Live Oak Bancshares Q3 profit falls 5.1% to $24.3M
Revenue rose 23.4% year over year, but common-shareholder income fell 5.1% as credit-loss provisions climbed.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Live Oak Bancshares, Inc. (LOB) reported third-quarter 2026 net income attributable to common shareholders of $24.260 million, or $0.52 per diluted common share. Total revenue was $175.646 million, up 23.4% from the third quarter of 2025, while net interest income rose 15.2% to $133.009 million. Pre-provision net revenue reached $89.926 million, up 52.9% year over year.
Common-shareholder net income declined 5.1% year over year and 30.1% from the second quarter. Provision for credit losses was $54.700 million, up 145.9% from a year earlier. The company said it was primarily driven by $17.0 million related to the stressed distillery portfolio and reserves supporting continued loan growth.
As of September 30, 2026, total assets were $16,965.575 million and deposits were $15,468.175 million, up 15.7% and 16.4% year over year, respectively; quarterly loan and lease production was $2,133.637 million. Live Oak also cited an identified material weakness in internal control over financial reporting among risks that could affect results.
1 point · 0 major1 major · 3 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointTotal revenue rose 23.4% year over year in the third quarter of 2026.
Negative
- Major pointLive Oak identified a material weakness in internal control over financial reporting.
- Moderate pointCommon-shareholder net income fell 5.1% year over year in the third quarter of 2026.
- Moderate pointCredit-loss provision increased 145.9% year over year to $54.700 million. 3.3% of market cap
Insights
Analyzing...
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Total revenue: $175.646 million
Net interest income: $133.009 million
Net income attributable to common shareholders: $24.260 million
+4 more
7 metrics
Total revenue
$175.646 million
Third quarter 2026; up 23.4% from the third quarter of 2025
Net interest income
$133.009 million
Third quarter 2026; up 15.2% from the third quarter of 2025
Net income attributable to common shareholders
$24.260 million
Third quarter 2026; down 5.1% from the third quarter of 2025
Diluted earnings per common share
$0.52
Third quarter 2026; down 5.5% from the third quarter of 2025
Provision for credit losses
$54.700 million
Third quarter 2026; up 145.9% from the third quarter of 2025
Total assets
$16,965.575 million
As of September 30, 2026; up 15.7% from September 30, 2025
Total deposits
$15,468.175 million
As of September 30, 2026; up 16.4% from September 30, 2025
Key Terms
pre-provision net revenue, net interest margin, provision for credit losses, fair value option, +1 more
5 terms
pre-provision net revenue financial
"increase in pre-provision net revenue"
Pre-provision net revenue is a bank’s income from core operations — interest earned minus interest paid plus fees and other operating income, after operating costs — measured before setting aside funds for potential loan losses. Investors use it to gauge how well a bank’s everyday business generates money independent of one-time loss reserves, like judging a store’s sales and operating profit before accounting for an expected number of returned items.
net interest margin financial
"Net interest margin decreased 3 basis points"
Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.
provision for credit losses financial
"Provision for credit losses of $54.7 million"
Provision for credit losses is an amount set aside by a financial institution to cover potential future losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution manage risks and stay financially healthy. For investors, it signals how cautious a lender is about potential loan defaults and can impact the company's profitability and financial stability.
fair value option financial
"loans accounted for under the fair value option"
An accounting election that lets a company measure eligible financial assets and liabilities at their current market price, recording gains and losses in the income statement as those prices move. For investors it matters because choosing the fair value option makes reported profits and asset values respond immediately to market swings—like revaluing a house to today’s sale price—so it can increase earnings volatility while giving a more up‑to‑date view of value.
non-GAAP financial measures financial
"This press release presents non-GAAP financial measures"
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
Earnings Snapshot
Total revenue: $175.646 million
Third quarter 2026
Total revenue
$175.646 million
Up 23.4% from the third quarter of 2025
Net interest income
$133.009 million
Up 15.2% from the third quarter of 2025
Net income attributable to common shareholders
$24.260 million
Down 5.1% from the third quarter of 2025
Diluted earnings per common share
$0.52
Down 5.5% from the third quarter of 2025
Provision for credit losses
$54.700 million
Up 145.9% from the third quarter of 2025
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did LOB report for Q3 2026?
Live Oak Bancshares reported total revenue of $175.646 million in the third quarter of 2026, up 23.4% from the third quarter of 2025 and 12.5% from the second quarter of 2026. The company defines revenue as net interest income and total noninterest income.
What drove LOB's credit-loss provision in Q3 2026?
Live Oak Bancshares recorded a $54.700 million provision for credit losses in the third quarter of 2026, up 145.9% from the third quarter of 2025. The company said it was primarily driven by $17.0 million related to the stressed distillery portfolio and reserves supporting continued loan growth.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 21, 2026
(Exact name of registrant as specified in its charter) | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s Telephone Number, Including Area Code: (910 ) 790-5867
| Not Applicable | ||
| (Former name or former address, if changed since last report) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02. Results of Operations and Financial Condition.
On October 21, 2026, Live Oak Bancshares, Inc. (the “Company”) announced financial results for the third quarter ended September 30, 2026. A copy of the press release announcing the Company’s results for the third quarter is attached as Exhibit 99.1 hereto and incorporated by reference herein.
