What changed in this filing

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Item 1. Financial Statements

2026-08-04 compared with 2026-05-05 · 244 added, 143 removed, 993 unchanged (28% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

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

As of June 30, 2026 (unaudited) and December 31, 2025

(Dollars in thousands)

22 unchanged sentences

Shareholders’ equity

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

Series A Preferred stock, no par value, 1,000,000 shares authorized, 100,000 shares issued and outstanding at June 30, 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

Class A common stock, no par value, 100,000,000 shares authorized, 46,283,620 and 46,032,402 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

399,396 388,389

9 unchanged sentences

Condensed Consolidated Statements of Income

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

For the three and six months ended June 30, 2026 and 2025 (unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Interest income

14 unchanged sentences

Net gains on sales of loans 17,554 17,570 32,979 33,008

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

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

Net gain (loss) on loans accounted for under the fair value option 291 1,082 ( 874 ) 48

Equity method investments income (loss) 74 ( 2,716 ) ( 743 ) ( 4,955 )

Equity security investments gains, net — 1,004 — 1,024

11 unchanged sentences

Other loan origination and maintenance expense 4,864 4,190 10,783 8,775

Renewable energy tax credit investment impairment 26 270 26 270

FDIC insurance 4,788 3,545 9,189 7,096

6 unchanged sentences

Net income attributable to Live Oak Bancshares, Inc.

36,795 23,428 66,835 33,145

Preferred stock dividends 2,094 — 4,188 —

5 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

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

For the three and six months ended June 30, 2026 and 2025 (unaudited)

(Dollars in thousands)

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Net income $ 36,704 $ 23,387 $ 66,651 $ 33,055

11 unchanged sentences

Condensed Consolidated Statements of Changes in Shareholders’ Equity

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

For the three and six months ended June 30, 2026 and 2025 (unaudited)

(Dollars in thousands)

6 unchanged sentences

Series A Class A Class B

Balance at March 31, 2026

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

Net income (loss) — — — — — 36,795 — ( 91 ) 36,704

Other comprehensive loss — — — — — — ( 5,216 ) — ( 5,216 )

Issuance of restricted stock — — 36,929 — — — — — —

Tax withholding related to vesting of restricted stock and other

— — — — ( 348 ) — — — ( 348 )

Stock option exercises — — 6,000 — 96 — — — 96

Restricted stock compensation expense — — — — 7,390 — — — 7,390

Reclassification of accumulated other comprehensive income due to tax rate adjustment — — — — — — 13 — 13

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

Cash dividends ($ 0.03 per share) - common

— — — — — ( 1,388 ) — — ( 1,388 )

Balance at June 30, 2026

100,000 $ 96,266 46,283,620 — $ 399,396 $ 869,757 $ ( 52,555 ) $ 4,054 $ 1,316,918

Balance at March 31, 2025

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

Net income (loss) — — — — — 23,428 — ( 41 ) 23,387

Other comprehensive income — — — — — — 6,184 — 6,184

Issuance of restricted stock — — 36,720 — — — — — —

Tax withholding related to vesting of restricted stock and other

— — — — ( 293 ) — — — ( 293 )

Stock option exercises — — 59,728 — 788 — — — 788

Restricted stock compensation expense — — — — 6,945 — — — 6,945

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

— — — — — 176 — — 176

Cash dividends ($ 0.03 per share) - common

— — — — — ( 1,369 ) — — ( 1,369 )

Balance at June 30, 2025

— $ — 45,686,081 — $ 377,953 $ 746,450 $ ( 61,514 ) $ 4,376 $ 1,067,265

Live Oak Bancshares, Inc.

