📊 What This Document Is 🏦

This filing is an 8-K, a required filing with the SEC, designed to announce major corporate events immediately. Specifically, this document serves as an exhibit for Live Oak Bancshares, Inc.'s first quarter of 2026 financial results.

👉 What to expect: We will review the company's financial performance for Q1 2026, comparing it to the previous quarter and the same quarter last year. The goal is to understand how the bank performed, where its assets and money came from, and what management expects next.

🏦 Live Oak Bancshares Overview 🚀

Live Oak Bancshares, Inc. is a financial holding company and the parent company of Live Oak Bank. In simple terms, it is a bank that helps businesses grow by offering lending and technology services.

👉 The company's model focuses on partnering with small businesses, using a "groundbreaking focus on service and technology to redefine banking." This suggests a strategy of moving beyond basic transactions to become a key technology partner for its customers.

💰 Q1 2026 Financial Highlights ✨

The financial highlights show significant variability in Q1 2026 compared to the prior period. While total assets grew solidly, net income and earnings per share dropped sharply due to non-recurring gains recorded in the previous quarter.

• Net Income: Live Oak reported net income attributable to common shareholders of $27.9 million, which translates to $0.60 per diluted common share for Q1 2026.
• Asset Growth: Total assets grew by 1.1% year-over-year, reaching $15.30 billion (or $15,300,033 thousand), compared to the $13.59 billion recorded in Q1 2025.
• Loan Production: The bank generated strong loan production of $1.37 billion in Q1 2026, which is slightly down compared to the $1.64 billion from the prior year, but still represents robust lending activity.
• Deposits: The company saw strong deposit growth of $146.4 million in Q1 2026, helping total deposits grow by 1.1% to $13.84 billion.

🏦 Balance Sheet Strength and Growth ⚖️

The balance sheet provides a snapshot of what the bank owns (assets) versus what it owes (liabilities). The balance sheet showed steady, gradual increases in the company's size and stability.

• Total Assets: As of Q1 2026, total assets reached $15.30 billion, up 1.1% from the previous quarter (Q4 2025: $15.13 billion). This steady growth suggests the bank is consistently expanding its scale.
• Loans and Leases: The core asset, loans and leases, stood at $11.96 billion, showing steady growth year-over-year (Q1 2025: $10.50 billion).
• Total Deposits: The company's deposits reached $13.84 billion, increasing 1.1% compared to the prior quarter. The total deposit balance is a crucial metric as it represents the stable, low-cost funding source for the bank.
• Borrowings: Borrowings (money borrowed from other institutions) increased by -2.6%, going from $102.4 million in Q4 2025 to $99.7 million in Q1 2026.

📈 Revenue Composition and Activity 💸

The income statement provides granular detail on where the bank earned its money. The revenue streams are driven by interest earned on loans and the non-interest revenue from services.

• Total Revenue: Total revenue for Q1 2026 was $145.5 million. This represented a decrease of 15.9% compared to Q4 2025, but was up 18.4% compared to Q1 2025.
• Non-Recurring Gains: The drop in revenue compared to Q4 2025 is largely attributed to non-core activities. Specifically, the decrease is linked to a $24.1 million pre-tax gain from the sale of Apiture, Inc., and a $9.0 million gain from selling a portfolio investment in Q4 2025.
• Net Interest Income: This income (the difference between interest earned and interest paid) was $123.1 million, marking a 18.8% increase compared to Q1 2025. However, it decreased 3.0% from Q4 2025.
• Noninterest Income: This segment, which includes fees and service charges, was $26.1 million, up 18.4% compared to Q1 2025.

📑 Profitability and Efficiency Ratios 📐

These ratios help investors understand how effectively the bank is using its resources to make money. Performance ratios are key for measuring health.

• Return on Average Assets (ROA): The ROA was 0.74% in Q1 2026. While this is a decrease from 1.19% in Q4 2025, it still shows the company's ability to generate returns relative to its total asset base.
• Return on Average Common Equity (ROE): The ROE was 9.39% in Q1 2026. This measures the return generated for the owners (shareholders) relative to the equity invested.
• Net Interest Margin (NIM): This margin was 3.27% in Q1 2026, compared to 3.38% in Q4 2025. The decrease, though modest, shows increased costs or reduced yields relative to the interest earned.
• Efficiency Ratio: This ratio is calculated by dividing noninterest expense by total revenue. For Q1 2026, the ratio was 58.63%. A lower percentage is generally better, suggesting the bank is efficient in controlling its operating costs.

🛡️ Credit Quality and Loan Metrics 🛡️

Bank stability hinges on the quality of its loans. This section tracks how much money the bank has set aside for potential loan losses.

• Allowance for Credit Losses: The bank set aside $20.1 million for provision expense in Q1 2026. This amount was lower than the $21.8 million provision in Q4 2025, indicating a slight improvement or reduced perceived risk in the lending environment.
• Total Loans and Leases: The total outstanding loan and lease balance was $12.59 billion. The ratio of the Allowance for Credit Losses to Net Loans and Leases was 1.62%, indicating the reserve set aside relative to the total lending portfolio.
• Nonperforming Loans (NPLs): The total nonperforming loans and leases (the loans that are not being paid back) were $444 million. This metric is used to gauge overall risk within the loan portfolio.

🗣️ Management Commentary and Strategic Focus 💬

The CEO's quote and the company’s focus areas provide crucial insight into the management's confidence and strategic priorities for the future.

• CEO James S. (Chip) Mahan III stated: "We are pleased with the momentum we’ve carried into 2026. Our first quarter results reflect the strength of our differentiated model and our commitment to serving America’s small business owners." This suggests management believes the underlying business strength is robust, despite the one-time revenue drops.
• Key Initiatives: Management remains focused on two core initiatives: Live Oak Express and business checking. This signals that the bank is heavily reinvesting in digital platforms and core services designed for small business users.
• Strategic Goal: The CEO emphasized a focus on "balance sheet strength and prudent capital management," assuring investors that the bank is maintaining a strong financial cushion while managing its capital wisely.

📅 What's Next: Upcoming Conference Call 🗓️

If you need more detail or want to hear directly from the management team, they have scheduled a follow-up call.

• Date: The conference call is scheduled for tomorrow, April 23, 2026.
• Topic: The call will discuss the Company's financial results and business outlook.
• Access: Details are provided, including a U.S. dial-in at 800.549.8228 and a webcast link at investor.liveoakbank.com.

📞 Key Contacts and Investor Relations 🧑‍💻

For specific questions, the filing provides dedicated contacts for financial and media inquiries.

• Investor Relations: Walter J. Phifer, CFO, can be reached at 910.202.6926.
• Media Relations: Claire Parker, Corporate Communications, can be reached at 910.597.1592.

🧠 The Analogy

Think of Live Oak Bank like a high-tech general store for small businesses. When the bank reports quarterly earnings, it’s like calculating the store’s cash register totals. In Q1 2026, the cash register numbers (Total Revenue) looked lower than the previous quarter, but that drop was primarily because they sold off a few valuable, one-time inventory items (the Apiture sale). The real story, according to management, is that the foundational daily sales—like stable deposits and steady lending (loan production)—are continuing to grow, showing the store is fundamentally strong and building value long-term.

🧩 Final Takeaway

Despite a quarter-over-quarter dip in headline revenue driven by non-recurring asset sales, Live Oak Bank reported steady growth in core assets and deposits, maintaining strong capital ratios. The bank's strategic focus on digital services and small business stability suggests underlying operational health and long-term value building.