First Republic, Biggest Bank IPO Since Credit Crisis, Gains In First Day

First Republic Bank, which is backed by Colony Capital and General Atlantic, is flourishing in its first day as a public company.

On Thursday, shares of First Republic surged more than 8%, or $2.14, to $27.62 in early afternoon trading. First Republic priced 11 million shares Wednesday at $25.50 via joint book runners BofA Merrill Lynch, Morgan Stanley and J.P. Morgan. Other underwriters include Barclays Capital, Jefferies & Co., Keefe, Bruyette & Woods, Sandler O’Neill & Partners and Stifel Nicolaus Weisel.

San Francisco-based First Republic, which caters to wealthy investors, has $22 billion in assets as of Sept. 30. The bank isn’t selling all the shares in the IPO. First Republic is offering about 4.1 million shares while stockholders are providing the remaining 6.9 million, a statement said. First Republic said it plans to use the $95.2 million in net proceeds from the IPO for general corporate purposes, which could include funding loans and buying stock for its portfolio.

The underwriters also have a greenshoe option to buy an additional 1.7 million. First Republic will have 128,248,334 shares outstanding, giving it a roughly $3.5 billion market cap.

First Republic is the largest bank IPO since the credit crisis, according to my compadres at Thomson Reuters. The offering also comes five months after Bank of America completed a sale of First Republic to management, which was backed by an investor group lead by Colony and General Atlantic. First Republic’s management, along with the consortium led by Colony and GA, contributed $1.86 billion equity as part of the deal, according to an FDIC filing.

The PE firms are selling shares in the IPO but it ain’t much. Colony and General Atlantic each own about 27 million shares, or about 22% of First Republic prior to the IPO. They are each offering roughly 1.7 million shares in the IPO. Each PE firm will see their holding cut to about 25.4 million shares or 19.8%. At $25.50 (the IPO price), Colony and GA could realize about $43.35 million on the sale of stock. Each firm’s stake is also valued at $701.5 million.

First United’s IPO is expected to be followed by BankUnited, which filed in October to raise up to $300 million. BankUnited is backed by the Blackstone Group, the Carlyle Group and WL Ross & Co. The BankUnited offering is not on calendar yet and no date for the IPO has been set, one source says.