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

For the three and six months ended June 30, 2026 and 2025 (unaudited)

(Dollars in thousands)

Six Months Ended

Preferred Stock Common stock Retained

earnings Accumulated

comprehensive (loss) income

Non-controlling interest Total

Shares Amount Shares Amount

Series A Class A Class B

Balance at December 31, 2025

8 unchanged sentences

Restricted stock compensation expense — — — — 14,270 — — — 14,270

Reclassification of accumulated other comprehensive income due to tax rate adjustment — — — — — — 13 — 13

Cash dividends - preferred — — — — — ( 4,188 ) — — ( 4,188 )

1 unchanged sentence

— — — — — ( 2,775 ) — — ( 2,775 )

Balance at March 31, 2026

Balance at June 30, 2026

100,000 $ 96,266 46,283,620 — $ 399,396 $ 869,757 $ ( 52,555 ) $ 4,054 $ 1,316,918

10 unchanged sentences

Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense — — — — — 274 — — 274

— — — — — 98 — — 98

Cash dividends ($ 0.06 per share) - common

— — — — — ( 2,736 ) — — ( 2,736 )

Balance at March 31, 2025

Balance at June 30, 2025

— $ — 45,686,081 — $ 377,953 $ 746,450 $ ( 61,514 ) $ 4,376 $ 1,067,265

See Notes to Unaudited Condensed Consolidated Financial Statements

Live Oak Bancshares, Inc.

Condensed Consolidated Statements of Cash Flows

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

For the six months ended June 30, 2026 and 2025 (unaudited)

(Dollars in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

9 unchanged sentences

Net loss on impairment or sale of foreclosed assets 186 12

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

Net loss (gain) on loans accounted for under fair value option 874 ( 48 )

Net change in servicing assets ( 3,578 ) ( 4,215 )

Purchase of transferable tax credits ( 22,966 ) —

Net loss on disposal of property and equipment 238 3,122

3 unchanged sentences

Net (gain) loss on equity warrant assets ( 77 ) 419

Renewable energy tax credit investment impairment 26 270

Restricted stock compensation expense 14,270 13,612

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

Stock based compensation excess tax benefit (deficiency) 104 ( 224 )

Lease right-of-use assets and liabilities, net 22 7

2 unchanged sentences

Other liabilities ( 17,955 ) ( 4,090 )

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

Net cash provided by operating activities 118,570 23,545

Cash flows from investing activities

12 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Continued)

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

For the six months ended June 30, 2026 and 2025 (unaudited)

(Dollars in thousands)

Three Months Ended

Six Months Ended

Cash flows from financing activities

17 unchanged sentences

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

122,282 18,894

Net transfers between foreclosed assets and government guaranteed receivable ( 328 ) 33

17 unchanged sentences

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

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

As of June 30, 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.

22 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 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.

Results of operations for the three and six months ended June 30, 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.

27 unchanged sentences

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.

The Company changed the quantitative component from a discounted cash flow model to a probability of default (“PD”) x loss given default (“LG”) 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.

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

During the three and six months ended June 30, 2026, cash dividends of $ 0.52344 and $ 1.04688 , respectively, per Depositary Share of its Series A Preferred Stock was declared and paid.

During the second quarter ended June 30, 2026, the Company purchased $ 25.0 million 2025 transferable renewable energy credits for $ 22.9 million, resulting in a reduction to income tax expense of $ 2.1 million.

The Company will account for purchased credits under ASC 740, Income Taxes , and record the transferred credits as an increase to income tax receivable within other assets on the Condensed Consolidated Balance Sheet.

Revision of Previously Issued Financial Statements

6 unchanged sentences

As previously reported Impact of revision As revised

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

Consolidated statement of income for three months ended June 30, 2025

Net gains on sales of loans $ 21,641 $ ( 4,071 ) $ 17,570

3 unchanged sentences

Total noninterest expense 89,293 ( 4,071 ) 85,222

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

Consolidated statement of income for six months ended June 30, 2025

Net gains on sales of loans $ 40,289 $ ( 7,281 ) $ 33,008

Total noninterest income 60,107 ( 7,281 ) 52,826

Salaries and employee benefits $ 97,145 $ ( 5,608 ) $ 91,537

Travel expense 5,371 ( 1,673 ) 3,698

Total noninterest expense 173,310 ( 7,281 ) 166,029

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

Operating activities:

15 unchanged sentences

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):

5 unchanged sentences

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):

16 unchanged sentences

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

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Earnings Per Share

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Basic earnings per share:

9 unchanged sentences

Anti-dilutive stock options and restricted stock grants 815,208 2,177,255 694,958 1,838,191

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Available-for-Sale

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

March 31, 2026 Amortized

June 30, 2026 Amortized

government agencies $ 20,280 $ — $ 148 $ 20,132

9 unchanged sentences

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

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.

