Live Oak Bancshares : 2024 Proxy Statement

LIVE OAK BANCSHARES, INC.

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 21, 2024

GENERAL INFORMATION

This Proxy Statement is being furnished in connection with the solicitation by the Board of Directors of Live Oak Bancshares, Inc. (the "Company") of appointments of proxy for use at the annual meeting of the Company's shareholders (the "Annual Meeting") to be held on May 21, 2024, at 9:00 a.m., at the Company's corporate offices located at 1741 Tiburon Drive, Wilmington, North Carolina 28403, and at any adjournments thereof. The Company's proxy solicitation materials are being made available to our shareholders on or about April 5, 2024. In this Proxy Statement, the Company's subsidiary bank, Live Oak Banking Company, is referred to as "Live Oak Bank" or the "Bank." The mailing address of the Company's principal executive offices is 1741 Tiburon Drive, Wilmington, North Carolina 28403.

Internet Availability of Proxy Materials

We are providing proxy materials to our shareholders primarily via the internet instead of mailing printed copies of those materials to each shareholder. By doing so, we save costs and reduce the environmental impact of the Annual Meeting. On or about April 5, 2024, we mailed a Notice of Internet Availability of Proxy Materials (the "Internet Notice") to our shareholders. The Internet Notice contains instructions about how to access our proxy materials and vote. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Internet Notice.

Proposals to be Voted on at the Annual Meeting

At the Annual Meeting, record holders of our voting common stock will consider and vote on the following matters:

• election of ten members of the Board of Directors for terms of one year;
• proposal to approve an amendment of the Company's Second Amended and Restated 2014 Employee Stock Purchase Plan (the "ESPP") to increase the number of shares of voting common stock issuable under such plan;
• a non-binding, advisory proposal to approve compensation paid to our named executive officers (commonly referred to as a "say-on-pay" vote);
• ratification of the appointment of FORVIS, LLP as the Company's independent auditors for 2024; and
• transaction of any other business properly presented for action at the Annual Meeting.

The Board of Directors recommends that you vote "FOR" the election of each of the ten nominees for director named in this Proxy Statement and "FOR" Proposals 2, 3 and 4.

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How You Can Vote at the Annual Meeting

Record Holders. If your shares of our voting common stock are held of record in your name, you can vote at the Annual Meeting in one of the following ways:

• you can attend the Annual Meeting and vote in person;
• you can sign and return a proxy card and appoint the "Proxies" named below to vote your shares for you at the Annual Meeting, or you can validly appoint another person to vote your shares for you; or
• you can appoint the Proxies to vote your shares for you by going to the internet
  website www.proxyvote.com. When you are prompted for your "control number," enter the number printed on the Internet Notice and then follow the instructions provided.

You may appoint the Proxies by internet only until 11:59 p.m. Eastern Time on May 20, 2024, which is the day before the Annual Meeting. If you appoint the Proxies by internet, you need not sign and return a proxy card. You will be appointing the Proxies to vote your shares on the same terms and with the same authority as if you marked, signed and returned a proxy card. The authority you will be giving the Proxies is described below and in the proxy card.

Shares Held in "Street Name." Only the record holders of shares of our voting common stock or their appointed proxies may vote those shares. As a result, if your shares of our voting common stock are held for you in "street name" by a broker or other nominee, then only your broker or nominee (i.e. the record holder) may vote them for you, or appoint the Proxies to vote them for you, unless you make arrangements for your broker or nominee to assign its voting rights to you or for you to be recognized as the person entitled to vote your shares. You will need to follow the directions your broker or nominee provides you and give it instructions as to how it should vote your shares by completing and returning to it a voting instruction sheet you received from your broker (or by following any directions you received for giving voting instructions electronically). Brokers and other nominees who hold shares in street name for their clients typically have the discretionary authority to vote those shares on "routine" matters when they have not received instructions from beneficial owners of the shares. However, they may not vote those shares on non-routine matters (including the election of directors) unless their clients give them voting instructions. To ensure that shares you hold in street name are represented at the Annual Meeting and voted in the manner you desire, it is important that you instruct your broker or nominee as to how it should vote your shares.

Solicitation and Voting of Proxy Cards

If you are the record holder of your shares of our voting common stock, a proxy card will be sent to you that provides for you to name Walter J. Phifer, our Chief Financial Officer, and Gregory W. Seward, our Chief Risk Officer, General Counsel, and Corporate Secretary, or any substitutes appointed by them, individually and as a group, to act as your "Proxies" and vote your shares at the Annual Meeting. We ask that you sign and date your proxy card and return it in the envelope provided or follow the instructions above for appointing the Proxies by internet, so that your shares will be represented at the meeting.

