Content analysis
?Positive | ||
Negative | ||
Uncertain | ||
Constraining | ||
Legalese | ||
Litigous | ||
Readability |
H.S. freshman Avg
|
Financial report summary
?Risks
- We may experience increased delinquencies and credit losses, which could have a material adverse effect on our capital, financial condition, and results of operations.
- SBA lending and other government guaranteed lending is an important part of our business. These lending programs are dependent upon the federal government, and we face specific risks associated with originating SBA and other government guaranteed loans.
- A prolonged U.S. government shutdown or default by the U.S. on government obligations would harm our results of operations.
- A failure in or breach of our operational or security systems, or those of our third-party service providers, including as a result of cyber-attacks, could disrupt our business, result in unintentional disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses.
- The fair value of our investment securities can fluctuate due to factors outside of our control.
- Our ACL may prove to be insufficient to absorb lifetime losses on loans, leases and off-balance sheet credit exposures.
- The valuation of our loans measured at fair value is based on estimates and subject to fluctuation based on market conditions and other factors that are beyond our control.
- The valuation of our servicing rights is based on estimates and subject to fluctuation based on market conditions and other factors that are beyond our control.
- The recognition of gains on the sale of loans reflects certain assumptions.
- Our rental equipment is subject to residual value risk upon disposition, and may not sell at the prices or in the quantities we expect.
- We are subject to liquidity risk in our operations.
- Changes in the interest rate environment could reduce our net interest income, which could reduce our profitability.
- The amount of other real estate owned, or OREO, may increase significantly, resulting in additional losses, and costs and expenses that will negatively affect our operations.
- We are subject to environmental liability risk associated with our lending activities.
- Our use of appraisals in deciding whether to make a loan secured by real property or how to value the loan in the future may not accurately reflect the net value of the collateral that we can realize.
- We could be subject to losses, regulatory action or reputational harm due to fraudulent and negligent acts on the part of loan applicants, our borrowers, our employees and vendors.
- New lines of business or new products and services may subject us to additional risks.
- We are subject to risk in connection with our strategic activities, including acquisitions, joint ventures, partnerships, and investments.
- Our investments in financial technology companies and initiatives, including our investment in Apiture and the activities of our subsidiary Canapi Advisors, subject us to material financial, reputational and strategic risks.
- Our investments in other companies may be illiquid.
- Our investments and/or financings in certain tax-advantaged projects may not generate returns as anticipated and may have an adverse impact on our financial results.
- Our loan portfolio may be affected by deterioration in real estate markets, including declines in the performance of loans.
- Deterioration in the commercial soundness of our counterparties could adversely affect us.
- We have different lending risks than larger, more diversified banks.
- Insiders have substantial control over us, and this control may limit our shareholders’ ability to influence corporate matters and may delay or prevent a third party from acquiring control over us.
- We are subject to extensive regulation that could limit or restrict our activities.
- We are required to maintain capital to meet regulatory requirements, and, if we fail to maintain sufficient capital, whether due to growth opportunities, losses or an inability to raise additional capital or otherwise, our financial condition, liquidity and results of operations, as well as our compliance with regulatory requirements, would be adversely affected.
- Because our total assets exceed $10 billion, we are subject to heightened regulatory requirements, which could have an adverse effect on our financial condition or results of operations.
- Our FDIC deposit insurance premiums and assessments may increase.
- Negative developments affecting the banking industry have eroded customer confidence in the banking system and may result in additional regulations that could increase the Company’s expenses and affect its operations.
- We may incur increased costs to comply with privacy and data security laws and regulations and, to the extent we fail to comply, we could be subject to government enforcement actions, private claims and litigation, adverse publicity, loss of customers, and other negative outcomes.
- The low trading volume in our common stock may adversely affect your ability to resell shares at prices that you find attractive or at all.
- Future sales of shares of our common stock by existing shareholders could depress the market price of our common stock.
- There can be no assurance that we will continue to pay cash dividends.
- Live Oak Bancshares, Inc. is subject to extensive regulation, and ownership of our common stock may have regulatory implications for its holders.
- Anti-takeover provisions could adversely affect Live Oak Bancshares, Inc. shareholders.
- Shares of Live Oak Bancshares, Inc.’s common stock are not insured deposits and may lose value.
- We face strong competition from a diverse group of competitors.
- We rely heavily on our management team and depend on our ability to attract and retain key personnel, and the unexpected loss of any of those personnel could adversely affect our operations.
- Our risk management framework may not be effective in mitigating risks and/or losses to us.
- Hurricanes or other adverse weather events could disrupt our operations, which could have an adverse effect on our business or results of operations.
- If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results. As a result, current and potential shareholders could lose confidence in our financial reporting which would harm our business and the trading price of our securities.
- Changes in accounting standards and management’s selection of accounting methods, including assumptions and estimates, could materially impact our financial statements.
- Our business reputation is important and any damage to it could have a material adverse effect on our business.
Management Discussion
- For 2023, noninterest income decreased by $126.3 million, or 53.1%, compared to 2022. The decrease over the prior year is primarily a result of the aggregate $149.2 million in Finxact and Payrailz gains included in equity method investments income in 2022. To a lesser extent, the decrease was also influenced by a $4.6 million negative change in net losses on loans accounted for under the fair value option and decreased equity security investments gains of $4.3 million. Partially offsetting the decrease over 2022 was an increased net gain of $21.5 million related to the loan servicing asset revaluation combined with increased net gains on sales of loans of $3.3 million and a $3.2 million increase in management fee income generated by Canapi Advisors. Canapi Advisors is included in the Company's Fintech segment.