Live Oak Bancshares, Inc. Prices Depositary Share Offering
Rhea-AI Summary
Live Oak Bancshares (NYSE: LOB) has announced the pricing of an underwritten offering of 4,000,000 depositary shares, each representing a 1/40th ownership interest in a share of 8.375% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock. The depositary shares have a liquidation preference of $25 per share.
The Series A Preferred Stock will pay dividends at a rate of 8.375% per annum, payable quarterly, beginning September 15, 2025. The company may redeem the shares on or after September 15, 2030, at $1,000 per share of Series A Preferred Stock. The depositary shares will be listed on NYSE under symbol "LOB PR A". The offering is expected to close around August 4, 2025, with proceeds intended for general corporate purposes and enhancing the company's capital position.
Positive
- Attractive 8.375% dividend yield for investors
- Strengthens company's capital position
- Supports balance sheet growth at Live Oak Banking Company
Negative
- Potential dilution of existing shareholders' equity
- Additional dividend payment obligations could impact cash flow
- Long lock-up period with no redemption option until September 2030
Insights
Live Oak raises $100M through preferred stock offering at 8.375% yield, strengthening capital position while preserving flexibility with redemption options.
Live Oak Bancshares has successfully priced an offering of 4,000,000 depositary shares, each representing a 1/40th ownership interest in its 8.375% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock. This translates to a
The 8.375% dividend yield represents a relatively high cost of capital, reflecting current market conditions and investor appetite for bank preferred shares. The non-cumulative feature means unpaid dividends don't accumulate if the board decides to suspend payments - an important protection for the issuer during potential stress periods.
What's particularly notable is the perpetual nature with redemption options. While technically having no maturity date, Live Oak has included call provisions allowing redemption starting September 2030 or earlier if regulatory capital treatment changes. This structure provides long-term capital while preserving flexibility.
The proceeds will support balance sheet growth at Live Oak Banking Company and enhance overall capital ratios - crucial metrics for a growing bank. This capital raise strengthens Live Oak's foundation for continued lending expansion without diluting common shareholders' equity.
Morgan Stanley, RBC, UBS, and KBW serving as joint bookrunners signals strong institutional support. The NYSE listing under "LOB PR A" will provide liquidity for investors. For Live Oak, this preferred offering represents a strategic capital management decision that balances growth funding with financial stability.
WILMINGTON, N.C., July 28, 2025 (GLOBE NEWSWIRE) -- Live Oak Bancshares, Inc. (NYSE: LOB) (“Live Oak” or the “Company”) announced the pricing of an underwritten offering of 4,000,000 depositary shares, each representing a 1/40th ownership interest in a share of
When, as and if declared by the board of directors of Live Oak, dividends will be payable on the Series A Preferred Stock from the date of issuance at a rate of
Net proceeds from the offering are expected to be used for general corporate purposes, including to support balance sheet growth at Live Oak Banking Company and to enhance the Company’s capital position.
Morgan Stanley & Co. LLC; RBC Capital Markets, LLC; UBS Investment Bank; and Keefe, Bruyette & Woods, A Stifel Company are serving as joint bookrunning managers for the offering.
The Company expects to close the offering, subject to customary conditions, on or about August 4, 2025.
The Company filed a “shelf” registration statement (File No. 333-269263) (including a base prospectus (the “Base Prospectus”)) on January 17, 2023 and the related preliminary prospectus supplement on July 28, 2025 (the “Preliminary Prospectus Supplement”) with the Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. You may obtain these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, the Company, any underwriter, or any dealer participating in the offering will arrange to send you the Base Prospectus and the Preliminary Prospectus Supplement if you request it by calling Morgan Stanley & Co. LLC toll-free at 1-866-718-1649, RBC Capital Markets, LLC at 1-866-375-6829, UBS Investment Bank at 1-833-481-0269 or Keefe, Bruyette & Woods, A Stifel Company at 1-800-966-1559.
This press release shall not constitute an offer to sell, or the solicitation of an offer to buy any securities, nor shall there be any offer or sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Important Note Regarding Forward-Looking Statements
This press release contains forward-looking statements which reflect management’s current views with respect to, among other things, future events and financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "might," "should," "could," "predict," "potential," "believe," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "goal," "target," "outlook," "aim," "would," "annualized" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. Forward-looking statements in this press release include, but are not limited to, statements regarding the offering, including the expected closing of the offering. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about the industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, management cautions that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated in these forward-looking statements, including the impacts of factors identified in "Risk Factors" or "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
About Live Oak Bancshares
Live Oak Bancshares, Inc. (NYSE: LOB) is a financial holding company and 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 | 910.202.6926
Claire Parker | Corporate Communications | Media Relations | 910.597.1592
FAQ
What is the dividend rate for Live Oak Bancshares' new preferred stock offering?
How many depositary shares is Live Oak Bancshares (LOB) offering?
When can Live Oak Bancshares redeem the Series A Preferred Stock?
What is the trading symbol for Live Oak Bancshares' new preferred shares?
How will Live Oak Bancshares use the proceeds from the preferred stock offering?
