| |||||
x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
2023
| |||||
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
________.
|
| ||||
North Carolina | 26-4596286 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
1741 Tiburon Drive Wilmington, North Carolina | 28403 | ||||
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Voting Common Stock, no par value per share | LOB | New York Stock Exchange LLC |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes Yesx☒ No Noo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | x |
| Accelerated filer |
| ||||||||||
Non-accelerated filer | o |
| Smaller reporting company |
| ||||||||||
Emerging growth company |
|
Securities registered pursuant to Section 12(b) of the Act:
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|
|
|
|
APPLICABLE ONLY TO CORPORATE ISSUERS:
2023
| ||||||||||
Page | ||||||||||
PART I. FINANCIAL INFORMATION | ||||||||||
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2022*
|
| June 30, 2022 |
|
| December 31, 2021 |
| June 30, 2023 | December 31, 2022 | |||||||||||
Assets |
|
|
|
|
|
|
|
| Assets | ||||||||||
Cash and due from banks |
| $ | 580,493 |
|
| $ | 187,203 |
| Cash and due from banks | $ | 808,131 | $ | 280,239 | ||||||
Federal funds sold |
|
| 51,694 |
|
|
| 16,547 |
| Federal funds sold | — | 136,397 | ||||||||
Certificates of deposit with other banks |
|
| 4,250 |
|
|
| 4,750 |
| Certificates of deposit with other banks | 4,000 | 4,000 | ||||||||
Investment securities available-for-sale |
|
| 927,968 |
|
|
| 906,052 |
| Investment securities available-for-sale | 1,133,146 | 1,014,719 | ||||||||
Loans held for sale (includes $23,452 and $25,310 measured at fair value, respectively) |
|
| 1,199,734 |
|
|
| 1,116,519 |
| |||||||||||
Loans and leases held for investment (includes $530,644 and $645,201 measured at fair value, respectively) |
|
| 5,860,209 |
|
|
| 5,521,262 |
| |||||||||||
Loans held for sale | Loans held for sale | 523,776 | 554,610 | ||||||||||||||||
Loans and leases held for investment (includes $441,781 and $494,458 measured at fair value, respectively) | Loans and leases held for investment (includes $441,781 and $494,458 measured at fair value, respectively) | 7,836,398 | 7,344,178 | ||||||||||||||||
Allowance for credit losses on loans and leases |
|
| (65,863 | ) |
|
| (63,584 | ) | Allowance for credit losses on loans and leases | (120,116) | (96,566) | ||||||||
Net loans and leases |
|
| 5,794,346 |
|
|
| 5,457,678 |
| Net loans and leases | 7,716,282 | 7,247,612 | ||||||||
Premises and equipment, net |
|
| 257,926 |
|
|
| 240,196 |
| Premises and equipment, net | 269,485 | 263,290 | ||||||||
Foreclosed assets |
|
| 191 |
|
|
| 620 |
| |||||||||||
Servicing assets |
|
| 28,661 |
|
|
| 33,574 |
| Servicing assets | 31,042 | 26,323 | ||||||||
Other assets |
|
| 275,634 |
|
|
| 250,254 |
| Other assets | 333,334 | 328,308 | ||||||||
Total assets |
| $ | 9,120,897 |
|
| $ | 8,213,393 |
| Total assets | $ | 10,819,196 | $ | 9,855,498 | ||||||
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
| Liabilities and Shareholders’ Equity | ||||||||||
Liabilities |
|
|
|
|
|
|
|
| Liabilities | ||||||||||
Deposits: |
|
|
|
|
|
|
|
| Deposits: | ||||||||||
Noninterest-bearing |
| $ | 119,371 |
|
| $ | 89,279 |
| Noninterest-bearing | $ | 229,833 | $ | 194,100 | ||||||
Interest-bearing |
|
| 8,036,373 |
|
|
| 7,022,765 |
| Interest-bearing | 9,649,278 | 8,690,828 | ||||||||
Total deposits |
|
| 8,155,744 |
|
|
| 7,112,044 |
| Total deposits | 9,879,111 | 8,884,928 | ||||||||
Borrowings |
|
| 86,209 |
|
|
| 318,289 |
| Borrowings | 28,317 | 83,203 | ||||||||
Other liabilities |
|
| 87,282 |
|
|
| 67,927 |
| Other liabilities | 79,280 | 76,334 | ||||||||
Total liabilities |
|
| 8,329,235 |
|
|
| 7,498,260 |
| Total liabilities | 9,986,708 | 9,044,465 | ||||||||
Shareholders’ equity |
|
|
|
|
|
|
|
| Shareholders’ equity | ||||||||||
Preferred stock, no par value, 1,000,000 shares authorized, NaN issued or outstanding at June 30, 2022 and December 31, 2021 |
|
| — |
|
|
| — |
| |||||||||||
Class A common stock, no par value, 100,000,000 shares authorized, 43,854,011 and 43,494,046 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively |
|
| 320,924 |
|
|
| 310,970 |
| |||||||||||
Class B common stock, no par value, 10,000,000 shares authorized, NaN issued or outstanding at June 30, 2022 and 125,024 shares issued and outstanding at December 31, 2021 |
|
| — |
|
|
| 1,324 |
| |||||||||||
Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding at June 30, 2023 and December 31, 2022 | Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding at June 30, 2023 and December 31, 2022 | — | — | ||||||||||||||||
Class A common stock, no par value, 100,000,000 shares authorized, 44,351,715 and 44,061,244 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | Class A common stock, no par value, 100,000,000 shares authorized, 44,351,715 and 44,061,244 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 341,032 | 330,854 | ||||||||||||||||
Class B common stock, no par value, 10,000,000 shares authorized, none issued or outstanding at June 30, 2023 and December 31, 2022 | Class B common stock, no par value, 10,000,000 shares authorized, none issued or outstanding at June 30, 2023 and December 31, 2022 | — | — | ||||||||||||||||
Retained earnings |
|
| 530,021 |
|
|
| 400,893 |
| Retained earnings | 589,036 | 572,497 | ||||||||
Accumulated other comprehensive (loss) income |
|
| (59,283 | ) |
|
| 1,946 |
| |||||||||||
Accumulated other comprehensive loss | Accumulated other comprehensive loss | (97,580) | (92,318) | ||||||||||||||||
Total shareholders’ equity |
|
| 791,662 |
|
|
| 715,133 |
| Total shareholders’ equity | 832,488 | 811,033 | ||||||||
Total liabilities and shareholders’ equity |
| $ | 9,120,897 |
|
| $ | 8,213,393 |
| Total liabilities and shareholders’ equity | $ | 10,819,196 | $ | 9,855,498 |
*Derived from audited consolidated financial statements. |
|
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest income | ||||||||||||||||||||||
Loans and fees on loans |
| $ | 94,157 |
|
| $ | 84,780 |
|
| $ | 183,355 |
|
| $ | 169,773 |
| Loans and fees on loans | $ | 152,362 | $ | 94,157 | $ | 291,414 | $ | 183,355 | ||||||||||||||
Investment securities, taxable |
|
| 4,046 |
|
|
| 2,975 |
|
|
| 7,445 |
|
|
| 5,904 |
| Investment securities, taxable | 8,503 | 4,046 | 16,050 | 7,445 | ||||||||||||||||||
Other interest earning assets |
|
| 1,044 |
|
|
| 244 |
|
|
| 1,229 |
|
|
| 547 |
| Other interest earning assets | 8,847 | 1,044 | 13,664 | 1,229 | ||||||||||||||||||
Total interest income |
|
| 99,247 |
|
|
| 87,999 |
|
|
| 192,029 |
|
|
| 176,224 |
| Total interest income | 169,712 | 99,247 | 321,128 | 192,029 | ||||||||||||||||||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense | ||||||||||||||||||||||
Deposits |
|
| 18,777 |
|
|
| 14,820 |
|
|
| 33,125 |
|
|
| 31,764 |
| Deposits | 85,003 | 18,777 | 152,598 | 33,125 | ||||||||||||||||||
Borrowings |
|
| 536 |
|
|
| 1,717 |
|
|
| 1,191 |
|
|
| 3,048 |
| Borrowings | 407 | 536 | 2,211 | 1,191 | ||||||||||||||||||
Total interest expense |
|
| 19,313 |
|
|
| 16,537 |
|
|
| 34,316 |
|
|
| 34,812 |
| Total interest expense | 85,410 | 19,313 | 154,809 | 34,316 | ||||||||||||||||||
Net interest income |
|
| 79,934 |
|
|
| 71,462 |
|
|
| 157,713 |
|
|
| 141,412 |
| Net interest income | 84,302 | 79,934 | 166,319 | 157,713 | ||||||||||||||||||
Provision for loan and lease credit losses |
|
| 5,267 |
|
|
| 7,846 |
|
|
| 7,103 |
|
|
| 6,973 |
| Provision for loan and lease credit losses | 13,028 | 5,267 | 32,049 | 7,103 | ||||||||||||||||||
Net interest income after provision for loan and lease credit losses |
|
| 74,667 |
|
|
| 63,616 |
|
|
| 150,610 |
|
|
| 134,439 |
| Net interest income after provision for loan and lease credit losses | 71,274 | 74,667 | 134,270 | 150,610 | ||||||||||||||||||
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest income | ||||||||||||||||||||||
Loan servicing revenue |
|
| 6,477 |
|
|
| 6,218 |
|
|
| 12,833 |
|
|
| 12,652 |
| Loan servicing revenue | 6,687 | 6,477 | 13,067 | 12,833 | ||||||||||||||||||
Loan servicing asset revaluation |
|
| (8,668 | ) |
|
| (3,181 | ) |
|
| (10,237 | ) |
|
| (1,688 | ) | Loan servicing asset revaluation | (2,831) | (8,668) | (2,475) | (10,237) | ||||||||||||||||||
Net gains on sales of loans |
|
| 5,630 |
|
|
| 16,234 |
|
|
| 26,607 |
|
|
| 28,163 |
| Net gains on sales of loans | 10,804 | 5,630 | 20,979 | 26,607 | ||||||||||||||||||
Net (loss) gain on loans accounted for under the fair value option |
|
| (4,461 | ) |
|
| 1,135 |
|
|
| (3,945 | ) |
|
| 5,353 |
| |||||||||||||||||||||||
Equity method investments income (loss) |
|
| 119,056 |
|
|
| (2,278 | ) |
|
| 116,932 |
|
|
| (3,435 | ) | |||||||||||||||||||||||
Net gain (loss) on loans accounted for under the fair value option | Net gain (loss) on loans accounted for under the fair value option | 1,728 | (4,461) | (2,801) | (3,945) | ||||||||||||||||||||||||||||||||||
Equity method investments (loss) income | Equity method investments (loss) income | (2,055) | 119,056 | (5,007) | 116,932 | ||||||||||||||||||||||||||||||||||
Equity security investments gains (losses), net |
|
| 1,655 |
|
|
| 44,253 |
|
|
| 1,611 |
|
|
| 44,358 |
| Equity security investments gains (losses), net | 121 | 1,655 | 198 | 1,611 | ||||||||||||||||||
Lease income |
|
| 2,510 |
|
|
| 2,616 |
|
|
| 5,013 |
|
|
| 5,215 |
| Lease income | 2,535 | 2,510 | 5,070 | 5,013 | ||||||||||||||||||
Management fee income |
|
| 2,558 |
|
|
| 1,473 |
|
|
| 4,046 |
|
|
| 3,407 |
| Management fee income | 3,266 | 2,558 | 6,738 | 4,046 | ||||||||||||||||||
Other noninterest income |
|
| 3,772 |
|
|
| 3,641 |
|
|
| 8,337 |
|
|
| 7,143 |
| Other noninterest income | 3,901 | 3,772 | 7,966 | 8,337 | ||||||||||||||||||
Total noninterest income |
|
| 128,529 |
|
|
| 70,111 |
|
|
| 161,197 |
|
|
| 101,168 |
| Total noninterest income | 24,156 | 128,529 | 43,735 | 161,197 | ||||||||||||||||||
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest expense | ||||||||||||||||||||||
Salaries and employee benefits |
|
| 46,276 |
|
|
| 32,900 |
|
|
| 84,783 |
|
|
| 64,266 |
| Salaries and employee benefits | 43,066 | 46,276 | 87,831 | 84,783 | ||||||||||||||||||
Travel expense |
|
| 2,358 |
|
|
| 1,549 |
|
|
| 4,255 |
|
|
| 2,208 |
| Travel expense | 2,770 | 2,358 | 5,181 | 4,255 | ||||||||||||||||||
Professional services expense |
|
| 3,988 |
|
|
| 3,329 |
|
|
| 6,779 |
|
|
| 7,160 |
| Professional services expense | 1,996 | 3,988 | 2,923 | 6,779 | ||||||||||||||||||
Advertising and marketing expense |
|
| 2,301 |
|
|
| 875 |
|
|
| 4,030 |
|
|
| 1,527 |
| Advertising and marketing expense | 3,009 | 2,301 | 6,612 | 4,030 | ||||||||||||||||||
Occupancy expense |
|
| 2,773 |
|
|
| 2,224 |
|
|
| 5,100 |
|
|
| 4,336 |
| Occupancy expense | 2,205 | 2,773 | 4,130 | 5,100 | ||||||||||||||||||
Technology expense |
|
| 5,762 |
|
|
| 5,131 |
|
|
| 11,815 |
|
|
| 10,009 |
| Technology expense | 8,005 | 5,762 | 15,734 | 11,815 | ||||||||||||||||||
Equipment expense |
|
| 3,784 |
|
|
| 3,721 |
|
|
| 7,600 |
|
|
| 7,422 |
| Equipment expense | 4,023 | 3,784 | 7,841 | 7,600 | ||||||||||||||||||
Other loan origination and maintenance expense |
|
| 3,022 |
|
|
| 3,307 |
|
|
| 6,135 |
|
|
| 6,634 |
| Other loan origination and maintenance expense | 3,442 | 3,022 | 7,369 | 6,135 | ||||||||||||||||||
Renewable energy tax credit investment impairment |
|
| 50 |
|
|
| — |
|
|
| 50 |
|
|
| 3,127 |
| Renewable energy tax credit investment impairment | — | 50 | 69 | 50 | ||||||||||||||||||
FDIC insurance |
|
| 2,164 |
|
|
| 1,704 |
|
|
| 4,136 |
|
|
| 3,469 |
| FDIC insurance | 5,061 | 2,164 | 8,464 | 4,136 | ||||||||||||||||||
Contributions and donations |
|
| 5,515 |
|
|
| 686 |
|
|
| 6,238 |
|
|
| 1,480 |
| Contributions and donations | — | 5,515 | — | 6,238 | ||||||||||||||||||
Other expense |
|
| 2,886 |
|
|
| 2,132 |
|
|
| 5,672 |
|
|
| 4,192 |
| Other expense | 2,880 | 2,886 | 9,265 | 5,672 | ||||||||||||||||||
Total noninterest expense |
|
| 80,879 |
|
|
| 57,558 |
|
|
| 146,593 |
|
|
| 115,830 |
| Total noninterest expense | 76,457 | 80,879 | 155,419 | 146,593 | ||||||||||||||||||
Income before taxes |
|
| 122,317 |
|
|
| 76,169 |
|
|
| 165,214 |
|
|
| 119,777 |
| Income before taxes | 18,973 | 122,317 | 22,586 | 165,214 | ||||||||||||||||||
Income tax expense |
|
| 25,278 |
|
|
| 12,587 |
|
|
| 33,666 |
|
|
| 16,768 |
| Income tax expense | 1,429 | 25,278 | 4,644 | 33,666 | ||||||||||||||||||
Net income |
| $ | 97,039 |
|
| $ | 63,582 |
|
| $ | 131,548 |
|
| $ | 103,009 |
| Net income | $ | 17,544 | $ | 97,039 | $ | 17,942 | $ | 131,548 | ||||||||||||||
Basic earnings per share |
| $ | 2.22 |
|
| $ | 1.48 |
|
| $ | 3.01 |
|
| $ | 2.40 |
| Basic earnings per share | $ | 0.40 | $ | 2.22 | $ | 0.41 | $ | 3.01 | ||||||||||||||
Diluted earnings per share |
| $ | 2.16 |
|
| $ | 1.41 |
|
| $ | 2.92 |
|
| $ | 2.29 |
| Diluted earnings per share | $ | 0.39 | $ | 2.16 | $ | 0.40 | $ | 2.92 |
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Net income |
| $ | 97,039 |
|
| $ | 63,582 |
|
| $ | 131,548 |
|
| $ | 103,009 |
|
Other comprehensive (loss) income before tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized (loss) gain on investment securities arising during the period |
|
| (29,967 | ) |
|
| 5,257 |
|
|
| (80,561 | ) |
|
| (11,031 | ) |
Reclassification adjustment for gain on sale of securities available-for-sale included in net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Other comprehensive (loss) income before tax |
|
| (29,967 | ) |
|
| 5,257 |
|
|
| (80,561 | ) |
|
| (11,031 | ) |
Income tax benefit (expense) |
|
| 7,190 |
|
|
| (1,262 | ) |
|
| 19,332 |
|
|
| 2,647 |
|
Other comprehensive (loss) income, net of tax |
|
| (22,777 | ) |
|
| 3,995 |
|
|
| (61,229 | ) |
|
| (8,384 | ) |
Total comprehensive income |
| $ | 74,262 |
|
| $ | 67,577 |
|
| $ | 70,319 |
|
| $ | 94,625 |
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | 17,544 | $ | 97,039 | $ | 17,942 | $ | 131,548 | |||||||||||||||
Other comprehensive loss before tax: | |||||||||||||||||||||||
Net unrealized loss on investment securities available-for-sale during the period | (17,348) | (29,967) | (6,916) | (80,561) | |||||||||||||||||||
Reclassification adjustment for gain on sale of securities available-for-sale included in net income | — | — | — | — | |||||||||||||||||||
Other comprehensive loss before tax | (17,348) | (29,967) | (6,916) | (80,561) | |||||||||||||||||||
Income tax benefit | 4,163 | 7,190 | 1,654 | 19,332 | |||||||||||||||||||
Other comprehensive loss, net of tax | (13,185) | (22,777) | (5,262) | (61,229) | |||||||||||||||||||
Total comprehensive income | $ | 4,359 | $ | 74,262 | $ | 12,680 | $ | 70,319 |
|
| Three Months Ended |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Common stock |
|
|
|
|
|
| Accumulated other |
|
|
|
|
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
|
| Shares |
|
|
|
|
|
| Retained |
|
| comprehensive |
|
| Total |
| Common stock | Retained earnings | Accumulated other comprehensive income (loss) | Total equity | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Retained earnings | Accumulated other comprehensive income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | Balance at March 31, 2023 | 44,290,840 | — | $ | 334,672 | $ | 572,530 | $ | (84,395) | $ | 822,807 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | Net income | — | — | — | 17,544 | — | 17,544 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | Other comprehensive loss | — | — | — | — | (13,185) | (13,185) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock | Issuance of restricted stock | 38,145 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock and other | Tax withholding related to vesting of restricted stock and other | — | — | (249) | — | — | (249) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | Stock option exercises | 22,730 | — | 297 | — | — | 297 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option compensation expense | Stock option compensation expense | — | — | 4 | — | — | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock compensation expense | Restricted stock compensation expense | — | — | 6,308 | — | — | 6,308 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense | Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense | — | — | — | 292 | — | 292 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.03 per share) | Cash dividends ($0.03 per share) | — | — | — | (1,330) | — | (1,330) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | Balance at June 30, 2023 | 44,351,715 | — | $ | 341,032 | $ | 589,036 | $ | (97,580) | $ | 832,488 | ||||||||||||||||||||||||||||||||||||||||||||||||
|
| Class A |
|
| Class B |
|
| Amount |
|
| earnings |
|
| income (loss) |
|
| equity |
| |||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 |
|
| 43,787,660 |
|
|
| — |
|
| $ | 315,607 |
|
| $ | 434,226 |
|
| $ | (36,506 | ) |
| $ | 713,327 |
| Balance at March 31, 2022 | 43,787,660 | — | $ | 315,607 | $ | 434,226 | $ | (36,506) | $ | 713,327 | ||||||||||||||||||||||||
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 97,039 |
|
|
| — |
|
|
| 97,039 |
| Net income | — | — | — | 97,039 | — | 97,039 | ||||||||||||||||||||||||||||
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (22,777 | ) |
|
| (22,777 | ) | Other comprehensive loss | — | — | — | — | (22,777) | (22,777) | ||||||||||||||||||||||||||||
Issuance of restricted stock |
|
| 17,156 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| Issuance of restricted stock | 17,156 | — | — | — | — | — | ||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock and other |
|
| — |
|
|
| — |
|
|
| (197 | ) |
|
| — |
|
|
| — |
|
|
| (197 | ) | Tax withholding related to vesting of restricted stock and other | — | — | (197) | — | — | (197) | ||||||||||||||||||||||||||||
Stock option exercises |
|
| 49,195 |
|
|
| — |
|
|
| 434 |
|
|
| — |
|
|
| — |
|
|
| 434 |
| Stock option exercises | 49,195 | — | 434 | — | — | 434 | ||||||||||||||||||||||||||||
Stock option compensation expense |
|
| — |
|
|
| — |
|
|
| 234 |
|
|
| — |
|
|
| — |
|
|
| 234 |
| Stock option compensation expense | — | — | 234 | — | — | 234 | ||||||||||||||||||||||||||||
Restricted stock compensation expense |
|
| — |
|
|
| — |
|
|
| 4,846 |
|
|
| — |
|
|
| — |
|
|
| 4,846 |
| Restricted stock compensation expense | — | — | 4,846 | — | — | 4,846 | ||||||||||||||||||||||||||||
Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 71 |
|
|
| — |
|
|
| 71 |
| Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense | — | — | — | 71 | — | 71 | ||||||||||||||||||||||||||||
Cash dividends ($0.03 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,315 | ) |
|
| — |
|
|
| (1,315 | ) | Cash dividends ($0.03 per share) | — | — | — | (1,315) | — | (1,315) | ||||||||||||||||||||||||||||
Balance at June 30, 2022 |
|
| 43,854,011 |
|
|
| — |
|
| $ | 320,924 |
|
| $ | 530,021 |
|
| $ | (59,283 | ) |
| $ | 791,662 |
| Balance at June 30, 2022 | 43,854,011 | — | $ | 320,924 | $ | 530,021 | $ | (59,283) | $ | 791,662 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 |
|
| 42,259,091 |
|
|
| 692,253 |
|
| $ | 305,855 |
|
| $ | 275,377 |
|
| $ | 9,128 |
|
| $ | 590,360 |
| |||||||||||||||||||||||||||||||||||
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 63,582 |
|
|
| — |
|
|
| 63,582 |
| |||||||||||||||||||||||||||||||||||
Other comprehensive income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,995 |
|
|
| 3,995 |
| |||||||||||||||||||||||||||||||||||
Issuance of restricted stock |
|
| 124,607 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock and other |
|
| — |
|
|
| — |
|
|
| (5,713 | ) |
|
| — |
|
|
| — |
|
|
| (5,713 | ) | |||||||||||||||||||||||||||||||||||
Stock option exercises |
|
| 188,509 |
|
|
| — |
|
|
| 951 |
|
|
| — |
|
|
| — |
|
|
| 951 |
| |||||||||||||||||||||||||||||||||||
Stock option compensation expense |
|
| — |
|
|
| — |
|
|
| 353 |
|
|
| — |
|
|
| — |
|
|
| 353 |
| |||||||||||||||||||||||||||||||||||
Restricted stock compensation expense |
|
| — |
|
|
| — |
|
|
| 3,767 |
|
|
| — |
|
|
| — |
|
|
| 3,767 |
| |||||||||||||||||||||||||||||||||||
Non-voting common stock converted to voting common stock in private sale |
|
| 181,926 |
|
|
| (181,926 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||||||||
Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,349 |
|
|
| — |
|
|
| 1,349 |
| |||||||||||||||||||||||||||||||||||
Cash dividends ($0.03 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,297 | ) |
|
| — |
|
|
| (1,297 | ) | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 |
|
| 42,754,133 |
|
|
| 510,327 |
|
| $ | 305,213 |
|
| $ | 339,011 |
|
| $ | 13,123 |
|
| $ | 657,347 |
|
See Notes to Unaudited Condensed Consolidated Financial Statements
|
| Six Months Ended |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Common stock |
|
|
|
|
|
| Accumulated other |
|
|
|
|
| Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
|
| Shares |
|
|
|
|
|
| Retained |
|
| comprehensive |
|
| Total |
| Common stock | Retained earnings | Accumulated other comprehensive income (loss) | Total equity | |||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Retained earnings | Accumulated other comprehensive income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | Balance at December 31, 2022 | 44,061,244 | — | $ | 330,854 | $ | 572,497 | $ | (92,318) | $ | 811,033 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | Net income | — | — | — | 17,942 | — | 17,942 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | Other comprehensive loss | — | — | — | — | (5,262) | (5,262) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock | Issuance of restricted stock | 201,019 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock and other | Tax withholding related to vesting of restricted stock and other | — | — | (3,602) | — | — | (3,602) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee stock purchase program | Employee stock purchase program | 31,059 | — | 631 | — | — | 631 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | Stock option exercises | 58,393 | — | 664 | — | — | 664 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option based compensation expense | Stock option based compensation expense | — | — | 137 | — | — | 137 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock compensation expense | Restricted stock compensation expense | — | — | 12,348 | — | — | 12,348 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Adoption of ASU 2022-02 | Adoption of ASU 2022-02 | — | — | — | 676 | — | 676 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense | Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense | — | — | — | 578 | — | 578 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.06 per share) | Cash dividends ($0.06 per share) | — | — | — | (2,657) | — | (2,657) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | Balance at June 30, 2023 | 44,351,715 | — | $ | 341,032 | $ | 589,036 | $ | (97,580) | $ | 832,488 | ||||||||||||||||||||||||||||||||||||||||||||||||
|
| Class A |
|
| Class B |
|
| Amount |
|
| earnings |
|
| income (loss) |
|
| equity |
| |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 |
|
| 43,494,046 |
|
|
| 125,024 |
|
| $ | 312,294 |
|
| $ | 400,893 |
|
| $ | 1,946 |
|
| $ | 715,133 |
| Balance at December 31, 2021 | 43,494,046 | 125,024 | $ | 312,294 | $ | 400,893 | $ | 1,946 | $ | 715,133 | ||||||||||||||||||||||||
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 131,548 |
|
|
| — |
|
|
| 131,548 |
| Net income | — | — | — | 131,548 | — | 131,548 | ||||||||||||||||||||||||||||
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (61,229 | ) |
|
| (61,229 | ) | Other comprehensive loss | — | — | — | — | (61,229) | (61,229) | ||||||||||||||||||||||||||||
Issuance of restricted stock |
|
| 112,693 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| Issuance of restricted stock | 112,693 | — | — | — | — | — | ||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock and other |
|
| — |
|
|
| — |
|
|
| (3,091 | ) |
|
| — |
|
|
| — |
|
|
| (3,091 | ) | Tax withholding related to vesting of restricted stock and other | — | — | (3,091) | — | — | (3,091) | ||||||||||||||||||||||||||||
Employee stock purchase program |
|
| 11,119 |
|
|
| — |
|
|
| 534 |
|
|
| — |
|
|
| — |
|
|
| 534 |
| Employee stock purchase program | 11,119 | — | 534 | — | — | 534 | ||||||||||||||||||||||||||||
Stock option exercises |
|
| 111,129 |
|
|
| — |
|
|
| 1,153 |
|
|
| — |
|
|
| — |
|
|
| 1,153 |
| Stock option exercises | 111,129 | — | 1,153 | — | — | 1,153 | ||||||||||||||||||||||||||||