During the three months ended June 30, 2026, eight securities totaling $ 15.7 million were settled.

During the six months ended June 30, 2026, eighteen securities totaling $ 33.7 million were settled.

During the three months ended June 30, 2025, four securities totaling $ 11.3 million were settled and one security totaling $ 4.0 million matured.

During the six months ended June 30, 2025, seven securities totaling $ 16.9 million were settled and one security totaling $ 4.0 million matured.

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Accrued interest receivable on available-for-sale securities totaled $ 5.5 million and $ 5.1 million at June 30, 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

March 31, 2026 Fair

June 30, 2026 Fair

government agencies $ 17,161 $ 130 $ 2,971 $ 18 $ 20,132 $ 148

8 unchanged sentences

Total $ 123,061 $ 647 $ 712,763 $ 66,500 $ 835,824 $ 67,147

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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

At June 30, 2026, there were 330 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.

There were 94 mortgage-backed securities, four U.S.

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

4 unchanged sentences

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 March 31, 2026 and December 31, 2025 were backed by U.S.

All mortgage-backed securities in the Company’s portfolio at June 30, 2026 and December 31, 2025 were backed by U.S.

government sponsored enterprises (“GSEs”).

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following is a summary of investment securities by maturity:

March 31, 2026

June 30, 2026

Available-for-Sale

1 unchanged sentence

government agencies

Within one year $ 2,989 $ 2,971

One to five years 478 472

14 unchanged sentences

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

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 June 30, 2026, investment securities with a fair value of $ 508.4 million and amortized cost of $ 553.3 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.

5 unchanged sentences

Equity Method Accounting

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

The carrying amount and ownership percentage of each equity method investment at June 30, 2026 and December 31, 2025 is reflected in the following table:

June 30, 2026 December 31, 2025

Amount Ownership % Amount Ownership %

13 unchanged sentences

Total $ 34,454 $ 36,698

(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.

(1) Investment unfunded commitments of $ 5.3 million and $ 4.8 million as of June 30, 2026 and December 31, 2025, respectively.

(2) Investment unfunded commitments of $ 466 thousand and $ 472 thousand as of June 30, 2026 and December 31, 2025, respectively.

(3) Investment unfunded commitments of $ 3.5 million and $ 3.6 million as of June 30, 2026 and December 31, 2025, respectively.

(4) Investment unfunded commitments of $ 4.8 million and $ 4.9 million as of June 30, 2026 and December 31, 2025, respectively.

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

7 unchanged sentences

Equity Security Accounting

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

The carrying amount of the Company’s investments in non-marketable equity securities with no readily determinable fair value for the six months ended June 30, 2026 and 2025 is reflected in the following table:

As of and for the six month period ended

June 30, 2026 June 30, 2025

Carrying value (1)

5 unchanged sentences

Net upward (downward) change $ — $ 955

(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.

(1) Investment unfunded commitments of $ 7.7 million and $ 5.3 million as of June 30, 2026, and June 30, 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 June 30, 2026.

For the three and six months ended June 30, 2026, the Company did not recognize any unrealized gains on equity securities held at the reporting date.

For the three and six months ended June 30, 2025, the Company recognized unrealized gains on all equity securities held at the reporting date of $ 959 thousand and $ 966 thousand, respectively.

Variable Interest Entities (“VIE”s)

28 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 March 31, 2026 and December 31, 2025:

March 31, 2026 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 June 30, 2026 and December 31, 2025:

June 30, 2026 Investment Carrying Amount Maximum Exposure to Loss Liability Recognized Classification

Solar tax credit investments $ 3,492 $ 17,576 $ — Other assets (1)

26 unchanged sentences

Total Loans and Leases

March 31, 2026

June 30, 2026

Commercial & Industrial

58 unchanged sentences

Converted to Term Total (1)

March 31, 2026

June 30, 2026

Small Business Banking

35 unchanged sentences

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

(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.

(1) Excludes $ 232.1 million and $ 260.6 million of loans accounted for under the fair value option as of June 30, 2026 and December 31, 2025, respectively.