If you sign a proxy card and return it so that we receive it before the Annual Meeting, or you appoint the Proxies by internet, the shares of our voting common stock that you hold of record will be voted by the Proxies according to your instructions. If you sign and return a proxy card or appoint the Proxies by internet, but you do not give any voting instructions, then the Proxies will vote your shares "FOR" the election of each of the ten nominees for director named in Proposal 1 below and "FOR" Proposals 2, 3 and 4. If, before the Annual Meeting, any nominee named in Proposal 1 becomes unable or unwilling to serve as a director for any reason, your proxy card or internet appointment will give the Proxies discretion to vote your shares for a substitute nominee named by our Board of Directors. We are not aware of any other business that will be brought before the Annual Meeting other than the election of directors and Proposals 2, 3 and 4 described in this Proxy Statement. If any other matter is properly presented for action by our shareholders, your proxy card or

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internet appointment will authorize the Proxies to vote your shares according to their best judgment. The Proxies also will be authorized to vote your shares according to their best judgment on matters incident to the conduct of the meeting.

If you are a record holder of your shares and you do not return a proxy card or appoint the Proxies by internet, the Proxies will not have authority to vote for you and your shares will not be represented or voted at the Annual Meeting unless you attend the meeting in person or validly appoint another person to vote your shares for you.

Revocation of Proxy Cards; How You Can Change Your Vote

Record Holders. If you are the record holder of your shares and you sign and return a proxy card or appoint the Proxies by internet and later wish to change the voting instructions or revoke the authority you gave the Proxies, you can do so before the Annual Meeting by taking the appropriate action described below.

To change the voting instruction you gave the Proxies:

• you can sign a new proxy card, dated after the date of your original proxy card, which contains your new instructions, and submit it to us so that we receive it before the voting takes place at the Annual Meeting; or
• if you appointed the Proxies by internet, you can go to the same internet website you used to appoint the Proxies (www.proxyvote.com) before 11:59 p.m. Eastern Time on May 20, 2024 (the day before the Annual Meeting), enter your control number (printed on the Internet Notice), and then change your voting instructions.

The Proxies will follow the last voting instructions they receive from you before the Annual Meeting.

To revoke your proxy card or your appointment of the Proxies by internet:

• you can give our Corporate Secretary a written notice, before the voting takes place at the Annual Meeting, that you want to revoke your proxy card or internet appointment; or
• you can attend the Annual Meeting and notify our Corporate Secretary that you want to revoke your proxy card or internet appointment and vote your shares in person. Simply attending the Annual Meeting alone, without notifying our Corporate Secretary, will not revoke your proxy card or internet appointment.

Shares Held in "Street Name." If your shares are held in "street name" and you want to change the voting instructions you have given to your broker or other nominee, you must follow your broker's or nominee's directions.

Expenses of Solicitation

The Company will pay the cost of preparing and assembling this Proxy Statement and other proxy solicitation expenses. In addition to the use of the mails and the internet, appointments of proxy may be solicited in person or by telephone by officers, directors, and employees of the Company or its subsidiaries without additional compensation. The Company will reimburse banks, brokers and other custodians, nominees and fiduciaries for their costs in sending the proxy materials to the beneficial owners of the Company's voting common stock.

Record Date

The close of business on March 22, 2024, has been fixed as the record date (the "Record Date") for the determination of shareholders entitled to notice of and to vote at the Annual Meeting. Only those shareholders of record on that date will be eligible to vote on the proposals described herein.

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Voting Securities

The voting securities of the Company are the shares of its voting common stock, of which 100,000,000 shares are authorized and 44,936,357 shares were issued and outstanding on March 22, 2024. There were 210 holders of record of the Company's voting common stock as of such date.

The Company has 1,000,000 shares of authorized preferred stock, of which no shares were issued or outstanding on March 22, 2024.

Voting Procedures; Quorum; Votes Required for Approval

At the Annual Meeting, each shareholder will be entitled to one vote for each share of voting common stock held of record on the Record Date on each matter submitted for voting.

A majority of the shares of the Company's voting common stock issued and outstanding on the Record Date must be present in person or by proxy to constitute a quorum for the conduct of business at the Annual Meeting.