Stock option compensation expense |
|
| — |
|
|
| — |
|
|
| 625 |
|
|
| — |
|
|
| — |
|
|
| 625 |
| |||||||||||||||||||||||||||||||||||
Stock option based compensation expense | Stock option based compensation expense | — | — | 625 | — | — | 625 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock compensation expense |
|
| — |
|
|
| — |
|
|
| 9,409 |
|
|
| — |
|
|
| — |
|
|
| 9,409 |
| Restricted stock compensation expense | — | — | 9,409 | — | — | 9,409 | ||||||||||||||||||||||||||||
Non-voting common stock converted to voting common stock in private sale |
|
| 125,024 |
|
|
| (125,024 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| Non-voting common stock converted to voting common stock in private sale | 125,024 | (125,024) | — | — | — | — | ||||||||||||||||||||||||||||
Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 207 |
|
|
| — |
|
|
| 207 |
| Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense | — | — | — | 207 | — | 207 | ||||||||||||||||||||||||||||
Cash dividends ($0.06 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (2,627 | ) |
|
| — |
|
|
| (2,627 | ) | Cash dividends ($0.06 per share) | — | — | — | (2,627) | — | (2,627) | ||||||||||||||||||||||||||||
Balance at June 30, 2022 |
|
| 43,854,011 |
|
|
| — |
|
| $ | 320,924 |
|
| $ | 530,021 |
|
| $ | (59,283 | ) |
| $ | 791,662 |
| Balance at June 30, 2022 | 43,854,011 | — | $ | 320,924 | $ | 530,021 | $ | (59,283) | $ | 791,662 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
|
| 41,344,689 |
|
|
| 1,107,757 |
|
| $ | 310,619 |
|
| $ | 235,724 |
|
| $ | 21,507 |
|
| $ | 567,850 |
| |||||||||||||||||||||||||||||||||||
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 103,009 |
|
|
| — |
|
|
| 103,009 |
| |||||||||||||||||||||||||||||||||||
Other comprehensive loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (8,384 | ) |
|
| (8,384 | ) | |||||||||||||||||||||||||||||||||||
Issuance of restricted stock |
|
| 416,823 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock and other |
|
| — |
|
|
| — |
|
|
| (17,000 | ) |
|
| — |
|
|
| — |
|
|
| (17,000 | ) | |||||||||||||||||||||||||||||||||||
Employee stock purchase program |
|
| 5,686 |
|
|
| — |
|
|
| 296 |
|
|
| — |
|
|
| — |
|
|
| 296 |
| |||||||||||||||||||||||||||||||||||
Stock option exercises |
|
| 389,505 |
|
|
| — |
|
|
| 2,164 |
|
|
| — |
|
|
| — |
|
|
| 2,164 |
| |||||||||||||||||||||||||||||||||||
Stock option compensation expense |
|
| — |
|
|
| — |
|
|
| 697 |
|
|
| — |
|
|
| — |
|
|
| 697 |
| |||||||||||||||||||||||||||||||||||
Restricted stock compensation expense |
|
| — |
|
|
| — |
|
|
| 8,437 |
|
|
| — |
|
|
| — |
|
|
| 8,437 |
| |||||||||||||||||||||||||||||||||||
Non-voting common stock converted to voting common stock in private sale |
|
| 597,430 |
|
|
| (597,430 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||||||||||||||||||||
Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,857 |
|
|
| — |
|
|
| 2,857 |
| |||||||||||||||||||||||||||||||||||
Cash dividends ($0.06 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (2,579 | ) |
|
| — |
|
|
| (2,579 | ) | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 |
|
| 42,754,133 |
|
|
| 510,327 |
|
| $ | 305,213 |
|
| $ | 339,011 |
|
| $ | 13,123 |
|
| $ | 657,347 |
|
|
| Six Months Ended June 30, |
| Six Months Ended June 30, | |||||||||||||||
|
| 2022 |
|
| 2021 |
| 2023 | 2022 | |||||||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
| Cash flows from operating activities | ||||||||||
Net income |
| $ | 131,548 |
|
| $ | 103,009 |
| Net income | $ | 17,942 | $ | 131,548 | ||||||
Adjustments to reconcile net income to net cash provided (used) by operating activities: |
|
|
|
|
|
|
|
| |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||
Depreciation and amortization |
|
| 10,553 |
|
|
| 10,566 |
| Depreciation and amortization | 10,447 | 10,553 | ||||||||
Provision for loan and lease credit losses |
|
| 7,103 |
|
|
| 6,973 |
| Provision for loan and lease credit losses | 32,049 | 7,103 | ||||||||
Amortization of premium on securities, net of accretion |
|
| 2,378 |
|
|
| 3,489 |
| Amortization of premium on securities, net of accretion | 132 | 2,378 | ||||||||
Deferred tax expense |
|
| 17,439 |
|
|
| 6,481 |
| |||||||||||
Deferred tax (benefit) expense | Deferred tax (benefit) expense | (9,723) | 17,439 | ||||||||||||||||
Originations of loans held for sale |
|
| (495,699 | ) |
|
| (654,707 | ) | Originations of loans held for sale | (425,441) | (495,699) | ||||||||
Proceeds from sales of loans held for sale |
|
| 529,989 |
|
|
| 456,873 |
| Proceeds from sales of loans held for sale | 649,306 | 529,989 | ||||||||
Net gains on sale of loans held for sale |
|
| (26,607 | ) |
|
| (28,163 | ) | Net gains on sale of loans held for sale | (20,979) | (26,607) | ||||||||
Net loss (gain) on sale of foreclosed assets |
|
| 41 |
|
|
| (100 | ) | |||||||||||
Net loss (gain) on loans accounted for under fair value option |
|
| 3,945 |
|
|
| (5,353 | ) | |||||||||||
Net decrease (increase) in servicing assets |
|
| 4,913 |
|
|
| (3,048 | ) | |||||||||||
Net gain on disposal of long-lived asset |
|
| — |
|
|
| (114 | ) | |||||||||||
Net loss (gain) on disposal of property and equipment |
|
| 22 |
|
|
| (48 | ) | |||||||||||
Impairment on premises and equipment, net |
|
| — |
|
|
| 904 |
| |||||||||||
Equity method investments (income) loss |
|
| (116,932 | ) |
|
| 3,435 |
| |||||||||||
Net loss on sale of foreclosed assets | Net loss on sale of foreclosed assets | — | 41 | ||||||||||||||||
Net loss on loans accounted for under fair value option | Net loss on loans accounted for under fair value option | 2,801 | 3,945 | ||||||||||||||||
Net (increase) decrease in servicing assets | Net (increase) decrease in servicing assets | (4,719) | 4,913 | ||||||||||||||||
Net loss on disposal of property and equipment | Net loss on disposal of property and equipment | 402 | 22 | ||||||||||||||||
Equity method investments loss (income) | Equity method investments loss (income) | 5,007 | (116,932) | ||||||||||||||||
Equity security investments (gains) losses, net |
|
| (1,611 | ) |
|
| (44,358 | ) | Equity security investments (gains) losses, net | (198) | (1,611) | ||||||||
Renewable energy tax credit investment impairment |
|
| 50 |
|
|
| 3,127 |
| Renewable energy tax credit investment impairment | 69 | 50 | ||||||||
Stock option compensation expense |
|
| 625 |
|
|
| 697 |
| Stock option compensation expense | 137 | 625 | ||||||||
Restricted stock compensation expense |
|
| 9,409 |
|
|
| 8,437 |
| Restricted stock compensation expense | 12,348 | 9,409 | ||||||||
Stock based compensation excess tax benefit |
|
| 1,106 |
|
|
| 8,430 |
| |||||||||||
Stock based compensation excess tax (shortfall) benefit | Stock based compensation excess tax (shortfall) benefit | (574) | 1,106 | ||||||||||||||||
Lease right-of-use assets and liabilities, net | Lease right-of-use assets and liabilities, net | (30) | 569 | ||||||||||||||||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
| Changes in assets and liabilities: | ||||||||||
Lease right-of-use assets and liabilities, net |
|
| 569 |
|
|
| (2 | ) | |||||||||||
Other assets |
|
| (11,017 | ) |
|
| 4,626 |
| Other assets | 20,429 | (11,017) | ||||||||
Other liabilities |
|
| 9,847 |
|
|
| (185 | ) | Other liabilities | 5,533 | 9,847 | ||||||||
Net cash provided (used) by operating activities |
|
| 77,671 |
|
|
| (119,031 | ) | |||||||||||
Net cash provided by operating activities | Net cash provided by operating activities | 294,938 | 77,671 | ||||||||||||||||
Cash flows from investing activities |
|
|
|
|
|
|
|
| Cash flows from investing activities | ||||||||||
Purchases of securities available-for-sale |
|
| (200,285 | ) |
|
| (212,935 | ) | |||||||||||
Proceeds from sales, maturities, calls, and principal paydown of securities available-for-sale |
|
| 95,429 |
|
|
| 130,617 |
| |||||||||||
Purchases of investment securities available-for-sale | Purchases of investment securities available-for-sale | (174,710) | (200,285) | ||||||||||||||||
Proceeds from maturities, calls, and principal paydown of investment securities available-for-sale | Proceeds from maturities, calls, and principal paydown of investment securities available-for-sale | 49,235 | 95,429 | ||||||||||||||||
Proceeds from SBA reimbursement/sale of foreclosed assets, net |
|
| 333 |
|
|
| 3,141 |
| Proceeds from SBA reimbursement/sale of foreclosed assets, net | — | 333 | ||||||||
Maturities of certificates of deposits with other banks |
|
| 500 |
|
|
| 500 |
| Maturities of certificates of deposits with other banks | — | 500 | ||||||||
Loan and lease originations and principal collections, net |
|
| (449,892 | ) |
|
| 38,141 |
| Loan and lease originations and principal collections, net | (689,804) | (449,892) | ||||||||
Proceeds from sale of long-lived asset |
|
| — |
|
|
| 8,988 |
| |||||||||||
Proceeds from sale of equity security investment |
|
| — |
|
|
| 15,000 |
| |||||||||||
Proceeds from sale of equity method investment |
|
| 125,321 |
|
|
| — |
| |||||||||||
Purchases of equity security investments | Purchases of equity security investments | (1,206) | — | ||||||||||||||||
Purchases of equity method investments | Purchases of equity method investments | (4,323) | — | ||||||||||||||||
Proceeds from sale of equity method investments | Proceeds from sale of equity method investments | — | 125,321 | ||||||||||||||||
Proceeds from sale of premises and equipment |
|
| 2 |
|
|
| 84 |
| Proceeds from sale of premises and equipment | — | 2 | ||||||||
Purchases of premises and equipment, net |
|
| (28,231 | ) |
|
| (1,232 | ) | Purchases of premises and equipment, net | (16,968) | (28,231) | ||||||||
Net cash used by investing activities |
|
| (456,823 | ) |
|
| (17,696 | ) | Net cash used by investing activities | (837,776) | (456,823) |
|
| Six Months Ended June 30, |
| Six Months Ended June 30, | |||||||||||||||
|
| 2022 |
|
| 2021 |
| 2023 | 2022 | |||||||||||
Cash flows from financing activities |
|
|
|
|
|
|
|
| Cash flows from financing activities | ||||||||||
Net increase in deposits |
| $ | 1,043,700 |
|
| $ | 808,005 |
| Net increase in deposits | $ | 994,183 | $ | 1,043,700 | ||||||
Proceeds from borrowings |
|
| 12,051 |
|
|
| 594,791 |
| Proceeds from borrowings | 2,906,039 | 12,051 | ||||||||
Repayment of borrowings |
|
| (244,131 | ) |
|
| (1,128,446 | ) | Repayment of borrowings | (2,960,925) | (244,131) | ||||||||
Stock option exercises |
|
| 1,153 |
|
|
| 2,164 |
| Stock option exercises | 664 | 1,153 | ||||||||
Employee stock purchase program |
|
| 534 |
|
|
| 296 |
| Employee stock purchase program | 631 | 534 | ||||||||
Withholding cash issued in lieu of restricted stock and other |
|
| (3,091 | ) |
|
| (17,000 | ) | Withholding cash issued in lieu of restricted stock and other | (3,602) | (3,091) | ||||||||
Shareholder dividend distributions |
|
| (2,627 | ) |
|
| (2,579 | ) | Shareholder dividend distributions | (2,657) | (2,627) | ||||||||
Net cash provided by financing activities |
|
| 807,589 |
|
|
| 257,231 |
| Net cash provided by financing activities | 934,333 | 807,589 | ||||||||
Net increase in cash and cash equivalents |
|
| 428,437 |
|
|
| 120,504 |
| Net increase in cash and cash equivalents | 391,495 | 428,437 | ||||||||
Cash and cash equivalents, beginning |
|
| 203,750 |
|
|
| 318,320 |
| Cash and cash equivalents, beginning | 416,636 | 203,750 | ||||||||
Cash and cash equivalents, ending |
| $ | 632,187 |
|
| $ | 438,824 |
| Cash and cash equivalents, ending | $ | 808,131 | $ | 632,187 | ||||||
|
|
|
|
|
|
|
|
| |||||||||||
Supplemental disclosures of cash flow information |
|
|
|
|
|
|
|
| Supplemental disclosures of cash flow information | ||||||||||
Interest paid |
| $ | 34,850 |
|
| $ | 35,687 |
| Interest paid | $ | 153,724 | $ | 34,850 | ||||||
Income tax paid, net |
|
| 6,778 |
|
|
| 9,043 |
| Income tax paid, net | 5,233 | 6,778 | ||||||||
|
|
|
|
|
|
|
|
| |||||||||||
Supplemental disclosures of noncash operating, investing, and financing activities |
|
|
|
|
|
|
|
| Supplemental disclosures of noncash operating, investing, and financing activities | ||||||||||
Unrealized holding losses on available-for-sale securities, net of taxes |
| $ | (61,229 | ) |
| $ | (8,384 | ) | |||||||||||
Unrealized holding losses on investment securities available-for-sale, net of taxes | Unrealized holding losses on investment securities available-for-sale, net of taxes | $ | (5,262) | $ | (61,229) | ||||||||||||||
Transfers from loans and leases to foreclosed real estate and other repossessions or SBA receivable |
|
| 11,278 |
|
|
| 9,837 |
| Transfers from loans and leases to foreclosed real estate and other repossessions or SBA receivable | 14,908 | 11,278 | ||||||||
Net transfers between foreclosed real estate and SBA receivable |
|
| 55 |
|
|
| 150 |
| Net transfers between foreclosed real estate and SBA receivable | — | 55 | ||||||||
Transfer of loans held for sale to loans and leases held for investment |
|
| 88,915 |
|
|
| 434,322 |
| Transfer of loans held for sale to loans and leases held for investment | 56,852 | 88,915 | ||||||||
Transfer of loans and leases held for investment to loans held for sale |
|
| 227,705 |
|
|
| 156,698 |
| Transfer of loans and leases held for investment to loans held for sale | 284,081 | 227,705 | ||||||||
Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense |
|
| 207 |
|
|
| 2,857 |
| Transfer from retained earnings to other assets for pro rata portion of equity method investee stock compensation expense | 578 | 207 | ||||||||
Recording of secured borrowing |
|
| — |
|
|
| 3,993 |
| |||||||||||
Equity method investment commitments |
|
| 10,566 |
|
|
| — |
| Equity method investment commitments | 7,721 | 10,566 | ||||||||
Equity security investment commitments |
|
| 415 |
|
|
| 2,250 |
| Equity security investment commitments | — | 415 | ||||||||
|
|
|
|
|
|
|
|
|
These loans are to small businesses and professionals with what the Bank believes are lower risk characteristics. Industries, or “verticals,” on which the Bank focuses its lending efforts are carefully selected. The Bank also lends more broadly to select borrowers outside of those verticals.
The Bank’s wholly owned subsidiaries are Live Oak Number One, Inc., Live Oak Clean Energy Financing LLC (“LOCEF”), and Live Oak Private Wealth, LLC (“Live Oak Private Wealth”). Live Oak Number One, Inc. holds properties foreclosed on by the Bank. LOCEF provides financing to entities for renewable energy applications. Live Oak Private Wealth provides high-net-worth individuals and families with strategic wealth and investment management services. During the first quarter of 2022, Jolley Asset Management, LLC (“JAM”) was merged into Live Oak Private Wealth. JAM was previously a wholly owned subsidiary of Live Oak Private Wealth.
GLS is a management and technology consulting firm that advises and offers solutions and services to participants in the government guaranteed lending sector. GLS primarily provides services in connection with the settlement, accounting, and securitization processes for government guaranteed loans, including loans originated under the SBA 7(a) loan programs and USDA guaranteed loans. The Grove provides Company employees and business visitors an on-site restaurant location. Live Oak Ventures’ purpose is investing in businesses that align with the Company's strategic initiative to be a leader in financial technology. Canapi Advisors provides investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies.
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The preparation of financial statements in conformity with United States (“US”) generally accepted accounting principles or (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.
Certain reclassifications have been made
date.
net increase to retained earnings of $676 thousand.
|
| Three Months Ended June 30, |
|
|
| Six Months Ended June 30, |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
|
| 2022 |
|
| 2021 |
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per share: | ||||||||||||||||||||||
Net income |
| $ | 97,039 |
|
| $ | 63,582 |
|
|
| $ | 131,548 |
|
| $ | 103,009 |
| Net income | $ | 17,544 | $ | 97,039 | $ | 17,942 | $ | 131,548 | ||||||||||||||
Weighted-average basic shares outstanding |
|
| 43,824,707 |
|
|
| 43,173,312 |
|
|
|
| 43,763,681 |
|
|
| 42,924,844 |
| Weighted-average basic shares outstanding | 44,327,474 | 43,824,707 | 44,242,785 | 43,763,681 | ||||||||||||||||||
Basic earnings per share |
| $ | 2.22 |
|
| $ | 1.48 |
|
|
| $ | 3.01 |
|
| $ | 2.40 |
| Basic earnings per share | $ | 0.40 | $ | 2.22 | $ | 0.41 | $ | 3.01 | ||||||||||||||
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per share: | ||||||||||||||||||||||
Net income, for diluted earnings per share |
| $ | 97,039 |
|
| $ | 63,582 |
|
|
| $ | 131,548 |
|
| $ | 103,009 |
| Net income, for diluted earnings per share | $ | 17,544 | $ | 97,039 | $ | 17,942 | $ | 131,548 | ||||||||||||||
Total weighted-average basic shares outstanding |
|
| 43,824,707 |
|
|
| 43,173,312 |
|
|
|
| 43,763,681 |
|
|
| 42,924,844 |
| Total weighted-average basic shares outstanding | 44,327,474 | 43,824,707 | 44,242,785 | 43,763,681 | ||||||||||||||||||
Add effect of dilutive stock options and restricted stock grants |
|
| 978,571 |
|
|
| 1,889,080 |
|
|
|
| 1,252,082 |
|
|
| 1,956,158 |
| Add effect of dilutive stock options and restricted stock grants | 507,615 | 978,571 | 657,538 | 1,252,082 | ||||||||||||||||||
Total weighted-average diluted shares outstanding |
|
| 44,803,278 |
|
|
| 45,062,392 |
|
|
|
| 45,015,763 |
|
|
| 44,881,002 |
| Total weighted-average diluted shares outstanding | 44,835,089 | 44,803,278 | 44,900,323 | 45,015,763 | ||||||||||||||||||
Diluted earnings per share |
| $ | 2.16 |
|
| $ | 1.41 |
|
|
| $ | 2.92 |
|
| $ | 2.29 |
| Diluted earnings per share | $ | 0.39 | $ | 2.16 | $ | 0.40 | $ | 2.92 | ||||||||||||||
Anti-dilutive shares |
|
| 869,753 |
|
|
| 9,319 |
|
|
|
| 869,753 |
|
|
| 9,319 |
| |||||||||||||||||||||||
Anti-dilutive stock options and restricted shares | Anti-dilutive stock options and restricted shares | 2,096,220 | 869,753 | 2,096,220 | 869,753 |
June 30, 2022 |
| Amortized Cost |
|
| Unrealized Gains |
|
| Unrealized Losses |
|
| Fair Value |
| ||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||||||||||||||||||||||||||
US government agencies |
| $ | 17,446 |
|
| $ | 12 |
|
| $ | 71 |
|
| $ | 17,387 |
| US government agencies | $ | 31,032 | $ | — | $ | 536 | $ | 30,496 | |||||||||||||||||
Mortgage-backed securities |
|
| 982,788 |
|
|
| 503 |
|
|
| 78,365 |
|
|
| 904,926 |
| Mortgage-backed securities | 1,226,789 | 107 | 127,759 | 1,099,137 | |||||||||||||||||||||
Municipal bonds |
|
| 3,235 |
|
|
| — |
|
|
| 70 |
|
|
| 3,165 |
| Municipal bonds | 3,212 | — | 177 | 3,035 | |||||||||||||||||||||
Other debt securities |
|
| 2,500 |
|
|
| — |
|
|
| 10 |
|
|
| 2,490 |
| Other debt securities | 500 | — | 22 | 478 | |||||||||||||||||||||
Total |
| $ | 1,005,969 |
|
| $ | 515 |
|
| $ | 78,516 |
|
| $ | 927,968 |
| Total | $ | 1,261,533 | $ | 107 | $ | 128,494 | $ | 1,133,146 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
US government agencies |
| $ | 10,444 |
|
| $ | 193 |
|
| $ | — |
|
| $ | 10,637 |
| ||||||||||||||||||||||||||
Mortgage-backed securities |
|
| 887,302 |
|
|
| 14,246 |
|
|
| 12,209 |
|
|
| 889,339 |
| ||||||||||||||||||||||||||
Municipal bonds |
|
| 3,246 |
|
|
| 333 |
|
|
| 3 |
|
|
| 3,576 |
| ||||||||||||||||||||||||||
Other debt securities |
|
| 2,500 |
|
|
| — |
|
|
| — |
|
|
| 2,500 |
| ||||||||||||||||||||||||||
Total |
| $ | 903,492 |
|
| $ | 14,772 |
|
| $ | 12,212 |
|
| $ | 906,052 |
|
December 31, 2022 | ||||||||||||||||||||||||||
US government agencies | $ | 16,080 | $ | — | $ | 412 | $ | 15,668 | ||||||||||||||||||
Mortgage-backed securities | 1,116,387 | 270 | 121,083 | 995,574 | ||||||||||||||||||||||
Municipal bonds | 3,223 | — | 246 | 2,977 | ||||||||||||||||||||||
Other debt securities | 500 | — | — | 500 | ||||||||||||||||||||||
Total | $ | 1,136,190 | $ | 270 | $ | 121,741 | $ | 1,014,719 |
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The following tables show debt securities available-for-sale in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.
|
| Less Than 12 Months |
|
| 12 Months or More |
|
| Total |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 |
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
| ||||||||||||||||||||||||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
US government agencies |
| $ | 9,375 |
|
| $ | 71 |
|
| $ | — |
|
| $ | — |
|
| $ | 9,375 |
|
| $ | 71 |
| US government agencies | $ | 23,832 | $ | 246 | $ | 6,664 | $ | 290 | $ | 30,496 | $ | 536 | |||||||||||||||||||||||||
Mortgage-backed securities |
|
| 637,947 |
|
|
| 44,226 |
|
|
| 216,231 |
|
|
| 34,139 |
|
|
| 854,178 |
|
|
| 78,365 |
| Mortgage-backed securities | 346,178 | 12,368 | 742,007 | 115,391 | 1,088,185 | 127,759 | |||||||||||||||||||||||||||||||
Municipal bonds |
|
| 3,072 |
|
|
| 64 |
|
|
| 93 |
|
|
| 6 |
|
|
| 3,165 |
|
|
| 70 |
| Municipal bonds | — | — | 3,035 | 177 | 3,035 | 177 | |||||||||||||||||||||||||||||||
Other debt securities |
|
| 490 |
|
|
| 10 |
|
|
| — |
|
|
| — |
|
|
| 490 |
|
|
| 10 |
| Other debt securities | 478 | 22 | — | — | 478 | 22 | |||||||||||||||||||||||||||||||
Total |
| $ | 650,884 |
|
| $ | 44,371 |
|
| $ | 216,324 |
|
| $ | 34,145 |
|
| $ | 867,208 |
|
| $ | 78,516 |
| Total | $ | 370,488 | $ | 12,636 | $ | 751,706 | $ | 115,858 | $ | 1,122,194 | $ | 128,494 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||
|
| Less Than 12 Months |
|
| 12 Months or More |
|
| Total |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 |
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
|
| Fair Value |
|
| Unrealized Losses |
| ||||||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities |
| $ | 479,322 |
|
| $ | 8,503 |
|
| $ | 110,633 |
|
| $ | 3,706 |
|
| $ | 589,955 |
|
| $ | 12,209 |
| ||||||||||||||||||||||||||||||||||||||
Municipal bonds |
|
| — |
|
|
| — |
|
|
| 96 |
|
|
| 3 |
|
|
| 96 |
|
|
| 3 |
| ||||||||||||||||||||||||||||||||||||||
Total |
| $ | 479,322 |
|
| $ | 8,503 |
|
| $ | 110,729 |
|
| $ | 3,709 |
|
| $ | 590,051 |
|
| $ | 12,212 |
|
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||
December 31, 2022 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||||
US government agencies | $ | 15,668 | $ | 412 | $ | — | $ | — | $ | 15,668 | $ | 412 | ||||||||||||||||||||||||||
Mortgage-backed securities | 513,639 | 29,060 | 456,972 | 92,023 | 970,611 | 121,083 | ||||||||||||||||||||||||||||||||
Municipal bonds | 2,884 | 241 | 93 | 5 | 2,977 | 246 | ||||||||||||||||||||||||||||||||
Total | $ | 532,191 | $ | 29,713 | $ | 457,065 | $ | 92,028 | $ | 989,256 | $ | 121,741 |
|
| June 30, 2022 |
| June 30, 2023 | |||||||||||||||
|
| Available-for-Sale |
| Available-for-Sale | |||||||||||||||
|
| Amortized cost |
|
| Fair value |
| Amortized Cost | Fair Value | |||||||||||
US government agencies |
|
|
|
|
|
|
|
| US government agencies | ||||||||||
Within one year |
| $ | 7,503 |
|
| $ | 7,502 |
| Within one year | $ | 8,000 | $ | 7,939 | ||||||
One to five years |
|
| 9,943 |
|
|
| 9,885 |
| One to five years | 20,421 | 20,027 | ||||||||
Five to ten years | Five to ten years | 2,611 | 2,530 | ||||||||||||||||
Total |
|
| 17,446 |
|
|
| 17,387 |
| Total | 31,032 | 30,496 | ||||||||
Mortgage-backed securities |
|
|
|
|
|
|
|
| Mortgage-backed securities | ||||||||||
Within one year | Within one year | 629 | 626 | ||||||||||||||||
One to five years |
|
| 121,946 |
|
|
| 117,826 |
| One to five years | 173,870 | 163,603 | ||||||||
Five to ten years |
|
| 224,820 |
|
|
| 206,806 |
| Five to ten years | 257,837 | 227,520 | ||||||||
After 10 years |
|
| 636,022 |
|
|
| 580,294 |
| After 10 years | 794,453 | 707,388 | ||||||||
Total |
|
| 982,788 |
|
|
| 904,926 |
| Total | 1,226,789 | 1,099,137 | ||||||||
Municipal bonds |
|
|
|
|
|
|
|
| Municipal bonds | ||||||||||
Five to ten years |
|
| 3,136 |
|
|
| 3,072 |
| Five to ten years | 3,114 | 2,951 | ||||||||
After 10 years |
|
| 99 |
|
|
| 93 |
| After 10 years | 98 | 84 | ||||||||
Total |
|
| 3,235 |
|
|
| 3,165 |
| Total | 3,212 | 3,035 | ||||||||
Other debt securities |
|
|
|
|
|
|
|
| Other debt securities | ||||||||||
Within one year |
|
| 500 |
|
|
| 490 |
| Within one year | 500 | 478 | ||||||||
One to five years |
|
| 2,000 |
|
|
| 2,000 |
| |||||||||||
Total |
|
| 2,500 |
|
|
| 2,490 |
| Total | 500 | 478 | ||||||||
|
|
|
|
|
|
|
|
| |||||||||||
Total |
| $ | 1,005,969 |
|
| $ | 927,968 |
| Total | $ | 1,261,533 | $ | 1,133,146 |
2022.
|
| June 30, 2022 |
|
| December 31, 2021 |
| ||||||||||
|
| Amount |
|
| Ownership % |
|
| Amount |
|
| Ownership % |
| ||||
Apiture, Inc. |
| $ | 63,402 |
|
|
| 40.3 | % |
| $ | 52,323 |
|
|
| 39.1 | % |
Canapi Ventures SBIC Fund, LP (1) (4) |
|
| 19,435 |
|
|
| 2.9 | % |
|
| 19,431 |
|
|
| 2.9 | % |
Canapi Ventures Fund, LP (2) (4) |
|
| 2,407 |
|
|
| 1.5 | % |
|
| 2,402 |
|
|
| 1.5 | % |
Canapi Ventures Fund II, LP (3) (4) |
|
| 7,500 |
|
|
| 1.7 | % |
|
| — |
|
| N/A |
| |
Other fintech investments in private companies (5) |
|
| 248 |
|
| Various |
|
|
| 5,330 |
|
| Various |
| ||
Other (6) |
|
| 12,284 |
|
| Various |
|
|
| 4,664 |
|
| Various |
| ||
Total |
| $ | 105,276 |
|
|
|
|
|
| $ | 84,150 |
|
|
|
|
|
June 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Amount | Ownership % | Amount | Ownership % | ||||||||||||||||||||
Apiture, Inc. | $ | 57,658 | 40.3 | % | $ | 60,320 | 40.3 | % | |||||||||||||||
Canapi Ventures SBIC Fund, LP (1) (5) | 18,281 | 2.9 | % | 19,246 | 2.9 | % | |||||||||||||||||
Canapi Ventures Fund, LP (2) (5) | 2,279 | 1.5 | % | 2,382 | 1.5 | % | |||||||||||||||||
Canapi Ventures Fund II, LP (3) (5) | 7,335 | 1.6 | % | 7,412 | 1.6 | % | |||||||||||||||||
Canapi Ventures SBIC Fund II, LP (4) (5) | 7,856 | 2.9 | % | 7,981 | 3.7 | % | |||||||||||||||||
Other Fintech investments in private companies (6) | — | — | % | 241 | 4.3 | % | |||||||||||||||||
Other (7) | 20,554 | Various | 12,476 | Various | |||||||||||||||||||
Total | $ | 113,963 | $ | 110,058 |
(1) | Includes unfunded commitments of |
(2) | Includes unfunded commitments of |
(3) | Includes unfunded commitments of | ||||
(4) | Includes unfunded commitments of $7.6 million and $7.5 million as of June 30, 2023 and December 31, |
| Investee is accounted for under equity method due to the Company's participation as an investment advisor. |
| As of December 31, 2022, Other Fintech investments include Kwipped, Inc. As of June 30, | ||||
(7) | As of June 30, 2023, Other investments include |
|
|
|
|
|
|
|
| As of and for the six month period ended |
| As of and for the six month period ended | |||||||||||||||||||||
|
| Cumulative Adjustments |
|
| June 30, 2022 |
|
| June 30, 2021 |
| Cumulative Adjustments | June 30, 2023 | June 30, 2022 | |||||||||||||||||
Carrying value (1) |
|
|
|
|
| $ | 72,760 |
|
| $ | 62,341 |
| Carrying value (1) | $ | 77,586 | $ | 72,760 | ||||||||||||
Carrying value adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| Carrying value adjustments: | ||||||||||||||||
Impairment |
| $ | — |
|
|
| — |
|
|
| — |
| Impairment | $ | — | — | — | ||||||||||||
Upward changes for observable prices (2) |
|
| 49,961 |
|
|
| 1,492 |
|
|
| 30,197 |
| Upward changes for observable prices (2) | 50,492 | — | 1,492 | |||||||||||||
Downward changes for observable prices |
|
| (86 | ) |
|
| — |
|
|
| — |
| Downward changes for observable prices | (86) | — | — | |||||||||||||
Net upward change |
| $ | 49,875 |
|
| $ | 1,492 |
|
| $ | 30,197 |
| Net upward change | $ | 50,406 | $ | — | $ | 1,492 |
(1) | Includes |
(2) |
|
June 30, 2023 | Investment Carrying Amount | Maximum Exposure to Loss | Liability Recognized | Classification | |||||||||||||||||||
Solar tax credit investments | $ | 4,079 | $ | 19,203 | $ | — | Other assets (1) | ||||||||||||||||
Affordable housing | 15,964 | 15,964 | 7,721 | Other assets & other liabilities (2) | |||||||||||||||||||
Canapi Funds | 35,751 | 35,751 | 20,525 | Other assets & other liabilities | |||||||||||||||||||
Non-marketable and other equity investments | 8,986 | 8,986 | 2,769 | Other assets & other liabilities |
December 31, 2022 | Investment Carrying Amount | Maximum Exposure to Loss | Liability Recognized | Classification | |||||||||||||||||||
Solar tax credit investments | $ | 5,221 | $ | 24,295 | $ | 2,641 | Other assets & other liabilities(3) | ||||||||||||||||
Affordable housing | 7,255 | 7,255 | — | Other assets | |||||||||||||||||||
Canapi Funds | 37,021 | 37,021 | 20,474 | Other assets & other liabilities | |||||||||||||||||||
Non-marketable and other equity investments | 8,509 | 8,509 | 3,033 | Other assets & other liabilities |
(1) | Maximum exposure to loss represents $4.1 million of current investments and a scenario in which related tax credits are recaptured, collectively totaling $19.2 million. | ||||
(2) | Maximum exposure to loss represents $16.0 million of investments. As there are no tax credits allocated in the current year, there is no increase to the maximum exposure to loss related to recaptured tax credits on the $8.8 million LIHTC investment. | ||||
(3) | Maximum exposure to loss represents $5.2 million of current investments and a scenario in which related tax credits are recaptured, collectively totaling $24.3 million. |
|
| Current or Less than 30 Days Past Due |
|
| 30-89 Days Past Due |
|
| 90 Days or More Past Due |
|
| Total Past Due |
|
| Total Carried at Amortized Cost |
|
| Loans Accounted for Under the Fair Value Option1 |
|
| Total Loans and Leases |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||
Current or Less than 30 Days Past Due | 30-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Total Carried at Amortized Cost | Loans Accounted for Under the Fair Value Option(1) | Total Loans and Leases | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial & Industrial | |||||||||||||||||||||||||||||||||||||||||||
Small Business Banking |
| $ | 1,232,869 |
|
| $ | 5,399 |
|
| $ | 13,240 |
|
| $ | 18,639 |
|
| $ | 1,251,508 |
|
| $ | 210,986 |
|
| $ | 1,462,494 |
| Small Business Banking | $ | 1,800,842 | $ | 8,096 | $ | 28,490 | $ | 36,586 | $ | 1,837,428 | $ | 160,621 | $ | 1,998,049 | |||||||||||||||||||||||||||||
Specialty Lending |
|
| 1,122,411 |
|
|
| 554 |
|
|
| 166 |
|
|
| 720 |
|
|
| 1,123,131 |
|
|
| 56,441 |
|
|
| 1,179,572 |
| Specialty Lending | 1,253,649 | — | 1,865 | 1,865 | 1,255,514 | 23,100 | 1,278,614 | ||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | Energy & Infrastructure | 495,580 | 3,854 | 3,082 | 6,936 | 502,516 | 47,580 | 550,096 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paycheck Protection Program |
|
| 63,851 |
|
|
| 14 |
|
|
| 10 |
|
|
| 24 |
|
|
| 63,875 |
|
|
| — |
|
|
| 63,875 |
| Paycheck Protection Program | 8,068 | — | — | — | 8,068 | — | 8,068 | ||||||||||||||||||||||||||||||||||||
Total |
|
| 2,419,131 |
|
|
| 5,967 |
|
|
| 13,416 |
|
|
| 19,383 |
|
|
| 2,438,514 |
|
|
| 267,427 |
|
|
| 2,705,941 |
| Total | 3,558,139 | 11,950 | 33,437 | 45,387 | 3,603,526 | 231,301 | 3,834,827 | ||||||||||||||||||||||||||||||||||||
Construction & Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Construction & Development | |||||||||||||||||||||||||||||||||||||||||||
Small Business Banking |
|
| 323,530 |
|
|
| — |
|
|
| 1,366 |
|
|
| 1,366 |
|
|
| 324,896 |
|
|
| — |
|
|
| 324,896 |
| Small Business Banking | 479,107 | — | — | — | 479,107 | — | 479,107 | ||||||||||||||||||||||||||||||||||||
Specialty Lending |
|
| 98,298 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 98,298 |
|
|
| — |
|
|
| 98,298 |
| Specialty Lending | 108,210 | — | — | — | 108,210 | — | 108,210 | ||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | Energy & Infrastructure | 6,779 | — | — | — | 6,779 | — | 6,779 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
|
| 421,828 |
|
|
| — |
|
|
| 1,366 |
|
|
| 1,366 |
|
|
| 423,194 |
|
|
| — |
|
|
| 423,194 |
| Total | 594,096 | — | — | — | 594,096 | — | 594,096 | ||||||||||||||||||||||||||||||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial Real Estate | |||||||||||||||||||||||||||||||||||||||||||
Small Business Banking |
|
| 1,722,856 |
|
|
| 7,609 |
|
|
| 1,204 |
|
|
| 8,813 |
|
|
| 1,731,669 |
|
|
| 199,197 |
|
|
| 1,930,866 |
| Small Business Banking | 2,199,359 | 9,789 | 22,227 | 32,016 | 2,231,375 | 148,696 | 2,380,071 | ||||||||||||||||||||||||||||||||||||
Specialty Lending |
|
| 365,214 |
|
|
| — |
|
|
| 1,631 |
|
|
| 1,631 |
|
|
| 366,845 |
|
|
| 19,879 |
|
|
| 386,724 |
| Specialty Lending | 353,604 | 12,232 | — | 12,232 | 365,836 | 2,153 | 367,989 | ||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | Energy & Infrastructure | 118,230 | — | 3,072 | 3,072 | 121,302 | 18,565 | 139,867 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
|
| 2,088,070 |
|
|
| 7,609 |
|
|
| 2,835 |
|
|
| 10,444 |
|
|
| 2,098,514 |
|
|
| 219,076 |
|
|
| 2,317,590 |
| Total | 2,671,193 | 22,021 | 25,299 | 47,320 | 2,718,513 | 169,414 | 2,887,927 | ||||||||||||||||||||||||||||||||||||
Commercial Land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial Land | |||||||||||||||||||||||||||||||||||||||||||
Small Business Banking |
|
| 371,299 |
|
|
| — |
|
|
| 1,917 |
|
|
| 1,917 |
|
|
| 373,216 |
|
|
| 44,141 |
|
|
| 417,357 |
| Small Business Banking | 493,789 | — | 1,917 | 1,917 | 495,706 | 41,066 | 536,772 | ||||||||||||||||||||||||||||||||||||
Total |
|
| 371,299 |
|
|
| — |
|
|
| 1,917 |
|
|
| 1,917 |
|
|
| 373,216 |
|
|
| 44,141 |
|
|
| 417,357 |
| Total | 493,789 | — | 1,917 | 1,917 | 495,706 | 41,066 | 536,772 | ||||||||||||||||||||||||||||||||||||
Total |
| $ | 5,300,328 |
|
| $ | 13,576 |
|
| $ | 19,534 |
|
| $ | 33,110 |
|
| $ | 5,333,438 |
|
| $ | 530,644 |
|
| $ | 5,864,082 |
| Total | $ | 7,317,217 | $ | 33,971 | $ | 60,653 | $ | 94,624 | $ | 7,411,841 | $ | 441,781 | $ | 7,853,622 | |||||||||||||||||||||||||||||
Net deferred fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3,873 | ) | Net deferred fees | (17,224) | ||||||||||||||||||||||||||||||||||||||||||
Loans and Leases, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 5,860,209 |
| Loans and Leases, Net | $ | 7,836,398 | |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||
Guaranteed Balance |
| $ | 1,903,647 |
|
| $ | 11,105 |
|
| $ | 14,428 |
|
| $ | 25,533 |
|
| $ | 1,929,180 |
|
| $ | 58,045 |
|
| $ | 1,987,225 |
| Guaranteed Balance | $ | 2,655,758 | $ | 11,414 | $ | 47,265 | $ | 58,679 | $ | 2,714,437 | $ | 74,225 | $ | 2,788,662 | |||||||||||||||||||||||||||||
% Guaranteed |
|
| 35.9 | % |
|
| 81.8 | % |
|
| 73.9 | % |
|
| 77.1 | % |
|
| 36.2 | % |
|
| 10.9 | % |
|
| 33.9 | % | % Guaranteed | 36.3% | 33.6% | 77.9% | 62.0% | 36.6% | 16.8% | 35.5% |
|
| Current or Less than 30 Days Past Due |
|
| 30-89 Days Past Due |
|
| 90 Days or More Past Due |
|
| Total Past Due |
|
| Total Carried at Amortized Cost |
|
| Loans Accounted for Under the Fair Value Option1 |
|
| Total Loans and Leases |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||
Current or Less than 30 Days Past Due | 30-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Total Carried at Amortized Cost | Loans Accounted for Under the Fair Value Option(1) | Total Loans and Leases | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial & Industrial | |||||||||||||||||||||||||||||||||||||||||||
Small Business Banking |
| $ | 1,103,915 |
|
| $ | 13,171 |
|
| $ | 7,320 |
|
| $ | 20,491 |
|
| $ | 1,124,406 |
|
| $ | 248,806 |
|
| $ | 1,373,212 |
| Small Business Banking | $ | 1,719,165 | $ | 21,589 | $ | 16,221 | $ | 37,810 | $ | 1,756,975 | $ | 182,348 | $ | 1,939,323 | |||||||||||||||||||||||||||||
Specialty Lending |
|
| 875,367 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 875,367 |
|
|
| 64,525 |
|
|
| 939,892 |
| Specialty Lending | 1,022,615 | 398 | 266 | 664 | 1,023,279 | 29,084 | 1,052,363 | ||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | Energy & Infrastructure | 420,447 | — | 3,082 | 3,082 | 423,529 | 50,094 | 473,623 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paycheck Protection Program |
|
| 266,893 |
|
|
| 68 |
|
|
| 1,414 |
|
|
| 1,482 |
|
|
| 268,375 |
|
|
| — |
|
|
| 268,375 |
| Paycheck Protection Program | 13,134 | — | — | — | 13,134 | — | 13,134 | ||||||||||||||||||||||||||||||||||||
Total |
|
| 2,246,175 |
|
|
| 13,239 |
|
|
| 8,734 |
|
|
| 21,973 |
|
|
| 2,268,148 |
|
|
| 313,331 |
|
|
| 2,581,479 |
| Total | 3,175,361 | 21,987 | 19,569 | 41,556 | 3,216,917 | 261,526 | 3,478,443 | ||||||||||||||||||||||||||||||||||||
Construction & Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Construction & Development | |||||||||||||||||||||||||||||||||||||||||||
Small Business Banking |
|
| 275,786 |
|
|
| — |
|
|
| 1,366 |
|
|
| 1,366 |
|
|
| 277,152 |
|
|
| — |
|
|
| 277,152 |
| Small Business Banking | 471,243 | 1,500 | — | 1,500 | 472,743 | — | 472,743 | ||||||||||||||||||||||||||||||||||||
Specialty Lending |
|
| 82,014 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 82,014 |
|
|
| — |
|
|
| 82,014 |
| Specialty Lending | 104,069 | — | — | — | 104,069 | — | 104,069 | ||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | Energy & Infrastructure | 13,753 | — | — | — | 13,753 | — | 13,753 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
|
| 357,800 |
|
|
| — |
|
|
| 1,366 |
|
|
| 1,366 |
|
|
| 359,166 |
|
|
| — |
|
|
| 359,166 |
| Total | 589,065 | 1,500 | — | 1,500 | 590,565 | — | 590,565 | ||||||||||||||||||||||||||||||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial Real Estate | |||||||||||||||||||||||||||||||||||||||||||
Small Business Banking |
|
| 1,577,765 |
|
|
| 5,802 |
|
|
| 10,761 |
|
|
| 16,563 |
|
|
| 1,594,328 |
|
|
| 250,856 |
|
|
| 1,845,184 |
| Small Business Banking | 2,137,028 | 12,082 | 5,771 | 17,853 | 2,154,881 | 166,595 | 2,321,476 | ||||||||||||||||||||||||||||||||||||
Specialty Lending |
|
| 285,373 |
|
|
| — |
|
|
| 2,315 |
|
|
| 2,315 |
|
|
| 287,688 |
|
|
| 19,481 |
|
|
| 307,169 |
| Specialty Lending | 319,419 | — | — | — | 319,419 | 2,050 | 321,469 | ||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | Energy & Infrastructure | 136,706 | — | 3,072 | 3,072 | 139,778 | 22,123 | 161,901 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
|
| 1,863,138 |
|
|
| 5,802 |
|
|
| 13,076 |
|
|
| 18,878 |
|
|
| 1,882,016 |
|
|
| 270,337 |
|
|
| 2,152,353 |
| Total | 2,593,153 | 12,082 | 8,843 | 20,925 | 2,614,078 | 190,768 | 2,804,846 | ||||||||||||||||||||||||||||||||||||
Commercial Land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial Land | |||||||||||||||||||||||||||||||||||||||||||
Small Business Banking |
|
| 362,881 |
|
|
| 7,399 |
|
|
| 2,055 |
|
|
| 9,454 |
|
|
| 372,335 |
|
|
| 61,533 |
|
|
| 433,868 |
| Small Business Banking | 429,014 | 1,663 | 1,917 | 3,580 | 432,594 | 42,164 | 474,758 | ||||||||||||||||||||||||||||||||||||
Total |
|
| 362,881 |
|
|
| 7,399 |
|
|
| 2,055 |
|
|
| 9,454 |
|
|
| 372,335 |
|
|
| 61,533 |
|
|
| 433,868 |
| Total | 429,014 | 1,663 | 1,917 | 3,580 | 432,594 | 42,164 | 474,758 | ||||||||||||||||||||||||||||||||||||
Total |
| $ | 4,829,994 |
|
| $ | 26,440 |
|
| $ | 25,231 |
|
| $ | 51,671 |
|
| $ | 4,881,665 |
|
| $ | 645,201 |
|
| $ | 5,526,866 |
| Total | $ | 6,786,593 | $ | 37,232 | $ | 30,329 | $ | 67,561 | $ | 6,854,154 | $ | 494,458 | $ | 7,348,612 | |||||||||||||||||||||||||||||
Net deferred fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (5,604 | ) | Net deferred fees | (4,434) | ||||||||||||||||||||||||||||||||||||||||||
Loans and Leases, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 5,521,262 |
| Loans and Leases, Net | $ | 7,344,178 | |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||
Guaranteed Balance |
| $ | 2,037,509 |
|
| $ | 18,421 |
|
| $ | 16,440 |
|
| $ | 34,861 |
|
| $ | 2,072,370 |
|
| $ | 77,722 |
|
| $ | 2,150,092 |
| Guaranteed Balance | $ | 2,657,770 | $ | 20,199 | $ | 26,026 | $ | 46,225 | $ | 2,703,995 | $ | 67,268 | $ | 2,771,263 | |||||||||||||||||||||||||||||
% Guaranteed |
|
| 42.2 | % |
|
| 69.7 | % |
|
| 65.2 | % |
|
| 67.5 | % |
|
| 42.5 | % |
|
| 12.0 | % |
|
| 38.9 | % | % Guaranteed | 39.2% | 54.3% | 85.8% | 68.4% | 39.5% | 13.6% | 37.7% |
|
|
|
| Term Loans and Leases Amortized Cost Basis by Origination Year |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| Prior |
|
| Revolving Loans Amortized Cost Basis |
|
| Revolving Loans Converted to Term |
|
| Total1 |
| Term Loans and Leases Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term | Total(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Small Business Banking |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Small Business Banking | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 |
| $ | 518,034 |
|
| $ | 1,108,441 |
|
| $ | 754,628 |
|
| $ | 486,036 |
|
| $ | 237,809 |
|
| $ | 245,570 |
|
| $ | 59,148 |
|
| $ | 373 |
|
| $ | 3,410,039 |
| Risk Grades 1 - 4 | $ | 440,780 | $ | 1,453,858 | $ | 1,301,691 | $ | 734,205 | $ | 387,068 | $ | 341,376 | $ | 68,046 | $ | 4,361 | $ | 4,731,385 | |||||||||||||||||||||||||||||||||||||
Risk Grade 5 |
|
| 3,925 |
|
|
| 8,839 |
|
|
| 39,239 |
|
|
| 44,173 |
|
|
| 41,524 |
|
|
| 46,087 |
|
|
| 2,755 |
|
|
| — |
|
|
| 186,542 |
| Risk Grade 5 | 1,573 | 41,286 | 27,317 | 39,763 | 36,410 | 50,466 | 15,666 | 1,055 | 213,536 | ||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 6 - 8 |
|
| 1,055 |
|
|
| 2,147 |
|
|
| 12,473 |
|
|
| 23,155 |
|
|
| 13,046 |
|
|
| 30,637 |
|
|
| 2,021 |
|
|
| 174 |
|
|
| 84,708 |
| Risk Grades 6 - 8 | — | 7,790 | 13,165 | 14,139 | 24,268 | 38,225 | 1,108 | — | 98,695 | ||||||||||||||||||||||||||||||||||||||||||||||
Total |
|
| 523,014 |
|
|
| 1,119,427 |
|
|
| 806,340 |
|
|
| 553,364 |
|
|
| 292,379 |
|
|
| 322,294 |
|
|
| 63,924 |
|
|
| 547 |
|
|
| 3,681,289 |
| Total | 442,353 | 1,502,934 | 1,342,173 | 788,107 | 447,746 | 430,067 | 84,820 | 5,416 | 5,043,616 | ||||||||||||||||||||||||||||||||||||||||||||||
Specialty Lending |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Specialty Lending | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 |
|
| 318,872 |
|
|
| 626,731 |
|
|
| 228,784 |
|
|
| 66,903 |
|
|
| 32,854 |
|
|
| 26,602 |
|
|
| 157,375 |
|
|
| 5,279 |
|
|
| 1,463,400 |
| Risk Grades 1 - 4 | 352,528 | 548,744 | 332,847 | 112,710 | 17,730 | 5,930 | 160,775 | 9,965 | 1,541,229 | ||||||||||||||||||||||||||||||||||||||||||||||
Risk Grade 5 |
|
| — |
|
|
| 23,832 |
|
|
| 31,290 |
|
|
| 21,965 |
|
|
| 9,830 |
|
|
| 10,817 |
|
|
| 9,348 |
|
|
| — |
|
|
| 107,082 |
| Risk Grade 5 | — | 43,148 | 45,208 | 16,882 | 12,439 | 4,042 | 23,930 | 7,500 | 153,149 | ||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 6 - 8 |
|
| — |
|
|
| 4,398 |
|
|
| 17 |
|
|
| 2,993 |
|
|
| 8,728 |
|
|
| 1,631 |
|
|
| 25 |
|
|
| — |
|
|
| 17,792 |
| Risk Grades 6 - 8 | — | — | 20,088 | 1,328 | 5,002 | 166 | 8,598 | — | 35,182 | ||||||||||||||||||||||||||||||||||||||||||||||
Total |
|
| 318,872 |
|
|
| 654,961 |
|
|
| 260,091 |
|
|
| 91,861 |
|
|
| 51,412 |
|
|
| 39,050 |
|
|
| 166,748 |
|
|
| 5,279 |
|
|
| 1,588,274 |
| Total | 352,528 | 591,892 | 398,143 | 130,920 | 35,171 | 10,138 | 193,303 | 17,465 | 1,729,560 | ||||||||||||||||||||||||||||||||||||||||||||||
Paycheck Protection Program |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 |
|
| — |
|
|
| 51,883 |
|
|
| 11,992 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 63,875 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | Energy & Infrastructure | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 1-4 | Risk Grades 1-4 | 113,399 | 176,727 | 152,760 | 39,360 | 50,716 | 28,752 | 12,822 | — | 574,536 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grade 5 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| Risk Grade 5 | — | 4,024 | 2,634 | 13,517 | 7,104 | 10,358 | — | — | 37,637 | ||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 6 - 8 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| Risk Grades 6 - 8 | — | — | 6,436 | 3,572 | — | 8,416 | — | — | 18,424 | ||||||||||||||||||||||||||||||||||||||||||||||
Total |
|
| — |
|
|
| 51,883 |
|
|
| 11,992 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 63,875 |
| Total | 113,399 | 180,751 | 161,830 | 56,449 | 57,820 | 47,526 | 12,822 | — | 630,597 | ||||||||||||||||||||||||||||||||||||||||||||||
Paycheck Protection Program | Paycheck Protection Program | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 | Risk Grades 1 - 4 | — | — | 4,151 | 3,917 | — | — | — | — | 8,068 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
| $ | 841,886 |
|
| $ | 1,826,271 |
|
| $ | 1,078,423 |
|
| $ | 645,225 |
|
| $ | 343,791 |
|
| $ | 361,344 |
|
| $ | 230,672 |
|
| $ | 5,826 |
|
| $ | 5,333,438 |
| Total | — | — | 4,151 | 3,917 | — | — | — | — | 8,068 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | $ | 908,280 | $ | 2,275,577 | $ | 1,906,297 | $ | 979,393 | $ | 540,737 | $ | 487,731 | $ | 290,945 | $ | 22,881 | $ | 7,411,841 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year-To-Date Gross Charge-offs | Year-To-Date Gross Charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Small Business Banking | Small Business Banking | $ | — | $ | 1,426 | $ | 621 | $ | 255 | $ | 586 | $ | 513 | $ | 50 | $ | — | $ | 3,451 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Specialty Lending | Specialty Lending | — | — | 4,315 | 514 | — | — | 888 | — | 5,717 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | $ | — | $ | 1,426 | $ | 4,936 | $ | 769 | $ | 586 | $ | 513 | $ | 938 | $ | — | $ | 9,168 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
|
| 2017 |
|
| Prior |
|
| Revolving Loans Amortized Cost Basis |
|
| Revolving Loans Converted to Term |
|
| Total1 |
| |||||||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Grades 1 - 4 |
| $ | 1,051,775 |
|
| $ | 853,250 |
|
| $ | 522,407 |
|
| $ | 285,397 |
|
| $ | 188,858 |
|
| $ | 116,645 |
|
| $ | 46,356 |
|
| $ | 1,771 |
|
| $ | 3,066,459 |
|
Risk Grade 5 |
|
| 7,838 |
|
|
| 19,651 |
|
|
| 65,715 |
|
|
| 60,615 |
|
|
| 37,661 |
|
|
| 13,933 |
|
|
| 5,066 |
|
|
| 195 |
|
|
| 210,674 |
|
Risk Grades 6 - 8 |
|
| 2,517 |
|
|
| 8,667 |
|
|
| 27,696 |
|
|
| 14,545 |
|
|
| 14,193 |
|
|
| 21,239 |
|
|
| 1,457 |
|
|
| 774 |
|
|
| 91,088 |
|
Total |
|
| 1,062,130 |
|
|
| 881,568 |
|
|
| 615,818 |
|
|
| 360,557 |
|
|
| 240,712 |
|
|
| 151,817 |
|
|
| 52,879 |
|
|
| 2,740 |
|
|
| 3,368,221 |
|
Specialty Lending |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Grades 1 - 4 |
|
| 644,851 |
|
|
| 238,409 |
|
|
| 73,978 |
|
|
| 42,452 |
|
|
| 38,703 |
|
|
| — |
|
|
| 133,889 |
|
|
| 1,816 |
|
|
| 1,174,098 |
|
Risk Grade 5 |
|
| 2,250 |
|
|
| 17,677 |
|
|
| 5,497 |
|
|
| 10,415 |
|
|
| 17,104 |
|
|
| — |
|
|
| 2,953 |
|
|
| 848 |
|
|
| 56,744 |
|
Risk Grades 6 - 8 |
|
| — |
|
|
| 17 |
|
|
| 3,166 |
|
|
| 8,654 |
|
|
| — |
|
|
| 2,315 |
|
|
| 75 |
|
|
|
|
|
|
| 14,227 |
|
Total |
|
| 647,101 |
|
|
| 256,103 |
|
|
| 82,641 |
|
|
| 61,521 |
|
|
| 55,807 |
|
|
| 2,315 |
|
|
| 136,917 |
|
|
| 2,664 |
|
|
| 1,245,069 |
|
Paycheck Protection Program |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk Grades 1 - 4 |
|
| 204,803 |
|
|
| 63,572 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 268,375 |
|
Risk Grade 5 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Risk Grades 6 - 8 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total |
|
| 204,803 |
|
|
| 63,572 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 268,375 |
|
Total |
| $ | 1,914,034 |
|
| $ | 1,201,243 |
|
| $ | 698,459 |
|
| $ | 422,078 |
|
| $ | 296,519 |
|
| $ | 154,132 |
|
| $ | 189,796 |
|
| $ | 5,404 |
|
| $ | 4,881,665 |
|
Term Loans and Leases Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term | Total(1) | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Small Business Banking | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 | $ | 1,427,182 | $ | 1,400,726 | $ | 795,647 | $ | 426,401 | $ | 217,893 | $ | 204,933 | $ | 65,455 | $ | 1,738 | $ | 4,539,975 | ||||||||||||||||||||||||||||||||||||||
Risk Grade 5 | 15,942 | 17,745 | 40,202 | 45,712 | 26,124 | 27,212 | 13,210 | 204 | 186,351 | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 6 - 8 | 1,806 | 4,277 | 17,845 | 23,470 | 14,094 | 27,215 | 1,638 | 522 | 90,867 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | 1,444,930 | 1,422,748 | 853,694 | 495,583 | 258,111 | 259,360 | 80,303 | 2,464 | 4,817,193 | |||||||||||||||||||||||||||||||||||||||||||||||
Specialty Lending | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 | 635,079 | 355,785 | 144,545 | 25,849 | 6,574 | 788 | 153,062 | 31,504 | 1,353,186 | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Grade 5 | 7,341 | 33,272 | 12,329 | 10,201 | 4,399 | — | 6,619 | 248 | 74,409 | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 6 - 8 | — | 11,433 | 416 | 5,577 | 166 | — | 1,343 | 237 | 19,172 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | 642,420 | 400,490 | 157,290 | 41,627 | 11,139 | 788 | 161,024 | 31,989 | 1,446,767 | |||||||||||||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 | 199,338 | 176,855 | 39,600 | 51,190 | 23,374 | 19,694 | 12,751 | 351 | 523,153 | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Grade 5 | 4,024 | 4,409 | 500 | 6,976 | 4,706 | 5,142 | — | — | 25,757 | |||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 6 - 8 | — | 3,082 | 16,589 | — | 8,479 | — | — | — | 28,150 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | 203,362 | 184,346 | 56,689 | 58,166 | 36,559 | 24,836 | 12,751 | 351 | 577,060 | |||||||||||||||||||||||||||||||||||||||||||||||
