Live Oak Bancshares : LiveOakBancshares Q4 2021 EarningsPresentation.pdf

FOURTH QUARTER 2021

January 26, 2022

©2022 Live Oak Bancshares. All rights reserved.

FORWARD LOOKING STATEMENTS	2

Information in this presentation may contain "forward-looking statements" within the Private Securities Litigation Reform Act of 1995. These statements generally relate to our financial condition, results of operations, plans, objectives, future performance or business and usually can be identified by the use of forward-looking terminology such as "may," "will," "would," "should," "could," "expect," "anticipate," "estimate," "believe," "plan," "intend," "project," "goals," "outlook," or "continue," or the negative thereof or other variations thereof or comparable terminology. These statements represent our judgment concerning the future and are subject to business, economic and other risks and uncertainties, both known and unknown. These statements are based on current expectations, estimates and projections about our business, management's beliefs and assumptions made by management. These statements are not guarantees of our future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements. Please see the Appendix for more information about these risks, uncertainties and assumptions.

Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Moreover, these forward-looking statements speak only as of the date they are made and based only on information actually known to us at the time. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Except as otherwise disclosed, forward-looking statements do not reflect: (i) the effect of any acquisitions, divestitures or similar transactions that have not been previously disclosed; (ii) any changes in laws, regulations or regulatory interpretations; or (iii) any change in current dividend or repurchase strategies, in each case after the date as of which such statements are made.

Non-GAAP Measures

This document presents non-GAAP financial measures. The adjustments to reconcile from the non-GAAP financial measures to the applicable GAAP financial measure are included where applicable in financial results presented in accordance with GAAP. Tabular presentation of this reconciliation is included in the Appendix to this document. We consider these adjustments to be relevant to ongoing operating results. We believe that excluding the amounts associated with these adjustments to present the non-GAAP financial measures provides a meaningful base for period-to-period comparisons, which will assist regulators, investors, and analysts in analyzing our operating results or financial position. The non-GAAP financial measures are used by management to assess the performance of our business for presentations of our performance to investors, and for other reasons as may be requested by investors and analysts. We further believe that presenting the non-GAAP financial measures will permit investors and analysts to assess our performance on the same basis as that applied by management. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. Although non-GAAP financial measures are frequently used by shareholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.

Numbers may not foot due to rounding in this presentation.

©2022 Live Oak Bancshares. All rights reserved.

LIVE OAK BANCSHARES Q4 GAAP RESULTS	3

©2022 Live Oak Bancshares. All rights reserved.

AGENDA	4

1. Chairman & CEO Remarks
2. 2021 & Q4 Highlights
3. Verticality - Our differentiated small business lending model
4. Scalability - Building the moat
5. Optionality - Value creation through industry disruption
6. Q&A

©2022 Live Oak Bancshares. All rights reserved.

LIVE OAK 2021 HIGHLIGHTS		5
Our Path to Becoming America's Small Business Bank
	$3.71	75%	$3.9B | 46%	32%	23%
	FY 2021	Adjusted PPNR1	Loan Production2	Loan	Tangible Book
	Diluted EPS	Growth YoY	and Growth YoY	Growth2 YoY	Value Growth YoY

VERTICALITY

Differentiated lending model dedicated to small businesses

• Significant loan production2 momentum, with broad-based strength across verticals
• • 50% SBA | 40% Conventional | 10% Other
• $668 million of guaranteed loans sold
• • 43% of loans that became eligible for sale in 2021; 35% of SBA
  • Strong gain on sale premiums
• Credit quality excellent
• • 0.08% NCOs
  • 0.33% Unguaranteed NPLs3

SCALABILITY

Building the moat

• 164 net new FTEs in 2021; 26% increase
• • 82% in lender/lender support and technology
  • Retention remains strong at 91% in 2021
• Energy & Infrastructure loans crossed $1 billion of total originations
• Business savings deposits crossed $1 billion
• Launched checking in Q4
• Converted 60,000+ deposit accounts
  to Finxact in Q3, joining PPP loans already on Finxact platform

OPTIONALITY

Value creation through industry disruption

• Implied value4 of ventures investments increased $27mm from existing portfolio company growth
• Realized $44mm gain on Greenlight investment
• Added 2 direct investments
• Canapi Fund I investments performing well; several portfolio companies in use at Live Oak
• Next-genplatform designed to enable product and service innovation for our customers
• Current and future use cases compelling

1.) Adjusted Non-GAAP financial measures. See Appendix for reconciliation of non-GAAP items to reported balances. 2.) Excluding PPP. 3.) Unguaranteed nonperforming loans and leases excluding those accounted for under the fair value option to loans and leases held for investment carried at historical cost. 4.) Estimated implied value based on most recent transaction data and not necessarily indicative of current or future value.

©2022 Live Oak Bancshares. All rights reserved.