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

March 31, 2026 Loan and Lease

June 30, 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 $ 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.

(1) Excludes $ 232.1 million and $ 260.6 million of loans accounted for under the fair value option as of June 30, 2026 and December 31, 2025, respectively.

Live Oak Bancshares, Inc.

1 unchanged sentence

Nonaccrual Loans and Leases

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

As of June 30, 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 and six months ended June 30, 2026 and 2025.

Accrued interest receivable on loans totaled $ 85.0 million and $ 85.0 million at June 30, 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 June 30, 2026 and December 31, 2025 are as follows:

June 30, 2026 Loan and Lease

Balance Unguaranteed Balance Unguaranteed

Exposure with No ACL

Balance with No ACL

Commercial & Industrial

15 unchanged sentences

Balance Unguaranteed Balance Unguaranteed

Exposure with No ACL

Balance with No ACL

Commercial & Industrial

19 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Commercial & Industrial $ 1,052 $ 597 $ 1,938 $ 1,041

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 March 31, 2026 and December 31, 2025:

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 June 30, 2026 and December 31, 2025:

Total Collateral-Dependent Loans Unguaranteed Portion

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

June 30, 2026 Real Estate Business Assets Real Estate Business Assets Allowance for Credit Losses

Commercial & Industrial

2 unchanged sentences

Total 29,970 25,996 4,828 18,866 48

Construction & Development

Small Business Banking 96 — 96 — 11

Total 96 — 96 — 11

Commercial Real Estate

2 unchanged sentences

Total 156,478 4,986 67,539 303 413

Commercial Land

Small Business Banking 6,806 — 5,093 — —

Total 6,806 — 5,093 — —

Total $ 193,254 $ 30,982 $ 77,460 $ 19,169 $ 461

Total Collateral-Dependent Loans Unguaranteed Portion

22 unchanged sentences

Real Estate Commercial

March 31, 2026

June 30, 2026

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

3 unchanged sentences

Ending Balance $ 137,368 $ 8,523 $ 45,016 $ 2,510 $ 193,417

March 31, 2025

June 30, 2025

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

1 unchanged sentence

Recoveries 731 — 771 — 1,502

Provision 26,856 769 1,639 178 29,442

Provision (Recovery) 19,166 324 5,098 ( 1,096 ) 23,492

Ending Balance $ 138,960 $ 6,036 $ 34,248 $ 2,987 $ 182,231

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.

Six Months Ended Commercial

& Industrial Construction &

Development Commercial

Real Estate Commercial

June 30, 2026

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

Charge offs ( 43,484 ) ( 209 ) ( 6,407 ) ( 438 ) ( 50,538 )

Recoveries 7,040 221 530 — 7,791

Provision (Recovery) 29,624 1,287 13,531 ( 542 ) 43,900

Ending Balance $ 137,368 $ 8,523 $ 45,016 $ 2,510 $ 193,417

June 30, 2025

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

Charge offs ( 36,840 ) — ( 2,852 ) ( 178 ) ( 39,870 )

Recoveries 771 — 862 18 1,651

Provision (Recovery) 46,022 1,093 6,737 ( 918 ) 52,934

Ending Balance $ 138,960 $ 6,036 $ 34,248 $ 2,987 $ 182,231

During the three months ended June 30, 2026, the ACL increased primarily as a result of loan growth with the impacts from the economic forecast remaining stable.

During the six months ended June 30, 2026, the ACL increased primarily as a result of loan growth, partially offset by an improving economic forecast.

Charge-offs for the three and six month periods ended June 30, 2026 for commercial and industrial loans are primarily attributed to the distillery portfolio.

During the three months ended June 30, 2025, the ACL decreased primarily as a result of moderating credit trends and net charge-offs of individually evaluated loans with specific reserves recorded in prior periods.

During the six months ended June 30, 2025, the ACL increased as a result of growth in the loan and lease portfolio, the impact of the macroeconomic environment on our small business and commercial borrowers, and changes in the macroeconomic outlook.

Live Oak Bancshares, Inc.

4 unchanged sentences

The Company typically does not offer principal forgiveness.