Paycheck Protection Program | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 | — | 7,421 | 5,713 | — | — | — | — | — | 13,134 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | — | 7,421 | 5,713 | — | — | — | — | — | 13,134 | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 2,290,712 | $ | 2,015,005 | $ | 1,073,386 | $ | 595,376 | $ | 305,809 | $ | 284,984 | $ | 254,078 | $ | 34,804 | $ | 6,854,154 | ||||||||||||||||||||||||||||||||||||||
(1) | Excludes |
June 30, 2022 |
| Loan and Lease Balance1 |
|
| Guaranteed Balance |
|
| Unguaranteed Balance |
|
| % Guaranteed |
| ||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | Loan and Lease Balance(1) | Guaranteed Balance | Unguaranteed Balance | % Guaranteed | |||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 |
| $ | 4,937,314 |
|
| $ | 1,732,613 |
|
| $ | 3,204,701 |
|
|
| 35.1 | % | Risk Grades 1 - 4 | $ | 6,855,218 | $ | 2,487,302 | $ | 4,367,916 | 36.3 | % | |||||||||||||||||
Risk Grade 5 |
|
| 293,624 |
|
|
| 127,695 |
|
|
| 165,929 |
|
|
| 43.5 |
| Risk Grade 5 | 404,322 | 133,822 | 270,500 | 33.1 | |||||||||||||||||||||
Risk Grades 6 - 8 |
|
| 102,500 |
|
|
| 68,872 |
|
|
| 33,628 |
|
|
| 67.2 |
| Risk Grades 6 - 8 | 152,301 | 93,313 | 58,988 | 61.3 | |||||||||||||||||||||
Total |
| $ | 5,333,438 |
|
| $ | 1,929,180 |
|
| $ | 3,404,258 |
|
|
| 36.2 | % | Total | $ | 7,411,841 | $ | 2,714,437 | $ | 4,697,404 | 36.6 | % |
December 31, 2021 |
| Loan and Lease Balance1 |
|
| Guaranteed Balance |
|
| Unguaranteed Balance |
|
| % Guaranteed |
| ||||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2022 | Loan and Lease Balance(1) | Guaranteed Balance | Unguaranteed Balance | % Guaranteed | |||||||||||||||||||||||||||||||||||||
Risk Grades 1 - 4 |
| $ | 4,508,932 |
|
| $ | 1,875,152 |
|
| $ | 2,633,780 |
|
|
| 41.6 | % | Risk Grades 1 - 4 | $ | 6,429,448 | $ | 2,508,229 | $ | 3,921,219 | 39.0 | % | |||||||||||||||||
Risk Grade 5 |
|
| 267,418 |
|
|
| 134,221 |
|
|
| 133,197 |
|
|
| 50.2 |
| Risk Grade 5 | 286,517 | 115,573 | 170,944 | 40.3 | |||||||||||||||||||||
Risk Grades 6 - 8 |
|
| 105,315 |
|
|
| 62,997 |
|
|
| 42,318 |
|
|
| 59.8 |
| Risk Grades 6 - 8 | 138,189 | 80,193 | 57,996 | 58.0 | |||||||||||||||||||||
Total |
| $ | 4,881,665 |
|
| $ | 2,072,370 |
|
| $ | 2,809,295 |
|
|
| 42.5 | % | Total | $ | 6,854,154 | $ | 2,703,995 | $ | 4,150,159 | 39.5 | % |
(1) | Excludes |
June 30, 2022 |
| Loan and Lease Balance1 |
|
| Guaranteed Balance |
|
| Unguaranteed Balance |
|
| Unguaranteed Exposure with No ACL |
| ||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | Loan and Lease Balance(1) | Guaranteed Balance | Unguaranteed Balance | Unguaranteed Exposure with No ACL | |||||||||||||||||||||||||||||||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial & Industrial | |||||||||||||||||||||||||
Small Business Banking |
| $ | 19,763 |
|
| $ | 16,542 |
|
| $ | 3,221 |
|
| $ | 407 |
| Small Business Banking | $ | 31,105 | $ | 27,185 | $ | 3,920 | $ | 407 | |||||||||||||||||
Specialty Lending |
|
| 166 |
|
|
| 166 |
|
|
| — |
|
|
| — |
| Specialty Lending | 15,824 | 4,619 | 11,205 | — | |||||||||||||||||||||
Payroll Protection Program |
|
| 24 |
|
|
| 24 |
|
|
| — |
|
|
| — |
| ||||||||||||||||||||||||||
Energy & Infrastructure | Energy & Infrastructure | 6,936 | 2,794 | 4,142 | 2,629 | |||||||||||||||||||||||||||||||||||||
Total |
|
| 19,953 |
|
|
| 16,732 |
|
|
| 3,221 |
|
|
| 407 |
| Total | 53,865 | 34,598 | 19,267 | 3,036 | |||||||||||||||||||||
Construction & Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
Small Business Banking |
|
| 1,366 |
|
|
| 1,201 |
|
|
| 165 |
|
|
| — |
| ||||||||||||||||||||||||||
Total |
|
| 1,366 |
|
|
| 1,201 |
|
|
| 165 |
|
|
| — |
| ||||||||||||||||||||||||||
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial Real Estate | |||||||||||||||||||||||||
Small Business Banking |
|
| 17,708 |
|
|
| 11,925 |
|
|
| 5,783 |
|
|
| 3,519 |
| Small Business Banking | 35,410 | 23,529 | 11,881 | 5,651 | |||||||||||||||||||||
Specialty Lending |
|
| 1,631 |
|
|
| — |
|
|
| 1,631 |
|
|
| 1,631 |
| Specialty Lending | 12,232 | — | 12,232 | — | |||||||||||||||||||||
Energy & Infrastructure | Energy & Infrastructure | 3,072 | 2,799 | 273 | — | |||||||||||||||||||||||||||||||||||||
Total |
|
| 19,339 |
|
|
| 11,925 |
|
|
| 7,414 |
|
|
| 5,150 |
| Total | 50,714 | 26,328 | 24,386 | 5,651 | |||||||||||||||||||||
Commercial Land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial Land | |||||||||||||||||||||||||
Small Business Banking |
|
| 5,110 |
|
|
| 3,936 |
|
|
| 1,174 |
|
|
| 196 |
| Small Business Banking | 6,642 | 5,396 | 1,246 | 196 | |||||||||||||||||||||
Total |
|
| 5,110 |
|
|
| 3,936 |
|
|
| 1,174 |
|
|
| 196 |
| Total | 6,642 | 5,396 | 1,246 | 196 | |||||||||||||||||||||
Total |
| $ | 45,768 |
|
| $ | 33,794 |
|
| $ | 11,974 |
|
| $ | 5,753 |
| Total | $ | 111,221 | $ | 66,322 | $ | 44,899 | $ | 8,883 |
December 31, 2022 | Loan and Lease Balance(1) | Guaranteed Balance | Unguaranteed Balance | Unguaranteed Exposure with No ACL | ||||||||||||||||||||||
Commercial & Industrial | ||||||||||||||||||||||||||
Small Business Banking | $ | 22,321 | $ | 19,302 | $ | 3,019 | $ | 407 | ||||||||||||||||||
Specialty Lending | 3,647 | 384 | 3,263 | — | ||||||||||||||||||||||
Energy & Infrastructure | 3,082 | 2,794 | 288 | 288 | ||||||||||||||||||||||
Total | 29,050 | 22,480 | 6,570 | 695 | ||||||||||||||||||||||
Commercial Real Estate | ||||||||||||||||||||||||||
Small Business Banking | 34,520 | 23,830 | 10,690 | 3,611 | ||||||||||||||||||||||
Energy & Infrastructure | 3,072 | 2,799 | 273 | — | ||||||||||||||||||||||
Total | 37,592 | 26,629 | 10,963 | 3,611 | ||||||||||||||||||||||
Commercial Land | ||||||||||||||||||||||||||
Small Business Banking | 6,750 | 5,499 | 1,251 | 196 | ||||||||||||||||||||||
Total | 6,750 | 5,499 | 1,251 | 196 | ||||||||||||||||||||||
Total | $ | 73,392 | $ | 54,608 | $ | 18,784 | $ | 4,502 |
December 31, 2021 |
| Loan and Lease Balance1 |
|
| Guaranteed Balance |
|
| Unguaranteed Balance |
|
| Unguaranteed Exposure with No ACL |
| ||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
| $ | 16,911 |
|
| $ | 13,981 |
|
| $ | 2,930 |
|
| $ | — |
|
Payroll Protection Program |
|
| 1,482 |
|
|
| 1,482 |
|
|
| — |
|
|
| — |
|
Total |
|
| 18,393 |
|
|
| 15,463 |
|
|
| 2,930 |
|
|
| — |
|
Construction & Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| 3,884 |
|
|
| 1,201 |
|
|
| 2,683 |
|
|
| — |
|
Total |
|
| 3,884 |
|
|
| 1,201 |
|
|
| 2,683 |
|
|
| — |
|
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| 12,410 |
|
|
| 5,226 |
|
|
| 7,184 |
|
|
| 5,169 |
|
Specialty Lending |
|
| 2,315 |
|
|
| 507 |
|
|
| 1,808 |
|
|
| 1,808 |
|
Total |
|
| 14,725 |
|
|
| 5,733 |
|
|
| 8,992 |
|
|
| 6,977 |
|
Commercial Land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| 5,531 |
|
|
| 4,148 |
|
|
| 1,383 |
|
|
| — |
|
Total |
|
| 5,531 |
|
|
| 4,148 |
|
|
| 1,383 |
|
|
| — |
|
Total |
| $ | 42,533 |
|
| $ | 26,545 |
|
| $ | 15,988 |
|
| $ | 6,977 |
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Commercial & Industrial | $ | 963 | $ | 141 | $ | 1,342 | $ | 310 | ||||||||||||||||||
Commercial Real Estate | 294 | 4 | 467 | 182 | ||||||||||||||||||||||
Commercial Land | — | — | — | 105 | ||||||||||||||||||||||
Total | $ | 1,257 | $ | 145 | $ | 1,809 | $ | 597 |
Total Collateral Dependent Loans | Unguaranteed Portion | |||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | Real Estate | Business Assets | Other | Real Estate | Business Assets | Other | Allowance for Credit Losses | |||||||||||||||||||||||||||||||||||||
Commercial & Industrial | ||||||||||||||||||||||||||||||||||||||||||||
Small Business Banking | $ | 5,549 | $ | — | $ | — | $ | 1,085 | $ | — | $ | — | $ | 490 | ||||||||||||||||||||||||||||||
Specialty Lending | — | 7,964 | — | — | 7,964 | — | 5,858 | |||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | 3,022 | — | — | 227 | — | — | — | |||||||||||||||||||||||||||||||||||||
Total | 8,571 | 7,964 | — | 1,312 | 7,964 | — | 6,348 | |||||||||||||||||||||||||||||||||||||
Commercial Real Estate | ||||||||||||||||||||||||||||||||||||||||||||
Small Business Banking | 16,963 | — | — | 8,093 | — | — | 420 | |||||||||||||||||||||||||||||||||||||
Total | 16,963 | — | — | 8,093 | — | — | 420 | |||||||||||||||||||||||||||||||||||||
Commercial Land | ||||||||||||||||||||||||||||||||||||||||||||
Small Business Banking | 4,917 | — | — | 999 | — | — | 16 | |||||||||||||||||||||||||||||||||||||
Total | 4,917 | — | — | 999 | — | — | 16 | |||||||||||||||||||||||||||||||||||||
Total | $ | 30,451 | $ | 7,964 | $ | — | $ | 10,404 | $ | 7,964 | $ | — | $ | 6,784 |
Total Collateral Dependent Loans | Unguaranteed Portion | |||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | Real Estate | Business Assets | Other | Real Estate | Business Assets | Other | Allowance for Credit Losses | |||||||||||||||||||||||||||||||||||||
Commercial & Industrial | ||||||||||||||||||||||||||||||||||||||||||||
Small Business Banking | $ | 2,730 | $ | — | $ | — | $ | 414 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
Specialty Lending | — | 371 | — | — | 371 | — | 291 | |||||||||||||||||||||||||||||||||||||
Energy & Infrastructure | 16,378 | — | — | 13,583 | — | — | — | |||||||||||||||||||||||||||||||||||||
Total | 19,108 | 371 | — | 13,997 | 371 | — | 291 | |||||||||||||||||||||||||||||||||||||
Commercial Real Estate | ||||||||||||||||||||||||||||||||||||||||||||
Small Business Banking | 15,286 | — | — | 6,440 | — | — | 152 | |||||||||||||||||||||||||||||||||||||
Total | 15,286 | — | — | 6,440 | — | — | 152 | |||||||||||||||||||||||||||||||||||||
Commercial Land | ||||||||||||||||||||||||||||||||||||||||||||
Small Business Banking | 1,743 | — | — | 202 | — | — | — | |||||||||||||||||||||||||||||||||||||
Total | 1,743 | — | — | 202 | — | — | — | |||||||||||||||||||||||||||||||||||||
Total | $ | 36,137 | $ | 371 | $ | — | $ | 20,639 | $ | 371 | $ | — | $ | 443 |
|
| Total Collateral Dependent Loans |
|
| Unguaranteed Portion |
| ||||||||||||||||||||||
June 30, 2022 |
| Real Estate |
|
| Business Assets |
|
| Other |
|
| Real Estate |
|
| Business Assets |
|
| Other |
|
| Allowance for Credit Losses |
| |||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
| $ | 2,730 |
|
| $ | 9,770 |
|
| $ | 25 |
|
| $ | 414 |
|
| $ | 2,061 |
|
| $ | 25 |
|
| $ | 1,631 |
|
Total |
|
| 2,730 |
|
|
| 9,770 |
|
|
| 25 |
|
|
| 414 |
|
|
| 2,061 |
|
|
| 25 |
|
|
| 1,631 |
|
Construction & Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| 1,354 |
|
|
| — |
|
|
| — |
|
|
| 153 |
|
|
| — |
|
|
| — |
|
|
| 56 |
|
Total |
|
| 1,354 |
|
|
| — |
|
|
| — |
|
|
| 153 |
|
|
| — |
|
|
| — |
|
|
| 56 |
|
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| 836 |
|
|
| 1,192 |
|
|
| 39 |
|
|
| 194 |
|
|
| 18 |
|
|
| 9 |
|
|
| 73 |
|
Total |
|
| 836 |
|
|
| 1,192 |
|
|
| 39 |
|
|
| 194 |
|
|
| 18 |
|
|
| 9 |
|
|
| 73 |
|
Commercial Land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| 1,922 |
|
|
| — |
|
|
| — |
|
|
| 382 |
|
|
| — |
|
|
| — |
|
|
| 61 |
|
Total |
|
| 1,922 |
|
|
| — |
|
|
| — |
|
|
| 382 |
|
|
| — |
|
|
| — |
|
|
| 61 |
|
Total |
| $ | 6,842 |
|
| $ | 10,962 |
|
| $ | 64 |
|
| $ | 1,143 |
|
| $ | 2,079 |
|
| $ | 34 |
|
| $ | 1,821 |
|
Live Oak Bancshares, Inc.
|
| Total Collateral Dependent Loans |
|
| Unguaranteed Portion |
| ||||||||||||||||||||||
December 31, 2021 |
| Real Estate |
|
| Business Assets |
|
| Other |
|
| Real Estate |
|
| Business Assets |
|
| Other |
|
| Allowance for Credit Losses |
| |||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
| $ | 698 |
|
| $ | 7,475 |
|
| $ | — |
|
| $ | 152 |
|
| $ | 449 |
|
| $ | — |
|
| $ | 235 |
|
Total |
|
| 698 |
|
|
| 7,475 |
|
|
| — |
|
|
| 152 |
|
|
| 449 |
|
|
| — |
|
|
| 235 |
|
Construction & Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Lending |
|
| 3,858 |
|
|
| — |
|
|
| — |
|
|
| 2,657 |
|
|
| — |
|
|
| — |
|
|
| 57 |
|
Total |
|
| 3,858 |
|
|
| — |
|
|
| — |
|
|
| 2,657 |
|
|
| — |
|
|
| — |
|
|
| 57 |
|
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| 5,172 |
|
|
| 700 |
|
|
| 64 |
|
|
| 4,038 |
|
|
| 14 |
|
|
| 13 |
|
|
| 65 |
|
Specialty Lending |
|
| 512 |
|
|
| — |
|
|
| — |
|
|
| 6 |
|
|
| — |
|
|
| — |
|
|
| — |
|
Total |
|
| 5,684 |
|
|
| 700 |
|
|
| 64 |
|
|
| 4,044 |
|
|
| 14 |
|
|
| 13 |
|
|
| 65 |
|
Commercial Land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| 5,541 |
|
|
| — |
|
|
| — |
|
|
| 1,393 |
|
|
| — |
|
|
| — |
|
|
| 601 |
|
Total |
|
| 5,541 |
|
|
| — |
|
|
| — |
|
|
| 1,393 |
|
|
| — |
|
|
| — |
|
|
| 601 |
|
Total |
| $ | 15,781 |
|
| $ | 8,175 |
|
| $ | 64 |
|
| $ | 8,246 |
|
| $ | 463 |
|
| $ | 13 |
|
| $ | 958 |
|
Allowance for Credit Losses - Loans and Leases
ACL.
Three Months Ended |
| Commercial & Industrial |
|
| Construction & Development |
|
| Commercial Real Estate |
|
| Commercial Land |
|
| Total |
| Three Months Ended | Commercial & Industrial | Construction & Development | Commercial Real Estate | Commercial Land | Total | |||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance | Beginning Balance | $ | 72,058 | $ | 6,954 | $ | 25,062 | $ | 4,168 | $ | 108,242 | |||||||||||||||||||||||||||||||||||||||||
Charge offs | Charge offs | (2,198) | — | (278) | — | (2,476) | ||||||||||||||||||||||||||||||||||||||||||||||
Recoveries | Recoveries | 558 | — | 764 | — | 1,322 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision | Provision | 8,989 | (526) | 4,360 | 205 | 13,028 | ||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance | Ending Balance | $ | 79,407 | $ | 6,428 | $ | 29,908 | $ | 4,373 | $ | 120,116 | |||||||||||||||||||||||||||||||||||||||||
June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| June 30, 2022 | |||||||||||||||||||||||||||||||
Beginning Balance |
| $ | 34,162 |
|
| $ | 4,102 |
|
| $ | 21,614 |
|
| $ | 3,180 |
|
| $ | 63,058 |
| Beginning Balance | $ | 34,162 | $ | 4,102 | $ | 21,614 | $ | 3,180 | $ | 63,058 | |||||||||||||||||||||
Charge offs |
|
| (1,812 | ) |
|
| — |
|
|
| (433 | ) |
|
| (318 | ) |
|
| (2,563 | ) | Charge offs | (1,812) | — | (433) | (318) | (2,563) | ||||||||||||||||||||||||||
Recoveries |
|
| 35 |
|
|
| — |
|
|
| 66 |
|
|
| — |
|
|
| 101 |
| Recoveries | 35 | — | 66 | — | 101 | ||||||||||||||||||||||||||
Provision |
|
| 8,793 |
|
|
| (598 | ) |
|
| (3,407 | ) |
|
| 479 |
|
|
| 5,267 |
| Provision | 8,793 | (598) | (3,407) | 479 | 5,267 | ||||||||||||||||||||||||||
Ending Balance |
| $ | 41,178 |
|
| $ | 3,504 |
|
| $ | 17,840 |
|
| $ | 3,341 |
|
| $ | 65,863 |
| Ending Balance | $ | 41,178 | $ | 3,504 | $ | 17,840 | $ | 3,341 | $ | 65,863 | |||||||||||||||||||||
June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Beginning Balance |
| $ | 26,577 |
|
| $ | 5,887 |
|
| $ | 18,646 |
|
| $ | 1,307 |
|
| $ | 52,417 |
| ||||||||||||||||||||||||||||||||
Charge offs |
|
| (225 | ) |
|
| (262 | ) |
|
| (2,173 | ) |
|
| — |
|
|
| (2,660 | ) | ||||||||||||||||||||||||||||||||
Recoveries |
|
| 137 |
|
|
| — |
|
|
| 108 |
|
|
| — |
|
|
| 245 |
| ||||||||||||||||||||||||||||||||
Provision |
|
| 950 |
|
|
| 607 |
|
|
| 5,582 |
|
|
| 707 |
|
|
| 7,846 |
| ||||||||||||||||||||||||||||||||
Ending Balance |
| $ | 27,439 |
|
| $ | 6,232 |
|
| $ | 22,163 |
|
| $ | 2,014 |
|
| $ | 57,848 |
|
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Six Months Ended |
| Commercial & Industrial |
|
| Construction & Development |
|
| Commercial Real Estate |
|
| Commercial Land |
|
| Total |
| Six Months Ended | Commercial & Industrial | Construction & Development | Commercial Real Estate | Commercial Land | Total | |||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance | Beginning Balance | $ | 64,995 | $ | 5,101 | $ | 22,901 | $ | 3,569 | $ | 96,566 | |||||||||||||||||||||||||||||||||||||||||
Adoption of ASU 2022-02 | Adoption of ASU 2022-02 | (25) | (166) | (83) | (402) | (676) | ||||||||||||||||||||||||||||||||||||||||||||||
Charge offs | Charge offs | (8,476) | — | (692) | — | (9,168) | ||||||||||||||||||||||||||||||||||||||||||||||
Recoveries | Recoveries | 581 | — | 764 | — | 1,345 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision | Provision | 22,332 | 1,493 | 7,018 | 1,206 | 32,049 | ||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance | Ending Balance | $ | 79,407 | $ | 6,428 | $ | 29,908 | $ | 4,373 | $ | 120,116 | |||||||||||||||||||||||||||||||||||||||||
June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| June 30, 2022 | |||||||||||||||||||||||||||||||
Beginning Balance |
| $ | 37,770 |
|
| $ | 3,435 |
|
| $ | 19,068 |
|
| $ | 3,311 |
|
| $ | 63,584 |
| Beginning Balance | $ | 37,770 | $ | 3,435 | $ | 19,068 | $ | 3,311 | $ | 63,584 | |||||||||||||||||||||
Charge offs |
|
| (4,635 | ) |
|
| — |
|
|
| (433 | ) |
|
| (652 | ) |
|
| (5,720 | ) | Charge offs | (4,635) | — | (433) | (652) | (5,720) | ||||||||||||||||||||||||||
Recoveries |
|
| 180 |
|
|
| — |
|
|
| 716 |
|
|
| — |
|
|
| 896 |
| Recoveries | 180 | — | 716 | — | 896 | ||||||||||||||||||||||||||
Provision |
|
| 7,863 |
|
|
| 69 |
|
|
| (1,511 | ) |
|
| 682 |
|
|
| 7,103 |
| Provision | 7,863 | 69 | (1,511) | 682 | 7,103 | ||||||||||||||||||||||||||
Ending Balance |
| $ | 41,178 |
|
| $ | 3,504 |
|
| $ | 17,840 |
|
| $ | 3,341 |
|
| $ | 65,863 |
| Ending Balance | $ | 41,178 | $ | 3,504 | $ | 17,840 | $ | 3,341 | $ | 65,863 | |||||||||||||||||||||
June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||
Beginning Balance |
| $ | 26,941 |
|
| $ | 5,663 |
|
| $ | 18,148 |
|
| $ | 1,554 |
|
| $ | 52,306 |
| ||||||||||||||||||||||||||||||||
Charge offs |
|
| (377 | ) |
|
| (262 | ) |
|
| (2,690 | ) |
|
| (12 | ) |
|
| (3,341 | ) | ||||||||||||||||||||||||||||||||
Recoveries |
|
| 146 |
|
|
| — |
|
|
| 1,764 |
|
|
| — |
|
|
| 1,910 |
| ||||||||||||||||||||||||||||||||
Provision |
|
| 729 |
|
|
| 831 |
|
|
| 4,941 |
|
|
| 472 |
|
|
| 6,973 |
| ||||||||||||||||||||||||||||||||
Ending Balance |
| $ | 27,439 |
|
| $ | 6,232 |
|
| $ | 22,163 |
|
| $ | 2,014 |
|
| $ | 57,848 |
|
combination thereof. The Company typically does not offer principal forgiveness.
Three Months Ended June 30, 2023 | Other-Than-Insignificant Payment Delay | Term Extension | Interest Rate Reduction | Combination - Term Extension & Payment Delay | % of Total Class of Financing Receivable | |||||||||||||||||||||||||||
Small Business Banking | $ | — | $ | — | $ | — | $ | 361 | 0.01 | % | ||||||||||||||||||||||
Specialty Lending | — | 4,427 | — | — | 0.26 | |||||||||||||||||||||||||||
Total | $ | — | $ | 4,427 | $ | — | $ | 361 | 0.27 | % |
Six Months Ended June 30, 2023 | Other-Than-Insignificant Payment Delay | Term Extension | Interest Rate Reduction | Combination - Term Extension & Payment Delay | % of Total Class of Financing Receivable | |||||||||||||||||||||||||||
Small Business Banking | $ | — | $ | — | $ | 3,436 | $ | 361 | 0.08 | % | ||||||||||||||||||||||
Specialty Lending | — | 244 | — | 4,183 | 0.26 | |||||||||||||||||||||||||||
Energy & Infrastructure | — | 13,517 | — | — | 2.14 | |||||||||||||||||||||||||||
Total | $ | — | $ | 13,761 | $ | 3,436 | $ | 4,544 | 2.48 | % |
Current | 30-89 Days Past Due | 90 Days or More Past Due | Total Past Due | |||||||||||||||||||||||
Small Business Banking | $ | 3,797 | $ | — | $ | — | $ | — | ||||||||||||||||||
Specialty Lending | 4,427 | — | — | — | ||||||||||||||||||||||
Energy & Infrastructure | 13,517 | — | — | — | ||||||||||||||||||||||
Total | $ | 21,741 | $ | — | $ | — | $ | — |
Three Months Ended June 30, 2023 | |||||||||||
Weighted Average Interest Rate Reduction | Weighted Average Term Extension (in Months) | ||||||||||
Small Business Banking | — | % | 161 | ||||||||
Specialty Lending | — | 72 | |||||||||
Six Months Ended June 30, 2023 | |||||||||||
Weighted Average Interest Rate Reduction | Weighted Average Term Extension (in Months) | ||||||||||
Small Business Banking | 1.45 | % | 161 | ||||||||
Specialty Lending | — | 72 | |||||||||
Energy & Infrastructure | — | 12 | |||||||||
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Only | Payment Deferral | Extend Amortization | Other | Total TDRs(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | Number of Loans | Recorded investment at period end | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial & Industrial | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Specialty Lending | — | $ | — | 1 | $ | 734 | — | $ | — | — | $ | — | 1 | $ | 734 | ||||||||||||||||||||||||||||||||||||||||||||
Total | — | — | 1 | 734 | — | — | — | — | 1 | 734 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total | — | $ | — | 1 | $ | 734 | — | $ | — | — | $ | — | 1 | $ | 734 |
|
| Three Months Ended June 30, 2022 |
| |||||||||||||||||||||||||||||||||||||
|
| Interest Only |
|
| Payment Deferral |
|
| Extend Amortization |
|
| Other |
|
| Total TDRs(1) |
| |||||||||||||||||||||||||
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
| ||||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Lending |
|
| — |
|
| $ | — |
|
|
| 1 |
|
| $ | 734 |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| 1 |
|
| $ | 734 |
|
Total |
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 734 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 734 |
|
Total |
|
| — |
|
| $ | — |
|
|
| 1 |
|
| $ | 734 |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| 1 |
|
| $ | 734 |
|
(1) |
|
|
| Six Months Ended June 30, 2022 |
| |||||||||||||||||||||||||||||||||||||||
|
| Interest Only |
|
| Payment Deferral |
|
|
|
| Extend Amortization |
|
| Other(1) |
|
| Total TDRs(2) |
| |||||||||||||||||||||||||
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
|
|
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
| ||||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| — |
|
| $ | — |
|
|
| 3 |
|
| $ | 3,119 |
|
|
|
|
| 2 |
|
| $ | 1,528 |
|
|
| 1 |
|
| $ | 527 |
|
|
| 6 |
|
| $ | 5,174 |
|
Specialty Lending |
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 734 |
|
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 734 |
|
Total |
|
| — |
|
|
| — |
|
|
| 4 |
|
|
| 3,853 |
|
|
|
|
| 2 |
|
|
| 1,528 |
|
|
| 1 |
|
|
| 527 |
|
|
| 7 |
|
|
| 5,908 |
|
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
| 1 |
|
|
| 4,847 |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 4,847 |
|
Total |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
| 1 |
|
|
| 4,847 |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| 4,847 |
|
Total |
|
| — |
|
| $ | — |
|
|
| 4 |
|
| $ | 3,853 |
|
|
|
|
| 3 |
|
| $ | 6,375 |
|
|
| 1 |
|
| $ | 527 |
|
|
| 8 |
|
| $ | 10,755 |
|
|
|
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
|
|
|
| Three Months Ended June 30, 2021 |
| |||||||||||||||||||||||||||||||||||||
|
| Interest Only |
|
| Payment Deferral |
|
| Extend Amortization |
|
| Other |
|
| Total TDRs(1) |
| |||||||||||||||||||||||||
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
| ||||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| — |
|
| $ | — |
|
|
| 2 |
|
| $ | 2,887 |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| 2 |
|
| $ | 2,887 |
|
Total |
|
| — |
|
|
| — |
|
|
| 2 |
|
|
| 2,887 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2 |
|
|
| 2,887 |
|
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| — |
|
|
| — |
|
|
| 3 |
|
|
| 3,732 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3 |
|
|
| 3,732 |
|
Total |
|
| — |
|
|
| — |
|
|
| 3 |
|
|
| 3,732 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3 |
|
|
| 3,732 |
|
Total |
|
| — |
|
| $ | — |
|
|
| 5 |
|
| $ | 6,619 |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| 5 |
|
| $ | 6,619 |
|
|
|
|
| Six Months Ended June 30, 2021 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Interest Only |
|
|
|
| Payment Deferral |
|
| Extend Amortization |
|
|
|
| Other(1) |
|
|
|
| Total TDRs(2) |
| |||||||||||||||||||||||||||||||||
|
| Number of Loans |
|
|
|
| Recorded investment at period end |
|
|
|
| Number of Loans |
|
|
|
| Recorded investment at period end |
|
| Number of Loans |
|
| Recorded investment at period end |
|
|
|
| Number of Loans |
|
|
|
| Recorded investment at period end |
|
|
|
| Number of Loans |
|
|
|
| Recorded investment at period end |
| ||||||||||
Commercial & Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| — |
|
|
|
| $ | — |
|
|
|
|
| 3 |
|
|
|
| $ | 6,097 |
|
|
| — |
|
| $ | — |
|
|
|
|
| — |
|
|
|
| $ | — |
|
|
|
|
| 3 |
|
|
|
| $ | 6,097 |
|
Total |
|
| — |
|
|
|
|
| — |
|
|
|
|
| 3 |
|
|
|
|
| 6,097 |
|
|
| — |
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 3 |
|
|
|
|
| 6,097 |
|
Commercial Real Estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Banking |
|
| — |
|
|
|
|
| — |
|
|
|
|
| 4 |
|
|
|
|
| 3,782 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1 |
|
|
|
|
| 3,124 |
|
|
|
|
| 5 |
|
|
|
|
| 6,906 |
|
Total |
|
| — |
|
|
|
|
| — |
|
|
|
|
| 4 |
|
|
|
|
| 3,782 |
|
|
| — |
|
|
| — |
|
|
|
|
| 1 |
|
|
|
|
| 3,124 |
|
|
|
|
| 5 |
|
|
|
|
| 6,906 |
|
Total |
|
| — |
|
|
|
| $ | — |
|
|
|
|
| 7 |
|
|
|
| $ | 9,879 |
|
|
| — |
|
| $ | — |
|
|
|
|
| 1 |
|
|
|
| $ | 3,124 |
|
|
|
|
| 8 |
|
|
|
| $ | 13,003 |
|
(1) Includes one small business banking loan with extend amortization and a rate concession TDR.
