LOB Live Oak Bancshares Inc

Live Oak Bancshares, Inc. (NYSE: LOB) (“Live Oak” or “the Company”) today reported fourth quarter of 2024 net income attributable to the Company of $9.9 million, or $0.22 per diluted share. Net income attributable to the Company for the year ended December 31, 2024, totaled $77.5 million, or $1.69 per diluted share.

Live Oak’s performance in 2024, includes these notable items:

• Record year of $5.16 billion of loan production accompanied by strong deposit growth of $1.49 billion, total assets grew by 14.8% to $12.94 billion
• 9% growth in revenue and 3% reduction in noninterest expenses generated 38% growth in pre-provision net revenue1
• Increased provision expense for credit losses of $44.9 million, or 87.5%, driven by record loan growth combined with the impacts of the current macroeconomic environment
• Two key initiatives saw positive momentum — non-interest bearing deposit growth and small dollar loan production

“Live Oak Bank’s fourth quarter performance demonstrates our continued trajectory to grow the company in service of America’s small business owners,” said Live Oak Chairman and CEO James S. (Chip) Mahan III. “This year, we expanded loan and deposit products in meaningful ways, stayed close to our borrowers through challenges, and leveraged our greatest asset, our employees, to produce strong results across the year.”

Conference Call

Live Oak will host a conference call to discuss the company's financial results and business outlook tomorrow, January 23, 2025, at 9:00 a.m. ET.

The call will be accessible by telephone and webcast using Conference ID: 33467. A supplementary slide presentation will be posted to the website prior to the event, and a replay will be available for 12 months following the event. The conference call details are as follows:

Live Telephone Dial-In

U.S.: 800.549.8228 International: +1 289.819.1520Pass Code: None Required

Live Webcast Log-In

Webcast Link: investor.liveoakbank.com Registration: Name and Email Required Multi-Factor Code: Provided After Registration

(1)  See accompanying GAAP to Non-GAAP Reconciliation.

Year Over Year Highlights

(Dollars in thousands, except per share data)									Increase (Decrease)
		2024				2023			Dollars				Percent
Total revenue (1)	$	499,686			$	457,038			$	42,648			9	%
Total noninterest expense		314,239				322,885				(8,646	)		(3	)
Income before taxes		89,235				82,830				6,405			8
Effective tax rate		13.2	%			10.8	%			n/a			n/a
Net income attributable to Live Oak Bancshares, Inc.	$	77,474			$	73,898			$	3,576			5	%
Diluted earnings per share		1.69				1.64				0.05			3
Loan and lease production:
Loans and leases originated	$	5,155,244			$	3,946,873			$	1,208,371			31	%
% Fully funded		44.2	%			55.1	%			n/a			n/a
Total loans and leases:	$	10,579,376			$	9,020,884			$	1,558,492			17	%
Total assets:		12,943,380				11,271,423				1,671,957			15
Total deposits:		11,760,494				10,275,019				1,485,475			14

(1)  Total revenue consists of net interest income and total noninterest income.Fourth Quarter 2024 Key Measures

(Dollars in thousands, except per share data)									Increase (Decrease)
	4Q 2024				3Q 2024				Dollars				Percent			4Q 2023
Total revenue (1)	$	128,067			$	129,932			$	(1,865	)		(1	)%		$	119,683
Total noninterest expense		81,257				77,589				3,668			5				93,204
Income before taxes		13,229				17,841				(4,612	)		(26	)			17,484
Effective tax rate		25.6	%			27.0	%			n/a			n/a				7.6	%
Net income attributable to Live Oak Bancshares, Inc.	$	9,900			$	13,025			$	(3,125	)		(24	)%		$	16,163
Diluted earnings per share		0.22				0.28				(0.06	)		(21	)			0.36
Loan and lease production:
Loans and leases originated	$	1,421,118			$	1,757,856			$	(336,738	)		(19	)%		$	981,703
% Fully funded		42.4	%			42.4	%		n/a				n/a				49.0	%

(1)  Total revenue consists of net interest income and total noninterest income.

