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]

Financial Performance - Net income available to common shareholders reached $26 million, a 96% increase year-over-year (YoY) and a 9% increase compared to the previous quarter[8],[23] - Diluted earnings per share (EPS) were $0.55, up 96% YoY and 8% quarter-over-quarter (QoQ)[8],[22],[23] - Adjusted Pre-Provision Net Revenue (PPNR) was $66 million, a 24% increase YoY and 7% QoQ[14],[16],[17],[18],[22] - Net interest income was $115 million, up 19% YoY and 6% QoQ[8],[22],[23] - Net interest margin was 333%, flat YoY and up 5 basis points QoQ[8],[22],[23] Loan and Deposit Growth - Total loans and leases reached $11916 million, a 17% increase YoY and 5% QoQ[8],[23] - Total deposits reached $13291 million, a 17% increase YoY and 6% QoQ[8],[23] - Business checking balances grew to $363 million, a 150% increase YoY and 26% QoQ[14],[22] Loan Origination and Sales - Loan and lease originations totaled $1649 million, a 6% decrease YoY and 8% increase QoQ[23],[26] - The company generated $12 million in year-to-date (YTD) gain on sales from Live Oak Express, a 4x increase compared to YTD 2024[14],[40] Credit Quality - Provision for credit losses was $22 million, a 36% decrease YoY and 4% decrease QoQ[8],[22],[23] - Unguaranteed Allowance for Credit Losses (ACL) to unguaranteed loans and leases was 222%[24],[44] Capital and Other Items - The company raised $963 million in net proceeds from a preferred stock offering[22],[24],[52] - The sale of Apiture settled in October, providing an estimated $24 million pre-tax gain in Q4[22],[52]