The information contained in this report (including Exhibit 99.1) shall not be deemed “filed” for purposes of section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number | Description | |||||||
99.1 | Press Release dated October 21, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LIVE OAK BANCSHARES, INC. | ||||||||
Date: October 21, 2026 | By: | /s/ Walter J. Phifer | ||||||
| Walter J. Phifer Chief Financial Officer | ||||||||
2
Exhibit 99.1
Live Oak Bancshares, Inc. Reports Third Quarter 2026 Results
WILMINGTON, NC, October 21, 2026 - Live Oak Bancshares, Inc. (NYSE: LOB) (“Live Oak” or “the Company”) today reported third quarter of 2026 net income attributable to common shareholders of $24.3 million, or $0.52 per diluted common share.
Live Oak’s performance in the quarter, compared to the second quarter of 2026 and third quarter of 2025, includes these notable items:
•Net interest income increased 6.1% and 15.2% compared to the second quarter of 2026 and third quarter of 2025, respectively. Net interest margin decreased 3 basis points during the third quarter of 2026 from 3.33% for the second quarter of 2026 and third quarter of 2025 to 3.30%
•Revenue (comprised of net interest income and noninterest income) increased 12.5% and 23.4% compared to the second quarter of 2026 and third quarter of 2025, respectively, and noninterest expense increased 1.4% and 2.6% compared to the second quarter of 2026 and third quarter of 2025, respectively, which generated a 25.6% and 52.9% increase in pre-provision net revenue1 compared to the second quarter of 2026 and third quarter of 2025, respectively
•Strong loan production of $2.1 billion accompanied by strong deposit growth of $920.6 million during the third quarter of 2026, compared to June 30, 2026, with total assets growing by 5.8% and 15.7% to $17.0 billion as of September 30, 2026, compared to June 30, 2026 and September 30, 2025, respectively
•Provision expense for credit losses of $54.7 million for the third quarter of 2026, increased $28.9 million and $32.5 million compared to the second quarter of 2026 and third quarter of 2025, respectively. The provision in the third quarter of 2026 was primarily driven by decisive action of $17.0 million related to the stressed distillery portfolio and reserves to support continued loan growth
“The fundamental story at Live Oak is that our franchise is getting stronger. Our operating leverage is improving, Live Oak Express continues to accelerate, and our deposit franchise is marching with gaining momentum,” said Live Oak Chairman and CEO James S. (Chip) Mahan III. “The earnings power of this business is expanding because revenue growth is meaningfully outpacing expenses, our loan origination engine is running strong, and our strategic initiatives are delivering results. This operating leverage momentum has aided in absorbing the elevated provision expense in the quarter, which primarily supported record loan growth while also our continued efforts to decisively act to address stress in our distillery-related portfolio. As I think about our operating earnings model, strong loan pipeline, and the possibilities that AI may unlock for both our customers and our employees, I am truly excited about Live Oak’s future.”
Conference Call
Live Oak will host a conference call to discuss the Company's financial results and business outlook tomorrow, October 22, 2026, at 9:00 a.m. ET. The call will be accessible by telephone and webcast. A supplementary slide presentation will be posted to the website prior to the event, and a replay will be available for 12 months following the event. The conference call details are as follows:
Live Telephone Dial-In
U.S.: 833.461.5787
Meeting ID: 300 750 082
Live Webcast Log-In
Webcast Link: investor.liveoakbank.com
Registration: Name and Email Required
Analyst Registration
To participate in Q&A, analysts must receive a unique passcode. Please follow instructions located at investor.liveoakbank.com.
(1)See accompanying GAAP to Non-GAAP Reconciliation.
1
Third Quarter 2026 Key Measures
| (Dollars in thousands, except per share data) | 3Q 2026 Change vs. | ||||||||||||||||||||||||||||||||||||||||
| 2Q 2026 | 3Q 2025 | ||||||||||||||||||||||||||||||||||||||||
| 3Q 2026 | 2Q 2026 | 3Q 2025 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||
Total revenue (1) | $ | 175,646 | $ | 156,145 | $ | 142,330 | $ | 19,501 | 12.5 | % | $ | 33,316 | 23.4 | % | |||||||||||||||||||||||||||
| Total noninterest expense | 85,720 | 84,525 | 83,516 | 1,195 | 1.4 | 2,204 | 2.6 | ||||||||||||||||||||||||||||||||||
| Provision for credit losses | 54,700 | 25,800 | 22,242 | 28,900 | 112.0 | 32,458 | 145.9 | ||||||||||||||||||||||||||||||||||
| Income before taxes | 35,226 | 45,820 | 36,572 | (10,594) | (23.1) | (1,346) | (3.7) | ||||||||||||||||||||||||||||||||||
| Effective tax rate | 25.4 | % | 19.9 | % | 27.6 | % | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||||||||
| Net income attributable to common shareholders | $ | 24,260 | $ | 34,701 | $ | 25,562 | $ | (10,441) | (30.1) | % | $ | (1,302) | (5.1) | % | |||||||||||||||||||||||||||
| Diluted earnings per common share | 0.52 | 0.74 | 0.55 | (0.22) | (29.7) | (0.03) | (5.5) | ||||||||||||||||||||||||||||||||||
| Loan and lease production | 2,133,637 | 1,548,432 | 1,648,711 | 585,205 | 37.8 | 484,926 | 29.4 | ||||||||||||||||||||||||||||||||||
| Total loans and leases | 13,869,854 | 13,142,671 | 11,915,511 | 727,183 | 5.5 | 1,954,343 | 16.4 | ||||||||||||||||||||||||||||||||||
| Total assets | 16,965,575 | 16,038,141 | 14,665,902 | 927,434 | 5.8 | 2,299,673 | 15.7 | ||||||||||||||||||||||||||||||||||
| Total deposits | 15,468,175 | 14,547,526 | 13,290,723 | 920,649 | 6.3 | 2,177,452 | 16.4 | ||||||||||||||||||||||||||||||||||
(1)Total revenue consists of net interest income and total noninterest income.