(2) | Excludes loans accounted for under the fair value option. See Note 9. Fair Value of Financial Instruments for additional information. |
NaN TDRs that were modified within the twelve months ended June 30, 2021 subsequently defaulted during the three months ended June 30, 2021. NaN TDR that was modified within the twelve months ended June 30, 2021 subsequently defaulted during the six months ended June 30, 2021. The TDR that defaulted was a Commercial Real Estate Small Business Banking loan that had previously been modified for a payment deferral and had a recorded investment of $50 thousand at June 30, 2021.
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
|
| June 30, 2022 |
|
| December 31, 2021 |
| June 30, 2023 | December 31, 2022 | |||||||||||
Gross direct finance lease payments receivable |
| $ | 5,490 |
|
| $ | 7,333 |
| Gross direct finance lease payments receivable | $ | 3,196 | $ | 4,284 | ||||||
Less – unearned interest |
|
| (662 | ) |
|
| (998 | ) | Less – unearned interest | (336) | (479) | ||||||||
Net investment in direct financing leases |
| $ | 4,828 |
|
| $ | 6,335 |
| Net investment in direct financing leases | $ | 2,860 | $ | 3,805 |
As of June 30, 2022 |
| Amount |
| |||||||||
2022 |
| $ | 517 |
| ||||||||
As of June 30, 2023 | As of June 30, 2023 | Amount | ||||||||||
2023 |
|
| 2,182 |
| 2023 | $ | 811 | |||||
2024 |
|
| 1,570 |
| 2024 | 1,288 | ||||||
2025 |
|
| 1,104 |
| 2025 | 980 | ||||||
2026 |
|
| 117 |
| 2026 | 117 | ||||||
Total |
| $ | 5,490 |
| Total | $ | 3,196 |
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
As of June 30, 20222023 and December 31, 2021,2022, the Company had a net investment of $119.1$109.4 million and $123.9$114.2 million, respectively, in assets included in premises and equipment that are subject to operating leases. Of the net investment, the gross balance of the assets was $163.4 million as of June 30, 20222023 and December 31, 20212022 and accumulated depreciation was $44.3$54.0 million and $39.5$49.2 million as of June 30, 20222023 and December 31, 2021,2022, respectively. Depreciation expense recognized on these assets was $2.4 million for the three months ended June 30, 20222023 and 2021 was $2.4 million.2022. Depreciation expense recognized on these assets was $4.8 million for the six months ended June 30, 20222023 and 2021 was $4.8 million and $4.9 million, respectively.
2022.
As of June 30, 2022 |
| Amount |
| |||||||||
2022 |
| $ | 4,001 |
| ||||||||
As of June 30, 2023 | As of June 30, 2023 | Amount | ||||||||||
2023 |
|
| 9,075 |
| 2023 | $ | 3,918 | |||||
2024 |
|
| 8,808 |
| 2024 | 8,808 | ||||||
2025 |
|
| 8,935 |
| 2025 | 8,935 | ||||||
2026 |
|
| 8,923 |
| 2026 | 8,923 | ||||||
2027 | 2027 | 8,690 | ||||||||||
Thereafter |
|
| 22,253 |
| Thereafter | 13,562 | ||||||
Total |
| $ | 61,995 |
| Total | $ | 52,836 |
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Balance at beginning of period |
| $ | 36,286 |
|
| $ | 37,744 |
|
| $ | 33,574 |
|
| $ | 33,918 |
| Balance at beginning of period | $ | 29,357 | $ | 36,286 | $ | 26,323 | $ | 33,574 | ||||||||||||||
Additions, net |
|
| 1,043 |
|
|
| 2,403 |
|
|
| 5,324 |
|
|
| 4,736 |
| Additions, net | 4,516 | 1,043 | 7,194 | 5,324 | ||||||||||||||||||
Fair value changes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value changes: | ||||||||||||||||||||||
Due to changes in valuation inputs or assumptions |
|
| (5,436 | ) |
|
| (59 | ) |
|
| (4,048 | ) |
|
| 2,887 |
| Due to changes in valuation inputs or assumptions | (501) | (5,436) | 2,123 | (4,048) | ||||||||||||||||||
Decay due to increases in principal paydowns or runoff |
|
| (3,232 | ) |
|
| (3,122 | ) |
|
| (6,189 | ) |
|
| (4,575 | ) | Decay due to increases in principal paydowns or runoff | (2,330) | (3,232) | (4,598) | (6,189) | ||||||||||||||||||
Balance at end of period |
| $ | 28,661 |
|
| $ | 36,966 |
|
| $ | 28,661 |
|
| $ | 36,966 |
| Balance at end of period | $ | 31,042 | $ | 28,661 | $ | 31,042 | $ | 28,661 |
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
|
| June 30, 2022 |
|
| December 31, 2021 |
| ||
Borrowings |
|
|
|
|
|
|
|
|
In March 2021, the Company entered into a 60-month term loan agreement of $50.0 million with a third party correspondent bank. The loan accrues interest at a fixed rate of 2.95% with a monthly payment sufficient to fully amortize the loan, with all remaining unpaid principal and interest due at maturity on March 30, 2026. The Company paid the Lender a non-refundable $325 thousand loan origination fee upon signing of the Note that is presented as a direct deduction from the carrying amount of the loan and will be amortized into interest expense over the life of the loan. |
| $ | 38,006 |
|
| $ | 42,734 |
|
In April 2020, the Company entered into the Federal Reserve Bank's Paycheck Protection Program Liquidity Facility ("PPPLF"). Under the PPPLF, advances must be secured by pledges of loans to small businesses originated by the Company under the U.S. Small Business Administration's 7(a) loan program titled the Paycheck Protection Program. The PPPLF accrues interest at NaN basis points and matures at various dates equal to the maturity date of the PPPLF collateral pledged to secure the advance, ranging from February 9, 2026 to April 14, 2026, and will be accelerated on and to the extent of any 7(a) loan forgiveness reimbursement by the SBA for any PPPLF collateral or the date of purchase by the SBA from the borrower of any PPPLF collateral. On the maturity date of each advance, the Company shall repay the advance plus accrued interest. This $48.2 million borrowing was fully advanced at June 30, 2022. |
|
| 48,201 |
|
|
| 267,550 |
|
In September 2020, the Company renewed a $50.0 million revolving line of credit originally issued in 2017 with a third party correspondent bank. Subsequently on October 20, 2021, the Company renewed and increased the revolving line of credit from $50.0 million to $100.0 million and increased the term from 12 months to 36 months. The line of credit is unsecured and accrues interest at 30-day SOFR plus 1.25%, with an interest rate cap of 4.25% and an interest rate floor of 2.75%. Payments are interest only with all principal and accrued interest due at maturity on October 10, 2024. The terms of this loan require the Company to maintain minimum capital and debt service coverage ratios. The Company paid the Lender a non-refundable $750 thousand loan origination fee upon signing of the Note that will be amortized into interest expense over the life of the loan. The Company made an advance of $8.0 million on December 20, 2021 and $12.0 million on March 16, 2022. The Company paid down this balance in full on May 20, 2022 and there is $100.0 million of available credit remaining at June 30, 2022. |
|
| — |
|
|
| 8,000 |
|
Other short term debt (1) |
|
| 2 |
|
|
| 5 |
|
Total borrowings |
| $ | 86,209 |
|
| $ | 318,289 |
|
June 30, 2023 | December 31, 2022 | |||||||||||||
Borrowings | ||||||||||||||
In March 2021, the Company entered into a 60-month term loan agreement of $50.0 million with a third party correspondent bank. The loan accrues interest at a fixed rate of 2.95% with a monthly payment sufficient to fully amortize the loan, with all remaining unpaid principal and interest due at maturity on March 30, 2026. The Company paid the Lender a non-refundable $325 thousand loan origination fee upon signing of the Note that is presented as a direct deduction from the carrying amount of the loan and will be amortized into interest expense over the life of the loan. | $ | 28,317 | $ | 33,203 | ||||||||||
On December 30, 2022, the Company made an advance of $50.0 million on an overnight Fed Funds line of credit that is unsecured with a variable interest rate of 4.65%. The Company paid down the balance in full on January 3, 2023 and there is $100.0 million of available credit remaining at June 30, 2023. | — | 50,000 | ||||||||||||
Total borrowings | $ | 28,317 | $ | 83,203 |
|
|
The Company may purchase federal fundsAs of June 30, 2023 the Company’s unused borrowing capacity was $3.77 billion, remaining consistent with March 31, 2023. Unused borrowing capacity consists of access through unsecured federal fundsthe Federal Reserve Bank's discount window, available lines of credit with various correspondent banks, which totaled $167.5 million of available funding as of June 30, 2022 and December 31, 2021. These lines are intended for short-term borrowings and are subject to restrictions limiting the frequency and terms of advances. These lines of credit are payable on demand and bear interest based upon the daily federal funds rate. The Company had 0 outstanding balances on the lines of credit as of June 30, 2022 and December 31, 2021.
The Company has entered into a repurchase agreement with a third party for an amount up to $5.0 million as of June 30, 2022 and December 31, 2021. At the time the Company enters into a transaction with the third party, the Company must transfer securities or other assets against the funds received. The terms of the agreement are set at market conditions at the time the Company enters into such transaction. The Company had 0 outstanding balance on the repurchase agreement as of June 30, 2022 and December 31, 2021.
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
On June 18, 2018, the Company entered into a borrowing agreement with the Federal Home Loan Bank and other correspondent banks as well as access to a repurchase agreement. As of Atlanta. These borrowingsDecember 31, 2022 the Company's unused borrowing capacity was $3.55 billion based upon securities and loans identified as available for collateral and $4.88 billion based principally upon the stated available limits from sources mentioned above. New borrowing capacity added in the first quarter of 2023 was from the Bank Term Funding Program (“BTFP”). Under the BTFP, advances must be secured withby pledging eligible collateral approvedsecurities owned by the Federal Home Loan BankCompany on March 12, 2023. BTFP advances can be requested for a term of Atlanta. At June 30, 2022 and December 31, 2021,up to one year at a fixed market rate until the Company had approximately $2.13 billion and $2.02 billion, respectively, in borrowing capacity available under these agreements. There are no advances outstanding and no collateral pledged as of June 30, 2022 and December 31, 2021.
The Company may borrow funds through the Federal Reserve Bank’s discount window. These borrowings are secured by a blanket floating lien on qualifying loans with a balance of $2.63 billion and $2.44 billion as of June 30, 2022 and December 31, 2021, respectively. At June 30, 2022 and December 31, 2021, the Company had approximately $2.22 billion and $2.04 billion, respectively, in borrowing capacity available under these arrangements with 0 outstanding balance as of June 30, 2022 and December 31, 2021.
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
Equity Warrant Assets |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| Equity Warrant Assets | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Balance at beginning of period |
| $ | 2,328 |
|
| $ | 1,314 |
|
| $ | 1,672 |
|
| $ | 908 |
| Balance at beginning of period | $ | 2,187 | $ | 2,328 | $ | 2,210 | $ | 1,672 | |||||||||||||||||
Issuances |
|
| 48 |
|
|
| 16 |
|
|
| 704 |
|
|
| 37 |
| ||||||||||||||||||||||||||
Net gains on derivative instruments |
|
| 46 |
|
|
| 385 |
|
|
| 46 |
|
|
| 770 |
| ||||||||||||||||||||||||||
New equity warrant assets | New equity warrant assets | 91 | 48 | 244 | 704 | |||||||||||||||||||||||||||||||||||||
Changes in fair value, net | Changes in fair value, net | 194 | 46 | 18 | 46 | |||||||||||||||||||||||||||||||||||||
Settlements |
|
| — |
|
|
| (135 | ) |
|
| — |
|
|
| (135 | ) | Settlements | (221) | — | (221) | — | |||||||||||||||||||||
Balance at end of period |
| $ | 2,422 |
|
| $ | 1,580 |
|
| $ | 2,422 |
|
| $ | 1,580 |
| Balance at end of period | $ | 2,251 | $ | 2,422 | $ | 2,251 | $ | 2,422 |
June 30, 2022 |
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||
Investment securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investment securities available-for-sale | |||||||||||||||||||||||||
US government agencies |
| $ | 17,387 |
|
| $ | — |
|
| $ | 17,387 |
|
| $ | — |
| US government agencies | $ | 30,496 | $ | — | $ | 30,496 | $ | — | |||||||||||||||||
Mortgage-backed securities |
|
| 904,926 |
|
|
| — |
|
|
| 904,926 |
|
|
| — |
| Mortgage-backed securities | 1,099,137 | — | 1,099,137 | — | |||||||||||||||||||||
Municipal bonds(1) |
|
| 3,165 |
|
|
| — |
|
|
| 3,072 |
|
|
| 93 |
| Municipal bonds(1) | 3,035 | — | 2,951 | 84 | |||||||||||||||||||||
Other debt securities(2) |
|
| 2,490 |
|
|
| — |
|
|
| 2,000 |
|
|
| 490 |
| Other debt securities(2) | 478 | — | — | 478 | |||||||||||||||||||||
Loans held for sale |
|
| 23,452 |
|
|
| — |
|
|
| — |
|
|
| 23,452 |
| ||||||||||||||||||||||||||
Loans held for investment |
|
| 530,644 |
|
|
| — |
|
|
| — |
|
|
| 530,644 |
| Loans held for investment | 441,781 | — | — | 441,781 | |||||||||||||||||||||
Servicing assets(3) |
|
| 28,661 |
|
|
| — |
|
|
| — |
|
|
| 28,661 |
| Servicing assets(3) | 31,042 | — | — | 31,042 | |||||||||||||||||||||
Mutual fund |
|
| 2,321 |
|
|
| — |
|
|
| 2,321 |
|
|
| — |
| Mutual fund | 1,652 | — | 1,652 | — | |||||||||||||||||||||
Equity warrant assets |
|
| 2,422 |
|
|
| — |
|
|
| — |
|
|
| 2,422 |
| Equity warrant assets | 2,251 | — | — | 2,251 | |||||||||||||||||||||
Total assets at fair value |
| $ | 1,515,468 |
|
| $ | — |
|
| $ | 929,706 |
|
| $ | 585,762 |
| Total assets at fair value | $ | 1,609,872 | $ | — | $ | 1,134,236 | $ | 475,636 |
December 31, 2022 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Investment securities available-for-sale | ||||||||||||||||||||||||||
US government agencies | $ | 15,668 | $ | — | $ | 15,668 | $ | — | ||||||||||||||||||
Mortgage-backed securities | 995,574 | — | 995,574 | — | ||||||||||||||||||||||
Municipal bonds(1) | 2,977 | — | 2,884 | 93 | ||||||||||||||||||||||
Other debt securities | 500 | — | 500 | — | ||||||||||||||||||||||
Loans held for investment | 494,458 | — | — | 494,458 | ||||||||||||||||||||||
Servicing assets(3) | 26,323 | — | — | 26,323 | ||||||||||||||||||||||
Mutual fund | 1,656 | — | 1,656 | — | ||||||||||||||||||||||
Equity warrant assets | 2,210 | — | — | 2,210 | ||||||||||||||||||||||
Total assets at fair value | $ | 1,539,366 | $ | — | $ | 1,016,282 | $ | 523,084 |
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
December 31, 2021 |
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||
Investment securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US government agencies |
| $ | 10,637 |
|
| $ | 0 |
|
| $ | 10,637 |
|
| $ | 0 |
|
Mortgage-backed securities |
|
| 889,339 |
|
|
| 0 |
|
|
| 889,339 |
|
|
| 0 |
|
Municipal bonds(1) |
|
| 3,576 |
|
|
| 0 |
|
|
| 3,480 |
|
|
| 96 |
|
Other debt securities(2) |
|
| 2,500 |
|
|
| — |
|
|
| 2,500 |
|
|
| — |
|
Loans held for sale |
|
| 25,310 |
|
|
| — |
|
|
| — |
|
|
| 25,310 |
|
Loans held for investment |
|
| 645,201 |
|
|
| — |
|
|
| — |
|
|
| 645,201 |
|
Servicing assets(3) |
|
| 33,574 |
|
|
| 0 |
|
|
| 0 |
|
|
| 33,574 |
|
Mutual fund |
|
| 2,379 |
|
|
| 0 |
|
|
| 2,379 |
|
|
| 0 |
|
Equity warrant assets |
|
| 1,672 |
|
|
| 0 |
|
|
| 0 |
|
|
| 1,672 |
|
Total assets at fair value |
| $ | 1,614,188 |
|
| $ | 0 |
|
| $ | 908,335 |
|
| $ | 705,853 |
|
(1) | During the three and six months ended June 30, 2023, the Company recorded a level 3 fair value adjustment gain of $1 thousand and loss of $9 thousand, respectively. During the three and six months ended June 30, 2022, the Company recorded a level 3 fair value adjustment loss of $1 thousand and $3 thousand, respectively. |
(2) | During the three and six months ended June 30, |
| loss of $2 thousand and $22 thousand, respectively. During the three and six months ended June 30, 2022, the Company recorded a level 3 fair value adjustment loss of $10 thousand. |
(3) | See Note 7 for a rollforward of recurring Level 3 fair values for servicing assets. |
The
such.
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The following tables provide more information about the fair value carrying amount and the unpaid principal outstanding of loans accounted for under the fair value option at June 30, 20222023 and December 31, 2021.
