Like many banking companies across the U.S., Wilmington-based Live Oak Bancshares experienced some stormy weather during the first quarter of 2023.
The difficulties of navigating through a landscape marked by two bank failures and a subsequent loss of public confidence in the industry were reflected in some officials’ comments Wednesday as the company announced its earnings for the first quarter of fiscal 2023, which ended March 31.
“The headlines for the first quarter of 2023 centered around deposits, liquidity, and credit. In the midst of this discourse, Live Oak weathered the noise and has a solid story to tell with continued deposit growth, a record first quarter for production backed by strong liquidity and healthy credit,” the company’s Chairman and CEO James “Chip” Mahan said in Wednesday’s earnings release. “We will continue to do what we have been doing since inception, diligently working to be America’s small business bank, while keeping a focus on soundness, profitability, and growth, in that order.”
Live Oak’s total revenue for the quarter was nearly $101.6 million, down $3.3 million from revenue in Q4 of 2022 and down almost $9 million year over year. Diluted earnings per share were $.01 compared with $.04 the previous quarter and $.76 for the first quarter of 2022.
Loan and lease origination likewise was down slightly from that of the previous quarter: about $1 billion compared with Q4 of FY 22 of nearly $1.2 billion. But comparing the past quarter with the first quarter of FY 22, loan and lease production was up nearly $166 million.
Live Oak’s total deposits increased, both quarter over quarter and year over year. As of March 31 of this year, the company held nearly $9.5 billion in deposits. That represented a 6% increase over Q4 of FY 22 deposit totals and an 8% increase over those of Q1 FY 22.
Another bright spot was the decrease in Live Oak’s borrowing over the just-ended quarter.
Borrowings totaled $30.8 million as of March 31, 2023, compared to $83.2 million at the end of Q4 of 2022 and $197 million in Q1 of 2022.
“The decrease from the fourth quarter of 2022 was principally due to paying off the Company’s Fed Funds line of credit while the decrease from the first quarter of 2022 was primarily the result of paying off the outstanding balance of the Federal Reserve’s Paycheck Protection Program Liquidity Facility in September 2022,” the release stated.
Live Oak Bancshares' stock rose to $23.09 from $21.55 Thursday in trading on the New York Stock Exchange.
NOTE: This version of the story was updated to show the company's closing stock price.