Assuming a quorum is present; in the case of Proposal 1 below, the ten nominees receiving the greatest number of votes shall be elected. In the case of Proposals 2, 3 and 4 below, for each proposal to be approved, the number of votes cast for approval must exceed the number of votes cast against the proposal.

"Withhold" Votes, Abstentions and Broker Non-Votes

"Withhold" votes, abstentions and broker non-votes are counted as present or represented for purposes of determining the presence or absence of a quorum for the Annual Meeting. A broker non-vote occurs when a nominee holding shares in street name for a beneficial owner votes on one proposal but does not vote on another proposal because, with respect to such other proposal, the nominee does not have discretionary voting power and has not received voting instructions from the beneficial owner.

Under New York Stock Exchange ("NYSE") rules, Proposal 4, the ratification of the appointment of FORVIS, LLP to serve as the Company's independent auditors for 2024, is considered a "routine" matter, which means that brokerage firms may vote in their discretion on this proposal on behalf of clients who have not furnished voting instructions. However, Proposal 1, the election of directors, Proposal 2, the approval of an amendment of the ESPP and Proposal 3, the advisory vote on named executive officer ("NEO") compensation, are all "non-routine" matters under NYSE rules, which means that brokerage firms that have not received voting instructions from their clients on these matters may not vote on these proposals.

With respect to Proposal 1, the election of directors, only "for" and "withhold" votes may be cast. Broker non-votes are not considered votes cast for the foregoing purpose and will therefore have no effect on the election of director nominees. "Withhold" votes will also generally have no effect on the election of director nominees.

With respect to Proposal 2, the approval of an amendment of the ESPP, Proposal 3, the advisory vote on NEO compensation, and Proposal 4, the ratification of the appointment of FORVIS, LLP to serve as the Company's independent auditors for 2024, you may vote "for" or "against" these proposals, or you may "abstain" from voting on these proposals. Abstentions are not deemed to constitute "votes cast" and, therefore, do not count either for or against approval of Proposals 2, 3, and 4. Similarly, broker non-votes do not count as "votes cast" and, therefore, do not count either for or against approval of Proposals 2 and 3. As discussed above, because Proposal 4, the ratification of the appointment of FORVIS, LLP to serve as the Company's independent auditors for 2024, is considered a "routine" matter, we do not expect any broker non-votes with respect to this proposal.

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Beneficial Ownership of Our Common Stock

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of January 31, 2024 for:

• each of our named executive officers;
• each of our directors;
• all of our executive officers and directors as a group; and
• each person, or group of affiliated persons, known by us to be the beneficial owner of more than 5% of our outstanding shares of voting common stock.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the "SEC") and includes voting or investment power with respect to the securities. Shares of common stock that may be acquired by an individual or group within sixty days of January 31, 2024, pursuant to the exercise of options, warrants or other rights, are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. The table below calculates the percentage of beneficial ownership of our common stock based on 44,648,626 shares of voting common stock outstanding as of January 31, 2024. Unless otherwise indicated, the address for each listed shareholder is c/o Live Oak Bancshares, Inc., 1741 Tiburon Drive, Wilmington, North Carolina 28403.

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• Represents beneficial ownership of less than one percent.