Important Note Regarding Forward-Looking Statements

Statements in this press release that are based on other than historical data or that express the Company’s plans or expectations regarding future events or determinations are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements based on historical data are not intended and should not be understood to indicate the Company’s expectations regarding future events. Forward-looking statements provide current expectations or forecasts of future events or determinations. These forward-looking statements are not guarantees of future performance or determinations, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that could cause actual results to differ materially from those expressed in the forward-looking statements include changes in Small Business Administration (“SBA”) rules, regulations or loan products, including the Section 7(a) program, changes in SBA standard operating procedures or changes in Live Oak Banking Company's status as an SBA Preferred Lender; changes in rules, regulations or procedures for other government loan programs, including those of the United States Department of Agriculture; the impacts of global health crises and pandemics, such as the Coronavirus Disease 2019 (COVID-19) pandemic, on trade (including supply chains and export levels), travel, employee productivity and other economic activities that may have a destabilizing and negative effect on financial markets, economic activity and customer behavior; adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; a reduction in or the termination of the Company's ability to use the technology-based platform that is critical to the success of its business model, including a failure in or a breach of operational or security systems or those of its third party service providers; technological risks and developments, including cyber threats, attacks, or events; competition from other lenders; the Company's ability to attract and retain key personnel; market and economic conditions and the associated impact on the Company; operational, liquidity and credit risks associated with the Company's business; changes in political and economic conditions, including any prolonged U.S. government shutdown; the impact of heightened regulatory scrutiny of financial products and services and the Company's ability to comply with regulatory requirements and expectations; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget; adverse results, including related fees and expenses, from pending or future lawsuits, government investigations or private actions; and the other factors discussed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and available at the SEC’s Internet site (http://www.sec.gov). Except as required by law, the Company specifically disclaims any obligation to update any factors or to publicly announce the result of revisions to any of the forward-looking statements included herein to reflect future events or developments.

About Live Oak Bancshares, Inc.

Live Oak Bancshares, Inc. (NYSE: LOB) is a financial holding company and the parent company of Live Oak Bank. Live Oak Bancshares and its subsidiaries partner with businesses that share a groundbreaking focus on service and technology to redefine banking. To learn more, visit www.liveoakbank.com.

Contacts:

Walter J. Phifer, CFO | Investor Relations | 910.202.6926Claire Parker | Corporate Communications | Media Relations | 910.597.1592