2
Important Note Regarding Forward-Looking Statements
Statements in this press release that are based on other than historical data or that express the Company’s plans or expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include changes in Small Business Administration (“SBA”) rules, regulations or loan products, including the Section 7(a) program, changes in SBA standard operating procedures or changes in Live Oak Banking Company's status as an SBA Preferred Lender; changes in rules, regulations or procedures for other government loan programs, including those of the United States Department of Agriculture; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; the impacts of any pandemic or public health situation on trade (including supply chains and export levels), travel, employee productivity and other economic activities that may have a destabilizing and negative effect on financial markets, economic activity and customer behavior; risks relating to the deployment and use of artificial intelligence by the Company, its customers, and counterparties; a reduction in or the termination of the Company's ability to use the technology-based platform that is critical to the success of its business model, including a failure in or a breach of operational or security systems or those of its third-party service providers; risks relating to the material weakness we identified in our internal control over financial reporting; technological risks and developments, including cyber threats, attacks, or events; competition from other lenders; the Company's ability to attract and retain key personnel; market and economic conditions and the associated impact on the Company; operational, liquidity and credit risks associated with the Company's business; changes in political and economic conditions, including any prolonged U.S. government shutdown; the impact of heightened regulatory scrutiny of financial products and services and the Company's ability to comply with regulatory requirements and expectations; changes in tariffs and trade barriers, including potential changes in U.S. and international trade policies and the resulting impact on the Company and its customers; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget; adverse results, including related fees and expenses, from pending or future lawsuits, government investigations or private actions; and the other factors discussed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (http://www.sec.gov). Except as required by law, the Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.
About Live Oak Bancshares, Inc.
Live Oak Bancshares, Inc. (NYSE: LOB) is a financial holding company and the parent company of Live Oak Bank. Live Oak Bancshares and its subsidiaries partner with businesses that share a groundbreaking focus on service and technology to redefine banking. To learn more, visit www.liveoak.bank.
Contacts:
Walter J. Phifer | CFO | Investor Relations | 910.218.2196
Claire Parker | Corporate Communications | Media Relations | 910.597.1592
3
Live Oak Bancshares, Inc.
Quarterly Statements of Income (unaudited)
(Dollars in thousands, except per share data)
| Three Months Ended | 3Q 2026 Change vs. | ||||||||||||||||||||||||||||||||||||||||
| 3Q 2026 | 2Q 2026 | 1Q 2026 | 4Q 2025 | 3Q 2025 | 2Q 2026 | 3Q 2025 | |||||||||||||||||||||||||||||||||||
| Interest income | % | % | |||||||||||||||||||||||||||||||||||||||
| Loans and fees on loans | $ | 237,270 | $ | 221,705 | $ | 214,129 | $ | 218,852 | $ | 211,599 | 7.0 | 12.1 | |||||||||||||||||||||||||||||
| Investment securities, taxable | 14,254 | 13,411 | 13,009 | 12,679 | 12,175 | 6.3 | 17.1 | ||||||||||||||||||||||||||||||||||
| Other interest earning assets | 7,953 | 6,601 | 6,726 | 8,124 | 7,654 | 20.5 | 3.9 | ||||||||||||||||||||||||||||||||||
| Total interest income | 259,477 | 241,717 | 233,864 | 239,655 | 231,428 | 7.3 | 12.1 | ||||||||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||||||||||||||
| Deposits | 124,850 | 114,776 | 112,847 | 114,879 | 114,266 | 8.8 | 9.3 | ||||||||||||||||||||||||||||||||||
| Borrowings | 1,618 | 1,603 | 1,617 | 1,656 | 1,677 | 0.9 | (3.5) | ||||||||||||||||||||||||||||||||||
| Total interest expense | 126,468 | 116,379 | 114,464 | 116,535 | 115,943 | 8.7 | 9.1 | ||||||||||||||||||||||||||||||||||
| Net interest income | 133,009 | 125,338 | 119,400 | 123,120 | 115,485 | 6.1 | 15.2 | ||||||||||||||||||||||||||||||||||
