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Analysis••By Canadian Preferred Shares

Brompton Split Banc Corp Raises $55M in Preferred Share Offering

# Brompton Split Banc Corp Raises $55M in Preferred Share Offering

Brompton Split Banc Corp (TSX: SBC) completed a treasury offering of preferred shares (SBC.PR.A) on March 6, 2026, raising approximately $55.3 million in gross proceeds.

Offering Details

| Item | Value |
|------|-------|
| Symbol | SBC.PR.A |
| Offering Price | $10.40 per share |
| Yield at Offering | 6.0% |
| Annual Dividend | $0.625 per share ($0.15625 quarterly) |
| Par Value | $10.00 |
| Maturity | November 29, 2027 |
| Rating | Pfd-3 (Morningstar DBRS) |
| Lead Underwriter | RBC Capital Markets |

Track Record

Brompton Split Banc has paid 81 consecutive quarterly dividends since inception on November 16, 2005. Total dividends paid: $10.37 per preferred share through December 31, 2025.

Historical Returns (CAGR to January 31, 2026):

| Period | Return |
|--------|--------|
| 1 Year | 6.4% |
| 3 Year | 6.4% |
| 5 Year | 5.9% |
| 10 Year | 5.4% |
| Since Inception | 5.3% |

Portfolio Composition

The fund invests in an equally-weighted portfolio of the six largest Canadian banks:

  • Royal Bank of Canada (RY)

  • Bank of Nova Scotia (BNS)

  • National Bank of Canada (NA)

  • Toronto-Dominion Bank (TD)

  • Canadian Imperial Bank of Commerce (CM)

  • Bank of Montreal (BMO)

    • Up to 10% may be invested in global financial companies for diversification.

    Downside Protection

    Based on net asset value as of February 19, 2026, the preferred shares have ~55% downside protection from a decline in the portfolio value.

    This means the fund could lose over half its value before preferred shareholders face any risk to their principal.

    What This Means for Investors

    For existing SBC.PR.A holders: The offering increases the share base but maintains the same dividend rate. Your shares continue to receive the same $0.15625 quarterly dividend.

    For new investors: The offering price of $10.40 was slightly above the $10.00 par value, offering a 6.0% yield. Current market price may differ.

    Key considerations:

  • Fixed maturity date (November 2027) - you get your $10.00 par back

  • Cumulative dividends - missed payments accumulate

  • Big 6 bank exposure - conservative underlying portfolio

  • Experienced manager (Brompton Funds, founded 2000)

    • Risks to Consider

    1. Split corp structure - Preferred shares rank ahead of Class A, but behind debt
    2. Market price volatility - Shares may trade above or below par
    3. Maturity risk - Principal returned at par ($10), not offering price ($10.40)
    4. Bank sector concentration - Portfolio focused on Canadian banks

    Where to Find More

    View SBC.PR.A details on our Split Corporations page.

    ---

    Offering closed March 6, 2026. Investors should review the prospectus before investing.