Live Oak Bancshares in Wilmington, N.C., has readied itself to raise up to $200 million.
The $1.9 billion-asset company filed documents on Tuesday to register a mix of securities, including preferred stock, depositary shares, common stock and warrants. The funds would be used for general corporate purposes such as capital expenditures, acquisitions and investments.
Live Oak is a national lender that originates Small Business Administration and other loans.
The filing didn’t “come as a surprise to us” as the company has leveraged capital from its 2015 initial public offering, Aaron James Deer, an analyst at Sandler O’Neill, wrote in a note to clients. The company’s tangible common equity ratio has fallen from 19.2% at Sept. 30, 2015, to 11.1% at March 31, Deer said.
It's doubtful Live Oak will raise the full amount, but it could sell up to $100 million in common stock, Deer said. The money likely would be used to support Live Oak’s “ongoing and exceptional growth” as it has shown “no indication that it is running out of ways to innovate and expand its business,” he added.