| Provision for credit losses | 54,700 | 25,800 | 20,100 | 21,845 | 22,242 | 112.0 | 145.9 | ||||||||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | 78,309 | 99,538 | 99,300 | 101,275 | 93,243 | (21.3) | (16.0) | ||||||||||||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||||||||||||||
| Loan servicing revenue | 9,710 | 9,194 | 9,094 | 9,227 | 8,812 | 5.6 | 10.2 | ||||||||||||||||||||||||||||||||||
| Loan servicing asset revaluation | (2,605) | (4,278) | (3,487) | (3,932) | (4,360) | 39.1 | 40.3 | ||||||||||||||||||||||||||||||||||
| Net gains on sales of loans | 20,893 | 17,554 | 15,425 | 12,313 | 17,099 | 19.0 | 22.2 | ||||||||||||||||||||||||||||||||||
| Net (loss) gain on loans accounted for under the fair value option | (66) | 291 | (1,165) | 1,518 | (350) | (122.7) | 81.1 | ||||||||||||||||||||||||||||||||||
| Equity method investments income (loss) | 553 | 74 | (817) | 23,812 | (1,470) | 647.3 | 137.6 | ||||||||||||||||||||||||||||||||||
| Equity security investments (losses) gains, net | (2,573) | — | — | 4,691 | 18 | (100.0) | (14,394.4) | ||||||||||||||||||||||||||||||||||
| Lease income | 2,088 | 2,238 | 2,135 | 2,196 | 2,179 | (6.7) | (4.2) | ||||||||||||||||||||||||||||||||||
| Other noninterest income | 14,637 | 5,734 | 4,889 | (38) | 4,917 | 155.3 | 197.7 | ||||||||||||||||||||||||||||||||||
| Total noninterest income | 42,637 | 30,807 | 26,074 | 49,787 | 26,845 | 38.4 | 58.8 | ||||||||||||||||||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 46,918 | 48,776 | 49,354 | 47,988 | 49,910 | (3.8) | (6.0) | ||||||||||||||||||||||||||||||||||
| Travel expense | 1,756 | 1,933 | 1,463 | 1,715 | 1,618 | (9.2) | 8.5 | ||||||||||||||||||||||||||||||||||
| Professional services expense | 2,924 | 2,938 | 2,516 | 2,855 | 1,999 | (0.5) | 46.3 | ||||||||||||||||||||||||||||||||||
| Advertising and marketing expense | 2,314 | 2,734 | 3,051 | 2,298 | 1,839 | (15.4) | 25.8 | ||||||||||||||||||||||||||||||||||
| Occupancy expense | 2,384 | 2,364 | 2,410 | 2,317 | 2,339 | 0.8 | 1.9 | ||||||||||||||||||||||||||||||||||
| Technology expense | 10,263 | 9,608 | 9,749 | 13,397 | 10,234 | 6.8 | 0.3 | ||||||||||||||||||||||||||||||||||
| Equipment expense | 3,595 | 3,662 | 3,693 | 3,677 | 3,320 | (1.8) | 8.3 | ||||||||||||||||||||||||||||||||||
| Other loan origination and maintenance expense | 5,101 | 4,864 | 5,919 | 4,917 | 4,777 | 4.9 | 6.8 | ||||||||||||||||||||||||||||||||||
| Renewable energy tax credit investment impairment | 310 | 26 | — | 129 | 336 | 1,092.3 | (7.7) | ||||||||||||||||||||||||||||||||||
| FDIC insurance | 4,197 | 4,788 | 4,401 | 3,933 | 3,643 | (12.3) | 15.2 | ||||||||||||||||||||||||||||||||||
| Other expense | 5,958 | 2,832 | 2,737 | 5,927 | 3,501 | 110.4 | 70.2 | ||||||||||||||||||||||||||||||||||
| Total noninterest expense | 85,720 | 84,525 | 85,293 | 89,153 | 83,516 | 1.4 | 2.6 | ||||||||||||||||||||||||||||||||||
| Income before taxes | 35,226 | 45,820 | 40,081 | 61,909 | 36,572 | (23.1) | (3.7) | ||||||||||||||||||||||||||||||||||
| Income tax expense | 8,961 | 9,116 | 10,134 | 15,787 | 10,106 | (1.7) | (11.3) | ||||||||||||||||||||||||||||||||||
| Net income | 26,265 | 36,704 | 29,947 | 46,122 | 26,466 | (28.4) | (0.8) | ||||||||||||||||||||||||||||||||||
| Net loss attributable to non-controlling interest | 88 | 91 | 93 | 88 | 50 | (3.3) | 76.0 | ||||||||||||||||||||||||||||||||||
| Net income attributable to Live Oak Bancshares, Inc. | 26,353 | 36,795 | 30,040 | 46,210 | 26,516 | (28.4) | (0.6) | ||||||||||||||||||||||||||||||||||
| Preferred stock dividends | 2,093 | 2,094 | 2,094 | 2,094 | 954 | — | 119.4 | ||||||||||||||||||||||||||||||||||
| Net income attributable to common shareholders | $ | 24,260 | $ | 34,701 | $ | 27,946 | $ | 44,116 | $ | 25,562 | (30.1) | (5.1) | |||||||||||||||||||||||||||||
| Earnings per common share | |||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.52 | $ | 0.75 | $ | 0.61 | $ | 0.96 | $ | 0.56 | (30.7) | (7.1) | |||||||||||||||||||||||||||||
| Diluted | $ | 0.52 | $ | 0.74 | $ | 0.60 | $ | 0.95 | $ | 0.55 | (29.7) | (5.5) | |||||||||||||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||||||||||||||||||||
| Basic | 46,325,262 | 46,265,757 | 46,138,609 | 45,906,268 | 45,780,794 | ||||||||||||||||||||||||||||||||||||
| Diluted | 46,869,123 | 46,594,482 | 46,509,040 | 46,298,408 | 46,216,958 | ||||||||||||||||||||||||||||||||||||
4
Live Oak Bancshares, Inc.