|
| June 30, 2022 |
| June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Total Loans |
|
| Nonaccruals |
|
| 90 Days or More Past Due |
| Total Loans | Nonaccruals | 90 Days or More Past Due | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Fair Value Carrying Amount |
|
| Unpaid Principal Balance |
|
| Difference |
|
| Fair Value Carrying Amount |
|
| Unpaid Principal Balance |
|
| Difference |
|
| Fair Value Carrying Amount |
|
| Unpaid Principal Balance |
|
| Difference |
| Fair Value Carrying Amount | Unpaid Principal Balance | Difference | Fair Value Carrying Amount | Unpaid Principal Balance | Difference | Fair Value Carrying Amount | Unpaid Principal Balance | Difference | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Option Elections |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value Option Elections | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale |
| $ | 23,452 |
|
| $ | 25,200 |
|
| $ | (1,748 | ) |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans held for investment |
|
| 530,644 |
|
|
| 553,437 |
|
|
| (22,793 | ) |
|
| 31,510 |
|
|
| 34,101 |
|
|
| (2,591 | ) |
|
| 16,733 |
|
|
| 18,282 |
|
|
| (1,549 | ) | Loans held for investment | $ | 441,781 | $ | 462,827 | $ | (21,046) | $ | 53,716 | $ | 57,561 | $ | (3,845) | $ | 35,070 | $ | 37,099 | $ | (2,030) | ||||||||||||||||||||||||||||||||||
|
| $ | 554,096 |
|
| $ | 578,637 |
|
| $ | (24,541 | ) |
| $ | 31,510 |
|
| $ | 34,101 |
|
| $ | (2,591 | ) |
| $ | 16,733 |
|
| $ | 18,282 |
|
| $ | (1,549 | ) | $ | 441,781 | $ | 462,827 | $ | (21,046) | $ | 53,716 | $ | 57,561 | $ | (3,845) | $ | 35,070 | $ | 37,099 | $ | (2,030) |
|
| December 31, 2021 |
| December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Total Loans |
|
| Nonaccruals |
|
| 90 Days or More Past Due |
| Total Loans | Nonaccruals | 90 Days or More Past Due | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Fair Value Carrying Amount |
|
| Unpaid Principal Balance |
|
| Difference |
|
| Fair Value Carrying Amount |
|
| Unpaid Principal Balance |
|
| Difference |
|
| Fair Value Carrying Amount |
|
| Unpaid Principal Balance |
|
| Difference |
| Fair Value Carrying Amount | Unpaid Principal Balance | Difference | Fair Value Carrying Amount | Unpaid Principal Balance | Difference | Fair Value Carrying Amount | Unpaid Principal Balance | Difference | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Option Elections |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value Option Elections | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans held for sale |
| $ | 25,310 |
|
| $ | 26,831 |
|
| $ | (1,521 | ) |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans held for investment |
|
| 645,201 |
|
|
| 666,066 |
|
|
| (20,865 | ) |
|
| 38,262 |
|
|
| 42,841 |
|
|
| (4,579 | ) |
|
| 24,057 |
|
|
| 25,633 |
|
|
| (1,576 | ) | Loans held for investment | $ | 494,458 | $ | 513,219 | $ | (18,761) | $ | 44,890 | $ | 46,993 | $ | (2,103) | $ | 24,663 | $ | 26,321 | $ | (1,658) | ||||||||||||||||||||||||||||||||||
|
| $ | 670,511 |
|
| $ | 692,897 |
|
| $ | (22,386 | ) |
| $ | 38,262 |
|
| $ | 42,841 |
|
| $ | (4,579 | ) |
| $ | 24,057 |
|
| $ | 25,633 |
|
| $ | (1,576 | ) | $ | 494,458 | $ | 513,219 | $ | (18,761) | $ | 44,890 | $ | 46,993 | $ | (2,103) | $ | 24,663 | $ | 26,321 | $ | (1,658) |
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
Gains (Losses) on Loans Accounted for under the Fair Value Option |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| Gains (Losses) on Loans Accounted for under the Fair Value Option | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Loans held for sale |
| $ | (56 | ) |
| $ | 428 |
|
| $ | (226 | ) |
| $ | 464 |
| Loans held for sale | $ | — | $ | (56) | $ | — | $ | (226) | ||||||||||||||
Loans held for investment |
|
| (4,405 | ) |
|
| 707 |
|
|
| (3,719 | ) |
|
| 4,889 |
| Loans held for investment | 1,728 | (4,405) | (2,801) | (3,719) | ||||||||||||||||||
|
| $ | (4,461 | ) |
| $ | 1,135 |
|
| $ | (3,945 | ) |
| $ | 5,353 |
| $ | 1,728 | $ | (4,461) | $ | (2,801) | $ | (3,945) |
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
Loans held for sale |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| Loans held for sale | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Balance at beginning of period |
| $ | 25,056 |
|
| $ | 35,936 |
|
| $ | 25,310 |
|
| $ | 36,111 |
| Balance at beginning of period | $ | — | $ | 25,056 | $ | — | $ | 25,310 | ||||||||||||||
Repurchases |
|
| — |
|
|
| — |
|
|
| 65 |
|
|
| — |
| Repurchases | — | — | — | 65 | ||||||||||||||||||
Fair value changes |
|
| (56 | ) |
|
| 428 |
|
|
| (226 | ) |
|
| 464 |
| Fair value changes | — | (56) | — | (226) | ||||||||||||||||||
Sales |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| |||||||||||||||||||||||
Settlements |
|
| (1,548 | ) |
|
| (7,316 | ) |
|
| (1,697 | ) |
|
| (7,527 | ) | Settlements | — | (1,548) | — | (1,697) | ||||||||||||||||||
Balance at end of period |
| $ | 23,452 |
|
| $ | 29,048 |
|
| $ | 23,452 |
|
| $ | 29,048 |
| Balance at end of period | $ | — | $ | 23,452 | $ | — | $ | 23,452 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Loans held for investment | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Balance at beginning of period | $ | 466,950 | $ | 600,571 | $ | 494,458 | $ | 645,201 | |||||||||||||||
Repurchases | 4,063 | 1,380 | 15,897 | 2,905 | |||||||||||||||||||
Fair value changes | 1,728 | (4,405) | (2,801) | (3,719) | |||||||||||||||||||
Settlements | (30,960) | (66,902) | (65,773) | (113,743) | |||||||||||||||||||
Balance at end of period | $ | 441,781 | $ | 530,644 | $ | 441,781 | $ | 530,644 |
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
Loans held for investment |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Balance at beginning of period |
| $ | 600,571 |
|
| $ | 790,797 |
|
| $ | 645,201 |
|
| $ | 815,374 |
|
Repurchases |
|
| 1,380 |
|
|
| 16,215 |
|
|
| 2,905 |
|
|
| 21,785 |
|
Fair value changes |
|
| (4,405 | ) |
|
| 707 |
|
|
| (3,719 | ) |
|
| 4,889 |
|
Settlements |
|
| (66,902 | ) |
|
| (64,493 | ) |
|
| (113,743 | ) |
|
| (98,822 | ) |
Balance at end of period |
| $ | 530,644 |
|
| $ | 743,226 |
|
| $ | 530,644 |
|
| $ | 743,226 |
|
Non-Recurring Fair Value
June 30, 2022 |
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||
Collateral-dependent loans |
| $ | 989 |
|
| $ | — |
|
| $ | — |
|
| $ | 989 |
| Collateral-dependent loans | $ | 7,085 | $ | — | $ | — | $ | 7,085 | |||||||||||||||||
Foreclosed assets |
|
| 191 |
|
|
| — |
|
|
| — |
|
|
| 191 |
| ||||||||||||||||||||||||||
Total assets at fair value |
| $ | 1,180 |
|
| $ | — |
|
| $ | — |
|
| $ | 1,180 |
| Total assets at fair value | $ | 7,085 | $ | — | $ | — | $ | 7,085 |
December 31, 2021 |
| Total |
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| ||||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2022 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||
Collateral-dependent loans |
| $ | 1,567 |
|
| $ | — |
|
| $ | — |
|
| $ | 1,567 |
| Collateral-dependent loans | $ | 4,840 | $ | — | $ | — | $ | 4,840 | |||||||||||||||||
Foreclosed assets |
|
| 620 |
|
|
| — |
|
|
| — |
|
|
| 620 |
| ||||||||||||||||||||||||||
Total assets at fair value |
| $ | 2,187 |
|
| $ | — |
|
| $ | — |
|
| $ | 2,187 |
| Total assets at fair value | $ | 4,840 | $ | — | $ | — | $ | 4,840 |
June 30, 2022
Level 3 Assets with Significant Unobservable Inputs |
| Fair Value |
|
| Valuation Technique |
| Significant Unobservable Inputs |
| Range |
| ||
Recurring fair value |
|
|
|
|
|
|
|
|
|
|
|
|
Municipal bond |
| $ | 93 |
|
| Discounted expected cash flows |
| Discount rate Prepayment speed |
| 5.6% 5.0% |
| |
Other debt security |
| $ | 490 |
|
| Discounted expected cash flows |
| Discount rate |
| 6.3% |
| |
Loans held for sale |
| $ | 23,452 |
|
| Discounted expected cash flows |
| Discount rate Prepayment speed |
| 14.5% to 20.1% WAVG 17.5% |
| |
Loans held for investment |
| $ | 530,644 |
|
| Discounted expected cash flows Discounted appraisals |
| Loss rate
Discount rate Prepayment speed Appraisal adjustments |
| 0% to 70.6% (WAVG 1.6%) 14.5% to 20.1% WAVG 17.5% 10.0% to 63.0% |
| |
Equity warrant assets |
| $ | 2,422 |
|
| Black-Scholes option pricing model |
| Volatility Risk-free interest rate Marketability discount Remaining life |
| 25.9% to 84.2% 3.0% 20.0% 3 - 10 years |
| |
Non-recurring fair value |
|
|
|
|
|
|
|
|
|
|
|
|
Collateral-dependent loans |
| $ | 989 |
|
| Discounted appraisals |
| Appraisal adjustments (1) |
| 10.0% to 99.0% |
| |
Foreclosed assets |
| $ | 191 |
|
| Discounted appraisals |
| Appraisal adjustments (1) |
|
| 10.0 | % |
December 31, 2021
Level 3 Assets with Significant Unobservable Inputs |
| Fair Value |
|
| Valuation Technique |
| Significant Unobservable Inputs |
| Range | |
Recurring fair value |
|
|
|
|
|
|
|
|
|
|
Municipal bond |
| $ | 96 |
|
| Discounted expected cash flows |
| Discount rate Prepayment speed |
| 4.8% 5.0% |
Loans held for sale |
| $ | 25,310 |
|
| Discounted expected cash flows |
| Discount rate Prepayment speed |
| 6.2% to 21.9% WAVG 17.4% |
Loans held for investment |
| $ | 645,201 |
|
| Discounted expected cash flows Discounted appraisals |
| Loss rate
Discount rate Prepayment speed Appraisal adjustments |
| 0.0% to 70.2% (WAVG 1.5%) 6.2% to 21.9% WAVG 17.4% 10.0% to 85.0% |
Equity warrant assets |
| $ | 1,672 |
|
| Black-Scholes option pricing model |
| Volatility Risk-free interest rate Marketability discount Remaining life |
| 26.2% to 88.2% 1.3% to 1.5% 20.0% 4 - 10 years |
Non-recurring fair value |
|
|
|
|
|
|
|
|
|
|
Collateral-dependent loans |
| $ | 1,567 |
|
| Discounted appraisals |
| Appraisal adjustments (1) |
| 10.0% to 99.0% |
Foreclosed assets |
| $ | 620 |
|
| Discounted appraisals |
| Appraisal adjustments (1) |
| 9.0% to 10.0% |
|
|
June 30, 2023 | ||||||||||||||||||||||||||||||||
Level 3 Assets with Significant Unobservable Inputs | Fair Value | Valuation Technique | Significant Unobservable Inputs | Range | Weighted Average(1) | |||||||||||||||||||||||||||
Recurring fair value | ||||||||||||||||||||||||||||||||
Municipal bond | $ | 84 | Discounted expected cash flows | Discount rate | 6.7 | % | N/A | |||||||||||||||||||||||||
Prepayment speed | 5.0 | % | N/A | |||||||||||||||||||||||||||||
Other debt security | $ | 478 | Discounted expected cash flows | Discount rate | 7.1 | % | N/A | |||||||||||||||||||||||||
Loans held for investment | $ | 441,781 | Discounted expected cash flows | Loss rate | 0.0 % - 65.8 % | 2.1 | % | |||||||||||||||||||||||||
Discount rate | 6.3 % - 10.2 % | 8.9 | % | |||||||||||||||||||||||||||||
Prepayment speed | 12.6 | % | 12.6 | % | ||||||||||||||||||||||||||||
Equity warrant assets | $ | 2,251 | Black-Scholes option pricing model | Volatility | 26.8 % - 90.0 % | 36.3 | % | |||||||||||||||||||||||||
Risk-free interest rate | 3.7 % - 3.9 % | 3.7 | % | |||||||||||||||||||||||||||||
Marketability discount | 20.0 | % | 20.0 | % | ||||||||||||||||||||||||||||
Remaining life | 3 - 10 years | 6.8 years | ||||||||||||||||||||||||||||||
Non-recurring fair value | ||||||||||||||||||||||||||||||||
Collateral-dependent loans | $ | 7,085 | Discounted appraisals | Appraisal adjustments (2) | 10.0 % - 100.0 % | 37.7 | % | |||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Level 3 Assets with Significant Unobservable Inputs | Fair Value | Valuation Technique | Significant Unobservable Inputs | Range | Weighted Average(1) | |||||||||||||||||||||||||||
Recurring fair value | ||||||||||||||||||||||||||||||||
Municipal bond | $ | 93 | Discounted expected cash flows | Discount rate | 6.0 | % | N/A | |||||||||||||||||||||||||
Prepayment speed | 5.0 | % | N/A | |||||||||||||||||||||||||||||
Loans held for investment | $ | 494,458 | Discounted expected cash flows | Loss rate | 0.0 % - 79.3 % | 1.9 | % | |||||||||||||||||||||||||
Discount rate | 7.5 % - 11.2 % | 10.0 | % | |||||||||||||||||||||||||||||
Prepayment speed | 16.5 | % | 16.5 | % | ||||||||||||||||||||||||||||
Discounted appraisals | Appraisal adjustments | 0.0 % - 77.3 % | 28.6 | % | ||||||||||||||||||||||||||||
Equity warrant assets | $ | 2,210 | Black-Scholes option pricing model | Volatility | 26.5 % - 90.0 % | 34.2 | % | |||||||||||||||||||||||||
Risk-free interest rate | 3.9 % - 4.0 % | 3.9 | % | |||||||||||||||||||||||||||||
Marketability discount | 20.0 | % | 20.0 | % | ||||||||||||||||||||||||||||
Remaining life | 3 - 10 years | 7.7 years | ||||||||||||||||||||||||||||||
Non-recurring fair value | ||||||||||||||||||||||||||||||||
Collateral-dependent loans | $ | 4,840 | Discounted appraisals | Appraisal adjustments (2) | 10.0 % - 66.5 % | 34.2 | % |
June 30, 2022 |
| Carrying Amount |
|
| Quoted Price In Active Markets for Identical Assets /Liabilities (Level 1) |
|
| Significant Other Observable Inputs (Level 2) |
|
| Significant Unobservable Inputs (Level 3) |
|
| Total Fair Value |
| |||||||||||||||||||||||||||||||||||||
June 30, 2023 | June 30, 2023 | Carrying Amount | Quoted Price In Active Markets for Identical Assets /Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial assets | |||||||||||||||||||||||||||||||
Cash and due from banks |
| $ | 580,493 |
|
| $ | 580,493 |
|
| $ | — |
|
| $ | — |
|
| $ | 580,493 |
| Cash and due from banks | $ | 808,131 | $ | 808,131 | $ | — | $ | — | $ | 808,131 | |||||||||||||||||||||
Federal funds sold |
|
| 51,694 |
|
|
| 51,694 |
|
|
| — |
|
|
| — |
|
|
| 51,694 |
| ||||||||||||||||||||||||||||||||
Certificates of deposit with other banks |
|
| 4,250 |
|
|
| 4,257 |
|
|
| — |
|
|
| — |
|
|
| 4,257 |
| Certificates of deposit with other banks | 4,000 | 4,000 | — | — | 4,000 | ||||||||||||||||||||||||||
Loans held for sale |
|
| 1,176,282 |
|
|
| — |
|
|
| — |
|
|
| 1,199,307 |
|
|
| 1,199,307 |
| Loans held for sale | 523,776 | — | — | 546,912 | 546,912 | ||||||||||||||||||||||||||
Loans and leases held for investment, net of allowance for credit losses on loans and leases |
|
| 5,263,702 |
|
|
| — |
|
|
| — |
|
|
| 5,216,334 |
|
|
| 5,216,334 |
| Loans and leases held for investment, net of allowance for credit losses on loans and leases | 7,274,501 | — | — | 7,572,899 | 7,572,899 | ||||||||||||||||||||||||||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial liabilities | |||||||||||||||||||||||||||||||
Deposits |
|
| 8,155,744 |
|
|
| — |
|
|
| 7,635,057 |
|
|
| — |
|
|
| 7,635,057 |
| Deposits | 9,879,111 | — | 9,625,941 | — | 9,625,941 | ||||||||||||||||||||||||||
Borrowings |
|
| 86,209 |
|
|
| — |
|
|
| — |
|
|
| 81,403 |
|
|
| 81,403 |
| Borrowings | 28,317 | — | — | 27,684 | 27,684 |
December 31, 2021 |
| Carrying Amount |
|
| Quoted Price In Active Markets for Identical Assets /Liabilities (Level 1) |
|
| Significant Other Observable Inputs (Level 2) |
|
| Significant Unobservable Inputs (Level 3) |
|
| Total Fair Value |
| |||||||||||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2022 | Carrying Amount | Quoted Price In Active Markets for Identical Assets /Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial assets | |||||||||||||||||||||||||||||||
Cash and due from banks |
| $ | 187,203 |
|
| $ | 187,203 |
|
| $ | — |
|
| $ | — |
|
| $ | 187,203 |
| Cash and due from banks | $ | 280,239 | $ | 280,239 | $ | — | $ | — | $ | 280,239 | |||||||||||||||||||||
Federal funds sold |
|
| 16,547 |
|
|
| 16,547 |
|
|
| — |
|
|
| — |
|
|
| 16,547 |
| Federal funds sold | 136,397 | 136,397 | — | — | 136,397 | ||||||||||||||||||||||||||
Certificates of deposit with other banks |
|
| 4,750 |
|
|
| 4,930 |
|
|
| — |
|
|
| — |
|
|
| 4,930 |
| Certificates of deposit with other banks | 4,000 | 4,000 | — | — | 4,000 | ||||||||||||||||||||||||||
Loans held for sale |
|
| 1,091,209 |
|
|
| — |
|
|
| — |
|
|
| 1,197,307 |
|
|
| 1,197,307 |
| Loans held for sale | 554,610 | — | — | 577,254 | 577,254 | ||||||||||||||||||||||||||
Loans and leases held for investment, net of allowance for credit losses on loans and leases |
|
| 4,812,477 |
|
|
| — |
|
|
| — |
|
|
| 4,958,875 |
|
|
| 4,958,875 |
| Loans and leases held for investment, net of allowance for credit losses on loans and leases | 6,753,154 | — | — | 6,652,936 | 6,652,936 | ||||||||||||||||||||||||||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial liabilities | |||||||||||||||||||||||||||||||
Deposits |
|
| 7,112,044 |
|
|
| — |
|
|
| 6,942,512 |
|
|
| — |
|
|
| 6,942,512 |
| Deposits | 8,884,928 | — | 8,532,615 | — | 8,532,615 | ||||||||||||||||||||||||||
Borrowings |
|
| 318,289 |
|
|
| — |
|
|
| — |
|
|
| 312,036 |
|
|
| 312,036 |
| Borrowings | 83,203 | — | — | 82,258 | 82,258 |
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
On March 12, 2021, a purported class action was filed against the Company in the United States District Court for the Eastern District
Unaudited Condensed Consolidated Financial Statements
|
| June 30, 2022 |
|
| December 31, 2021 |
| June 30, 2023 | December 31, 2022 | |||||||||||
Commitments to extend credit |
| $ | 2,867,217 |
|
| $ | 2,634,387 |
| Commitments to extend credit | $ | 3,120,016 | $ | 2,731,866 | ||||||
Standby letters of credit |
|
| 25,319 |
|
|
| 10,753 |
| Standby letters of credit | 24,474 | 26,454 | ||||||||
Airplane purchase agreement commitments | Airplane purchase agreement commitments | 18,000 | 24,000 | ||||||||||||||||
Total unfunded off-balance-sheet credit risk |
| $ | 2,892,536 |
|
| $ | 2,645,140 |
| Total unfunded off-balance-sheet credit risk | $ | 3,162,490 | $ | 2,782,320 |
Live Oak Bancshares, Inc.
NotesThe Company is in the early phase of constructing a new facility to Unaudited Condensed Consolidated Financial Statements
accommodate expansion of its main campus. The total estimated cost to complete the construction program is approximately $33.6 million. At June 30, 2023, the Company has paid and was committed to approximately $7.0 million of the total estimated amount.
Live Oak Bancshares, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The following tables provide financial information for the Company's segments. The information provided under the caption “Other” represents operations not considered to be reportable segments and/or general operating expenses of the Company, and includes the parent company, other non-bank subsidiaries and elimination adjustments to reconcile the results of the operating segments to the unaudited condensed consolidated financial statementsUnaudited Condensed Consolidated Financial Statements prepared in conformity with GAAP.
| Banking |
|
| Fintech |
|
| Other |
|
| Consolidated |
| |||||||||||||||||||||||||||
As of and for the three months ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Interest income | $ | 99,215 |
|
| $ | 36 |
|
| $ | (4 | ) |
| $ | 99,247 |
| |||||||||||||||||||||||
Interest expense |
| 18,850 |
|
|
| — |
|
|
| 463 |
|
|
| 19,313 |
| |||||||||||||||||||||||
Net interest income (loss) |
| 80,365 |
|
|
| 36 |
|
|
| (467 | ) |
|
| 79,934 |
| |||||||||||||||||||||||
Provision for loan and lease credit losses |
| 5,267 |
|
|
| — |
|
|
| — |
|
|
| 5,267 |
| |||||||||||||||||||||||
Noninterest income |
| 5,168 |
|
|
| 122,661 |
|
|
| 700 |
|
|
| 128,529 |
| |||||||||||||||||||||||
Noninterest expense |
| 76,779 |
|
|
| 2,146 |
|
|
| 1,954 |
|
|
| 80,879 |
| |||||||||||||||||||||||
Income tax (benefit) expense |
| (268 | ) |
|
| 25,868 |
|
|
| (322 | ) |
|
| 25,278 |
| |||||||||||||||||||||||
Net income (loss) | $ | 3,755 |
|
| $ | 94,683 |
|
| $ | (1,399 | ) |
| $ | 97,039 |
| |||||||||||||||||||||||
Total assets | $ | 8,963,851 |
|
| $ | 158,930 |
|
| $ | (1,884 | ) |
| $ | 9,120,897 |
| |||||||||||||||||||||||
As of and for the three months ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Banking | Fintech | Other | Consolidated | |||||||||||||||||||||||||||||||||||
As of and for the three months ended June 30, 2023 | As of and for the three months ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||
Interest income | $ | 87,974 |
|
| $ | 7 |
|
| $ | 18 |
|
| $ | 87,999 |
| Interest income | $ | 169,586 | $ | 8 | $ | 118 | $ | 169,712 | ||||||||||||||
Interest expense |
| 16,135 |
|
|
| — |
|
|
| 402 |
|
|
| 16,537 |
| Interest expense | 85,103 | — | 307 | 85,410 | ||||||||||||||||||
Net interest income (loss) |
| 71,839 |
|
|
| 7 |
|
|
| (384 | ) |
|
| 71,462 |
| Net interest income (loss) | 84,483 | 8 | (189) | 84,302 | ||||||||||||||||||
Provision for loan and lease credit losses |
| 7,846 |
|
|
| — |
|
|
| — |
|
|
| 7,846 |
| Provision for loan and lease credit losses | 13,028 | — | — | 13,028 | ||||||||||||||||||
Noninterest income |
| 26,810 |
|
|
| 42,648 |
|
|
| 653 |
|
|
| 70,111 |
| Noninterest income | 21,488 | 1,998 | 670 | 24,156 | ||||||||||||||||||
Noninterest expense |
| 50,829 |
|
|
| 1,112 |
|
|
| 5,617 |
|
|
| 57,558 |
| Noninterest expense | 71,916 | 2,707 | 1,834 | 76,457 | ||||||||||||||||||
Income tax expense (benefit) |
| 5,130 |
|
|
| 10,209 |
|
|
| (2,752 | ) |
|
| 12,587 |
| Income tax expense (benefit) | 1,404 | 26 | (1) | 1,429 | ||||||||||||||||||
Net income (loss) | $ | 34,844 |
|
| $ | 31,334 |
|
| $ | (2,596 | ) |
| $ | 63,582 |
| Net income (loss) | $ | 19,623 | $ | (727) | $ | (1,352) | $ | 17,544 | ||||||||||||||
Total assets | $ | 8,092,506 |
|
| $ | 136,104 |
|
| $ | 14,576 |
|
| $ | 8,243,186 |
| Total assets | $ | 10,642,872 | $ | 124,459 | $ | 51,865 | $ | 10,819,196 | ||||||||||||||
As of and for the three months ended June 30, 2022 | As of and for the three months ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||
Interest income | Interest income | $ | 99,215 | $ | 36 | $ | (4) | $ | 99,247 | |||||||||||||||||||||||||||||
Interest expense | Interest expense | 18,850 | — | 463 | 19,313 | |||||||||||||||||||||||||||||||||
Net interest income (loss) | Net interest income (loss) | 80,365 | 36 | (467) | 79,934 | |||||||||||||||||||||||||||||||||
Provision for loan and lease credit losses | Provision for loan and lease credit losses | 5,267 | — | — | 5,267 | |||||||||||||||||||||||||||||||||
Noninterest income | Noninterest income | 5,168 | 122,661 | 700 | 128,529 | |||||||||||||||||||||||||||||||||
Noninterest expense | Noninterest expense | 76,779 | 2,146 | 1,954 | 80,879 | |||||||||||||||||||||||||||||||||
Income tax expense (benefit) | Income tax expense (benefit) | (268) | 25,868 | (322) | 25,278 | |||||||||||||||||||||||||||||||||
Net income (loss) | Net income (loss) | $ | 3,755 | $ | 94,683 | $ | (1,399) | $ | 97,039 | |||||||||||||||||||||||||||||
Total assets | Total assets | $ | 8,963,851 | $ | 158,930 | $ | (1,884) | $ | 9,120,897 |
| Banking |
|
| Fintech |
|
| Other |
|
| Consolidated |
| |||||||||||||||||||||||||||
Banking | Fintech | Other | Consolidated | |||||||||||||||||||||||||||||||||||
As of and for the six months ended June 30, 2023 | As of and for the six months ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||
Interest income | Interest income | $ | 320,855 | $ | 20 | $ | 253 | $ | 321,128 | |||||||||||||||||||||||||||||
Interest expense | Interest expense | 154,180 | — | 629 | 154,809 | |||||||||||||||||||||||||||||||||
Net interest income (loss) | Net interest income (loss) | 166,675 | 20 | (376) | 166,319 | |||||||||||||||||||||||||||||||||
Provision for loan and lease credit losses | Provision for loan and lease credit losses | 32,049 | — | — | 32,049 | |||||||||||||||||||||||||||||||||
Noninterest income | Noninterest income | 38,485 | 4,037 | 1,213 | 43,735 | |||||||||||||||||||||||||||||||||
Noninterest expense | Noninterest expense | 146,399 | 4,963 | 4,057 | 155,419 | |||||||||||||||||||||||||||||||||
Income tax expense (benefit) | Income tax expense (benefit) | 4,701 | 182 | (239) | 4,644 | |||||||||||||||||||||||||||||||||
Net income (loss) | Net income (loss) | $ | 22,011 | $ | (1,088) | $ | (2,981) | $ | 17,942 | |||||||||||||||||||||||||||||
Total assets | Total assets | $ | 10,642,872 | $ | 124,459 | $ | 51,865 | $ | 10,819,196 | |||||||||||||||||||||||||||||
As of and for the six months ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of and for the six months ended June 30, 2022 | ||||||||||||||||||||||
Interest income | $ | 191,961 |
|
| $ | 72 |
|
| $ | (4 | ) |
| $ | 192,029 |
| Interest income | $ | 191,961 | $ | 72 | $ | (4) | $ | 192,029 | ||||||||||||||
Interest expense |
| 33,380 |
|
|
| — |
|
|
| 936 |
|
|
| 34,316 |
| Interest expense | 33,380 | — | 936 | 34,316 | ||||||||||||||||||
Net interest income (loss) |
| 158,581 |
|
|
| 72 |
|
|
| (940 | ) |
|
| 157,713 |
| Net interest income (loss) | 158,581 | 72 | (940) | 157,713 | ||||||||||||||||||
Provision for loan and lease credit losses |
| 7,103 |
|
|
| — |
|
|
| — |
|
|
| 7,103 |
| Provision for loan and lease credit losses | 7,103 | — | — | 7,103 | ||||||||||||||||||
Noninterest income |
| 37,103 |
|
|
| 122,898 |
|
|
| 1,196 |
|
|
| 161,197 |
| Noninterest income | 37,103 | 122,898 | 1,196 | 161,197 | ||||||||||||||||||
Noninterest expense |
| 138,178 |
|
|
| 4,314 |
|
|
| 4,101 |
|
|
| 146,593 |
| Noninterest expense | 138,178 | 4,314 | 4,101 | 146,593 | ||||||||||||||||||
Income tax expense (benefit) |
| 8,808 |
|
|
| 25,722 |
|
|
| (864 | ) |
|
| 33,666 |
| Income tax expense (benefit) | 8,808 | 25,722 | (864) | 33,666 | ||||||||||||||||||
Net income (loss) | $ | 41,595 |
|
| $ | 92,934 |
|
| $ | (2,981 | ) |
| $ | 131,548 |
| Net income (loss) | $ | 41,595 | $ | 92,934 | $ | (2,981) | $ | 131,548 | ||||||||||||||
Total assets | $ | 8,963,851 |
|
| $ | 158,930 |
|
| $ | (1,884 | ) |
| $ | 9,120,897 |
| Total assets | $ | 8,963,851 | $ | 158,930 | $ | (1,884) | $ | 9,120,897 | ||||||||||||||
As of and for the six months ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Interest income | $ | 176,073 |
|
| $ | 129 |
|
| $ | 22 |
|
| $ | 176,224 |
| |||||||||||||||||||||||
Interest expense |
| 34,300 |
|
|
| — |
|
|
| 512 |
|
|
| 34,812 |
| |||||||||||||||||||||||
Net interest income (loss) |
| 141,773 |
|
|
| 129 |
|
|
| (490 | ) |
|
| 141,412 |
| |||||||||||||||||||||||
Provision for loan and lease credit losses |
| 6,973 |
|
|
| — |
|
|
| — |
|
|
| 6,973 |
| |||||||||||||||||||||||
Noninterest income |
| 57,334 |
|
|
| 42,644 |
|
|
| 1,190 |
|
|
| 101,168 |
| |||||||||||||||||||||||
Noninterest expense |
| 106,454 |
|
|
| 2,132 |
|
|
| 7,244 |
|
|
| 115,830 |
| |||||||||||||||||||||||
Income tax expense (benefit) |
| 9,780 |
|
|
| 10,214 |
|
|
| (3,226 | ) |
|
| 16,768 |
| |||||||||||||||||||||||
Net income (loss) | $ | 75,900 |
|
| $ | 30,427 |
|
| $ | (3,318 | ) |
| $ | 103,009 |
| |||||||||||||||||||||||
Total assets | $ | 8,092,506 |
|
| $ | 136,104 |
|
| $ | 14,576 |
|
| $ | 8,243,186 |
|
|
|
•deterioration in the financial condition of borrowers resulting in significant increases in the Company’s loan and lease losses and provisions for those losses and other adverse impacts to results of operations and financial condition; |
|
•changes in Small Business Administration (“SBA”) rules, regulations and loan products, including specifically the Section 7(a) program, changes in SBA standard operating procedures or changes to the status of Live Oak Banking Company (the “Bank”) 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 (“USDA”); |
|
•changes in interest rates that affect the level and composition of deposits, loan demand and the values of loan collateral, securities, and interest sensitive assets and liabilities; |
|
•the failure of assumptions underlying the establishment of reserves for possible loan and lease losses; |
|
•changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; |
|
•recent 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 global health crises and pandemics, such as the Coronavirus Disease 2019 (“COVID-19”) pandemic, 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; |
|
|
|
•a reduction in or the termination of the Company’s ability to use the technology-based platform that is critical to the success of the Company’s business model or to develop a next-generation banking platform, including a failure in or a breach of the Company’s operational or security systems or those of its third party service providers; |
|
•changes in financial market conditions, either internationally, nationally or locally in areas in which the Company conducts operations, including reductions in rates of business formation and growth, demand for the Company’s products and services, commercial and residential real estate development and prices, premiums paid in the secondary market for the sale of loans, and valuation of servicing rights; |
|
•changes in accounting principles, policies, and guidelines applicable to bank holding companies and banking; |
|
•fluctuations in markets for equity, fixed-income, commercial paper and other securities, which could affect availability, market liquidity levels, and pricing; |
|
•the effects of competition from other commercial banks, non-bank lenders, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and mutual funds, and other financial institutions operating in the Company’s market area and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone and the Internet; |
|
•the Company's ability to attract and retain key personnel; |
|
•changes in governmental monetary and fiscal policies as well as other legislative and regulatory changes, including with respect to SBA or USDA lending programs and investment tax credits; |
|
•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; |
|
•changes in political and economic conditions; |
|
•the impact of heightened regulatory scrutiny of financial products and services, primarily led by the Consumer Financial Protection Bureau and various state agencies; |
|
•the Company's ability to comply with any requirements imposed on it by regulators, and the potential negative consequences that may result; |
|
•operational, compliance and other factors, including conditions in local areas in which the Company conducts business such as inclement weather or a reduction in the availability of services or products for which loan proceeds will be used, that could prevent or delay closing and funding loans before they can be sold in the secondary market; |
|
Nature of Operations
These loans are to small businesses and professionals with what the Bank believes are lower risk characteristics. Industries, or “verticals,” on which the Bank focuses its lending efforts are carefully selected. The Bank also lends more broadly to select borrowers outside of those verticals.
The Bank’s wholly owned subsidiaries are Live Oak Number One, Inc., Live Oak Clean Energy Financing LLC (“LOCEF”) and Live Oak Private Wealth, LLC (“Live Oak Private Wealth”). Live Oak Number One, Inc. holds properties foreclosed on by the Bank. LOCEF provides financing to entities for renewable energy applications and became a wholly owned subsidiary of the Bank during the first quarter of 2019. Live Oak Private Wealth provides high-net-worth individuals and families with strategic wealth and investment management services. During the first quarter of 2022, Jolley Asset Management, LLC (“JAM”) was merged into Live Oak Private Wealth. JAM was previously a wholly owned subsidiary of Live Oak Private Wealth.
GLS is a management and technology consulting firm that advises and offers solutions and services to participants in the government guaranteed lending sector. GLS primarily provides services in connection with the settlement, accounting, and securitization processes for government guaranteed loans, including loans originated under the SBA 7(a) loan programs and USDA guaranteed loans. The Grove provides Company employees and business visitors an on-site restaurant location. Live Oak Ventures’ purpose is investing in businesses that align with the Company's strategic initiative to be a leader in financial technology. Canapi Advisors provides investment advisory services to a series of funds (the “Canapi Funds”) focused on providing venture capital to new and emerging financial technology companies.
