First Republic Bank: This 5.50% Preferred Stock Has Begun Trading On The NYSE

In this article, we want to shed light on a new Preferred Stock issued by First Republic Bank (FRC). Our goal is purely to inform you about the product while refraining ourselves from an investment recommendation. Even though the product might not be of interest to us and our financial objectives, it is definitely worth taking a look at.

The New Issue

Before we get into our brief analysis, here is a link to the prospectus.

For a total of 12M shares issued, the total gross proceeds to the company are $300M. You can find some relevant information about the new preferred stock in the table below:

Source: Author’s spreadsheet

First Republic Bank 5.50% Depositary Shares Non-Cumulative Perpetual Series I Preferred Stock (NYSE:FRC-I) pays a qualified fixed dividend at a rate of 5.50%. The new preferred stock has a BBB-Standard & Poor’s rating and is callable as of June 30, 2023. Currently, the new issue trades a little below its par value at a price of $24.75, and has a 5.56% current yield and a 5.96% yield to call.

Here’s how the stock’s YTC curve looks right now:

Source: Author’s spreadsheet

The Company

As per the the company’s website:

Founded in 1985, First Republic and its subsidiaries offer private banking, private business banking and private wealth management, including investment, trust and brokerage services. First Republic specializes in delivering exceptional, relationship-based service, with a solid commitment to responsiveness and action. Services are offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland, Boston, Palm Beach, Greenwich, and New York City. First Republic offers a complete line of banking products for individuals and businesses, including deposit services, as well as residential, commercial and personal loans.

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