Quarterly Balance Sheets (unaudited)
(Dollars in thousands)
| As of the quarter ended | 3Q 2026 Change vs. | ||||||||||||||||||||||||||||||||||||||||
| 3Q 2026 | 2Q 2026 | 1Q 2026 | 4Q 2025 | 3Q 2025 | 2Q 2026 | 3Q 2025 | |||||||||||||||||||||||||||||||||||
| Assets | % | % | |||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 1,099,902 | $ | 927,630 | $ | 816,135 | $ | 864,904 | $ | 892,445 | 18.6 | 23.2 | |||||||||||||||||||||||||||||
| Certificates of deposit with other banks | 250 | 250 | 250 | 250 | 250 | — | — | ||||||||||||||||||||||||||||||||||
| Investment securities available-for-sale | 1,500,709 | 1,467,855 | 1,434,538 | 1,427,401 | 1,373,219 | 2.2 | 9.3 | ||||||||||||||||||||||||||||||||||
Loans held for sale | 496,807 | 511,812 | 435,313 | 420,055 | 360,693 | (2.9) | 37.7 | ||||||||||||||||||||||||||||||||||
Loans and leases held for investment (1) | 13,373,047 | 12,630,859 | 12,158,216 | 11,973,622 | 11,554,818 | 5.9 | 15.7 | ||||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans and leases | (213,630) | (193,417) | (193,279) | (192,264) | (185,700) | (10.5) | (15.0) | ||||||||||||||||||||||||||||||||||
| Net loans and leases | 13,159,417 | 12,437,442 | 11,964,937 | 11,781,358 | 11,369,118 | 5.8 | 15.7 | ||||||||||||||||||||||||||||||||||
| Premises and equipment, net | 220,894 | 231,198 | 235,329 | 240,203 | 241,140 | (4.5) | (8.4) | ||||||||||||||||||||||||||||||||||
| Foreclosed assets | 8,484 | 11,017 | 12,005 | 8,208 | 11,024 | (23.0) | (23.0) | ||||||||||||||||||||||||||||||||||
| Servicing assets | 71,215 | 66,733 | 64,677 | 63,155 | 62,491 | 6.7 | 14.0 | ||||||||||||||||||||||||||||||||||
| Other assets | 407,897 | 384,204 | 336,849 | 329,244 | 355,522 | 6.2 | 14.7 | ||||||||||||||||||||||||||||||||||
| Total assets | $ | 16,965,575 | $ | 16,038,141 | $ | 15,300,033 | $ | 15,134,778 | $ | 14,665,902 | 5.8 | 15.7 | |||||||||||||||||||||||||||||
| Liabilities and shareholders’ equity | |||||||||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing | $ | 638,332 | $ | 605,237 | $ | 510,917 | $ | 515,051 | $ | 494,019 | 5.5 | 29.2 | |||||||||||||||||||||||||||||
| Interest-bearing | 14,829,843 | 13,942,289 | 13,324,141 | 13,173,608 | 12,796,704 | 6.4 | 15.9 | ||||||||||||||||||||||||||||||||||
| Total deposits | 15,468,175 | 14,547,526 | 13,835,058 | 13,688,659 | 13,290,723 | 6.3 | 16.4 | ||||||||||||||||||||||||||||||||||
| Borrowings | 99,793 | 99,766 | 99,746 | 102,404 | 105,045 | — | (5.0) | ||||||||||||||||||||||||||||||||||
| Other liabilities | 85,373 | 73,931 | 83,468 | 89,609 | 67,585 | 15.5 | 26.3 | ||||||||||||||||||||||||||||||||||
| Total liabilities | 15,653,341 | 14,721,223 | 14,018,272 | 13,880,672 | 13,463,353 | 6.3 | 16.3 | ||||||||||||||||||||||||||||||||||
| Shareholders’ equity | |||||||||||||||||||||||||||||||||||||||||
| Preferred stock | 96,266 | 96,266 | 96,266 | 96,266 | 96,266 | — | — | ||||||||||||||||||||||||||||||||||
| Class A common stock (voting) | 404,119 | 399,396 | 392,258 | 388,389 | 383,288 | 1.2 | 5.4 | ||||||||||||||||||||||||||||||||||
| Retained earnings | 892,626 | 869,757 | 836,444 | 809,885 | 770,820 | 2.6 | 15.8 | ||||||||||||||||||||||||||||||||||
| Accumulated other comprehensive loss | (84,743) | (52,555) | (47,352) | (44,672) | (52,151) | (61.2) | (62.5) | ||||||||||||||||||||||||||||||||||
| Total shareholders' equity attributed to Live Oak Bancshares, Inc. | 1,308,268 | 1,312,864 | 1,277,616 | 1,249,868 | 1,198,223 | (0.4) | 9.2 | ||||||||||||||||||||||||||||||||||
| Non-controlling interest | 3,966 | 4,054 | 4,145 | 4,238 | 4,326 | (2.2) | (8.3) | ||||||||||||||||||||||||||||||||||
| Total shareholders' equity | 1,312,234 | 1,316,918 | 1,281,761 | 1,254,106 | 1,202,549 | (0.4) | 9.1 | ||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 16,965,575 | $ | 16,038,141 | $ | 15,300,033 | $ | 15,134,778 | $ | 14,665,902 | 5.8 | 15.7 | |||||||||||||||||||||||||||||
(1)Includes $216.6 million, $232.1 million, $244.9 million, $260.6 million and $280.3 million loans measured at fair value for the quarters ended September 30, 2026, June 30, 2026, March 31, 2026, December 31, 2025, and September 30, 2025, respectively.
5
Live Oak Bancshares, Inc.