Live Oak Bancshares, Inc.Quarterly Statements of Income (unaudited)(Dollars in thousands, except per share data)
	Three Months Ended																				4Q 2024 Change vs.
	4Q 2024				3Q 2024				2Q 2024				1Q 2024				4Q 2023				3Q 2024			4Q 2023
Interest income																					%			%
Loans and fees on loans	$	194,821			$	192,170			$	181,840			$	176,010			$	169,531			1.4			14.9
Investment securities, taxable		10,490				9,750				9,219				8,954				8,746			7.6			19.9
Other interest earning assets		7,257				7,016				7,389				7,456				8,259			3.4			(12.1	)
Total interest income		212,568				208,936				198,448				192,420				186,536			1.7			14.0
Interest expense
Deposits		113,357				110,174				105,358				101,998				96,695			2.9			17.2
Borrowings		1,737				1,762				1,770				311				265			(1.4	)		555.5
Total interest expense		115,094				111,936				107,128				102,309				96,960			2.8			18.7
Net interest income		97,474				97,000				91,320				90,111				89,576			0.5			8.8
Provision for credit losses		33,581				34,502				11,765				16,364				8,995			(2.7	)		273.3
Net interest income after provision for credit losses		63,893				62,498				79,555				73,747				80,581			2.2			(20.7	)
Noninterest income
Loan servicing revenue		8,524				8,040				7,347				7,624				7,342			6.0			16.1
Loan servicing asset revaluation		(2,326	)			(4,207	)			(2,878	)			(2,744	)			(3,974	)		44.7			41.5
Net gains on sales of loans		18,356				16,646				14,395				11,502				12,891			10.3			42.4
Net gain (loss) on loans accounted for under the fair value option		195				2,255				172				(219	)			(170	)		(91.4	)		214.7
Equity method investments (loss) income		(2,739	)			(1,393	)			(1,767	)			(5,022	)			47			(96.6	)		(5,927.7	)
Equity security investments gains (losses), net		12				909				161				(529	)			(384	)		(98.7	)		103.1
Lease income		2,456				2,424				2,423				2,453				2,439			1.3			0.7
Management fee income		—				1,116				3,271				3,271				3,309			(100.0	)		(100.0	)
Other noninterest income		6,115				7,142				11,035				9,761				8,607			(14.4	)		(29.0	)
Total noninterest income		30,593				32,932				34,159				26,097				30,107			(7.1	)		1.6
Noninterest expense
Salaries and employee benefits		45,214				44,524				46,255				47,275				44,274			1.5			2.1
Travel expense		2,628				2,344				2,328				2,438				1,544			12.1			70.2
Professional services expense		2,797				3,287				3,061				1,878				3,052			(14.9	)		(8.4	)
Advertising and marketing expense		1,979				2,473				3,004				3,692				2,501			(20.0	)		(20.9	)
Occupancy expense		2,558				2,807				2,388				2,247				2,231			(8.9	)		14.7
Technology expense		9,406				9,081				7,996				7,723				8,402			3.6			11.9
Equipment expense		3,769				3,472				3,511				3,074				3,480			8.6			8.3
Other loan origination and maintenance expense		4,812				4,872				3,659				3,911				3,937			(1.2	)		22.2
Renewable energy tax credit investment impairment (recovery)		1,172				115				170				(927	)			14,575			919.1			(92.0	)
FDIC insurance		3,053				1,933				2,649				3,200				4,091			57.9			(25.4	)
Other expense		3,869				2,681				2,635				3,226				5,117			44.3			(24.4	)
Total noninterest expense		81,257				77,589				77,656				77,737				93,204			4.7			(12.8	)
Income before taxes		13,229				17,841				36,058				22,107				17,484			(25.9	)		(24.3	)
Income tax expense (benefit)		3,386				4,816				9,095				(5,479	)			1,321			(29.7	)		156.3
Net income		9,843				13,025				26,963				27,586				16,163			(24.4	)		(39.1	)
Net loss attributable to non-controlling interest		57				—				—				—				—			100.0			100.0
Net income attributable to Live Oak Bancshares, Inc.	$	9,900			$	13,025			$	26,963			$	27,586			$	16,163			(24.0	)		(38.7	)
Earnings per share
Basic	$	0.22			$	0.28			$	0.60			$	0.62			$	0.36			(21.4	)		(38.9	)
Diluted	$	0.22			$	0.28			$	0.59			$	0.60			$	0.36			(21.4	)		(38.9	)
Weighted average shares outstanding
Basic		45,224,470				45,073,482				44,974,942				44,762,308				44,516,646
Diluted		46,157,979				45,953,947				45,525,082				45,641,210				45,306,506

