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First Republic Bank Reports Record Annual And Quarterly Earnings

First Republic Bank (NYSE: FRC) today announced strong financial results for the fourth quarter and the year ended December 31, 2012.

“First Republic had a terrific year by every performance measure,” said Jim Herbert, Chairman and Chief Executive Officer. “Core earnings per share increased 28% in 2012, while loans, deposits, business banking and wealth management assets all grew strongly. Credit quality and capital ratios are strong.”

2012 Full Year Highlights

  • Book value per share increased by 13.5% to $22.08.
  • Tier 1 leverage ratio increased to 9.32%, up from 8.81% a year ago.
  • Asset quality remains very strong; nonperforming assets were only 14 basis points of total assets.
  • Net income was a record $402.5 million, an increase of 14%, and diluted earnings per share (“EPS”) were $2.76.
  • Excluding the impact of purchase accounting, net income was $307.0 million, up 38%. (1)
  • Excluding the impact of purchase accounting and the one-time charge on redemption of preferred stock in the second quarter, core diluted EPS were $2.15, up 28%. (1)
  • Excluding the impact of purchase accounting, the net interest margin was 3.53% in 2012 and 2011. (1)
  • Loan originations were a record $15.5 billion.
  • Loans outstanding were $28.5 billion at December 31, 2012, up 23%.
  • Deposits were $27.1 billion at December 31, 2012, up 21%.
  • Wealth management assets were $31.7 billion, including $5.9 billion from the Luminous Capital Holdings, LLC (“Luminous”) acquisition, up 55%.
  • A dividend on our common stock was initiated in the third quarter of 2012.

Fourth Quarter Highlights

  • Net income was $110.1 million, up 21% from last year’s fourth quarter. Diluted EPS were $0.77, up 13% from last year’s fourth quarter.
  • Excluding the impact of purchase accounting, net income was $89.3 million, up 51% from last year’s fourth quarter and diluted EPS were $0.61, up 39% from last year’s fourth quarter. (1)
  • Net interest margin was 4.02%, compared to 4.13% for the prior quarter.
  • Excluding the impact of purchase accounting, the net interest margin was 3.46%, compared to 3.47% for the prior quarter. (1)
  • The efficiency ratio was 51.2%, compared to 52.1% for the prior quarter.
  • Excluding the impact of purchase accounting, the efficiency ratio was 56.2%, versus 58.6% for the prior quarter. (1)
  • Loan originations were $4.3 billion, our highest quarter ever.
  • Loans sold were $671 million for the quarter and pre-tax net gains on sales were $17.7 million, compared to sales of $774 million and pre-tax gains of $12.5 million for the prior quarter.

“First Republic’s success in 2012 was due to its intense focus on exceptional client service coupled with disciplined asset underwriting,” said Katherine August-deWilde, President and Chief Operating Officer. “We’re particularly pleased with the robust growth of business banking and wealth management assets, including those acquired in the Luminous transaction.”

Stock quotes in this article: FRC 

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