Statements of Income (unaudited)
(Dollars in thousands, except per share data)
| Nine Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| Interest income | |||||||||||
| Loans and fees on loans | $ | 673,104 | $ | 611,728 | |||||||
| Investment securities, taxable | 40,674 | 34,912 | |||||||||
| Other interest earning assets | 21,280 | 22,177 | |||||||||
| Total interest income | 735,058 | 668,817 | |||||||||
| Interest expense | |||||||||||
| Deposits | 352,473 | 338,534 | |||||||||
| Borrowings | 4,838 | 5,045 | |||||||||
| Total interest expense | 357,311 | 343,579 | |||||||||
| Net interest income | 377,747 | 325,328 | |||||||||
| Provision for credit losses | 100,600 | 74,458 | |||||||||
| Net interest income after provision for credit losses | 277,147 | 250,780 | |||||||||
| Noninterest income | |||||||||||
| Loan servicing revenue | 27,998 | 25,675 | |||||||||
| Loan servicing asset revaluation | (10,370) | (12,145) | |||||||||
| Net gains on sales of loans | 53,872 | 50,107 | |||||||||
| Net loss on loans accounted for under the fair value option | (940) | (302) | |||||||||
| Equity method investments (loss) income | (190) | (6,425) | |||||||||
| Equity security investments gain (losses), net | (2,573) | 1,042 | |||||||||
| Lease income | 6,461 | 7,855 | |||||||||
| Other noninterest income | 25,260 | 13,864 | |||||||||
| Total noninterest income | 99,518 | 79,671 | |||||||||
| Noninterest expense | |||||||||||
| Salaries and employee benefits | 145,048 | 141,447 | |||||||||
| Travel expense | 5,152 | 5,316 | |||||||||
| Professional services expense | 8,378 | 7,897 | |||||||||
| Advertising and marketing expense | 8,099 | 9,924 | |||||||||
| Occupancy expense | 7,158 | 7,445 | |||||||||
| Technology expense | 29,620 | 29,551 | |||||||||
| Equipment expense | 10,950 | 10,750 | |||||||||
| Other loan origination and maintenance expense | 15,884 | 13,552 | |||||||||
| Renewable energy tax credit investment impairment | 336 | 606 | |||||||||
| FDIC insurance | 13,386 | 10,739 | |||||||||
| Other expense | 11,527 | 12,318 | |||||||||
| Total noninterest expense | 255,538 | 249,545 | |||||||||
| Income before taxes | 121,127 | 80,906 | |||||||||
| Income tax expense | 28,211 | 21,385 | |||||||||
| Net income | 92,916 | 59,521 | |||||||||
| Net loss attributable to non-controlling interest | 272 | 140 | |||||||||
| Net income attributable to Live Oak Bancshares, Inc. | 93,188 | 59,661 | |||||||||
| Preferred stock dividends | 6,281 | 954 | |||||||||
| Net income attributable to common shareholders | $ | 86,907 | $ | 58,707 | |||||||
| Earnings per common share | |||||||||||
| Basic | $ | 1.88 | $ | 1.29 | |||||||
| Diluted | $ | 1.86 | $ | 1.28 | |||||||
| Weighted average shares outstanding | |||||||||||
| Basic | 46,243,893 | 45,632,313 | |||||||||
| Diluted | 46,658,232 | 45,956,835 | |||||||||
6
Live Oak Bancshares, Inc.
Quarterly Selected Financial Data
(Dollars in thousands, except per share data)
| As of and for the three months ended | |||||||||||||||||||||||||||||
| 3Q 2026 | 2Q 2026 | 1Q 2026 | 4Q 2025 | 3Q 2025 | |||||||||||||||||||||||||
| Income Statement Data | |||||||||||||||||||||||||||||
| Net income attributable to common shareholders | $ | 24,260 | $ | 34,701 | $ | 27,946 | $ | 44,116 | $ | 25,562 | |||||||||||||||||||
| Per Common Share | |||||||||||||||||||||||||||||
| Net income, diluted | $ | 0.52 | $ | 0.74 | $ | 0.60 | $ | 0.95 | $ | 0.55 | |||||||||||||||||||
| Dividends declared - common | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | ||||||||||||||||||||||||
| Book value per common share | 26.13 | 26.29 | 25.55 | 25.06 | 24.03 | ||||||||||||||||||||||||
Tangible book value per common share (1) | 26.05 | 26.20 | 25.46 | 24.97 | 23.96 | ||||||||||||||||||||||||
| Performance Ratios | |||||||||||||||||||||||||||||
| Return on average assets (annualized) | 0.59 | % | 0.90 | % | 0.74 | % | 1.19 | % | 0.72 | % | |||||||||||||||||||
| Return on average common equity (annualized) | 7.70 | 11.36 | 9.39 | 15.25 | 9.32 | ||||||||||||||||||||||||
| Net interest margin | 3.30 | 3.33 | 3.27 | 3.38 | 3.33 | ||||||||||||||||||||||||
Efficiency ratio (1) | 48.80 | 54.13 | 58.63 | 51.56 | 58.68 | ||||||||||||||||||||||||
| Noninterest income to total revenue | 24.27 | 19.73 | 17.92 | 28.79 | 18.86 | ||||||||||||||||||||||||
| Selected Loan Metrics | |||||||||||||||||||||||||||||
| Loans and leases originated | $ | 2,133,637 | $ | 1,548,432 | $ | 1,368,311 | $ | 1,638,113 | $ | 1,648,711 | |||||||||||||||||||
| Outstanding balance of sold loans serviced | 6,338,443 | 5,991,590 | 5,943,787 | 5,599,724 | 5,563,363 | ||||||||||||||||||||||||
| Asset Quality Ratios | |||||||||||||||||||||||||||||
Allowance for credit losses to loans and leases held for investment (3) | 1.62 | % | 1.56 | % | 1.62 | % | 1.64 | % | 1.65 | % | |||||||||||||||||||
Net charge-offs (3) | $ | 32,087 | $ | 24,162 | $ | 18,585 | $ | 13,739 | $ | 16,816 | |||||||||||||||||||