Live Oak Bancshares, Inc.Quarterly Balance Sheets (unaudited)(Dollars in thousands)
	As of the quarter ended																				4Q 2024 Change vs.
	4Q 2024				3Q 2024				2Q 2024				1Q 2024				4Q 2023				3Q 2024			4Q 2023
Assets																					%			%
Cash and due from banks	$	608,800			$	666,585			$	615,449			$	597,394			$	582,540			(8.7	)		4.5
Certificates of deposit with other banks		250				250				250				250				250			—			—
Investment securities available-for-sale		1,248,203				1,233,466				1,151,195				1,120,622				1,126,160			1.2			10.8
Loans held for sale		346,002				359,977				363,632				310,749				387,037			(3.9	)		(10.6	)
Loans and leases held for investment (1)		10,233,374				9,831,891				9,172,134				8,912,561				8,633,847			4.1			18.5
Allowance for credit losses on loans and leases		(167,516	)			(168,737	)			(137,867	)			(139,041	)			(125,840	)		(0.7	)		33.1
Net loans and leases		10,065,858				9,663,154				9,034,267				8,773,520				8,508,007			4.2			18.3
Premises and equipment, net		264,059				267,032				267,864				258,071				257,881			(1.1	)		2.4
Foreclosed assets		1,944				8,015				8,015				8,561				6,481			(75.7	)		(70.0	)
Servicing assets		56,144				52,553				51,528				49,343				48,591			6.8			15.5
Other assets		352,120				356,314				376,370				387,059				354,476			(1.2	)		(0.7	)
Total assets	$	12,943,380			$	12,607,346			$	11,868,570			$	11,505,569			$	11,271,423			2.7			14.8
Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest-bearing	$	318,890			$	258,844			$	264,013			$	226,668			$	259,270			23.2			23.0
Interest-bearing		11,441,604				11,141,703				10,443,018				10,156,693				10,015,749			2.7			14.2
Total deposits		11,760,494				11,400,547				10,707,031				10,383,361				10,275,019			3.2			14.5
Borrowings		112,820				115,371				117,745				120,242				23,354			(2.2	)		383.1
Other liabilities		66,570				83,672				82,745				74,248				70,384			(20.4	)		(5.4	)
Total liabilities		11,939,884				11,599,590				10,907,521				10,577,851				10,368,757			2.9			15.2
Shareholders’ equity
Preferred stock, no par value, 1,000,000 shares authorized, none issued or outstanding		—				—				—				—				—			—			—
Class A common stock (voting)		365,607				361,925				356,381				349,648				344,568			1.0			6.1
Class B common stock (non-voting)		—				—				—				—				—			—			—
Retained earnings		715,767				707,026				695,172				669,307				642,817			1.2			11.3
Accumulated other comprehensive loss		(82,344	)			(61,195	)			(90,504	)			(91,237	)			(84,719	)		34.6			(2.8	)
Total shareholders' equity attributed to Live Oak Bancshares, Inc.		999,030				1,007,756				961,049				927,718				902,666			(0.9	)		10.7
Non-controlling interest		4,466				—				—				—				—			100.0			100.0
Total shareholders’ equity		1,003,496				1,007,756				961,049				927,718				902,666			(0.4	)		11.2
Total liabilities and shareholders’ equity	$	12,943,380			$	12,607,346			$	11,868,570			$	11,505,569			$	11,271,423			2.7			14.8

(1)  Includes $328.7 million, $343.4 million, $363.0 million, $379.2 million and $388.0 million measured at fair value for the quarters ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively.

Live Oak Bancshares, Inc.Statements of Income (unaudited)(Dollars in thousands, except per share data)
	Twelve Months Ended
	December 31, 2024				December 31, 2023
Interest income
Loans and fees on loans	$	744,841			$	623,667
Investment securities, taxable		38,413				33,497
Other interest earning assets		29,118				31,111
Total interest income		812,372				688,275
Interest expense
Deposits		430,887				340,207
Borrowings		5,580				2,763
Total interest expense		436,467				342,970
Net interest income		375,905				345,305
Provision for credit losses		96,212				51,323
Net interest income after provision for credit losses		279,693				293,982
Noninterest income
Loan servicing revenue		31,535				27,399
Loan servicing asset revaluation		(12,155	)			4,886
Net gains on sales of loans		60,899				46,545
Net gain (loss) on loans accounted for under the fair value option		2,403				(3,539	)
Equity method investments (loss) income		(10,921	)			(5,994	)
Equity security investments gains (losses), net		553				(969	)
Lease income		9,756				10,007
Management fee income		7,658				13,324
Other noninterest income		34,053				20,074
Total noninterest income		123,781				111,733
Noninterest expense
Salaries and employee benefits		183,268				175,052
Travel expense		9,738				8,922
Professional services expense		11,023				7,737
Advertising and marketing expense		11,148				12,559
Occupancy expense		10,000				8,490
Technology expense		34,206				31,858
Equipment expense		13,826				14,997
Other loan origination and maintenance expense		17,254				14,804
Renewable energy tax credit investment impairment		530				14,644
FDIC insurance		10,835				16,670
Other expense		12,411				17,152
Total noninterest expense		314,239				322,885
Income before taxes		89,235				82,830
Income tax expense		11,818				8,932
Net income		77,417				73,898
Net loss attributable to non-controlling interest		57				—
Net income attributable to Live Oak Bancshares, Inc.	$	77,474			$	73,898
Earnings per share
Basic	$	1.72			$	1.67
Diluted	$	1.69			$	1.64
Weighted average shares outstanding
Basic		45,009,567				44,353,708
Diluted		45,820,321				45,094,879

