8. First Republic Bank
Shares of First Republic Bank (FRC) of San Francisco closed at $28.51 Monday, down 2% year-to-date.
The bank closed its initial public offering in December.Second-quarter net income was $84.8 million, or 64 cents a share, compared to $61.7 million in the second quarter of 2010, before the company was taken public. The second-quarter net interest margin was 4.67% and the operating ROA was a strong 1.44% according to SNL. Pre-provision net revenue for the second quarter was $149.4 million according to SNL, increasing 37% from a year earlier. The bank reported that its total loans of $20.3 billion as of June 30 were up 13% from a year earlier. Following the earnings release, JPMorgan analyst Steven Alexopoulos maintained his "Overweight" or buy rating on First Republic, with a $38 price target, saying on July 21 that the bank's "second quarter trends continued to differentiate from peers with average loans increasing 10% annualized," and that "asset quality remained best in class." The analyst added that "on the heels of a strong quarter and the pipeline for new business looking robust, we would use recent weakness in the stock as a buying opportunity." The shares trade for 10.4 times the 2012 consensus EPS estimate of $2.73. Out of eight analysts covering First Republic Bank, three rate the shares a buy, while the remaining analysts all have neutral ratings.