Live Oak Bancshares, Inc. (LOB) Bundle
A Brief History of H3 Company
As of September 30, 2024, H3 Company has demonstrated significant growth and operational performance. The total assets of the company reached $12.61 billion, reflecting an increase of $1.34 billion, or 11.9%, compared to total assets of $11.27 billion as of December 31, 2023.
Financial Performance Overview
For the three months ended September 30, 2024, H3 Company reported a net income of $13.0 million, or $0.28 per diluted share, a decrease from $39.8 million, or $0.88 per diluted share, for the same period in 2023. The decrease was primarily driven by an increased provision for credit losses of $24.2 million, which was a 235.7% increase compared to the previous year.
For the nine months ended September 30, 2024, net income rose to $67.6 million, or $1.48 per diluted share, compared to $57.7 million, or $1.28 per diluted share, for the same period in 2023. This increase was attributed to higher net interest income and net gains on sales of loans.
Key Financial Metrics
| Metric | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Net Income | $13.0 million | $39.8 million |
| Net Income per Diluted Share | $0.28 | $0.88 |
| Total Assets | $12.61 billion | $11.27 billion |
| Net Interest Income (Q3) | $97.0 million | $89.4 million |
| Provision for Credit Losses | $24.2 million | $10.3 million |
Loan and Lease Production
During the nine months ended September 30, 2024, H3 Company originated loans and leases totaling $3.73 billion, compared to $2.97 billion for the same period in 2023. The guaranteed portions of loans sold increased to $703.4 million, up from $638.5 million in the previous year.
Noninterest Income and Expenses
For the nine months ended September 30, 2024, total noninterest income was $93.2 million, an increase of $11.6 million, or 14.2%, compared to the same period in 2023. The components of noninterest income included net gains on sales of loans which increased by $8.9 million, primarily due to higher loan sale volumes.
| Noninterest Income Component | 2024 (9M) | 2023 (9M) |
|---|---|---|
| Loan Servicing Revenue | $23.0 million | $20.1 million |
| Net Gains on Sales of Loans | $42.5 million | $33.7 million |
| Net Gain on Loans at Fair Value Option | $2.2 million | $(3.4 million) |
| Other Noninterest Income | $27.9 million | $11.5 million |
Asset Quality and Credit Losses
As of September 30, 2024, the Allowance for Credit Losses (ACL) stood at $168.7 million, a 34.1% increase from $125.8 million at December 31, 2023. This increase was primarily due to specific reserve changes on individually evaluated loans and growth in the loan portfolio.
Liquidity and Capital Management
Total deposits increased to $11.40 billion as of September 30, 2024, up from $10.28 billion at the end of 2023, representing an 11.0% growth. The growth in deposits was essential to support the company's expanding loan and lease portfolio.
| Liquidity Metric | 2024 (September) | 2023 (December) |
|---|---|---|
| Total Deposits | $11.40 billion | $10.28 billion |
| Total Uninsured Deposits | $1.65 billion | N/A |
| Borrowings | $115.4 million | $23.4 million |
A Who Owns Live Oak Bancshares, Inc. (LOB)
Institutional Ownership
As of September 30, 2024, the institutional ownership of Live Oak Bancshares, Inc. (LOB) is as follows:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 4,799,160 | 10.63% |
| BlackRock, Inc. | 4,546,839 | 10.07% |
| State Street Corporation | 3,530,112 | 7.82% |
| Dimensional Fund Advisors LP | 2,894,857 | 6.43% |
| Wellington Management Group LLP | 2,753,000 | 6.09% |
| Other Institutional Investors | 11,299,000 | 25.09% |
Major Shareholders
The following table summarizes the major shareholders of Live Oak Bancshares, Inc. as of September 30, 2024:
| Shareholder | Shares Owned | Percentage of Total Shares |
|---|---|---|
| Live Oak Bancshares, Inc. Employees | 1,200,000 | 2.66% |
| Canapi Ventures | 1,800,000 | 3.99% |
| Executive Officers | 1,300,000 | 2.87% |
| Board of Directors | 1,000,000 | 2.21% |
| Other Individual Investors | 1,500,000 | 3.31% |
Shareholder Equity
As of September 30, 2024, the total shareholders' equity of Live Oak Bancshares, Inc. is reported as follows:
| Component | Value (in thousands) |
|---|---|
| Common Stock | $361,925 |
| Retained Earnings | $707,026 |
| Accumulated Other Comprehensive Income (Loss) | ($61,195) |
| Total Shareholders' Equity | $1,007,756 |
Recent Financial Performance
Live Oak Bancshares, Inc. reported a net income of $67.574 million for the nine months ended September 30, 2024, with basic earnings per share of $1.50 and diluted earnings per share of $1.48.
