Live Oak Bancshares Inc
For the period ended Mar 31, 2024. Filed May 10, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 10, 2024
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Item 5. Other Information
Subsequent to the Company's earnings release on April 24, 2024, the Company identified that a renewable energy tax credit investment made in the fourth quarter of 2023 became eligible for increased levels of tax credits in the first quarter of 2024. Under the Inflation Reduction Act of 2022, certain circumstances allow for enhanced investment tax credits, if requirements, including locations within an energy community, are satisfied. At the time of the investment in 2023, the location of the investee was not within a previously declared energy community. On March 22, 2024, the Internal Revenue Service released Notice 2024-30 which expanded the qualifying list of energy communities. This expanded list included the Company's 2023 investment. The Company became eligible for incremental federal investment tax credits of $10.6 million and, combined with other related impacts, resulted in increased net income of $11.0 million, or $0.24 per diluted share, in the first quarter of 2024.
As a result of the items described above, certain of the GAAP financial results for the three months ended March 31, 2024 furnished in Exhibit 99.1 to the Current Report on Form 8-K filed on April 24, 2024 (the “Form 8-K”), differ from the financial results disclosed in this Quarterly Report on Form 10-Q. The Company's Unaudited Condensed Consolidated Statement of Income for the three months ended March 31, 2024 and the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2024 furnished in Exhibit 99.1 to the Form 8-K did not reflect the additional investment tax credit and related impacts due to the timing of this new information. The Unaudited Condensed Consolidated Financial Statements and the accompanying disclosures presented in this Quarterly Report on Form 10-Q reflect these adjustments.
The following tables present the Company’s Unaudited Condensed Consolidated Statement of Income for the three months ended March 31, 2024 and the Unaudited Condensed Consolidated Balance Sheet as of March 31, 2024 as adjusted for the additional tax credits and related impacts discussed above.
Quarterly Statements of Income (unaudited)
(Dollars in thousands, except per share data)
| Three Months Ended March 31, 2024 | |||
|---|---|---|---|
| As Furnished | Adjustments | As Adjusted | |
| Interest income | |||
| Loans and fees on loans | $176,010 | $— | $176,010 |
| Investment securities, taxable | 8,954 | — | 8,954 |
| Other interest earning assets | 7,456 | — | 7,456 |
| Total interest income | 192,420 | — | 192,420 |
| Interest expense | |||
| Deposits | 101,998 | — | 101,998 |
| Borrowings | 311 | — | 311 |
| Total interest expense | 102,309 | — | 102,309 |
| Net interest income | 90,111 | — | 90,111 |
| Provision for loan and lease credit losses | 16,364 | — | 16,364 |
| Net interest income after provision for loan and lease credit losses | 73,747 | — | 73,747 |
| Noninterest income | |||
| Loan servicing revenue | 7,624 | — | 7,624 |
| Loan servicing asset revaluation | (2,744) | — | (2,744) |
| Net gains on sales of loans | 11,502 | — | 11,502 |
| Net loss on loans accounted for under the fair value option | (219) | — | (219) |
| Equity method investments (loss) income | (5,022) | — | (5,022) |
| Equity security investments (losses) gains, net | (529) | — | (529) |
| Lease income | 2,453 | — | 2,453 |
| Management fee income | 3,271 | — | 3,271 |
| Other noninterest income | 9,761 | — | 9,761 |
| Total noninterest income | 26,097 | — | 26,097 |
| Noninterest expense | |||
| Salaries and employee benefits | 47,275 | — | 47,275 |
| Travel expense | 2,438 | — | 2,438 |
| Professional services expense | 1,878 | — | 1,878 |
| Advertising and marketing expense | 3,692 | — | 3,692 |
| Occupancy expense | 2,247 | — | 2,247 |
| Technology expense | 7,723 | — | 7,723 |
| Equipment expense | 3,074 | — | 3,074 |
| Other loan origination and maintenance expense | 3,911 | — | 3,911 |
| Renewable energy tax credit investment impairment (recovery) | 15 | (942) | (927) |
| FDIC insurance | 3,200 | — | 3,200 |
| Other expense | 3,226 | — | 3,226 |
| Total noninterest expense | 78,679 | (942) | 77,737 |
| Income before taxes | 21,165 | 942 | 22,107 |
| Income tax (benefit) expense | 4,617 | (10,096) | (5,479) |
| Net income | $16,548 | $11,038 | $27,586 |
| Earnings per share | |||
| Basic | $0.37 | $0.25 | $0.62 |
| Diluted | $0.36 | $0.24 | $0.60 |
| Weighted average shares outstanding | |||
| Basic | 44,762,308 | — | 44,762,308 |
| Diluted | 45,641,210 | — | 45,641,210 |
Quarterly Balance Sheets (unaudited)
| As of the quarter ended March 31, 2024 | |||
|---|---|---|---|
| As Furnished | Adjustments | As Adjusted | |
| Assets | |||
| Cash and due from banks | $597,394 | $— | $597,394 |
| Certificates of deposit with other banks | 250 | — | 250 |
| Investment securities available-for-sale | 1,120,622 | — | 1,120,622 |
| Loans held for sale | 310,749 | — | 310,749 |
| Loans and leases held for investment (1) | 8,912,561 | — | 8,912,561 |
| Allowance for credit losses on loans and leases | (139,041) | — | (139,041) |
| Net loans and leases | 8,773,520 | — | 8,773,520 |
| Premises and equipment, net | 258,071 | — | 258,071 |
| Foreclosed assets | 8,561 | — | 8,561 |
| Servicing assets | 49,343 | — | 49,343 |
| Other assets | 384,790 | 2,269 | 387,059 |
| Total assets | $11,503,300 | $2,269 | $11,505,569 |
| Liabilities and shareholders’ equity | |||
| Liabilities | |||
| Deposits: | |||
| Noninterest-bearing | $226,668 | $— | $226,668 |
| Interest-bearing | 10,156,693 | — | 10,156,693 |
| Total deposits | 10,383,361 | — | 10,383,361 |
| Borrowings | 120,242 | — | 120,242 |
| Other liabilities | 83,017 | (8,769) | 74,248 |
| Total liabilities | 10,586,620 | (8,769) | 10,577,851 |
| Shareholders’ equity | |||
| Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding | — | — | — |
| Class A common stock (voting) | 349,648 | — | 349,648 |
| Class B common stock (non-voting) | — | — | — |
| Retained earnings | 658,269 | 11,038 | 669,307 |
| Accumulated other comprehensive loss | (91,237) | — | (91,237) |
| Total shareholders' equity | 916,680 | 11,038 | 927,718 |
| Total liabilities and shareholders’ equity | $11,503,300 | $2,269 | $11,505,569 |
(1)Includes $379.2 million, $388.0 million, $410.1 million, $441.8 million and $467.0 million measured at fair value for the quarters ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.