Live Oak Bancshares is planning an initial public offering that could yield as much as $86 million for the Wilmington, N.C., company and its shareholders.
The $430 million-asset company said in a regulatory filing Monday that it would list its shares under the stock symbol LOB. The filing did not disclose how many shares it plans to sell or the price per share.
The company said it plans to spin off its common stock in nCino prior to going public. Formed in early 2012, the cloud technology firm created an app that transfers the bulk of the paper-intensive lending process online. The spinoff will reduce Live Oak's assets by $11.3 million. The filing also disclosed that nCino also lost $6.7 million last year.
"It is anticipated that the company and nCino will remain closely aligned for the foreseeable future," the filing said, noting that Live Oak's directors, officers and employees will own about 52% of the tech firm after the spinoff. Three Live Oak executives will remain on nCino's board and transactions between the company and nCino, including an existing software license agreement and the lease agreement for commercial office space, are "anticipated to remain in effect without modification."
Live Oak, which is among the nation's most-prolific Small Business Administration lenders, said it will pay a $6 million cash distribution to existing shareholders as it converts to a C corporation from an S corporation. The move will offset the estimated tax liability for shareholders tied to the nCino spinoff and any tax consequences tied to the IPO.
The company said it plans to use its proceeds from the offering to pay off about $8 million in outstanding debt to a third-party lender and to support the growth and expansion of our franchise, among other things. Live Oak said it could also invest in the development of new technology platforms or acquire banks or nonbanks.
Keefe Bruyette & Woods and Raymond James will handle the offering.