Key Points Live Oak Bank is highlighting how a $300,000 grant awarded in 2024 has supported the Lower Cape Fear LifeCare Scholars program, which trains and retains hospice and palliative care nurses in southeastern North Carolina.The program has achieved strong outcomes, including high retention, expanded patient access, and a growing pipeline of specialized nursing talent. WILMINGTON, N.C., March 31, 2026 (GLOBE NEWSWIRE) -- Live Oak Bank is highlighting the impact of a $300,000 grant to the Lower Cape Fea ...

Core Insights - Live Oak Bancshares CEO James S. Mahan III reported the indirect sale of 20,000 shares of Common Stock for approximately $653,000 on March 11 and 12, 2026 [1][2] Company Overview - Live Oak Bancshares is a regional bank holding company based in Wilmington, North Carolina, offering commercial banking products and services, including loans and deposit accounts [6] - As of March 21, 2026, the company's stock price is $31.85, with a market capitalization of $1.47 billion and a revenue of $480.78 million for the trailing twelve months (TTM) [4] Transaction Details - The transaction involved the sale of 20,000 shares at a weighted average price of $32.67, representing 0.31% of Mahan's indirect Common Stock holdings [2][4] - This sale matches the recent median trade size of 20,000 shares for Mahan's sell transactions since December of the previous year [4] Financial Performance - Live Oak Bancshares reported a Q4 revenue of $150.93 million, marking a 61.75% increase from the previous year, and has shown growth in net income and earnings per share (EPS) [9] - Despite recent revenue growth, the company's stock has declined 7.29% year to date (YTD) and has experienced four consecutive weeks of price declines as of March 21, 2026 [10] Industry Position - The company was recognized as the most active SBA 7(a) lender in the nation by dollar volume in October 2025, securing over $2.8 billion in funding for small businesses [8] - Live Oak Bancshares is considered less ideal for investment compared to larger banking competitors due to its niche operational focus [10]

Core Insights - SouthernSun Asset Management's "SouthernSun Smid Cap Strategy" reported a -3.72% gross return for the fourth quarter of 2025, underperforming the Russell 2500 Index which returned 2.22% [1] - Over the trailing 12 months, the composite achieved a gross return of 5.19%, significantly lower than the Russell 2500 Index's 11.91% [1] - The letter draws parallels between the economic impacts of the 2014-15 oil price collapse and the current situation with artificial intelligence, emphasizing the need for careful analysis of associated risks [1] Company Highlights - Live Oak Bancshares, Inc. (NYSE:LOB) is highlighted as a key investment, with a market capitalization of $1.678 billion [2] - As of March 3, 2026, Live Oak Bancshares, Inc. shares closed at $36.45, experiencing a one-month return of -12.57% but a 52-week gain of 21.30% [2] - The company is recognized as the largest originator of SBA 7(a) loans in the U.S., expanding its market leadership during the current small business credit cycle [3] - Live Oak Bancshares has developed a branchless operating model that utilizes proprietary technology and vertical specialization to enhance service delivery and maintain disciplined underwriting standards [3]

