unrealized holding gains on investment securities available-for-sale, net of taxes $ 30,193 $ 23,524

Transfers from loans and leases to foreclosed real estate and other repossessions or SBA receivable

35,421 10,351

Net transfers between foreclosed assets and SBA receivable 33 —

Transfer from premises and equipment, net to other assets — 18,540

Unrealized holding (losses) gains on investment securities available-for-sale, net of taxes $ ( 2,680 ) $ 14,646

Transfers from loans and leases to foreclosed real estate and other repossessions or government guaranteed receivable

Net transfers between foreclosed assets and government guaranteed receivable 214 —

Transfer of loans held for sale to loans and leases held for investment 32,153 68,015

1 unchanged sentence

Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense

Accrued premises and equipment additions — 297

Equity method investment commitments — 1,008

Equity security investment commitments — 2,500

See Notes to Unaudited Condensed Consolidated Financial Statements

13 unchanged sentences

The Bank also lends more broadly to select borrowers outside of those verticals.

As of September 30, 2025, t he Company’s wholly owned material subsidiaries are the Bank, Government Loan Solutions, Inc.

As of March 31, 2026, t he Company’s wholly owned material subsidiaries are the Bank, Government Loan Solutions, Inc.

(“GLS”), Live Oak Grove, LLC (“Grove”), and Live Oak Ventures, Inc.

4 unchanged sentences

Live Oak Ventures’ purpose is investing in businesses that align with the Company's strategic initiative to be a leader in financial technology.

Canapi Advisors, LLC (“Canapi Advisors”) was a wholly owned subsidiary providing investment advisory services to a series of funds (the “Canapi Funds”) focused on providing venture capital to new and emerging financial technology companies.

During the third quarter of 2024, the Canapi Funds were restructured and Canapi Advisors voluntarily withdrew as an investment advisor to the funds.

Canapi Advisors was subsequently dissolved in the fourth quarter of 2024.

During the fourth quarter of 2024, Live Oak Ventures consolidated its investment in Synply, Inc.

16 unchanged sentences

In the opinion of management, all adjustments necessary for a fair presentation of the financial position and results of operations for the periods presented have been included, and all intercompany transactions have been eliminated in consolidation.

Results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2025.

The Condensed Consolidated Balance Sheet as of December 31, 2024 has been derived from the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2024, filed with the Securities Exchange Commission ( “ SEC ” ) on November 17, 2025 (SEC File No.

001-37497) (the “ 2024 Form 10-K/A ” ).

A summary description of the significant accounting policies followed by the Company is set forth in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2024 Form 10-K/A.

These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and footnotes in the Company's 2024 Form 10-K/A.

Results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2026.

The Condensed Consolidated Balance Sheet as of December 31, 2025 has been derived from the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities Exchange Commission ( “ SEC ” ) on February 27, 2025 (SEC File No.

001-37497) (the “ 2025 Form 10-K ” ).

A summary description of the significant accounting policies followed by the Company is set forth in Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2025 Form 10-K.

These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and footnotes in the Company's 2025 Form 10-K.

The preparation of financial statements in conformity with United States ( “ U.S.

7 unchanged sentences

In determining the appropriateness of the segment definition, the Company considers the components of the business about which financial information is available and components the chief operating decision maker regularly evaluates relative to resource allocation and performance assessment.

Management has determined that the Company has one significant operating segment, which is providing a banking platform for small businesses nationwide.

Management has determined that the Company has one significant operating segment, which is providing a banking platform for businesses nationwide.

The banking platform generates revenue primarily from net interest income and secondarily through the origination and sale of government guaranteed loans.

12 unchanged sentences

Changes in Accounting Estimates

During the first quarter of 2026, the Company enhanced both the quantitative and qualitative components of its ACL estimation process.

The Company changed the quantitative component from a discounted cash flow model to a probability of default ("PD") x loss given default ("LGD") x exposure at default ("EAD") based credit loss forecasting model to estimate expected credit losses, which incorporates a two-year reasonable-and-supportable forecast period influenced by multiple economic variables followed by a one-year reversion to long-run assumptions.

Prior to the change, the Company forecasted losses over a one-year reasonable-and-supportable forecast period using a single economic variable.

In connection with the implementation of this model, the Company enhanced its qualitative framework to better incorporate and align qualitative adjustments with the updated model.

The cumulative effect of these changes was not material.

During the third quarter of 2025, the Company made enhancements to the quantitative and qualitative components of the ACL estimate.

Within the quantitative component, the Company updated the method used to forecast the probability of default during a reasonable and supportable forecast period.

Within the quantitative component, the Company updated the method used to forecast the PD during a reasonable and supportable forecast period.

The Company changed the economic variable used in forecasting default rates from the national unemployment rate to the Baa-rated Corporate Bond Yield utilizing a logistic regression and changed the default rate forecast starting point from 36 month historical default performance to the most recent 12 month trailing average default performance.

These changes were based on a statistical analysis of historical defaults and macroeconomic factors.

In conjunction with the enhancements made to the probability of default methodology, the Company made enhancements to the qualitative framework to introduce weighting of quantifiable credit metrics used in the qualitative ACL estimate to put more weight on the metrics that are the strongest indicators of credit risk in the portfolio.

In conjunction with the enhancements made to the PD methodology, the Company made enhancements to the qualitative framework to introduce weighting of quantifiable credit metrics used in the qualitative ACL estimate to put more weight on the metrics that are the strongest indicators of credit risk in the portfolio.

The cumulative effect of these changes was not material.

During the second quarter of 2024, the Company made enhancements to the qualitative framework of the ACL.

The enhanced framework leverages quantifiable credit risk metrics as well as current and forecasted economic conditions to determine possible portfolio outcomes that are not captured in quantitatively modeled results.

The framework continues to consider risk factors which include, but are not limited to, changes in lending policies, economic and business conditions, nature and volume of portfolio, volume and severity of past due loans, value of underlying collateral, concentrations, and prepayment speeds.

The result of these changes was not material.

These refinements have been accounted for as changes in accounting estimates under Financial Accounting Standards Board ( “ FASB ” ) Accounting Standards Codification ( “ ASC ” ) 250, Accounting Changes and Error Corrections , with prospective application beginning in the period of change.

Long-Lived Asset Reclassified to Held for Sale

During the second quarter of 2024, the Company sold an aircraft that was previously reclassified as held for sale.

The $ 6.7 million gain on the sale of the aircraft is reflected in other income on the Condensed Consolidated Statements of Income.

During the first quarter of 2024, the Company determined that retention of an idle building and accompanying land adjacent to its main campus was not best suited to serve future expansion plans.

As a result of this determination, the Company entered into a purchase and sale agreement with a third party with expected total proceeds, net of estimated expenses, of $ 20.9 million.

Accordingly, the $ 18.5 million carrying amount of the building and land, was considered held for sale, and reclassified from premises and equipment, net to other assets in the Unaudited Condensed Consolidated Balance Sheet.

During the third quarter of 2024, the building and land were sold for a gain of $ 2.4 million.

The above refinements have been accounted for as changes in accounting estimates under Financial Accounting Standards Board ( “ FASB ” ) Accounting Standards Codification ( “ ASC ” ) 250, Accounting Changes and Error Corrections , with prospective application beginning in the period of change.

Preferred Stock

3 unchanged sentences

The Company may redeem the Series A Preferred Stock at its option, (i) in whole or in part, from time to time, on any dividend payment date on or after September 15, 2030 or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event, in either case at a redemption price equal to $ 1,000 per share (equivalent to $ 25 per depositary share), plus any declared and unpaid dividends.

