First Republic reported third-quarter earnings available to common stockholders of $97.0 million, or 72 cents a share, increasing from $87.8 million, or 66 cents a share, in the third quarter of 2011. The company's total loans grew by 27% year-over-year, to $26.3 billion, as of Sept. 30. First Republic's return on average assets (ROA) has ranged between 1.27% and 1.34%, while its return on equity (ROE) has ranged between 13.13% and 15.12%, over the past five quarters, according to Thomson Reuters Bank Insight.
Those are very respectable returns in the prolonged low-rate environment, and while Bank of America certainly had good reason to take the $1.86 billion when it unloaded First Republic in 2010, there's no question that First Republic has thrived on its own, with the shares returning 21% since the IPO on Dec. 9, 2010 through Tuesday's close at $44.56, while Bank of America's shares were down 23%, though Tuesday's close at $9.63.
Haire raised his 2013 earnings estimate for First Republic $2.26 a share from $2.21, while raising his 2014 EPS estimate to $2.49 from $3.27, saying that the benefit of the Luminous acquisition would be partially "offset by last week's $150mm preferred issuance (at 5.6% coupon), which will add $8mm of below-the-line dividends annually."
First Republic's shares have returned 10% year-to-date, following a 5% return in 2011.The shares trade for 1.7 times their reported Sept. 30 tangible book value of $20.37, and for 11.5 times the consensus 2013 EPS estimate of $2.93, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $2.96. FRC data by YCharts
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