NEW YORK (TheStreet) -- Shares of First Republic Bank (FRC - Get Report) were falling 5.3% to $56.49 with heavy trading volume on Friday after the bank and wealth management company priced the 3.5 million shares of common stock in its public offering.

First Republic Bank priced the 3.5 million shares of common stock in its public offering for expected gross proceeds of about $205 million. The bank also granted the underwriters of the public offering a 30-day option to buy up to 525,000 additional shares of common stock.

The company said it plans to use the net proceeds from the offering for general corporate purposes which may include funding loans and purchasing investment securities for its portfolio.

About 2.1 million shares of First Republic Bank were traded by 10:46 a.m. following the pricing announcement, above the company's average trading volume of about 693,000 shares a day.

TheStreet Ratings team rates FIRST REPUBLIC BANK as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate FIRST REPUBLIC BANK (FRC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 11.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for FIRST REPUBLIC BANK is currently very high, coming in at 88.52%. Regardless of FRC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FRC's net profit margin of 25.38% significantly outperformed against the industry.
  • Net operating cash flow has increased to $214.61 million or 29.63% when compared to the same quarter last year. Despite an increase in cash flow of 29.63%, FIRST REPUBLIC BANK is still growing at a significantly lower rate than the industry average of 303.29%.
  • The net income growth from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income increased by 0.1% when compared to the same quarter one year prior, going from $115.30 million to $115.46 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: FRC Ratings Report