Live Oak Bancshares (LOB) investor relations material

Executive summary

• Q2 2026 delivered strong earnings momentum, with net income attributable to common shareholders rising to $34.7 million ($0.74 per diluted share), up 24.2% sequentially and 48.1% year-over-year, driven by higher net interest income and lower noninterest expense.

• Adjusted EPS was $0.77, up 20% year-over-year.

• Organic growth remained robust, with loans and deposits each increasing 16% year-over-year and checking balances up 63% year-over-year.

• Strategic initiatives, including Live Oak Express and business checking, contributed to record origination and deeper customer relationships.

• AI adoption accelerated, with 100% of employees having access to AI-native tools and over 640 AI agents built, supporting operational efficiency and innovation.

Financial highlights

• Net interest income for Q2 was $125.3 million, up 5% sequentially and 14.8% year-over-year; net interest margin expanded to 3.33%.

• Loan originations reached $1.55 billion across 33 industries; loan book grew 4% sequentially and 16% year-over-year to $13 billion.

• Deposit portfolio grew 16% year-over-year to $14.55 billion; checking balances rose 63% year-over-year to $469 million.

• Gain on sale from guaranteed loans was $17 million, up 13% sequentially; Live Oak Express contributed $5 million in gain on sale.

• Noninterest expense was $85 million, down 1% year-over-year; efficiency ratio improved to 54%.

Outlook and guidance

• Management expects continued loan growth, sustainable earnings momentum, and ongoing investment in AI and strategic initiatives.

• Net interest margin is expected to remain in the low to mid 3.30s for the remainder of the year.

• Loan growth guidance remains at 10%-15% annually, with strong pipelines supporting continued momentum.

• Provision expense expected to normalize in the $20-$25 million range per quarter, driven by growth.

• The company is actively managing interest rate risk and liquidity, with a moderately asset-sensitive profile.