During three months ended September 30, 2025, a cash dividend of $ 0.23845 per Depositary Share of its Series A Preferred Stock was declared and paid.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Correction of Error

Subsequent to the issuance of the Company's March 31, 2025 and June 30, 2025 Quarterly Consolidated Financial Statements on May 5, 2025 and August 5, 2025, respectively, an error was identified in the historical Condensed Consolidated Statements of Cash Flows related to the classification of cash flows between operating and investing activities associated with the proceeds received from the sale of loan participations and the related supplemental disclosures of non-cash operating, investing, and financing activities related to these loans.

Accordingly, the Company has restated the Condensed Consolidated Statements of Cash Flows to reflect the error correction for the three months ended March 31, 2025 and 2024, six months ended June 30, 2025 and 2024 and nine months ended September 30, 2024.

Net income, retained earnings and shareholders' equity previously reported were not affected by the error correction.

The effect of the above error on previously reported Condensed Consolidated Statements of Cash Flows is presented below:

As reported Corrections As restated

Condensed consolidated statement of cash flows for the three months ended March 31, 2025

Operating activities:

Proceeds from sales of loans held for sale $ 422,294 $ ( 137,954 ) $ 284,340

Net cash provided by (used in) operating activities 104,977 ( 137,954 ) ( 32,977 )

Investing activities:

Loan and lease originations and principal collections, net $ ( 524,894 ) $ 137,954 $ ( 386,940 )

Net cash used by investing activities ( 599,264 ) 137,954 ( 461,310 )

Net increase in cash and cash equivalents $ 135,463 $ — $ 135,463

Supplemental disclosures of noncash operating, investing, and financing activities

Transfer of loans held for sale to loans and leases held for investment $ 205,385 $ ( 137,370 ) $ 68,015

Transfer of loans and leases held for investment to loans held for sale 283,718 ( 274,740 ) 8,978

Condensed consolidated statement of cash flows for the six months ended June 30, 2025

Operating activities:

Proceeds from sales of loans held for sale $ 924,481 $ ( 296,882 ) $ 627,599

Net cash provided by operating activities 313,146 ( 296,882 ) 16,264

Investing activities:

Loan and lease originations and principal collections, net $ ( 984,384 ) $ 296,882 $ ( 687,502 )

Net cash used by investing activities ( 1,084,324 ) 296,882 ( 787,442 )

Net increase in cash and cash equivalents $ 53,955 $ — $ 53,955

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

As reported Corrections As restated

Supplemental disclosures of noncash operating, investing, and financing activities

Transfer of loans held for sale to loans and leases held for investment $ 408,925 $ ( 295,599 ) $ 113,326

Transfer of loans and leases held for investment to loans held for sale 610,907 ( 591,199 ) 19,708

Condensed consolidated statement of cash flows for the three months ended March 31, 2024

Operating activities:

Proceeds from sales of loans held for sale $ 258,708 $ ( 60,725 ) $ 197,983

Net cash provided by operating activities 90,893 ( 60,725 ) 30,168

Investing activities:

Loan and lease originations and principal collections, net $ ( 228,713 ) $ 60,725 $ ( 167,988 )

Net cash used by investing activities ( 278,698 ) 60,725 ( 217,973 )

Net increase in cash and cash equivalents $ 14,854 $ — $ 14,854

Supplemental disclosures of noncash operating, investing, and financing activities

Transfer of loans and leases held for investment to loans held for sale $ 63,508 $ ( 60,552 ) $ 2,956

Condensed consolidated statement of cash flows for the six months ended June 30, 2024

Operating activities:

Proceeds from sales of loans held for sale $ 577,817 $ ( 115,071 ) $ 462,746

Net cash provided by operating activities 174,769 ( 115,071 ) 59,698

Investing activities:

Loan and lease originations and principal collections, net $ ( 577,457 ) $ 115,071 $ ( 462,386 )

Net cash used by investing activities ( 664,282 ) 115,071 ( 549,211 )

Net increase in cash and cash equivalents $ 32,909 $ — $ 32,909

Supplemental disclosures of noncash operating, investing, and financing activities

Transfer of loans and leases held for investment to loans held for sale $ 178,482 $ ( 114,800 ) $ 63,682

During three months ended March 31, 2026, a cash dividend of $ 0.52344 per Depositary Share of its Series A Preferred Stock was declared and paid.

Revision of Previously Issued Financial Statements

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, certain immaterial prior-period amounts in the Unaudited Condensed Consolidated Statements of Income have been revised and are reflected below.

Specifically, there was a decrease in the line item for net gains on sales of loans, which was fully offset by a decrease in salaries and employee benefits, and travel expense.

The changes were presentation only and had no impact on previously reported net income, total assets, total liabilities, or shareholders’ equity.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

As reported Corrections As restated

Condensed consolidated statement of cash flows for the nine months ended September 30, 2024

The effect of the above revision on previously reported financial statements is presented below:

As previously reported Impact of revision As revised

Consolidated statement of income for the three months ended March 31, 2025

Net gains on sales of loans $ 18,648 $ ( 3,210 ) $ 15,438

Total noninterest income 25,581 ( 3,210 ) 22,371

Salaries and employee benefits $ 48,008 $ ( 2,479 ) $ 45,529

Travel expense 2,795 ( 731 ) 2,064

Total noninterest expense 84,017 ( 3,210 ) 80,807

Consolidated statement of cash flows for the three months ended March 31, 2025

Operating activities:

Proceeds from sales of loans held for sale $ 1,003,740 $ ( 258,677 ) $ 745,063

Net gains on sale of loans held for sale $ ( 18,648 ) $ 3,210 $ ( 15,438 )

Net cash provided by operating activities ( 32,977 ) 3,210 ( 29,767 )

Investing activities:

Loan and lease originations and principal collections, net $ ( 1,341,740 ) $ 258,677 $ ( 1,083,063 )

Net change in loans and leases $ ( 410,547 ) $ ( 3,210 ) $ ( 413,757 )

Net cash used by investing activities ( 461,310 ) ( 3,210 ) ( 464,520 )

Net increase in cash and cash equivalents $ 84,045 $ — $ 84,045

Supplemental disclosures of noncash operating, investing, and financing activities

Transfer of loans and leases held for investment to loans held for sale $ 340,121 $ ( 257,770 ) $ 82,351

Reclassifications

Certain reclassifications have been made to the prior period's Unaudited Condensed Consolidated Financial Statements to place them on a comparable basis with the current year.

Net income and shareholders' equity previously reported were not affected by these reclassifications.

Recent Accounting Pronouncements

In October 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-06 “Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”).

ASU 2023-06 amends the ASC to incorporate certain disclosure requirements from SEC Release No.

33-10532 - Disclosure Update and Simplification that was issued in 2018.

The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

The Company does not believe this standard will have a material impact on its consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”).

ASU 2023-09 requires enhanced income tax disclosures primarily related to the rate reconciliation and income taxes paid information to provide more transparency by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation table and (ii) income taxes paid, net of refunds, to be disaggregated by jurisdiction based on an established threshold.

ASU 2023-09 is effective January 1, 2025 and impacts the Company’s annual income tax disclosure.

Aside from complying with the new disclosure requirements, the Company does not believe this standard will have a material impact on its consolidated financial statements.

In March 2024, the FASB issued ASU 2024-01 “Compensation - Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards” (“ASU 2024-01”).

ASU 2024-01 adds an illustrative example to clarify how an entity should determine whether a profits interest or similar award is within the scope of ASC 718.

The Company adopted the standard on January 1, 2025, with no material effect on its consolidated financial statements.

In March 2024, the FASB issued ASU 2024-02 “Codification Improvements - Amendments to Remove References to the Concepts Statements” (“ASU 2024-02”).

ASU 2024-02 removes references to various Concepts Statements in the Codification.

The Company adopted the standard on January 1, 2025, with no material effect on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03 “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Accounting Standards Issued But Not Currently Effective

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03 “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses” (“ASU 2024-03”).

1 unchanged sentence

The amendments in this standard will be effective for the Company on January 1, 2027.