Employee and Workplace Environment - As of December 31, 2025, the Company had 1,027 full-time employees, 13 part-time employees, and 37 independent contractors[26] - The Company operates on a cloud-based system, allowing flexible work arrangements without affecting operations or customer experience[32] - The Company emphasizes employee wellness, providing access to an on-site health clinic, physical therapy, and wellness classes at its Wilmington headquarters[31] - The compensation program includes a combination of fixed and incentive pay, aiming to align employee interests with those of shareholders[29] - The Company focuses on fostering a supportive environment through Employee Resource Groups and initiatives aimed at promoting diversity and inclusion[27] - The Company maintains good relations with employees, with no employees covered by collective bargaining agreements[26] Financial Performance - Increased net interest income of $72.5 million, or 19.3%[264] - Increased net gains on sales of loans of $12.7 million, or 25.4%, due to higher loan sale volumes in 2025[264] - Total assets as of December 31, 2025, were $15.13 billion for the Company and $15.06 billion for the Bank[113] - Average interest-earning assets increased to $13.59 billion in 2025, with a net interest margin of 3.30%[266] - Noninterest income increased by $16.8 million, or 14.9%, to $129.5 million in 2025, driven by higher servicing revenue and net gains on sales of loans[277] Regulatory Compliance - The Company is subject to extensive regulation under the Bank Holding Company Act and must comply with NYSE listing standards[46][49] - Live Oak Bank is subject to extensive supervision and regulation by the NCCOB, which oversees compliance with state banking statutes[61] - The Bank Merger Act requires prior written approval from federal bank regulatory agencies for any proposed merger or acquisition[58] - Bancshares must comply with the Federal Reserve's capital adequacy standards, which include maintaining a capital conservation buffer of 2.5%[72] - The Federal Reserve reviews incentive compensation arrangements to ensure they do not encourage excessive risk-taking, impacting the Bank's operational strategies[108] Capital and Liquidity - Bancshares' risk-based capital ratios as of December 31, 2025, were 10.53% for common equity Tier 1 capital to risk-weighted assets, 11.40% for Tier 1 capital to risk-weighted assets, and 12.66% for total capital to risk-weighted assets[73] - Live Oak Bank is classified as "well capitalized" under applicable regulations as of December 31, 2025[77] - The total capital ratio for the bank as of December 31, 2025 is 11.72%, surpassing the minimum requirement of 8.00%[346] - At December 31, 2025, total liquidity sources amounted to $4.89 billion, or 32.3% of total assets, a slight decrease from 32.4% at December 31, 2024[337] - The Company maintains a goal to exceed regulatory "well capitalized" levels for capital ratios, including Tier 1 Capital and Total Capital[343] Asset Quality and Credit Losses - The provision for credit losses was $96.3 million in 2025, relatively flat compared to $96.2 million in 2024, with loans and leases held for investment increasing by $1.81 billion, or 18.3%, to $11.71 billion[271] - Nonperforming loans and leases not guaranteed by the SBA or USDA totaled $101.4 million, or 0.87% of the held for investment loan and lease portfolio at December 31, 2025[273] - The allowance for credit losses on loans and leases was $192.3 million, up from $167.5 million in 2024, representing an increase of 14.8%[306] - Total nonperforming assets increased by $200.5 million, or 53.9%, to $572.2 million as of December 31, 2025, compared to the previous year[304] - The total outstanding balance of loans and leases, including those serviced for others, was $18.03 billion, an increase from $15.32 billion in 2024[295] Investment and Growth Strategies - The Company has established various subsidiaries, including Live Oak Private Wealth, LLC, and Live Oak Clean Energy Financing LLC, to diversify its services[40][41] - The Company has a strategic initiative to invest in financial technology businesses through its subsidiary Live Oak Ventures, Inc.[42] - The Company is exploring investments that generate investment tax credits, affecting future effective tax rates[116] - The investment securities totaled $1.43 billion at December 31, 2025, an increase of $179.2 million, or 14.4%, compared to $1.25 billion at December 31, 2024[325] - The company purchased $301.0 million in mortgage-backed securities in 2025, including $84.3 million for Community Reinvestment Act compliance[325]

Core Viewpoint - Live Oak Bancshares has shown strong stock performance in 2026, with CEO James S. Iii Mahan selling 20,000 shares for approximately $810,000 as part of a pre-planned trading strategy [1][4]. Transaction Summary - The indirect sale involved 20,000 shares with a transaction value of $810,000, based on a weighted average purchase price of $40.49 [2]. - Post-transaction, Mahan retains 6,454,875 shares, indicating that the sale represents only 0.31% of his overall indirect holdings [4]. Company Overview - Live Oak Bancshares is a regional bank holding company based in Wilmington, North Carolina, offering various commercial banking products and services [6]. - The company generates revenue primarily from interest income on loans and deposits, as well as fees from wealth management and investment advisory accounts [6]. Financial Performance - For fiscal year 2025, Live Oak Bancshares reported Q4 revenue of $150.93 million, marking a 61.75% increase year-over-year [9]. - The company has experienced four consecutive quarters of revenue growth, alongside increases in net income and earnings per share [9]. Market Position - Live Oak Bancshares was recognized as the most active SBA 7(a) lender in the U.S. by dollar volume, securing 2,280 loan approvals and providing over $2.8 billion in funding to small businesses in FY 2025 [8]. - Despite recent revenue growth, the company has faced challenges in stock performance over the past two years, with current stock up 18% as of February 21, 2026 [10].

