Banking & Finance

Live Oak Reports Lower Income, A Leap In Lending, For Q2 2020

By Jenny Callison, posted Jul 23, 2020
Live Oak Bancshares’ net income for the second quarter of 2020 was down about $1.2 million compared with that of the second quarter of 2019, officials reported during the quarterly earnings call Thursday morning.

Diluted earnings per share were 9 cents, a decline of 3 cents per share from a year ago. Deposits increased more than $2 billion, from $3.7 billion at the end of Q2 of 2019 to almost $5.9 billion for the most recent quarter.

A look at the figures for loans and leases originated this past quarter points to the quarter’s real story. Live Oak originated more than $2 billion in loans and leases, a jump of 314% over the total for Q2 of 2019. Much of that increase resulted from the SBA’s Paycheck Protection Program (PPP).

Dominating Thursday’s earnings call was a report of the bank’s high level of involvement with SBA emergency lending in the face of COVID-19. Work to help existing SBA borrowers and Paycheck Protection Program loan applicants overshadowed almost every other activity during the quarter ended June 30, according to the officials. Live Oak Chairman and CEO James “Chip” Mahan called the period just ended “a very complex” quarter.

“Live Oak leveraged the power of its people and technology platforms in the second quarter of 2020 to deliver in excess of $1.7 billion of loans through the Paycheck Protection Program,” Mahan said in the earnings news release. “We fully lived out our mission as we provided much-needed capital to more than 10,000 small businesses across the U.S.”

As the economic ripples caused by COVID-19-related shutdowns and cutbacks made federal mitigation a necessity, Live Oak Bank prepared to do whatever it could to take care of its customers, Mahan said Thursday afternoon. The bank prepared by borrowing about $1 billion to establish a pool from which to advance PPP funds to successful applicants.

In addition to helping its existing borrowers arrange to have their loan payments deferred and making sure that the SBA would pay the principal and interest for six months on its customers’ SBA loans, Live Oak focused its attention on securing as many of those PPP loans as possible.

When current borrowers’ needs were addressed, Live Oak – the nation’s largest SBA lender – turned its attention to the community, processing local PPP applications from local businesses and organizations.

“We are most proud of the fact that we saved 8,500 jobs at 723 businesses and organizations in Wilmington,” Mahan said. “That includes 56 nonprofits and 11 churches.”

Although the PPP loans were not big revenue generators for the banks that made them, those lenders did earn fees for their work. Live Oak reaped about $60 million in fees, but Mahan said $7 million of that total was given to all Live Oak employees, with the exception of senior executives, in the form of bonuses.

“We worked our people twice as hard, and hired no new staff to handle [the additional lending activity],” Mahan said.
Ico insights


Burrus rob headshot 300x300

Internal Auditors Can Serve A Key Role In Tough Times

Robert Burrus - Cameron School of Business - UNC-Wilmington
Chris coudriet

Share Your Feedback, Perceptions About Workforce Housing And Housing Affordability

Chris Coudriet - New Hanover County Government
Headshot2 3182020512

Things To Know Before Installing A HEPA Filter

Chris Jones - Green Dot Heating & Air

Trending News

Cape Fear Sports Medicine Joining EmergeOrtho

Staff Reports - Sep 25, 2020

South College Road Property For Sale After Honda Dealership's Move

Cece Nunn - Sep 24, 2020

NHC Commissioners Look To Vote Oct. 5 On Hospital Sale

Vicky Janowski - Sep 25, 2020

Third ReStore In New Hanover County Helps Expand Habitat Capabilities

Jenny Callison - Sep 24, 2020

State's $40M Relief Program Could Help Local Businesses

Christina Haley O'Neal - Sep 24, 2020

In The Current Issue

Biz Expo Keynote: Naudé Oversees NCino's Rapid Growth

CEO Pierre Naudé, who took the helm of Wilmington-based nCino in 2012, is a keynote speaker for this year's WilmingtonBiz Conference & Expo....

Take A Walk To Local Movie Sites In Town Of Burgaw

The town of Burgaw might seem a long way from California’s Tinseltown, but it has been a star in its own right as the backdrop to many Holly...

Connecting The Business Community Amid The Shutdowns

This year's WilmingtonBiz Conference & Expo is a little different, but still aims to help the area's business community make vital one-on-on...

Book On Business

The 2020 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!



2020 Leadership Accelerator: Virtual Workshops for Real Leaders
2019 Health Care Heroes
August 26, 2019 Power Breakfast: A Healthy Sale?
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`