The guidance may be applied on a prospective or retrospective basis.

The Company is currently evaluating the impact the amendments will have on the consolidated financial statements and related disclosures.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

In September 2025, the FASB issued ASU 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

3 unchanged sentences

The amendments in this standard will be effective for the Company on January 1, 2028.

The guidance may be applied on a prospective, modified, or retrospective transition basis.

The Company is currently evaluating the impact the amendments will have on the consolidated financial statements.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

In September 2025, the FASB issued ASU 2025-07 “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

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The guidance in other ASCs, including derivatives (ASC 815) and equity securities (ASC 321), is not applied unless and until the entity’s right to receive or retain the share-based noncash consideration is unconditional under ASC 606.The amendments in this standard will be effective for the Company on January 1, 2027.

The guidance may be applied on a prospective or modified retrospective basis.

The Company is currently evaluating the impact the amendments will have on the consolidated financial statements.

Legislative Developments

On July 4, 2025, H.R.

fiscal-year 2025 budget reconciliation legislation, commonly known as the One Big Beautiful Bill Act (“OBBB”), was signed into law, implementing changes in tax and other provisions.

The Company does not currently believe the impacts of the OBBB will be material to the consolidated financial statements and related disclosures .

In December 2025, the FASB issued ASU 2025-11 “Interim Reporting (Topic 270):

Narrow-Scope Improvements” (“ASU 2025-11”).

The amendments clarify interim disclosure requirements and when Topic 270 applies as well as the addition of a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

The amendments in this standard will be effective for the Company on January 1, 2028.

The guidance may be applied on a prospective or retrospective basis.

The Company is currently evaluating the impact the amendments will have on the consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12 “Codification Improvements” (“ASU 2025-12”).

The amendments represent changes to the Codification to make incremental improvements to GAAP including technical corrections, clarifications, and minor improvements.

The amendments in this standard will be effective for the Company on January 1, 2027.

The guidance may generally be applied, by issue, on a prospective or retrospective basis.

The Company does not believe this standard will have a material impact on its consolidated financial statements.

Earnings Per Share

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Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Basic earnings per share:

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Available-for-Sale

The carrying amount of investments and their approximate fair values are reflected in the following table:

September 30, 2025 Amortized

The amortized cost, estimated fair value and unrealized gains (losses) are reflected in the following table:

March 31, 2026 Amortized

government agencies $ 20,274 $ 18 $ 38 $ 20,254

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Total $ 1,486,194 $ 8,354 $ 67,147 $ 1,427,401

During the three months ended September 30, 2025, six securities totaling $ 12.5 million were settled and one security totaling $ 3.0 million matured.

During the nine months ended September 30, 2025, thirteen securities totaling $ 29.4 million were settled and two securities totaling $ 7.0 million matured.

During the three months ended September 30, 2024, four securities totaling $ 3.7 million were settled.

During the nine months ended September 30, 2024, six securities totaling $ 18.5 million were settled, one security totaling $ 2.5 million was called and one security totaling $ 3.0 million matured.

Accrued interest receivable on available-for-sale securities totaled $ 4.8 million and $ 4.2 million at September 30, 2025 and December 31, 2024, respectively, and is included in other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2026, ten securities totaling $ 18.0 million were settled.

During the three months ended March 31, 2025, three securities totaling $ 5.6 million were settled.

Accrued interest receivable on available-for-sale securities totaled $ 5.2 million and $ 5.1 million at March 31, 2026 and December 31, 2025, respectively, and is included in other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets.

The following tables show debt securities available-for-sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.

Less Than 12 Months 12 Months or More Total

September 30, 2025 Fair

March 31, 2026 Fair

government agencies $ 9,788 $ 23 $ 2,971 $ 15 $ 12,759 $ 38

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Notes to Unaudited Condensed Consolidated Financial Statements

At September 30, 2025, there were 385 mortgage-backed securities, one U.S.

At March 31, 2026, there were 340 mortgage-backed securities, one U.S.

government agency and two municipal bonds in unrealized loss positions for greater than 12 months.

There were 55 mortgage-backed securities, two U.S.

government agencies and one municipal bond in unrealized loss positions for less than 12 months.

Unrealized losses at December 31, 2025 were comprised of 357 mortgage-backed securities, one U.S.

government agency and one municipal bond in unrealized loss positions for greater than 12 months.

There were 15 mortgage-backed securities, one U.S.

government agency and two municipal bonds in unrealized loss positions for less than 12 months.

Unrealized losses at December 31, 2024 were comprised of 404 mortgage-backed securities, three U.S.

government agencies and two municipal bonds in unrealized loss positions for greater than 12 months.

There were 59 mortgage-backed securities and two U.S.

government agencies in unrealized loss positions for less than 12 months.

There were 18 mortgage-backed securities and two municipal bonds in unrealized loss positions for less than 12 months.

These unrealized losses are primarily the result of non-credit-related volatility in the market and market interest rates.

Since none of the unrealized losses relate to the issuers' ability to honor redemption obligations, and the Company does not intend to sell the related securities and does not believe it is more likely than not that it will be required to sell the securities before recovery of amortized cost, none of the losses have been recognized in the Company’s Unaudited Condensed Consolidated Statements of Income.

All mortgage-backed securities in the Company’s portfolio at September 30, 2025 and December 31, 2024 were backed by U.S.

All mortgage-backed securities in the Company’s portfolio at March 31, 2026 and December 31, 2025 were backed by U.S.

government sponsored enterprises (“GSEs”).

The following is a summary of investment securities by maturity:

September 30, 2025

March 31, 2026

Available-for-Sale

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Actual results will differ as the loans underlying the mortgage-backed securities may prepay sooner than scheduled.

At September 30, 2025, investment securities with a fair value of $ 580.2 million and amortized cost of $ 630.2 million were pledged to support unused borrowing capacity.

At March 31, 2026, investment securities with a fair value of $ 540.0 million and amortized cost of $ 583.5 million were pledged to support unused borrowing capacity.

At December 31, 2025, investment securities with a fair value of $ 565.8 million and amortized cost of $ 610.1 million were pledged to support unused borrowing capacity.

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Equity Method Accounting

The carrying amount and ownership percentage of each equity method investment at September 30, 2025 and December 31, 2024 is reflected in the following table:

September 30, 2025 December 31, 2024

The carrying amount and ownership percentage of each equity method investment at March 31, 2026 and December 31, 2025 is reflected in the following table:

March 31, 2026 December 31, 2025

Amount Ownership % Amount Ownership %

Apiture, Inc.

$ 48,640 40.4 % $ 53,108 40.4 %

Canapi Ventures SBIC Fund, LP (1) (5)

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Total $ 35,402 $ 36,698

(1) On October 21, 2025, the Company sold all interest in Apiture, Inc.

Please refer to Note 11.

Subsequent Event for details.

(2) Investment unfunded commitments of $ 4.8 million and $ 5.0 million as of September 30, 2025 and December 31, 2024, respectively.

(3) Investment unfunded commitments of $ 472 thousand and $ 492 thousand as of September 30, 2025 and December 31, 2024, respectively.

(4) Investment unfunded commitments of $ 4.0 million and $ 5.2 million as of September 30, 2025 and December 31, 2024, respectively.

(5) Investment unfunded commitments of $ 5.8 million and $ 6.5 million as of September 30, 2025 and December 31, 2024, respectively.

(1) Investment unfunded commitments of $ 4.8 million as of March 31, 2026 and December 31, 2025.

(2) Investment unfunded commitments of $ 472 thousand as of March 31, 2026 and December 31, 2025.

(3) Investment unfunded commitments of $ 3.6 million as of March 31, 2026 and December 31, 2025.

(4) Investment unfunded commitments of $ 4.9 million as of March 31, 2026 and December 31, 2025.

(5) Investee is accounted for under equity method due to the Company's potential influence with investment advisor.

