United States securities and exchange commission logo
June 15, 2022
William C. Losch, III
Chief Financial Officer
Live Oak Bancshares, Inc.
1741 Tiburon Drive
Wilmington, North Carolina 28403
Re: Live Oak
Bancshares, Inc.
Form 10-K for the
fiscal year ended December 31, 2021
Filed February 24,
2022
File No. 001-37497
Dear Mr. Losch:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the fiscal year ended December 31, 2022
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Non-GAAP Measures, page 64
1. We note that you
present different non-GAAP measures in the slide deck presentation
accompanying your
earnings conference call for the first quarter of 2022 held on April 28,
2022 as compared to the
non-GAAP measures presented here. Please tell us why it is
appropriate to reflect
each of the adjustments presented on slide 36 of that presentation for
the following measures:
Adjusted net
interest income
Adjusted
noninterest income
Adjusted
noninterest expense
Adjusted PPNR
Adjusted net income
before tax
In your response tell
us how each such adjustment is not a prohibited tailored recognition
William C. Losch, III
Live Oak Bancshares, Inc.
June 15, 2022
Page 2
or measurement method as stipulated in Question 100.04 or represents
the prohibited
removal of normal, recurring cash operating expenses as stipulated in
Question 100.01 of
the Compliance and Disclosure Interpretations for Non-GAAP Financial
Measures.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk, page 68
2. You disclose that you have an asset sensitive balance sheet with a
cumulative gap in
interest-earning assets and interest-bearing liabilities of 4.55%. You
indicate on page 69
that this gap would result in higher net interest income with a
unilateral increase in market
interest rates; however, during your first quarter 2022 earnings
conference call
you indicated that interest rate increases by the Federal Reserve in
2022 higher than
initially contemplated would result in a decrease in your net interest
margin. Please
reconcile for us how increased net interest income from this
disclosure would result in
lower net interest margin.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Mark Brunhofer at (202) 551-3638 or Sharon Blume at (202)
551-
3474 with any questions.
FirstName LastNameWilliam C. Losch, III Sincerely,
Comapany NameLive Oak Bancshares, Inc.
Division of
Corporation Finance
June 15, 2022 Page 2 Office of
Finance
FirstName LastName