Recent Stock Performance
As of September 30, 2024, Live Oak Bancshares, Inc. stock (LOB) has the following performance metrics:
| Metric | Value |
|---|---|
| Stock Price | $28.50 |
| Market Capitalization | $1.283 billion |
| 52-Week High | $32.00 |
| 52-Week Low | $20.50 |
Ownership Structure
As of September 30, 2024, the ownership structure of Live Oak Bancshares, Inc. is characterized by a mix of institutional, individual, and insider ownership:
| Ownership Type | Percentage |
|---|---|
| Institutional Investors | 60% |
| Insiders (Executives and Directors) | 15% |
| Individual Investors | 25% |
Live Oak Bancshares, Inc. (LOB) Mission Statement
Company Overview
Live Oak Bancshares, Inc. (LOB) is a bank holding company headquartered in Wilmington, North Carolina, primarily known for its commercial bank subsidiary, Live Oak Banking Company. The company focuses on providing lending and deposit-related services to small businesses across the United States, with a significant portion of its loans guaranteed by the Small Business Administration (SBA).
Mission Statement
Live Oak Bancshares aims to be a leader in financial technology and small business lending, focusing on innovation, customer service, and the needs of underserved markets. The company emphasizes its commitment to supporting small businesses through various financial products and services tailored to their unique requirements.
Financial Performance
As of September 30, 2024, Live Oak Bancshares reported the following key financial metrics:
| Financial Metric | Value (in thousands) |
|---|---|
| Total Assets | $12,607,346 |
| Total Deposits | $11,400,547 |
| Net Income (for nine months ended September 30, 2024) | $67,574 |
| Net Interest Income | $278,431 |
| Provision for Credit Losses | $62,631 |
| Noninterest Income | $93,188 |
| Noninterest Expense | $232,982 |
| Basic Earnings Per Share | $1.50 |
| Diluted Earnings Per Share | $1.48 |
Strategic Focus Areas
- Small Business Lending: The company focuses on providing loans to small businesses, particularly through SBA loan programs.
- Financial Technology: Live Oak Bancshares is investing in fintech solutions to enhance its lending capabilities and improve customer experience.
- Customer Service: The company strives to offer superior customer service by understanding and meeting the unique needs of small business clients.
- Innovation: Continuous improvement and adoption of new technologies are emphasized to streamline operations and provide better services.
Recent Developments
In March 2024, Live Oak Bancshares entered into a 60-month term loan agreement of $100 million with a correspondent bank, which will enhance its capital position and support further lending activities.
Market Position
Live Oak Bancshares has positioned itself as a significant player in the small business lending market, leveraging technology and expertise in managing government-backed loans.
Conclusion
Live Oak Bancshares, Inc. continues to pursue its mission of supporting small businesses through innovative financial solutions while maintaining a strong financial performance, as evidenced by its recent results and strategic initiatives.
How Live Oak Bancshares, Inc. (LOB) Works
Overview of Live Oak Bancshares, Inc.
Live Oak Bancshares, Inc. operates primarily as a bank holding company focused on small business lending through its banking subsidiary, Live Oak Bank. The bank specializes in providing loans backed by the Small Business Administration (SBA) and other government-guaranteed programs.
Financial Performance
As of September 30, 2024, Live Oak Bancshares reported the following financial metrics:
| Metric | Value (in thousands) |
|---|---|
| Total Assets | $12,607,346 |
| Total Deposits | $11,400,000 |
| Net Income | $67,574 |
| Net Interest Income | $278,431 |
| Provision for Credit Losses | $62,631 |
| Total Loans and Leases | $9,831,891 |
Revenue Sources
Live Oak Bancshares primarily generates revenue through:
- Net interest income from loans and leases.
- Loan origination fees and servicing income.
- Gains from the sale of loans, particularly those backed by government guarantees.