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Also included are Cape Fear Collective Impact Opportunity 1 LLC (“Cape Fear Collective 1”) and Cape Fear Collective Impact Opportunity 2 LLC (“Cape Fear Collective 2”) which the Company holds 91.0 % and 32.3 % of limited member interests, respectively.

As of December 31, 2024, the Company had an unfunded commitment of $ 1.7 million in Estrella Landing.

There was no unfunded commitment as of September 30, 2025.

(7) Solar tax credit investments includes Green Sun Tenant LLC (“Green Sun”), SVA 2021-2 TE Holdco LLC (“Sun Vest”), EG5 CSP1 Holding LLC (“HEP”), and HRE Lessee I, LLC (“Heelstone”), which the Company holds a 99.0 % limited member interest in all investments.

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Equity Security Accounting

The carrying amount of the Company’s investments in non-marketable equity securities with no readily determinable fair value for the nine months ended September 30, 2025 and 2024 is reflected in the following table:

As of and for the nine month period ended

September 30, 2025 September 30, 2024

The carrying amount of the Company’s investments in non-marketable equity securities with no readily determinable fair value for the three months ended March 31, 2026 and 2025 is reflected in the following table:

As of and for the three month period ended

March 31, 2026 March 31, 2025

Carrying value (1)

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Net upward (downward) change $ — $ —

(1) Investment unfunded commitments of $ 6.9 million and $ 4.4 million as of September 30, 2025, and September 30, 2024, respectively.

(2) The equity securities portfolio has recognized cumulative adjustments of $ 49.7 million over the life of the equity security portfolio as of September 30, 2025.

For the three and nine months ended September 30, 2025, the Company recognized unrealized gains on all equity securities held at the reporting date of $ 5 thousand and $ 986 thousand, respectively.

For the three and nine months ended September 30, 2024, the Company recognized unrealized gains on all equity securities held at the reporting date of $ 383 thousand and $ 114 thousand, respectively.

(1) Investment unfunded commitments of $ 6.0 million and $ 5.4 million as of March 31, 2026, and March 31, 2025, respectively.

(2) The equity securities portfolio has recognized cumulative adjustments of $ 59.3 million over the life of the equity security portfolio as of March 31, 2026.

For the three months ended March 31, 2026, the Company did not recognize any unrealized gains on equity securities held at the reporting date.

For the three months ended March 31, 2025, the Company recognized unrealized gains on all equity securities held at the reporting date of $ 8 thousand.

Variable Interest Entities (“VIE”s)

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The Company also has equity interests in two limited liability companies that invest in the acquisition, rehabilitation, or new construction of local qualified housing projects which are accounted for as equity method investments.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company’s limited partnership investments in the Canapi Funds focus on providing venture capital to new and emerging financial technology companies.

After the initial commitment and over the course of the investment period, the Company will make capital contributions and receive profit and return of capital distributions as a result of fund performance until the funds wind down.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Non-marketable and Other Equity Investments

The Company also has limited interests in several non-marketable funds, including Small Business Investment Company (“SBIC”) and venture capital funds, which are accounted for as equity security investments.

The Company also has limited interests in several non-marketable funds, including Small Business Investment Company (“SBIC”), venture capital funds, and a reciprocal deposit network, all of which are accounted for as equity security investments.

For fund investments, after the initial commitment and over the course of the investment period, the Company will make capital contributions and receive profit and return of capital distributions as a result of fund performance until the funds wind down.

While the partnership agreements allow the Company to remove the general partner, this right is not deemed to be substantive as the general partner can only be removed for cause.

8 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

The following table provides a summary of the VIEs that the Company has not consolidated as of September 30, 2025 and December 31, 2024:

September 30, 2025 Investment Carrying Amount Maximum Exposure to Loss Liability Recognized Classification

The following table provides a summary of the VIEs that the Company has not consolidated as of March 31, 2026 and December 31, 2025:

March 31, 2026 Investment Carrying Amount Maximum Exposure to Loss Liability Recognized Classification

Solar tax credit investments $ 3,550 $ 17,634 $ — Other assets (1)

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(1) Maximum exposure to loss includes $ 3.6 million of current investments and a scenario in which related tax credits are recaptured, collectively totaling $ 14.0 million.

(2) Maximum exposure to loss includes $ 13.7 million of current investments and a scenario in which related tax credits are recaptured, collectively totaling $ 941 thousand.

(2) Maximum exposure to loss includes $ 13.2 million of current investments and a scenario in which $ 941 thousand in related tax credits are recaptured.

(3) Maximum exposure to loss includes $ 18.6 million of current investments and $ 13.8 million in unfunded commitments.

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(5) Maximum exposure to loss includes $ 4.2 million of current investments and a scenario in which related tax credits are recaptured, collectively totaling $ 23.4 million.

(6) Maximum exposure to loss includes $ 12.9 million of current investments, $ 1.7 million in unfunded commitments, and a scenario in which related tax credits are recaptured, collectively totaling $ 824 thousand.

(6) Maximum exposure to loss includes $ 13.5 million of current investments and a scenario in which $ 941 thousand in related tax credits are recaptured.

(7) Maximum exposure to loss includes $ 19.0 million of current investments and $ 13.8 million in unfunded commitments.

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Total Loans and Leases

September 30, 2025

March 31, 2026

Commercial & Industrial

1 unchanged sentence

Commercial Banking 2,997,549 4,298 38,053 42,351 3,039,900 40,011 3,079,911

Paycheck Protection Program 1,128 — — — 1,128 — 1,128

Total 5,382,803 33,532 165,770 199,302 5,582,105 119,436 5,701,541

9 unchanged sentences

Small Business Banking 677,434 2,140 3,279 5,419 682,853 24,297 707,150

Commercial Banking 596 — — — 596 — 596

Total 677,434 2,140 3,279 5,419 682,853 24,297 707,150

16 unchanged sentences

Commercial Banking 2,833,724 9 112 121 2,954,283 41 2,995,115

Paycheck Protection Program 2,361 — — — 2,361 — 2,361

Total 5,203,908 32,108 238,947 271,055 5,474,963 128,364 5,603,327

17 unchanged sentences

Fair Value of Financial Instruments for additional information.

Credit Quality Indicators

The following tables present asset quality indicators by portfolio class and origination year.

Loans and Leases Held for Investment and Credit Quality in the Company’s 2024 Form 10-K/A for additional discussion around the asset quality indicators that the Company uses to manage and monitor credit risk.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Credit Quality Indicators

The following tables present asset quality indicators by portfolio class and origination year.

Loans and Leases Held for Investment and Credit Quality in the Company’s 2025 Form 10-K for additional discussion around the asset quality indicators that the Company uses to manage and monitor credit risk.

Term Loans and Leases Amortized Cost Basis by Origination Year

2 unchanged sentences

Converted to Term Total (1)

September 30, 2025

March 31, 2026

Small Business Banking

8 unchanged sentences

Total 242,374 1,386,898 838,063 475,834 324,091 289,454 638,293 225,358 4,420,365

Paycheck Protection Program

Pass — — — — 827 301 — — 1,128

Total $ 563,866 $ 3,064,080 $ 2,192,202 $ 1,511,372 $ 1,481,978 $ 2,016,083 $ 841,941 $ 279,288 $ 11,950,810

Total $ 2,171,146 $ 2,253,634 $ 1,732,277 $ 1,680,026 $ 1,320,509 $ 1,153,783 $ 742,482 $ 253,895 $ 11,307,752

Year-To-Date Gross Charge-offs

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Total 1,461,802 842,588 485,396 351,956 298,283 153,672 608,236 233,373 4,435,306

Paycheck Protection Program

Pass — — — 1,461 900 — — — 2,361

Total $ 3,022,630 $ 2,219,587 $ 1,561,548 $ 1,561,548 $ 1,250,966 $ 1,053,567 $ 794,800 $ 284,563 $ 11,749,209

Total $ 2,302,364 $ 1,928,177 $ 2,003,945 $ 1,520,116 $ 704,224 $ 724,494 $ 590,812 $ 160,477 $ 9,934,609

Year-To-Date Gross Charge-offs

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Total $ 3,472 $ 5,518 $ 14,763 $ 16,079 $ 14,960 $ 5,624 $ 4,689 $ 9,070 $ 74,175

(1) Excludes $ 280.3 million and $ 328.7 million of loans accounted for under the fair value option as of September 30, 2025 and December 31, 2024, respectively.