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

The following tables summarize the amortized cost basis of loans that were modified during the three and six months ended June 30, 2026 and June 30, 2025, respectively:

Three Months Ended June 30, 2026 Other-Than-Insignificant

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

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

3 unchanged sentences

Total $ 13,056 $ 6,221 $ 1,908 $ 375 $ 13,361 $ 34,921 0.28 %

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

Six Months Ended June 30, 2026 Other-Than-Insignificant

Payment Delay Term Extension 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 $ 16,634 $ 15,888 $ 1,908 $ 1,840 $ 9,740 $ 46,010 0.60 %

Commercial Banking 2,951 5,519 13,127 6,300 4,361 32,258 0.68

Total $ 19,585 $ 21,407 $ 15,035 $ 8,140 $ 14,101 $ 78,268 0.63 %

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

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

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

Financing Receivable

Small Business Banking $ — $ 10,893 $ 9,820 $ 20,713 0.16 %

1 unchanged sentence

Total $ 5,527 $ 10,893 $ 9,820 $ 26,240 0.37 %

March 31, 2025 Current 30-89 Days

Past Due 90 Days or More Past Due Total Past Due

Six Months Ended June 30, 2025 Other-Than-Insignificant

Payment Delay 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 $ — $ 14,448 $ 9,862 $ 3,020 $ 3,009 $ 10,010 $ 40,349 0.45 %

3 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2026, the Company had commitments to lend additional funds to these borrowers totaling $ 700 thousand.

As of June 30, 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 June 30, 2026 and June 30, 2025, respectively:

June 30, 2026 Current 30-89 Days

Past Due 90 Days or More Past Due Total Past Due

Small Business Banking $ 83,011 $ 12,475 $ 1,897 $ 14,372

Commercial Banking 35,204 2,951 — 2,951

Total $ 118,215 $ 15,426 $ 1,897 $ 17,323

June 30, 2025 Current 30-89 Days

Past Due 90 Days or More Past Due Total Past Due

Small Business Banking $ 40,120 $ — $ 2,243 $ 2,243

Commercial Banking 22,824 — — —

Total $ 62,944 $ — $ 2,243 $ 2,243

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

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Weighted Average

2 unchanged sentences

Small Business Banking 1.93 % 112

Three Months Ended March 31, 2025

Commercial Banking 8.07 % 9

Six Months Ended June 30, 2026

Weighted Average

2 unchanged sentences

Small Business Banking 1.94 % 90

Commercial Banking 6.73 % 12

Three Months Ended June 30, 2025

Weighted Average

Interest Rate Reduction Weighted Average

Term Extension (in Months)

Small Business Banking 2.48 % 54

Six Months Ended June 30, 2025

Weighted Average

Interest Rate Reduction Weighted Average

Term Extension (in Months)

Small Business Banking 4.32 % 51

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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

Three Months Ended June 30, 2026 Other-Than-Insignificant Payment Delay Term Extension Interest Rate Reduction Total

Small Business Banking $ 2,839 $ 4,607 $ — $ 7,446

Commercial Banking — 2,336 — 2,336

Total $ 2,839 $ 4,607 $ — $ 7,446

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

Six Months Ended June 30, 2026 Other-Than-Insignificant Payment Delay Term Extension Interest Rate Reduction Total

Small Business Banking $ 7,840 $ 5,658 $ — $ 13,498

Total $ 7,840 $ 5,658 $ — $ 13,498

At June 30, 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.

1 unchanged sentence

The amortized cost basis is reduced by the uncollectible amount and the ACL is adjusted by the same amount.

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

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 $ 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 unpaid principal balance of loans serviced for others requiring recognition of a servicing asset was $ 4.19 billion and $ 3.96 billion at June 30, 2026 and December 31, 2025, respectively.

The unpaid principal balance for all loans serviced for others was $ 5.99 billion and $ 5.60 billion at June 30, 2026 and December 31, 2025, respectively.

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

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Balance at beginning of period $ 64,520 $ 56,684 $ 62,941 $ 55,788

5 unchanged sentences

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 12.8 % at June 30, 2026 and 13.5 % at June 30, 2025.