Net charge-offs to average loans and leases held for investment (2) (3) | 1.00 | % | 0.80 | % | 0.63 | % | 0.48 | % | 0.61 | % | |||||||||||||||||||
Nonperforming loans and leases at historical cost (3) | |||||||||||||||||||||||||||||
| Unguaranteed | $ | 138,422 | $ | 124,336 | $ | 116,791 | $ | 101,371 | $ | 76,887 | |||||||||||||||||||
| Guaranteed | 370,267 | 346,419 | 327,409 | 399,786 | 379,381 | ||||||||||||||||||||||||
| Total | 508,689 | 470,755 | 444,200 | 501,157 | 456,268 | ||||||||||||||||||||||||
Unguaranteed nonperforming historical cost loans and leases, to loans and leases held for investment (3) | 1.05 | % | 1.00 | % | 0.98 | % | 0.87 | % | 0.68 | % | |||||||||||||||||||
Nonperforming loans at fair value (4) | |||||||||||||||||||||||||||||
| Unguaranteed | $ | 11,607 | $ | 6,623 | $ | 6,884 | $ | 7,715 | $ | 6,775 | |||||||||||||||||||
| Guaranteed | 46,300 | 52,695 | 54,679 | 53,887 | 54,887 | ||||||||||||||||||||||||
| Total | 57,907 | 59,318 | 61,563 | 61,602 | 61,662 | ||||||||||||||||||||||||
Unguaranteed nonperforming fair value loans to fair value loans held for investment (4) | 5.36 | % | 2.85 | % | 2.81 | % | 2.96 | % | 2.42 | % | |||||||||||||||||||
| Capital Ratios | |||||||||||||||||||||||||||||
| Common equity tier 1 capital (to risk-weighted assets) | 9.94 | % | 10.42 | % | 10.63 | % | 10.53 | % | 10.51 | % | |||||||||||||||||||
| Tier 1 leverage capital (to average assets) | 8.23 | 8.59 | 8.47 | 8.48 | 8.57 | ||||||||||||||||||||||||
(1)See accompanying GAAP to Non-GAAP Reconciliation.
(2)Quarterly net charge-offs as a percentage of quarterly average loans and leases held for investment, annualized.
(3)Loans and leases at historical cost only (excludes loans measured at fair value).
(4)Loans accounted for under the fair value option only (excludes loans and leases carried at historical cost).
7
Live Oak Bancshares, Inc.
Quarterly Average Balances and Net Interest Margin
(Dollars in thousands)
| Three Months Ended September 30, 2026 | Three Months Ended June 30, 2026 | Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | Average Balance | Interest | Average Yield/Rate | |||||||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-earning balances in other banks | $ | 818,936 | $ | 7,953 | 3.85 | % | $ | 710,110 | $ | 6,601 | 3.73 | % | $ | 701,059 | $ | 7,654 | 4.33 | % | |||||||||||||||||||||||||||||||||||
| Investment securities | 1,577,763 | 14,254 | 3.58 | 1,519,670 | 13,411 | 3.54 | 1,418,810 | 12,175 | 3.40 | ||||||||||||||||||||||||||||||||||||||||||||
| Loans held for sale | 571,358 | 11,460 | 7.96 | 527,857 | 10,441 | 7.93 | 396,084 | 8,103 | 8.12 | ||||||||||||||||||||||||||||||||||||||||||||
Loans and leases held for investment (1) | 13,022,914 | 225,810 | 6.88 | 12,322,003 | 211,264 | 6.88 | 11,249,234 | 203,496 | 7.18 | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 15,990,971 | 259,477 | 6.44 | 15,079,640 | 241,717 | 6.43 | 13,765,187 | 231,428 | 6.67 | ||||||||||||||||||||||||||||||||||||||||||||
| Less: Allowance for credit losses on loans and leases | (192,700) | (193,304) | (182,001) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 586,176 | 537,352 | 530,529 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 16,384,447 | $ | 15,423,688 | $ | 14,113,715 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Savings | $ | 7,661,348 | $ | 64,020 | 3.32 | % | $ | 7,170,652 | $ | 58,289 | 3.26 | % | $ | 6,608,380 | $ | 58,657 | 3.52 | % | |||||||||||||||||||||||||||||||||||
| Certificates of deposit | 5,856,418 | 55,322 | 3.75 | 5,637,001 | 51,968 | 3.70 | 5,272,818 | 51,443 | 3.87 | ||||||||||||||||||||||||||||||||||||||||||||
| Other interest-bearing deposits | 747,469 | 5,508 | 2.92 | 629,105 | 4,519 | 2.88 | 498,455 | 4,166 | 3.32 | ||||||||||||||||||||||||||||||||||||||||||||
| Total deposits | 14,265,235 | 124,850 | 3.47 | 13,436,758 | 114,776 | 3.43 | 12,379,653 | 114,266 | 3.66 | ||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | 99,761 | 1,618 | 6.43 | 99,743 | 1,603 | 6.45 | 106,744 | 1,677 | 6.23 | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 14,364,996 | 126,468 | 3.49 | 13,536,501 | 116,379 | 3.45 | 12,486,397 | 115,943 | 3.68 | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 594,809 | 536,054 | 401,916 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities | 64,497 | 29,222 | 63,133 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 1,356,092 | 1,317,767 | 1,157,893 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-controlling interest | 4,053 | 4,144 | 4,376 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 16,384,447 | $ | 15,423,688 | $ | 14,113,715 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income and interest rate spread | $ | 133,009 | 2.95 | % | $ | 125,338 | 2.98 | % | $ | 115,485 | 2.99 | % | |||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.30 | 3.33 | 3.33 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 111.32 | % | 111.40 | % | 110.24 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1)Average loan and lease balances include non-accruing loans and leases.
