UPDATE: Morgan Stanley Reiterates on First Republic Bank Following Talks with Management

In a report published Tuesday, Morgan Stanley analyst Ken A. Zerbe reiterated an Overweight rating on

, but removed the $56.00 price target. In the report, Morgan Stanley noted, “We spoke with FRC management to get a better sense of why they were raising equity. The main reason is to improve its liquidity coverage ratio ahead of becoming a CCAR bank (we estimate they cross $50 bil in assets in mid-2015). The company plans to use the new equity to ever up its balance sheet (they have among the lowest ratio of high-quality liquid assets to total assets, among their larger bank peers, of just 2%) by purchasing liquid assets funded by a combination of wholesale borrowings and core deposits.” First Republic Bank closed on Monday at $53.22.