The fair value of servicing rights was determined using a weighted average prepayment speed of 16.7 % at June 30, 2026 and 16.0 % at June 30, 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.

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 March 31, 2026 As of December 31, 2025

As of June 30, 2026 As of December 31, 2025

Fair value of servicing rights $ 66,575 $ 62,941

10 unchanged sentences

Changes in one factor may result in changes in another.

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

8 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Equity Warrant Assets 2026 2025 2026 2025

7 unchanged sentences

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

March 31, 2026 Total Level 1 Level 2 Level 3

June 30, 2026 Total Level 1 Level 2 Level 3

Investment securities available-for-sale

22 unchanged sentences

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

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

(1) During the three and six months ended June 30, 2026 and June 30, 2025 there were no Level 3 fair value adjustment gains or losses.

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

10 unchanged sentences

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 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.

There were no loans accounted for under the fair value option that were 90 days or more past due and still accruing interest at June 30, 2026 or December 31, 2025.

The unpaid principal balance of unguaranteed exposure for nonaccruals was $ 7.9 million and $ 8.5 million at June 30, 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

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 June 30, 2026 and December 31, 2025.

June 30, 2026

Total Loans Nonaccruals 90 Days or More Past Due

19 unchanged sentences

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

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

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

Three Months Ended June 30, Six Months Ended June 30,

Net Gains (Losses) on Loans Accounted for under the Fair Value Option 2026 2025 2026 2025

Loans held for investment $ 291 $ 1,082 $ ( 874 ) $ 48

1 unchanged sentence

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Loans held for investment 2026 2025 2026 2025

4 unchanged sentences

Balance at end of period $ 232,088 $ 303,818 $ 232,088 $ 303,818

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Non-Recurring Fair Value

1 unchanged sentence

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

March 31, 2026 Total Level 1 Level 2 Level 3

June 30, 2026 Total Level 1 Level 2 Level 3

Collateral-dependent loans $ 32,469 $ — $ — $ 32,469

1 unchanged sentence

Total assets at fair value $ 33,379 $ — $ — $ 33,379

Live Oak Bancshares, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

December 31, 2025 Total Level 1 Level 2 Level 3

7 unchanged sentences

Level 3 Analysis

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

For Level 3 assets measured at fair value on a recurring or non-recurring basis as of June 30, 2026 and December 31, 2025, the significant unobservable inputs used in the fair value measurements were as follows:

June 30, 2026

Level 3 Assets with Significant Unobservable Inputs

50 unchanged sentences

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:

March 31, 2026 Carrying

June 30, 2026 Carrying

Identical Assets/Liabilities

35 unchanged sentences

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Commitments to extend credit (1) (2)

4 unchanged sentences

(1) Includes unfunded overdraft protection.

(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.

(2) Includes $ 1.78 billion and $ 1.27 billion at June 30, 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.

9 unchanged sentences

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 $ 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.

The allowance for off-balance-sheet credit exposures was $ 18.4 million and $ 16.4 million at June 30, 2026 and December 31, 2025, respectively.

During the three and six months ended June 30, 2026, the Company recorded $ 1.5 million and $ 2.0 million in expense related to the allowance for off-balance-sheet credit exposures, respectively.

During the three and six months ended June 30, 2025, the Company recorded $ 240 thousand and $ 718 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 March 31, 2026 and December 31, 2025.

Investments for unfunded commitments to provide capital contributions for equity fund investments as of June 30, 2026 and December 31, 2025.

Concentrations of Credit Risk

The distribution of commitments to extend credit approximates the distribution of loans outstanding.

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.

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 March 31, 2026:

The following table presents the geographic concentration of the Company's loan and lease portfolio at June 30, 2026:

Geographic Regions (1)

12 unchanged sentences

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

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.

Subsequent Event

On July 28, 2026, the issuer of certain equity warrants held by the Company (the “ Warrants ” ) was acquired (the “ Transaction ” ).

In connection with the Transaction, the Company's Warrants converted and settled, and the Company received cash proceeds of $ 8.7 million and recognized a realized gain of approximately $ 8.6 million and a related bankers success fee of approximately $ 1.4 million which will be included in the Company’s noninterest income and noninterest expense, respectively, for the third quarter of 2026.

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