Live Oak Prices 4 Million Preferred Share Offering
Live Oak Bancshares is selling depositary shares of 8.750% Series B Non-Cumulative Perpetual Preferred Stock through a group of underwriters.
Updated on Nov. 5, 2026 in Banking
Live Oak Bancshares, Inc. priced an underwritten offering of 4,000,000 depositary shares of its 8.750% Series B Non-Cumulative Perpetual Preferred Stock. Underwriters hold an option to buy up to 600,000 additional shares.
Why it matters
The offering gives Live Oak new capital to support balance sheet growth at Live Oak Banking Company and strengthen its capital position. For North Carolina-based bank investors, it adds a higher-yielding, perpetual preferred security to the bank's capital structure.
The deal consists of 4,000,000 depositary shares carrying an 8.750% dividend, each with a $25 liquidation preference and a $1,000 per-share redemption price tied to 1/40th interests in Series B Preferred Stock. Underwriters hold an option for 600,000 more shares, exercisable within 30 days, and the closing timing and NYSE listing remain pending.
The players
Live Oak Bancshares, Inc.
Live Oak Bancshares is a Wilmington, North Carolina-based bank holding company whose subsidiary, Live Oak Banking Company, serves small businesses nationwide.
Morgan Stanley & Co. LLC
Morgan Stanley is a global investment bank that served as a joint bookrunning manager on the offering.
Keefe, Bruyette & Woods
Keefe, Bruyette & Woods is an investment bank specializing in financial institutions and a joint bookrunning manager on the offering.
RBC Capital Markets, LLC
RBC Capital Markets is the investment banking arm of Royal Bank of Canada and a joint bookrunning manager on the offering.
UBS Investment Bank
UBS Investment Bank is the investment banking division of the Swiss multinational UBS and a joint bookrunning manager on the offering.
The details
Morgan Stanley & Co. LLC, Keefe, Bruyette & Woods, RBC Capital Markets, LLC, and UBS Investment Bank are acting as joint bookrunning managers. The offering was made under a shelf registration statement filed March 6, 2026, with a preliminary prospectus supplement filed November 4, 2026. Dividends are payable quarterly when, as and if declared by the board, with the first payment due December 15, 2026.
Timeline
March 6, 2026: Shelf registration statement filed with the SEC.
November 4, 2026: Offering priced and preliminary prospectus supplement filed.
November 12, 2026: Expected closing of the offering.
December 15, 2026: First quarterly dividend payment date.
December 15, 2031: Earliest date Live Oak may optionally redeem the preferred stock.
Market Dynamics
Non-cumulative perpetual preferred stock like this offering is a recognized Tier 1 capital instrument under the Federal Reserve's Basel III capital framework for bank holding companies. Banks issuing such instruments are strengthening capital ratios in a way that sits alongside, rather than replacing, common equity.
Investors who buy the depositary shares receive a $25 liquidation preference per share and quarterly dividends at an 8.750% annual rate, payable when declared by the board. The first payment is scheduled for December 15, 2026, and the shares are not redeemable by the company until December 15, 2031 or after a regulatory capital treatment event.
The takeaway
For investors comparing fixed-income options, the 8.750% fixed dividend on a perpetual preferred security depends on the board declaring payments each quarter, since the dividends are non-cumulative. Reviewing the redemption terms and dividend policy in the prospectus is a sensible step before buying.
Further reading
Explore more stories in Banking for context on how banks raise and manage capital.
Source note: This article includes information reported by The Manila times.
