First Republic files IPO just months after buyout

By Joe Rauch

CHARLOTTE, North Carolina (BestGrowthStock) – First Republic, a bank catering to the wealthy, said it plans an initial public offering, just a few months after Bank of America Corp (BAC.N: ) sold the company to buyout firms.

The San Francisco-based bank said it may use IPO proceeds to fund loans or buy securities.

In July, Bank of America sold First Republic to a group led by private equity firms General Atlantic and Colony Financial. First Republic’s management was part of the investor group.

The bank will sell 4 million shares in the IPO, while shareholders, including the private equity firms, will sell 7 million.

First Republic, which first went public in 1986, expects the IPO to be priced at $24 to $27 a share. At the midpoint of that range, the bank’s proceeds would be $92.4 million.

Colony Financial and General Atlantic will each sell off 6 percent of their stake, or 1.6 million shares. Each will own 19.8 percent of the bank’s stock after the IPO.

Most private equity firms look to sell businesses about three years after buying them.

A Colony Financial spokesman said the firm had no comment on First Republic. A General Atlantic spokesman was not immediately available for a comment.

In July, First Republic co-founder and Chief Executive Jim Herbert said the company would watch the market carefully for opportunities, and an IPO could be on the horizon.

“We went public to give ourselves access to capital markets, to help us grow,” he said at that time. “We expect that would be a possibility again in the future.

He also said First Republic was gearing up to make acquisitions, expand its branch network and recruit bankers and money managers.

Herbert will not be selling shares in the IPO, according to the company’s prospectus.

The two private equity firms in the IPO have a history with First Republic. General Atlantic was an early investor in the bank in the 1980s and had a representative on the bank’s board from 1987 to 1990.

Colony Financial’s founder, Thomas Barrack, has also been a board member of the bank.

First Republic was owned by Merrill Lynch when Merrill was acquired by Bank of America at the height of the financial crisis.

Merrill never integrated the bank, and First Republic was tabbed as easy target for BofA to carve off when it started to sell off assets to boost its capital position.

The July buyout was completed with $1.86 billion of new equity from Colony Financial, a real estate finance and investment company, and General Atlantic.

As of September 30, First Republic had assets of $22.0 billion, with wealth management assets totaling $17.2 billion.

The company intends to list its common stock on the New York Stock Exchange under the symbol “FRC.”

BofA Merrill Lynch, Morgan Stanley and JPMorgan will be joint book-running managers for the IPO, the company said.

(Reporting by Joe Rauch in Charlotte, N.C.; additional reporting by Megan Davies and Elinor Comlay in New York and Sweta Singh in Bangalore; Editing by Don Sebastian and John Wallace)

First Republic files IPO just months after buyout