San Francisco-based private bank and wealth management company First Republic Bank announced the public offering of 2.5 million shares of its common stock. The offering is expected to end on or around Jun 6, 2016, subject to certain conditions.

First Republic Bank has permitted a 30-day option to the underwriters for covering over-allotments, if any. The option includes the purchase of an additional 0.375 million shares of common stock.

JPMorgan Chase & Co. (JPM Quick QuoteJPM - Free Report) , Morgan Stanley (MS Quick QuoteMS - Free Report) and BofA Merrill Lynch, a unit of Bank of America Corporation (BAC Quick QuoteBAC - Free Report) , are acting as the joint book-running managers.

The net proceeds from the offering are anticipated to be used for general corporate purposes. These purposes might include funding of loans and purchase of investment securities. Further, debt repayment and other operational needs can be met through the funds.

During first-quarter 2016, First Republic Bank originated loans worth $4.8 billion. As of Mar 31, 2016, the bank’s total long-term debt came in at $3.8 billion.

First Republic Bank’s cash and cash equivalents totaled $1.9 billion as of Mar 31, 2016, up around 18.8% year over year. Cash position improved mainly due to an increase in deposits.

The latest capital raising move will aid the company in reducing its total debt burden to some extent. On the other hand, First Republic Bank’s capital ratios will improve and the bank will be able to further pursue growth and acquisition opportunities.

Yet, the unsettled economic environment and stringent regulatory issues remain concerns. First Republic Bank currently carries a Zacks Rank #3 (Hold).

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