Live Oak Bancshares, Inc.LOB

Live Oak Bancshares, Inc. Segments Disclosure

10-KFiled Feb 22, 20242 min read
Segments
The Company's management reporting process measures the performance of its operating segments based on internal operating structure, which is subject to change from time to time. Accordingly, the Company operates two reportable segments for management reporting purposes as discussed below:
Banking - This segment specializes in providing financing services to small businesses nationwide in targeted industries and deposit-related services to small businesses, consumers and other customers nationwide. The primary source of revenue for this segment is net interest income and secondarily the origination and sale of government guaranteed loans.
Fintech - This segment is involved in making strategic investments into emerging financial technology companies. The primary sources of revenue for this segment are principally gains and losses on equity method and equity security investments and management fees. The Fintech segment is comprised of the Company's direct wholly owned subsidiaries Live Oak Ventures and Canapi Advisors, and the investments held by those entities, as well as the Bank's investment in Apiture.
The following tables provide financial information for the Company's segments. The information provided under the caption “Other” represents operations not considered to be reportable segments and/or general operating expenses of the Company, and includes the parent company, other non-bank subsidiaries and elimination adjustments to reconcile the results of the operating segments to the consolidated financial statements prepared in conformity with GAAP.
Banking Fintech Other Consolidated
As of and for the year ended December 31, 2023
Interest income$687,655 $39 $581 $688,275 
Interest expense341,789 — 1,181 342,970 
Net interest income345,866 39 (600)345,305 
Provision for loan and lease credit losses51,323 — — 51,323 
Noninterest income101,054 8,297 2,382 111,733 
Noninterest expense303,695 10,458 8,732 322,885 
Income tax (benefit) expense 9,106 1,034 (1,208)8,932 
Net income (loss)$82,796 $(3,156)$(5,742)$73,898 
Total assets$11,145,385 $131,310 $(5,272)$11,271,423 
As of and for the year ended December 31, 2022
Interest income$444,307 $93 $73 $444,473 
Interest expense115,324 — 1,648 116,972 
Net interest income328,983 93 (1,575)327,501 
Provision for loan and lease credit losses40,943 — — 40,943 
Noninterest income80,562 155,028 2,402 237,992 
Noninterest expense296,891 9,413 7,922 314,226 
Income tax (benefit) expense(226)36,016 (1,674)34,116 
Net income (loss)$71,937 $109,692 $(5,421)$176,208 
Total assets$9,672,458 $124,249 $58,791 $9,855,498 
As of and for the year ended December 31, 2021
Interest income$360,986 $201 $26 $361,213 
Interest expense63,119 — 1,309 64,428 
Net interest income297,867 201 (1,283)296,785 
Provision for loan and lease credit losses15,210 — — 15,210 
Noninterest income114,363 43,141 2,696 160,200 
Noninterest expense215,819 5,395 9,773 230,987 
Income tax (benefit) expense 35,539 10,280 (2,026)43,793 
Net income (loss)$145,662 $27,667 $(6,334)$166,995 
Total assets$8,053,212 $121,889 $38,292 $8,213,393 

Historical Timeline

Fiscal YearFiled
2023Feb 22, 2024Showing above
2022Feb 23, 2023
2021Feb 24, 2022
2020Feb 25, 2021

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

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