Patrick T. McHenry - Director | Live Oak Bancshares (LOB) Executive Profile & Compensation

About Patrick T. McHenry

Patrick T. McHenry was appointed to the Live Oak Bancshares (LOB) Board of Directors effective May 21, 2025, with a term running until the 2026 annual meeting of shareholders . He is a former Chairman of the U.S. House Financial Services Committee with 20 years in Congress and currently advises on public policy, financial services, fintech, and AI, and serves as a distinguished fellow at Georgetown University’s Psaros Center for Financial Markets and Policy; he is a graduate of Belmont Abbey College . As disclosed, he will participate in LOB’s non‑employee director compensation program on a pro‑rated basis and has no related‑party transactions with the Company .

Past Roles

Organization	Role	Tenure	Committees/Impact
U.S. House of Representatives	Chairman, House Financial Services Committee; U.S. Representative (NC-10); Chief Deputy Whip; Speaker Pro Tempore (Oct 2023)	“20 years in Congress” (former)	Led agenda on cryptocurrency, capital formation, AI, fintech, data privacy, corporate governance

External Roles

Organization	Role	Tenure	Focus/Impact
Georgetown University, Psaros Center for Financial Markets and Policy	Distinguished Fellow	Current	Financial policy, markets, governance
Private advisory practice	Advisor on public policy, financial services, fintech, AI	Current	Policy, fintech, AI; based in Washington, D.C.

Board Governance

Appointment and tenure: Appointed May 6, 2025, effective May 21, 2025; term through the 2026 annual meeting .
Committee assignments: Not yet determined at time of appointment .
Independence/related party: Board disclosed no Item 404(a) related‑party transactions for McHenry; he will receive standard non‑employee director compensation; independence not explicitly stated in the 8‑K .
Board structure context: LOB combines CEO/Chair roles and has no lead independent director at this time .
Board activity/attendance baseline: In 2024 the Board met six times; all incumbent directors attended at least 75% of Board and committee meetings; independent directors hold executive sessions .
Policies: Code of Ethics covers conflicts of interest; governance guidelines posted; insider trading policy prohibits hedging; pledging permitted with oversight and quarterly reporting to the Audit Committee .

Fixed Compensation

Component	Amount/Terms	Notes
Annual cash retainer (non‑employee director)	$60,000	Current plan (approved May 2024)
Committee chair retainers	Audit: $25,000; Risk: $20,000; Compensation: $18,000; Nominating & Corporate Governance: $13,000; Directors Loan Committee: $17,000	Current plan
Committee member retainer	Bank Directors Loan Committee member: $12,000	Current plan
2024 temporary action	Directors voluntarily forfeited $15,000 (three monthly $5,000 payments) in Q1 2024	Context for director pay posture
McHenry compensation start	Pro‑rated participation in current director arrangements from May 21, 2025	Committees TBD

Performance Compensation

Equity Element	Grant details	Vesting	Notes
Standard non‑employee director RSU (2024)	2,327 RSUs; grant date May 21, 2024; grant date fair value $82,725	Vests May 1, 2025	Program example for reference; 2025 grants for McHenry not disclosed
McHenry equity awards	Not disclosed at appointment	N/A	Will participate per plan, pro‑rated; no specifics provided

LOB director equity awards are time‑based RSUs; no performance metric framework for director equity is disclosed in the proxy .

Other Directorships & Interlocks

Company/Organization	Role	Interlock/Conflict Notes
None disclosed (public companies)	—	The 8‑K discloses no related‑party transactions; no other public company directorships are disclosed for McHenry by LOB at appointment

Expertise & Qualifications

Policy and regulatory expertise: Former Chair, House Financial Services Committee; leadership focus on crypto, capital formation, AI, fintech, data privacy, corporate governance .
Financial services and fintech domain knowledge; current policy/future‑of‑finance thought leadership at Georgetown .
Governance and legislative process experience from senior House leadership roles (Chief Deputy Whip; Speaker Pro Tempore in Oct 2023) .

Equity Ownership

Item	Status
Beneficial ownership at LOB	Not reported in the Jan 31, 2025 beneficial ownership table (appointment post‑cutoff)
Pledging/Hedging	Company prohibits hedging; pledging permitted with oversight and quarterly reporting to Audit Committee; minimum collateral coverage required by lenders

Governance Assessment

Strengths for board effectiveness
- Deep policy/regulatory expertise directly relevant to a $10B+ asset bank navigating evolving fintech, AI, crypto, and governance issues .
- No related‑party transactions disclosed at appointment; participation in standard, pro‑rated director pay plan .
- Active board risk oversight framework (separate Audit and Risk Committees; cybersecurity oversight at Risk Committee) .
Watch items / potential red flags
- Board leadership: Combined CEO/Chair and no lead independent director—may concern some investors on independent oversight .
- Ownership alignment: LOB has not implemented formal director/executive stock ownership guidelines, though it periodically reviews ownership; director equity grants are time‑based (no performance linkage) .
- Pledging policy permits pledges with oversight; while not about McHenry specifically, pledging by insiders is monitored by the Audit Committee—investors often view pledging as a potential risk factor .
- Committee assignments for McHenry were TBD at appointment; investors should monitor placement (Audit/Risk/Nom-Gov/Comp) to gauge governance impact and workload .
Shareholder sentiment context
- Say‑on‑pay approval at the 2024 meeting was 76.45% (moderate support), which management/Comp Committee considered in 2024/2025 program design .

No legal proceedings, SEC investigations, or related‑party transactions are disclosed for McHenry at appointment; insider trade filings were not included in these documents and were not disclosed in the 8‑K .