First Republic BankFRC is set to offer about 4 million common shares to the public at market price. The bank might be able to raise as much as $347.6 million, per yesterday's closing price of $89.9.
The bank's move comes at the time when it is being included in the S&P 500. Notably, it aims to utilize the capital raised by this offering for funding loans or purchasing investment securities for its portfolio.
First Republic has entered into a distribution agreement with Keefe, Bruyette & Woods, a Stifel Company, BofA Merrill Lynch, J.P. Morgan JPM and Morgan Stanley MS . The bank plans to commence offering of the intended shares through these agents only.
Also, per the agreement, sales of shares of First Republic's common stock may be done through ordinary brokers' transactions on the NYSE or otherwise at market prices prevailing at the time of sale or as agreed to with the applicable distribution agent.
Previously, in September 2018, First Republic had offered 2 million shares and raised nearly $201 million. Through these capital market activities, First Republic reflects its focus on ensuring long-term growth of the bank.
First Republic's efforts to maintain its organic growth momentum through new client acquisitions were backed by improvement in loans and deposits, which boosted revenue performance. Nevertheless, its shrinking net interest margin, mainly due to flattening of yield curve, remains a key concern.
The bank's shares have lost 11.5% over the past six months compared with the industry 's decline of 24%.
A better-ranked stock in the same space is Bank of Marin Bancorp BMRC , carrying a Zacks Rank #2 (Buy) at present. The company's earnings estimates for 2018 have been revised slightly upward over the past 60 days. Its shares have gained 21.3% in a year's time.
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