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First Republic Bank Reports Strong Quarterly Earnings

Stocks in this article: FRC

First Republic Bank (NYSE: FRC) today announced financial results for the second quarter and six months ended June 30, 2013.

“We had a very good second quarter. Year-over-year core earnings per share increased 28%,” said Jim Herbert, Chairman and Chief Executive Officer. “Deposit and loan growth for the quarter were up 5% and 7%, respectively. Wealth management assets increased by 6% and our credit quality remains strong.”

Quarterly Cash Dividend Declared

The Bank declared a cash dividend for the second quarter of $0.12 per share of common stock, which is payable on August 15, 2013 to shareholders of record as of August 1, 2013.

Quarterly Financial Highlights

  • Net income was $113.7 million for the second quarter of 2013, compared to $97.9 million last year. Diluted earnings per share (“EPS”) were $0.77, compared to $0.60 (which was reduced by a $0.10 per share one-time charge upon redemption of REIT preferred stock).
  • Excluding the impact of purchase accounting, core net income was $97.1 million, up 37% from last year. On this non-GAAP basis, which also excludes the one-time redemption charge in 2012, core diluted EPS for the quarter were $0.64, up 28% year-over-year. (1)
  • The Bank issued $190 million of 5.50% Noncumulative Perpetual Preferred Stock, which qualifies as Tier 1 capital.
  • Nonperforming assets were only 17 basis points of total assets.
  • Loans outstanding were $30.7 billion, up 7% for the quarter and 20% compared to a year ago.
  • Deposits were $28.2 billion, up 5% and 17% compared to a year ago.
  • Wealth management assets were $37.4 billion, up 6% and 61% compared to a year ago.
  • Wealth management fees were $33.1 million, up 12% and 69% compared to the same period last year.
  • Loan originations were $5.3 billion, our highest quarter ever, and were up 34% compared to last year’s second quarter.
  • Loans sold were $945.4 million and pre-tax gains on loan sales were $8.8 million, or 0.93% of loans sold.
  • The core net interest margin was 3.37%, compared to 3.42% for the prior quarter. (1)
  • The core efficiency ratio was 58.9%, compared to 57.3% for the prior quarter. (1)

“Record loan originations and renewed deposit growth were the result of healthy conditions in our markets and the continued execution of our business model,” said Katherine August-deWilde, President and Chief Operating Officer. “Wealth management assets grew substantially, rising $5.7 billion through the first six months of the year.”

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