(1) Excludes $ 244.9 million and $ 260.6 million of loans accounted for under the fair value option as of March 31, 2026 and December 31, 2025, respectively.

The following tables present guaranteed and unguaranteed loan and lease balances by asset quality indicator:

September 30, 2025 Loan and Lease

March 31, 2026 Loan and Lease

Guaranteed Balance Unguaranteed Balance % Guaranteed

9 unchanged sentences

Total $ 11,749,209 $ 3,309,886 $ 8,439,323 28.2 %

(1) Excludes $ 280.3 million and $ 328.7 million of loans accounted for under the fair value option as of September 30, 2025 and December 31, 2024, respectively.

(1) Excludes $ 244.9 million and $ 260.6 million of loans accounted for under the fair value option as of March 31, 2026 and December 31, 2025, respectively.

Live Oak Bancshares, Inc.

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Nonaccrual Loans and Leases

As of September 30, 2025 and December 31, 2024 there were no loans greater than 90 days past due and still accruing.

There was no interest income recognized on nonaccrual loans and leases during the three and nine months ended September 30, 2025 and 2024.

Accrued interest receivable on loans totaled $ 81.8 million and $ 80.7 million at September 30, 2025 and December 31, 2024 , respectively, and is included in other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets.

Nonaccrual loans and leases held for investment as of September 30, 2025 and December 31, 2024 are as follows:

September 30, 2025 Loan and Lease

As of March 31, 2026 and December 31, 2025 there were no loans greater than 90 days past due and still accruing.

There was no interest income recognized on nonaccrual loans and leases during the three months ended March 31, 2026 and 2025.

Accrued interest receivable on loans totaled $ 83.8 million and $ 85.0 million at March 31, 2026 and December 31, 2025 , respectively, and is included in other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets.

Nonaccrual loans and leases held for investment as of March 31, 2026 and December 31, 2025 are as follows:

March 31, 2026 Loan and Lease

Balance Unguaranteed Balance Unguaranteed

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The following table summarizes the amount of accrued interest reversed during the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Commercial & Industrial $ 886 $ 444

5 unchanged sentences

Fair Value of Financial Instruments for additional information.

The following table presents the amortized cost basis of collateral-dependent loans and leases, which are individually evaluated to determine expected credit losses, as of September 30, 2025 and December 31, 2024:

The following table presents the amortized cost basis of collateral-dependent loans and leases, which are individually evaluated to determine expected credit losses, as of March 31, 2026 and December 31, 2025:

Total Collateral-Dependent Loans Unguaranteed Portion

September 30, 2025 Real Estate Business Assets Real Estate Business Assets Allowance for Credit Losses

March 31, 2026 Real Estate Business Assets Real Estate Business Assets Allowance for Credit Losses

Commercial & Industrial

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Total 22,421 30,610 6,252 21,137 50

Construction & Development

Small Business Banking 96 — 96 — 11

Total 96 — 96 — 11

Commercial Real Estate

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Total 17,477 91,426 4,937 4,118 1,424

Commercial Real Estate

Construction & Development

Small Business Banking 277 — 277 — —

Total 277 — 277 — —

Commercial Land

Commercial Real Estate

Small Business Banking 85,987 1,990 27,813 690 266

Commercial Banking 20,389 — 15,425 — —

Total 106,376 1,990 43,238 690 266

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Allowance for Credit Losses - Loans and Leases

Basis of Presentation above and Note 1.

Organization and Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements in the Company’s 2024 Form 10-K/A for a description of the methodologies used to estimate the ACL.

Basis of Presentation above for a description of enhancements made to the ACL during the first quarter of 2026 and Note 1.

Organization and Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements in the Company’s 2025 Form 10-K for a description of the methodologies used to estimate the ACL prior to January 1, 2026.

The following table details activity in the ACL by portfolio segment allowance for the periods presented:

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Real Estate Commercial

September 30, 2025

March 31, 2026

Beginning Balance $ 144,188 $ 7,224 $ 37,362 $ 3,490 $ 192,264

3 unchanged sentences

Ending Balance $ 139,211 $ 7,474 $ 44,543 $ 2,051 $ 193,279

September 30, 2024

March 31, 2025

Beginning Balance $ 129,007 $ 4,943 $ 29,501 $ 4,065 $ 167,516

3 unchanged sentences

Ending Balance $ 149,916 $ 5,712 $ 30,295 $ 4,261 $ 190,184

Nine Months Ended Commercial

& Industrial Construction &

Development Commercial

Real Estate Commercial

September 30, 2025

Beginning Balance $ 129,007 $ 4,943 $ 29,501 $ 4,065 $ 167,516

Charge offs ( 51,609 ) — ( 6,023 ) ( 178 ) ( 57,810 )

Recoveries 1,781 — 893 101 2,775

Provision (Recovery) 58,684 1,397 13,175 ( 37 ) 73,219

Ending Balance $ 137,863 $ 6,340 $ 37,546 $ 3,951 $ 185,700

September 30, 2024

Beginning Balance $ 87,581 $ 4,717 $ 28,864 $ 4,678 $ 125,840

Charge offs ( 13,483 ) ( 338 ) ( 378 ) ( 24 ) ( 14,223 )

Recoveries 553 — 536 8 1,097

Provision (Recovery) 58,397 ( 394 ) ( 1,049 ) ( 931 ) 56,023

Ending Balance $ 133,048 $ 3,985 $ 27,973 $ 3,731 $ 168,737

During the three months ended September 30, 2025, the ACL increased primarily as a result of loan growth and moderating credit trends.

During the nine months ended September 30, 2025, the ACL increased primarily as a result of loan growth and the impact of charge offs amid a challenging macroeconomic environment.

Elevated interest rates and inflationary pressures have placed financial strain on some small business and commercial borrowers which resulted in a continued increase in charge-offs.

Loss rates are adjusted for twelve month forecasted Baa-rated corporate bond yields followed by a twelve-month straight-line reversion period.

During the three months ended September 30, 2024, the ACL increased primarily as a result of an increase in specific reserves on loans individually evaluated for impairment.

During the nine months ended September 30, 2024, the ACL increased as a result of specific reserve changes on individually evaluated loans and continued growth of the loan and lease portfolio.

During the three months ended March 31, 2026, the ACL increased primarily as a result of loan growth and charge off impacts amid a challenging macroeconomic environment, where elevated interest rates and inflationary pressures have placed financial strain on some small business and commercial borrowers.

Loss rates are adjusted for multiple two year forecasted economic variables followed by a twelve-month straight-line reversion period.

During the three months ended March 31, 2025, the ACL increased as a result of loan growth amid a challenging macroeconomic environment which included specific reserve changes on individually evaluated loans.

Loss rates are adjusted for twelve month forecasted unemployment followed by a twelve-month straight-line reversion period.

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The Company typically does not offer principal forgiveness.

The following tables summarize the amortized cost basis of loans that were modified during the three and nine months ended September 30, 2025 and September 30, 2024, respectively:

Three Months Ended September 30, 2025 Other-Than-Insignificant

The following tables summarize the amortized cost basis of loans that were modified during the three months ended March 31, 2026 and March 31, 2025, respectively:

Three Months Ended March 31, 2026 Other-Than-Insignificant

Payment Delay Term Extension Interest Rate Reduction Combination - Other-Than-Insignificant Payment Delay & Interest Rate Reduction

Combination - Term Extension & Interest Rate Reduction % of Total Class of

Financing Receivable

Small Business Banking $ 94 $ 5,701 $ 2,015 $ 6,019 $ 8,066 0.31 %

Commercial Banking 13,126 — — — — 0.48

Total $ 13,220 $ 5,701 $ 2,015 $ 6,019 $ 8,066 0.79 %

Nine Months Ended September 30, 2025 Other-Than-Insignificant

Payment Delay Term Extension Interest Rate Reduction Combination - Term Extension, Other-Than-Insignificant Payment Delay & Interest Rate Reduction Combination - Other-Than-Insignificant Payment Delay & Interest Rate Reduction Combination - Term Extension & Other-Than-Insignificant Payment Delay Combination - Term Extension & Interest Rate Reduction % of Total Class of

Financing Receivable

Small Business Banking $ 94 $ 19,949 $ 11,807 $ 2,906 $ 6,019 $ 3,009 $ 17,953 0.87 %

Commercial Banking 18,653 — — — — — — 0.68

Total $ 18,747 $ 19,949 $ 11,807 $ 2,906 $ 6,019 $ 3,009 $ 17,953 1.55 %

Three Months Ended September 30, 2024 Other-Than-Insignificant

Payment Delay Interest Rate Reduction Combination - Term Extension & Interest Rate Reduction % of Total Class of

Combination - Term Extension & Interest Rate Reduction Total Modifications % of Total Class of

Financing Receivable

2 unchanged sentences

Total $ 7,575 $ 13,610 $ 13,127 $ 7,774 $ 1,141 $ 43,227 0.58 %

Nine Months Ended September 30, 2024 Other-Than-Insignificant

Payment Delay Interest Rate Reduction Combination - Term Extension & Interest Rate Reduction % of Total Class of

Three Months Ended March 31, 2025

Term Extension Interest Rate Reduction Combination - Term Extension, Other-Than-Insignificant Payment Delay & Interest Rate Reduction Combination - Term Extension & Other-Than-Insignificant Payment Delay Combination - Term Extension & Interest Rate Reduction Total Modifications % of Total Class of

Financing Receivable

Small Business Banking $ 3,601 $ 2,243 $ 3,057 $ 3,009 $ 193 $ 12,103 0.20 %

Commercial Banking — 3,478 2,500 0.16

Total $ 3,601 $ 2,243 $ 3,057 $ 3,009 $ 193 $ 12,103 0.20 %

As of September 30, 2025, the Company had commitments to lend additional funds to these borrowers totaling $ 28 thousand.

As of December 31, 2024, the Company had commitments to lend additional funds to these borrowers totaling $ 6.3 million.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following table presents an aging analysis of loans that were modified within the twelve months ended September 30, 2025 and September 30, 2024, respectively:

September 30, 2025 Current 30-89 Days

As of March 31, 2026, the Company had commitments to lend additional funds to these borrowers totaling $ 698 thousand.

As of March 31, 2025, the Company had commitments to lend additional funds to these borrowers totaling $ 28 thousand.

The following table presents an aging analysis of loans that were modified within the twelve months ended March 31, 2026 and March 31, 2025, respectively:

March 31, 2026 Current 30-89 Days

Past Due 90 Days or More Past Due Total Past Due

2 unchanged sentences

Total $ 123,468 $ 3,287 $ 390 $ 3,677

September 30, 2024 Current 30-89 Days

March 31, 2025 Current 30-89 Days

Past Due 90 Days or More Past Due Total Past Due

2 unchanged sentences

Total $ 35,220 $ — $ 2,243 $ 2,243

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following tables summarize the financial impacts of loan modifications made to borrowers experiencing financial difficulty during the periods presented:

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

Weighted Average

2 unchanged sentences

Small Business Banking 5.99 % 37

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2025

Weighted Average

2 unchanged sentences

Small Business Banking 1.81 % 44

Three Months Ended September 30, 2024

Weighted Average

Interest Rate Reduction Weighted Average

Term Extension (in Months)

Commercial Lending 5.00 % 7

Nine Months Ended September 30, 2024

Weighted Average

Interest Rate Reduction Weighted Average

Term Extension (in Months)

Commercial Lending 5.00 % 7

Additionally, there were no loans that were modified within the twelve months ended September 30, 2025 and September 30, 2024 that subsequently defaulted during the periods presented.

The following table presents the loans that were modified during the preceding twelve months and subsequently defaulted during the period.

Three Months Ended March 31, 2026 Other-Than-Insignificant Payment Delay Term Extension Interest Rate Reduction Total

Small Business Banking $ 4,997 $ — $ — $ 4,997

Commercial Banking — 2,336 — 2,336

Total $ 4,997 $ 2,336 $ — $ 7,333

At March 31, 2025, there were no loans that defaulted after being modified during the preceding twelve months.

The Company’s ACL is estimated using lifetime historical loan performance adjusted to reflect current conditions and reasonable and supportable forecasts.

2 unchanged sentences

As a result, the impact of loss mitigation strategies is captured in the estimates of PD and LGD.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Lessor Equipment Leasing

The Company may purchase new equipment for the purpose of leasing such equipment to customers within its verticals.

Equipment purchased to fulfill commitments to commercial renewable energy projects is rented out under operating leases while leases of equipment outside of the renewable energy vertical are generally direct financing leases.

Accordingly, leased assets under operating leases are included in premises and equipment, net while leased assets under direct financing leases are included in loans and leases held for investment in the accompanying Unaudited Condensed Consolidated Balance Sheets.

Direct Financing Leases

Interest income on direct financing leases is recognized when earned.

Unearned interest is recognized over the lease term on a basis which results in a constant rate of return on the unrecovered lease investment.

The term of each lease is generally 3 to 7 years which is consistent with the useful life of the equipment with no residual value.

The net investment in direct finance leases included in loans and leases held for investment are as follows:

September 30, 2025 December 31, 2024

Gross direct finance lease payments receivable $ 250 $ 961

Less – unearned interest ( 3 ) ( 39 )

Net investment in direct financing leases $ 247 $ 922

Future minimum lease payments to be received under finance leases are as follows:

As of September 30, 2025

Interest income of $ 7 thousand and $ 29 thousand was recognized in the three months ended September 30, 2025 and 2024, respectively.

Interest income of $ 36 thousand and $ 95 thousand was recognized in the nine months ended September 30, 2025 and 2024, respectively.

Operating Leases

The term of each operating lease is generally 10 to 15 years.

The Company retains ownership of the equipment and associated tax benefits such as investment tax credits and accelerated depreciation.

At the end of the lease term, the lessee has the option to renew the lease for two additional terms or purchase the equipment at the then-current fair value.

Rental revenue from operating leases is recognized on a straight-line basis over the term of the lease.

Rental equipment is recorded at cost and depreciated to an estimated residual value on a straight-line basis over the estimated useful life.

The useful lives generally range from 20 to 25 years and residual values generally range from 20 % to 50 %, however, they are subject to periodic evaluation.

Changes in useful lives or residual values will impact depreciation expense and any gain or loss from the sale of used equipment.

The estimated useful lives and residual values of the Company's leasing equipment are based on industry disposal experience and the Company's expectations for future sale prices.

If the Company decides to sell or otherwise dispose of rental equipment, it is carried at the lower of cost or fair value less costs to sell or dispose.

Repair and maintenance costs that do not extend the lives of the rental equipment are charged to equipment expense at the time the costs are incurred.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

As of September 30, 2025 and December 31, 2024, the Company had a net investment of $ 79.1 million and $ 93.4 million, respectively, in assets included in premises and equipment, net that are subject to operating leases.

Of the net investment, the gross balance of the assets was $ 142.4 million and $ 159.7 million as of September 30, 2025 and December 31, 2024, respectively.

Accumulated depreciation was $ 63.3 million and $ 66.2 million as of September 30, 2025 and December 31, 2024, respectively.

Depreciation expense recognized on these assets was $ 2.2 million and $ 2.4 million for the three months ended September 30, 2025 and 2024.

Depreciation expense recognized on these assets was $ 7.2 million and $ 7.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Lease income of $ 2.0 million and $ 2.3 million was recognized in the three months ended September 30, 2025 and 2024, respectively.

Lease income of $ 7.5 million and $ 7.1 million was recognized in the nine months ended September 30, 2025 and 2024, respectively.

A maturity analysis of future minimum lease payments to be received under non-cancelable operating leases is as follows:

As of September 30, 2025

Thereafter 7,309

Total $ 32,447

Servicing Assets

Loans serviced for others are not included in the accompanying Unaudited Condensed Consolidated Balance Sheets.

The unpaid principal balance of loans serviced for others requiring recognition of a servicing asset was $ 3.93 billion and $ 3.46 billion at September 30, 2025 and December 31, 2024, respectively.

The unpaid principal balance for all loans serviced for others was $ 5.56 billion and $ 4.72 billion at September 30, 2025 and December 31, 2024, respectively.

The unpaid principal balance of loans serviced for others requiring recognition of a servicing asset was $ 4.09 billion and $ 3.96 billion at March 31, 2026 and December 31, 2025, respectively.

The unpaid principal balance for all loans serviced for others was $ 5.94 billion and $ 5.60 billion at March 31, 2026 and December 31, 2025, respectively.

The following table summarizes the activity pertaining to servicing rights measured at fair value:

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Balance at beginning of period $ 62,941 $ 55,788

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Fair Value of Financial Instruments for further details about servicing assets measured at fair value.

The fair value of servicing rights was determined using a weighted average discount rate of 13.3 % on September 30, 2025 and 14.5 % on September 30, 2024.

The fair value of servicing rights was determined using a weighted average prepayment speed of 16.1 % on September 30, 2025 and 15.7 % on September 30, 2024, with the actual rate depending on the stratification of the specific right.

Changes to fair value are reported in loan servicing asset revaluation within the Unaudited Condensed Consolidated Statements of Income.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The fair value of servicing rights was determined using a weighted average discount rate of 12.8 % at March 31, 2026 and 13.5 % at March 31, 2025.

The fair value of servicing rights was determined using a weighted average prepayment speed of 16.6 % at March 31, 2026 and 16.0 % at March 31, 2025, with the actual rate depending on the stratification of the specific right.

Changes to fair value are reported in loan servicing asset revaluation within the Unaudited Condensed Consolidated Statements of Income.

The table below reflects the sensitivity of the current fair value of servicing assets to immediate adverse changes in the above key assumptions with all other assumptions remaining static:

As of September.

30, 2025 As of December.

As of March 31, 2026 As of December 31, 2025

Fair value of servicing rights $ 64,520 $ 62,941

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Changes in one factor may result in changes in another.

As of September 30, 2025 and December 31, 2024, the Company had servicing assets related to conventional commercial loans carried at amortized cost of $ 170 thousand and $ 356 thousand, respectively.

Total outstanding borrowings consisted of the following:

September 30,

2025 December 31,

In March 2021, the Company entered into a 60 -month term loan agreement of $ 50.0 million with a third party correspondent bank.

The loan accrues interest at a fixed rate of 2.95 % with a monthly payment sufficient to fully amortize the loan, with all remaining unpaid principal and interest due at maturity on March 30, 2026 .

The Company paid the Lender a non-refundable $ 325 thousand loan origination fee upon signing of the Note that is presented as a direct deduction from the carrying amount of the loan and will be amortized into interest expense over the life of the loan.

$ 5,335 $ 13,184

In March 2024, the Company entered into a 60 -month term loan agreement of $ 100.0 million with a third party correspondent bank.

The loan accrues interest at a fixed rate of 5.95 % with monthly interest payments until maturity on March 28, 2029 , and $ 33.0 million of principal to be paid in year 4, and $ 67.0 million of principal to be paid in year 5.

The Company paid the Lender a non-refundable $ 600 thousand loan origination fee upon signing of the Note that is represented as a direct deduction from the carrying amount of the loan and will be amortized into interest expense over the life of the loan.

99,610 99,505

Other long term debt (1)

Total borrowings $ 105,045 $ 112,820

(1) Includes finance leases.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

As of September 30, 2025 and December 31, 2024, the Company’s unused borrowing capacity was $ 3.90 billion and $ 3.55 billion, respectively, based upon securities and loans identified as available for collateral.

Unused borrowing capacity consists of access through the Federal Reserve Bank's discount window, available lines of credit with the Federal Home Loan Bank and other correspondent banks, and access to a repurchase agreement.

If additional collateral is available, the Company's aggregate borrowing capacity with all of the above sources is $ 6.59 billion and $ 6.10 billion as of September 30, 2025 and December 31, 2024, respectively.

As of March 31, 2026 and December 31, 2025, the Company had servicing assets related to conventional commercial loans carried at amortized cost of $ 157 thousand and $ 214 thousand, respectively.

Fair Value of Financial Instruments

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The table below provides a rollforward of the fair value of the Level 3 equity warrant assets:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Equity Warrant Assets 2026 2025

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Balance at end of period $ 1,916 $ 7,035

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis.

September 30, 2025 Total Level 1 Level 2 Level 3

March 31, 2026 Total Level 1 Level 2 Level 3

Investment securities available-for-sale

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64,520 — — 64,520

Mutual fund (4)

Equity warrant assets 1,916 — — 1,916

Total assets at fair value $ 1,745,914 $ — $ 1,434,455 $ 311,459

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

December 31, 2025 Total Level 1 Level 2 Level 3

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Total assets at fair value $ 1,752,761 $ — $ 1,427,337 $ 325,424

(1) During the three and nine months ended September 30, 2025, the Company recorded a principal paydown of $ 1 thousand.

During the three and nine months ended September 30, 2024 there were no level 3 fair value adjustment gains or losses.

(1) During the three months ended March 31, 2026 and 2025 there were no level 3 fair value adjustment gains or losses.

(2) Loans accounted for under the fair value option.

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For additional information on the valuation techniques and significant inputs for Level 2 and Level 3 assets and liabilities that are measured at fair value on a recurring basis, see Note 10.

Fair Value of Financial Instruments in the Company’s 2024 Form 10-K/A.

Fair Value of Financial Instruments in the Company’s 2025 Form 10-K.

Fair Value Option

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In accordance with GAAP, any loans for which fair value was previously elected continue to be measured as such.

There were no loans accounted for under the fair value option that were 90 days or more past due and still accruing interest at September 30, 2025 or December 31, 2024.

The unpaid principal balance of unguaranteed exposure for nonaccruals was $ 8.2 million and $ 10.0 million at September 30, 2025 and December 31, 2024, respectively.

The following tables provide more information about the fair value carrying amount and the unpaid principal outstanding of loans accounted for under the fair value option at September 30, 2025 and December 31, 2024.

September 30, 2025

There were no loans accounted for under the fair value option that were 90 days or more past due and still accruing interest at March 31, 2026 or December 31, 2025.

The unpaid principal balance of unguaranteed exposure for nonaccruals was $ 8.0 million and $ 8.5 million at March 31, 2026 and December 31, 2025, respectively.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following tables provide more information about the fair value carrying amount and the unpaid principal outstanding of loans accounted for under the fair value option at March 31, 2026 and December 31, 2025.

March 31, 2026

Total Loans Nonaccruals 90 Days or More Past Due

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$ 244,940 $ 253,668 $ ( 8,728 ) $ 61,563 $ 62,839 $ ( 1,276 ) $ 48,109 $ 49,087 $ ( 978 )

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

December 31, 2025

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$ 260,625 $ 269,851 $ ( 9,226 ) $ 61,602 $ 62,824 $ ( 1,222 ) $ 45,784 $ 46,824 $ ( 1,040 )

The following table presents the net gains (losses) from changes in fair value.