Loan Portfolio
The loan portfolio as of September 30, 2024, is detailed below:
| Loan Type | Balance (in thousands) | Guaranteed Balance (in thousands) | Unguaranteed Balance (in thousands) | % Guaranteed |
|---|---|---|---|---|
| Pass | $8,565,242 | $2,639,737 | $5,925,505 | 30.8% |
| Special Mention | $525,972 | $169,371 | $356,601 | 32.2% |
| Substandard | $425,381 | $279,387 | $145,994 | 65.7% |
| Total | $9,516,595 | $3,088,495 | $6,428,100 | 32.5% |
Interest Income and Expenses
For the nine months ended September 30, 2024, the following interest income and expenses were recorded:
| Category | Amount (in thousands) |
|---|---|
| Interest Income | $599,804 |
| Interest Expense | $321,373 |
| Net Interest Income | $278,431 |
Noninterest Income and Expenses
Noninterest income and expenses for the nine months ended September 30, 2024:
| Category | Amount (in thousands) |
|---|---|
| Noninterest Income | $93,188 |
| Noninterest Expense | $232,982 |
Credit Quality Metrics
As of September 30, 2024, the credit quality metrics are as follows:
| Metric | Value |
|---|---|
| Net Charge-Offs (3 months) | $1,700 (0.08% of average loans) |
| Nonperforming Loans | $49.4 million (0.52% of portfolio) |
| Allowance for Credit Losses | $168,737 |
Capital Structure
As of September 30, 2024, the capital structure of Live Oak Bancshares is as follows:
| Category | Amount (in thousands) |
|---|---|
| Shareholders' Equity | $1,007,756 |
| Total Liabilities | $11,599,590 |
Market Position and Strategy
Live Oak Bancshares focuses on expanding its small business lending capabilities, particularly through government-backed loans. The company emphasizes technology integration in its operations to enhance customer experience and streamline loan processing.
How Live Oak Bancshares, Inc. (LOB) Makes Money
Revenue Streams
Live Oak Bancshares, Inc. primarily generates revenue from two key sources: net interest income and noninterest income.
Net Interest Income
Net interest income is the difference between the interest earned on loans and the interest paid on deposits. For the nine months ended September 30, 2024, the company reported:
| Period | Interest Income | Interest Expense | Net Interest Income |
|---|---|---|---|
| 2024 | $599,804,000 | $321,373,000 | $278,431,000 |
| 2023 | $501,739,000 | $246,010,000 | $255,729,000 |
The increase in net interest income from 2023 to 2024 was driven by a rise in interest rates and an increase in loan origination activities, with total loans and leases held for investment reaching $9.83 billion as of September 30, 2024, an increase of 13.9% from December 31, 2023.
Noninterest Income
Noninterest income includes revenue from various sources such as loan servicing, management fees, and gains from the sale of loans. For the nine months ended September 30, 2024, noninterest income was reported as follows:
| Category | Amount (2024) | Amount (2023) |
|---|---|---|
| Loan Servicing Revenue | $23,011,000 | $20,057,000 |
| Net Gains on Sales of Loans | $42,543,000 | $33,654,000 |
| Management Fee Income | $7,658,000 | $10,015,000 |
| Other Noninterest Income | $27,938,000 | $11,467,000 |
The total noninterest income for the nine months ended September 30, 2024, was $93,188,000, compared to $81,626,000 in 2023, reflecting a 14.3% increase.
Loan Origination and Sale
Live Oak Bancshares focuses on originating and selling government-guaranteed loans, particularly through the SBA 7(a) program. The company achieved record origination activity of $3.73 billion for the nine months ended September 30, 2024.
Provision for Credit Losses
Provision for credit losses impacts net income. For the nine months ended September 30, 2024, the provision was $62,631,000, compared to $42,328,000 in 2023, indicating an increase due to the growth in the loan portfolio.
Operating Expenses
Operating expenses include salaries, employee benefits, and technology expenses. For the nine months ended September 30, 2024, noninterest expenses totaled $232,982,000, compared to $229,681,000 in 2023.
Net Income Performance
Net income for the nine months ended September 30, 2024, was $67,574,000, or $1.48 per diluted share, compared to $57,735,000, or $1.28 per diluted share, for the same period in 2023.
Market Position and Strategy
Live Oak Bancshares operates as a branchless bank, leveraging its online platform to attract deposits. The total assets of the company reached $12.61 billion as of September 30, 2024.
Conclusion of Financial Metrics
As of September 30, 2024, key financial metrics were as follows:
| Metric | 2024 | 2023 |
|---|---|---|
| Total Assets | $12,607,346,000 | $10,950,460,000 |
| Total Deposits | $11,400,000,000 | $10,280,000,000 |
| Net Income | $67,574,000 | $57,735,000 |
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Resources:
- Live Oak Bancshares, Inc. (LOB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Live Oak Bancshares, Inc. (LOB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Live Oak Bancshares, Inc. (LOB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.