Post Earnings Coverage as First Republic Bank Q3 Earnings Beat Expectations

LONDON, UK / ACCESSWIRE / October 14, 2016 / Active Wall St. announces its post-earnings coverage on First Republic Bank (NYSE: FRC). The company posted its financial results for the third quarter fiscal 2016 (Q3 FY16) on October 13, 2016. First Republic Bank’ net income gained 27.4% y-o-y and its diluted earnings per share grew 26.9% 22.0%, outperforming Wall Street’s estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.

Today, AWS is promoting its earnings coverage on FRC. Get our free coverage by signing up to http://www.activewallst.com/registration-3/?symbol=FRC.

Earnings Reviewed

In the three months ended on September 30, 2016, First Republic Bank’s total revenue grew 19% on y-o-y basis to $557.88 million; however, revenue fell short of market consensus of $592.65 million. As the bank witnessed growth in average earning assets, its net interest income grew 18.4% y-o-y to $460.60 million from $388.88 million in Q3 FY15. Non-interest income also improved 22.0% y-o-y to $97.27 million in Q3 FY16 from $79.75 million in the year ago quarter. The growth in non-interest income is primarily attributed to increased wealth management revenues.

The San Francisco, California-based bank reported net income of $171.82 million, or $1.00 per diluted common share, in Q3 FY16, versus $134.84 million, or $0.82 per diluted common share, in Q3 FY15. Wall Street had expected net income of $0.99 per diluted share.

During the reported quarter, the bank’s annualized net income on average assets stood at 1.02% versus 0.96% in the prior year’s comparable quarter. The net income available to average common stockholders’ equity came in at 11.62% in Q3 FY16, which was above 10.84% reported in the year ago period. Additionally, the Bank efficiency ratio was 60.5% in Q3 FY16 compared to 58.9% in Q3 FY15.

Jim Herbert, Chairman and Chief Executive Officer of First Republic Bank, stated:

“We’re pleased with third quarter results. Our client-centric business model continues to perform very well. Revenue and earnings per share grew nicely, as did wealth management assets, which now exceed $80 billion.”

Earnings Metrics

Net interest margin for the reported quarter was down by five basis points to 3.16% from 3.21% in Q3 FY15. Further, core net interest margin also fell to 3.11% in Q3 FY16, from 3.16% in the year ago period. In Q3 FY16, average interest earning assets surged to $63.45 billion from $53.02 billion in the previous year’s quarter.

As on September 30, 2016, the Banks’s Common Equity Tier 1 ratio stood at 10.52% compared to 10.74% as at end of last year’s third quarter. During Q3 FY16, total regulatory capital has grown 25.1% y-o-y. The bank had a strong credit quality with the ratio of non-performing assets standing at 0.08% of total asset compared to 0.09% of total asset in the year ago quarter.

Balance Sheet Analyzed

First Republic Bank’s total loans originations surged 33.1% y-o-y to $6.5 billion as on September 30, 2016, from $4.9 billion as on September 30, 2015. Total deposits were $55.06 billion as on September 30, 2016, which was 24.2% higher than $51.16 billion recorded as on September 30, 2015.

The reported total wealth management assets worth $80.19 billion as on September 30, 2016, up from $58.82 billion as on September 30, 2015. Furthermore, the company’s wealth management revenues grew 27.0% y-o-y to $71.9 million in reported quarter.

Dividend

The company’s Board of Directors declared quarterly cash dividend of $0.16 per share of common stock, which will be payable November 10, 2016 to shareholders of record as of October 27, 2016.

Stock Performance

First Republic Bank’s share price finished yesterday’s trading session at $73.99, sliding 4.07% from its previous close of $77.13. A total volume of 2.99 million shares exchanged hands, which was higher than the 3 months average volume of 698.20 thousand shares. The stock has advanced 3.28% and 4.93% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company have gained 12.78%. The stock is trading at a PE ratio of 20.81 and has a dividend yield of 0.86%.

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