Live Oak Bancshares, Inc.Quarterly Selected Financial Data(Dollars in thousands, except per share data)
	As of and for the three months ended
	4Q 2024				3Q 2024				2Q 2024				1Q 2024				4Q 2023
Income Statement Data
Net income attributable to Live Oak Bancshares, Inc.	$	9,900			$	13,025			$	26,963			$	27,586			$	16,163
Per Common Share
Net income, diluted	$	0.22			$	0.28			$	0.59			$	0.60			$	0.36
Dividends declared		0.03				0.03				0.03				0.03				0.03
Book value		22.12				22.32				21.35				20.64				20.23
Tangible book value (1)		22.05				22.24				21.28				20.57				20.15
Performance Ratios
Return on average assets (annualized)		0.31	%			0.43	%			0.93	%			0.98	%			0.58	%
Return on average equity (annualized)		3.85				5.21				11.39				11.93				7.36
Net interest margin		3.15				3.33				3.28				3.33				3.32
Efficiency ratio (1)		63.45				59.72				61.89				66.89				77.88
Noninterest income to total revenue		23.89				25.35				27.22				22.46				25.16
Selected Loan Metrics
Loans and leases originated	$	1,421,118			$	1,757,856			$	1,171,141			$	805,129			$	981,703
Outstanding balance of sold loans serviced		4,715,895				4,452,750				4,292,857				4,329,097				4,238,328
Asset Quality Ratios
Allowance for credit losses to loans and leases held for investment (3)		1.69	%			1.78	%			1.57	%			1.63	%			1.53	%
Net charge-offs (3)	$	33,566			$	1,710			$	8,253			$	3,163			$	4,428
Net charge-offs to average loans and leases held for investment (2) (3)		1.39	%			0.08	%			0.38	%			0.15	%			0.22	%
Nonperforming loans and leases at historical cost (3)
Unguaranteed	$	81,412			$	49,398			$	37,340			$	43,117			$	39,285
Guaranteed		222,885				166,177				122,752				105,351				95,678
Total		304,297				215,575				160,092				148,468				134,963
Unguaranteed nonperforming historical cost loans and leases, to loans and leases held for investment (3)		0.82	%			0.52	%			0.42	%			0.51	%			0.48	%
Nonperforming loans at fair value (4)
Unguaranteed	$	9,115			$	8,672			$	9,590			$	7,942			$	7,230
Guaranteed		54,873				49,822				51,570				47,620				41,244
Total		63,988				58,494				61,160				55,562				48,474
Unguaranteed nonperforming fair value loans to loans held for investment (4)		2.77	%			2.53	%			2.64	%			2.09	%			1.86	%
Capital Ratios
Common equity tier 1 capital (to risk-weighted assets)		11.04	%			11.19	%			11.85	%			11.89	%			11.73	%
Tier 1 leverage capital (to average assets)		8.21				8.60				8.71				8.69				8.58

Notes to Quarterly Selected Financial Data(1)  See accompanying GAAP to Non-GAAP Reconciliation.(2)  Quarterly net charge-offs as a percentage of quarterly average loans and leases held for investment, annualized.(3)  Loans and leases at historical cost only (excludes loans measured at fair value).(4)  Loans accounted for under the fair value option only (excludes loans and leases carried at historical cost).