8
Live Oak Bancshares, Inc.
GAAP to Non-GAAP Reconciliation
(Dollars in thousands)
| As of and for the three months ended | |||||||||||||||||||||||||||||
| 3Q 2026 | 2Q 2026 | 1Q 2026 | 4Q 2025 | 3Q 2025 | |||||||||||||||||||||||||
| Total shareholders’ equity | $ | 1,312,234 | $ | 1,316,918 | $ | 1,281,761 | $ | 1,254,106 | $ | 1,202,549 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||
| Preferred stock | 96,266 | 96,266 | 96,266 | 96,266 | 96,266 | ||||||||||||||||||||||||
| Non-controlling interest | 3,966 | 4,054 | 4,145 | 4,238 | 4,326 | ||||||||||||||||||||||||
| Total common shareholders' equity | $ | 1,212,002 | $ | 1,216,598 | $ | 1,181,350 | $ | 1,153,602 | $ | 1,101,957 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||
| Goodwill | 1,797 | 1,797 | 1,797 | 1,797 | 1,797 | ||||||||||||||||||||||||
| Other intangible assets | 1,937 | 2,013 | 2,089 | 2,165 | 1,453 | ||||||||||||||||||||||||
| Tangible common shareholders’ equity (a) | $ | 1,208,268 | $ | 1,212,788 | $ | 1,177,464 | $ | 1,149,640 | $ | 1,098,707 | |||||||||||||||||||
| Shares outstanding (c) | 46,377,874 | 46,283,620 | 46,240,691 | 46,032,402 | 45,855,739 | ||||||||||||||||||||||||
| Total assets | $ | 16,965,575 | $ | 16,038,141 | $ | 15,300,033 | $ | 15,134,778 | $ | 14,665,902 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||
| Goodwill | 1,797 | 1,797 | 1,797 | 1,797 | 1,797 | ||||||||||||||||||||||||
| Other intangible assets | 1,937 | 2,013 | 2,089 | 2,165 | 1,453 | ||||||||||||||||||||||||
| Tangible assets (b) | $ | 16,961,841 | $ | 16,034,331 | $ | 15,296,147 | $ | 15,130,816 | $ | 14,662,652 | |||||||||||||||||||
| Tangible common shareholders’ equity to tangible assets (a/b) | 7.12 | % | 7.56 | % | 7.70 | % | 7.60 | % | 7.49 | % | |||||||||||||||||||
| Tangible book value per common share (a/c) | $ | 26.05 | $ | 26.20 | $ | 25.46 | $ | 24.97 | $ | 23.96 | |||||||||||||||||||
| Efficiency ratio: | |||||||||||||||||||||||||||||
| Noninterest expense (d) | $ | 85,720 | $ | 84,525 | $ | 85,293 | $ | 89,153 | $ | 83,516 | |||||||||||||||||||
| Net interest income | 133,009 | 125,338 | 119,400 | 123,120 | 115,485 | ||||||||||||||||||||||||
| Noninterest income | 42,637 | 30,807 | 26,074 | 49,787 | 26,845 | ||||||||||||||||||||||||
| Total revenue (e) | $ | 175,646 | $ | 156,145 | $ | 145,474 | $ | 172,907 | $ | 142,330 | |||||||||||||||||||
| Efficiency ratio (d/e) | 48.80 | % | 54.13 | % | 58.63 | % | 51.56 | % | 58.68 | % | |||||||||||||||||||
| Pre-provision net revenue (e-d) | $ | 89,926 | $ | 71,620 | $ | 60,181 | $ | 83,754 | $ | 58,814 | |||||||||||||||||||
This press release presents non-GAAP financial measures. The adjustments to reconcile from the non-GAAP financial measures to the applicable GAAP financial measure are included where applicable in financial results presented in accordance with GAAP. The Company considers these adjustments to be relevant to ongoing operating results. The Company believes that excluding the amounts associated with these adjustments to present the non-GAAP financial measures provides a meaningful base for period-to-period comparisons, which will assist regulators, investors, and analysts in analyzing the operating results or financial position of the Company. The non-GAAP financial measures are used by management to assess the performance of the Company’s business for presentations of Company performance to investors, and for other reasons as may be requested by investors and analysts. The Company further believes that presenting the non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis as that applied by management. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although non-GAAP financial measures are frequently used by shareholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.
9