2022
2022.
|
|
|
|
•Decreased income tax expense of $23.8 million, or 94.3%, principally related to above discussed decrease in net income. |
|
|
|
|
|
|
|
Six months ended June 30, 20222023 compared with six months ended June 30, 2021
2022
•Decrease in equity method investment income of $121.9 million, principally a product of the above discussed Finxact gain of $120.5 million in the second quarter of 2022; |
|
•Provision for loan and lease credit losses increased by $24.9 million, to $32.0 million, compared to $7.1 million for the first half of 2022. The level of provision expense in the first half of 2023 was primarily the result of continued growth of the loan and lease portfolio combined with portfolio trends and changes in the macroeconomic outlook; |
|
•Decreased contributions and donations expense of $6.2 million, principally related to a special 2022 charitable donation of $5.0 million discussed above related to the 2022 Finxact gain; and |
|
•Decreased income tax expense of $29.0 million, or 86.2%, principally related to above discussed decrease in net income. |
|
|
|
|
|
Net Interest Income and Margin
Three months ended June 30, 20222023 compared with three months ended June 30, 2021
2022 2022 3.36% for the first half of 2023. Average Balances and Yields. The following table presents information regarding average balances for assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amount of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. The yields and costs for the periods indicated are derived by dividing the income or expense by the average balances for assets or liabilities, respectively, for the periods presented and annualizing that result. Loan fees are included in interest income on loans. Three Months Ended June 30, 2022 2021 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate Interest-earning assets: Interest-earning balances in other banks $ 328,014 $ 848 1.04 % $ 514,232 $ 234 0.18 % Federal funds sold 78,216 196 1.01 29,199 10 0.14 Investment securities 915,106 4,046 1.77 764,017 2,975 1.56 Loans held for sale 1,119,094 15,969 5.72 1,134,259 15,216 5.38 Loans and leases held for investment(1) 5,805,907 78,188 5.40 5,447,839 69,564 5.12 Total interest-earning assets 8,246,337 99,247 4.83 7,889,546 87,999 4.47 Less: Allowance for credit losses on loans and leases (62,566 ) (51,994 ) Noninterest-earning assets 644,495 623,895 Total assets $ 8,828,266 $ 8,461,447 Interest-bearing liabilities: Interest-bearing checking $ — $ — — % $ 60,439 $ 86 0.57 % Savings 3,894,177 7,538 0.78 3,101,733 4,309 0.56 Money market accounts 93,072 56 0.24 104,826 82 0.31 Certificates of deposit 3,714,882 11,183 1.21 3,078,789 10,343 1.35 Total deposits 7,702,131 18,777 0.98 6,345,787 14,820 0.94 Borrowings 132,969 536 1.62 1,368,742 1,717 0.50 Total interest-bearing liabilities 7,835,100 19,313 0.99 7,714,529 16,537 0.86 Noninterest-bearing deposits 96,123 85,824 Noninterest-bearing liabilities 55,725 45,309 Shareholders' equity 841,318 615,785 Total liabilities and shareholders' equity $ 8,828,266 $ 8,461,447 Net interest income and interest rate spread $ 79,934 3.84 % $ 71,462 3.61 % Net interest margin 3.89 % 3.63 % Ratio of average interest-earning assets to average interest-bearing liabilities 105.25 % 102.27 % Six Months Ended June 30, 2022 2021 Average Balance Interest Average Yield/Rate Average Balance Interest Average Yield/Rate Interest-earning assets: Interest-earning balances in other banks $ 276,114 $ 1,027 0.75 % $ 423,252 $ 531 0.25 % Federal funds sold 43,897 202 0.93 28,703 16 0.11 Investment securities 905,403 7,445 1.66 750,164 5,904 1.59 Loans held for sale 1,117,360 31,152 5.62 1,152,667 30,293 5.30 Loans and leases held for investment(1) 5,708,084 152,203 5.38 5,311,939 139,480 5.30 Total interest-earning assets 8,050,858 192,029 4.81 7,666,725 176,224 4.64 Less: Allowance for credit losses on loans and leases (62,649 ) (52,155 ) Noninterest-earning assets 616,486 608,923 Total assets $ 8,604,695 $ 8,223,493 Interest-bearing liabilities: Interest-bearing checking $ — $ — — % $ 154,698 $ 442 0.58 % Savings 3,750,838 12,378 0.67 2,731,224 7,821 0.58 Money market accounts 92,272 110 0.24 105,289 165 0.32 Certificates of deposit 3,633,547 20,637 1.15 3,114,979 23,336 1.51 Total deposits 7,476,657 33,125 0.89 6,106,190 31,764 1.05 Borrowings 197,369 1,191 1.22 1,398,793 3,048 0.44 Total interest-bearing liabilities 7,674,026 34,316 0.90 7,504,983 34,812 0.94 Noninterest-bearing deposits 91,373 83,336 Noninterest-bearing liabilities 53,841 33,649 Shareholders' equity 785,455 601,525 Total liabilities and shareholders' equity $ 8,604,695 $ 8,223,493 Net interest income and interest rate spread $ 157,713 3.91 % $ 141,412 3.70 % Net interest margin 3.95 % 3.72 % Ratio of average interest-earning assets to average interest-bearing liabilities 104.91 % 102.16 % (1)Average loan and lease balances include non-accruing loans and leases. Rate/Volume Analysis.2022,2023, net interest income increased $8.5$4.4 million, or 11.9%5.5%, to $79.9$84.3 million compared to $71.5$79.9 million for the three months ended June 30, 2021.2022. This increase was principally due to the growth in both average yield and volumethe held for the totalinvestment loan and lease portfolio outpacing moderate growth in interest-bearing liabilities combined withoffset by an increase in average cost of funds.Thisfunds which exceeded the increase over the prior year was significantly higher when excluding the effects of declining levels of Paycheck Protection Program (“PPP”) loan net interest income for the compared period, which has been declining over time as PPP loans are paid down.in average yield on interest-earning assets. Excluding PPP loan impacts, of $1.2 million, comprised of amortization of net deferred fees combined with a 1% annualized interest rate less the related interest expense from funding activity, net interest income increased by $20.1$5.5 million. Average interest-earning assets increased by $356.8 million,$2.03 billion, or 4.5%24.6%, to $10.27 billion for the second quarter of 2023, compared to $8.25 billion for the three months ended June 30,second quarter of 2022, compared to $7.89 billion for the three months ended June 30, 2021, while the yield on average interest-earning assets increased thirty-fiveone hundred-eighty basis points to 4.83%6.63%. The cost of funds on interest-bearing liabilities for the three months ended June 30, 2022,second quarter of 2023 increased thirteentwo hundred-sixty basis points to 0.99% while3.59%, and the average balance of interest-bearing liabilities increased by $120.6 million,$1.69 billion, or 1.6%21.6%, over the three months ended June 30, 2021. second quarter of 2022.growth.growth as well as maintenance of the Company's target liquidity profile. This increase was muted by a $1.24 billion$95.0 million reduction in average borrowings largely related to Paycheck Protection Program Liquidity Facility, or PPPLF, repayments since June 30, 2021.in 2022. As indicated in the rate/volume table below, the overall increase discussed above is reflected in increased interest income of $11.2$70.5 million outpacing growth in interest expense of $2.8$66.1 million for the second quarter of 20222023 compared to the second quarter of 2021. For the three months ended June 30, 2021 compared to the three months ended June 30, 2022,2022. The net interest margin increaseddecreased from 3.63%3.89% for the second quarter of 2022 to 3.89%. As3.29% for the second quarter of June 30, 2022, the Company had $61.4 million in PPP loan balances on its books which includes $1.6 million in net deferred fees remaining to be recognized into future interest income. The Company expects to recognize most2023.20222023 compared with six months ended June 30, 20212022,2023, net interest income increased $16.3$8.6 million, or 11.5%5.5%, to $157.7$166.3 million compared to $141.4$157.7 million for the six months ended June 30, 2021. 2022. This increase was principally due to the growth in both average yield and volumethe held for the totalinvestment loan and lease portfolio outpacing growth in interest-bearing liabilities combined with a decreaseoffset by an increase in average cost of funds.Thisfunds which exceeded the increase over the prior year was significantly higher when excluding the effects of declining levels of PPP loan net interest income for the compared period.in average yield on interest-earning assets. Excluding PPP loan impacts, comprised of $5.3 million as defined above,amortization of net deferred fees combined with a 1% annualized interest rate less the related interest expense from funding activity, net interest income increased by $42.7$13.8 million. Average interest-earning assets increased by $384.1 million,$1.94 billion, or 5.0%24.1%, to $9.99 billion for the first half of 2023, compared to $8.05 billion for the six months ended June 30,first half of 2022, compared to $7.67 billion for the six months ended June 30, 2021, while the yield on average interest-earning assets increased seventeenone hundred-sixty-seven basis points to 4.81%6.48%. The cost of funds on interest-bearing liabilities for the six months ended June 30, 2022, decreased fourfirst half of 2023 increased two hundred-forty-six basis points to 0.90% while3.36%, and the average balance of interest-bearing liabilities increased by $169.0 million,$1.61 billion, or 2.3%21.0%, over the six months ended June 30, 2021. first half of 2022. also largely driven by funding for significant loan originations and growth.growth as well as maintenance of the Company's target liquidity profile. This increase was muted by a $1.20 billion$99.4 million reduction in average borrowings largely related to Paycheck Protection Program Liquidity Facility, or PPPLF, repayments since June 30, 2021.in 2022. As indicated in the rate/volume table below, the overall increase discussed above is reflected in increased interest income of $15.8$129.1 million as compared to a decreaseoutpacing growth in interest expense of $496 thousand$120.5 million for the six months ended June 30, 2022first half of 2023 compared to the six months ended June 30, 2021. For the six months ended June 30, 2021 compared to the six months ended June 30, 2022,first half of 2022. The net interest margin increaseddecreased from 3.72%3.95% for the first half of 2022 to 3.95%. 2022,2023, the Federal Reserve increased the federal funds upper target rate by 15075 basis points. Subsequently, on July 27, 202226, 2023 the Federal Reserve further increased the target federal funds upper target rate by 7525 basis points, to 5.50%. In June 2023, the Federal Reserve released its most current federal funds target rate midpoint projections which implied an increase of the median Federal Funds rate to 5.6% by the end of 2023 and indicates that it anticipates ongoing increases will be appropriate.a decrease of approximately 100 basis points to 4.6% by the end of 2024. There can be no assurance that any further increases in the federal fundsFederal Funds rate will occur, and if they do, the amount and timing of actual increases are subject to change. See Item 3. Quantitative and Qualitative Disclosures About Market Risk for information about the Company’s sensitivity to interest rates.(1)Average loan and lease balances include non-accruing loans and leases.Three Months Ended June 30, 2023 2022 Average
BalanceInterest Average
Yield/RateInterest Average
Yield/RateInterest-earning assets: Interest-earning balances in other banks $ 731,427 $ 8,847 4.85 % $ 328,014 $ 848 1.04 % Federal funds sold — — — 78,216 196 1.01 Investment securities 1,252,320 8,503 2.72 915,106 4,046 1.77 Loans held for sale 516,378 12,153 9.44 1,119,094 15,969 5.72 7,773,816 140,209 7.23 5,805,907 78,188 5.40 Total interest-earning assets 10,273,941 169,712 6.63 8,246,337 99,247 4.83 Less: Allowance for credit losses on loans and leases (108,552) (62,566) Noninterest-earning assets 499,661 644,495 Total assets $ 10,665,050 $ 8,828,266 Interest-bearing liabilities: Interest-bearing checking $ 300,046 $ 3,968 5.30 % $ — $ — — % Savings 4,277,850 41,930 3.93 3,894,177 7,538 0.78 Money market accounts 121,382 184 0.61 93,072 56 0.24 Certificates of deposit 4,792,289 38,921 3.26 3,714,882 11,183 1.21 Total deposits 9,491,567 85,003 3.59 7,702,131 18,777 0.98 Borrowings 37,997 407 4.30 132,969 536 1.62 Total interest-bearing liabilities 9,529,564 85,410 3.59 7,835,100 19,313 0.99 Noninterest-bearing deposits 205,741 96,123 Noninterest-bearing liabilities 80,427 55,725 Shareholders' equity 849,318 841,318 Total liabilities and shareholders' equity $ 10,665,050 $ 8,828,266 Net interest income and interest rate spread $ 84,302 3.04 % $ 79,934 3.84 % Net interest margin 3.29 % 3.89 % Ratio of average interest-earning assets to average interest-bearing liabilities 107.81 % 105.25 % Six Months Ended June 30, 2023 2022 Interest Interest Interest-earning assets: Interest-earning balances in other banks $ 530,205 $ 12,040 4.58 % $ 276,114 $ 1,027 0.75 % Federal funds sold 69,629 1,624 4.70 43,897 202 0.93 Investment securities 1,220,028 16,050 2.65 905,403 7,445 1.66 Loans held for sale 538,385 24,139 9.04 1,117,360 31,152 5.62 7,636,343 267,275 7.06 5,708,084 152,203 5.38 Total interest-earning assets 9,994,590 321,128 6.48 8,050,858 192,029 4.81 Less: Allowance for credit losses on loans and leases (101,457) (62,649) Noninterest-earning assets 496,925 616,486 Total assets $ 10,390,058 $ 8,604,695 Interest-bearing liabilities: Interest-bearing checking $ 161,626 $ 4,239 5.29 % $ — $ — — % Savings 4,242,763 78,181 3.72 3,750,838 12,378 0.67 Money market accounts 117,753 321 0.55 92,272 110 0.24 Certificates of deposit 4,664,536 69,857 3.02 3,633,547 20,637 1.15 Total deposits 9,186,678 152,598 3.35 7,476,657 33,125 0.89 Borrowings 97,920 2,211 4.55 197,369 1,191 1.22 Total interest-bearing liabilities 9,284,598 154,809 3.36 7,674,026 34,316 0.90 Noninterest-bearing deposits 191,489 91,373 Noninterest-bearing liabilities 72,467 53,841 Shareholders' equity 841,504 785,455 Total liabilities and shareholders' equity $ 10,390,058 $ 8,604,695 Net interest income and interest rate spread $ 166,319 3.12 % $ 157,713 3.91 % Net interest margin 3.36 % 3.95 % Ratio of average interest-earning assets to average interest-bearing liabilities 107.65 % 104.91 % (1)Average loan and lease balances include non-accruing loans and leases.
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2022 vs. 2021 |
|
| 2022 vs. 2021 |
| 2023 vs. 2022 | 2023 vs. 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Increase (Decrease) Due to |
|
| Increase (Decrease) Due to |
| Increase (Decrease) Due to | Increase (Decrease) Due to | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Rate |
|
| Volume |
|
| Total |
|
| Rate |
|
| Volume |
|
| Total |
| Rate | Volume | Total | Rate | Volume | Total | |||||||||||||||||||||||||||||||||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest income: | ||||||||||||||||||||||||||||||||||
Interest-earning balances in other banks |
| $ | 897 |
|
| $ | (283 | ) |
| $ | 614 |
|
| $ | 862 |
|
| $ | (366 | ) |
| $ | 496 |
| Interest-earning balances in other banks | $ | 5,038 | $ | 2,961 | $ | 7,999 | $ | 7,655 | $ | 3,358 | $ | 11,013 | ||||||||||||||||||||||
Federal funds sold |
|
| 116 |
|
|
| 70 |
|
|
| 186 |
|
|
| 147 |
|
|
| 39 |
|
|
| 186 |
| Federal funds sold | — | (196) | (196) | 1,063 | 359 | 1,422 | ||||||||||||||||||||||||||||
Investment securities |
|
| 443 |
|
|
| 628 |
|
|
| 1,071 |
|
|
| 292 |
|
|
| 1,249 |
|
|
| 1,541 |
| Investment securities | 2,567 | 1,890 | 4,457 | 5,242 | 3,363 | 8,605 | ||||||||||||||||||||||||||||
Loans held for sale |
|
| 963 |
|
|
| (210 | ) |
|
| 753 |
|
|
| 1,815 |
|
|
| (956 | ) |
|
| 859 |
| Loans held for sale | 7,577 | (11,393) | (3,816) | 14,037 | (21,050) | (7,013) | ||||||||||||||||||||||||||||
Loans and leases held for investment |
|
| 3,927 |
|
|
| 4,697 |
|
|
| 8,624 |
|
|
| 2,241 |
|
|
| 10,482 |
|
|
| 12,723 |
| Loans and leases held for investment | 31,023 | 30,998 | 62,021 | 55,619 | 59,453 | 115,072 | ||||||||||||||||||||||||||||
Total interest income |
|
| 6,346 |
|
|
| 4,902 |
|
|
| 11,248 |
|
|
| 5,357 |
|
|
| 10,448 |
|
|
| 15,805 |
| Total interest income | 46,205 | 24,260 | 70,465 | 83,616 | 45,483 | 129,099 | ||||||||||||||||||||||||||||
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense: | ||||||||||||||||||||||||||||||||||
Interest-bearing checking |
|
| — |
|
|
| (86 | ) |
|
| (86 | ) |
|
| — |
|
|
| (442 | ) |
|
| (442 | ) | Interest-bearing checking | — | 3,968 | 3,968 | — | 4,239 | 4,239 | ||||||||||||||||||||||||||||
Savings |
|
| 1,912 |
|
|
| 1,317 |
|
|
| 3,229 |
|
|
| 1,415 |
|
|
| 3,142 |
|
|
| 4,557 |
| Savings | 32,140 | 2,252 | 34,392 | 60,459 | 5,344 | 65,803 | ||||||||||||||||||||||||||||
Money market accounts |
|
| (18 | ) |
|
| (8 | ) |
|
| (26 | ) |
|
| (37 | ) |
|
| (18 | ) |
|
| (55 | ) | Money market accounts | 98 | 30 | 128 | 161 | 50 | 211 | ||||||||||||||||||||||||||||
Certificates of deposit |
|
| (1,186 | ) |
|
| 2,026 |
|
|
| 840 |
|
|
| (6,114 | ) |
|
| 3,415 |
|
|
| (2,699 | ) | Certificates of deposit | 21,741 | 5,997 | 27,738 | 38,572 | 10,648 | 49,220 | ||||||||||||||||||||||||||||
Borrowings |
|
| 2,085 |
|
|
| (3,266 | ) |
|
| (1,181 | ) |
|
| 3,077 |
|
|
| (4,934 | ) |
|
| (1,857 | ) | Borrowings | 571 | (700) | (129) | 2,443 | (1,423) | 1,020 | ||||||||||||||||||||||||||||
Total interest expense |
|
| 2,793 |
|
|
| (17 | ) |
|
| 2,776 |
|
|
| (1,659 | ) |
|
| 1,163 |
|
|
| (496 | ) | Total interest expense | 54,550 | 11,547 | 66,097 | 101,635 | 18,858 | 120,493 | ||||||||||||||||||||||||||||
Net interest income |
| $ | 3,553 |
|
| $ | 4,919 |
|
| $ | 8,472 |
|
| $ | 7,016 |
|
| $ | 9,285 |
|
| $ | 16,301 |
| Net interest income | $ | (8,345) | $ | 12,713 | $ | 4,368 | $ | (18,019) | $ | 26,625 | $ | 8,606 |
the macroeconomic outlook.
In addition, nonperforming loans and leases not guaranteed by the SBA or USDA, excluding $3.6$8.6 million and $5.5$3.6 million accounted for under the fair value option at June 30, 20222023 and 2021,2022, respectively, totaled $12.0$44.9 million, which was 0.22%0.61% of the held for investment loan and lease portfolio carried at historical cost at June 30, 2022,2023, compared to $22.5$12.0 million, or 0.48%0.22% of loans and leases held for investment carried at historical cost at June 30, 2021. Nonperforming2022. The increase in total nonperforming loans and leases not guaranteed and carried at historical cost which are not guaranteed by the SBA or USDA were 0.23% and 0.60% of the historical cost portion of the held for investment loan and lease portfolio, excluding PPP loans, at June 30, 2022 and 2021, respectively.
was principally isolated to two large relationships.
|
| Three Months Ended June 30, |
|
| 2022/2021 Increase (Decrease) |
| Three Months Ended June 30, | 2023/2022 Increase (Decrease) | |||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| Amount |
|
| Percent |
| 2023 | 2022 | Amount | Percent | |||||||||||||||||||||||
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest income | ||||||||||||||||||||||
Loan servicing revenue |
| $ | 6,477 |
|
| $ | 6,218 |
|
| $ | 259 |
|
|
| 4.17 | % | Loan servicing revenue | $ | 6,687 | $ | 6,477 | $ | 210 | 3.2 | % | ||||||||||||||
Loan servicing asset revaluation |
|
| (8,668 | ) |
|
| (3,181 | ) |
|
| (5,487 | ) |
|
| (172.49 | ) | Loan servicing asset revaluation | (2,831) | (8,668) | 5,837 | 67.3 | ||||||||||||||||||
Net gains on sales of loans |
|
| 5,630 |
|
|
| 16,234 |
|
|
| (10,604 | ) |
|
| (65.32 | ) | Net gains on sales of loans | 10,804 | 5,630 | 5,174 | 91.9 | ||||||||||||||||||
Net (loss) gain on loans accounted for under the fair value option |
|
| (4,461 | ) |
|
| 1,135 |
|
|
| (5,596 | ) |
|
| (493.04 | ) | |||||||||||||||||||||||
Equity method investments income (loss) |
|
| 119,056 |
|
|
| (2,278 | ) |
|
| 121,334 |
|
|
| 5,326.34 |
| |||||||||||||||||||||||
Net gain (loss) on loans accounted for under the fair value option | Net gain (loss) on loans accounted for under the fair value option | 1,728 | (4,461) | 6,189 | 138.7 | ||||||||||||||||||||||||||||||||||
Equity method investments (loss) income | Equity method investments (loss) income | (2,055) | 119,056 | (121,111) | (101.7) | ||||||||||||||||||||||||||||||||||
Equity security investments gains (losses), net |
|
| 1,655 |
|
|
| 44,253 |
|
|
| (42,598 | ) |
|
| (96.26 | ) | Equity security investments gains (losses), net | 121 | 1,655 | (1,534) | (92.7) | ||||||||||||||||||
Lease income |
|
| 2,510 |
|
|
| 2,616 |
|
|
| (106 | ) |
|
| (4.05 | ) | Lease income | 2,535 | 2,510 | 25 | 1.0 | ||||||||||||||||||
Management fee income |
|
| 2,558 |
|
|
| 1,473 |
|
|
| 1,085 |
|
|
| 73.66 |
| Management fee income | 3,266 | 2,558 | 708 | 27.7 | ||||||||||||||||||
Other noninterest income |
|
| 3,772 |
|
|
| 3,641 |
|
|
| 131 |
|
|
| 3.60 |
| Other noninterest income | 3,901 | 3,772 | 129 | 3.4 | ||||||||||||||||||
Total noninterest income |
| $ | 128,529 |
|
| $ | 70,111 |
|
| $ | 58,418 |
|
|
| 83.32 | % | Total noninterest income | $ | 24,156 | $ | 128,529 | $ | (104,373) | (81.2) | % |
|
| Six Months Ended June 30, |
|
| 2022/2021 Increase (Decrease) |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| Amount |
|
| Percent |
| ||||
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan servicing revenue |
| $ | 12,833 |
|
| $ | 12,652 |
|
| $ | 181 |
|
|
| 1.43 | % |
Loan servicing asset revaluation |
|
| (10,237 | ) |
|
| (1,688 | ) |
|
| (8,549 | ) |
|
| (506.46 | ) |
Net gains on sales of loans |
|
| 26,607 |
|
|
| 28,163 |
|
|
| (1,556 | ) |
|
| (5.52 | ) |
Net (loss) gain on loans accounted for under the fair value option |
|
| (3,945 | ) |
|
| 5,353 |
|
|
| (9,298 | ) |
|
| (173.70 | ) |
Equity method investments income (loss) |
|
| 116,932 |
|
|
| (3,435 | ) |
|
| 120,367 |
|
|
| 3,504.13 |
|
Equity security investments gains (losses), net |
|
| 1,611 |
|
|
| 44,358 |
|
|
| (42,747 | ) |
|
| (96.37 | ) |
Lease income |
|
| 5,013 |
|
|
| 5,215 |
|
|
| (202 | ) |
|
| (3.87 | ) |
Management fee income |
|
| 4,046 |
|
|
| 3,407 |
|
|
| 639 |
|
|
| 18.76 |
|
Other noninterest income |
|
| 8,337 |
|
|
| 7,143 |
|
|
| 1,194 |
|
|
| 16.72 |
|
Total noninterest income |
| $ | 161,197 |
|
| $ | 101,168 |
|
| $ | 60,029 |
|
|
| 59.34 | % |
Six Months Ended June 30, | 2023/2022 Increase (Decrease) | ||||||||||||||||||||||
2023 | 2022 | Amount | Percent | ||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||
Loan servicing revenue | $ | 13,067 | $ | 12,833 | $ | 234 | 1.8 | % | |||||||||||||||
Loan servicing asset revaluation | (2,475) | (10,237) | 7,762 | 75.8 | |||||||||||||||||||
Net gains on sales of loans | 20,979 | 26,607 | (5,628) | (21.2) | |||||||||||||||||||
Net gain (loss) on loans accounted for under the fair value option | (2,801) | (3,945) | 1,144 | 29.0 | |||||||||||||||||||
Equity method investments (loss) income | (5,007) | 116,932 | (121,939) | (104.3) | |||||||||||||||||||
Equity security investments gains (losses), net | 198 | 1,611 | (1,413) | (87.7) | |||||||||||||||||||
Lease income | 5,070 | 5,013 | 57 | 1.1 | |||||||||||||||||||
Management fee income | 6,738 | 4,046 | 2,692 | 66.5 | |||||||||||||||||||
Other noninterest income | 7,966 | 8,337 | (371) | (4.5) | |||||||||||||||||||
Total noninterest income | $ | 43,735 | $ | 161,197 | $ | (117,462) | (72.9) | % |
For the six months ended June 30, 2022,2023, noninterest income increaseddecreased by $60.0$117.5 million, or 59.3%72.9%, compared to the six months ended June 30, 2021.2022. The increasedecrease over the first half of 2021prior year is also theprimarily a result of the above mentioned Finxact gain partially offset byin the second quarter of 2022 combined with a decrease in equity security investmentnet gains on sales of $42.7loans of $5.6 million. Partially offsetting the decrease over the prior year to date period was lower losses of $7.8 million related to Greenlight. Also partially offsetting the increase over the first half of 2021 was an increased loss on loan servicing asset revaluation of $8.5combined with a $2.7 million and an increased net loss on loans accounted for underincrease in management fee income generated by Canapi Advisors. Canapi Advisors is included in the fair value option of $9.3 million.