1. Included in the beneficial ownership tabulations are options to purchase the following number of shares of voting common stock: Mr. Cameron - 30,000 shares; Mr. Petty - 30,000 shares; Mr. Seward - 13,500 shares; and all directors and executive officers as a group - 115,661 shares. These options are capable of being exercised within sixty days of January 31, 2024 and therefore are deemed to be owned by the holder under the beneficial ownership rules of the SEC.
2. Includes 3,147,844 shares held by the James S. Mahan III Revocable Trust, which shares are pledged as security for personal loans, and 127,167 shares held by the 2021 Peggy Mahan Family Trust; also includes shared voting rights on 3,032,547 shares held by the Marguerite D. Mahan Revocable Trust, which shares are pledged as security for personal loans, on 127,167 shares held by the 2021 Chip Mahan Family and Charitable Trust, on 124,807 shares held by Salt Water Fund, a nonprofit corporation for which Mr. Mahan serves as a director and officer, and on 212,150 shares held by Peapod II, LLC. The 6,180,391 shares serve as collateral in connection with a personal line of credit. As of January 31, 2024, there was $25,894,657 outstanding under this line of credit and the maximum amount that Mr. Mahan may draw was $42,000,000.
3. In addition to the role of Chief Financial Officer, which Mr. Losch maintained through December 31, 2023, Mr. Losch assumed the role of President of the Bank effective August 25, 2023, and of the Company effective November 14, 2023. Mr. Losch also served as Chief Banking Officer of the Company and the Bank through August 25, 2023.
4. Mr. Garriott served as President of the Bank until August 25, 2023, when his employment was terminated by the Company.
5. Includes 470 shares held by the GST-Exempt Trust for William H. Cameron and 174,496 shares held by the William H. Cameron Revocable Trust; excludes 61,171 shares held by the Mary Jo Cameron Revocable Trust for which Mr. Cameron disclaims beneficial ownership.
6. As disclosed in the Company's Current Report on Form 8-K filed with the SEC on April 4, 2024, if re-elected at the Annual Meeting, Dr. Hoffsis intends to retire from the Company's Board of Directors at the 2025 Annual Meeting of Shareholders.
7. Mr. Lucht jointly owns these shares with his spouse, with whom he shares voting and investment power over the shares.
8. Mr. Underwood, a member of our Board of Directors, served as President of the Company until November 14, 2023. Includes 1,367,491 shares held by the Neil L. Underwood Revocable Trust; also includes shared voting rights on 50,000 shares held by the Linda D. Underwood Revocable Trust, and 120,641 shares held by the Neil L. Underwood Spousal Lifetime Access Trust.
9. Includes 825,100 shares held by the William L. Williams III Revocable Trust, of which 392,100 and 433,000 shares are pledged as collateral in connection with personal lines of credit, with $2,000,000 and $4,466,453, respectively, outstanding under each line of credit as of January 31, 2024; also includes shared voting rights on 14,110 shares held by SPoint-ILM, LLC, and on 450,000 shares held by the Elizabeth L. Williams Revocable Trust.
10. Includes the beneficial ownership of five additional executive officers not listed in the table.
11. A Schedule 13G/A filed on February 14, 2024, by T. Rowe Price Investment Management, Inc. reported aggregate beneficial ownership of 6,365,830 shares of voting common stock as of December 31, 2023, with sole voting power over 2,145,809 shares and sole dispositive power over 6,365,830 shares. T. Rowe Price Investment Management, Inc. is the investment adviser of T. Rowe Price Small-Cap Value Fund, which has an interest in 2,467,336 shares.
12. A Schedule 13G/A filed on February 13, 2024, by The Vanguard Group reported beneficial ownership of 2,509,008 shares of voting common stock as of December 31, 2023, with shared voting power over 22,731 shares, sole dispositive power over 2,451,314 shares, and shared dispositive power over 57,694 shares.
13. A Schedule 13G/A filed on January 29, 2024, by BlackRock, Inc. reported beneficial ownership of 2,887,100 shares of voting common stock as of December 31, 2023, with sole voting power over 2,818,585 shares, and sole dispositive power over 2,887,100 shares.

Except as indicated in footnotes to the table above, we believe that the shareholders named in the table have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them, based on information provided to us by such shareholders.

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Anti-Hedging Policy and Pledges of Shares of Common Stock

The Company's Insider Trading Policy prohibits all employees and directors from entering into hedging transactions with respect to any Company securities including our common stock, including any transactions in puts, calls or other derivative securities (other than receipt or exercise of an employee stock option granted by the Company).

With respect to the pledging of shares, we recognize that a significant portion of the wealth of some of our executive officers and directors resides in their ownership of shares of the Company's voting common stock, and that each individual's financial situation is unique. Accordingly, the Company's Insider Trading Policy does not prohibit the pledging of shares of the Company's voting common stock. However, the Insider Trading Policy requires directors and executive officers to report details of any pledged securities to the Company's Risk Committee on a quarterly basis. Lenders extending credit secured by shares of our common stock that are owned by directors or officers require a minimum collateral value equal to at least twice the amount of credit extended at any given time, and in some cases the lender imposes more stringent collateral requirements. The Risk Committee is mindful of the need to avoid actions that pose undue risk or appear to pose undue risk to the Company.

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PROPOSAL 1: ELECTION OF DIRECTORS

The Board of Directors has set the number of directors of the Company at ten and recommends that shareholders vote for the nominees listed below, each for a term of one year.

1. The year first elected indicates the year in which each individual was first elected a director of the Company or the Bank and does not reflect any break(s) in tenure.
2. Mr. Lucht was previously a member of our Board of Directors from 2008 until 2017 and was re-appointed effective February 23, 2021.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES FOR DIRECTOR OF THE COMPANY FOR A TERM OF ONE YEAR.

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