Live Oak Bancshares — the nation's largest Small Business Administration lender by dollar volume — expects to create more than 200 jobs at its Wilmington, North Carolina, headquarters over the next five years. To house its expanding workforce, the company is spending $25 million on a new building.
Live Oak plans to break ground on the building this year. Since 2012, "we've built three buildings and a parking garage" on the 100-acre campus, "but we're all full," Huntley Garriott, president of the $9.1 billion-asset company's Live Oak Bank subsidiary, said Thursday.
It's not the only SBA lender in expansion mode. Earlier this month, Bank of America's SBA head, Steve Turner, said August was the $2.4 trillion-asset company's
At the same time, a unit of the $2.3 billion-asset Stearns Bank in St. Cloud, Minnesota,
Growth at Live Oak, which has 700 of its 900 employees working from Wilmington, has been "fast and furious," Claire Parker, its senior vice president of corporate communications, said.
"The capacity of the first building was 100," Parker said. "On day one, there were 95 people occupying it. Building two was similar. Building three gave us some extra capacity, but we've filled it up."
While many of the 204 employees Live Oak has committed to hire will be lenders, that number will also include analysts, underwriters, technology managers and information security professionals, Garriott said.
"We're working on building a completely new technological architecture," Garriott said. "That effort has required lots of really smart people to help get us there."
The majority of Live Oak's Wilmington employees have returned to the office since the end of the pandemic emergency, according to Garriott.
"We still think there's a lot of benefit to having a significant number of our folks collaborating on a campus engaged together," Garriott said.
The new jobs will have an average $101,000 salary, creating an additional annual payroll commitment that could exceed $20.7 million, Live Oak said. The average salary in New Hanover County, where Wilmington is located, is $53,400.
Bank of America says August was its best month ever for Small Business Administration lending and that it's optimistic a new program supporting women and minority commercial real estate borrowers could boost production even more.
State and local grants of $2 million will help underwrite Live Oak's expansion.
"This is phenomenal news for New Hanover County and for the state of North Carolina," Charles Miller, who represents New Hanover in North Carolina's General Assembly, said in a press release last week. "The $25 million investment made by Live Oak Bank will continue to support our local communities by creating more jobs and stimulating additional economic prosperity in our region."
The news of Live Oak's Wilmington expansion comes less than three months after Chairman and CEO Chip Mahan
This month, Live Oak said it added 10 people to its general lending team during the first half of 2022, part of the 13 hired through the second quarter of 2022.
"We expect to continue hiring lenders," Garriott said. "It all speaks to the continued opportunity we have to grow."
Through Wednesday, Live Oak had made 1,068 SBA 7(a) loans for $1.53 billion. Its closest competitor, New York-based Newtek Small Business Finance, reported 1,626 7(a) loans for $981 million.
The 7(a) program is SBA's largest lending program, under which the agency guarantees between 50% and 85% of loans up to $5 million in size. Through Wednesday, the agency reported guaranteeing 44,728 7(a) loans for $23.9 billion during the 2022 fiscal year, which concludes Sept. 30.
"We've had a really good year," Garriott said. "The market is down a bit, our volume is pretty consistent, so we've actually been increasing market share a bit. That's the way I'd sum up the year.
With inflation and rising interest rates expected to dampen lenders' appetite for new loans in the remainder of 2022 and into 2023, activity may pick up next year, Garriott added.
"Typically, in more recessionary, slower environments, banks are contracting lending because of economic concerns," Garriott said. "SBA programs become more valuable. We've seen that before."