Financial Data and Key Metrics Changes - The company reported a record net income of $44 million and earnings per share of $0.95 for Q4 2025, both approximately three times higher than Q4 2024 [9] - Loan production reached $1.6 billion in Q4, contributing to a total of $6.2 billion for the year, marking a 17% annual loan balance growth [9][10] - Adjusted PP&R increased by 27% year-over-year, while adjusted EPS rose by 49% [6][11] Business Line Data and Key Metrics Changes - Business Checking balances doubled year-over-year to $377 million, significantly benefiting the interest expense line [10] - Live Oak Express contributed $12 million to gain on sales in 2025, a 100% increase from 2024 [16] - Approximately 70% of verticals saw increased production in 2025 compared to 2024, with both small business and commercial lending teams achieving double-digit growth rates [11] Market Data and Key Metrics Changes - Year-over-year customer deposit growth was 18%, despite a slight decline linked quarter due to typical Q4 seasonality [12][14] - The company’s total loan portfolio grew approximately 4% linked quarter, with a 17% increase year-over-year [12][14] Company Strategy and Development Direction - The company aims to maintain momentum in earnings outcomes that are consistent and sustainable over time, focusing on business checking and Live Oak Express as key growth initiatives [7][19] - The company is investing in technology and operational improvements to enhance customer service and efficiency, with a focus on becoming an AI-native bank [19][70] - The company is strategically moderating expense growth while supporting strong revenue growth, with an expected single-digit year-over-year growth rate in expenses [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in 2026 and beyond, citing a stable or low-rate environment as favorable for growth, margin, and credit outlook [19] - The company is focused on deepening customer relationships and increasing fee revenue through its strategic initiatives [19] - Management noted that while credit trends have improved, the company remains vigilant about maintaining credit quality amid industry challenges [45] Other Important Information - The company experienced a slight increase in non-accrual loans to $110 million, primarily driven by SBA credits, but overall credit metrics remain stable [18][45] - The company’s capital levels are healthy, with Q4 results matching asset growth and keeping capital levels relatively flat linked quarter [18] Q&A Session Summary Question: Can you discuss the dynamics of NII and NIM for the first quarter? - Management indicated that NIM and NII may experience compression in the near term due to Fed cuts, but growth will help restore upward momentum [24][25] Question: What is the outlook for gain on sale income? - Management expects gain on sale income in Q1 to be more in line with historical levels, with a typical increase in the latter part of the quarter [28][30] Question: How do you view the trajectory of margins with the anticipated Fed cuts? - Management anticipates that stable environments will allow for NIM expansion throughout the year, driven by growth [37] Question: What is the expected growth rate for expenses moving forward? - Management expects expense growth to moderate to single digits year-over-year as they focus on strategic investments [41][42] Question: Can you provide insights on credit trends and non-accrual loans? - Management noted that while non-accrual loans increased, overall credit quality remains stable, and they expect some relief for borrowers in 2026 due to interest rate cuts [45][46] Question: What are the expectations for Live Oak Express in 2026? - Management expressed an aspirational goal of reaching $1 billion in production over time, with ongoing efforts to build capabilities and improve efficiency [58][60]

Financial Data and Key Metrics Changes - The company reported a record net income of $44 million and earnings per share of $0.95 for Q4 2025, approximately three times the figures from Q4 2024 [9] - Loan production reached $1.6 billion in Q4, contributing to a total of $6.2 billion for the year, marking a 17% annual loan balance growth [9][10] - Core profitability metrics showed a 27% growth in core PP&R and a 49% increase in adjusted EPS compared to the previous year [5][11] Business Line Data and Key Metrics Changes - Business Checking balances doubled year-over-year to $377 million, significantly benefiting the interest expense line [10] - Live Oak Express contributed $12 million to gain on sales in 2025, a 100% increase from the previous year [16][19] - Approximately 70% of verticals saw increased production in 2025 compared to 2024, with both small business and commercial lending teams achieving double-digit growth rates [11] Market Data and Key Metrics Changes - Year-over-year customer deposit growth was 18%, despite a slight decline linked quarter due to typical Q4 seasonality [12][14] - The company’s total loan portfolio grew approximately 4% linked quarter, with a 17% increase year-over-year [12] Company Strategy and Development Direction - The company aims to maintain momentum in earnings outcomes and deepen customer relationships through initiatives like Business Checking and Live Oak Express [7][19] - There is a focus on leveraging AI and technology to enhance customer service and operational efficiency [19][70] - The company is strategically investing in areas that support revenue growth while moderating expense growth, targeting single-digit year-over-year expense growth [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in 2026, citing a stable or low-rate environment as favorable for growth and credit outlook [19] - The company is focused on improving credit trends and maintaining a strong credit culture, with expectations for relief in borrower pressures due to interest rate cuts [46][72] Other Important Information - The company experienced a modest increase in non-accrual loans, primarily driven by SBA credits, but remains confident in its credit management [18] - Capital levels are healthy, with a stable outlook for the company's growth trajectory [18] Q&A Session Summary Question: Can you discuss the dynamics of NII and NIM for the first quarter? - Management indicated that NIM may experience compression due to Fed cuts, but expects NII to remain strong as deposit pricing adjusts [24][25] Question: What is the outlook for gain on sale income? - Management expects Q1 gain on sale income to be more in line with Q1 2025, following a typical seasonal pattern [28][30] Question: How do you view the trajectory of margins with the anticipated Fed cuts? - Management anticipates that stable environments will allow for NIM expansion throughout the year, driven by growth [37][38] Question: What are the expectations for expense growth moving forward? - Management expects mid-single digit growth for expenses, focusing on strategic investments [41][55] Question: Can you provide insights on credit trends and non-accrual loans? - Management noted stable credit trends with low past dues and classified loans, while non-accruals are manageable [44][46] Question: What are the expectations for Live Oak Express in 2026? - Management aims for significant growth in Live Oak Express, with aspirational goals of $1 billion in production over time [58][60]