Three Months Ended September 30, Nine Months Ended September 30,

Gains (Losses) on Loans Accounted for under the Fair Value Option 2025 2024 2025 2024

The following table presents the net losses from changes in fair value.

Three Months Ended March 31,

Losses on Loans Accounted for under the Fair Value Option 2026 2025

Loans held for investment $ ( 1,165 ) $ ( 1,034 )

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The following tables summarize the activity pertaining to loans accounted for under the fair value option:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Loans held for investment 2026 2025

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The Company has no liabilities recorded at fair value on a non-recurring basis.

September 30, 2025 Total Level 1 Level 2 Level 3

March 31, 2026 Total Level 1 Level 2 Level 3

Collateral-dependent loans $ 36,054 $ — $ — $ 36,054

1 unchanged sentence

Total assets at fair value $ 45,604 $ — $ — $ 45,604

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

December 31, 2025 Total Level 1 Level 2 Level 3

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Foreclosed assets 6,877 — — 6,877

Equity security investment with a non-readily determinable fair value

2,101 — — 2,101

Total assets at fair value $ 29,597 $ — $ — $ 29,597

For additional information on the valuation techniques and significant inputs for Level 2 and Level 3 assets that are measured at fair value on a non-recurring basis, see Note 10.

Fair Value of Financial Instruments in the Company’s 2024 Form 10-K/A.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Fair Value of Financial Instruments in the Company’s 2025 Form 10-K.

Level 3 Analysis

For Level 3 assets measured at fair value on a recurring or non-recurring basis as of September 30, 2025 and December 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows:

September 30, 2025

For Level 3 assets measured at fair value on a recurring or non-recurring basis as of March 31, 2026 and December 31, 2025, the significant unobservable inputs used in the fair value measurements were as follows:

March 31, 2026

Level 3 Assets with Significant Unobservable Inputs

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Foreclosed assets $ 9,550 Discounted appraisals Appraisal adjustments (2)

7.1 % - 10.0 %

Live Oak Bancshares, Inc.

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10.0 % 10.0 %

Equity security investment with a non-readily determinable fair value $ 2,101 Market Approach Revenue Multiple 3.75 N/A

(1) Weighted averages are determined by the relative fair value of the instruments or the relative contribution to the instruments fair value.

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The carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis are as follows:

September 30, 2025 Carrying

March 31, 2026 Carrying

Identical Assets/Liabilities

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A summary of the Company’s commitments is as follows:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Commitments to extend credit (1) (2)

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Standby letters of credit 15,944 51,842

Airplane purchase agreement commitments 48,636 48,636

Total unfunded off-balance-sheet credit risk $ 4,484,236 $ 4,199,791

(1) Includes unfunded overdraft protection.

(2) Includes $ 1.62 billion and $ 1.20 billion at September 30, 2025 and December 31, 2024, respectively, for which loan commitment letters have been issued.

(2) Includes $ 1.65 billion and $ 1.27 billion at March 31, 2026 and December 31, 2025, respectively, for which loan commitment letters have been issued.

Such letters do not represent a present obligation to extend credit due to the variety of conditions contained in the letters.

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Collateral held varies as specified above and is required in instances which the Company deems necessary.

The allowance for off-balance-sheet credit exposures was $ 14.8 million and $ 13.6 million at September 30, 2025 and December 31, 2024, respectively.

During the three and nine months ended September 30, 2025, the Company recorded $ 1.9 million and $ 1.2 million in expense related to the allowance for off-balance-sheet credit exposures, respectively.

During the three and nine months ended September 30, 2024, the Company recorded $ 1.9 million and $ 7.5 million in expense related to the allowance for off-balance-sheet credit exposures, respectively.

Beginning in the second quarter of 2024, this expense was presented in the provision for credit losses.

This expense has historically been presented in other expense and that classification remains unchanged for prior periods.

The allowance for off-balance-sheet credit exposures was $ 16.9 million and $ 16.4 million at March 31, 2026 and December 31, 2025, respectively.

During the three months ended March 31, 2026 and 2025, the Company recorded $ 500 thousand in expense and $ 478 thousand in recoveries related to the allowance for off-balance-sheet credit exposures, respectively.

Other Commitments

Investments for unfunded commitments to provide capital contributions for equity fund investments as of September 30, 2025 and December 31, 2024.

Investments for unfunded commitments to provide capital contributions for equity fund investments as of March 31, 2026 and December 31, 2025.

Concentrations of Credit Risk

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The Company generally does not have a significant number of credits to any single borrower or group of related borrowers whereby their retained unguaranteed exposure exceeds $ 20.0 million, except for 77 relationships that have a retained unguaranteed exposure of $ 3.01 billion of which $ 2.37 billion of the unguaranteed exposure has been disbursed.

Additionally, the Company has future minimum lease payments receivable under non-cancelable operating leases totaling $ 32.4 million, of which no relationships exceed $ 20.0 million.

The Company from time-to-time may have cash and cash equivalents on deposit with other financial institutions that exceed federally-insured limits.

2 unchanged sentences

Geographic Concentration s

The following table presents the geographic concentration of the Company's loan and lease portfolio at September 30, 2025:

The following table presents the geographic concentration of the Company's loan and lease portfolio at March 31, 2026:

Geographic Regions (1)

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Domicile is determined by the principal resident or business address of the entity.

Subsequent Event

On October 21, 2025, Computer Services Inc., (“CSI”) acquired all of the ownership interests in Apiture, Inc.

(“Apiture”) that it did not already own (the “Transaction”), including the interest of the Company, pursuant to the previously announced definitive agreement between CSI and Apiture.

The Company received initial cash proceeds of $ 67.0 million, and the Transaction resulted in a pre-tax gain of approximately $ 24.0 million which will be included in the Company’s noninterest income for the fourth quarter of 2025.

Table of Conten t s

On March 20, 2015, the Company adopted the 2015 Omnibus Stock Incentive Plan (as amended and currently in effect, the “2015 Omnibus Stock Incentive Plan”) which replaced the previously existing Amended Incentive Stock Option Plan and Nonstatutory Stock Option Plan.

Subsequently on May 24, 2016, the 2015 Omnibus Stock Incentive Plan was amended and restated, and on May 15, 2018, the 2015 Omnibus Stock Incentive Plan was amended, to authorize awards covering a maximum of 7,000,000 and 8,750,000 common voting shares, respectively.

On May 11, 2021, the Amended and Restated 2015 Omnibus Stock Incentive Plan was amended to authorize awards covering a maximum of 10,750,000 common voting shares.

Subsequently on May 16, 2023, the 2015 Omnibus Stock Incentive Plan was amended to authorize awards covering a maximum of 13,750,000 common voting shares.

Options or restricted shares granted under the 2015 Omnibus Stock Incentive Plan expire no more than 10 years from date of grant.

Exercise prices under the 2015 Omnibus Stock Incentive Plan are set by the Board of Directors at the date of grant but shall not be less than 100 % of fair market value of the related stock at the date of the grant.

Forfeitures are recognized as they occur.

Restricted Stock

Restricted stock awards are authorized in the form of restricted stock awards or units (“RSU”s).

RSUs have a restriction based on the passage of time and may also have a restriction based on a non-market-related performance criteria.

The fair value of the RSUs is based on the closing price on the date of the grant.

For the three months ended March 31, 2026, 786,525 RSUs were granted with a weighted average grant date fair value of $ 41.12 .

At March 31, 2026, unrecognized compensation costs relating to RSUs amounted to $ 77.7 million which will be recognized over a weighted average period of 3.68 years.

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 1. Financial Statements