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Banking & Finance

Live Oak Reports Higher Earnings, Deposits At End Of Q3 2020

By Jenny Callison, posted Oct 22, 2020
Several of Live Oak Bancshares’ key metrics were up as of Sept. 30, the end of the company’s third quarter. Net income and earnings per share were higher than those of both the second quarter of 2020 and the third quarter of 2019, company officials reported Wednesday.
 
The company’s net income for Q3 of 2020 was $33.8 million, up 767% from the net income of $3.8 million a year earlier and roughly the same percentage increase from the net income of $3.8 million at the end of Q2 of this year.  This past quarter’s diluted earnings per share were 81 cents, compared to 9 cents for Q3 2019 and Q2 2020.
 
The earnings per share amount exceeded analysts’ expectations by 56 cents, according to Seeking Alpha, a content service for financial markets.
 
Loan and lease origination during the quarter rose as well: Q3’s total was $966.5 million, up 72% from $562.3 million a year ago. Loan and lease production from the second quarter of this year, however, was substantially higher (at nearly $2.2 billion) because of Live Oak’s high volume of Paycheck Protection Program loan origination.
 
Total loans and leases at the end of September were at $6.2 billion, an 87% increase over the $3.3 billion value at the end of Q3 2019.
 
“We understand what a challenging year this has been for everyone, and we are pleased to report that our performance during the third quarter of 2020 successfully displayed our ability to help American small business owners in a time of real need,” Live Oak’s Chairman and CEO James “Chip” Mahan said in a news release. “We greatly exceeded our previous quarterly maximum for loan and lease origination at nearly $1 billion, excluding the work we accomplished for the Paycheck Protection Program.”
 
Live Oak Bank’s total deposits have grown 42% over the past year, increasing from just over $4 billion as of Sept. 30, 2019, to $5.7 billion a year later. But deposits decreased by $167.2 million quarter-over-quarter, “as excess deposits began to run off following the defensive strategy to build liquidity during the first quarter of 2020 due to the uncertainty of the effects of COVID-19,” the company stated in the release.
 
The company’s total assets increased 76% from the end of Q3 2019 to the end of Q3 2020, growing from $4.6 billion to nearly $8.1 billion. 
 
“Our core business has shown scale and efficiency thanks to previous investments in infrastructure and talent, and our position as a financial technology change leader was further validated with the increased valuations on several of our investments,” Mahan said in the release.
 
The financial institution’s stock price Thursday afternoon was $33.20, more than double the per-share price of about  $14 at the end of Q2 of this year.
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