Financial Data and Key Metrics Changes - The company reported a record loan production of $6.2 billion for 2025, representing a 17% annual loan balance growth [9][10] - Q4 2025 net income reached $44 million, with earnings per share of $0.95, both approximately three times higher than Q4 2024 [9][10] - Adjusted PP&R for Q4 was $64 million, a 21% increase compared to Q4 2024, while adjusted EPS doubled over the same period [11][12] Business Line Data and Key Metrics Changes - Business Checking balances grew to $377 million, doubling year-over-year, significantly benefiting the interest expense line [10][12] - Live Oak Express contributed $12 million to gain on sales in 2025, a twofold increase from 2024 [10][17] - Approximately 70% of verticals saw increased production in 2025 compared to 2024, with both small business and commercial lending teams achieving double-digit growth rates [11][12] Market Data and Key Metrics Changes - Year-over-year customer deposit growth was 18%, despite a slight decline linked quarter due to typical Q4 seasonality [12][13] - The company’s total low-cost deposits, including non-interest-bearing checking balances, doubled year-over-year to approximately 4% of the total deposit base [13] Company Strategy and Development Direction - The company aims to continue momentum in earnings outcomes that are consistent and sustainable over time, focusing on business checking and Live Oak Express as key growth initiatives [6][19] - The company is investing in technology and operational improvements to enhance customer service and efficiency, with a goal of creating an AI-native bank over the next three to five years [62][63] - The company is strategically moderating expense growth while supporting strong revenue growth, with an expected single-digit year-over-year growth rate in expenses [38][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in 2026 and beyond, anticipating a stable or low-rate environment coupled with strong loan growth [19] - The company expects to see some relief in credit trends as borrowers benefit from interest rate cuts in 2026 [42][64] - Management noted that while credit trends have shown some pressure, the company continues to outperform industry peers in terms of credit quality [6][42] Other Important Information - The company experienced a significant gain of $28 million from its ventures investment portfolio, primarily due to a $24 million gain from the Apiture sale [9][10] - Non-accrual loans increased to $110 million, or 91 basis points of the unguaranteed held-for-investment loan portfolio, but management indicated that this increase is manageable [18][42] Q&A Session Summary Question: Can you discuss the dynamics of NII and NIM for the first quarter? - Management indicated that NIM and NII may experience near-term compression due to Fed cuts, but growth will push back towards an upward trajectory [24][25] Question: What is the outlook for gain on sale income in the first quarter? - Management expects Q1 gain on sale income to be more in line with Q1 2025, with a typical increase in the mid to back end of the quarter [27][28] Question: How do you view the trajectory of margins over the year? - Management anticipates that stable environments will allow for NIM expansion throughout the year, driven by growth [34] Question: Can you provide insights on credit trends and non-accrual loans? - Management noted that while non-accrual loans have increased, the overall credit quality remains stable, and the company continues to outperform industry averages [42][64] Question: What are the expectations for expenses moving forward? - Management expects expense growth to moderate to single digits year-over-year as they focus on strategic investments [38][50] Question: How is the company leveraging AI in its operations? - The company is actively exploring AI applications across various departments to enhance efficiency and customer experience, aiming to become an AI-native bank [62][63]

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FOURTH QUARTER 2025 January 22, 2026 ©2026 Live Oak Bancshares. All rights reserved. FORWARD LOOKING STATEMENTS Information in this presentation may contain "forward-looking statements" within the Private Securities Litigation Reform Act of 1995. These statements generally relate to our financial condition, results of operations, plans, objectives, future performance or business and usually can be identified by the use of forward-looking terminology such as "may," "will," "would," "should," "could," "expect ...