Company's Fintech segment.
|
| Three months ended June 30, |
|
| Three months ended March 31, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Amount of loans and leases originated |
| $ | 959,635 |
|
| $ | 1,153,693 |
|
| $ | 865,063 |
|
| $ | 1,180,219 |
|
Guaranteed portions of loans sold |
|
| 68,818 |
|
|
| 130,858 |
|
|
| 219,703 |
|
|
| 136,747 |
|
Outstanding balance of guaranteed loans sold (1) |
|
| 2,681,079 |
|
|
| 2,694,931 |
|
|
| 2,786,403 |
|
|
| 2,843,963 |
|
Three months ended June 30, | Three months ended March 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Amount of loans and leases originated | $ | 861,033 | $ | 959,635 | $ | 1,030,882 | $ | 865,063 | |||||||||||||||
Guaranteed portions of loans sold | 245,074 | 68,818 | 167,826 | 219,703 | |||||||||||||||||||
Outstanding balance of guaranteed loans sold (1) | 2,808,200 | 2,681,079 | 2,695,757 | 2,786,403 |
|
| Six Months Ended June 30, |
|
| For years ended December 31, |
| ||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2021 |
|
| 2020 |
|
| 2019 |
|
| 2018 |
| ||||||
Amount of loans and leases originated |
| $ | 1,824,698 |
|
| $ | 2,333,912 |
|
| $ | 4,480,725 |
|
| $ | 4,450,198 |
|
| $ | 2,001,886 |
|
| $ | 1,765,680 |
|
Guaranteed portions of loans sold |
|
| 288,521 |
|
|
| 267,605 |
|
|
| 668,462 |
|
|
| 542,596 |
|
|
| 340,374 |
|
|
| 945,178 |
|
Outstanding balance of guaranteed loans sold (1) |
|
| 2,681,079 |
|
|
| 2,694,931 |
|
|
| 2,756,915 |
|
|
| 2,819,625 |
|
|
| 2,746,480 |
|
|
| 3,045,460 |
|
Six Months Ended June 30, | For years ended December 31, | ||||||||||||||||||||||||||||||||||
2023 | 2022 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||
Amount of loans and leases originated | $ | 1,891,915 | $ | 1,824,698 | $ | 4,007,621 | $ | 4,480,725 | $ | 4,450,198 | $ | 2,001,886 | |||||||||||||||||||||||
Guaranteed portions of loans sold | 412,900 | 288,521 | 580,889 | 668,462 | 542,596 | 340,374 | |||||||||||||||||||||||||||||
Outstanding balance of guaranteed loans sold (1) | 2,808,200 | 2,681,079 | 2,668,110 | 2,756,915 | 2,819,625 | 2,746,480 |
(1) | This represents the outstanding principal balance of guaranteed loans serviced, as of the last day of the applicable period, which have been sold into the secondary market. |
Net Gain (Loss) Gain on Loans Accounted for Under the Fair Value Option: For the three months ended June 30, 2023, the Company had a net gain on loans accounted for under the fair value option of $1.7 million compared to a net loss of $4.5 million for the second quarter of 2022, a positive change of $6.2 million, or 138.7%. For the six months ended June 30, 2023, 2022, the Company had a net loss on loans accounted for under the fair value option of $4.5$2.8 million compared to a net gainloss of $1.1 million for the second quarter of 2021, a negative change of $5.6 million, or 493.0%. For the six months ended June 30, 2022, the Company had a net loss on loans accounted for under the fair value option of $3.9 million compared to a net gain of $5.4 million for the same period of 2021,2022, a negativepositive change of $9.3$1.1 million, or 173.7%29.0%. The carrying amount of loans accounted for under the fair value option at June 30, 202330, and 2022 was $441.8 million (all classified as held for investment) and 2021 was $554.1 million ($23.5 million classified as held for sale and $530.6 million classified as held for investment) and $772.3 million ($29.0 million classified as held for sale and $743.2 million classified as held for investment), respectively, a decrease of $218.2$112.3 million, or 28.3%20.3%. The decreasedincremental net gain on loans accounted for under the fair value option during second quarter and half of 2022compared to both prior periods was largely the result of moderating interest rate impacts in 2023 combined with a continued decline in the same negative market conditions discussed above.size of the underlying
principal balance of the portfolio.
|
| Three Months Ended June 30, |
|
| 2022/2021 Increase (Decrease) |
| Three Months Ended June 30, | 2023/2022 Increase (Decrease) | |||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| Amount |
|
| Percent |
| 2023 | 2022 | Amount | Percent | |||||||||||||||||||||||
Noninterest expense | Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest expense | ||||||||||||||||||||||
Salaries and employee benefits |
| $ | 46,276 |
|
| $ | 32,900 |
|
| $ | 13,376 |
|
|
| 40.66 | % | Salaries and employee benefits | $ | 43,066 | $ | 46,276 | $ | (3,210) | (6.9) | % | ||||||||||||||
Non-employee expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-employee expenses: | ||||||||||||||||||||||
Travel expense |
|
| 2,358 |
|
|
| 1,549 |
|
|
| 809 |
|
|
| 52.23 |
| Travel expense | 2,770 | 2,358 | 412 | 17.5 | ||||||||||||||||||
Professional services expense |
|
| 3,988 |
|
|
| 3,329 |
|
|
| 659 |
|
|
| 19.80 |
| Professional services expense | 1,996 | 3,988 | (1,992) | (49.9) | ||||||||||||||||||
Advertising and marketing expense |
|
| 2,301 |
|
|
| 875 |
|
|
| 1,426 |
|
|
| 162.97 |
| Advertising and marketing expense | 3,009 | 2,301 | 708 | 30.8 | ||||||||||||||||||
Occupancy expense |
|
| 2,773 |
|
|
| 2,224 |
|
|
| 549 |
|
|
| 24.69 |
| Occupancy expense | 2,205 | 2,773 | (568) | (20.5) | ||||||||||||||||||
Technology expense |
|
| 5,762 |
|
|
| 5,131 |
|
|
| 631 |
|
|
| 12.30 |
| Technology expense | 8,005 | 5,762 | 2,243 | 38.9 | ||||||||||||||||||
Equipment expense |
|
| 3,784 |
|
|
| 3,721 |
|
|
| 63 |
|
|
| 1.69 |
| Equipment expense | 4,023 | 3,784 | 239 | 6.3 | ||||||||||||||||||
Other loan origination and maintenance expense |
|
| 3,022 |
|
|
| 3,307 |
|
|
| (285 | ) |
|
| (8.62 | ) | Other loan origination and maintenance expense | 3,442 | 3,022 | 420 | 13.9 | ||||||||||||||||||
Renewable energy tax credit investment impairment |
|
| 50 |
|
|
| — |
|
|
| 50 |
|
|
| 100.00 |
| Renewable energy tax credit investment impairment | — | 50 | (50) | (100.0) | ||||||||||||||||||
FDIC insurance |
|
| 2,164 |
|
|
| 1,704 |
|
|
| 460 |
|
|
| 27.00 |
| FDIC insurance | 5,061 | 2,164 | 2,897 | 133.9 | ||||||||||||||||||
Contributions and donations |
|
| 5,515 |
|
|
| 686 |
|
|
| 4,829 |
|
|
| 703.94 |
| Contributions and donations | — | 5,515 | (5,515) | (100.0) | ||||||||||||||||||
Other expense |
|
| 2,886 |
|
|
| 2,132 |
|
|
| 754 |
|
|
| 35.37 |
| Other expense | 2,880 | 2,886 | (6) | (0.2) | ||||||||||||||||||
Total non-employee expenses |
|
| 34,603 |
|
|
| 24,658 |
|
|
| 9,945 |
|
|
| 40.33 |
| Total non-employee expenses | 33,391 | 34,603 | (1,212) | (3.5) | ||||||||||||||||||
Total noninterest expense |
| $ | 80,879 |
|
| $ | 57,558 |
|
| $ | 23,321 |
|
|
| 40.52 | % | Total noninterest expense | $ | 76,457 | $ | 80,879 | $ | (4,422) | (5.5) | % |
|
| Six Months Ended June 30, |
|
| 2022/2021 Increase (Decrease) |
| Six Months Ended June 30, | 2023/2022 Increase (Decrease) | |||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| Amount |
|
| Percent |
| 2023 | 2022 | Amount | Percent | |||||||||||||||||||||||
Noninterest expense | Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest expense | ||||||||||||||||||||||
Salaries and employee benefits |
| $ | 84,783 |
|
| $ | 64,266 |
|
| $ | 20,517 |
|
|
| 31.93 | % | Salaries and employee benefits | $ | 87,831 | $ | 84,783 | $ | 3,048 | 3.6 | % | ||||||||||||||
Non-employee expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-employee expenses: | ||||||||||||||||||||||
Travel expense |
|
| 4,255 |
|
|
| 2,208 |
|
|
| 2,047 |
|
|
| 92.71 |
| Travel expense | 5,181 | 4,255 | 926 | 21.8 | ||||||||||||||||||
Professional services expense |
|
| 6,779 |
|
|
| 7,160 |
|
|
| (381 | ) |
|
| (5.32 | ) | Professional services expense | 2,923 | 6,779 | (3,856) | (56.9) | ||||||||||||||||||
Advertising and marketing expense |
|
| 4,030 |
|
|
| 1,527 |
|
|
| 2,503 |
|
|
| 163.92 |
| Advertising and marketing expense | 6,612 | 4,030 | 2,582 | 64.1 | ||||||||||||||||||
Occupancy expense |
|
| 5,100 |
|
|
| 4,336 |
|
|
| 764 |
|
|
| 17.62 |
| Occupancy expense | 4,130 | 5,100 | (970) | (19.0) | ||||||||||||||||||
Technology expense |
|
| 11,815 |
|
|
| 10,009 |
|
|
| 1,806 |
|
|
| 18.04 |
| Technology expense | 15,734 | 11,815 | 3,919 | 33.2 | ||||||||||||||||||
Equipment expense |
|
| 7,600 |
|
|
| 7,422 |
|
|
| 178 |
|
|
| 2.40 |
| Equipment expense | 7,841 | 7,600 | 241 | 3.2 | ||||||||||||||||||
Other loan origination and maintenance expense |
|
| 6,135 |
|
|
| 6,634 |
|
|
| (499 | ) |
|
| (7.52 | ) | Other loan origination and maintenance expense | 7,369 | 6,135 | 1,234 | 20.1 | ||||||||||||||||||
Renewable energy tax credit investment impairment |
|
| 50 |
|
|
| 3,127 |
|
|
| (3,077 | ) |
|
| (98.40 | ) | Renewable energy tax credit investment impairment | 69 | 50 | 19 | 38.0 | ||||||||||||||||||
FDIC insurance |
|
| 4,136 |
|
|
| 3,469 |
|
|
| 667 |
|
|
| 19.23 |
| FDIC insurance | 8,464 | 4,136 | 4,328 | 104.6 | ||||||||||||||||||
Contributions and donations |
|
| 6,238 |
|
|
| 1,480 |
|
|
| 4,758 |
|
|
| 321.49 |
| Contributions and donations | — | 6,238 | (6,238) | (100.0) | ||||||||||||||||||
Other expense |
|
| 5,672 |
|
|
| 4,192 |
|
|
| 1,480 |
|
|
| 35.31 |
| Other expense | 9,265 | 5,672 | 3,593 | 63.3 | ||||||||||||||||||
Total non-employee expenses |
|
| 61,810 |
|
|
| 51,564 |
|
|
| 10,246 |
|
|
| 19.87 |
| Total non-employee expenses | 67,588 | 61,810 | 5,778 | 9.3 | ||||||||||||||||||
Total noninterest expense |
| $ | 146,593 |
|
| $ | 115,830 |
|
| $ | 30,763 |
|
|
| 26.56 | % | Total noninterest expense | $ | 155,419 | $ | 146,593 | $ | 8,826 | 6.0 | % |
Technology expense: For the three and six months ended June 30, 2022, technology expense increased $631 thousand, or 12.3%, and $1.8 million, or 18.0%, respectively, compared to the same periods in 2021.2022. This increase was primarily related to enhanced investments in the Company’s technology resources.
Renewable energy tax credit investment impairment:
Contributions and donations:For the three and six months ended June 30, 2022, contributions and donations expense2023, FDIC insurance increased $4.8$2.9 million, or 703.9%133.9%, and $4.8$4.3 million, or 321.5%104.6%, respectively, compared to the same periods in 2021.2022. This increase wasis largely the result of rate increases effective in 2023 combined with the ongoing growth of Live Oak Banking Company.
Results of Segment Operations
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Banking |
| $ | 3,755 |
|
| $ | 34,844 |
|
| $ | 41,595 |
|
| $ | 75,900 |
| Banking | $ | 19,623 | $ | 3,755 | $ | 22,011 | $ | 41,595 | ||||||||||||||
Fintech |
|
| 94,683 |
|
|
| 31,334 |
|
|
| 92,934 |
|
|
| 30,427 |
| Fintech | (727) | 94,683 | (1,088) | 92,934 | ||||||||||||||||||
Other |
|
| (1,399 | ) |
|
| (2,596 | ) |
|
| (2,981 | ) |
|
| (3,318 | ) | Other | (1,352) | (1,399) | (2,981) | (2,981) | ||||||||||||||||||
Consolidated net income |
| $ | 97,039 |
|
| $ | 63,582 |
|
| $ | 131,548 |
|
| $ | 103,009 |
| Consolidated net income | $ | 17,544 | $ | 97,039 | $ | 17,942 | $ | 131,548 |
Key factors influencing these changes are discussed below.
See the analysis of
pretax income.
For the three and six months ended June 30, 2022, noninterest expense increased $1.0 million and $2.2 million, respectively, compared to the same period of 2021. This increase was largely due increasedCanapi Advisors combined with lower levels of salaries and benefits.
For the three and six months ended June 30, 2022, income tax expense increased $15.7 million, or 153.4%, and $15.5 million, or 151.8%, respectively, compared to the same periodsas a result decreased pretax income in 2023.
Discussion and Analysis of Financial Condition
2022
|
|
|
|
Loans held for sale increased $83.2 million, or 7.5%, during the first six months of 2022, from $1.12 billion at December 31, 2021, to $1.20 billion at June 30, 2022. The increase was primarily the result of strong origination volumes during the first half of the year combined with intentionally2023 and holding loans available for sale for longer periods of time before sale, as discussed more fully below. Total originations during the second quarterfirst half of 2023 were $1.89 billion.
loan sales in the first half of 2023.
and lease portfolio combined with strong deposit inflows. At June 30, 2023, the Bank’s total uninsured deposits were approximately $1.4 billion, or 14.3%, of total deposits.
Shareholders’ equity at June 30, 2022 was $791.7 million as comparedenforce a new statutory requirement that such fees be reasonable and proportional to $715.1 million at December 31, 2021.the actual cost of a transaction to the issuer. The bookFederal Reserve Board has adopted rules under this provision that limit the swipe fees that a debit card issuer can charge a merchant for a transaction to the sum of 21 cents and five basis points times the value per share was $18.05 at June 30, 2022 comparedof the transaction, plus up to $16.39 at December 31, 2021. Average equity to average assets was 9.1%one cent for the six months ended June 30, 2022 compared to 8.8% for the year ended December 31, 2021. The increase in shareholders’ equity for the first six months of 2022 was principally the result of $131.5 million in net income and stock-based compensation expense of $10.0 million, partially offset by other comprehensive loss associated with negative market impacts on the Company’s available-for-sale investment portfolio of $61.2 million.
fraud prevention costs.
In respect to the Company's adoption of
2022.
|
| June 30, 2022 (1) |
|
| December 31, 2021 (1) |
| ||
Nonaccrual loans and leases: |
|
|
|
|
|
|
|
|
Total nonperforming loans and leases (all on nonaccrual) |
| $ | 45,768 |
|
| $ | 42,533 |
|
Total accruing loans and leases past due 90 days or more |
|
| — |
|
|
| — |
|
Foreclosed assets |
|
| 191 |
|
|
| 620 |
|
Total troubled debt restructurings |
|
| 66,638 |
|
|
| 55,273 |
|
Less nonaccrual troubled debt restructurings |
|
| (23,809 | ) |
|
| (18,210 | ) |
Total performing troubled debt restructurings |
|
| 42,829 |
|
|
| 37,063 |
|
Total nonperforming assets and troubled debt restructurings |
| $ | 88,788 |
|
| $ | 80,216 |
|
Allowance for credit losses on loans and leases |
| $ | 65,863 |
|
| $ | 63,584 |
|
Total nonperforming loans and leases to total loans and leases held for investment |
|
| 0.86 | % |
|
| 0.87 | % |
Total nonperforming loans and leases to total assets |
|
| 0.53 | % |
|
| 0.56 | % |
Total nonperforming assets and troubled debt restructurings to total assets |
|
| 1.04 | % |
|
| 1.06 | % |
Allowance for credit losses on loans and leases to loans and leases held for investment |
|
| 1.24 | % |
|
| 1.30 | % |
Allowance for credit losses on loans and leases to total nonperforming loans and leases |
|
| 143.91 | % |
|
| 149.49 | % |
June 30, 2023 (1) | December 31, 2022 (1) | ||||||||||
Nonaccrual loans and leases: | |||||||||||
Total nonperforming loans and leases (all on nonaccrual) | $ | 111,221 | $ | 73,392 | |||||||
Foreclosed assets | — | — | |||||||||
Total nonperforming assets | $ | 111,221 | $ | 73,392 | |||||||
Allowance for credit losses on loans and leases | $ | 120,116 | $ | 96,566 | |||||||
Total nonperforming loans and leases to total loans and leases held for investment | 1.50 | % | 1.07 | % | |||||||
Total nonperforming loans and leases to total assets | 1.07 | % | 0.78 | % | |||||||
Allowance for credit losses on loans and leases to loans and leases held for investment | 1.62 | % | 1.41 | % | |||||||
Allowance for credit losses on loans and leases to total nonperforming loans and leases | 108.00 | % | 131.58 | % |
(1) | Excludes loans measured at fair value. |
June 30, 2023 (1) | December 31, 2022 (1) | ||||||||||
Nonaccrual loans and leases guaranteed by U.S. government: | |||||||||||
Total nonperforming loans and leases guaranteed by the U.S government (all on nonaccrual) | $ | 66,322 | $ | 54,608 | |||||||
Foreclosed assets guaranteed by the U.S. government | — | — | |||||||||
Total nonperforming assets guaranteed by the U.S. government | $ | 66,322 | $ | 54,608 | |||||||
Allowance for credit losses on loans and leases | $ | 120,116 | $ | 96,566 | |||||||
Total nonperforming loans and leases not guaranteed by the U.S. government to total held for investment loans and leases | 0.61 | % | 0.27 | % | |||||||
Total nonperforming loans and leases not guaranteed by the U.S. government to total assets | 0.43 | % | 0.20 | % | |||||||
Allowance for credit losses on loans and leases to total nonperforming loans and leases not guaranteed by the U.S. government | 267.52 | % | 514.09 | % |
|
| June 30, 2022 (1) |
|
| December 31, 2021 (1) |
| ||
Nonaccrual loans and leases guaranteed by U.S. government: |
|
|
|
|
|
|
|
|
Total nonperforming loans and leases guaranteed by the U.S government (all on nonaccrual) |
| $ | 33,794 |
|
| $ | 26,546 |
|
Total accruing loans and leases past due 90 days or more guaranteed by the U.S government |
|
| — |
|
|
| — |
|
Foreclosed assets guaranteed by the U.S. government |
|
| 162 |
|
|
| 490 |
|
Total troubled debt restructurings guaranteed by the U.S. government |
|
| 36,712 |
|
|
| 26,954 |
|
Less nonaccrual troubled debt restructurings guaranteed by the U.S. government |
|
| (15,842 | ) |
|
| (10,770 | ) |
Total performing troubled debt restructurings guaranteed by U.S. government |
|
| 20,870 |
|
|
| 16,184 |
|
Total nonperforming assets and troubled debt restructurings guaranteed by the U.S. government |
| $ | 54,826 |
|
| $ | 43,220 |
|
Allowance for credit losses on loans and leases |
| $ | 65,863 |
|
| $ | 63,584 |
|
Total nonperforming loans and leases not guaranteed by the U.S. government to total held for investment loans and leases |
|
| 0.22 | % |
|
| 0.33 | % |
Total nonperforming loans and leases not guaranteed by the U.S. government to total assets |
|
| 0.14 | % |
|
| 0.21 | % |
Total nonperforming assets and troubled debt restructurings not guaranteed by the U.S. government to total assets |
|
| 0.40 | % |
|
| 0.49 | % |
Allowance for credit losses on loans and leases to total nonperforming loans and leases not guaranteed by the U.S government |
|
| 550.05 | % |
|
| 397.73 | % |
|
|
Total nonperforming assets, and TDRs, including loans measured at fair value, at June 30, 20222023 were $148.7$168.8 million, which represented a $4.9$48.4 million, or 3.2%40.2%, decreaseincrease from December 31, 2021. These nonperforming assets at June 30, 2022 were comprised of $79.9 million in nonaccrual loans and leases and $191 thousand in foreclosed assets.2022. Of the $148.7$168.8 million of nonperforming assets, and TDRs, $102.7$113.2 million carried a government guarantee, leaving an unguaranteed exposure of $45.9$55.6 million in total nonperforming assets and TDRs at June 30, 2022.2023. This represents a decreasean increase of $6.6$29.5 million, or 12.6%113.4%, from an unguaranteed exposure of $52.5$26.0 million at December 31, 2021.
2022.
deferral.
Allowance for Credit Losses on Loans and Leases
2022.
Asset/Liability Management and Interest Rate Sensitivity
For further information, see Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Actual | Minimum Capital Requirement | Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions (1) | |||||||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||
Consolidated - June 30, 2023 | |||||||||||||||||||||||||||||||||||
Common Equity Tier 1 (to Risk-Weighted Assets) | $ | 911,721 | 11.55 | % | $ | 355,139 | 4.50 | % | N/A | N/A | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | 1,010,695 | 12.81 | 631,358 | 8.00 | N/A | N/A | |||||||||||||||||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets) | 911,721 | 11.55 | 473,519 | 6.00 | N/A | N/A | |||||||||||||||||||||||||||||
Tier 1 Capital (to Average Assets) | 911,721 | 8.46 | 430,986 | 4.00 | N/A | N/A | |||||||||||||||||||||||||||||
Bank - June 30, 2023 | |||||||||||||||||||||||||||||||||||
Common Equity Tier 1 (to Risk-Weighted Assets) | $ | 770,449 | 10.14 | % | $ | 342,051 | 4.50 | % | $ | 494,074 | 6.50 | % | |||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | 865,832 | 11.39 | 608,091 | 8.00 | 760,113 | 10.00 | |||||||||||||||||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets) | 770,449 | 10.14 | 456,068 | 6.00 | 608,091 | 8.00 | |||||||||||||||||||||||||||||
Tier 1 Capital (to Average Assets) | 770,449 | 7.23 | 426,493 | 4.00 | 533,116 | 5.00 | |||||||||||||||||||||||||||||
Consolidated - December 31, 2022 | |||||||||||||||||||||||||||||||||||
Common Equity Tier 1 (to Risk-Weighted Assets) | $ | 888,235 | 12.47 | % | $ | 320,446 | 4.50 | % | N/A | N/A | |||||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | 977,360 | 13.73 | 569,681 | 8.00 | N/A | N/A | |||||||||||||||||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets) | 888,235 | 12.47 | 427,261 | 6.00 | N/A | N/A | |||||||||||||||||||||||||||||
Tier 1 Capital (to Average Assets) | 888,235 | 9.26 | 383,499 | 4.00 | N/A | N/A | |||||||||||||||||||||||||||||
Bank - December 31, 2022 | |||||||||||||||||||||||||||||||||||
Common Equity Tier 1 (to Risk-Weighted Assets) | $ | 730,092 | 10.70 | % | $ | 307,179 | 4.50 | % | $ | 443,703 | 6.50 | % | |||||||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | 815,577 | 11.95 | 546,096 | 8.00 | 682,620 | 10.00 | |||||||||||||||||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets) | 730,092 | 10.70 | 409,572 | 6.00 | 546,096 | 8.00 | |||||||||||||||||||||||||||||
Tier 1 Capital (to Average Assets) | 730,092 | 7.70 | 379,396 | 4.00 | 474,245 | 5.00 |
|
| Actual |
|
| Minimum Capital Requirement |
|
| Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions (1) |
| |||||||||||||||
|
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
|
| Amount |
|
| Ratio |
| ||||||
Consolidated - June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 (to Risk-Weighted Assets) |
| $ | 828,942 |
|
|
| 13.14 | % |
| $ | 283,874 |
|
|
| 4.50 | % |
| N/A |
|
| N/A |
| ||
Total Capital (to Risk-Weighted Assets) |
|
| 895,677 |
|
|
| 14.20 |
|
|
| 504,666 |
|
|
| 8.00 |
|
| N/A |
|
| N/A |
| ||
Tier 1 Capital (to Risk-Weighted Assets) |
|
| 828,942 |
|
|
| 13.14 |
|
|
| 378,499 |
|
|
| 6.00 |
|
| N/A |
|
| N/A |
| ||
Tier 1 Capital (to Average Assets) |
|
| 828,942 |
|
|
| 9.44 |
|
|
| 351,419 |
|
|
| 4.00 |
|
| N/A |
|
| N/A |
| ||
Bank - June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 (to Risk-Weighted Assets) |
| $ | 687,823 |
|
|
| 11.39 | % |
| $ | 271,856 |
|
|
| 4.50 | % |
| $ | 392,681 |
|
|
| 6.50 | % |
Total Capital (to Risk-Weighted Assets) |
|
| 754,558 |
|
|
| 12.49 |
|
|
| 483,300 |
|
|
| 8.00 |
|
|
| 604,125 |
|
|
| 10.00 |
|
Tier 1 Capital (to Risk-Weighted Assets) |
|
| 687,823 |
|
|
| 11.39 |
|
|
| 362,475 |
|
|
| 6.00 |
|
|
| 483,300 |
|
|
| 8.00 |
|
Tier 1 Capital (to Average Assets) |
|
| 687,823 |
|
|
| 7.90 |
|
|
| 348,418 |
|
|
| 4.00 |
|
|
| 435,522 |
|
|
| 5.00 |
|
Consolidated - December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 (to Risk-Weighted Assets) |
| $ | 689,367 |
|
|
| 12.38 | % |
| $ | 250,619 |
|
|
| 4.50 | % |
| N/A |
|
| N/A |
| ||
Total Capital (to Risk-Weighted Assets) |
|
| 753,691 |
|
|
| 13.53 |
|
|
| 445,544 |
|
|
| 8.00 |
|
| N/A |
|
| N/A |
| ||
Tier 1 Capital (to Risk-Weighted Assets) |
|
| 689,367 |
|
|
| 12.38 |
|
|
| 334,158 |
|
|
| 6.00 |
|
| N/A |
|
| N/A |
| ||
Tier 1 Capital (to Average Assets) |
|
| 689,367 |
|
|
| 8.87 |
|
|
| 310,902 |
|
|
| 4.00 |
|
| N/A |
|
| N/A |
| ||
Bank - December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 (to Risk-Weighted Assets) |
| $ | 640,652 |
|
|
| 12.05 | % |
| $ | 239,201 |
|
|
| 4.50 | % |
| $ | 345,512 |
|
|
| 6.50 | % |
Total Capital (to Risk-Weighted Assets) |
|
| 704,976 |
|
|
| 13.26 |
|
|
| 425,246 |
|
|
| 8.00 |
|
|
| 531,557 |
|
|
| 10.00 |
|
Tier 1 Capital (to Risk-Weighted Assets) |
|
| 640,652 |
|
|
| 12.05 |
|
|
| 318,934 |
|
|
| 6.00 |
|
|
| 425,246 |
|
|
| 8.00 |
|
Tier 1 Capital (to Average Assets) |
|
| 640,652 |
|
|
| 8.32 |
|
|
| 307,931 |
|
|
| 4.00 |
|
|
| 384,914 |
|
|
| 5.00 |
|
|
|
Critical Accounting Policies and Estimates
|
|
•Allowance for credit losses; |
|
•Valuation of loans accounted for under the fair value option; |
|
instruments, assets will reprice before liabilities.
|
| Estimated Increase/Decrease in Net Interest Income |
| Estimated Percentage Change in EVE | Estimated Increase/Decrease in Net Interest Income | Estimated Percentage Change in EVE | ||||||||||||||||||||
Basis Point ("bp") Change in Interest Rates |
| 12 Months Ending June 30, 2023 |
| 12 Months Ending June 30, 2024 |
| As of June 30, 2022 | Basis Point ("bp") Change in Interest Rates | 12 Months Ending June 30, 2024 | 12 Months Ending June 30, 2025 | As of June 30, 2023 | ||||||||||||||||
+400 |
| 10.1% |
| 6.5% |
| (30.8)% | +400 | 1.0% | (4.0)% | (28.0)% | ||||||||||||||||
+300 |
| 7.5 |
| 4.8 |
| (23.7) | +300 | 0.9 | (2.9) | (21.2) | ||||||||||||||||
+200 |
| 5.0 |
| 3.2 |
| (16.1) | +200 | 0.7 | (1.8) | (14.2) | ||||||||||||||||
+100 |
| 2.5 |
| 1.6 |
| (8.2) | +100 | 0.3 | (0.9) | (7.1) | ||||||||||||||||
-100 |
| (2.4) |
| (1.5) |
| 8.1 | -100 | (0.9) | — | 6.8 | ||||||||||||||||
-200 |
| (6.4) |
| (5.5) |
| 19.1 | -200 | (1.9) | (0.4) | 13.5 | ||||||||||||||||
-300 | -300 | (3.0) | (0.9) | 20.1 |
On March 12, 2021, a purported class action was filed against the Company in the United States District Court for the Eastern District of North Carolina, Joseph McAlear, individually and on behalf of all others similarly situated v. Live Oak Bancshares, Inc. et al. The complaint alleged the existence of an agreement between the Company, nCino, Inc. and Apiture, LLC in which those companies purportedly sought to restrain the mobility of employees in violation of antitrust laws by agreeing not to solicit or hire each other’s employees. The complaint alleged violations of Section 1 of the federal Sherman Act (15 U.S.C. § 1) and violations of Sections 75-1 and 75-2 of the North Carolina General Statutes. The plaintiff sought monetary damages, including treble damages, entitlement to restitution, disgorgement, attorneys’ fees, and pre- and post-judgment interest. On October 12, 2021, the Company reached an agreement to settle the case with a proposed class of all persons (with certain exclusions) employed by the Company or its wholly-owned subsidiary, Live Oak Banking Company, Apiture, Inc. or nCino, Inc. in North Carolina at any time from January 27, 2017, through March 31, 2021. In the agreement, the Company agreed to pay $3.9 million. On October 13, 2021, the plaintiff filed a motion for preliminary approval of the settlement, which the court granted by order entered on November 23, 2021. After class-wide noticing, the plaintiff filed a motion for final approval on March 28, 2022, which the court granted by order entered on April 28, 2022. Pursuant to the terms of the settlement, the settlement became effective on June 11, 2022.
Exhibit
| Description of Exhibit | ||||||||
3.1 | |||||||||
3.2 | |||||||||
4.1 | |||||||||
| |||||||||
| Form of | ||||||||
10.2.1 | |||||||||
10.2.2 | |||||||||
| |||||||||
10.2.4 | |||||||||
10.2.5 | |||||||||
31.1 | |||||||||
31.2 | |||||||||
32 | |||||||||
101 | Interactive data files pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets as of June 30, | ||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|
|
|
|
|
|
Live Oak Bancshares, Inc. | ||||||||
| ||||||||
Date: August | By: | /s/ William C. Losch III | ||||||
William C. Losch III | ||||||||
Chief Financial Officer |
59