Live Oak Bancshares, Inc.Quarterly Average Balances and Net Interest Margin(Dollars in thousands)
	Three Months EndedDecember 31, 2024										Three Months EndedSeptember 30, 2024
	Average Balance				Interest			Average Yield/Rate			AverageBalance				Interest			Average Yield/Rate
Interest-earning assets:
Interest-earning balances in other banks	$	603,758			$	7,257		4.78	%		$	519,340			$	7,016		5.37	%
Investment securities		1,340,027				10,490		3.11				1,287,410				9,750		3.01
Loans held for sale		339,394				7,361		8.63				409,902				9,859		9.57
Loans and leases held for investment (1)		10,030,353				187,460		7.44				9,354,522				182,311		7.75
Total interest-earning assets		12,313,532				212,568		6.87				11,571,174				208,936		7.18
Less: Allowance for credit losses on loans and leases		(155,498	)									(137,285	)
Noninterest-earning assets		551,265										567,098
Total assets	$	12,709,299									$	12,000,987
Interest-bearing liabilities:
Interest-bearing checking	$	350,304			$	4,350		4.94	%		$	350,239			$	4,892		5.56	%
Savings		5,333,338				52,308		3.90				5,043,930				51,516		4.06
Money market accounts		138,021				176		0.51				134,481				190		0.56
Certificates of deposit		5,376,290				56,523		4.18				5,028,830				53,576		4.24
Total deposits		11,197,953				113,357		4.03				10,557,480				110,174		4.15
Borrowings		114,561				1,737		6.03				116,925				1,762		6.00
Total interest-bearing liabilities		11,312,514				115,094		4.05				10,674,405				111,936		4.17
Noninterest-bearing deposits		281,874										237,387
Noninterest-bearing liabilities		83,373										90,079
Shareholders' equity		1,028,426										999,116
Non-controlling interest		3,112										—
Total liabilities and shareholders' equity	$	12,709,299									$	12,000,987
Net interest income and interest rate spread					$	97,474		2.82	%						$	97,000		3.01	%
Net interest margin								3.15										3.33
Ratio of average interest-earning assets to average interest-bearing liabilities								108.85	%									108.40	%

(1)  Average loan and lease balances include non-accruing loans and leases.

Live Oak Bancshares, Inc.GAAP to Non-GAAP Reconciliation(Dollars in thousands)
	As of and for the three months ended																				For the twelve months ended
	4Q 2024				3Q 2024				2Q 2024				1Q 2024				4Q 2023				2024			2023
Total shareholders’ equity	$	1,003,496			$	1,007,756			$	961,049			$	927,718			$	902,666
Less:
Goodwill		1,797				1,797				1,797				1,797				1,797
Other intangible assets		1,568				1,606				1,644				1,682				1,721
Tangible shareholders’ equity (a)	$	1,000,131			$	1,004,353			$	957,608			$	924,239			$	899,148
Shares outstanding (c)		45,359,425				45,151,691				45,003,856				44,938,673				44,617,673
Total assets	$	12,943,380			$	12,607,346			$	11,868,570			$	11,505,569			$	11,271,423
Less:
Goodwill		1,797				1,797				1,797				1,797				1,797
Other intangible assets		1,568				1,606				1,644				1,682				1,721
Tangible assets (b)	$	12,940,015			$	12,603,943			$	11,865,129			$	11,502,090			$	11,267,905
Tangible shareholders’ equity to tangible assets (a/b)		7.73	%			7.97	%			8.07	%			8.04	%			7.98	%
Tangible book value per share (a/c)	$	22.05			$	22.24			$	21.28			$	20.57			$	20.15
Efficiency ratio:
Noninterest expense (d)	$	81,257			$	77,589			$	77,656			$	77,737			$	93,204			$	314,239		$	322,885
Net interest income		97,474				97,000				91,320				90,111				89,576				375,905			345,305
Noninterest income		30,593				32,932				34,159				26,097				30,107				123,781			111,733
Total revenue (e)	$	128,067			$	129,932			$	125,479			$	116,208			$	119,683			$	499,686		$	457,038
Efficiency ratio (d/e)		63.45	%			59.72	%			61.89	%			66.89	%			77.88	%
Pre-provision net revenue (e-d)	$	46,810			$	52,343			$	47,823			$	38,471			$	26,479			$	185,447		$	134,153

This press release presents the 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. The Company considers these adjustments to be relevant to ongoing operating results. The Company believes 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 the operating results or financial position of the Company. The non-GAAP financial measures are used by management to assess the performance of the Company’s business for presentations of Company performance to investors, and for other reasons as may be requested by investors and analysts. The Company further believes that presenting the non-GAAP financial measures will permit investors and analysts to assess the performance of the Company 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.