This Day On The Street
Continue to site
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

5 Small-Cap Bank Stock Plays for 2013 From Credit Suisse

2. First Republic Bank

Shares of First Republic Bank (FRC - Get Report) of San Francisco closed at $33.31 Wednesday, returning 10% year-to-date, following a 5% return during 2011.

The shares trade for 1.6 times tangible book value, and for 11.2 times the consensus 2013 EPS estimate of $2.97. The consensus 2014 EPS estimate is also $2.97.

Based on a quarterly payout of 10 cents, the shares have a dividend yield of 1.20%. First Republic also accelerated the payment of its fourth quarter dividend in order to avoid a possibly higher tax rate next year. The fourth-quarter dividend will be paid on Dec. 28 to shareholders of record as of Dec. 17.

After being acquired by Bank of America (as part of that company's purchase of Merrill Lynch in January 2009, First Republic was sold in July 2010 for $1.86 billion to an investor group that included Colony Financial and General Atlantic LLC, and was led by First Republic's original management team. First Republic completed a public offering of common shares in December of 2010.

First Republic is among the small and mid-cap banks covered by Credit Suisse that Clark thinks "could potentially sell in the next 12-18 months."

First Republic Bank had $32.6 billion in assets as of Sept. 30, with offices in California, Oregon, Connecticut, Massachusetts and New York, focusing on private banking and jumbo mortgage lending. The bank in November agreed to acquire Luminous Capital of Los Angeles, for undisclosed terms.

Luminous Capital is an investment advisor with $5.5 billion in assets under management. First Republic said that "the six partners of the firm will sign long-term employment contracts as part of the transaction," which is expected to close by the end of the year.

The bank's total loans grew by 27% year-over-year, to $26.3 billion as of Sept. 30.

Third-quarter earnings available to common stockholders were $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 said that "excluding the impact of purchase accounting, net income for the third quarter of 2012 was $78.7 million, up 43% from last year's third quarter," and that "on this non-GAAP basis, the third quarter diluted EPS were $0.54, up 29% year over year."

Third-quarter net interest income was $298.8 million, increasing 3% sequentially, and 11% year-over-year. Excluding accretion and amortization of fair value adjustments recorded in purchase accounting, the third-quarter net interest margin was 3.47%, expanding from 3.41% the previous quarter, but narrowing from 3.49% a year earlier.

Clark's price target for First Republic is $42, and he estimates the bank will earn three dollars a share in 2013, with EPS increasing to $3.10 in 2014.

FRC Chart FRC data by YCharts

Interested in more on First Republic Bank? See TheStreet Ratings' report card for this stock.
5 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SUSQ $14.20 -0.77%
BAC $15.38 0.00%
C $49.88 0.00%
FRC $62.55 0.00%
EWBC $37.53 0.00%


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs