This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

First Republic Reports Strong Second Quarter Results

Stocks in this article: FRC

Excluding the impact of purchase accounting, net interest margin (contractual net interest margin) was 3.48% for the second quarter of 2012, compared to 3.64% for the first quarter of 2012 and 3.54% for the second quarter a year ago. (1)

The decrease in the contractual net interest margin compared to the prior quarter is due to declines in contractual loan yields due to lower interest rates, higher average cash balances, and higher average long-term borrowings from the FHLB.

Noninterest income

Noninterest income for the second quarter of 2012 was $36.6 million, compared to $32.6 million for the first quarter of 2012 and $27.2 million for the second quarter a year ago. The increase compared to last year’s second quarter was primarily due to increases in investment advisory, brokerage and trust fees, gain on sale of loans and income from investments in life insurance, partially offset by a decline in net loan servicing fees.

Noninterest expense

Noninterest expense for the second quarter of 2012 was $171.6 million, compared to $164.8 million for the first quarter of 2012 and $138.8 million for the second quarter a year ago, a 24% increase year over year. Noninterest expense has grown primarily due to an increase in personnel to support loan, deposit and wealth management growth, increased occupancy costs as the Bank added both office space and deposit offices and invested in technology.

Efficiency ratio

The Bank’s efficiency ratio was 52.4% for the second quarter of 2012, compared to 52.5% for the first quarter of 2012 and 48.9% for the second quarter a year ago. For the six months ended June 30, 2012 and 2011, the efficiency ratio was 52.5% and 48.1%, respectively.

Excluding the impact of purchase accounting, the Bank’s efficiency ratio was 60.5% for the second quarter of 2012, compared to 59.6% for the first quarter of 2012 and 59.1% for the second quarter a year ago. For the six months ended June 30, 2012 and 2011, the efficiency ratio was 60.1% and 58.9%, respectively. (1)

Income tax rate declines

The Bank provides for income taxes based on an estimate of earnings and tax preference items for each calendar year. The Bank’s effective tax rate for the six months ended June 30, 2012 was 30.5% and represents the current estimated tax rate for the full year 2012. As a result, the effective tax rate for the second quarter of 2012 decreased to 30.0%, compared to 31.0% for the prior quarter. This decrease in the effective tax rate results from a higher level of tax-exempt securities, bank-owned life insurance, tax credit investments and tax-advantaged loans.

5 of 8

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs